Document:

Amended and Restated Credit Agreement

 Exhibit 4.1 
 [Execution Copy] 
 AMENDED AND RESTATED CREDIT AGREEMENT 
 DATED AS OF APRIL 23, 2007 
 AMONG 
 PLAINS
EXPLORATION & PRODUCTION COMPANY, 
 AS BORROWER, 
 JPMORGAN CHASE BANK, N.A., 
 AS ADMINISTRATIVE AGENT, 
 BANK OF AMERICA, N.A. and BMO CAPITAL MARKETS
FINANCING, INC., 
 AS SYNDICATION AGENTS, 
 BNP PARIBAS and THE BANK OF NOVA SCOTIA, 
 AS DOCUMENTATION AGENTS, 
 AND 
 THE LENDERS PARTY HERETO 
  

 SOLE
LEAD ARRANGER AND SOLE BOOKRUNNER 
 J.P. Morgan Securities
Inc. 

 TABLE OF CONTENTS 
  

							
	  	  	 	  	 	  	Page
	 ARTICLE I Definitions and Accounting Matters
	  	1
				
		  	Section 1.01	  	Terms Defined Above	  	1
		  	Section 1.02	  	Certain Defined Terms	  	1
		  	Section 1.03	  	Types of Loans and Borrowings	  	22
		  	Section 1.04	  	Terms Generally; Rules of Construction	  	22
		  	Section 1.05	  	Accounting Terms and Determinations; GAAP	  	22
		
	 ARTICLE II The Credits
	  	23
				
		  	Section 2.01	  	Commitments	  	23
		  	Section 2.02	  	Loans and Borrowings	  	23
		  	Section 2.03	  	Requests for Borrowings	  	24
		  	Section 2.04	  	Interest Elections	  	25
		  	Section 2.05	  	Funding of Borrowings	  	27
		  	Section 2.06	  	Termination and Reduction of Aggregate Maximum Credit Amounts	  	27
		  	Section 2.07	  	Borrowing Base	  	28
		  	Section 2.08	  	Letters of Credit	  	30
		  	Section 2.09	  	Increase in the Revolving Loan Maximum Credit Amounts	  	35
		
	 ARTICLE III Payments of Principal and Interest; Prepayments; Fees
	  	36
				
		  	Section 3.01	  	Repayment of Loans	  	36
		  	Section 3.02	  	Interest	  	36
		  	Section 3.03	  	Alternate Rate of Interest	  	37
		  	Section 3.04	  	Prepayments	  	37
		  	Section 3.05	  	Fees	  	39
		
	 ARTICLE IV Payments; Pro Rata Treatment; Sharing of Set-offs.
	  	40
				
		  	Section 4.01	  	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	  	40
		  	Section 4.02	  	Presumption of Payment by the Borrower	  	41
		  	Section 4.03	  	Certain Deductions by the Administrative Agent	  	41
		  	Section 4.04	  	Disposition of Proceeds	  	41
		
	 ARTICLE V Increased Costs; Break Funding Payments; Taxes; Illegality
	  	42
				
		  	Section 5.01	  	Increased Costs	  	42
		  	Section 5.02	  	Break Funding Payments	  	43
		  	Section 5.03	  	Taxes	  	43
		  	Section 5.04	  	Mitigation Obligations; Replacement of Lenders	  	45
		  	Section 5.05	  	Illegality	  	45
		
	 ARTICLE VI Conditions Precedent
	  	46
				
		  	Section 6.01	  	Effective Date.	  	46
		  	Section 6.02	  	Each Credit Event	  	48

							
	 ARTICLE VII Representations and Warranties
	  	49
				
		  	Section 7.01	  	Organization; Powers	  	49
		  	Section 7.02	  	Authority; Enforceability	  	49
		  	Section 7.03	  	Approvals; No Conflicts	  	49
		  	Section 7.04	  	Financial Condition; No Material Adverse Effect	  	50
		  	Section 7.05	  	Litigation	  	50
		  	Section 7.06	  	Environmental Matters	  	50
		  	Section 7.07	  	Compliance with the Laws and Agreements; No Defaults	  	51
		  	Section 7.08	  	Investment Company Act	  	52
		  	Section 7.09	  	Taxes	  	52
		  	Section 7.10	  	Disclosure; No Material Misstatements	  	52
		  	Section 7.11	  	Subsidiaries	  	52
		  	Section 7.12	  	Location of Business and Offices	  	52
		  	Section 7.13	  	Properties; Titles, Etc.	  	53
		  	Section 7.14	  	Federal Reserve Regulations	  	54
		  	Section 7.15	  	Solvency	  	54
		
	 ARTICLE VIII Affirmative Covenants
	  	54
				
		  	Section 8.01	  	Financial Statements; Other Information	  	54
		  	Section 8.02	  	Notices of Material Events	  	57
		  	Section 8.03	  	Existence; Conduct of Business	  	57
		  	Section 8.04	  	Payment of Obligations	  	57
		  	Section 8.05	  	Operation and Maintenance of Properties	  	57
		  	Section 8.06	  	Insurance	  	58
		  	Section 8.07	  	Books and Records; Inspection Rights	  	58
		  	Section 8.08	  	Compliance with Laws	  	58
		  	Section 8.09	  	Environmental Matters	  	59
		  	Section 8.10	  	Further Assurances	  	59
		  	Section 8.11	  	Reserve Reports	  	60
		  	Section 8.12	  	Title Information	  	60
		  	Section 8.13	  	Additional Collateral; Additional Guarantors	  	61
		  	Section 8.14	  	ERISA Compliance	  	62
		  	Section 8.15	  	Unrestricted Subsidiaries	  	63
		  	Section 8.16	  	Post Closing Matters.	  	63
		
	 ARTICLE IX Negative Covenants
	  	63
				
		  	Section 9.01	  	Ratio of Debt to EBITDAX	  	63
		  	Section 9.02	  	Debt	  	64
		  	Section 9.03	  	Liens	  	65
		  	Section 9.04	  	Restricted Payments	  	66
		  	Section 9.05	  	Repayment of Debt; Amendment of Indentures	  	66
		  	Section 9.06	  	Investments, Loans and Advances	  	67
		  	Section 9.07	  	Designation and Conversion of Restricted and Unrestricted Subsidiaries; Debt of Unrestricted Subsidiaries	  	69
		  	Section 9.08	  	Nature of Business	  	69
		  	Section 9.09	  	Proceeds of Notes	  	69

							
		  	Section 9.10	  	Sale or Discount of Receivables	  	69
		  	Section 9.11	  	Mergers, Etc.	  	70
		  	Section 9.12	  	Sale of Properties	  	70
		  	Section 9.13	  	Transactions with Affiliates	  	71
		  	Section 9.14	  	Subsidiaries	  	71
		  	Section 9.15	  	Negative Pledge Agreements; Dividend Restrictions.	  	72
		  	Section 9.16	  	Take-or-Pay or Other Prepayments	  	72
		  	Section 9.17	  	Swap Agreements	  	72
		
	 ARTICLE X Events of Default; Remedies
	  	73
				
		  	Section 10.01	  	 Events of Default
	  	73
		  	Section 10.02	  	Remedies	  	75
		
	 ARTICLE XI The Agents
	  	76
				
		  	Section 11.01	  	Appointment; Powers	  	76
		  	Section 11.02	  	Duties and Obligations of Administrative Agent	  	76
		  	Section 11.03	  	Action by Administrative Agent	  	77
		  	Section 11.04	  	Reliance by Administrative Agent	  	77
		  	Section 11.05	  	Subagents	  	78
		  	Section 11.06	  	Resignation or Removal of Agents	  	78
		  	Section 11.07	  	Agents as Lenders	  	78
		  	Section 11.08	  	No Reliance	  	78
		  	Section 11.09	  	Authority of Administrative Agent to Release Collateral and Liens	  	79
		  	Section 11.10	  	Administrative Agent May File Proofs of Claim	  	79
		  	Section 11.11	  	The Syndication Agents, Documentation Agents and Arranger	  	80
		
	 ARTICLE XII Miscellaneous
	  	80
				
		  	Section 12.01	  	Notices	  	80
		  	Section 12.02	  	Waivers; Amendments	  	81
		  	Section 12.03	  	Expenses, Indemnity; Damage Waiver	  	82
		  	Section 12.04	  	Successors and Assigns	  	85
		  	Section 12.05	  	Survival; Revival; Reinstatement	  	88
		  	Section 12.06	  	Counterparts; Integration; Effectiveness	  	88
		  	Section 12.07	  	Severability	  	89
		  	Section 12.08	  	Right of Setoff	  	89
		  	Section 12.09	  	GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS	  	89
		  	Section 12.10	  	Headings	  	91
		  	Section 12.11	  	Confidentiality	  	91
		  	Section 12.12	  	Interest Rate Limitation	  	91
		  	Section 12.13	  	EXCULPATION PROVISIONS	  	92
		  	Section 12.14	  	Collateral Matters; Swap Agreements	  	93
		  	Section 12.15	  	No Third Party Beneficiaries	  	93
		  	Section 12.16	  	USA Patriot Act Notice	  	93
		  	Section 12.17	  	Release of Liens and Guarantors	  	93

			
	 Annex I
	  	List of Maximum Credit Amounts
		
	 Exhibit A
	  	Form of Note
	 Exhibit B
	  	Form of Compliance Certificate
	 Exhibit C-1
	  	Security Instruments
	 Exhibit C-2
	  	Form of Guaranty and Collateral Agreement
	 Exhibit D
	  	Form of Assignment and Assumption
		
	 Schedule 1.01
	  	Initial Guarantors
	 Schedule 7.11
	  	Subsidiaries and Partnerships; Unrestricted Subsidiaries
	 Schedule 9.03
	  	Liens
	 Schedule 9.06
	  	Investments
	 Schedule 9.08
	  	Nature of Business

 THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 23, 2007, is among PLAINS
EXPLORATION & PRODUCTION COMPANY, a Delaware corporation (the “Borrower”); each of the Lenders from time to time party hereto; JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such capacity, together
with its successors in such capacity, the “Administrative Agent”); Bank of America, N.A. and BMO Capital Markets Financing, Inc., as syndication agents for the Lenders (each, in such capacity, a “Syndication
Agent”); and BNP Paribas and The Bank of Nova Scotia, as documentation agents for the Lenders (each, in such capacity, a “Documentation Agent”). 
 R E C I T A L S 
 A. The Borrower, the Administrative Agent and other financial institutions
named and defined therein as lenders and agents are parties to an Amended and Restated Credit Agreement dated as of May 16, 2005, pursuant to which such lenders provided certain loans to and extensions of credit on behalf of the Borrower (as
heretofore amended, modified or supplemented, the “Existing Credit Agreement”). 
 B. The Borrower has requested the
Lenders, and the Lenders have agreed, to amend, restate, increase and extend the Existing Credit Agreement, subject to the terms and conditions of this Agreement. 
 C. Now, therefore, in consideration of the mutual covenants and agreements herein contained and of the loans, extensions of credit and commitments hereinafter referred to, the parties hereto agree as follows:

 ARTICLE I 
 Definitions and Accounting Matters 
 Section 1.01 Terms Defined Above. As used in this Agreement, each term
defined above has the meaning indicated above. 
 Section 1.02 Certain Defined Terms. As used in this Agreement, the following
terms have the meanings specified below: 
 “ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate. 
 “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 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate. 
 “Administrative Questionnaire” means an Administrative
Questionnaire in a form supplied by the Administrative Agent. 
 “Affected Loans” has the meaning assigned 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” means, collectively, the Administrative Agent, the Syndication Agents and the Documentation Agents; and “Agent” means the Administrative Agent, either Syndication Agent or either Documentation Agent, as
the context requires. 
 “Aggregate Maximum Credit Amounts” at any time shall equal the sum of the Maximum Credit Amounts,
as the same may be reduced or terminated pursuant to Section 2.06. 
 “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 greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus  1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. 
 “Applicable Margin” means, for any day, with respect to any 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

Percentage
	  	<25%	 	 	325%, but
<50%	 	 	350%, but
<75%	 	 	375%, but
<90%	 	 	390%	 
	 ABR Loans
	  	0.000	%	 	0.000	%	 	0.000	%	 	0.000	%	 	0.250	%
	 Eurodollar Loans
	  	1.000	%	 	1.000	%	 	1.250	%	 	1.500	%	 	1.750	%
	 Commitment Fee Rate
	  	0.225	%	 	0.250	%	 	0.300	%	 	0.350	%	 	0.375	%

 provided, that at any time when the Borrower’s Debt Rating is rated BB+ or higher from S&P or Ba1 or
higher from Moody’s, then the Applicable Margin for Eurodollar Loans set forth in each portion of the grid shall be reduced by an amount equal to 0.125%. Each change in the Applicable Margin resulting from either a change in the Borrowing Base
Utilization Percentage or in the Debt Rating 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. 
 “Applicable Percentage” means, with respect to any Lender, the percentage of the Aggregate Maximum Credit Amounts represented by such
Lender’s Maximum Credit Amount as such percentage is set forth on Annex I. 
  

 2 

 “Approved Counterparty” means (a) any Lender or any Affiliate of a Lender and
(b) any other Person whose long term senior unsecured debt rating at the time of entering into the Swap Agreement is BBB+/Baa3 by S&P or Moody’s (or their equivalent) or higher. 
 “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans
and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender. 
 “Approved Petroleum Engineers” means (a) Netherland, Sewell & Associates, Inc., (b) Ryder
Scott Company Petroleum Consultants, L.P. and (c) any other independent petroleum engineers reasonably acceptable to the Administrative Agent. 
 “Arranger” means J.P. Morgan Securities Inc., in its capacities as the sole lead arranger and sole bookrunner hereunder. 
 “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 D 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. 
 “Board” means the Board of Governors
of the Federal Reserve System of the United States of America or any successor Governmental Authority. 
 “Borrowing” means
Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect. 
 “Borrowing Base” means at any time an amount determined in accordance with Section 2.07, in each case as the same may be adjusted from time to time pursuant to Section 8.12(c),
Section 9.02(i) or Section 9.12(d). 
 “Borrowing Base Deficiency” occurs if at any time the total Revolving
Credit Exposures exceeds the Borrowing Base then in effect. 
 “Borrowing Base Utilization Percentage” means, as of any day,
the fraction expressed as a percentage, the numerator of which is the sum of the Revolving Credit Exposures of the Lenders on such day, and the denominator of which is the 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 City or Houston, Texas
are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London
interbank market. 
  

 3 

 “Capital Leases” means, in respect of any Person, all leases that are or should be 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 damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Oil and Gas Property of the
Borrower or any of its Restricted Subsidiaries having a fair market value in excess of $50,000,000. 
 “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 Permitted Holders (except that such person or group shall be deemed to have “beneficial ownership” of all shares that any person or group has the right to acquire, whether such right is exercisable immediately or only after the
passage of time) of Equity Interests representing more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower (or its successor by merger, consolidation or purchase of all or
substantially all of its assets); (b) the first day on which a majority of the members of the Board of Directors of the Borrower are not Continuing Directors; (c) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Borrower and its Restricted Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d)
and 14(d) of the Securities and Exchange Act of 1934); or (d) a “Change of Control” under the Senior Indenture or any Permitted Additional Debt Instrument. 
 “Change in Law” means (a) the adoption of any law, rule or regulation after the Effective Date, (b) any change in any law, rule or regulation or in the interpretation or application thereof
by any Governmental Authority after the Effective Date 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 Effective Date. 
 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute. 
 “Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of
Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) modified from time to time pursuant to Section 2.06 or
Section 2.09 and (b) modified from time to time pursuant to assignments by or to such Lender pursuant to Section 12.04(b). The amount representing each Lender’s Commitment shall be the lesser of such Lender’s Maximum Credit
Amount and such Lender’s Applicable Percentage of the then effective Borrowing Base. 
  

 4 

 “Commitment Fee Rate” has the meaning set forth in the definition of “Applicable
Margin”. 
 “Consolidated Net Income” means with respect to the Borrower and the Consolidated Restricted
Subsidiaries, for any period, the aggregate of the net income (or loss) of the Borrower and the Consolidated Restricted 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
(other than a Restricted Subsidiary) in which the Borrower or any Consolidated Restricted Subsidiary has an interest, except to the extent of the amount of dividends or distributions actually paid in cash during such period by such other Person to
the Borrower or to a Consolidated Restricted Subsidiary, as the case may be; 
 (b) the net income (but not loss) during such period of any
Consolidated Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by that Consolidated Restricted Subsidiary is not at the time permitted by the terms of its charter or any
agreement, instrument or Governmental Requirement applicable to such Consolidated Restricted Subsidiary or is otherwise restricted or prohibited; 
 (c) any extraordinary gains or losses during such period; 
 (d) non-cash gains, losses or adjustments, including gains, losses or
adjustments under FASB Statement No. 133 as a result of changes in the fair market value of derivatives and any gains or losses attributable to writeups or writedowns of assets, including ceiling test writedowns and writedowns under FASB
Statements Nos. 19, 142 and 144; 
 (e) any charges related to any premium or penalty paid, write off of deferred financing costs or other
financial recapitalization charges in connection with redeeming or retiring any indebtedness prior to its stated maturity; and 
 (f) any
non-cash employee based compensation. 
 “Consolidated Restricted Subsidiaries” means any Restricted Subsidiaries that are
Consolidated Subsidiaries. 
 “Consolidated Subsidiaries” means each Subsidiary of the Borrower (whether now existing or
hereafter created or acquired) the financial statements of which are or shall be (or should have been) consolidated with the financial statements of the Borrower in accordance with GAAP. 
 “Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Borrower who: (a) was a
member of such Board of Directors on the date hereof; or (b) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such
nomination or election. 
  

 5 

 “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. “Controlling” and “Controlled” have meanings correlative thereto. 

“Debt” means, for any Person, the sum of the following (without duplication): 
 (a) all obligations of such Person for borrowed money or evidenced by bonds, debentures, notes or other similar instruments; 
 (b) all reimbursement obligations of such Person in respect of draws under letters of credit, bankers’ acceptance, surety or other bonds and similar
instruments that have not been paid or deemed to have been paid within one Business Day after such obligations arise; 
 (c) all amounts owed
by such Person representing the deferred purchase price of Property or services (other than liabilities of such Person to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such
liabilities) that are either (i) not greater than 120 days past the invoice or billing date or (ii) are being contested in good faith by appropriate proceedings and adequate reserves therefore have been established under GAAP); 

(d) all obligations under Capital Leases; 
 (e) 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; 
 (f) 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; 
 (g) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the
Debt or Property of others; 
 (h) 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; 
 (i) Disqualified Capital Stock; and 
 (j) the undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received
payment. 
 For the avoidance of doubt, “Debt” does not include obligations in respect of Swap Agreements, indemnities incurred in
the ordinary course of business, any non-cash employee or director compensation or any compensation paid to employees or directors pursuant to stock appreciation rights. 
  

 6 

 “Debt Rating” means, as of any date of determination, the issuer or family rating of the
Borrower most recently announced by S&P or Moody’s. 
 “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. 
 “Default
Rate” means a rate per annum equal to 2% plus the rate applicable to ABR Loans as provided in Section 3.02(a). 
 “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 91 days 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. 
 “EBITDAX” means, for any period, the sum of Consolidated Net Income for such period plus (i) the following expenses or charges to
the extent deducted in determining Consolidated Net Income in such period (without duplication): interest, income taxes, depreciation, depletion, amortization, exploration expenses and other non-cash charges and minus (ii) all non-cash income
included in the calculation of Consolidated Net Income; provided, however, that if any such Person shall have consummated any material acquisition or disposition during such period, EBITDAX shall be subject to pro forma adjustments as
approved by the Administrative Agent as if such acquisition or disposition had occurred on the first day of such period. 
 “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” means 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 the Borrower or any Restricted Subsidiary is conducting or at any time has conducted business, or where any Property of the Borrower or any Restricted
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

  

 7 

 
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” has the meaning specified in OPA, the terms “hazardous substance” and
“release” (or “threatened release”) have the meanings specified in CERCLA, the terms “solid waste” and “disposal” (or “disposed”) have the meanings specified in
RCRA and the term “oil and gas waste” has 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 the Borrower or any Restricted 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” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute. 
 “ERISA Affiliate” means each trade or business (whether or not incorporated) which together with the Borrower 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 and the regulations issued thereunder, (b) the withdrawal of the Borrower, 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, (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 or (g) the incurrence of any liability to the PBGC or any Plan or Multiemployer Plan (other than to make
contributions in the ordinary course of business) that could reasonably be expected to have a Material Adverse Effect. 
 “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. 
  

 8 

 “Excepted Liens” means: 
 (a) Liens for Taxes, assessments or other governmental charges or levies which are not delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in accordance with GAAP; 
 (b) Liens incurred or deposits made in
connection with workers’ compensation, unemployment insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action and for which
adequate reserves have been maintained in accordance with GAAP; 
 (c) statutory landlord’s Liens, operators’, vendors’,
carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s and construction Liens, Liens on pipelines and pipeline facilities that arise by operation of law or other like Liens arising
by operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties each of which is in respect of obligations that are not delinquent or which are being contested
in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; 
 (d) contractual Liens
under lease agreements or which arise in the ordinary course of business under operating agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases, farm-out and farm-in 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 the Borrower or any Restricted Subsidiary or materially impair the value of such
Property subject thereto; 
 (e) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens,
rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution, provided that no such deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board and no such deposit account is intended by Borrower or any of its Restricted Subsidiaries to provide collateral to the depository
institution; 
 (f) easements, restrictions, zoning restrictions servitudes, permits, conditions, covenants, exceptions or reservations in
any Property of the Borrower or any Restricted 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, 

  

 9 

 
and 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
Restricted Subsidiary or materially impair the value of such Property subject thereto; 
 (g) Liens on cash or securities pledged to secure
performance of tenders, surety and appeal bonds, government contracts, performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the
ordinary course of business; 
 (h) judgment and attachment Liens not giving rise to an Event of Default, provided that any appropriate legal
proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired and no action to enforce such Lien has been
commenced; and 
 (i) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the
Borrower and the Restricted Subsidiaries in the ordinary course of business covering only the Property under lease; 
 provided, however, that Liens
described in clauses (a) through (e) shall remain “Excepted Liens” only for so long as no action to enforce such Lien has been commenced and 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. 
 “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any Guarantor hereunder
or under any other Loan Document, (a) income or franchise taxes imposed on (or measured by) its income, receipts, total assets, net worth, or capital 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 the Borrower or any Guarantor 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 set forth in the recitals hereto. 
 “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, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if 

  

 10 

 
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it. 
 “Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower. 
 “Financial Statements” means the financial statement or
statements of the Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a). 
 “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 Restricted Subsidiary that is not a Domestic Subsidiary.

 “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 Borrower, any Restricted Subsidiary, any of their Properties, any Agent, any Issuing Bank or any Lender. 
 “Governmental Requirement” means any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or other directive or requirement, whether now or hereinafter in effect, including, without limitation, Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority. 
 “Guarantors” means the entities listed on Schedule 1.01 and any
other Person that must guarantee the Indebtedness in order for the Borrower to comply with Section 8.13, but excluding any Person released as a Guarantor pursuant to Section 12.17. 
 “Guaranty Agreement” means an agreement executed by the Guarantors in substantially the form of Exhibit C-2 unconditionally guarantying
on a joint and several basis, payment of the Indebtedness, as the same may be amended, modified or supplemented from time to time. 
 “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. 
  

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 “Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter
acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any
reserved or residual interests of whatever nature. 
 “Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom. 
 “Immaterial Title Deficiencies” means minor defects or deficiencies in title which do not diminish more than 5% of the aggregate value of the Oil and Gas Properties included in the Borrowing Base. 
 “Increasing Lender” has the meaning set forth in Section 2.09. 
 “Indebtedness” means any and all amounts owing or to be owing by the Borrower, any of its Restricted Subsidiaries or any Guarantor:
(a) to the Administrative Agent, any Issuing Bank or any Lender under any Loan Document; (b) to any Lender or any Affiliate of a Lender under any Swap Agreement between the Borrower or any of its Restricted Subsidiaries and such Lender or
Affiliate of a Lender while such Person (or in the case of its Affiliate, the Person affiliated therewith) is a Lender hereunder; and (c) all renewals, extensions and/or rearrangements of any of the foregoing. 
 “Indemnified Taxes” means Taxes other than Excluded Taxes. 
 “Initial Reserve Report” means the report of Netherland, Sewell & Associates, Inc. with respect to the value of certain Oil and
Gas Properties of the Borrower and its Restricted Subsidiaries as of December 31, 2006. 
 “Interest Election Request”
means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.04. 
 “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, six or, with the consent of the Administrative Agent, nine or 12 months thereafter, as the Borrower may elect; provided, that
(a) with respect to any Interest Period the Administrative Agent may consent to an Interest Period that is less than one month, (b) 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 

  

 12 

 
on the next preceding Business Day, and (c) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing. 
 “Interim Redetermination” has the meaning assigned such term in Section 2.07(b). 
 “Interim Redetermination Date” means the date on which a Borrowing Base that has been redetermined pursuant to an Interim
Redetermination becomes effective as provided in Section 2.07(d). 
 “Investment” means, for any Person: (a) the
acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests of any other Person or any agreement to make any such acquisition (including, without limitation, any “short sale” or any sale of any
securities at a time when such securities are not owned by the Person entering into such short sale); (b) the making of any deposit with, or advance, loan or 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 agreement, contingent or otherwise, to resell such Property
to such Person, but excluding any such advance, loan or extension of credit having a term not exceeding 90 days representing the purchase price of inventory or supplies sold by such Person in the ordinary course of business); (c) the purchase
or acquisition (in one or a series of transactions) of Property of another Person that constitutes a business unit or (d) the entering into of any guarantee of, or other contingent obligation (including the deposit of any Equity Interests to be
sold) with respect to, Debt or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person. 
 “Investment Grade Rating” means (i) Debt Ratings of at least Baa3 by Moody’s and at least BBB- by S&P or (ii) a Debt Rating by either Moody’s or S&P as described in clause
(i) and a Debt Rating from the other rating agency that is not more than one level below the Debt Rating described in clause (i). 
 “Issuing Bank” means JPMorgan 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 an 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 $150,000,000. 
 “LC Disbursement” means a payment made by any Issuing Bank pursuant
to a Letter of Credit issued by such Issuing Bank. 
  

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 “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn and
unexpired stated 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” means the Persons listed on
Annex I and any Person that shall have become a party hereto pursuant to Section 2.09 or pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. 

“Letter of Credit” means any letter of credit issued pursuant to this Agreement. 
 “Letter of Credit Agreements” means all letter of credit applications and other agreements (including any amendments, modifications or
supplements thereto) submitted by the Borrower, or entered into by the Borrower, with 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 at Reuters Reference LIBOR01 (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 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
$5,000,000 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) production payments and the like payable
out of Oil and Gas Properties. The term “Lien” shall include easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations. 
 “Loan Documents” means this Agreement, the Notes, all Letter of Credit Agreements, the Letters of Credit and the Security Instruments.

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

 14 

 “Majority Lenders” means, at any time while no Loans or LC Exposure is outstanding,
Lenders having more than 50% of the Aggregate Maximum Credit Amounts; and at any time while any Loans or LC Exposure is outstanding, Lenders holding more than 50% of the outstanding aggregate principal amount of the Loans and 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 or financial condition of the Borrower and the Restricted Subsidiaries taken as a whole, excluding the effect of
events, developments and circumstances affecting the oil and gas exploration and production industry generally, (b) the validity or enforceability of any of the Loan Documents taken as a whole or the ability of the Borrower and the Restricted
Subsidiaries, taken as a whole, to perform any of their respective obligations under any Loan Document or (c) the rights and remedies of or benefits available to the Administrative Agent, any Issuing Bank or any Lender under any Loan Document.

 “Material Domestic Restricted Subsidiary” means each Restricted Subsidiary that is a Domestic Subsidiary and owns assets
representing 10% or more of the total assets of the Borrower and its Restricted Subsidiaries or whose EBITDAX represents 10% or more of the EBITDAX of the Borrower and its Restricted Subsidiaries. For purposes of this definition, the total assets
and EBITDAX of the Borrower and its Restricted Subsidiaries shall be determined as of the end of the Borrower’s most recent fiscal year for which financial statements are available. 
 “Material Indebtedness” means Debt (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap
Agreements, of any one or more of the Borrower and its Restricted Subsidiaries in an aggregate principal amount exceeding $50,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the
Borrower or any Restricted Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement
were terminated at such time. 
 “Material Title Defect” has the meaning assigned such term in Section 8.12(a).

 “Maturity Date” means April 23, 2012. 
 “Maximum Credit Amount” means, as to each Lender, the amount set forth opposite such Lender’s name on Annex I under the caption “Maximum Credit Amounts”, as the same may be
(a) reduced or terminated from time to time in connection with a reduction or termination of the Aggregate Maximum Credit Amounts pursuant to Section 2.06(b), (b) increased pursuant to Section 2.09, (c) modified from time to
time pursuant to any assignment permitted by Section 12.04(b) or (d) amended by the addition of a new Increasing Lender pursuant to Section 2.09. 
 “Minimum Liquidity” means, as of any date of determination, the sum of (a) the aggregate unused amount of the Commitments under this Agreement as of such date and (b) all unrestricted and
unencumbered cash and Investments of the type described in Section 9.06(c), (d), (e) and (f) reflected on the Borrower’s balance sheet as of such date. 
  

 15 

 “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 the Borrower or any Restricted
Subsidiary which is subject to the Liens existing and to exist under the terms of the Security Instruments. 
 “Mortgage Release
Date” means the earlier to occur of (i) the date that the Borrower obtains an Investment Grade rating and (ii) the date upon which the Commitments have been terminated, no Note is outstanding, all Loans have been repaid in full,
all Letters of Credit have been terminated and all Indebtedness then due and payable has been paid in full. 
 “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). 
 “Non-Recourse Debt” means any Debt of any
Unrestricted Subsidiary or other Person in which the Borrower or a Restricted Subsidiary made an Investment permitted by Section 9.06(h), in each case in respect of which: (a) the holder or holders thereof (i) shall have recourse only
to, and shall have the right to require the obligations of such Unrestricted Subsidiary or such Person to be performed, satisfied, and paid only out of, the Property of such Unrestricted Subsidiary or such Person and/or one or more of its
Subsidiaries (but only to the extent that such Subsidiaries are Unrestricted Subsidiaries or not Subsidiaries of the Borrower) and/or any other Person (other than the Borrower and/or any Restricted Subsidiary) or the Equity Interests of such
Unrestricted Subsidiary, such Person or such Subsidiaries and (ii) shall have no direct or indirect recourse (including by way of guaranty, support or indemnity) to the Borrower or any Restricted Subsidiary or to any of the Property of Borrower
or any Restricted Subsidiary (other than the Equity Interests of such Unrestricted Subsidiary or Person), whether for principal, interest, fees, expenses or otherwise; and (b) the terms and conditions relating to the non-recourse nature of such
Debt are in form and substance reasonably acceptable to the Administrative Agent. 
 “Notes” means 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” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with
Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of
any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, transportation, 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 

  

 16 

 
Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or
useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping
units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases,
rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing. 
 “Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or Property taxes, charges or similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this Agreement and any other Loan Document. 
 “Participant” has the meaning set forth in Section 12.04(c)(i). 
 “PBGC” means the Pension
Benefit Guaranty Corporation, or any successor thereto. 
 “Permitted Additional Debt” means Debt permitted to be incurred
pursuant to Section 9.02(i). 
 “Permitted Additional Debt Instruments” means the indentures, promissory notes, credit
agreements and other instruments pursuant to which Permitted Additional Debt has been issued or incurred, as amended or supplemented as permitted by Section 9.02(i). 
 “Permitted Holders” means (i) James C. Flores and his spouse and lineal descendants, their respective estates or legal representatives, (ii) trusts created for the benefit of such Persons
and (iii) entities of which 80% or more of the Equity Interest having ordinary voting power is directly or indirectly owned by any of the preceding Persons. 
 “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. 
 “Plan” means any employee pension benefit plan, as defined in section 3(2) of ERISA, which (a) is currently or hereafter sponsored,
maintained or contributed to by the Borrower, a Subsidiary or an ERISA Affiliate or (b) was at any time during the six calendar years preceding the date hereof, sponsored, maintained or contributed to by the Borrower or a Subsidiary or an ERISA
Affiliate. 
 “Point Arguello Partnerships” means the following partnerships of which Arguello Inc. is a managing general
partner: (i) Gaviota Gas Plant Company, (ii) Point Arguello Natural Gas Line Company, (iii) Point Arguello Pipeline Company and (iv) Point Arguello Terminal Company. 
  

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

 “Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or
intangible, including, without limitation, cash, securities, accounts and contract rights. 
 “Proposed Borrowing Base” has
the meaning assigned to such term in Section 2.07(c)(i). 
 “Proposed Borrowing Base Notice” has the meaning assigned
to such term in Section 2.07(c)(ii). 
 “Redemption” means with respect to any Debt, the repurchase, redemption,
prepayment, repayment, defeasance or any other acquisition or retirement for value (or the segregation of funds with respect to any of the foregoing) of such Debt. “Redeem” has the correlative meaning thereto. 
 “Redetermination Date” means, with respect to any Scheduled Redetermination or any Interim Redetermination, the date that the
redetermined Borrowing Base related thereto becomes effective pursuant to Section 2.07(d). 
 “Register” has the
meaning assigned such term in Section 12.04(b)(iv). 
 “Regulation D” means Regulation D of the Board, as the same may
be amended, supplemented or replaced from time to time. 
 “Related Parties” means, with respect to any specified Person,
such Person’s Affiliates and the respective directors, officers, employees, agents and attorneys, accountants and experts of such Person and such Person’s Affiliates. 
 “Release Date” means the earlier of (i) the date the Borrower obtains an Investment Grade Rating and (ii) the date on which
the Commitments have terminated, all Loans, interest, fees and other amounts (other than obligations for taxes, costs, indemnifications, reimbursements and damages in respect of which no claim has been made and which survive the termination of this
Agreement) have been paid, all LC Disbursements have been reimbursed, and all Letters of Credit have been terminated or expired. 
 “Remedial Work” has the meaning assigned such term in Section 8.09(a). 
  

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 “Required Lenders” means, at any time while no Loans or LC Exposure is outstanding,
Lenders having at least 90% of the Aggregate Maximum Credit Amounts; and at any time while any Loans or LC Exposure is outstanding, Lenders having not less than 90% of the outstanding aggregate principal amount of the Loans and 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)). 
 “Reserve Report” means a report, in form and substance reasonably satisfactory to the Administrative Agent, setting forth, as of each December 31st (or such other date in the event of an Interim Redetermination) the
proved oil and gas reserves attributable to Oil and Gas Properties of the Borrower and the Restricted Subsidiaries, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with
respect thereto as of such date, based upon the pricing assumptions consistent with SEC reporting requirements at the time. For the avoidance of doubt, any reference in the Credit Agreement (including Sections 8.12, 8.13 and 9.12) to Oil and Gas
Properties described, included or evaluated in a Reserve Report shall be deemed to exclude possible or probable oil and gas reserves attributable to such Oil and Gas Properties. 
 “Responsible Officer” means, as to any Person, the Chief Executive 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. 
 “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in the Borrower or any of its Subsidiaries, 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 the Borrower or any of its Subsidiaries or any
option, warrant or other right to acquire any such Equity Interests in the Borrower or any of its Subsidiaries. 
 “Restricted
Subsidiary” means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary. 
 “Revolving Credit
Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Loans and its LC Exposure at such time. 
 “Scheduled Redetermination” has the meaning assigned such term in Section 2.07(b). 
 “Scheduled Redetermination Date” means the date on which a Borrowing Base that has been redetermined pursuant to a Scheduled
Redetermination becomes effective as provided in Section 2.07(d). 
 “SEC” means the Securities and Exchange Commission
or any successor Governmental Authority. 
 “Security Instruments” means the Guaranty Agreement, mortgages, deeds of trust
and other agreements, instruments or certificates described or referred to in Exhibit C-1, and any and all other agreements, instruments or certificates now or hereafter executed and delivered by the 

  

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Borrower or any other Person (other than Swap Agreements with the Lenders or any Affiliate of a Lender or participation or similar agreements between any
Lender and any other lender or creditor with respect to any Indebtedness pursuant to this Agreement) in connection with, or as security for the payment or performance of the Indebtedness, the Notes, this Agreement, or reimbursement obligations under
the Letters of Credit, as such agreements may be amended, modified, supplemented or restated from time to time. 
 “Senior
Indenture” means the Indenture dated as of March 13, 2007, among the Borrower, as issuer, the guarantors party thereto and Wells Fargo Bank, N.A., as trustee, pursuant to which the Senior Notes were issued, as amended or supplemented
as permitted by Section 9.05. 
 “Senior Notes” means the $500,000,000 aggregate principal amount of 7% Senior Notes
due 2017 issued by the Borrower pursuant to the Senior Indenture. 
 “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 for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage. 
 “Subsidiary” means: (a) any Person of which at least a majority of the outstanding
Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors, manager or other governing body of such Person (irrespective of whether or not at the time Equity Interests of any other class or
classes of such Person have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by the Borrower or one or more of its Subsidiaries or by the Borrower and one or more of
its Subsidiaries and (b) any partnership of which the Borrower or any of its Subsidiaries is a general partner other than the Point Arguello Partnerships; provided, however, that neither Sepulveda Oil and Gas Company nor Nuevo Energy Company
shall be a Subsidiary of the Borrower. Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower. 
 “Super-majority Lenders” means, at any time while no Loans or LC Exposure are outstanding, Lenders having at least 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 66-2/3% of the outstanding aggregate principal amount of the Loans and 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)). 
  

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 “Swap Agreement” means any agreement with respect to any swap, cap, collar, 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, 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 Borrower or the Subsidiaries shall be a Swap Agreement. 
 “Taxes” means 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. 
 “Transactions” means, with respect to (a) the Borrower, the execution, delivery and performance by the
Borrower of this Agreement and each other Loan Document, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder, and the grant of Liens by the Borrower on Mortgaged Properties and other Properties
pursuant to the Security Instruments, (b) each Guarantor, the execution, delivery and performance by such Guarantor of each Loan Document, the guaranteeing of the Indebtedness and the other obligations under the Guaranty Agreement by such
Guarantor and such Guarantor’s grant of the security interests and provision of collateral pursuant to the Security Instruments, and the grant of Liens by such Guarantor on Mortgaged Properties and other Properties pursuant to the Security
Instruments and (c) each Restricted Subsidiary, the execution, delivery and performance by such Guarantor of each Loan Document, and such Restricted Subsidiary’s grant of the security interests and provision of collateral pursuant to the
Security Instruments, and the grant of Liens by such Restricted Subsidiary 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 any Subsidiary of the Borrower designated as such on
Schedule 7.11 or which the Borrower has designated in writing to the Administrative Agent to be an Unrestricted Subsidiary pursuant to Section 9.07. 
 “Wholly-Owned Subsidiary” means any Restricted Subsidiary of which all of the outstanding Equity Interests (other than any directors’ qualifying shares mandated by applicable law), on a
fully-diluted basis, are owned by the Borrower or one or more of the Wholly-Owned Subsidiaries or are owned by the Borrower and one or more of the Wholly-Owned Subsidiaries. 
  

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 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 in the Loan Documents), (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 in the Loan Documents), (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. 
 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 Administrative Agent or the Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with the Financial
Statements 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, if (i) the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof
in GAAP or in the application thereof on the operation of or calculation of compliance with such provision or (ii) the Administrative Agent notifies the Borrower that the Majority Lenders request an amendment to any provision hereof for such
purpose, regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. 
  

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 ARTICLE II 
 The Credits 
 Section 2.01 Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Loans to the Borrower during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or
(b) the total Revolving Credit Exposures exceeding the total Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, repay and reborrow the Loans. 
 Section 2.02 Loans and Borrowings. 
 (a) Borrowings; Several Obligations. Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required
to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. 
 (b) Types of Loans. Subject to Section 3.03, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or 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. No such designation or transfer shall result in any liability on the part of the Borrower for increased costs or expenses resulting solely from such designation or
transfer (except any such transfer which is made by a Lender pursuant to Section 5.04 or Section 5.05, or otherwise for the purpose of complying with any Governmental Requirement). Increased costs for expenses resulting from a change in
law occurring subsequent to any such designation or transfer shall be deemed not to result solely from such designation or transfer. 
 (c)
Minimum Amounts; Limitation on Number of Borrowings. Each Eurodollar Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. Each ABR Borrowing shall be in an aggregate amount that is
an integral multiple of $100,000 and not less than $1,000,000; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments 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 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. If requested by a Lender, the Loans made by such Lender shall be evidenced by a single promissory note of the Borrower 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 Effective Date, (ii) any other Lender, as of the date such Lender becomes a party hereto, payable to the order of such
Lender in a principal amount equal to its Maximum Credit Amount as in 

  

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effect on such date, and otherwise duly completed. In the event that any Lender’s Maximum Credit Amount increases or decreases for any reason (whether
pursuant to Section 2.06, Section 2.09, Section 12.04(b) or otherwise) and at such Lender’s request, 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 such Lender in a principal amount equal to its Maximum Credit Amount after giving effect to such increase or decrease, and otherwise duly completed. The date, amount, Type, interest rate and, if applicable, Interest Period of each Loan
made by each Lender, and all payments made on account of the principal thereof, 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. 
 (e) On the Effective Date (or as soon as practicable after the Effective Date
with respect to (iii)): 
 (i) the Borrower shall pay all accrued and unpaid commitment fees, break funding fees under
Section 5.02, if any, associated with refunded “Eurodollar Loans” outstanding under the Existing Credit Agreement and all other fees that are outstanding under the Existing Credit Agreement for the account of each “Lender”
or “Issuing Bank” under the Existing Credit Agreement; 
 (ii) each “ABR Loan” outstanding under the
Existing Credit Agreement shall be deemed to be repaid with the proceeds of a new ABR Loan under this Agreement; and each “Eurodollar Loan” outstanding under the Existing Credit Agreement shall be repaid with the proceeds of a new
Eurodollar Loan under this Agreement made by the Lenders in accordance with their respective Applicable Percentage of the Borrowing; 
 (iii) each “Lender” under the Existing Credit Agreement shall deliver to the Borrower as soon as practicable after the Effective Date any promissory note issued by the Borrower to it under the Existing Credit Agreement, marked
“canceled” or otherwise similarly defaced; 
 (iv) any “Letters of Credit” issued under the Existing
Credit Agreement shall be deemed issued under this Agreement (without payment of additional fees); and 
 (v) the Existing
Credit Agreement and the commitments thereunder shall be superceded by this Agreement and such commitments shall terminate. 
 (f) It is the
intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities existing under the Existing Credit Agreement or evidence repayment of any such obligations and liabilities and that this Agreement amend
and restate in its entirety the Existing Credit Agreement and re-evidence the obligations of the Borrower outstanding thereunder. 
 Section 2.03 Requests for Borrowings. To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar 

  

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Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time, on the date 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 such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative
Agent and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02: 
 (i) the aggregate amount of the requested Borrowing; 
 (ii) the date of such Borrowing, which shall be a Business Day; 
 (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; 
 (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by
the definition of the term “Interest Period”; and 
 (v) 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.

 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. No such conversion or continuation shall be deemed the making of a
new Borrowing for purposes of this Agreement, including without limitation ARTICLE VI. 
  

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 (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 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 such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower. 
 (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. 
  

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 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 City 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 Houston, Texas 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. Nothing herein shall be deemed to obligate any Lender to obtain the
funds for its Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for its Loan in any particular place or manner. 
 (b) Presumption of Funding by the Lenders. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of
any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with
Section 2.05(a) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing. 
 Section 2.06 Termination and Reduction of Aggregate Maximum Credit Amounts. 
 (a) Scheduled Termination of Commitments. Unless previously terminated, the Commitments shall terminate on the Maturity Date. If at any time the
Aggregate Maximum Credit Amounts or the Borrowing Base is terminated or reduced to zero, then the Commitments shall terminate on the effective date of such termination or reduction. 
 (b) Optional Termination and Reduction of Aggregate Credit Amounts. 
 (i) The Borrower may at any time terminate, or from time to time reduce, the Aggregate Maximum Credit Amounts; provided that (A) each
reduction of the Aggregate Maximum Credit Amounts shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (B) the Borrower shall not terminate or reduce the Aggregate Maximum Credit Amounts if, after
giving effect to any concurrent prepayment of the Loans in accordance with Section 3.04(c), the total Revolving Credit Exposures would exceed the total Commitments. 
  

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 (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. Each reduction of the Aggregate Maximum Credit Amounts shall be made ratably among the Lenders in accordance with each Lender’s Applicable Percentage. 
 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 $1,000,000,000. Notwithstanding the foregoing, the Borrowing
Base may be subject to further adjustments from time to time, whether before or after the first Redetermination Date, pursuant to Section 8.12(c), Section 9.02(i) or Section 9.12. 
 (b) Scheduled and Interim Redeterminations. Subject to Section 2.07(d), the Borrowing Base shall be redetermined (a “Scheduled
Redetermination”) on May 1st of each year, commencing May 1, 2008. In addition, the Borrower may, by notifying the Administrative Agent thereof, and the Administrative Agent may, at the direction of the Super-majority Lenders, by
notifying the Borrower thereof, each elect to cause the Borrowing Base to be redetermined one time between Scheduled Redeterminations (an “Interim Redetermination”) in accordance with this Section 2.07. 
 (c) Scheduled and Interim Redetermination Procedure. 
 (i) Each Scheduled Redetermination and each Interim Redetermination shall be effectuated as follows: Upon receipt by the Administrative Agent of (A) the Reserve Report and the certificate required to be delivered
by the Borrower to the Administrative Agent, in the case of a Scheduled Redetermination, pursuant to Section 8.11(a) and (c), and, in the case of an Interim Redetermination, pursuant to Section 8.11(b) and (c), and (B) such other
reports, data and supplemental information as may, from time to time, be reasonably requested by 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 Oil and Gas Properties as described in the Engineering Reports and the existence of any other Debt) as the Administrative Agent deems
appropriate and consistent with its normal oil and gas lending criteria as it exists at the particular time. 
  

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 (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 8.11(a) and (c) in a timely and complete manner, then on or before the April 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 8.11(a) and (c) in a timely and complete manner, then
promptly after the Administrative Agent has received complete Engineering Reports from the Borrower and has had a reasonable opportunity to determine the Proposed Borrowing Base in accordance with Section 2.07(c)(i); and 
 (B) in the case of an Interim Redetermination, promptly, and in any event, within 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 the Required 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 Super-majority Lenders as provided in this Section 2.07(c)(iii). Upon receipt of the Proposed Borrowing Base Notice, each Lender shall have 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 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, the Required Lenders, in the case of a Proposed Borrowing Base that would increase the Borrowing Base then in effect, or the Super-majority Lenders, in the case of a Proposed
Borrowing Base that would decrease or maintain the Borrowing Base 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, the Required Lenders or the Super-majority Lenders, as applicable, have not approved or deemed to have approved, as aforesaid, then the Administrative Agent shall poll the Lenders
to ascertain the highest Borrowing Base then acceptable to a number of Lenders sufficient to constitute the Required Lenders or the Super-majority Lenders, as applicable, and 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 the Required Lenders or the Super-majority 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 

  

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Borrower pursuant to Section 8.11(a) and (c) in a timely and complete manner, then on the May 1st following such notice, or (B) if the
Administrative Agent shall not have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 8.11(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 8.12(c), Section 9.02(i) 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. 
 Section 2.08 Letters of Credit. 
 (a) General. Subject to the terms and conditions set forth herein, the Borrower may request any Issuing Bank to issue dollar denominated Letters of
Credit for its own account or for the account of any of its Restricted Subsidiaries, 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; provided,
however, that (i) no Letter of Credit shall be issued if, after such issuance, the LC Exposure would exceed the lesser of (A) the LC Commitment and (B) an amount equal to the aggregate Commitments minus the aggregate Revolving Credit
Exposure and (ii) the Borrower shall not request the issuance of a Letter of Credit to support a Swap Agreement permitted under Section 9.17 if such issuance would cause the aggregate face amount of all Letters of Credit securing such Swap
Agreements to exceed $50,000,000. 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 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 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)); 
  

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 (iv) specifying the amount of such Letter of Credit; and 
 (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. 
 If requested by any Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing
Bank’s standard form in connection with any request for a Letter of Credit. 
 (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 or extension thereof, one year after such renewal or extension) and
(ii) the date that is five Business Days prior to the Maturity Date; provided, however, that any Letter of Credit with a one-year tenor may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond
the date referred to in clause (ii) above). 
 (d) Participations. By the issuance of a Letter of Credit (or an amendment to a
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 City 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 City 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 City 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 City 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 equal to or greater than $1,000,000, the Borrower shall, subject to the conditions to Borrowing set forth herein, be deemed to
have 

  

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requested, and the Borrower does hereby request under such circumstances, that such LC Disbursement 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. For purposes of the first sentence of Section 2.01, the amount of the ABR Borrowing shall be
considered, but the amount of the LC Disbursement to be concurrently reimbursed shall not be considered. 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 an 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 

  

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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 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 2.08(h) 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 2.08(e) 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 retiring 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 retiring 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 “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 retiring 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 2.08(j), or (ii) the Borrower is required to pay to the Administrative Agent the excess
attributable to an LC Exposure in connection with any prepayment pursuant to Section 3.04(c), then the Borrower shall deposit, in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to, in the case of an Event of Default, the LC Exposure, and in the case of a payment required by Section 3.04(c), the amount of such excess as provided in Section 3.04(c), as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective 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 described in Section 10.01(h) or Section 10.01(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 2.08(j) 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. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. 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. In the event of any such payment by the Borrower of amounts contingently owing under outstanding Letters of Credit and in the event that thereafter drafts or other demands for payment complying with the terms of such
Letters of Credit are not made on or prior to the respective expiration dates thereof, the Administrative Agent agrees, if no Event of Default is then continuing or if no other amounts are then outstanding under this Agreement, the Notes or the Loan
Documents, to remit to the Borrower amounts for which the contingent obligations 

  

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evidenced by the Letters of Credit have ceased. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, and the Borrower is not otherwise required to pay to the Administrative Agent the excess attributable to an LC Exposure in connection with any prepayment pursuant to Section 3.04(c), then such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived. 
 Section 2.09 Increase in the Revolving Loan Maximum Credit Amounts. 
 (a) The Borrower may on no more than five
occasions during the period beginning on the date hereof to and including the date that is six months prior to the Maturity Date, by written notice to the Administrative Agent executed by the Borrower and one or more financial institutions (any such
financial institution executing such notice being called an “Increasing Lender”), which may include any Lender, cause the Maximum Credit Amounts to be extended by the Increasing Lenders if such Increasing Lender is not already a
Lender (or cause the Maximum Credit Amounts of the Increasing Lenders that are already Lenders to be increased, as the case may be) in an amount for each Increasing Lender set forth in such notice; provided, that (i) each extension of new
Maximum Credit Amounts or increase in existing Maximum Credit Amounts pursuant to this paragraph shall result in the aggregate Maximum Credit Amounts being increased by no less than $25,000,000, (ii) no extension of new Maximum Credit Amounts
or increase in existing Maximum Credit Amounts pursuant to this paragraph may result in the aggregate Maximum Credit Amounts exceeding $1,150,000,000 without the approval of all Lenders, (iii) each Increasing Lender shall be subject to the
approval of the Administrative Agent (which approval shall not be unreasonably withheld or delayed), (iv) each Increasing Lender, if not already a Lender hereunder, shall become a party to this Agreement by completing and delivering to the
Administrative Agent a duly executed joinder agreement in a form reasonably satisfactory to the Administrative Agent and the Borrower (a “Joinder Agreement”), (v) any Lender requested by Borrower to become an Increasing Lender
may elect, or decline, such request in its sole discretion, (vi) since December 31, 2006, no event has occurred that has had or could reasonably be expected to have a Material Adverse Effect, and (vii) no Default or Event of Default
has occurred and is continuing. New Maximum Credit Amounts and increases in Maximum Credit Amounts shall become effective on the date specified in the applicable notices delivered pursuant to this paragraph. 
 (b) Upon the effectiveness of any Joinder Agreement to which any Increasing Lender is a party, (i) such Increasing Lender shall thereafter be deemed
to be a party to this Agreement and shall be entitled to all rights, benefits and privileges accorded a Lender hereunder and subject to all obligations of a Lender hereunder and (ii) Annex I shall be deemed to have been amended to reflect the
Maximum Credit Amount of such Increasing Lender as provided in such Joinder Agreement. Upon the effectiveness of any increase pursuant to this Section 2.09 in the Maximum Credit Amount of a Lender already a party hereto, Annex I shall be deemed
to have been amended to reflect the increased Maximum Credit Amount of such Lender. Notwithstanding the foregoing, no increase in the aggregate Maximum Credit Amounts (or in the Maximum Credit Amount of any Lender) shall become effective under this
Section unless, on the date of such increase, the Administrative Agent shall have received a certificate, dated as of the effective date of such increase and executed by a Financial Officer of the Borrower, to the effect that the conditions set
forth in paragraphs (a), (b), (c), (d) and (e) of Section 6.02 shall be satisfied (with all references in such paragraphs to a Borrowing being deemed to be references to such increase and attaching resolutions of the Borrower
approving such increase). 
  

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 (c) The Borrowers shall prepay any Loans outstanding prior to the effectiveness of such increase or
extension, together with any amounts due pursuant to Section 5.02, with new Loans made pursuant to Section 2.01 ratably in accordance with the Maximum Credit Amounts in effect following such extension or increase. 
 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) Default Rate. Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower or
any Guarantor 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
(i) in the case of overdue principal of any Loan, the lesser of (A) the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section plus 2%, and with respect to any Eurodollar Loan, after the expiration
of the Interest Period in which such Event of Default arose, the Default Rate, or (B) the Highest Lawful Rate or (ii) in the case of any other amount, the lesser of (A) the Default Rate or (B) 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 3.02(c) shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than an optional prepayment of an ABR Loan prior to the
Termination Date), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion (but only to the extent so converted). 
 (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 

  

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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. 
 Section 3.03 Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar
Borrowing: 
 (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest Period; or 
 (b) the Administrative
Agent is advised by the Majority Lenders that the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period; 
 then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as
promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of
any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing. 
 Section 3.04 Prepayments. 
 (a)
Optional Prepayments. The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with Section 3.04(b). 
 (b) Notice and Terms of Optional Prepayment. The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing, not
later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid. Promptly following receipt
of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of
the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 3.02.

  

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 (c) Mandatory Prepayments. 
 (i) If, after giving effect to any termination or reduction of the Aggregate Maximum Credit Amounts pursuant to Section 2.06(b), the
total Revolving Credit Exposures exceeds the total Commitments, then the Borrower shall (A) prepay the Borrowings on the date of such termination or reduction in an aggregate principal amount equal to such excess, and (B) if any excess
remains after prepaying all of the Borrowings as a result of an LC Exposure, pay to the Administrative Agent on behalf of the Lenders an amount equal to such excess to be held as cash collateral as provided in Section 2.08(j). 
 (ii) Upon any redetermination of or adjustment to the amount of the Borrowing Base in accordance with Section 2.07 or
Section 8.12(c), if the total Revolving Credit Exposures exceeds the redetermined or adjusted Borrowing Base, 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 2.08(j). The
Borrower shall be obligated to make 50% of such prepayment and/or deposit of cash collateral within 90 days following its receipt of the New Borrowing Base Notice in accordance with Section 2.07(d) or the date the adjustment occurs and to make
the balance of such prepayment within 180 days of such date; provided that all payments required to be made pursuant to this Section 3.04(c)(ii) must be made on or prior to the Termination Date. 
 (iii) Upon any adjustments to the Borrowing Base pursuant to Section 9.12, if the total Revolving 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 2.08(j). The Borrower shall be obligated to make such prepayment and/or deposit of cash collateral on the date
it or any Subsidiary receives proceeds as a result of such disposition; provided that all payments required to be made pursuant to this Section 3.04(c)(iii) must be made on or prior to the Termination Date. 
 (iv) Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be applied, first, ratably to any ABR Borrowings then
outstanding, and, second, to any Eurodollar Borrowings then outstanding, 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 3.04(c) shall be applied ratably to the Loans included in the prepaid
Borrowings. Prepayments pursuant to this Section 3.04(c) shall be accompanied by accrued interest to the extent required by Section 3.02. 
  

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 (d) No Premium or Penalty. Prepayments permitted or required under this Section 3.04 shall be
without premium or penalty, except as required under Section 5.02. 
 Section 3.05 Fees. 
 (a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at
the applicable Commitment Fee Rate on the average daily amount of the unused amount of the Commitment of such Lender during the period from and including the Effective Date 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 Effective Date. All commitment fees 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 Effective Date 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 a
fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of that portion of the LC Exposure attributable to such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date 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 attributable to such Issuing Bank, provided that (A) in no
event shall such fee be less than $125 during any quarter and (B) if the expiration date of the Letter of Credit is less than one year after its date of issuance and the aggregate fronting fee otherwise payable through its expiration would be
less than $500, then the Borrower shall pay to the Issuing Bank $500 upon the issuance of such Letter of Credit in lieu of the fronting fee otherwise payable, and (iii) to each Issuing Bank, for its own account, its standard fees with respect
to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year, shall
be payable on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date; 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 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). 
  

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 (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. 
 ARTICLE
IV 
 Payments; Pro Rata Treatment; Sharing of Set-offs. 
 Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of Set-offs. 
 (a) Payments by the Borrower. The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 5.01, Section 5.02, Section 5.03 or otherwise) prior to 12:00 noon, New York City time, on the date when due (for purposes of computing interest and fees, each
such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day), in immediately available funds, without defense, deduction, recoupment, set-off or counterclaim. Fees, once paid, shall not be
refundable under any circumstances. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its offices specified in Section 12.01, except payments to be made directly to an Issuing Bank as expressly provided herein and except that payments pursuant to
Section 5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to
the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars. 
 (b) Application of Insufficient Payments. If at any time 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. 
 (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 

  

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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 2.08(e) or Section 4.02 then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all
such unsatisfied obligations are fully paid. 
 Section 4.04 Disposition of Proceeds. The Security Instruments contain an
assignment by the Borrower and/or the Guarantors unto and in favor of the Administrative Agent for the benefit of the Lenders of all of the Borrower’s or each Guarantor’s interest in and to production and all proceeds attributable thereto
which may be produced from or allocated to the Mortgaged Property. The Security Instruments further provide in general for the application of such proceeds to the satisfaction of the Indebtedness and other obligations described therein and secured
thereby. Notwithstanding the assignment contained in such Security Instruments, until the occurrence of an Event of Default, (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. 
  

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 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, but not including Excluded Taxes), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred
or reduction suffered. 
 (b) Capital Requirements. If any Lender or 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 Borrower 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. 
 (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 5.01(a) or (b) shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower 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 5.01 shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such 

  

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compensation; provided that the Borrower shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section 5.01 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 5.04(b), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such
event (exclusive of any lost profits or opportunity costs). In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount
for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. 
 A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. 
 Section 5.03 Taxes. 
 (a)
Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower or any Guarantor under any Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided
that if the Borrower 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 Administrative 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 Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. 
  

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 (b) Payment of Other Taxes by the Borrower. The Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law. 
 (c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative 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 the Administrative 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 the Borrower 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; provided that the Borrower shall
not be required to indemnify the Administrative Agent, any Lender or any Issuing Bank for any amounts under this Section 5.03(c) to the extent that such Person fails to notify the Borrower of its intent to make a claim for indemnification under
this Section 5.03(c) within 180 days after a claim is asserted against such Person by the relevant Governmental Authority. A certificate of the Administrative 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 the Borrower 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 the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to Section 5.03, it shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under Section 5.03 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section 5.03(f) shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower
or any other Person. 
  

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 Section 5.04 Mitigation Obligations; Replacement of Lenders. 
 (a) Designation of Different Lending Office. If any Lender requests compensation under Section 5.01, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.03, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to
Section 5.01 or Section 5.03, 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 Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender solely as a result of such designation or assignment. 
 (b) Replacement of
Lenders. If (i) any Lender requests compensation under Section 5.01, or (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.03, or (iii) any Lender defaults in its obligation to fund Loans hereunder or (iv) any Lender has asserted that any adoption or change of the type described in Section 5.05 has occurred, or (v) any Lender fails to
approve an amendment, waiver or other modification to this Credit Agreement that requires the approval of all Lenders and at least the Super-majority Lenders have approved such amendment, waiver or other modification, or (vi) any Lender fails
to approve an increase in the Borrowing Base and at least the Super-majority Lenders have approved such increase, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.04(b)), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided that (i) if such assignee is not a Lender, the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation
under Section 5.01 or payments required to be made pursuant to Section 5.03, such assignment will result in a reduction in such compensation or payments. 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: 
 (a) 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 

  

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particular Interest Period hereunder, then (i) 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 (ii) 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; and 
 (b) If it becomes unlawful for any Lender or its applicable lending office to honor its obligation to make
any Loans to the Borrower, then such Lender shall promptly notify the Borrower and the Administrative Agent thereof and such Lender’s obligation to make Loans shall be suspended until such time as such Lender may again make and maintain Loans
to the Borrower. The Borrower shall have no obligation to pay to such Lender the commitment fee described in Section 3.05(a) that would otherwise accrue during such period of suspension. 
 ARTICLE VI 
 Conditions Precedent 
 Section 6.01 Effective Date. 
 The obligations of the Lenders to amend and restate the Existing Credit Agreement, to make Loans and of any Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 12.02): 
 (a) The Administrative Agent, the Arranger and the Lenders shall
have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses for which invoices have been presented required to be reimbursed or
paid by the Borrower hereunder. 
 (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary
of the Borrower and of each Guarantor dated as of the Effective Date setting forth (i) resolutions of its board of directors with respect to the authorization of the Borrower or such Guarantor to execute and deliver the Loan Documents to which
the Borrower or such Guarantor is a party and to enter into the transactions contemplated in those documents, (ii) the officers of the Borrower or such Guarantor (y) who are authorized to sign the Loan Documents to which the Borrower or
such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in
connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation and bylaws of the Borrower and such Guarantor, certified
as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. 
  

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 (c) The Administrative Agent shall have received certificates of the appropriate State agencies with
respect to the existence, qualification and good standing of the Borrower and each Guarantor. 
 (d) The Administrative Agent shall have
received a compliance certificate which shall be substantially in the form of Exhibit B, duly and properly executed by a Responsible Officer 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 duly executed Notes payable to the order
of each Lender in a principal amount equal to its Maximum Credit Amount dated as of the Effective Date. 
 (g) 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
C-1. In connection with the execution and delivery of the Security Instruments, the Administrative Agent shall: 
 (i) be
reasonably satisfied that the Security Instruments create first priority, perfected Liens (subject only to Excepted Liens identified in clauses (a) to (d) and (f) of the definition thereof, but subject to the provisos at the end of
such definition and the Liens described on Schedule 9.03) on at least 75% of the total value of the Oil and Gas Properties evaluated in the Initial Reserve Report; and 
 (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and
outstanding Equity Interests of each Domestic Subsidiary that is a Restricted Subsidiary and not less than 65% of all of the issued and outstanding capital stock of each Foreign Subsidiary that is a Restricted Subsidiary that is directly owned by
either the Borrower or a Domestic Subsidiary that is a Restricted Subsidiary. 
 (h) The Administrative Agent shall have received an opinion
dated as of the Effective Date of Bracewell & Giuliani LLP, special counsel to the Borrower, in form and substance reasonably satisfactory to the Administrative Agent. 
 (i) The Administrative Agent shall have received the financial statements referred to in Section 7.04(a) and the Initial Reserve Report. 

(j) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the personal property
related to the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries for each of the following jurisdictions: Delaware, Texas, California, Louisiana, New Mexico, Oklahoma and any other jurisdiction requested by the Administrative
Agent; other than those being assigned or released on or prior to the Effective Date or Liens permitted by Section 9.03. 
  

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 (k) The Administrative Agent shall have received a letter from CT Corporation evidencing the appointment
of CT Corporation as authorized agent for service of process on each of the Borrower and each Obligor (as defined in the Guaranty Agreement) under each Loan Document to which it is a party. 
 (l) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may
reasonably request. 
 The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be
conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of any Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 12.02) at or prior to 3:00 p.m., New York City time on May 15, 2007 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time). 
 Section 6.02 Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing (including the initial funding)
(excluding any Loan made pursuant to Section 2.08(e)), and of any Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions: 
 (a) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing. 
 (b) At the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Material Adverse Effect shall have occurred. 
 (c)
The representations and warranties of the Borrower and the Guarantors set forth in this Agreement and in the other Loan Documents shall be true and correct in all material respects 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 in all material respects as of such specified earlier date. 
 (d) The pro forma total Revolving Credit Exposures (after giving effect to the requested Borrowing or the issuance of the requested Letter of Credit)
shall not exceed the aggregate Commitments. 
 (e) The Administrative Agent shall have received a Borrowing Request in accordance with
Section 2.03 or a request for a Letter of Credit in accordance with Section 2.08(b), as applicable. 
 Each Borrowing (excluding
any Borrowing made pursuant to Section 2.08(e)) 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 6.02(a) through (d). 
  

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 ARTICLE VII 
 Representations and Warranties 
 The Borrower represents and warrants to the Lenders that:

 Section 7.01 Organization; Powers. Each of the Borrower and the Restricted Subsidiaries is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority 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 the Borrower’s and each Restricted Subsidiary’s corporate,
partnership or limited liability company powers and have been duly authorized by all necessary corporate, partnership or limited liability company and, if required, stockholder, partner or member action. Each Loan Document to which the Borrower and
each Restricted Subsidiary is a party has been duly executed and delivered by the Borrower and such Restricted Subsidiary and constitutes a legal, valid and binding obligation of the Borrower and such Restricted Subsidiary, as applicable,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent transfer or conveyance, 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 and an implied covenant of good faith and fair dealing. 
 Section 7.03 Approvals; No Conflicts. The Transactions 
 (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other third Person, nor is any such consent, approval, registration, filing or other action necessary for the validity or enforceability of any Loan Document except such as have
been obtained or made and are in full force and effect other than (i) those necessary to comply with Sections 8.03, 8.08 and 8.13 and (ii) those third party approvals or consents that, if not made or obtained, would not cause a Default
hereunder and could not reasonably be expected to have a Material Adverse Effect; 
 (b) will not violate (i) the charter, by-laws or
other organizational documents of the Borrower or any Restricted Subsidiary or (ii) any applicable Governmental Requirement or any order of any Governmental Authority applicable to or binding upon the Borrower or any Restricted Subsidiary which
would reasonably be expected to have a Material Adverse Effect; 
 (c) will not violate or result in a default under any indenture, agreement
or other instrument pursuant to which any Material Indebtedness is outstanding, including the Senior Indenture, binding upon the Borrower or any Restricted Subsidiary or their Properties, or give rise to a right thereunder to require any payment to
be made by the Borrower or any Restricted Subsidiary that could reasonably be expected to have a Material Adverse Effect; and 
  

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 (d) will not result in the creation or imposition of any Lien on any Property of the Borrower or any
Restricted Subsidiary (other than the Liens created by the Loan Documents). 
 Section 7.04 Financial Condition; No Material Adverse
Effect. 
 (a) The Borrower has furnished to the Lenders on or before the Effective Date its consolidated balance sheet and statements of
income, shareholders’ equity and cash flows as of and for the fiscal year ended December 31, 2006, audited by PricewaterhouseCoopers LLP, independent public accountants. Such financial statements present fairly, in all material respects,
the financial position and results of operations and cash flows of the Borrower and its Consolidated Subsidiaries as of such date and for such period in accordance with GAAP. 
 (b) Since the date of the most recent audited financial statements of the Borrower and its Subsidiaries delivered to the Lenders pursuant to
Section 8.01(a), (i) there has been no material adverse change in the business, operations, Property or financial condition of the Borrower and the Restricted Subsidiaries taken as a whole, excluding the effect of events, developments and
circumstances affecting the oil and gas exploration and production industry generally and (ii) the business of the Borrower and its Restricted Subsidiaries has been conducted only in the ordinary course consistent with past business practices.

 Section 7.05 Litigation. Except as disclosed in the Borrower’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2006, there are no actions, suits, investigations or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any
Restricted Subsidiary (i) that 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. There has been no change in the status of the
matters disclosed in such Annual Report on Form 10-K that, individually or in the aggregate, has resulted in a Material Adverse Effect. 
 Section 7.06 Environmental Matters. Except as disclosed in the Borrower’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, or as could not be reasonably expected to have a Material Adverse Effect
(or with respect to (c), (d), (e) and with respect to remedial work, (f) below, where the failure to take such actions could not be reasonably expected to have a Material Adverse Effect): 
 (a) neither any Property of the Borrower or any Restricted Subsidiary nor the operations conducted by the Borrower or any Restricted Subsidiary thereon
violate any order or requirement of any court or Governmental Authority or any Environmental Laws; 
 (b) no Property of the Borrower or any
Restricted Subsidiary nor the operations currently conducted thereon or, to the knowledge of the Borrower, by any prior owner or operator of such Property or operation, are in violation of or subject to any existing, pending or, to the
Borrower’s knowledge, 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 

  

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Property of the Borrower and each Restricted 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 the Borrower and each Restricted Subsidiary are in compliance with the terms and conditions of all such notices, permits, licenses and
similar authorizations; 
 (d) all hazardous substances, solid waste and oil and gas waste, if any, generated at any and all Property of the
Borrower or any Restricted Subsidiary have in the past been transported, treated and disposed of in accordance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment,
and, to the knowledge of the Borrower, 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, to the Borrower’s knowledge, threatened action, investigation or inquiry by any Governmental Authority in connection with any Environmental Laws;

 (e) the Borrower has taken all steps reasonably necessary to determine and has determined that no oil, hazardous substances, solid waste
or oil and gas waste, have been disposed of or otherwise released and to the Borrower’s knowledge, there has been no threatened release of any oil, hazardous substances, solid waste or oil and gas waste on or to any Property of the Borrower or
any Restricted 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; and 
 (f) neither the Borrower nor any Restricted 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 of the Borrower and each Restricted 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, consents, approvals and other governmental authorizations necessary
for the ownership of its Property and the conduct of its business, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
 (b) Neither the Borrower nor any Restricted Subsidiary is in default nor has any event or circumstance occurred which, but for the expiration of any
applicable grace period or the giving of notice, or both, would constitute a default or would require the Borrower or a Restricted Subsidiary to Redeem or make any offer to Redeem under any indenture, note, credit agreement or instrument pursuant to
which any Material Indebtedness is outstanding or by which the Borrower or any Restricted Subsidiary or any of their Properties is bound. 
 (c) No Default has occurred and is continuing. 
  

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 Section 7.08 Investment Company Act. Neither the Borrower 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 Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all federal income and other material
Tax returns and reports required to have been filed (or obtained extensions with respect thereto) and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower 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. No action to enforce any Tax Lien has been commenced. 
 Section 7.10 Disclosure; No Material
Misstatements. Taken as a whole, none of the reports, financial statements, certificates or other written information (other than projections) furnished by or on behalf of the Borrower or any Restricted 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), when
furnished, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading (other than omissions that
pertain to matters of a general economic nature or matters of public knowledge that generally affect any of the industry segments of the Borrower or its Subsidiaries); provided that, with respect to projected financial information, prospect
information, geological and geophysical data and engineering projections, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time, recognizing that (a) there are
industry-wide risks normally associated with the types of business conducted by the Borrower and its Subsidiaries and (b) 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 the Borrower and the Restricted Subsidiaries do not warrant that such opinions, estimates and projections will ultimately prove to have been
accurate. 
 Section 7.11 Subsidiaries. Schedule 7.11 lists the name, jurisdiction of organization and organizational
identification number of each Subsidiary of the Borrower as of the Effective Date and identifies each such Subsidiary as either a Restricted or Unrestricted Subsidiary. Each such Subsidiary is a Wholly-Owned Subsidiary as of the Effective Date.

 Section 7.12 Location of Business and Offices. As of the Effective Date, the Borrower’s jurisdiction of organization is
Delaware; the name of the Borrower as listed in the public records of its jurisdiction of organization is Plains Exploration & Production Company; and the organizational identification number of the Borrower in its jurisdiction of
organization is 3569131. As of the Effective Date, each Restricted Subsidiary’s jurisdiction of organization, name as listed in the public records of its jurisdiction of organization, organizational identification number in its jurisdiction of
organization, and the location of its principal place of business and chief executive office is stated on Schedule 7.11. 
  

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 Section 7.13 Properties; Titles, Etc. Except as would not have a Material Adverse Effect and
provided that no representation or warranty is made with respect to any Oil and Gas Property or interest to which no proved oil or gas reserves are properly attributed: 
 (a) Each of the Borrower and the Restricted Subsidiaries has good and defensible title to the Oil and Gas Properties evaluated in the most recently delivered Reserve Report and good title to all its personal
Properties that are necessary to permit the Borrower and the Restricted Subsidiaries to conduct their business in all material respects in the same manner as its business has been conducted prior to the date hereof, in each case, subject to
Immaterial Title Deficiencies and free and clear of all Liens except Liens permitted by Section 9.03. Subject to Immaterial Title Deficiencies and after giving full effect to the Excepted Liens, the Borrower or the Restricted Subsidiary
specified as the owner owns the net interests in production attributable to the Hydrocarbon Interests as reflected in the most recently delivered Reserve Report. The ownership of such Properties shall not obligate the Borrower or such Restricted
Subsidiary to bear the costs and expenses relating to the maintenance, development and operations of each such Property in an amount materially 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 Borrower’s or such Restricted Subsidiary’s net revenue interest in such Property; provided that the Borrower or any applicable Restricted Subsidiary shall have the
right to bear costs disproportionate to the Borrower’s or such Subsidiary’s working interest with respect to any Hydrocarbon Interest for a period of time in order to earn an interest in such Hydrocarbon Interest from a third party as
evidenced by written agreement. Subject to Immaterial Title Deficiencies, there are no “back-in” or “reversionary” interests held by third parties that could reduce the interest of the Borrower or any Restricted Subsidiary in any
such Property except as expressly set forth in such Reserve Report. 
 (b) All material leases and agreements necessary for the conduct of
the business of the Borrower and the Restricted Subsidiaries are valid and subsisting, in full force and effect, and there exists no default or event or circumstance which with the giving of notice or the passage of time or both would give rise to a
default under any such lease or leases. 
 (c) The rights and Properties presently owned, leased or licensed by the Borrower and the
Restricted Subsidiaries, including, without limitation, all easements and rights of way, include all rights and Properties necessary to permit the Borrower and the Restricted Subsidiaries to conduct their business in the same manner as its business
has been conducted prior to the date hereof. 
 (d) The Borrower and each Restricted Subsidiary owns, or is licensed to use, (i) all
trademarks, tradenames, copyrights, patents and other intellectual Property material to its business, and the use thereof by the Borrower and such Restricted Subsidiary does not infringe upon the rights of any other Person and (ii) 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. 
  

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 Section 7.14 Federal Reserve Regulations. The Borrower and its 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). 
 Section 7.15 Solvency. After giving effect to the transactions contemplated hereby, (a) the aggregate assets
(after giving effect to amounts that could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement), at a fair valuation, of the Borrower and the Restricted Subsidiaries, taken as a whole, will exceed the
aggregate Debt of the Borrower and the Restricted Subsidiaries on a consolidated basis, as the Debt becomes absolute and matures, (b) each of the Borrower and the Restricted Subsidiaries on a consolidated basis will not have incurred or
intended to incur, and does not believe that it will have incurred, Debt beyond its ability to pay such Debt (after taking into account the timing and amounts of cash to be received by each of the Borrower and the Restricted Subsidiaries and the
amounts to be payable on or in respect of its liabilities, and giving effect to amounts that could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement) as such Debt becomes absolute and matures and
(c) each of the Borrower and the Restricted Subsidiaries on a consolidated basis 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, the Borrower covenants and agrees with the Lenders
that: 
 Section 8.01 Financial Statements; Other Information. The Borrower will furnish to the Administrative Agent: 

(a) Annual Financial Statements. As soon as available, but in any event not later than 20 days after the date on which the Borrower is initially
required to file its Annual Report on Form 10-K with the SEC, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for the fiscal year most recently ended, setting
forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or other independent public accountants of recognized national standing (without a “going concern” or like
qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations
of the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied. 
 (b) Quarterly
Financial Statements. As soon as available, but in any event not later than 10 days after the Borrower is initially required to file each Quarterly Report on Form 10-Q with the SEC, its consolidated balance sheet and related statements of
operations, stockholders’ 

  

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equity and cash flows as of the end of and for the fiscal quarter most recently ended and the then elapsed portion of such fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of
footnotes. 
 (c) Certificate of Financial Officer – Compliance. Within 10 Business Days after the 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 B hereto (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect thereto and (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 9.01. 
 (d) Certificate Regarding Swap Agreements and Gas Imbalances. Concurrently with the delivery of any Reserve Report under Section 8.11(a) and
Section 8.11(b), a certificate of a Responsible Officer, in form and substance satisfactory to the Administrative Agent, (i) containing a true and complete list of all Swap Agreements of the Borrower and each Restricted Subsidiary as of
the date that such Reserve Report is required to be delivered, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), any credit support agreements relating thereto, any margin
required or supplied under any credit support document, and the counterparty to each such agreement and (ii) stating the amount of gas imbalances in excess of 1.0 Bcf (billion cubic feet) in existence as of the date of such Reserve Report.

 (e) Certificate of Insurer – Insurance Coverage. Concurrently with the annual renewal thereof, a certificate of insurance
coverage from each insurer with respect to the insurance required by Section 8.06, 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) 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 (other than filings under Section 16 of the Securities Exchange Act of 1934) filed by the Borrower or any Subsidiary with the SEC or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be. 
 (g) Notices Under Material Instruments. Promptly
after the furnishing thereof, copies of any financial statement, report or notice furnished to or by any Person pursuant to the terms of any preferred stock designation or indenture, loan or credit or other similar agreement in respect of Material
Indebtedness, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this Section 8.01. 
 (h) Notice of Sales of Oil and Gas Properties. In the event the Borrower or any Restricted Subsidiary sells, transfers, assigns or otherwise disposes of any Oil or Gas Properties included in the most recently
delivered Reserve Report during any period between two 

  

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successive Scheduled Redetermination Dates having a fair market value in excess of 10% of the Borrowing Base then in effect, written notice of such
disposition, the price thereof and the date of closing. 
 (i) Notice of Casualty Events. Prompt written notice, and in any event
within three 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. 
 (j) Issuance of Permitted Additional Debt. In the event the Borrower intends to incur any Permitted Additional Debt, prior written notice of such
intended offering therefor, the amount thereof and the anticipated date of closing. 
 (k) Information Regarding Borrower and Restricted
Subsidiaries. Prompt written notice of any change (i) in the Borrower’s or any Restricted Subsidiary’s corporate name or in the trade name used to identify such Person in the conduct of its business or the ownership of its
Properties, (ii) in the Borrower’s or any Restricted Subsidiary’s identity or corporate structure or in the jurisdiction in which such Person is incorporated or formed, and (iii) in the Borrower’s or any Restricted
Subsidiary’s jurisdiction of organization or such Person’s organizational identification number in such jurisdiction of organization. 
 (l) New Subsidiaries. Promptly and in any event with ten Business Days after organizing or acquiring any new Material Domestic Restricted Subsidiary, the name, jurisdiction of organization, organizational identification number, and
the locations of the principal place of business and chief executive office of such Subsidiary. 
 (m) Other Requested Information.
Promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary (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. 
 Documents required to be delivered pursuant to Section 8.01 may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at www.pxp.com or (ii) on which such documents are delivered to the Administrative
Agent. The Administrative Agent shall post such documents on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent); provided that the Borrower shall deliver such documents in a form acceptable to the Administrative Agent. Except for such compliance certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents. 
  

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 Section 8.02 Notices of Material Events. The Borrower will furnish to the Administrative
Agent and each Lender prompt written notice of the following: 
 (a) the occurrence of any Default; 
 (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower
or any Affiliate thereof that, if adversely determined could reasonably be expected to result in liability in excess of $50,000,000 per claim not fully covered by insurance, subject to normal deductibles; and 
 (c) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. 
 Each notice delivered under this Section 8.02 shall be accompanied by a statement of a Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto. 
 Section 8.03 Existence; Conduct of
Business. The Borrower will, and will cause each Restricted Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct 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 such 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 9.11. 
 Section 8.04 Payment of Obligations. The Borrower will, and will cause each Restricted Subsidiary to, pay
its obligations, including Tax liabilities of the Borrower and all of its Subsidiaries, before the same shall become delinquent or in default, except where (i) (A) the validity or amount thereof is being contested in good faith by
appropriate proceedings, and (B) the Borrower or such Restricted Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (ii) the failure to make payment could not reasonably be expected to
result in a Material Adverse Effect. 
 Section 8.05 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, the Borrower will, and will cause each Restricted Subsidiary to: 
 (a) operate the Oil and Gas Properties described in the most recent Reserve Report or, to the extent commercially reasonable, cause such Oil and Gas Properties to be operated in a good and workmanlike 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; 
 (b) preserve, maintain and keep in good repair, working order and efficiency (ordinary wear and tear excepted) the producing Oil and Gas Properties described in the most recent Reserve Report, including, without
limitation, all equipment, machinery and facilities related thereto; 
  

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 (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 the Oil and Gas Properties described in the most recent Reserve Report, 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 the Oil and Gas Properties described in the most recent Reserve Report; and 
 (e) to the extent the Borrower is not the
operator of any Oil and Gas Property, the Borrower shall not be obligated to directly perform any undertakings contemplated by the covenants and agreements contained in this Section 8.06 which are performable only by such operators and are
beyond the control of the Borrower, but shall be obligated to seek to enforce such operators’ contractual obligations to maintain, develop and operate the Oil and Gas Properties subject to such operating agreements and use commercially
reasonable efforts to cause the operator to comply with this Section 8.05. 
 Section 8.06 Insurance. The Borrower will, and
will cause each Restricted 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 provide that the insurer will endeavor to give at least 30 days prior notice of any cancellation to the Administrative Agent. 
 Section 8.07 Books and Records; Inspection Rights. The Borrower will, and will cause each Restricted Subsidiary to, keep proper books of record and account in which full, true and correct entries are made
of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each Restricted 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 and as often as
reasonably requested. The Lenders shall bear the cost of such inspections and examinations unless a Default or Event of Default then exists, in which event the Borrower shall bear such cost. 
 Section 8.08 Compliance with Laws. The Borrower will, and will cause each Restricted Subsidiary to, comply with all Governmental Requirements
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 8.09 Environmental Matters. 
 (a) Except to the extent that the failure to comply could not reasonably be expected to have a Material Adverse Effect, (i) at its sole expense, the
Borrower shall, and shall cause each Subsidiary to comply with all applicable Environmental Laws, including, without limitation, (x) all licensing, permitting, notification, and similar requirements of Environmental Laws, and (y) all
provision of Environmental Laws regarding storage, discharge, release, transportation, treatment and disposal of Hydrocarbons and (ii) the Borrower shall, and shall cause each Subsidiary to, promptly pay and discharge when due all claims,
liabilities and obligations with respect to any clean-up or remediation measures necessary to comply with applicable Environmental Laws. 
 (b) To the extent the Borrower or a Subsidiary is not the operator of any Property, none of the Borrower and its Subsidiaries shall be obligated to directly perform any undertakings contemplated by the covenants and agreements contained in
this Section 8.9 which are performable only by such operators and are beyond the control of the Borrower and its Subsidiaries. Notwithstanding the above and except to the extent that the failure to do so could not reasonably be expected to have
a Material Adverse Effect, the Borrower shall be obligated to enforce such operators’ contractual obligations to maintain, develop and operate the Oil and Gas Properties subject to such operating agreements, and the Borrower shall, and shall
cause its Subsidiaries to, use commercially reasonable efforts to cause the operator to comply with this Section 8.9. 
 Section 8.10 Further Assurances. 
 (a) The Borrower at its expense will, and will cause each Restricted Subsidiary to,
promptly execute and deliver to the Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent to comply with, cure any defects or accomplish the conditions precedent, covenants and
agreements of the Borrower or any Restricted Subsidiary, 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) The Borrower 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 the Borrower or any other Restricted Subsidiary 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. 
  

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 Section 8.11 Reserve Reports. 
 (a) On or before April 1st of each year, commencing April 1, 2008, the Borrower shall furnish to the Administrative Agent and the Lenders a
Reserve Report prepared by or under the supervision of the chief engineer of the Borrower and audited by one or more Approved Petroleum Engineers. It is 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 the Borrower and the Restricted Subsidiaries do not warrant that such opinions, estimates and
projections will ultimately prove to have been accurate. 
 (b) In the event of an Interim Redetermination, the Borrower shall furnish to the
Administrative Agent and the Lenders a Reserve Report prepared by or under the supervision of the chief engineer of the Borrower and in accordance with the procedures used in the most recent Reserve Report delivered pursuant to Section 8.11(a).
For any Interim Redetermination requested by the Administrative Agent or the Borrower pursuant to Section 2.07(b), the Borrower shall provide such Reserve Report with an “as of” date as required by the Administrative Agent as soon as
possible, but in any event no later than 30 days following the receipt of such request. 
 Section 8.12 Title Information.

 (a) If requested by the Administrative Agent at least 90 days prior to the delivery to the Administrative Agent and the Lenders of each
Reserve Report required by Section 8.11(a), the Borrower will, prior to or on the date of such delivery, deliver title information in form and substance acceptable to the Administrative Agent covering (i) Oil and Gas Properties included in
such Reserve Report that were not included in the Initial Reserve Report and (ii) Oil and Gas Properties evaluated by such Reserve Report that were included in the Initial Reserve Report, provided, however, that with respect to clause (ii),
such information shall not be required unless the Administrative Agent has notified the Borrower it believes that title defects in the aggregate in excess of Immaterial Title Deficiencies (a “Material Title Defect”) may exist with
respect to such Properties. 
 (b) If the Borrower has provided title information for Properties under Section 8.12(a), the Borrower
shall, within 60 days of notice from the Administrative Agent that a Material Title Defect exists with respect to such Properties, either (i) cure any such Material Title Defects (including defects as to priority) which are not permitted by
Section 9.03 raised by such information, (ii) substitute acceptable Mortgaged Properties with no title defects or exceptions except for Excepted Liens (other than Excepted Liens described in clauses (e), (g) and (h) of such
definition) or Immaterial Title Deficiencies having an equivalent value or (iii) deliver title information in form and substance acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title
information previously delivered to the Administrative Agent, satisfactory title information on at least 70% of the value of the Oil and Gas Properties evaluated by such Reserve Report. 
 (c) If the Borrower is unable to cure any Material Title Defect requested by the Administrative Agent or the Lenders to be cured within the 60-day period
or the Borrower does not comply with the requirements to provide acceptable title information covering 70% of the value of the Oil and Gas Properties evaluated in the most recent Reserve Report, such default 

  

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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 the Administrative Agent or the Lenders. To the extent that the Administrative Agent or the
Super-majority Lenders are not satisfied with the Borrower’s curative title information for any Material Title Defect after the 60-day period has elapsed, such Mortgaged Property subject to such Material Title Defect, shall not count towards
the 70% requirement, and the Administrative Agent may send a notice to the Borrower and the Lenders that the then outstanding Borrowing Base shall be reduced by an amount as determined by the Super-majority Lenders to cause the Borrower to be in
compliance with the requirement to provide acceptable title information on 70% of the value of the Oil and Gas Properties. This new Borrowing Base shall become effective immediately after receipt of such notice. 
 Section 8.13 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 to ascertain whether the Mortgaged Properties represent at
least 75% of the total value of the Oil and Gas Properties evaluated in the most recently completed Reserve Report after giving effect to exploration and production activities, acquisitions, dispositions and production. In the event that the
Mortgaged Properties do not represent at least 75% of such total value, then the Borrower shall, and shall cause its Restricted Subsidiaries to, grant, within 30 days of such review, to the Administrative Agent as security for the Indebtedness a
first-priority Lien interest (provided that Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof may exist, but subject to the provisos at the end of such definition) on additional Oil and Gas
Properties containing proved oil and gas reserves not already subject to a Lien of the Security Instruments such that after giving effect thereto, the Mortgaged Properties will represent at least 75% of such total value. All such Liens will be
created and perfected by and in accordance with the provisions of deeds of trust, security agreements and financing statements or other Security Instruments, all in form and substance reasonably satisfactory to the Administrative Agent and in
sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes. 
 (b) If the Borrower or any
Domestic Subsidiary that is a Restricted Subsidiary becomes the owner of a Restricted Subsidiary, then the Borrower shall, or shall cause such Domestic Subsidiary to, promptly, but in any event no later than 30 days after the date of becoming an
owner thereof (or such longer period as the Administrative Agent may agree in its discretion), (i) pledge 100% of the Equity Interests of such Restricted Subsidiary if it is a Domestic Subsidiary and (ii) pledge 65% of the Equity Interests
of such Restricted Subsidiary if it is a Foreign Subsidiary, (iii) deliver original stock certificates, if any, evidencing such Equity Interests so pledged, together with appropriate stock powers for each certificate duly executed in blank by
the registered owner thereof) and (iv) execute and deliver such other additional closing documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent. 
  

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 (c) The Borrower shall cause the following Persons to guarantee the Indebtedness pursuant to the Guaranty
Agreement: 
 (i) each Material Domestic Restricted Subsidiary; 
 (ii) any Person required to guarantee the Indebtedness in order for the Borrower to be in compliance with Section 9.05(b);

 (iii) any Person that guarantees the Senior Notes or any Permitted Additional Debt; and 
 (iv) one or more additional Domestic Subsidiaries that are Restricted Subsidiaries to the extent necessary to cause the total assets of
the Domestic Subsidiaries that are Restricted Subsidiaries but are not Guarantors to be less than 20% of the combined assets of the Borrower and its Restricted Subsidiaries and the combined EBITDAX of such Domestic Subsidiaries to be less than 20%
of the combined EBITDAX of the Borrower and its Restricted Subsidiaries. 
 (d) In connection with any guaranty required by
Section 8.13(c), the Borrower shall, or shall cause such Subsidiary or other Person to promptly, but in any event no later than 30 days (or such longer period as the Administrative Agent may agree in its discretion) after the event requiring
such guaranty, execute and deliver (i) a supplement to the Guaranty Agreement and (ii) such other additional closing documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent. If at any time
any Person is not otherwise required to guarantee the Indebtedness hereunder (whether pursuant to the other provisions of this Section 8.13 or otherwise) or under any other Loan Document, then upon receipt by the Administrative Agent of
evidence satisfactory to it that such Person has been fully and finally released from its guarantee obligations in respect of the Senior Notes or, if applicable, any Permitted Additional Debt, as the case may be, such Person shall be released from
its guarantee obligations with respect to the Indebtedness and the Administrative Agent shall, at the sole cost and expense of the Borrower, execute such further documents and do all such further acts so as to reasonably evidence such release.

 (e) If the Borrower obtains an Investment Grade Rating, then the provisions of Section 8.13(a) and (b) shall no longer apply.

 Section 8.14 ERISA Compliance. The Borrower will promptly furnish to the Administrative Agent (i) immediately 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 that could reasonably
be expected to have a Material Adverse Effect, a written notice signed by a Responsible Officer, specifying the nature thereof, what action the Borrower, any of its Subsidiaries or any 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 (ii) immediately upon receipt thereof, copies of any notice of the PBGC’s intention to
terminate or to have a trustee appointed to administer any Plan that could reasonably be expected to have a Material Adverse 
  

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Effect. With respect to each Plan (other than a Multiemployer Plan), the Borrower will, and will cause each Subsidiary and ERISA Affiliate to,
(A) satisfy in full and in a timely manner, without incurring any late payment or underpayment charge or penalty that could reasonably be expected to have a Material Adverse Effect and without giving rise to any Lien securing an amount in
excess of $50,000,000, 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 (B) pay, or cause to be paid, to the PBGC in a timely manner, without incurring any late payment or underpayment charge or penalty that could reasonably be expected to have a Material Adverse Effect, all premiums
required pursuant to sections 4006 and 4007 of ERISA. 
 Section 8.15 Unrestricted Subsidiaries. The Borrower: 
 (a) will cause the management, business and affairs of each of the Borrower and its Restricted Subsidiaries to be conducted in such a manner (including,
without limitation, by keeping separate books of account, furnishing separate financial statements of Unrestricted Subsidiaries to creditors and potential creditors thereof and by not permitting Properties of the Borrower and its respective
Restricted Subsidiaries to be commingled) so that each Unrestricted Subsidiary that is a corporation will be treated as a corporate entity separate and distinct from the Borrower and the Restricted Subsidiaries; 
 (b) will not, and will not permit any of the Restricted Subsidiaries to, incur, assume, guarantee or be or become liable for any Debt of any of the
Unrestricted Subsidiaries; and 
 (c) will not permit any Unrestricted Subsidiary to hold any Equity Interest in, or any Debt of, the
Borrower or any Restricted Subsidiary. 
 Section 8.16 Post Closing Matters. On or before June 30, 2007 (or such later date
agreed to by the Administrative Agent), the Borrower shall deliver to the Administrative Agent an opinion of California counsel in form and substance reasonably satisfactory to the Administrative Agent relating to the amendments to the deeds of
trust delivered on the Effective Date that are to be recorded in California. 
 ARTICLE IX 
 Negative Covenants 
 Until the
Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder and all other amounts payable under the Loan Documents have been paid in full and all Letters of Credit have expired or terminated
and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that: 
 Section 9.01 Ratio of
Debt to EBITDAX. The Borrower will not, as of the last day of any fiscal quarter, permit the ratio of Debt of the Borrower and its Consolidated Restricted Subsidiaries as of such day to EBITDAX for the most recent period of four fiscal quarters
for which financial statements are available to be greater than 4.25 to 1.0. 
  

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 Section 9.02 Debt. The Borrower will not, and will not permit any Restricted Subsidiary to,
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. 
 (b) The Senior Notes and other
Debt of the Borrower and its Restricted Subsidiaries existing on the date hereof that is reflected in the Financial Statements. 
 (c)
purchase money Debt and Debt under Capital Leases not to exceed $50,000,000 in the aggregate. 
 (d) Debt associated with workers’
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. 
 (e) intercompany Debt between the Borrower and any Restricted Subsidiary or between Restricted Subsidiaries to the extent permitted by
Section 9.06(g); provided that such Debt is not held, assigned, transferred, negotiated or pledged to any Person other than the Borrower or one of its Subsidiaries, and, provided further, that any such Debt owed by either the Borrower or a
Guarantor shall be subordinated to the Indebtedness on terms set forth in the Guaranty Agreement. 
 (f) Debt secured by Liens permitted by
Section 9.03(d) and Section 9.03(e), the principal amount of which does not exceed $50,000,000 in the aggregate at any one time. 
 (g) endorsements of negotiable instruments for collection in the ordinary course of business. 
 (h) Debt outstanding under one or
more unsecured short term credit facilities the principal amount of which does not exceed $50,000,000 in the aggregate. 
 (i) Debt and any
guarantees thereof by the Guarantors (including any Persons becoming Guarantors simultaneously with the incurrence of such Debt), provided that: (i) immediately before, and after giving effect to, the incurrence of any such Debt (and any
concurrent repayment of Debt with the proceeds of such incurrence), no Default exists or would exist, (ii) the cash pay interest rate on such Debt is reasonably satisfactory to the Administrative Agent, (iii) such Debt does not have any
scheduled amortization of principal prior to the Maturity Date, (iv) such Debt has a stated maturity no earlier than one year after the Maturity Date, (v) such Debt does not have mandatory redemption events that are not Events of Default
hereunder, (vi) such Debt does not prohibit prior repayment of Loans, and (vii) at the time any such Debt is incurred, the Borrowing Base then in effect shall be automatically reduced by an amount equal to the product of 0.30 multiplied by
the stated principal amount of such Debt, rounded to the nearest $1,000,000, and the Borrowing Base as so reduced shall become the new Borrowing Base immediately upon the date of such issuance or assumption, effective and applicable to the Borrower,
the Agents, each Issuing Bank and the Lenders on such date until the next redetermination or modification thereof hereunder. For purposes of this Section 9.02(i), the “stated principal amount” shall mean the stated face amount of such
Debt without giving effect to any original issue discount. 
  

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 (j) other Debt not to exceed $50,000,000 in the aggregate at any one time outstanding. 
 (k) Any renewals, refinancings or extensions of (but, except to the extent permitted herein, not increases in) any Debt described in clauses (b), (c),
(f) and (i) of this Section 9.02; provided, however, that any refinancing of Debt described in clause (i) shall comply with the provisions of such clause (i). 
 Section 9.03 Liens. The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or permit to exist any
Lien on any of its Properties (now owned or hereafter acquired), except: 
 (a) Liens securing the payment of any Indebtedness. 
 (b) Excepted Liens. 
 (c) Liens securing
purchase money Debt and Debt under Capital Leases to the extent permitted by Section 9.02(c) or Section 9.02(j) but only on the Property and improvements and accessions thereof and proceeds thereof acquired or under lease; provided that
such Liens are created within 180 days of construction, acquisition or lease of such Property. 
 (d) Liens (other than Liens under ERISA or
Environmental Laws) on Property of any Person that becomes a Restricted Subsidiary of the Borrower after the Effective Date; provided that (i) such Liens are in existence at the time such Person becomes a Restricted Subsidiary of the Borrower
and were not created in anticipation thereof and (ii) no such Liens shall extend to or cover any Property of such Person other than such Property. 
 (e) Liens (other than Liens under ERISA or Environmental Laws) upon real and/or tangible personal Property acquired after the Effective Date (by purchase, construction or otherwise) by the Borrower or its Restricted
Subsidiaries, each of which Liens either (i) existed on such Property before the time of its acquisition and was not created in anticipation thereof or (ii) was created solely for the purpose of securing Debt representing, or incurred to
finance, refinance or refund, the cost (including the cost of construction) of such Property; provided that no such Lien shall extend to or cover any Property of the Borrower or such Restricted Subsidiary other than the Property so acquired and
improvements thereon and accessions and proceeds thereof. 
 (f) Liens on cash, letters of credit and other financial assets pledged to
secure obligations under any Swap Agreement permitted by Section 9.17 in an aggregate amount at any time not to exceed $30,000,000. 
 (g) Liens on Property not constituting collateral for the Indebtedness and not otherwise permitted by the foregoing clauses of this Section 9.03; provided that the aggregate principal or face amount of all Debt secured under this
Section 9.03(g) shall not exceed $50,000,000 at any time. 
 (h) Liens disclosed on Schedule 9.03. 
  

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 (i) Liens on the Equity Interests in, or Debt or other obligations of, any Unrestricted Subsidiary or any
Person (other than a Restricted Subsidiary) that is directly or indirectly owned by any Unrestricted Subsidiary securing the payment of Non-Recourse Debt. 
 Section 9.04 Restricted Payments. The Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, return any
capital to its stockholders or make any distribution of its Property to its Equity Interest holders, except 
 (a) the Borrower may declare
and pay dividends with respect to its Equity Interests payable solely in additional shares of its Equity Interests (other than Disqualified Capital Stock), 
 (b) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, 
 (c) the
Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries, 
 (d) to the extent not permitted by clauses (a) to (c) above, the Borrower may make Restricted Payments to repurchase, redeem, or otherwise
acquire any Equity Interests of the Borrower if (i) no Default or Event of Default has occurred and is continuing at the time such Restricted Payment is made or would result from the making of such Restricted Payment, (ii) after giving
effect to such Restricted Payment (or, for purposes of determining compliance with Section 9.05(a), any Redemption of Debt pursuant to Section 9.05(a)), the ratio of the Debt of the Borrower and its Restricted Subsidiaries to EBITDAX,
determined on a pro forma basis, shall not be greater than 2.5 to 1.0, and (iii) the Borrower’s Minimum Liquidity after giving effect to such Restricted Payment is not less than $115,000,000. 
 Section 9.05 Repayment of Debt; Amendment of Indentures. The Borrower will not, and will not permit any Restricted Subsidiary to: 

(a) call, make or offer to make any optional or voluntary Redemption (whether in whole or in part) of any Senior Notes or Permitted Additional Debt,
provided, however, that the Borrower may Redeem Senior Notes or Permitted Additional Debt to the extent that it could make a Restricted Payment in respect of Equity Interests under Section 9.04(d); 
 (b) amend, modify, waive or otherwise change, consent or agree to any amendment, modification, waiver or other change to, any of the terms of the Senior
Notes, Permitted Additional Debt, the Senior Indenture or the Permitted Additional Debt Instruments if (i) the effect thereof would be to shorten its maturity to be less than one year after the Maturity Date or average life or increase the
amount of any payment of principal thereof or increase the rate or shorten any period for payment of interest thereon, (ii) such action requires the payment of a consent fee that has not been approved the Administrative Agent (such approval not
to be unreasonably withheld), or (iii) the effect thereof would be to add any guarantor or surety, unless such guarantor or surety also guarantees the Indebtedness pursuant to the Guaranty Agreement and each of the Borrower and such guarantor
or surety otherwise complies with Section 8.13(c); or 
  

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 (c) designate any Debt (other than obligations of the Borrower and the Restricted Subsidiaries pursuant
to the Loan Documents) as “designated senior indebtedness” or “designated guarantor senior indebtedness” or give any such other Debt any other similar designation for the purposes of the Senior Indenture or any Permitted
Additional Debt Instrument. 
 Section 9.06 Investments, Loans and Advances. The Borrower will not, and will not permit any
Restricted Subsidiary to, make or permit to remain outstanding any Investments in or to any Person, except that the foregoing restriction shall not apply to: 
 (a) Investments reflected in the Financial Statements or which are disclosed to the Lenders in Schedule 9.06. 
 (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. 
 (f) deposits in money market funds investing exclusively in Investments described in Section 9.06(c), Section 9.06(d) and Section 9.06(e). 
 (g) Investments (i) made by the Borrower in or to the Guarantors, (ii) made by any Subsidiary in or to the Borrower or any Guarantor, and (iii) made by the Borrower or any Restricted Subsidiary in or to
all other Restricted Subsidiaries which are not Guarantors, Unrestricted Subsidiaries, Nuevo Energy Company and Sepulveda Oil and Gas Company provided that, with respect to any Investment described in clause (iii), (A) the aggregate amount of
all such Investments at any one time shall not exceed $150,000,000; (b) no Default or Event of Default has occurred and is continuing at the time such Investment is made or would result from the making of such Investment, and (C) the
Borrower’s Minimum Liquidity after giving effect to such Investment is not less than $115,000,000. 
 (h) Investments (including,
without limitation, capital contributions) in general or limited partnerships or other types of entities (each a “venture”) entered into by the Borrower or a Restricted Subsidiary with others in the ordinary course of business; provided
that (i) any such venture is engaged exclusively in oil and gas exploration, development, production, processing and related activities, including transportation, (ii) the interest in such venture is acquired in the 

  

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ordinary course of business and on fair and reasonable terms and (iii) such venture interests acquired and capital contributions made (valued as of the
date such interest was acquired or the contribution made) do not exceed, in the aggregate at any time outstanding an amount equal to $50,000,000. 
 (i) Investments received in settlement of amounts owing to the Borrower or any Restricted Subsidiary as a result of a bankruptcy or other insolvency proceeding of the obligor in respect of such amounts or upon the enforcement of any Lien in
favor of the Borrower or any of its Restricted Subsidiaries; provided that the Borrower shall give the Administrative Agent prompt written notice in the event that the aggregate amount of all Investments held at any one time under this
Section 9.06(i) exceeds $10,000,000. 
 (j) entry into operating agreements, working interests, royalty interests, mineral leases,
processing agreements, farm-out agreements, contracts for the sale, transportation or exchange of oil and natural gas, unitization agreements, pooling arrangements, area of mutual interest agreements, production sharing agreements or other similar
or customary agreements, transactions, properties, interests or arrangements, and Investments and expenditures in connection therewith or pursuant thereto, in each case made or entered into in the ordinary course of the oil and gas business,
excluding, however, Investments in other Persons other than joint ventures; provided, however, that none of the foregoing shall involve the incurrence of any Debt not permitted by Section 9.02, and provided further that this
Section 9.06(j) shall not be construed to permit Investments by the Borrower or any Restricted Subsidiary in any Person which maintains or incurs in the future any Debt other than Non-Recourse Debt. 
 (k) loans and advances to directors, officers and employees in the ordinary course of business consistent with prior practice. 
 (l) Guarantees by the Borrower and the Restricted Subsidiaries of Debt permitted by Section 9.02(a), Section 9.02(c), Section 9.02(d),
Section 9.02(f), Section 9.02(h), Section 9.02(i), Section 9.02(j) and Section 9.02(k). 
 (m) Indemnities entered
into in the ordinary course of business. 
 (n) Investments of surface rights in fee property in California in Unrestricted Subsidiaries.

 (o) Investments arising from the endorsement of financial instruments in the ordinary course of business. 
 (p) Investments consisting of Swap Agreements to the extent permitted under Section 9.17; and 
 (q) other Investments not to exceed $25,000,000 in the aggregate at any time. 
  

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 Section 9.07 Designation and Conversion of Restricted and Unrestricted Subsidiaries; Debt of
Unrestricted Subsidiaries. 
 (a) Unless designated as an Unrestricted Subsidiary on Schedule 7.11 as of the Effective Date or thereafter,
assuming compliance with Section 9.07(b), any Person that becomes a Subsidiary of the Borrower or any of its Restricted Subsidiaries shall be classified as a Restricted Subsidiary. 
 (b) The Borrower may designate by written notification thereof to the Administrative Agent, any Restricted Subsidiary, including a newly formed or newly
acquired Subsidiary, as an Unrestricted Subsidiary if (i) prior, and after giving effect, to such designation, neither a Default nor a Borrowing Base Deficiency would exist and (ii) such designation is deemed to be an Investment in an
Unrestricted Subsidiary in an amount equal to the fair market value as of the date of such designation of the Borrower’s direct and indirect ownership interest in such Subsidiary and such Investment would be permitted to be made at the time of
such designation under Section 9.06(g) or (n). 
 (c) The Borrower may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary if after giving effect to such designation, (i) the representations and warranties of the Borrower and its Restricted Subsidiaries contained in each of the Loan Documents are true and correct on and as of such date as if made on and
as of the date of such redesignation (or, if stated to have been made expressly as of an earlier date, were true and correct as of such date), (ii) no Default would exist and (iii) the Borrower complies with the requirements of
Section 8.13 and Section 9.14. 
 (d) The Borrower shall not permit the aggregate principal amount of all Non-Recourse Debt
outstanding at any one time to exceed $500,000,000. 
 Section 9.08 Nature of Business. The Borrower will not, and will not
permit any Restricted 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. Notwithstanding the foregoing, this Section 9.08 shall not prohibit the
Borrower and its Subsidiaries from holding and developing the Properties described on Schedule 9.08, as updated from time to time. 
 Section 9.09 Proceeds of Notes. The Borrower will not use the proceeds of the Notes for any purpose other than for general corporate purposes (including making of Restricted Payments). Neither the Borrower nor any Person acting
on behalf of the Borrower will violate Regulations T, U or X or any other regulation of the Board or violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect. If requested by the Administrative Agent, the Borrower 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. 
 Section 9.10 Sale or Discount of
Receivables. Except for receivables obtained by the Borrower or any Restricted Subsidiary out of the ordinary course of business or the settlement of joint interest billing accounts in the ordinary course of business or discounts granted to
settle collection of accounts receivable or the sale of defaulted accounts arising in the ordinary course of business in connection with the compromise or collection thereof and not in connection with 
 any financing transaction, the Borrower will not, and will not permit any Restricted Subsidiary to, discount or sell (with or without recourse) any of its notes
receivable or accounts receivable. 
  

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 Section 9.11 Mergers, Etc. The Borrower will not, and will not permit any Restricted
Subsidiary to, merge into or with or consolidate with any other Person, or sell, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its Property to any other Person (any such
transaction, a “consolidation”); provided that 
 (a) any Restricted Subsidiary may (i) participate in a consolidation
with (A) the Borrower (provided that the Borrower shall be the continuing or surviving corporation), (B) any other Restricted Subsidiary (provided that if a Guarantor is a party to such transaction, the survivor is a Guarantor or becomes a
party to the Guaranty Agreement as a Guarantor) or (C) subject to compliance with Section 9.14, any other Subsidiary or (ii) transfer all or substantially all of its assets to a Guarantor or a Person that becomes a party to the
Guaranty Agreement as a Guarantor; 
 (b) the Borrower or any Restricted Subsidiary may participate in a consolidation (other than as
described in clause (a) above) if (i) at the time thereof and immediately after giving effect thereto, no Default shall occur and be continuing and no Borrowing Base Deficiency would result therefrom and (ii) the Borrower or such
Restricted Subsidiary, as the case may be, is the surviving entity or the recipient of any such sale, lease or other disposition of Property, provided that no such consolidation shall have the effect of releasing the Borrower or any Guarantor from
any of its obligations under this Agreement or any other Loan Document; 
 (c) any sale of all or substantially all of the assets of any
Restricted Subsidiary provided that such sale is permitted by Section 9.12; and 
 (d) any Subsidiary may liquidate or dissolve if
(i) the continued existence and operation of such Subsidiary is no longer in the best interests of the Borrower and its Subsidiaries taken as a whole (as reasonably determined by a Responsible Officer of the Borrower), (ii) such
liquidation and dissolution is not disadvantageous in any material respect to the Lenders, and (iii) at the time thereof and immediately after giving effect thereto, no Default shall occur and be continuing and no Borrowing Base Deficiency
would result therefrom. 
 Section 9.12 Sale of Properties. The Borrower will not, and will not permit any Restricted Subsidiary
to, sell, assign, farm-out, convey or otherwise transfer any Oil and Gas Property included in the most recent Reserve Report delivered to Lenders or any interest therein or any Restricted Subsidiary owning any such Oil and Gas Property except for

 (a) the sale of Hydrocarbons in the ordinary course of business; 
 (b) farmouts of undeveloped acreage and assignments in connection with such farmouts or the abandonment, farm-out, exchange, lease, sublease or other
disposition of Oil and Gas Properties not containing proved reserves capable of being produced in economic quantities and which are not included in the Borrowing Base in the ordinary cause of business; 
  

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 (c) the sale or transfer of equipment that is no longer necessary for the business of the Borrower or
such Restricted Subsidiary or is replaced by equipment of at least comparable value and use; 
 (d) the sale or other disposition (including
Casualty Events) of such Oil and Gas Property or any interest therein or any Restricted Subsidiary owning such Oil and Gas Properties; provided that (i) 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 (other than in the case of a Casualty Event), interest therein or Restricted Subsidiary subject of such sale or other disposition (as reasonably determined by any Responsible Officer
of the Borrower), (ii) if such sale or other disposition of such Oil and Gas Property included in the Borrowing Base or Restricted Subsidiary owning such Oil and Gas Property during any period between two successive Scheduled Redetermination
Dates has a fair market value in excess of 10% of the Borrowing Base then in effect, 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 (iii) if any such sale or other disposition is of a Restricted Subsidiary owning such Oil and Gas Properties, such sale or other disposition shall include all the Equity
Interests of such Restricted Subsidiary; 
 (e) the sale of Oil and Gas Properties in connection with tax credit transactions complying with
§29 of the Code or any other analogous provision whether now existing or hereafter enacted, which sale does not result in a reduction in the right of the Borrower or any Restricted Subsidiary to receive the cash flow from such Oil and Gas
Properties and which sale is on terms reasonably acceptable to the Administrative Agent; 
 (f) transfers and other dispositions among the
Borrower and the Restricted Subsidiaries subject to the limitations set forth in Section 9.06(g)(iii); 
 (g) transfers permitted by
Section 9.11. 
 Section 9.13 Transactions with Affiliates. The Borrower will not, and will not permit any Restricted
Subsidiary to, enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate (other than the Guarantors and Wholly-Owned Subsidiaries of the Borrower)
unless such transactions are not otherwise prohibited under this Agreement and are upon fair and reasonable terms no less favorable to it than it would obtain in a comparable arm’s length transaction with a Person not an Affiliate. 

Section 9.14 Subsidiaries. The Borrower will not, and will not permit any Restricted Subsidiary to, create or acquire any additional
Restricted Subsidiary or redesignate an Unrestricted Subsidiary as a Restricted Subsidiary unless the Borrower gives written notice to the Administrative Agent of such creation or acquisition and complies with Section 8.13(b) and
Section 8.13(d). The Borrower shall not, and shall not permit any Restricted Subsidiary to, sell, assign or otherwise dispose of any Equity Interests in any Restricted Subsidiary except in compliance with Section 9.11 or
Section 9.12(d). 
  

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 Section 9.15 Negative Pledge Agreements; Dividend Restrictions. 
 The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any contract, agreement or understanding
which in any way prohibits or restricts the granting, conveying, creation or imposition of any Lien on any of its Property in favor of the Administrative Agent and the Lenders or restricts any Restricted Subsidiary from paying dividends or making
distributions to the Borrower or any Guarantor, 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 (i) this Agreement or the Security Instruments, (ii) Debt securing Liens or any contract, agreement or understanding creating Liens permitted by Sections 9.03(c), (d), (e), (f), (g), (h) and (i) (but only to the
extent related to the Property on which such Liens were created), (iii) any leases or licenses or similar contracts as they affect any Property or Lien subject to a lease or license, (iv) 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, or (v) customary provisions with respect to the distribution of Property in joint venture agreements. 
 Section 9.16 Take-or-Pay or Other Prepayments. The Borrower will not, and will not permit any Restricted Subsidiary to, allow take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Borrower or any
Restricted Subsidiary that would require the Borrower or such Restricted Subsidiary to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor; provided that such restriction shall not apply to gas
imbalances incurred in the ordinary course of business. 
 Section 9.17 Swap Agreements. The Borrower will not, and will not
permit any Restricted Subsidiary to, enter into any Swap Agreements with any Person other than (a) Swap Agreements in respect of commodities (i) with an Approved Counterparty and (ii) the notional volumes for which (when aggregated
with other commodity Swap Agreements then in effect other than basis differential swaps on volumes already hedged pursuant to other Swap Agreements) do not exceed, as of the date such Swap Agreement is executed, for (A) natural gas, 85% of the
reasonably anticipated projected production from proved, developed, producing Oil and Gas Properties for each month during the period during which such Swap Agreement is in effect and (B) crude oil, 90% of the reasonably anticipated projected
production from proved Oil and Gas Properties for each month during the period commencing on such date and ending on the date twelve months thereafter, and for each month during any period after such twelve-month period, 85% of the reasonably
anticipated projected production from proved Oil and Gas Properties for each month during such period, provided, however, that for purposes of this Section 9.17(a), put options and price floors for crude oil and natural gas shall be
disregarded, and (b) Swap Agreements in respect of interest rates entered into for hedging purposes and not for speculation. In no event shall any Swap Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted
Subsidiary to post collateral or margin to secure their obligations under such Swap Agreement or to cover market exposures except to the extent permitted by Section 9.03(a) and Section 9.03(f). 
  

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 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) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in Section 10.01(a))
payable under any Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days. 
 (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Restricted 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 the provisions hereof or any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have
been incorrect in any material respect when made or deemed made. 
 (d) the Borrower or any Restricted Subsidiary shall fail to observe or
perform any covenant, condition or agreement contained in Section 8.02, Section 8.13, or in ARTICLE IX. 
 (e) the Borrower or any
Restricted Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in Section 10.01(a), Section 10.01(b) or Section 10.01(d)) or any other Loan Document,
and such failure shall continue unremedied for a period of 30 days after the earlier to occur of (A) notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender) or (B) a
Responsible Officer of the Borrower or such Restricted Subsidiary otherwise becoming aware of such default; provided, however, that if the Borrower fails to deliver any financial statements, certificates or other information within the time period
required by Section 8.01, 8.02, 8.11 or 8.13 and subsequently delivers such financial statements, certificates or other information as required by such Sections prior to acceleration or the exercise of any remedy by the Lenders, then such Event
of Default shall be deemed to have been cured and/or waived without any further action by the Administrative Agent or Lenders. 
 (f) the
Borrower or any Restricted Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable. 
 (g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with
or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the Redemption thereof or
any offer to Redeem to be made in respect thereof, prior to its scheduled maturity or require the Borrower or any Restricted Subsidiary to make an offer in respect thereof. 
  

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 (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking
(i) liquidation, reorganization or other relief in respect of the Borrower or any Restricted Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary 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) the Borrower or, except as permitted by Section 9.11(c), any Restricted Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief
under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described
in Section 10.01(h), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the
foregoing. 
 (j) the Borrower or any Restricted Subsidiary shall become unable, admit in writing its inability or fail generally to pay its
debts as they become due. 
 (k) one or more judgments for the payment of money in an aggregate amount in excess of $50,000,000 (to the
extent not covered by independent third party insurance provided by insurers of the highest claims paying rating or financial strength as to which the insurer does not dispute coverage and is not subject to an insolvency proceeding) shall be
rendered against the Borrower, any Restricted Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 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 the Borrower or any Restricted Subsidiary to enforce any such judgment. 
 (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 generally valid, binding and enforceable in accordance with their terms
against the Borrower or a Guarantor party thereto or shall be repudiated by any of them, 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 the Borrower or any Restricted Subsidiary or any of their 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 the Borrower and its
Subsidiaries in an aggregate amount exceeding $50,000,000. 
  

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 (n) a Change in Control shall occur. 
 Section 10.02 Remedies. 
 (a) In
the case of an Event of Default other than one described in Section 10.01(h), Section 10.01(i) or Section 10.01(j), at any time thereafter during the continuance of such Event of Default, the 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 Borrower and the Guarantors accrued hereunder and under the Notes and the other Loan Documents (including, without
limitation, the payment of cash collateral to secure the LC Exposure as provided in Section 2.08(j)), 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 the Borrower and each Guarantor; and in case of an Event of Default described in Section 10.01(h), Section 10.01(i) or Section 10.01(j), the Commitments shall automatically
terminate and the Notes and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and the other obligations of the Borrower and the Guarantors accrued hereunder and under the Notes and the other Loan
Documents (including, without limitation, the payment of cash collateral to secure the LC Exposure as provided in Section 2.08(j)), shall automatically become due and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower and each Guarantor. 
 (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 Notes, whether by acceleration or otherwise, shall be applied: 
 (i) first, pro rata to payment or reimbursement of that portion of the Indebtedness constituting fees, expenses and indemnities
payable to the Administrative Agent, Arranger, other Agents and the Lenders; 
 (ii) second, pro rata to payment of
accrued interest on the Loans; 
 (iii) third, pro rata to payment of principal outstanding on the Loans and
Indebtedness referred to in Clause (b) of the definition of Indebtedness owing to a Lender or an Affiliate of a Lender; 
 (iv) fourth, pro rata to any other Indebtedness; 
 (v) fifth, to serve as cash collateral to be held
by the Administrative Agent to secure the LC Exposure; and 
  

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 (vi) sixth, any excess, after all of the Indebtedness shall have been indefeasibly
paid in full in cash, shall be paid to the Borrower or as otherwise required by any Governmental Requirement. 
 ARTICLE XI 

The Agents 
 Section 11.01
Appointment; Powers. Each of the Lenders and each Issuing Bank hereby irrevocably 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, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing (the use of the term “agent” herein and in the
other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law; rather, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties), (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except as provided in Section 11.03, and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or under any other Loan Document or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any other Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in ARTICLE VI or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent,
(vi) the existence, value, perfection or priority of any collateral security or the financial or other condition of the Borrower and its Subsidiaries or any other obligor or guarantor, or (vii) any failure by the Borrower or any other
Person (other than itself) to perform any of its obligations hereunder or under any other Loan Document or the performance or observance of any covenants, agreements or other terms or conditions set forth herein or therein. For purposes of
determining compliance with the conditions specified in ARTICLE VI, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed closing date specifying its objection thereto. 
  

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 Section 11.03 Action by Administrative Agent. The Administrative Agent shall have no duty to
take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise in writing as directed by
the Majority Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02) and in all cases the Administrative Agent shall be fully justified in failing or refusing to act
hereunder or under any other Loan Documents unless it shall (a) receive written instructions from the Majority Lenders or the Lenders, as applicable, (or such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02) specifying the action to be taken and (b) be indemnified to its satisfaction by the Lenders against any and all liability and expenses which may be incurred by it by reason of taking or
continuing to take any such action. The instructions as aforesaid and any action taken or failure to act pursuant thereto by the Administrative Agent shall be binding on all of the Lenders. If a Default has occurred and is continuing, then the
Administrative Agent shall take such action with respect to such Default as shall be directed by the requisite Lenders in the written instructions (with indemnities) described in this Section 11.03, provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best
interests of the Lenders. In no event, however, shall the Administrative Agent be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, the Loan Documents or applicable law.
If a Default has occurred and is continuing, neither the Syndication Agents nor the Documentation Agents shall have any obligation to perform any act in respect thereof. The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Majority Lenders or the Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02), and otherwise the Administrative
Agent shall not 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 Borrower, 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 the Administrative Agent. The
Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any
such counsel, accountants or experts. The Administrative Agent may deem and treat the payee of any 

  

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Note as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof permitted hereunder shall have
been filed with the Administrative Agent. 
 Section 11.05 Subagents. The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding Sections of this ARTICLE XI shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. 
 Section 11.06 Resignation or Removal of Agents. Subject to the appointment and acceptance of a successor Administrative Agent as provided in this Section 11.06, the Administrative Agent may resign at any time by notifying
the Lenders, each Issuing Bank and the Borrower, and the Administrative 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 the Borrower, 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 XI and Section 12.03 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as
Agent. 
 Section 11.07 Agents as Lenders. Each bank serving as an Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower 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 

  

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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 Borrower or any of its Subsidiaries of this Agreement, the Loan Documents or any other document referred to or provided for herein or to inspect the Properties or books of the Borrower or its Subsidiaries. Except for notices,
reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder, no Agent or Arranger shall have any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the Borrower (or any of its Affiliates) which may come into the possession of such Agent or any of its Affiliates. In this regard, each Lender acknowledges that Andrews Kurth LLP
is acting in this transaction as special counsel to the Administrative Agent only, except to the extent otherwise expressly stated in any legal opinion or any Loan Document. Each other party hereto will consult with its own legal counsel to the
extent that it deems necessary in connection with the Loan Documents and the matters contemplated therein. 
 Section 11.09 Authority
of Administrative Agent to Release Collateral and Liens. Each Lender and 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.
Each Lender and each Issuing Bank hereby authorizes the Administrative Agent to execute and deliver to the Borrower, at the Borrower’s sole cost and expense, any and all releases of Liens, termination statements, assignments or other documents
reasonably requested by the Borrower in connection with any sale or other disposition of Property to the extent such sale or other disposition is permitted by the terms of Section 9.12 or is otherwise authorized by the terms of the Loan
Documents. 
 Section 11.10 Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Borrower or any of its Subsidiaries, the Administrative Agent (irrespective of whether the principal of any Loan
shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or
otherwise: 
 (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and
all other Indebtedness that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 12.03) allowed in such judicial
proceeding; and 
 (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the
same; 
 and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making 

  

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of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 12.03. 
 Nothing
contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Indebtedness or the rights
of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. 
 Section 11.11 The Syndication Agents, Documentation Agents and Arranger. The Syndication Agents, the Documentation Agents and the Arranger shall have no duties, responsibilities or liabilities under this Agreement and the other
Loan Documents other than their duties, responsibilities and liabilities in their capacity as Lenders hereunder. 
 ARTICLE XII

 Miscellaneous 
 Section 12.01 Notices. 
 (a) Except in the case of notices and other communications expressly permitted to be given by
telephone (and subject to Section 12.01(b)), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy,
as follows: 
 (i) if to the Borrower, to it at 700 Milam Street, Suite 3100, Houston, Texas 77002-4804, Attention of Winston
M. Talbert, Chief Financial Officer and Executive Vice President (Telecopy No. (713) 579-6210), with a copy to John F. Wombwell, Executive Vice President, General Counsel and Secretary (Telecopy No. 713-579-6231); 
 (ii) if to the Administrative Agent, to it at 10 South Dearborn, Floor 7, Chicago, Illinois 60603-2003, Attention of Marlene Zanoria,
(Telecopy No. (312) 385-7096, and for all other correspondence other than borrowings, continuation, conversion and Letter of Credit requests 712 Main Street, 8th Floor South, Houston, Texas 77002, Attention of Jo Linda Papadakis (Telecopy No.
(713) 216-7770); and 
 (iii) 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
III, ARTICLE IV and ARTICLE V 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. 
  

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 (c) Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. 
 Section 12.02 Waivers; Amendments. 
 (a) No failure on the part of the Administrative Agent, 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 Administrative Agent, 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 the Borrower therefrom shall in any event be effective unless the same shall be
permitted by Section 12.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter
of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time. 
 (b) Neither this Agreement nor any provision hereof nor any Security Instrument nor any provision thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the 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 the Required Lenders, decrease or maintain the Borrowing Base without the
consent of Super-majority Lenders or modify Section 2.07 or 2.09 without the written consent of all of the Lenders; 
 (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 or prepayment of the principal amount
of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or any other Indebtedness hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, or postpone or extend the
Termination Date without the written consent of each Lender affected thereby; 
  

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 (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) waive or amend
Section 3.04(c), Section 6.01, Section 8.13, Section 10.02(c) or Section 12.14 or change the definition of the terms “Domestic Subsidiary”, “Foreign Subsidiary”, “Material Domestic Restricted
Subsidiary” or “Subsidiary”, without the written consent of each Lender; 
 (vii) release any Guarantor (except
as set forth in the Guaranty Agreement, Section 8.13(c), Section 9.11 or Section 12.17) or release all or substantially all of the collateral (other than as provided in Section 11.09 and Section 12.17), without the written
consent of each Lender; or 
 (viii) change any of the provisions of this Section 12.02(b) or the definitions of
“Required Lenders”, “Super-majority Lenders” or “Majority Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or under any other
Loan Documents or make any determination or grant any consent hereunder or any other Loan Documents, without the written consent of each Lender; 
 provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, any other Agent or any Issuing Bank hereunder or under any other Loan Document without the
prior written consent of the Administrative Agent, such other Agent or such Issuing Bank, as the case may be. Notwithstanding the foregoing, any supplement to Schedule 9.08 (Nature of Business) shall be effective simply by delivering to the
Administrative Agent a supplemental schedule clearly marked as such and, upon receipt, the Administrative Agent will promptly deliver a copy thereof to the Lenders. 
 Section 12.03 Expenses, Indemnity; Damage Waiver. 
 (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including, without limitation, the reasonable fees, charges and disbursements of counsel and other outside consultants for the Administrative Agent, the
reasonable travel, photocopy, mailing, courier, telephone and other similar expenses, and the cost of environmental audits and surveys and appraisals, in connection with the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the execution hereof and including advice of counsel to the Administrative Agent as to the rights and duties of the Administrative Agent and the Lenders with respect thereto)
of this Agreement and the other Loan Documents and any amendments, modifications or waivers of or consents related to the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated),
(ii) all costs, expenses, Taxes, assessments and other charges incurred by any Agent or any Lender in connection with any filing, registration, recording or perfection of any security interest 

  

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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 in connection with this Agreement or any other
Loan Document, including its rights under this Section 12.03, or in connection with the Loans made or Letters of Credit issued hereunder, including, without limitation, all such out-of-pocket expenses incurred during any workout, restructuring
or negotiations in respect of such Loans or Letters of Credit. 
 (b) THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER, 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 BORROWER OR ANY RESTRICTED 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 BORROWER OR ANY GUARANTOR 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 PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES BY THE BORROWER AND ITS SUBSIDIARIES, (vii) ANY
ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT
LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, 

  

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ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (ix) THE BREACH OR
NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (x) THE PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR
PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR
ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR
FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION
IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY
INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION,
INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED
THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES 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. 
 (c) To the extent that the Borrower fails to pay any amount
required to be paid by it to any Agent, the Arranger or any Issuing Bank under Section 12.03(a) or (b), each Lender severally agrees to pay to such Agent, the Arranger 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, the Arranger or such Issuing Bank in its capacity as such. 
 (d) To the extent
permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising
out of, in 

  

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connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof. 
 (e) All amounts due under this Section 12.03 shall be payable not
later than 10 days after written demand therefor. 
 (f) Notwithstanding any other provisions of this Section 12.03, 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 Borrower and the Guarantors 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 Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this
Section 12.04. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank
that issues any Letter of Credit), Participants (to the extent provided in Section 12.04(c)) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, each Issuing Bank and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement. 
 (b) (i) Subject to the conditions set forth in
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) 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 consent of the Administrative Agent 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 or Loans, the amount of the Commitment or Loans of the assigning 

  

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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 amount of the Commitment of Loans of the assigning Lender after such assignment shall not be less than $10,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, 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; and 
 (D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. 
 (iii) Subject to Section 12.04(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 5.01,
Section 5.02, Section 5.03 and Section 12.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.04 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in accordance with Section 12.04(c). 
 (iv) The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders,
and the Maximum Credit Amount of, and principal amount of the Loans and LC 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. In connection with any changes to the Register, if necessary, the
Administrative Agent will reflect the revisions on Annex I and forward a copy of such revised Annex I to the Borrower, each Issuing Bank and each Lender. 
  

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 (v) Upon its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 12.04(b) and any written consent
to such assignment required by Section 12.04(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this Section 12.04(b). 
 (c) (i) Any Lender may, without the consent of
the Borrower, the Administrative Agent or any Issuing Bank, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (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. 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 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 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 12.04(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. 
  

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 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 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 5.01, Section 5.02, Section 5.03 and Section 12.03 and ARTICLE XI shall
survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this
Agreement, any other Loan Document or any provision hereof or thereof. 
 (b) To the extent that any payments on the Indebtedness or proceeds
of any collateral are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver or other Person under any bankruptcy law, common law or equitable cause, then
to such extent, the Indebtedness so satisfied shall be revived and continue as if such payment or proceeds had not been received and the Administrative Agent’s and the Lenders’ Liens, security interests, rights, powers and remedies under
this Agreement and each Loan Document shall continue in full force and effect. In such event, each Loan Document shall be automatically reinstated and the Borrower shall take such action as may be reasonably requested by the Administrative Agent and
the Lenders to effect such reinstatement. 
 Section 12.06 Counterparts; Integration; Effectiveness. 
 (a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single contract. 
 (b) This Agreement, the other Loan Documents and any
separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof and thereof. This Agreement and the other Loan Documents (other than the Letters of Credit and the Letter of Credit Agreements) represent the final agreement among the parties hereto and thereto
and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties. 
 (c) Except as provided in Section 6.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent 

  

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shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart
of this Agreement. 
 Section 12.07 Severability. Any provision of this Agreement or any other Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions
hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 
 Section 12.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations (of whatsoever kind, including, without limitations obligations under Swap
Agreements) at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or any Restricted Subsidiary against any of and all the obligations of the Borrower or any Restricted Subsidiary owed to such Lender now or
hereafter existing under this Agreement or any other Loan Document, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of
each Lender under this Section 12.08 are in addition to other rights and remedies (including other rights of setoff) which such Lender or its Affiliates may have. 
 Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. 
 (a) THIS AGREEMENT
AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
 (b) ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY
ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE
AND DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION. 
  

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 (c) THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS AND HEREBY CONFERS AN IRREVOCABLE
SPECIAL POWER, AMPLE AND SUFFICIENT, TO CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 111 EIGHTH AVENUE, THIRTEENTH FLOOR, NEW YORK, NEW YORK 10011, AS ITS DESIGNEE, APPOINTEE AND AGENT WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING IN
NEW YORK TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH PROCEEDING AND AGREES THAT THE FAILURE OF SUCH
AGENT TO GIVE ANY ADVICE OF ANY SUCH SERVICE OF PROCESS TO THE BORROWER SHALL NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY CLAIM BASED THEREON. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS
SUCH, THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION. EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED
PURSUANT TO SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION. 
 (d) EACH PARTY
HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN;
(ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF 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
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 Section 12.10 Headings. Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 
 Section 12.11 Confidentiality. Each of the Administrative Agent, 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, (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 12.11, 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 (provided that such Person agrees in writing to be bound by the
provisions of this Section 12.11) or (ii) any actual or prospective counterparty (or its advisors) to any Swap Agreement relating to the Borrower and its obligations (provided that such Person agrees in writing to be bound by the
provisions of this Section 12.11), (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 12.11 or (ii) becomes
available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section 12.11, “Information” means all information received from
the Borrower or any Restricted Subsidiary relating to the Borrower or any Restricted 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 the Borrower or a Restricted Subsidiary; provided that, in the case of information received from the Borrower or any Restricted Subsidiary after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 12.11 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. 
 Section 12.12 Interest Rate Limitation. It is the intention of the parties hereto that each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby would be usurious as
to any Lender under laws applicable to it (including the laws of the United States of America and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to such Lender notwithstanding the other provisions of this
Agreement), then, in that event, notwithstanding anything to the contrary in any of the Loan Documents or any agreement entered into in connection with or as security for the Notes, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that is contracted for, taken, reserved, charged or received by such Lender under any of the Loan Documents or agreements or otherwise in connection with the Notes shall
under no circumstances exceed the maximum amount allowed by such applicable law, and any excess shall be canceled automatically and if theretofore paid shall be credited by 

  

 91 

 
such Lender on the principal amount of the Indebtedness (or, to the extent that the principal amount of the Indebtedness shall have been or would thereby be
paid in full, refunded by such Lender to the Borrower); and (ii) in the event that the maturity of the Notes is accelerated by reason of an election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or
in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by such Lender as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Lender on the principal amount of the Indebtedness (or,
to the extent that the principal amount of the Indebtedness shall have been or would thereby be paid in full, refunded by such Lender to the Borrower). All sums paid or agreed to be paid to any Lender for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Lender, be amortized, prorated, allocated and spread throughout the actual full term of the Loans evidenced by the Notes until payment in full so that the rate or amount of
interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time (i) the amount of interest payable to any Lender on any date shall be computed at the Highest
Lawful Rate applicable to such Lender pursuant to this Section 12.12 and (ii) in respect of any subsequent interest computation period the amount of interest otherwise payable to such Lender would be less than the amount of interest
payable to such Lender computed at the Highest Lawful Rate applicable to such Lender, then the amount of interest payable to such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful
Rate applicable to such Lender until the total amount of interest payable to such Lender shall equal the total amount of interest which would have been payable to such Lender if the total amount of interest had been computed without giving effect to
this Section 12.12. 
 Section 12.13 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, CONDITIONS AND EFFECTS 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 RESULT 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.” 
  

 92 

 Section 12.14 Collateral Matters; Swap Agreements. The benefit of the Security Instruments
and of the provisions of this Agreement relating to any collateral securing the Indebtedness shall also extend to and be available to any Lender or any Affiliate of a Lender that is counterparty to any Swap Agreement with the Borrower or any of its
Subsidiaries (including any Swap Agreement between such Persons in existence prior to the date hereof) on a pro rata basis in respect of any obligations of the Borrower or any of its Subsidiaries which arise under any such Swap Agreement; provided
that such benefits shall cease to extend to and be available to any such Lender or Affiliate in respect of obligations under such Swap Agreements if such Person or its Affiliate, as the case may be, ceases to be Lender. For the avoidance of doubt, a
Person ceases to be a Lender hereunder if (a) pursuant to an assignment, such Person ceases to have any Commitment, Loans and LC Exposure hereunder or (b) the Commitments of all of the Lenders hereunder have been terminated and all
principal, interest and other amounts outstanding under this Agreement have been paid in full in cash (whether as a result of repayment at maturity, prepayment in connection with the refinancing of this Agreement or otherwise). No Lender or any
Affiliate of a Lender shall have any voting rights under any Loan Document as a result of the existence of obligations owed to it under any such Swap Agreements. 
 Section 12.15 No Third Party Beneficiaries. This Agreement, the other Loan Documents, and the agreement of the Lenders to make Loans and the Issuing Bank to issue, amend, renew or extend Letters of Credit
hereunder are solely for the benefit of the Borrower, and no other Person (including, without limitation, 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, the Issuing Bank or any Lender for any reason whatsoever. There are no third party beneficiaries. 
 Section 12.16 USA Patriot Act Notice. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender to identify the Borrower in accordance with the Act. 
 Section 12.17 Release of
Liens and Guarantors. After the Mortgage Release Date, the Administrative Agent, at the request and expense of the Borrower, shall promptly (i) execute and deliver to the Borrower or its designee such UCC termination statements, mortgage
releases and other documentation as shall be reasonably requested by the Borrower to effect the termination and release of the Liens created by the Security Instruments and (ii) assign, transfer and deliver to the Borrower or its designee,
against receipt but without any recourse, warranty or representation whatsoever, any collateral then in the Administrative Agent’s possession. Upon the request of the Borrower (and at the Borrower’s expense), the Administrative Agent shall
release from its obligations under the Guaranty Agreement each Guarantor that (i) is not a Material Domestic Restricted Subsidiary and (ii) is not required to guarantee the Indebtedness pursuant to Section 8.13. Upon the completion of
any sale or dissolution of a Subsidiary otherwise permitted hereunder, the Administrative Agent shall promptly deliver to the Borrower any certificate representing the Equity Interests of such Subsidiary then held by it. 
  

 93 

 [SIGNATURES BEGIN ON NEXT PAGE] 
  

 94 

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

					
	BORROWER:	 	PLAINS EXPLORATION & PRODUCTION COMPANY
			
		 	By:	 	 /s/ Winston M. Talbert

		 	Name:	 	Winston M. Talbert
		 	Title:	 	 Executive Vice President and Chief
 Financial
Officer

					
	ADMINISTRATIVE AGENT:	 	 JPMORGAN CHASE BANK, N.A., as a Lender
 And as Administrative Agent

			
		 	By:	 	 /s/ Jo Linda Papadakis

		 	Name:	 	Jo Linda Papadakis
		 	Title:	 	Vice President

  

 96 

					
	LENDERS:	 	 BANK OF AMERICA, N.A., as a Lender and as a
 Co-Syndication Agent

			
		 	By:	 	 /s/ Ronald E. McKaig

		 	Name:	 	Ronald E. McKaig
		 	Title:	 	Senior Vice President

  

 97 

			
	BMO CAPITAL MARKETS FINANCING, INC., as a Lender and as a Co-Syndication Agent
		
	 By:
	 	 /s/ James V. Ducote

	 Name:
	 	James V. Ducote
	 Title:
	 	Director

 98 

			
	 THE BANK OF NOVA SCOTIA, as a Lender and
 as a Co-Documentation Agent

		
	 By:
	 	 /s/ Gregory E. George

	 Name:
	 	Gregory E. George
	 Title:
	 	Managing Director

  

 99 

			
	 BNP PARIBAS, as a Lender and as a
 Co-Documentation Agent

		
	 By:
	 	 /s/ Brian M. Malone

	 Name:
	 	Brian M. Malone
	 Title:
	 	Managing Director
		
	 By:
	 	 /s/ Betsy Jocher

	 Name:
	 	Betsy Jocher
	 Title:
	 	Director

  

 100 

			
	 BANK OF SCOTLAND, as a Lender

		
	 By:
	 	 /s/ Karen Weich

	 Name:
	 	Karen Weich
	 Title:
	 	Vice President

  

 101 

			
	 CALYON NEW YORK BRANCH, as a Lender

		
	 By:
	 	 /s/ Michael D. Willis

	 Name:
	 	Michael D. Willis
	 Title:
	 	Director
		
	 By:
	 	 /s/ Tom Byargeon

	 Name:
	 	Tom Byargeon
	 Title:
	 	Managing Director

  

 102 

			
	 CITICORP NORTH AMERICA, INC., as a Lender

		
	 By:
	 	 /s/ John F. Miller

	 Name:
	 	John F. Miller
	 Title:
	 	Vice President

  

 103 

			
	 DEUTSCHE BANK TRUST COMPANY
 AMERICAS, as a Lender

		
	 By:
	 	 /s/ Evelyn Thierry

	 Name:
	 	Evelyn Thierry
	 Title:
	 	Vice President
		
	 By:
	 	 /s/ Omayra Laucella

	 Name:
	 	Omayra Laucella
	 Title:
	 	Vice President

  

 104 

			
	 FORTIS CAPITAL CORP., as a Lender

		
	 By:
	 	 /s/ Scott Myatt

	 Name:
	 	Scott Myatt
	 Title:
	 	Vice President
		
	 By:
	 	 /s/ Darrell Holley

	 Name:
	 	Darrell Holley
	 Title:
	 	Managing Director

  

 105 

			
	 THE ROYAL BANK OF SCOTLAND PLC, as a
 Lender

		
	 By:
	 	 /s/ Douglas A. Whiddon

	 Name:
	 	Douglas A. Whiddon
	 Title:
	 	Senior Vice President

  

 106 

			
	 TORONTO DOMINION (TEXAS) LLC, as a Lender

		
	 By:
	 	 /s/ Jackie Barrett

	 Name:
	 	Jackie Barrett
	 Title:
	 	Authorized Signatory

  

 107 

			
	WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender
		
	 By:
	 	 /s/ Christopher L. Hewitt

	 Name:
	 	Christopher L. Hewitt
	 Title:
	 	Vice President

  

 108 

			
	 COMERICA BANK, as a Lender

		
	 By:
	 	 /s/ Juli Bieser

	 Name:
	 	Juli Bieser
	 Title:
	 	Senior Vice President

  

 109 

			
	 UBS LOAN FINANCE LLC, as a Lender

		
	 By:
	 	 /s/ Richard L. Tavrow

	 Name:
	 	Richard L. Tavrow
	 Title:
	 	Director, Banking Products Services, US
		
	 By:
	 	 /s/ Mary E. Evans

	 Name:
	 	Mary E. Evans
	 Title:
	 	Associate Director, Banking Products Services, US

  

 110 

			
	 WELLS FARGO BANK, N.A., as a Lender

		
	 By:
	 	 /s/ Paul A. Squires

	 Name:
	 	Paul A. Squires
	 Title:
	 	Vice President

  

 111 

			
	 MORGAN STANLEY BANK, as a Lender

		
	 By:
	 	 /s/ Daniel Twenge

	 Name:
	 	Daniel Twenge
	 Title:
	 	Authorized Signatory

  

 112 

			
	 GOLDMAN SACHS CREDIT PARTNERS L.P., as a Lender

		
	 By:
	 	 /s/ Mark Walton

	 Name:
	 	Mark Walton
	 Title:
	 	Authorized Signatory

  

 113Asset Purchase & Sale Agreement

 Exhibit 10.1 
 ASSET PURCHASE AND SALE AGREEMENT 
 LARAMIE ENERGY, LLC 
 AS SELLER 
 AND 
 PLAINS EXPLORATION & PRODUCTION COMPANY 
 AS BUYER 
 Dated April 18, 2007 

 TABLE OF CONTENTS 
  

					
	ARTICLE I DEFINITIONS	  	1
		
	ARTICLE II PURCHASE AND SALE	  	8
	      2.1	 	Purchase and Sale	  	8
	      2.2	 	Purchased Assets; Excluded Assets	  	8
	      2.3	 	Revenues and Expenses	  	10
	      2.4	 	Effective Time	  	10
	      2.5	 	Purchase Price	  	11
	      2.6	 	Allocation of Purchase Price	  	11
	      2.7	 	Adjustments to Purchase Price	  	11
		
	ARTICLE III BUYER’S INSPECTION	  	13
	      3.1	 	Access to Records	  	13
	      3.2	 	Access to Properties	  	13
		
	ARTICLE IV TITLE MATTERS	  	13
	      4.1	 	Defensible Title	  	13
	      4.2	 	Purchase Price Adjustments for Defective Interests	  	14
	      4.3	 	Interest Additions	  	17
	      4.4	 	Title Dispute Resolution.	  	17
	      4.5	 	Casualty Loss and Condemnation	  	18
		
	ARTICLE V ENVIRONMENTAL MATTERS	  	19
	      5.1	 	Assertions of Environmental Defects	  	19
	      5.2	 	Remedies for Environmental Defects	  	20
	      5.3	 	Exclusive Remedy	  	20
	      5.4	 	Environmental Deductibles	  	20
	      5.5	 	Environmental Dispute Resolution	  	21
	      5.6	 	NORM, Wastes and Other Substances	  	22
		
	ARTICLE VI SELLER’S REPRESENTATIONS AND WARRANTIES	  	22
	      6.1	 	Organization and Standing	  	22
	      6.2	 	Power	  	22
	      6.3	 	Authorization and Enforceability	  	22
	      6.4	 	Liability for Brokers’ Fees	  	23
	      6.5	 	Alien Status	  	23
	      6.6	 	Litigation	  	23
	      6.7	 	Rentals and Royalties	  	23
	      6.8	 	No Conflicts	  	23
	      6.9	 	Compliance with Laws, Etc	  	24
	      6.10	 	Environmental Conditions	  	24
	      6.11	 	Taxes	  	24
	      6.12	 	Hydrocarbon Sales Contracts	  	24

  

 i 

					
	      6.13	 	Material Contracts	  	24
	      6.14	 	No Preferential Rights or Consents	  	25
	      6.15	 	Records	  	25
	      6.16	 	Suspense Accounts	  	25
	      6.17	 	Hedging Contracts	  	25
	      6.18	 	Gas Imbalances	  	25
	      6.19	 	Well Status	  	25
	      6.20	 	Laramie Land Assets	  	26
	      6.21	 	Operating Agreements	  	26
	      6.22	 	Change in Condition	  	26
	      6.23	 	Plugging and Abandonment; Status of Wells	  	26
	      6.24	 	Operating Equipment	  	27
	      6.25	 	Investment	  	27
		
	ARTICLE VII BUYER’S REPRESENTATIONS AND WARRANTIES	  	27
	      7.1	 	Organization and Standing	  	27
	      7.2	 	Power	  	28
	      7.3	 	Authorization and Enforceability	  	28
	      7.4	 	Liability for Brokers’ Fees	  	28
	      7.5	 	Litigation	  	28
	      7.6	 	Securities Laws	  	28
	      7.7	 	Independent Evaluation	  	29
	      7.8	 	No Conflicts	  	29
	      7.9	 	Eligibility	  	29
	      7.10	 	Shares	  	30
	      7.11	 	Listing	  	30
	      7.12	 	Financial Statements	  	30
	      7.13	 	Filings	  	30
		
	ARTICLE VIII COVENANTS AND AGREEMENTS	  	31
	      8.1	 	Covenants and Agreements of Seller	  	31
	      8.2	 	Covenants and Agreements of Buyer	  	32
	      8.3	 	Covenants and Agreements of the Parties	  	33
	      8.4	 	Personnel	  	33
	      8.5	 	HSR Act	  	34
		
	ARTICLE IX TAX MATTERS	  	34
	      9.1	 	Apportionment of Tax Liability	  	34
	      9.2	 	Tax Returns and Reports	  	34
		
	ARTICLE X CONDITIONS TO CLOSING	  	35
	      10.1	 	Conditions to Seller’s Obligations	  	35
	      10.2	 	Conditions to Buyer’s Obligations	  	35
	      10.3	 	Conditions to Obligations of Seller and Buyer	  	36
		
	ARTICLE XI RIGHT OF TERMINATION AND ABANDONMENT	  	36
	      11.1	 	Termination	  	36

  

 ii 

					
	      11.2	 	Liabilities Upon Termination	  	37
		
	ARTICLE XII CLOSING	  	37
	      12.1	 	Date of Closing	  	37
	      12.2	 	Place of Closing	  	37
	      12.3	 	Closing Obligations	  	37
		
	ARTICLE XIII POST-CLOSING OBLIGATIONS	  	38
	      13.1	 	Post-Closing Adjustments	  	38
	      13.2	 	Proceeds and Expenses	  	39
	      13.3	 	Records	  	40
	      13.4	 	Suspense Accounts	  	40
	      13.5	 	Sales Tax	  	40
	      13.6	 	Further Assurances	  	40
	      13.7	 	Release of Escrow Funds and Shares	  	40
	      13.8	 	Removal of Name	  	41
		
	ARTICLE XIV INDEMNIFICATION	  	41
	      14.1	 	Indemnification by Seller	  	41
	      14.2	 	Assumption of Certain Liabilities	  	41
	      14.3	 	Indemnification by Buyer	  	42
	      14.4	 	Mutual Releases	  	42
	      14.5	 	Limitations on Indemnification	  	42
	      14.6	 	Survival Provisions	  	43
	      14.7	 	Certain Disclaimers	  	43
	      14.8	 	Procedure	  	44
	      14.9	 	Reservation as to Non-Parties	  	45
	      14.10	 	Exclusive Remedy	  	46
	      14.11	 	Waiver of Right to Rescission	  	46
		
	ARTICLE XV MISCELLANEOUS	  	46
	      15.1	 	Schedules and Exhibits	  	46
	      15.2	 	Expenses	  	46
	      15.3	 	Notices	  	46
	      15.4	 	Amendments	  	48
	      15.5	 	Assignment	  	48
	      15.6	 	Announcements	  	48
	      15.7	 	Headings	  	48
	      15.8	 	Counterparts	  	48
	      15.9	 	References	  	48
	      15.10	 	Governing Law; Jurisdiction; Venue; Jury Waiver	  	48
	      15.11	 	Entire Agreement	  	49
	      15.12	 	Knowledge and Reasonable and Commercially Reasonable Efforts	  	49
	      15.13	 	Binding Effect	  	49
	      15.14	 	No Third-Party Beneficiaries	  	49
	      15.15	 	Waiver of Compliance with Bulk Transfer Laws	  	49
	      15.16	 	Dispute Resolution	  	49

  

 iii 

					
	      15.17	 	Disclaimer of Representations and Warranties	  	50
	      15.18	 	Confidentiality	  	50
	      15.19	 	Construction	  	51

  

 iv 

 ASSET PURCHASE AND SALE AGREEMENT 
 THIS ASSET PURCHASE AND SALE AGREEMENT (this “Agreement”), dated April 18, 2007, is between LARAMIE ENERGY, LLC, a Delaware
limited liability company (“Seller”) and PLAINS EXPLORATION & PRODUCTION COMPANY, a Delaware corporation (“Buyer”). 
 Agreement 
 In consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 The following terms when used herein and in the Exhibits and Schedules shall have the following meanings: 
 “Accountants” is defined in Section 13.1(b). 
 “Affiliate” means with
respect to a Person, any other Person controlling, controlled by, or under common control with such Person. As used in this definition, the word “control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. A Person conclusively will be deemed to control another Person if it owns greater than 50% of the equity or voting power
of such Person. 
 “Aggregate Defect Deductible” is defined in Section 4.2(c)(iii). 
 “Agreement” means this Asset Purchase and Sale Agreement, together with all of the Exhibits and Schedules hereto, as the same may
be amended from time to time. 
 “Allocated Value” is defined in Section 2.6. 
 “Approved Expenditures” is defined in Section 8.1(a)(ii). 
 “Assets” is defined in Section 2.2(a). 
 “Assumed Obligations” is defined in Section 14.2. 
 “Background Materials” is defined in Section 7.7. 
 “Buyer” is defined
in the introductory paragraph. 
 “Buyer Indemnified Parties” means (a) Buyer and its Affiliates and
(b) all persons who are or were an officer, director, shareholder, partner, member or manager of Buyer, or any Affiliate of Buyer. 

 “Claim Notice” is defined in Section 14.8(a). 
 “Closing” is defined in Section 12.1. 
 “Closing Amount” is defined in Section 2.7. 
 “Closing
Date” is defined in Section 12.1. 
 “Code” is defined in Section 6.5.

 “Commission” means the U.S. Securities and Exchange Commission. 
 “Confidentiality Agreement” is defined in Section 8.3(a). 
 “Contracts” is defined in Section 2.2(a)(iii). 
 “Current Market Value” means, with respect to a Share as of any date of calculation, the average of the closing prices for
Buyer’s common stock on the New York Stock Exchange for the period of ten consecutive trading days ending with the last trading day prior to such date. 
 “Defect Adjustment” is defined in Section 4.2(c)(i). 
 “Defect Value” is defined in Section 4.2(d). 
 “Defective Interest” is
defined in Section 4.2(a). 
 “Defensible Title” is defined in Section 4.1(a). 
 “Disputed Title Matters” is defined in Section 4.4(a). 
 “DOJ” means the Department of Justice. 
 “Effective Time” is defined in Section 2.4. 
 “Employee
Benefit Plans” means any employee pension benefit plan, as defined in Section 3(2) of ERISA, any employee welfare benefit plan as defined in Section 3(1) of ERISA, any plans that would be employee pension benefit plans or
employee welfare benefit plans if they were subject to ERISA, such as any stock bonus, stock option, stock purchase, stock appreciation rights, phantom stock or other stock plan, deferred compensation plan and any bonus or incentive compensation
plan. 
 “Environmental Defect” is defined in Section 5.1(a). 
 “Environmental Defect Deductible” is defined in Section 5.4. 
 “Environmental Laws” means any and all present and future laws (whether common or statutory), compacts, treaties, conventions,
rules, regulations, orders, decrees, judgments, injunctions, promulgated or entered under such laws by any federal, state, tribal or local governmental entity relating to public or employee health and safety, pollution or protection of 

  

 2 

 
the environment, including, without limitation, common law claims and theories of liability in negligence, trespass, nuisance, strict liability or any other
common law theory, CERCLA, RCRA, the Federal Safe Drinking Water Act, the Federal Water Pollution Control Act, the Emergency Planning and Community Right-to-Know Act, the Clean Air Act, the Oil Pollution Act, the Toxic Substances Control Act, and
any and all other federal, state, tribal and local laws, rules, regulations and orders relating to reclamation of land, wetlands and waterways or relating to use, storage, emissions, discharges, cleanup, releases or threatened releases of pollutants
on or into the workplace or the environment (including, without limitation, ambient air, oceans, waterways, wetlands, surface water, ground water (tributary and non-tributary), land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transportation or handling of Hazardous Substances, as all of the foregoing may be amended, supplemented and reauthorized from time to time. 
 “Environmental Defect Notice” is defined in Section 5.1(a). 
 “Environmental Obligations” shall mean all of the liabilities and obligations, direct or indirect, known or unknown, asserted or
unasserted, absolute or contingent, actual or potential, accrued or unaccrued, solely to the extent related to the Properties, whether such liabilities and obligations accrue before, on or after the Effective Time, including, without limitation,
costs for environmental responses, removal, remediation and all other cleanup costs, to the extent such liabilities and obligations relate to (a) the violation of, and compliance with, past, present and future Environmental Laws,
(b) remediation and restoration of the Properties, including, without limitation, plugging and abandonment and remediation of the Wells, (c) asbestos and (d) damage to persons or property on account of pollutants, contaminants,
chemicals or industrial, toxic or Hazardous Substances or similar substances. 
 “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended. 
 “Escrow Account” is defined in Section 2.7.

 “Escrow Agent” is defined in Section 2.7. 
 “Excluded Assets” means (a) all of Seller’s minute books, financial records, and other business records that relate to
Seller’s business generally (excluding the ownership and operation of the Assets); (b) all trade credits, all accounts, receivables and all other proceeds, income or revenues attributable to the Assets with respect to any period of time
prior to the Effective Time; (c) all claims and causes of action of Seller arising under or with respect to any Contracts that are attributable to periods of time prior to the Effective Time (including claims for adjustments or refunds);
(d) all rights and interests of Seller (A) under any policy or agreement of insurance or indemnity, (B) under any bond or (C) to any insurance or condemnation proceeds or awards arising, in each case, from acts, omissions or
events, or damage to or destruction of property prior to the Effective Time; (e) all Hydrocarbons produced and sold from the Properties with respect to all periods prior to the Effective Time; (f) all claims of Seller for refunds of or
loss carry forwards with respect to (A) production or any other taxes attributable to any period prior to the Effective Time, (B) income or franchise taxes or (C) any taxes attributable to the Excluded Assets; (g) all of
Seller’s proprietary computer software, patents, trade secrets, copyrights, names, trademarks, logos and other intellectual property; (h) all documents and instruments of 

  

 3 

 
Seller that may be protected by an attorney-client privilege; (i) all audit rights arising under any of the Contracts or otherwise with respect to any
period prior to the Effective Time or to any of the Excluded Assets; (j) documents prepared or received by Seller with respect to (A) lists of prospective purchasers for such transactions compiled by Seller, (B) bids submitted by
other prospective purchasers of the Assets, (C) analyses by Seller or its representatives of bids submitted by all prospective purchasers, (D) correspondence between or among Seller, its representatives, and any prospective purchaser other
than Buyer and (E) correspondence between Seller or any of its respective representatives with respect to any of the bids, the prospective purchasers, or the transactions contemplated in this Agreement; (k) Seller’s Denver office
lease and all personal property located at Seller’s Denver office not directly related to the Assets; (l) all of Seller’s Employee Benefit Plans, including all rights, obligations and assets related thereto; (m) all of
Seller’s rights and obligations under accounting and human resources outsource contracts; (n) the Mid-Stream LLC Interests; and (o) peripherals located in Seller’s Denver office. 
 “Exhibit” means any of the exhibits attached hereto and incorporated herein. 
 “Existing Seller Claims” is defined in Section 6.6. 
 “Final Purchase Price” is defined in Section 13.1(a). 
 “Final Settlement Date” is defined in Section 13.1(a). 
 “Final Settlement Statement” is defined in Section 13.1(a). 
 “Flowlines” is defined in Section 2.2(a)(ii). 
 “FTC” means the Federal Trade Commission. 
 “GAAP” means United States generally accepted accounting principles as applied in the oil and gas industry. 
 “Governmental Authority” means any federal, state, local, municipal, foreign or other government, any governmental or quasi-governmental authority of any nature (including any governmental
board, agency, branch, department, official, or entity and any court or other tribunal); and any body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any
nature. 
 “Hazardous Substances” means any pollutants, contaminants, toxic or hazardous or extremely hazardous
substances, materials, wastes, constituents, compounds, or chemicals that are regulated by, or may form the basis of liability under, any Environmental Laws, including NORM and other substances referenced in Section 5.6. 
 “Hidden Creek Pipeline” is defined in Section 2.2(a)(viii). 
 “HSR Act” means the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder.
“Hydrocarbons” is defined in Section 2.2(a)(i). “Indemnified Party” is defined in Section 14.8(a). 
  

 4 

 “Hydrocarbons” is defined in Section 2.2(a)(i). 
 “Indemnifying Party” is defined in Section 14.8(a). 
 “Indemnity Deductible” is defined in Section 14.5(b). 
 “Individual Title Defect Threshold” is defined in Section 4.2(a). 
 “Individual Environmental Threshold” is defined in Section 5.4. 
 “Interest Addition Adjustment” is defined in Section 4.3. 
 “Interest Additions” is defined in Section 4.3. 
 “Lands” is defined in Section 2.2(a)(i). 
 “Laramie Land” is defined in Section 2.2(a)(vii). 
 “Law” means any federal, state, local, municipal, foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, rule, regulation, statute or treaty, and includes Environmental Laws. 
 “Leases” is defined in Section 2.2(a)(i). 
 “Liabilities” shall mean
any and all claims, causes of actions, payments, charges, judgments, assessments, liabilities, losses, damages, penalties, fines or costs and expenses, including any attorneys’ fees, legal or other expenses incurred in connection therewith.

 “LLC Interests” is defined in Section 2.2(a)(vii). 
 “Loss” means any loss, cost, expense, liability, obligation, damage, demand, suit, or sanction of every kind and character
including reasonable fees and expenses of attorneys, technical experts and expert witnesses reasonably incident to matters indemnified against; excluding any special, consequential, punitive or exemplary damages or claims for lost profits or lost
business opportunities, except to the extent recovered against the indemnified party by a third-party claimant. 
 “Material
Contracts” means those Contracts currently in force and effect that involve the performance of services or delivery of goods or materials by or to Seller of an amount or value in excess of $100,000 per year or that are otherwise
material to the ownership or development of the Properties. 
 “Mid-Stream LLC Interests” means Seller’s 25%
member interest in Collbran Valley Gas Gathering, LLC, which interest is subject to a separate Membership Interests Purchase and Sale Agreement. 
 “NORM” means naturally occurring radioactive materials. 
 “Notice Deadline” is
defined in Section 4.2(b). 
  

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 “Notice of Defective Interest” is defined in Section 4.2(b).

 “NRI” is defined in Section 4.1(a). 
 “Operating Costs” is defined in Section 2.3. 
 “Order” means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made or rendered by
any arbitrator, court or other Governmental Agency. 
 “Other Assets” means the LLC Interests and other Assets that
individually have been assigned an Allocated Value as set forth on Exhibit B. 
 “Permits” means any approval,
license, consent, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law. All material Permits are described in Exhibit A-1.

 “Permitted Encumbrances” means: 
 (a) lessors’ royalties, overriding royalties, net profits interests, production payments, reversionary interests and similar burdens if the net cumulative effect of such burdens does not operate to reduce the NRI
for a Well or Well Location below that set forth in Exhibit B; 
 (b) liens for taxes or assessments not yet due and delinquent or, if
delinquent, that are being contested in good faith in the normal course of business; 
 (c) all rights to consent by, required notices to,
filings with, or other actions by federal, state or local Governmental Authorities in connection with the sale or conveyance of the applicable Asset if the same are customarily sought subsequent to such sale or conveyance; 
 (d) rights of reassignment upon the surrender or expiration of any Lease; 
 (e) easements, rights-of-way, servitudes, permits, surface leases and other rights with respect to surface operations, on, over or in respect of any of the Properties or any restriction on access thereto that do not
materially interfere with the operation of the affected Property as has been conducted in the past; 
 (f) such Title Defects as Buyer has
waived pursuant to Section 4.2(e) or otherwise; 
 (g) the terms and conditions of the Contracts to the extent such terms and
conditions do not cause the present NRI to be less than or the present WI to be more than as set forth in Exhibit B for the applicable Well or Well Location (other than resulting from non-consent elections of operating agreements and other
agreements, reversions, back-ins, unit revisions and other events expressly contemplated by such agreements); 
 (h) materialmen’s,
mechanics’, repairmen’s, employees’, contractors’, operators’ or other similar liens or charges arising in the ordinary course of business incidental to construction, maintenance or operation of the Properties (i) if
such liens and charges have not been filed 

  

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pursuant to law and the time for filing such liens and charges has expired, (ii) if filed, such liens and charges have not yet become due and payable or
payment is being withheld as provided by law, or (iii) if their validity is being contested in good faith by appropriate action; 
 (i)
rights reserved to or vested in any Governmental Authority to control or regulate any of the Properties in any manner; and all applicable Laws of general applicability in the area of the Properties; 
 (j) liens arising under operating agreements and production sales contracts securing amounts not yet delinquent or, if delinquent, that are being
contested in good faith in the ordinary course of business; 
 (k) any Existing Seller Claims set forth on Schedule 6.6; and

 (l) all other liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects and irregularities affecting any of
the Properties that are not such as to interfere materially with the operation, value or use thereof. 
 “Person”
means any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity or Governmental Authority. 
 “Personal Property” is defined in Section 2.2(a)(vi). 
 “Preliminary Settlement Statement” is defined in Section 2.7. 
 “Prime Rate” means the per annum rate of interest established from time to time by JPMorgan Chase Bank, N.A. as its prime rate.

 “Properties” and “Property” are defined in Section 2.2(a)(ii). 
 “Purchase Price” is defined in Section 2.5. 
 “Records” is defined in Section 2.2(a)(ix). 
 “Remediation” means, with respect to an Environmental Defect, the implementation and completion of any remedial, removal,
response, construction, closure, disposal or other corrective actions required under Environmental Laws to correct or remove such Environmental Defect. 
 “Remediation Amount” means, with respect to an Environmental Defect, an amount equal to the sum of (i) the estimated cost to remediate the Environmental Defect, but only to the level
required by Environmental Laws in effect at the date hereof using the most cost effective Remediation available, and (ii) the amount reflecting the damage, if any, incurred or suffered by Buyer attributable to any impairment of production from
the affected Properties arising out of or resulting from Seller’s Remediation activities. 
 “Schedule” means
any of the schedules attached hereto and incorporated herein. 
  

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 “Securities Act” means the Securities Act of 1933, as amended. 
 “Seller” is defined in the introductory paragraph. 
 “Seller Indemnified Parties” means (a) Seller and its Affiliates and (b) all persons who are or were an officer, director, shareholder, partner, member or manager of Seller, or any
Affiliate of Seller. 
 “Seller’s Warranties” is defined in Section 14.7. 
 “Shares” is defined in Section 2.5. 
 “Taxes” means all ad valorem, property, production, excise, severance and other taxes based upon or measured by the ownership of property or the production of Hydrocarbons or the receipt of
proceeds therefrom other than income taxes. 
 “Third Party” means any Person other than a Party to this Agreement or
an Affiliate of a Party to this Agreement. 
 “Title Arbitrator” is defined in Section 4.4(b).

 “Title Defect” is defined in Section 4.2(a). 
 “Transition Services Agreement” is defined in Section 12.3(d). 
 “Value of Interest Addition” is defined in Section 4.3. 
 “Wells” is defined in Section 2.2(a)(ii). 
 “Well Location” is defined in Section 2.2(a)(ii). 
 “WI” is defined in Section 4.1(a). 
 ARTICLE II  
 PURCHASE AND SALE 
 2.1 Purchase and Sale. 
 Seller
agrees to sell, and Buyer agrees to purchase, the Assets pursuant to the terms of this Agreement. 
 2.2 Purchased Assets; Excluded
Assets. 
 (a) As used herein, the term “Assets” refers to the following and all of Seller’s right, title
and interest therein: 
 (i) the leasehold estates created by the oil and gas leases described in Exhibit A attached hereto and
mineral interests (the “Leases”) and in and to the lands covered by 

  

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the Leases, including without limitation the lands described in Exhibit A (the “Lands”), and the oil, gas and all other
hydrocarbons (“Hydrocarbons”) attributable to the Leases and the Lands, and all rights to Hydrocarbon production after the Effective Time relating to the Leases and the Lands, including, without limitation, all reversionary
interests, backin interests, overriding royalty interests, production payments, net profits interests and mineral and royalty interests in production of Hydrocarbons; 
 (ii) the existing oil and gas wells as described in Exhibit B (the “Wells”), any gathering and flowlines associated with the Wells (the “Flowlines”) up to their
connection with the gathering systems owned by Collbran Valley Gas Gathering, LLC, or the Hidden Creek Pipeline described in Section 2.2(a)(viii) below, and the undrilled well locations located on the Leases as described in Exhibit
B (the “Well Locations”) (the Leases, the Lands, Hydrocarbons, the Wells, the Flowlines and the Well Locations are referred to herein collectively as the “Properties” or individually as a
“Property”); 
 (iii) all of Seller’s existing and effective sales, purchase, exchange, gathering,
transportation and processing contracts, operating agreements, balancing agreements, farmout agreements, service agreements, equipment leases and other contracts, agreements and instruments (“Contracts”); 
 (iv) all rights and interests in, under or derived from all unitization and pooling agreements in effect with respect to the Properties and the units
created thereby which accrue or are attributable to the interests of Seller in the Properties; 
 (v) all permits, licenses, servitudes,
easements, rights-of-way and other surface agreements used in connection with the ownership or operation of the Properties or the Personal Property; 
 (vi) all equipment, machinery, fixtures, and other real, personal, and mixed property, operational and nonoperational, known or unknown, located on the Properties or the other Assets described above as of the Closing
Date, including, without limitation, the field and gathering assets specifically described in Exhibit C, and all other saltwater disposal wells, well equipment, casing, rods, tanks, boilers, buildings, tubing, pumps, motors, fixtures,
machinery, compression equipment, flow lines, separation facilities, structures, materials, and other items used in the operation thereof, all personal computers and associated peripherals located in Seller’s Grand Junction office, and all
personal computers located in Seller’s Denver office (“Personal Property”); 
 (vii) a 100% member interest
(the “LLC Interests”) in Laramie Land & Cattle Company, LLC, a Colorado limited liability company (“Laramie Land”), which owns approximately 3200 acres of surface estate and mineral interests
overlying a portion of the Properties and an associated ranching operation as more particularly described in Schedule 6.20; 
 (viii)
the pipeline described in Exhibit D and all equipment, machinery, fixtures, pipe, valves, compressors, meters, rights of way, easements, and other real and personal property associated therewith (the “Hidden Creek
Pipeline”); and 
  

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 (ix) all of the files, records, information, and data, whether written or electronically stored,
relating to the Assets, including, without limitation: (A) land and title records (including abstracts of title, title opinions, and title curative documents); (B) contract files; (C) correspondence; (D) operations,
environmental, production, and accounting records; (E) facility and well records; (F) geological, geophysical and seismic records, interpretations, data, maps and information; (G) engineering data; and (H) copies of all
Environmental Assessments, both completed or pending, and any other environmental studies or reports related to the Assets, but excluding any of the foregoing items that are Excluded Assets (“Records”). 
 (b) The Assets do not include, and Seller shall not sell or convey, any of the Excluded Assets. 
 2.3 Revenues and Expenses. 
 Subject to the provisions hereof, Seller shall remain entitled to all of the rights and responsibilities of ownership (including, without limitation, the right to all production, proceeds of production and other proceeds) and shall remain
responsible for all Operating Costs, in each case attributable to the Assets for the period of time prior to the Effective Time. Subject to the provisions hereof, and subject to the occurrence of the Closing, Buyer shall be entitled to all of the
rights and responsibilities of ownership (including, without limitation, the right to all production, proceeds of production, and other proceeds), and shall be responsible for all Operating Costs (provided such costs are permitted to have been
incurred pursuant to Section 8.1(a)(ii), if applicable), in each case, attributable to the Assets for the period of time from and after the Effective Time. All Operating Costs attributable to the Assets, in each case that are:
(i) incurred with respect to operations conducted or production prior to the Effective Time shall be paid by or allocated to Seller and (ii) incurred with respect to operations conducted or production after the Effective Time shall be paid
by or allocated to Buyer. “Operating Costs” means all (i) operating costs (including, without limitation, costs of insurance and Taxes), leasehold acquisition and other capital expenditures incurred in the ownership and
operation of the Assets in the ordinary course of business (excluding any general and administrative or overhead costs incurred by Seller but including, where applicable, in accordance with the relevant operating or unit agreement, if any, any
overhead costs charged to the Assets by Third Party operators under the relevant operating agreement or unit agreement), (ii) Liabilities attributable to personal injury or death, property damage or violation of any Law with respect to
operations prior to the Closing Date, (iii) Environmental Obligations, and (iv) obligations to pay working interests, royalties, overriding royalties or other interest owners revenues or proceeds attributable to sales of Hydrocarbons
relating to the Properties; but excluding obligations to plug wells, dismantle or decommission facilities, close pits. and restore the surface around such wells, facilities and pits. 
 2.4 Effective Time. 
 The
purchase and sale of the Assets shall be effective January 1, 2007, at 7:00 A.M. local time where the Assets are located (the “Effective Time”). 
  

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 2.5 Purchase Price. 
 The purchase price for the Assets (the “Purchase Price”) (i) shall be $860,000,000 and (ii) 1,000,000 newly issued
shares of common stock of Buyer, par value $0.01 per share (the “Shares”). For purposes of computing the Purchase Price under the provisions of this Agreement, the value of the Shares will be based upon the closing price of
the Buyer’s common stock on the New York Stock Exchange on the date of this Agreement. 
 2.6 Allocation of Purchase
Price. 
 The Purchase Price shall be allocated among the Wells, the Well Locations and the Other Assets as set forth on Exhibit
B. The value allocated to a Well, Well Location or Other Asset as set forth on Exhibit B is referred to as the “Allocated Value” for such Asset. 
 2.7 Adjustments to Purchase Price. 
 The Purchase Price shall be adjusted according to this Section 2.7 without duplication. The Purchase Price shall be adjusted at Closing pursuant to a preliminary settlement statement prepared by Seller and submitted, together
with reasonably detailed supporting documentation (the “Preliminary Settlement Statement”), to Buyer five days prior to Closing for Buyer’s comments and review. The Preliminary Settlement Statement shall set forth the
Closing Amount (as hereinafter defined) and all adjustments to the Purchase Price and associated calculations. The term “Closing Amount” means the Purchase Price adjusted as provided in this Section 2.7, using the
best information available, less (i) the Shares plus (ii) $12,500,000 of the Purchase Price to be deposited into an interest bearing escrow account (the “Escrow Account”) established by Seller and Buyer at JPMorgan
Chase Bank, N.A. (the “Escrow Agent”), pursuant to Section 4.2(c)(ii). After Closing, the Purchase Price shall be adjusted in the Final Settlement Statement delivered pursuant to Section 13.1.

 (a) Upward Adjustments. The Purchase Price shall be adjusted upward, without duplication, by the following: 
 (i) an amount equal to the proceeds derived from the sale of Hydrocarbons attributable to the Properties (net of royalties and overriding royalties
payable to third parties to the extent Buyer assumes and agrees to pay the same) actually received by Buyer and attributable to the Properties which are, in accordance with GAAP, attributable to Seller with respect to periods prior to the Effective
Time; 
 (ii) an amount equal to the value of all Hydrocarbons in storage above any pipeline connection owned by Seller at the Effective
Time and not previously sold by Seller that is attributable to the Properties, such value to be the contract price (or if there is no applicable contract price, the market price) in effect as of the Effective Time less Taxes or gravity adjustments,
transportation and marketing costs that are deducted by the purchaser of such Hydrocarbons (net of all royalties and overriding royalties payable to third parties to the extent Buyer assumes and agrees to pay the same); 
 (iii) the amount of all expenditures (including, without limitation, royalties, rentals and other charges, Taxes and Operating Costs (but if applicable,
only to the 

  

 11 

 
extent permitted to have been incurred pursuant to Section 8.1(a)(ii))) paid directly by or on behalf of Seller in connection with the ownership
or operation of the Properties attributable, in accordance with GAAP, to periods from and after the Effective Time; 
 (iv) an amount equal
to all prepaid expenses attributable, in accordance with GAAP, to the Properties for the period from and after the Effective Time that are paid by or on behalf of Seller, including, without limitation, prepaid utility charges, prepayments under
leases, easements and rights-of-way, prepaid insurance premiums and prepaid Taxes; delay rentals and payments under rights-of-way and easements shall be allocated per day over the period by which the applicable lease, right-of-way or easement is
extended thereby, and amounts attributable to the period from and after the Effective Time shall be deemed to be prepaid expenses; 
 (v) an
amount equal to the adjustment, if any, for aggregate Approved Expenditures pursuant to Section 8.1(a)(ii); 
 (vi) the amount,
if any, of Interest Addition Adjustments; 
 (vii) interest on the Purchase Price at the Prime Rate accruing from but excluding May 31,
2007 to the Closing Date if the Closing shall not have occurred on or before May 31, 2007 as a result of the failure to be satisfied of the condition precedent to Seller’s obligations set forth in Section 10.1(a); and 
 (viii) any other amount agreed upon in writing by Seller and Buyer. 
 (b) Downward Adjustments. The Purchase Price shall be adjusted downward, without duplication, by the following: 
 (i) an amount equal to all proceeds derived from the sale of Hydrocarbons attributable to the Properties, net of royalties and severance taxes paid by Seller, actually received by Seller that are, in accordance with
GAAP, attributable to Buyer with respect to periods from and after the Effective Time; 
 (ii) an amount equal to all unpaid Operating Costs
and other expenses, burdens and obligations (including, without limitation, royalties, overriding royalties, rentals, seismic and other charges) which in accordance with GAAP, accrue or are attributable to the Properties prior to the Effective Time;

 (iii) an amount equal to all unpaid Taxes directly attributable to the Properties for any period ending prior to the Effective Time that
are assumed by Buyer pursuant to Section 9.1; 
 (iv) the amount by which the aggregate amount of Defect Adjustments and
adjustments for Environmental Defects, if any, exceeds the Aggregate Defect Deductible; 
 (v) an amount equal to the value of any casualty
loss pursuant to Section 4.5(b); 
  

 12 

 (vi) an amount equal to the adjustment, if any, for Loss attributable to any casualty or taking
described in Section 4.5(b); and 
 (vii) any other amount agreed upon in writing by Seller and Buyer. 
 ARTICLE III 
 BUYER’S
INSPECTION 
 3.1 Access to Records. 
 From and after the date of this Agreement until Closing, and subject to this Section 3.1, Seller will make the Records available to Buyer and Buyer’s authorized representatives for inspection and
review at Seller’s offices where the respective Records are maintained, during normal business hours for the purpose of permitting Buyer to perform its due diligence review. Subject to the consent and cooperation of Third Parties, Seller will
assist Buyer in Buyer’s efforts to obtain, at Buyer’s expense, additional information in the possession of a Third Party as Buyer may reasonably desire. 
 3.2 Access to Properties. 
 From and after the date of this Agreement until Closing,
Seller will, upon reasonable advance notice, allow Buyer and Buyer’s authorized representatives to conduct, at Buyer’s sole risk and expense, on-site inspections and environmental assessments of the Lands, Wells and lands owned by Laramie
Land during reasonable business hours. In connection with any such on-site inspections, Buyer agrees not to interfere with the normal operation of the Properties and agrees to comply with all requirements of the operator. Buyer shall provide to
Seller any plan for such an environmental assessment prior to commencement of field work. If Buyer prepares its own environmental assessment of any Property, Buyer will furnish copies thereof to Seller. In connection with granting such access, Buyer
represents that it is adequately insured and, except to the extent caused by Seller’s gross negligence or willful misconduct, Buyer waives, releases and agrees to indemnify, defend, save and hold harmless the Seller Indemnified Parties against
all claims for injury to, or death of, Persons or for damage to property arising in any way from the access afforded to Buyer hereunder or the activities of Buyer. This waiver, release and indemnity by Buyer shall survive the termination of this
Agreement. 
 ARTICLE IV 
 TITLE MATTERS 
 4.1 Defensible Title. 
 (a) Defensible Title – Definitions. The term “Defensible Title” means, as to each Well or Well Location described on
Exhibit B, such title held by Seller that: (i) for each such Well or Well Location, entitles Seller (and after Closing will entitle Buyer) to receive not less than the net revenue interest (the “NRI”) set forth in
Exhibit B for such Well or Well Location, without reduction, suspension or termination (except as set forth in Exhibit B); (ii) obligates Seller (and after Closing will obligate Buyer) to bear costs and expenses relating to the

  

 13 

 
maintenance, development, operation and the production of Hydrocarbons from the Well or Well Location in an amount not greater than the corresponding working
interest (the “WI”) set forth in Exhibit B without a corresponding increase in the NRI (except as set forth in Exhibit B); (iii) is reflected by appropriate documentation properly filed in the official
records of Mesa County or Garfield County, Colorado, and of the United States Bureau of Land Management, as applicable; (iv) is not adversely affected by any failure of Seller or others to have obtained any Permit or other regulatory action
from any Governmental Authority necessary or desirable for the ownership or operation thereof in accordance with historical practice or that are necessary to carry out the drilling of the Well Locations described in Schedule 8.1(a)(ii); and
(v) subject to and except for the Permitted Encumbrances, is free and clear of liens, security interests, title defects and encumbrances of any kind or character. The term “Defensible Title” means, as to each Other Asset, such title
held by Seller that: (i) is good and marketable, subject to and except only for the Permitted Encumbrances; and (ii) is not adversely affected by any failure of Seller or others to have obtained any Permit or other regulatory action from
any Governmental Authority necessary or desirable for the ownership or operation thereof in accordance with historical practice or that are necessary to carry out the drilling of the Well Locations described in Schedule 8.1(a)(ii).

 (b) Allocated Value. If a Well, Well Location or any Other Asset has not been given an Allocated Value by Buyer, or if the
Allocated Value (prior to any adjustments hereunder) of such Well, Well Location or Other Asset is $20,000 or less, Seller shall be deemed to have Defensible Title to such Well, Well Location or Other Asset. 
 4.2 Purchase Price Adjustments for Defective Interests. 
 (a) Defective Interest. “Defective Interest” means a Well, Well Location or Other Asset affected by a Title Defect that
reduces the Allocated Value of the affected Well, Well Location or Other Asset by more than $20,000 (the “Individual Title Defect Threshold”). For purposes hereof, a “Title Defect” means any lien,
encumbrance, adverse claim, encroachment, irregularity, defect in or objection to title, excluding Permitted Encumbrances, that alone or in combination with other defects renders Seller’s title to a Well, Well Location or Other Asset less than
Defensible Title. 
 (b) Notice of Defective Interest. Buyer shall give Seller written notice (a “Notice of Defective
Interest”) as soon as Title Defects are discovered, and in any event no later than the Closing Date (the “Notice Deadline”). A Notice of Defective Interest shall include all of the following: (i) a
description of each Defective Interest; (ii) the basis for each Defective Interest, and, if the basis is derived from any document, a copy of such document (or pertinent part thereof) shall be attached, or if the basis is derived from any gap
in the chain of title, the documents preceding and following the gap shall be attached; (iii) the Allocated Value of such affected Well, Well Location or Other Asset; and (iv) Buyer’s good faith estimate of the Defect Value and the
computations upon which Buyer’s estimate is based. To give Seller an opportunity to commence reviewing and curing Title Defects, Buyer agrees to use reasonable efforts to give Seller, on or before the end of each calendar week prior to the
Notice Deadline, a Notice of Defective Interest covering all Title Defects discovered by Buyer during the preceding calendar week, which notice may be preliminary in nature and supplemented prior to the Notice Deadline. 
  

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 (c) Defect Adjustments. 
 (i) Subject to Sections 4.2(a) and (b), if a Well, Well Location or Other Asset is a Defective Interest, the Purchase Price will be reduced
under Section 2.7(b)(iv) by the corresponding Defect Value (which reduction is called a “Defect Adjustment”) unless (A) the basis for treating such Well, Well Location or Other Asset as a Defective Interest
has been removed by Seller at its sole cost and expense to the reasonable satisfaction of Buyer prior to Closing, (B) Buyer agrees to waive the relevant Title Defect, (C) Seller elects not later than two business days prior to Closing to
cure such Title Defect no later than 90 days after Closing, or (D) Seller elects to retain the entirety of the Well, Well Location or Other Asset that is subject to such Title Defect and treat it as an Excluded Asset, in which case the Purchase
Price shall be reduced by an amount equal to the Allocated Value of such Well, Well Location or Other Asset. Any Purchase Price reduction under clause (D) shall also constitute a Defect Adjustment for purposes of this Agreement. If Seller and
Buyer elect not to pursue any of the options in clauses (A), (B), or (C) in the previous sentence with respect to any Defective Interests, the Purchase Price shall be reduced pursuant to Section 2.7(b)(iv). 
 (ii) In order to provide security for Title Defects to be cured after Closing, for Environmental Defects resolved under Section 5.5, and for
indemnity claims under Section 14.1, at Closing (i) the Shares and (ii) $12,500,000 of the Purchase Price shall be deposited by Buyer into the Escrow Account (in case of the Shares, by delivery of the certificate representing
the Shares accompanied by a properly completed undated stock power, duly executed in blank by the record holder and in the case of the amount specified in clause (ii), by wire transfer). 
 (A) If any Title Defect that Seller has elected to cure is cured to the reasonable satisfaction of Buyer on or before 90 days after Closing, Buyer shall
so notify Seller within 15 days after receipt of such curative materials. Within five days after Buyer has notified Seller that such Title Defect has been cured to its reasonable satisfaction, the parties shall instruct the Escrow Agent to
distribute to Seller out of the Escrow Account the Defect Value for such Title Defect. If Buyer disputes the adequacy of Seller’s curative material with respect to, or that Seller has adequately cured, any Title Defect, Buyer shall so notify
Seller within 15 days after receipt of such curative materials. 
 (B) If Seller provides no curative materials to cure a Title Defect
within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Wells, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded
Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option to either
(1) receive the Allocated Value of the Excluded Asset as a credit to Buyer in the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly
after Buyer’s election to treat the affected Property as an Excluded Asset, the Defect Value with respect to such Title Defect. 
 (C)
If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value 

  

 15 

 
asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure
or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement
Date (or later determination of the Defect Value). 
 (iii) Notwithstanding anything to the contrary in this Section 4.2,
(A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any
adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by
Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate
Defect Adjustments and Environmental Defects in excess of the Aggregate Defect Deductible. 
 (d) Defect Value. The amount by which
the Allocated Value of a Defective Interest has been reduced by a Title Defect (the “Defect Value”) shall be determined in accordance with this Section 4.2(d). In determining which portion of a Property is a
Defective Interest pursuant to this Section 4.2(d), it is the intent of the parties to include, to the extent possible, only that portion of the Property adversely affected by the defect as a Defective Interest. The Defect Value may not
exceed the Allocated Value of the Property, and shall be determined by the parties in good faith taking into account all relevant factors, including, without limitation, the following: 
 (i) the Allocated Value of the affected Property; 
 (ii) in the case of Wells or Well Locations, the potential for, or actual reduction in, the NRI of the Defective Interest, or the potential for, or actual increase in, the WI to the extent such increase is not accompanied by a corresponding
increase in the NRI of the Defective Interest; 
 (iii) if the Title Defect represents only a possibility of title failure, the probability
that such failure will occur; 
 (iv) the legal effect of the Title Defect; and 
 (v) if the Title Defect is a lien or encumbrance on the Property, the cost of removing such lien or encumbrance. 
 (e) Waiver. Subject to Seller’s special warranty of title to be contained in the Assignment and Bill of Sale referred to in
Section 12.3(a), Buyer shall be deemed to have conclusively waived all Title Defects (i) that do not qualify as Defective Interests, or (ii) that are not disclosed to Seller in a Notice of Defective Interests prior to the
Notice Deadline. Any Title Defect waived shall be deemed a Permitted Encumbrance. 
  

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 4.3 Interest Additions. 
 Promptly on discovery and in any event no later than the Notice Deadline, Seller may notify Buyer in writing of any interest that entitles a Seller to
receive more than the NRI set forth in Exhibit B hereto with respect to a Well or Well Location listed thereon, to the extent the same does not cause a greater than proportionate increase in Seller’s WI therein above that shown on
Exhibit B, or obligates Seller to bear costs and expenses in an amount less than the WI set forth in Exhibit B hereto, to the extent the same causes a decrease in Seller’s WI that is proportionately greater than the decrease in
Seller’s NRI therein below that shown on Exhibit B (collectively, “Interest Additions”). Any notice of possible Interest Additions must include (a) a description of each Interest Addition, (b) the basis
for each Interest Addition, (c) the Allocated Value of the Well or Well Location affected by the Interest Addition, and (d) the value of the Interest Addition or the amount by which Seller believes the Allocated Value of the Well or Well
Location has been increased by the Interest Addition (“Value of Interest Addition”) and the computations upon which Seller’s belief is based. The Value of the Interest Addition shall be determined by the parties in good
faith taking into account all relevant factors including those set forth in Section 4.2(d), and the Purchase Price will be increased in accordance with Section 2.7(a)(vi) by the amount by which the aggregate of all Value of
Interest Additions exceeds one and one-half percent (1.5%) of the Purchase Price (an “Interest Addition Adjustment”). If Buyer disputes the existence of an Interest Addition or the Value of an Interest Addition, the
issue will be deemed submitted for resolution under Section 4.4. Seller shall be deemed to have conclusively waived all Interest Addition Adjustments that are not disclosed to Buyer in writing by the Notice Deadline. 
 4.4 Title Dispute Resolution. 
 (a) The parties agree to resolve disputes concerning the following matters pursuant to this Section 4.4: (i) the existence and scope of a Title Defect, (ii) the Defect Value of that portion of the Properties affected
by a Title Defect, (iii) the adequacy of Seller’s Title Defect curative materials submitted pursuant to Section 4.2(c) or of the cure of a Title Defect, and (iv) the existence or Value of an Interest Addition
(collectively, the “Disputed Title Matters”). 
 (b) The parties agree to attempt to initially resolve all Disputed
Title Matters through good faith negotiations. If the parties cannot resolve any such Disputed Title Matters on or before the Closing, then the Disputed Title Matters will be finally determined by an independent arbitrator mutually acceptable to the
parties, who shall be a title attorney with at least 10 years experience in Colorado oil and gas titles or, if no such arbitrator is mutually acceptable and selected by the parties within 10 days after Closing, then as selected by the American
Arbitration Association (in either event, the “Title Arbitrator”). The arbitration proceeding shall be held in Denver, Colorado and shall be conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association to the extent such rules do not conflict with the terms of this Section 4.4. The Title Arbitrator’s determination of the dispute shall be made within 20 days after submission of the matters in dispute, and
shall be final and binding upon both parties, without right of appeal. In making his determination, the Title Arbitrator shall take into account the factors set forth in Sections 4.1 through 4.3. Notwithstanding the foregoing, for
Disputed Title Matters arising with regard to Title Defects that Seller elects to cure after Closing, the Title Arbitrator shall be selected by the parties not 

  

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later than 100 days after Closing, and the Title Arbitrator’s determination of the dispute shall be made within 20 days after submission of the matters
in dispute. The costs incurred in employing the Title Arbitrator shall be borne 50% by Seller and 50% by Buyer. After the Title Arbitrator makes a determination as to any Disputed Title Matters, the Title Arbitrator shall instruct the Escrow Agent
to pay to Seller or Buyer the appropriate funds from the Escrow Account. 
 4.5 Casualty Loss and Condemnation.

 (a) Notwithstanding anything herein to the contrary, from and after the Effective Time, Buyer shall assume all risk of loss with
respect to production of Hydrocarbons through normal depletion (including watering out of any well, collapsed casing or sand infiltration of any well) and the depreciation of personal property due to ordinary wear and tear, in each case, with
respect to the Properties. 
 (b) If, after the date of this Agreement but prior to the Closing Date, any portion of the Properties is
destroyed by fire or other casualty or is taken in condemnation or under right of eminent domain, and the Loss as a result of such individual casualty or taking exceeds ten percent (10%) of the Purchase Price based on the Allocated Value of the
affected Assets, Buyer shall nevertheless be required to close and Seller shall elect by written notice to Buyer prior to Closing either (i) to cause the Assets affected by such casualty or taking to be repaired or restored to at least its
condition prior to such casualty or taking, at Seller’s sole cost, as promptly as reasonably practicable (which work may extend after the Closing Date), or (ii) to treat such casualty or taking as basis for a downward adjustment to the
Purchase Price pursuant to Section 2.7(b) with respect to the affected Asset or Assets under Section 4.3. In each case, Seller shall retain all rights to insurance, condemnation awards and other claims against third parties
with respect to the casualty or taking except to the extent the parties otherwise agree in writing. 
 (c) If, after the date of this
Agreement but prior to the Closing Date, any portion of the Properties is destroyed by fire or other casualty or is taken in condemnation or under right of eminent domain, and the Loss to the Assets as a result of all such casualties or taking is 10
percent (10%) or less of the Purchase Price based on the Allocated Value of the affected Properties, Buyer shall nevertheless be required to close and Seller, at Closing, shall pay to Buyer (i) all sums paid to Seller by Third Parties by
reason of such casualty or taking insofar as with respect to the Properties and shall assign, transfer and set over to Buyer or subrogate Buyer to all of Seller’s right, title and interest (if any) in insurance claims, unpaid awards, and other
rights against Third Parties (excluding any Liabilities, other than insurance claims, of or against any Seller Indemnified Parties) arising out of such casualty or taking insofar as with respect to the Properties and (ii) an amount equal to any
applicable deductible under Seller’s insurance policies covering such Loss; provided, however, that Seller shall reserve and retain (and Buyer shall assign to Seller) all rights, title, interests and claims against Third Parties for the
recovery of Seller’s costs and expenses incurred prior to the Closing in pursuing or asserting any such insurance claims or other rights against third parties or in defending or asserting rights in such condemnation or eminent domain action
with respect to the Properties. 
 (d) If any action for condemnation or taking under right of eminent domain is pending or threatened with
respect to any Property or portion thereof after the date of this 

  

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Agreement, but no taking of such Property or portion thereof occurs prior to the Closing Date, Buyer shall nevertheless be required to close and Seller, at
Closing, shall assign, transfer and set over to Buyer or subrogate Buyer to all of Seller’s right, title and interest (if any) in such condemnation or eminent domain action, including any future awards therein, insofar as they are attributable
to the Properties threatened to be taken, except that Seller shall reserve and retain (and Buyer shall assign to Seller) all rights, titles, interests and claims against Third Parties for the recovery of Seller’s costs and expenses incurred
prior to the Closing in defending or asserting rights in such action with respect to the Properties. 
 ARTICLE V 
 ENVIRONMENTAL MATTERS 
 5.1
Assertions of Environmental Defects. 
 (a) Buyer must deliver claim notices to Seller meeting the requirements of this
Section 5.1 (collectively the “Environmental Defect Notices” and individually an “Environmental Defect Notice”) not later than the Notice Deadline setting forth any matters which, in
Buyer’s reasonable opinion, constitute Environmental Defects and which Buyer intends to assert as Environmental Defects pursuant to this Section 5.1. For purposes hereof, an “Environmental Defect” shall mean
the existence as of the date of any such notice with respect to the Assets or the operation thereof of any environmental pollution, contamination, degradation, damage or injury as to which remedial or corrective action is presently required (or if
known, would be presently required) under Environmental Laws or which, if left unremediated, would reasonably be likely to require future Remediation under Environmental Laws as in effect at the Closing Date. 
 (b) For all purposes of this Agreement (excluding Section 14.1(c)), Buyer shall be deemed to have conclusively waived any Environmental
Defect which Buyer fails to properly assert as an Environmental Defect by an Environmental Defect Notice received by Seller on or before the Notice Deadline. 
 (c) Each Environmental Defect Notice shall be in writing and shall include (i) a description of the matter constituting the alleged Environmental Defect, (ii) a description of each Well, Well Location or
other portion of the Assets that Buyer believes in good faith is affected by the alleged Environmental Defect, (iii) Buyer’s assertion of the Allocated Value of the portion of the Properties or other portion of the Assets affected by the
alleged Environmental Defect, (iv) supporting documents reasonably necessary for Seller to verify the existence of the alleged Environmental Defect, and (v) a calculation of the Remediation Amount (itemized in reasonable detail) that Buyer
asserts is attributable to such alleged Environmental Defect. Buyer’s calculation of the Remediation Amount included in the Environmental Defect Notice must describe in reasonable detail the Remediation proposed for the Environmental Condition
that gives rise to the asserted Environmental Defect and identify all assumptions used by the Buyer in calculating the Remediation Amount, including the standards that Buyer asserts must be met to comply with Environmental Laws. Seller shall have
the right, but not the obligation, to cure any claimed Environmental Defect on or before Closing. 
  

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 5.2 Remedies for Environmental Defects. 
 (a) Subject to Seller’s continuing right to dispute the existence of an Environmental Defect and/or the Remediation Amount asserted with respect
thereto, in the event that any Environmental Defect timely asserted by Buyer in accordance with Section 5.1 is not waived in writing by Buyer or cured by Seller on or before Closing, Seller shall, at its sole option, elect to:

 (i) subject to the Individual Environmental Threshold and the Aggregate Defect Deductible, reduce the Purchase Price by the Remediation
Amount; 
 (ii) assume responsibility for the Remediation of such Environmental Defect; or 
 (iii) retain the Well, Well Location or other portion of the Assets that is subject to such Environmental Defect and treat it as an Excluded Asset, in
which case the Purchase Price shall be reduced by an amount equal to the Allocated Value of such Well, Well Location or other portion of the Assets. If the portion of the Assets affected by the Environmental Defect is a field facility that is not
located on a Well or Well Location, then for purposes of this clause (iii), in making the election provided in this clause (iii) with regard to such Environmental Defect, Seller shall retain all of the Wells or Well Locations that are or will
be served by the affected facility. 
 If Seller elects the option set forth in clause (i) above, Buyer shall be deemed to have assumed responsibility
for Remediation of such Environmental Defect and such Environmental Defect and all liabilities with respect thereto shall be deemed to constitute Assumed Obligations. If Seller elects the option set forth in clause (ii) above, Seller shall use
reasonable efforts to implement such Remediation in a manner which is consistent with the requirements of Environmental Laws in a timely fashion for the type of Remediation that Seller elects to undertake and Buyer shall grant Seller access to the
affected Property after the Closing Date to implement and complete such Remediation to the extent and as long as necessary to conduct and complete such Remediation. Seller will be deemed to have adequately completed the Remediation required in the
immediately preceding sentence (A) upon receipt of a certificate or approval from the applicable Governmental Authority that the Remediation has been implemented to the extent necessary to comply with existing regulatory requirements or
(B) upon receipt of a certificate from a mutually agreeable licensed professional engineer that the Remediation has been implemented to the extent necessary to comply with existing regulatory requirements. 
 5.3 Exclusive Remedy. 
 Subject to Sections 5.4 and 14.1(c), Section 5.2 shall be the exclusive right and remedy of Buyer with respect to any Environmental Defect. 
 5.4 Environmental Deductibles. 
 Notwithstanding anything to the contrary in this Article V, (a) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any individual 

  

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Environmental Defect for which the Remediation Amount does not exceed $50,000 per individual Well, Well Location or other portion of the Assets affected by
such Environmental Defect (“Individual Environmental Threshold”); and (b) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Environmental Defect for which the
Remediation Amount exceeds the Individual Environmental Threshold unless the sum of (i) the Remediation Amounts of all such Environmental Defects that exceed the Individual Environmental Threshold, in the aggregate, excluding any Environmental
Defects cured by Seller, plus (ii) the sum of the Defect Adjustments for all Defective Interests exceeds the Aggregate Deductible, after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate
Environmental Defects and Defect Adjustments in excess of the Aggregate Defect Deductible. 
 5.5 Environmental Dispute
Resolution. 
 Seller and Buyer shall attempt to agree on all Environmental Defects and Remediation Amounts prior to Closing.
If Seller and Buyer are unable to agree by Closing, the Environmental Defects and/or Remediation Amounts in dispute shall be exclusively and finally resolved by arbitration pursuant to this Section 5.5. There shall be a single
arbitrator, who shall be an environmental attorney with at least ten years experience in environmental matters involving oil and gas producing properties in Colorado, as selected by mutual agreement of Buyer and Seller within 15 days after the
Closing Date, and absent such agreement, by the American Arbitration Association (the “Environmental Arbitrator”). The arbitration proceeding shall be held in Denver, Colorado and shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, to the extent such rules do not conflict with the terms of this Section 5.5. The Environmental Arbitrator’s determination shall be made within 20 days after
submission of the matters in dispute and shall be final and binding upon both parties, without right of appeal. In making his determination, the Environmental Arbitrator shall be bound by the rules set forth in this Section 5.5 and,
subject to the foregoing, may consider such other matters as in the opinion of the Environmental Arbitrator are necessary or helpful to make a proper determination. The Environmental Arbitrator, however, may not award the Buyer a greater Remediation
Amount than the Remediation Amount claimed by Buyer in its applicable Environmental Defect Notice. The Environmental Arbitrator shall act as an expert for the limited purpose of determining the specific disputed Environmental Defects and/or
Remediation Amounts submitted by either party and may not award damages, interest or penalties to either party with respect to any matter. Seller and Buyer shall each bear its own legal fees and other costs of presenting its case. Each of Seller and
Buyer shall bear one-half of the costs and expenses of the Environmental Arbitrator. To the extent that the award of the Environmental Arbitrator with respect to any Remediation Amount is not taken into account as an adjustment to the Purchase Price
in the Final Settlement Statement pursuant to Section 13.1, then within ten days after the Environmental Arbitrator delivers written notice to Buyer and Seller of his award with respect to a Remediation Amount, and subject to Article
V, the Environmental Arbitrator shall instruct the Escrow Agent to pay to Seller or Buyer the appropriate funds from the Escrow Account. 
  

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 5.6 NORM, Wastes and Other Substances. 
 Buyer acknowledges that the Properties have been used for exploration, development, and production of oil and gas and that there may be petroleum,
produced water, wastes, or other substances or materials located in, on or under the Properties or associated with the Properties. Equipment and sites included in the Properties may contain asbestos, NORM or other Hazardous Substances. NORM may
affix or attach itself to the inside of wells, materials, and equipment as scale, or in other forms. The wells, materials, and equipment located on the Properties or included in the Properties may contain NORM and other wastes or Hazardous
Substances. NORM containing material and/or other wastes or Hazardous Substances may have come in contact with various environmental media, including without limitation, water, soils or sediment. Special procedures may be required for the
assessment, remediation, removal, transportation, or disposal of environmental media, wastes, asbestos, NORM and other Hazardous Substances from the Properties. 
 ARTICLE VI 
 SELLER’S REPRESENTATIONS AND WARRANTIES 
 Seller represents and warrants to Buyer as of the date hereof and as of the Closing Date as follows: 
 6.1 Organization and Standing. 
 Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the state of Delaware, and is duly qualified to carry on its business in the state of Colorado. 
 6.2 Power. 
 Seller has
all requisite power and authority to carry on its business as presently conducted and to enter into this Agreement. The execution and delivery of this Agreement does not, and the fulfillment of and compliance with the terms and conditions hereof
will not contravene, violate, or be in conflict with, any provision of its organizational or governing documents. 
 6.3 Authorization
and Enforceability. 
 The execution, delivery and performance of this Agreement and the transactions contemplated hereby have
been duly and validly authorized by all requisite limited liability company action on the part of Seller and this Agreement has been duly executed and delivered by Seller. This Agreement constitutes, and all agreements and instruments delivered by
Seller at Closing will constitute, the legal, valid and binding obligations of Seller, enforceable in accordance with their respective terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and other laws for
the protection of creditors, as well as to general principles of equity, regardless whether such enforceability is considered in a proceeding in equity or at law. 
  

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 6.4 Liability for Brokers’ Fees. 
 Seller has incurred no liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this
Agreement for which Buyer shall have any responsibility whatsoever. 
 6.5 Alien Status. 
 Seller is not a non-resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate alien, as those terms are defined in the
Internal Revenue Code of 1986, as amended, and the rules and regulations of the Internal Revenue Service thereunder (the “Code”). 
 6.6 Litigation. 
 Except as set forth in Schedule 6.6 or Schedule 6.10
attached hereto (“Existing Seller Claims”), there is no action, suit, proceeding, claim or, to its knowledge, investigation pending or, to its knowledge, threatened, against Seller or with respect to any of the Properties in
any court or by or before any Governmental Authority or arbitration or mediation that would adversely affect the value of the Properties, or impair Seller’s ability to consummate, or that would reasonably be expected to prevent, delay or make
illegal the transaction contemplated hereby. No condemnation or eminent domain proceedings are pending, or, to Seller’s knowledge, threatened, by any Governmental Authority affecting any of the Properties. 
 6.7 Rentals and Royalties. 
 Except for those amounts held in suspense that are listed on Schedule 6.16, all rentals and royalties payable by Seller with respect to the Properties and due and payable with respect to periods ending on the Closing Date have been
or, by Closing, will be duly and properly paid in all material respects in accordance with applicable law. 
 6.8 No
Conflicts. 
 Except as set forth in Schedule 6.8, the execution and delivery of this Agreement does not, and the
fulfillment of and compliance with the terms and conditions hereof will not (a) contravene, violate, or be in conflict with or breach any material provision of, or give any Person the right to declare a default or exercise any remedy under, or
to cancel, terminate or modify, any agreement or instrument to which Seller is a party or by which it or any of the Properties are bound; (b) contravene, violate, be in conflict with, or give any Governmental Authority or other Person the right
to challenge any of the transactions contemplated herein or to exercise any remedy or obtain any relief under, any Law or any judgment, decree, or order applicable to Seller or to any of the Properties; (c) contravene, violate, be in conflict
with, or give any Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate or modify any Permit held by Seller; or (d) result in the imposition or creation of any lien, charge or other encumbrance upon or with respect to
any of the Properties. 
  

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 6.9 Compliance with Laws, Etc. 
 With respect to the Properties operated by Seller and with respect to Properties not operated by Seller, to Seller’s knowledge:
(a) Seller’s ownership and the operation of the Properties is and has been in material compliance with all applicable Laws; and (b) Seller or the Third Party operator has acquired and maintains all material Permits from appropriate
Governmental Authorities necessary to conduct operations on the Wells in compliance with all applicable Environmental and other Laws and Orders. Except as compliance with Environmental Laws is covered in clause (b), this Section 6.9 does
not include any matters with respect to Environmental Laws, such matters being addressed exclusively in Section 6.10. 
 6.10
Environmental Conditions. 
 Except as disclosed in Schedule 6.6 or Schedule 6.10: (a) with respect to
the Properties operated by Seller, and with respect to Properties not operated by Seller, to Seller’s knowledge, Seller or the Third Party operator thereof has been in material compliance with, and has not been and is not in any material
respect in violation of or liable under, any Environmental Law in effect on the date hereof; (b) Seller has no knowledge of any facts relating to the condition, use or operation of any of the Properties that are reasonably likely to constitute
or result in a violation of any Environmental Law in effect on the date hereof, or result in a suit, action, claim, investigation or inquiry under or with respect to such Environmental Law, or cause or result in the incurrence of any Environmental
Obligation; and (c) with respect to the Properties, Seller has not received any actual or threatened Order, notice or other communication from a Governmental Authority or other Person of any actual or potential violation or failure to comply
with any Environmental Law in effect on the date hereof. 
 6.11 Taxes. 
 All Taxes due and payable on or before the Closing Date applicable to Seller’s ownership and operation of Properties prior to the Effective Time have
been or will by Closing be duly and timely paid except as may be contested by Seller in good faith. Any such contests that are pending at the date hereof are disclosed in Schedule 6.11. All reports and returns required to be filed by Seller
prior to the Effective Time with respect to such Taxes will have been (and all such reports and returns required to be filed by Seller prior to the Closing Date will have been, at such date) duly and timely filed. 
 6.12 Hydrocarbon Sales Contracts. 
 Except as disclosed in Schedule 6.12, all agreements for the sale of production from Seller’s interest in any Properties (including, without limitation, calls on, options to purchase or other rights to
purchase production whether or not the same currently are being exercised) can be terminated by Seller without penalty on 30 days or less notice. 
 6.13 Material Contracts. 
 Schedule 6.13 contains a complete and accurate list of all Material Contracts
affecting the Properties. Each Material Contract is in full force and effect and is valid and enforceable in accordance with its terms in all material respects. Seller is not in breach of any Material 

  

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Contract and, to the knowledge of Seller, no other Person is in breach of any Material Contract, which breach would reasonably be expected to have a material
adverse effect on the Properties taken as a whole. To the knowledge of Seller, no event has occurred and no circumstance exists that would, in any material respect, contravene, conflict with, or result in a violation or breach of, or give Seller or
any other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any Material Contract. 
 6.14 No Preferential Rights or Consents. 
 There are no preferential rights providing a third party the option to purchase any of the Properties. There are no permissions, approvals or consents of Governmental Authorities or any other Third Parties that are
required in connection with the sale and transfer of the Assets to Buyer (except to the extent the same are customarily obtained after Closing). 
 6.15 Records. 
 All Records and other documents relating to the Properties made available by Seller to Buyer
for its due diligence reviews are true and correct copies of documents contained in Seller’s files. All historical information and data reflecting volumes of oil and gas production from the Properties, and all Lease operating expense, capital
cost and revenue information and data, furnished by Seller to Buyer are true and correct, except for such inaccuracies as would not have a material adverse effect on the value of the Assets taken as a whole. The representations and warranties
contained in this Section 6.15 shall not be construed to be representations and warranties with respect to the accuracy of any estimates, forecasts or conclusions contained in any document, any such representations and warranties being
expressly denied and disclaimed. 
 6.16 Suspense Accounts. 
 Schedule 6.16 sets forth an accurate list of all funds (including interest owed thereon, if any) held in suspense by Seller as of February 28,
2007 for sales through the production month of January, 2007 that are attributable to the Properties. 
 6.17 Hedging
Contracts. 
 Seller has not entered into any hedging contracts pursuant to which any production of Hydrocarbons from any of
the Properties is dedicated or committed as of the Effective Time. 
 6.18 Gas Imbalances. 
 Except for pipeline gas imbalances not exceeding $200,000 in the aggregate, which shall be the obligation of Buyer after Closing, there are no gas
imbalances with respect to any of the Properties. 
 6.19 Well Status. 
 Except as set forth in Schedule 6.19, there are no wells located on the Properties that: (a) Seller is obligated by Law or contract to
currently plug and abandon; or (b) have been plugged and abandoned but have not been plugged in accordance with all applicable requirements of each regulatory authority having jurisdiction over the Properties. 
  

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 6.20 Laramie Land Assets. 
 Seller owns good and marketable title to the LLC Interests, and Laramie Land owns good and marketable title to the surface estate in the lands and all
other property owned by Laramie Land as more particularly described in Schedule 6.20; provided, however, with respect to mineral interests owned by Laramie Land, Seller represents only that Laramie Land has Defensible Title thereto.
Laramie Land has conducted no business or operations on said lands other than an agricultural business pursuant to the contracts described in Schedule 6.20. Laramie Land has no assets other than the lands and such other property and no
Liabilities other than under the contracts described in Schedule 6.20. Laramie Land does not own or hold, directly or indirectly, any equity or other ownership interest in any corporation, limited liability company, partnership, joint
venture, or other Person. Laramie Land has no employees, and has never had any employees. Laramie Land has not ever maintained, contributed to, sponsored, or been a party to any employee benefit plan as defined in section 3(3) of ERISA. None of
Seller or any ERISA Affiliate of Seller has incurred any liability under Title IV of ERISA. 
 6.21 Operating Agreements.

 With respect to the joint, unit or other operating agreements relating to the Leases and Lands: (a) except as disclosed on
Schedule 6.21, there are no outstanding calls or payments under authorities for expenditures (AFE’s) that commit Seller (net to its interest) to an amount in excess of $200,000; (b) Seller has listed on Schedule 6.21 the
status of all material operations by less than all parties to the extent that such has an effect upon Seller’s interests in the Leases and Lands; and (c) except as disclosed on Schedule 6.21, there are no operations under the
operating agreements with respect to which Seller has become a non-consenting party. 
 6.22 Change in Condition.

 Except as disclosed on Schedule 6.22, there has occurred no physical change in the Assets (other than operations and production
in the ordinary course) or other casualty since Effective Time that adversely affects the value, use or operation of the Assets (other than declines due to actual depletion). 
 6.23 Plugging and Abandonment; Status of Wells. 
 The Assets include all of the wells reflected in the Background Materials, and do not include any wells not reflect in the Background Materials that as of the Effective Time required, in accordance with sound oilfield
practice or pursuant to orders of a governmental authority, or that had been AFE’ed for, permanent plugging and abandonment. No Well identified in Exhibit B and associated with an Allocated Value of greater than zero was non-producing or
shut-in as of the Effective Time, except for any such Wells that were shut-in on a temporary basis as part of normal oilfield operations. 
  

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 6.24 Operating Equipment. 
 The operating equipment and field facilities included in the Assets are in good working order, ordinary wear and tear excepted, and have been constructed
and maintained in accordance with sound oilfield operating practices. All such equipment and field facilities are located on Lands covered by the Leases, and Seller owns or co-owns the same or leases or co-leases the same from non-affiliated
lessors. 
 6.25 Investment. Seller is not acquiring the Shares with a view to or for sale in connection with any distribution
thereof or any other security related thereto within the meaning of the Securities Act. Seller (a) is familiar with investments of the nature of the Shares, (b) understands that this investment involves substantial risks, (c) has
adequately investigated the Shares, (d) has substantial knowledge and experience in financial and business matters such that it is capable of evaluating, and has evaluated, the merits and risks inherent in an investment in the Shares, and
(e) is able to bear the economic risks of such investment. Seller has had the opportunity to visit with Buyer and meet with its officers and other representatives to discuss the business, assets, liabilities, financial condition, and operations
of Buyer, has received all materials, documents and other information that Seller deems necessary or advisable to evaluate an investment in the Shares, and has made its own independent examination, investigation, analysis and evaluation of an
investment in the Shares, including its own estimate of the value of the Shares. Seller has undertaken such due diligence (including a review of Buyer’s assets, properties, liabilities, books, records and contracts) as Seller deems adequate.
Seller understands that neither the Commission nor any state agency nor any other Governmental Authority has passed upon or made any recommendation or endorsement of the Shares. Seller understands that the certificate(s) evidencing the Shares will
bear a restrictive legend in substantially the following form: 
 “The securities evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction. The securities may not be offered, sold, pledged or otherwise transferred except (1) pursuant to an
exemption from registration under the Securities Act or (2) pursuant to an effective registration statement under the Securities Act, in each case in accordance with all applicable securities laws of the states and other jurisdictions, and in
the case of a transaction exempt from registration, unless the Issuer has received an opinion of counsel reasonably satisfactory to it that such transaction does not require registration under the Securities Act and such other applicable laws.”

 ARTICLE VII 
 BUYER’S REPRESENTATIONS AND WARRANTIES 
 Buyer represents and warrants to Seller as of the date hereof and as of the
Closing Date as follows: 
 7.1 Organization and Standing. 
 Buyer is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, and on the Closing Date will be
duly qualified to carry on its business in each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification. 
  

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 7.2 Power. 
 Buyer has all requisite power and authority to carry on its business as presently conducted and to enter into this Agreement. The execution and delivery
of this Agreement and consummation of the transactions contemplated hereby and the fulfillment of and compliance with the terms and conditions hereof will not violate, or be in conflict with, any provision of its organizational or governing
documents. 
 7.3 Authorization and Enforceability. 
 The execution, delivery and performance of this Agreement, the payment of the Purchase Price and the other transactions contemplated hereby have been duly
and validly authorized by all requisite action on behalf of Buyer and this Agreement has been duly executed and delivered by Buyer. This Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable in accordance with its
terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws for the protection of creditors, as well as to general principles of equity, regardless whether such enforceability is considered in a
proceeding in equity or at law. 
 7.4 Liability for Brokers’ Fees. 
 Buyer has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this
Agreement for which Seller shall have any responsibility whatsoever. 
 7.5 Litigation. 
 There is no action, suit, proceeding, claim or, to Buyer’s knowledge, investigation pending or, to Buyer’s knowledge, threatened in writing
against Buyer in any court or by or before any Governmental Authority or arbitration or mediation that would impair Buyer’s ability to consummate, or that would reasonably be expected to prevent, delay or make illegal the transaction
contemplated hereby. 
 7.6 Securities Laws. 
 Buyer has such knowledge, sophistication and experience in business and financial matters that Buyer is capable of evaluating the merits and risks of the
acquisition of the Assets and has so evaluated the merits and risks of such acquisition. Buyer is able to bear the economic risk of its acquisition of the Assets and, at the present time, is able to afford a complete loss of such investment. The
Assets are being acquired for Buyer’s own account for the purpose of investment or consumption and not with a view to reselling or distributing the Assets in violation of any securities registration or qualification requirements of any
securities laws. 
  

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 7.7 Independent Evaluation. 
 Buyer has retained and taken advice concerning the Assets and transactions herein from advisors and consultants which are knowledgeable about the oil and
gas business and Buyer is aware of its risks. Buyer has been afforded the opportunity to examine the Records and other materials made available to it by Seller and Seller’s authorized representatives with respect to the Assets (the
“Background Materials”). The Background Materials include files, or copies thereof, that Seller has used in its normal course of business and other information about the Assets that Seller and Seller’s
authorized representatives have compiled or generated; provided, however, that Buyer acknowledges and agrees that neither Seller nor any other Seller Indemnified Party has made any representations or warranties, express or implied, written or
oral, as to the accuracy or completeness of the Background Materials or, except for the representations and warranties of Seller contained in this Agreement, as to any other information relating to the Assets, furnished or to be furnished to Buyer
or its representatives by or on behalf of Seller, including without limitation any estimate with respect to the value of the Properties or reserves or any projections as to events that could or could not occur. In entering into this Agreement, Buyer
acknowledges and affirms that it has relied and will rely solely on the terms of this Agreement and upon its independent analysis, evaluation and investigation of, and judgment with respect to, the business, economic, legal, tax or other
consequences of this transaction including its own estimate and appraisal of the extent and value of the petroleum, natural gas and other reserves attributable to the Properties. Buyer’s representatives have visited the offices of Seller and
have been given opportunities to examine the Records. Except as expressly provided in this Agreement, neither Seller, Seller’s authorized representatives nor any other Seller Indemnified Party shall have any liability to Buyer or its
Affiliates, agents, representatives or employees resulting from any use of, authorized or unauthorized, or reliance on, the Background Materials or other information relating to the Assets provided by or on behalf of Seller or any other Seller
Indemnified Party. 
 7.8 No Conflicts. 
 The execution and delivery of this Agreement does not, and the fulfillment of and compliance with the terms and conditions hereof will not (a) contravene, violate, or be in conflict with or breach any material
provision of, or give any Person the right to declare a default or exercise any remedy under, or to cancel, terminate or modify, any agreement or instrument to which Buyer is a party or by which it is bound, or (b) contravene, violate, be in
conflict with, or give any Governmental Authority or other Person the right to challenge any of the transactions contemplated herein or to exercise any remedy or obtain any relief under, any Law or any judgment, decree, or order applicable to Buyer.

 7.9 Eligibility. 
 Buyer is, or as of the Closing Date, will be eligible and qualified under all applicable laws, rules and regulations to own the Assets, including, without limitation, the Leases. 
  

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 7.10 Shares. 
 The Shares have been duly and validly authorized for issuance by Buyer and when issued in accordance with the terms and conditions contained herein, the
Shares will be duly authorized, validly issued, fully paid and non-assessable and will not be subject to any preemptive or similar rights. 
 7.11 Listing. 
 Buyer is in compliance in all material respects with all requirements of the New York Stock
Exchange. Buyer shall comply with all requirements of the New York Stock Exchange with respect to the issuance of the Shares. 
 7.12
Financial Statements. 
 The consolidated financial statements of Buyer and the related notes contained or incorporated by
reference in Buyer’s Form 10-K for the fiscal year ended December 31, 2006 as filed with the Commission (a) comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with
respect thereto at the time of filing; and (b) present fairly, in accordance with generally accepted accounting principles, the consolidated financial position of Buyer and its subsidiaries as of the dates indicated, and the results of their
operations, cash flows and the changes in shareholders’ equity for the periods therein specified. Except as otherwise indicated therein or in the footnotes thereto, such consolidated financial statements (including the related notes) have been
prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods therein specified. 
 7.13 Filings. 
 The information contained in the following documents does not, as of their respective dates of
filing with the Commission, include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made,
not misleading: 
 (a) Buyer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006; 
 (b) Buyer’s Current Reports on Form 8-K filed after December 31, 2006; and 
 (c) Buyer’s definitive Proxy Statement for its 2007 Annual Meeting of Stockholders. 
  

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 ARTICLE VIII 
 COVENANTS AND AGREEMENTS 
 8.1 Covenants and Agreements of Seller. 

Seller covenants and agrees with Buyer as follows: 
 (a) Operations Prior to Closing. Without the prior written consent of Buyer to act otherwise, and subject to the constraints of applicable operating and other agreements, during the period from the date of execution of this Agreement
to the Closing Date, Seller will not: 
 (i) sell, transfer or abandon any part of the Assets, or voluntarily permit any of the Assets or any
material rights with respect thereto to expire, or waive or release any material rights in respect of the Properties (except, in the ordinary course of business, for the abandonment of Leases upon the expiration of their respective primary terms or
if not capable of production in paying quantities); 
 (ii) except for activities in connection with the drilling of the Well Locations
described in Schedule 8.1(a)(ii), which has been approved by Buyer, approve or cause any operation, or series of related operations, with respect to any of the Properties anticipated in any instance to cost more than $200,000 per activity net
to direct or indirect interest of Seller (except for emergency operations, operations required under presently existing contractual obligations and ongoing commitments under existing AFE’s as described in Schedule 8.1(a)(ii)). All
expenditures (from the first dollar) incurred by Seller for operations consented to by Buyer pursuant to this Section 8.1(a)(ii) which are anticipated to exceed such $200,000 limit are herein called “Approved
Expenditures” and the Purchase Price shall be increased by an amount equal to the aggregate amount of all Approved Expenditures. Notwithstanding the foregoing, any expenditures incurred for what Seller reasonably deems to be an
emergency operation, yet conducted without Buyer’s consent, shall be Approved Expenditures; 
 (iii) enter into any new marketing
contracts or agreements providing for the sale or disposition of Hydrocarbons produced from the Properties for a term in excess of 30 days; 
 (iv) modify, amend or terminate any of the Material Contracts or Leases; 
 (v) encumber any of the Properties, or acquire any
additional interests in any of the Properties other than non-consent interests; or 
 (vi) convey or dispose of any material part of the
Assets (other than replacement of equipment or sale of Hydrocarbons produced from the Assets in the regular course of business) or enter into any farmout, or enter into any farmin or other similar contract affecting the Properties. 
 (b) Operation in Ordinary Course. Between the date of this Agreement and the Closing Date, Seller will continue or, with respect to Properties
operated by other Persons, to the extent within Seller’s reasonable control cause to be continued the operation of the Properties in the ordinary course of its business, in accordance with past practices. 
  

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 (c) Notices of Claims. Seller shall promptly notify Buyer, if, between the date of execution of
this Agreement and the Closing Date, Seller receives written notice of any claim, suit, action or other proceeding of the type referred to in Section 6.6 or written notice of any default under any Material Contract. 
 (d) Consents of Others; Conditions. Prior to the Closing, Seller shall use its commercially reasonable efforts to obtain all authorizations and
consents from Third Parties, if any, required of Seller to permit it to consummate the transaction contemplated by this Agreement. 
 (e)
Existing Insurance. Seller shall maintain all existing insurance covering the Properties and Seller’s operations in full force and effect through the Closing Date. 
 (f) Burdens. Seller shall ensure that all expenses, burdens and obligations (including, without limitation, royalties, overriding royalties,
rentals and other charges) attributable to the Assets that are due and payable prior to the Closing Date are properly and fully paid prior to the Closing Date. 
 (g) Financial Statements. Seller will deliver (i) upon execution hereof, consolidated financial statements of Seller for the fiscal year ended December 31, 2006, together with the audit report thereon
of Seller’s independent public accountants and (ii) within 40 days after the end of each fiscal quarter ending prior to the Closing Date, unaudited consolidated financial statements of Seller, in each case meeting the requirements of
Regulation S-X promulgated by the Commission. In the event audited financial statements on the Properties are required, Seller agrees to have such carve-out audit prepared by its auditors within 60 days after the Closing Date, at Buyer’s
expense. Seller will cause its auditors to issue in favor of, or as requested by, Buyer, any consents, reports, opinions and comfort letters with respect to such financial statements that would be required by Buyer to issue and sell securities in
one or more public offerings (through underwriters or otherwise), or otherwise as required by Buyer to comply with its continuous reporting obligations under the Securities Exchange Act of 1934, as amended, or the requirements of any stock exchange
on which Buyer’s securities are listed or admitted for trading. 
 8.2 Covenants and Agreements of Buyer.

 Buyer covenants and agrees with Seller that: 
 (a) Status. Buyer shall maintain its entity status from the date hereof until the Final Settlement Date, and use all reasonable efforts to assure that as of the Closing Date it will not be under any material
corporate, legal or contractual restriction that would prohibit or delay the timely consummation of the transaction contemplated hereby. 
 (b) Consents of Others; Conditions. Prior to Closing, Buyer shall use its commercially reasonable efforts to obtain all authorizations, consents and permits from Third Parties, if any, required of Buyer to permit it to consummate the
transaction contemplated by this Agreement. 
  

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 (c) Bonds and Other Documents. Buyer acknowledges that none of the bonds, letters of credit and
guarantees, if any, posted by Seller or its Affiliates with Governmental Authorities or other Third Parties and relating to the Assets or the Material Contracts (all of which bonds, letters of credit and guarantees are described in Schedule
8.2(c)) are transferable to Buyer. On or before the Closing Date, Buyer shall obtain, or cause to be obtained in the name of Buyer or its designee, replacements for such bonds, letters of credit and guarantees, to the extent such replacements
are necessary to permit the cancellation of the bonds, letters of credit and guarantees posted by Seller and/or its Affiliates. In addition, at or prior to Closing, Buyer shall deliver to Seller evidence of the posting of bonds or other security
with all applicable Governmental Authorities meeting the requirements of such authorities to own and, where appropriate, operate, the Assets, and meeting the requirements of Third Parties under the Material Contracts. 
 8.3 Covenants and Agreements of the Parties. 
 (a) Confidentiality. The existing Confidentiality Agreement between Seller and Buyer dated March 19, 2007 (the “Confidentiality Agreement”) shall be deemed terminated as of the date
hereof. 
 (b) Cure Period for Breach. If any party to this Agreement believes any other party has breached the terms of this
Agreement, the party who believes the breach has occurred may give written notice to the breaching party of the nature of the breach and give that party five business days to cure. Notwithstanding the foregoing, this Section 8.3(b) shall
not apply to breach of the parties’ obligations at Closing and shall not operate to delay Closing unless the non-breaching party agrees to extend the Closing to allow the other party to cure. 
 (c) Like-Kind Exchange. Each party consents to the other party’s assignment of its rights and obligations under this Agreement to its
Qualified Intermediary (as that term is defined in Section 1.1031(k)-1(g)(4)(v) of the Treasury Regulations promulgated by the U.S. Internal Revenue Service), or to its Qualified Exchange Accommodation Titleholder (as that term is defined in
Rev. Proc. 2000-37), in connection with effectuation of a like-kind exchange. However, Seller and Buyer acknowledge and agree that any assignment of this Agreement to a Qualified Intermediary or to a Qualified Exchange Accommodation Titleholder does
not release either party from any of its liabilities and obligations under this Agreement. If requested to do so, each party agrees to cooperate with the other to attempt structure the transaction as a like-kind exchange; provided, however,
that neither party shall be required to assume any additional liabilities or obligations in connection with such like-kind exchange. 
 8.4 Personnel. 
 Attached hereto as Schedule 8.4 is a list of employees who are directly engaged in the
operation, maintenance, administration and similar functions for the Properties and who may be available for employment after Closing. Buyer will evaluate its personnel needs and consider offering employment to these certain employees on a
case-by-case basis; however, the Buyer 

  

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will have no obligation to hire any such employees. Any offers of employment made by Buyer will be effective as of the Closing Date. Buyer will not have
access to personnel records relating to individual performance or other working history, unless the applicable employee provides Seller with a signed release permitting the disclosure of said information. 
 8.5 HSR Act. 
 Within
five business days following the execution by Buyer and Seller of this Agreement, Buyer and Seller will each prepare and simultaneously file with the DOJ and the FTC the notification and report form required for the transactions contemplated by this
Agreement by the HSR Act, and request early termination of the waiting period thereunder. The fees required for such filings shall be the responsibility of Buyer. Buyer and Seller agree to respond promptly to any inquiries from the DOJ or the FTC
concerning such filings and to comply in all material respects with the filing requirements of the HSR Act. Buyer and Seller shall cooperate with each other and, subject to the terms of the Confidentiality Agreement, shall promptly furnish all
information to the other party that is necessary in connection with Buyer’s and Seller’s compliance with the HSR Act. Buyer and Seller shall keep each other fully advised with respect to any requests from or communications with the DOJ or
FTC concerning such filings and shall consult with each other with respect to all responses thereto. Each of Seller and Buyer shall use its reasonable efforts to take all actions reasonably necessary and appropriate in connection with any HSR Act
filing to consummate the transactions consummated hereby. 
 ARTICLE IX 
 TAX MATTERS 
 9.1 Apportionment of Tax Liability.

 All Taxes shall be prorated between Buyer and Seller as of the Effective Time for all taxable periods that include the Effective Time.
Based on the best current information available as of Closing, the proration shall be made between the parties as an adjustment to the Purchase Price pursuant to Section 2.7(b)(iii), and shall be subject to adjustment in the Final
Settlement Statement based on then-current information, which shall then constitute a final settlement of Taxes between the parties. Taxes based on or measured by production of Hydrocarbons or the value thereof shall be deemed attributable to the
period when such Taxes are assessed (even if the same are based on production or other activities occurring in prior periods). Accordingly, after Closing, and subject to adjustment in the Final Settlement Statement, Buyer expressly assumes its
proportionate share of all obligations and liabilities for all Taxes payable by Seller that are assessed after the Effective Time, regardless of whether such Taxes are attributable to the period of time before or after the Effective Time.

 9.2 Tax Returns and Reports. 
 For the tax period in which the Effective Time occurs, Seller agrees to immediately forward to Buyer any tax returns and reports relating to the Assets received by Seller after Closing and provide Buyer with any
information Seller has in its possession that is necessary for Buyer to file any required tax returns and reports relating to the Assets. Buyer agrees to file all 

  

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tax returns and reports applicable to the Assets and required to be filed after the Closing, pay all required Taxes payable with respect to the Assets for
which Buyer is responsible under this Agreement, and indemnify Seller against liability for the payment of such Taxes and the filing of such tax returns or reports. This indemnity shall survive Closing. 
 ARTICLE X 
 CONDITIONS TO
CLOSING 
 10.1 Conditions to Seller’s Obligations. 
 The obligations of Seller at the Closing are subject, at the option of Seller, to the satisfaction or waiver at or prior to the Closing of the following
conditions precedent: 
 (a) All representations and warranties of Buyer contained in this Agreement shall be true in all material respects
(considering the transaction as a whole and disregarding any qualifications with respect to materiality or material adverse effect) at and as of the Closing in accordance with their terms as if such representations and warranties were remade at and
as of the Closing, and Buyer shall have performed and satisfied all covenants and agreements required by this Agreement to be performed and satisfied by Buyer at or prior to the Closing in all material respects; 
 (b) Seller shall have received a certificate dated as of the Closing, executed by the president, vice president or other duly authorized officer of Buyer
to the effect that (i) the statements in Section 10.1(a) are true at and as of the Closing as to Buyer, and (ii) the covenants and agreements of Buyer contained in Article VIII have been performed in all material
respects; and 
 (c) The waiting period under the HSR Act applicable to the consummation of the transactions contemplated hereby shall have
expired, notice of early termination shall have been received, or a consent order issued (in form and substance satisfactory to Seller) by or from applicable Governmental Authorities. 
 10.2 Conditions to Buyer’s Obligations. 
 The obligations of Buyer at the Closing are subject, at the option of Buyer, to the satisfaction or waiver at or prior to the Closing of the following conditions precedent: 
 (a) All representations and warranties of Seller contained in this Agreement shall be true in all material respects (considering the transaction as a
whole and disregarding any qualifications with respect to materiality or material adverse effect) at and as of the Closing in accordance with their terms as if such representations were remade at and as of the Closing, and Seller shall have
performed and satisfied all covenants and agreements required by this Agreement to be performed and satisfied by them at or prior to the Closing in all material respects; 
 (b) Buyer shall have received a certificate dated as of the Closing, executed by the Chief Executive Officer or other duly authorized officer of Seller, to the effect that (i) the statements in
Section 10.2(a) are true at and as of the Closing, and (ii) the covenants and agreements of Seller contained in Article VIII have been performed in all material respects; 
  

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 (c) The waiting period under the HSR Act applicable to the consummation of the transactions contemplated
hereby shall have expired, notice of early termination shall have been received, or a consent order issued (in form and substance satisfactory to Seller) by or from applicable Governmental Authorities; and 
 (d) The JPMorgan Chase Bank, NA mortgage and related security interests covering the Assets shall have been released; 
 10.3 Conditions to Obligations of Seller and Buyer. 
 The obligations of both Seller and Buyer are subject, at each party’s option, to the satisfaction or waiver by it at or prior to the Closing of the following conditions precedent: 
 (a) no final Order shall have been entered by any court or other Governmental Authority having jurisdiction over the parties or the subject matter of this
Agreement that restrains or prohibits the purchase and sale contemplated by this Agreement and that remains in effect at the time of Closing; and 
 (b) the aggregate reductions in the Purchase Price for (i) Defect Adjustments made pursuant to Section 4.2 (excluding any Disputed Title Matters subject to Section 4.4) plus (ii) adjustments for
Environmental Defects made pursuant to Section 5.2 (excluding any Environmental Defects or Remediation amounts subject to arbitration under Section 5.5) shall not exceed ten percent (10%) of
the Purchase Price. 
 ARTICLE XI 
 RIGHT OF TERMINATION AND ABANDONMENT 
 11.1 Termination. 
 This Agreement may be terminated in accordance with the following provisions: 
 (a) by the mutual written consent of Seller and Buyer; 
 (b) by Seller if, on the Closing Date, the conditions to the obligations of Seller set forth in Sections 10.1 and 10.3 have not been satisfied or have not been waived by Seller; 
 (c) by Buyer if, on the Closing Date, the conditions to the obligations of Buyer set forth in Sections 10.2 and 10.3 have not
been satisfied or have not been waived by Buyer; 
 (d) by Seller if, through no fault of Seller, the Closing does not occur on or before
June 29, 2007; or 
  

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 (e) by Buyer if, through no fault of Buyer, the Closing does not occur on or before June 29, 2007.

 11.2 Liabilities Upon Termination. 
 If Closing does not occur because of a breach of this Agreement by one of the parties or a party’s failure or refusal to close that is not permitted by the terms of this Agreement, then the other party shall be
entitled to all remedies such party may have at law or in equity, including without limitation the remedy of specific performance. If this Agreement is terminated for any other reason, such termination is without liability to either party. Upon
termination of this Agreement, Buyer shall promptly return, or certify that it has destroyed, all confidential documents and information that Buyer has received in connection with the transactions contemplated by this Agreement and that Seller
identifies for return or destruction. 
 ARTICLE XII 
 CLOSING 
 12.1 Date of Closing. 
 Unless otherwise agreed to in writing and subject to the conditions stated in this Agreement, consummation of the transactions contemplated hereby (the
“Closing”) shall be held on May 31, 2007, or such (a) later date that is three business days after satisfaction (or waiver) of all conditions precedent set forth in Article X, or (b) other date and time
as the parties may mutually agree, but in any event no later than June 29, 2007 (the “Closing Date”). 
 12.2
Place of Closing. 
 The Closing shall be held at the offices of Holme Roberts & Owen LLP in Denver, Colorado at
9:00 A.M. Denver time or at such other time and place as Buyer and Seller may agree in writing. 
 12.3 Closing Obligations.

 At the Closing, the following events shall occur, each being a condition precedent to the others and each being deemed to have occurred
simultaneously with the others: 
 (a) Seller shall execute, acknowledge and deliver to Buyer, an assignment of the Assets (other than the LLC
Interests), with a special warranty of title against liens, encumbrances and other matters arising by, through or under Seller, but not otherwise, in the form of the Assignment and Bill of Sale attached hereto as Exhibit E; 
 (b) Seller shall execute, acknowledge and deliver to Buyer any required Federal and State lease forms of assignment; 
  

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 (c) Seller shall execute, acknowledge and deliver to Buyer an assignment of the LLC Interests in the form
of an Assignment of Limited Liability Company Membership Interests attached hereto as Exhibit F; 
 (d) Seller and Buyer shall execute
and deliver a Transition Services Agreement in substantially the form attached hereto as Exhibit G (the “Transition Services Agreement”); 
 (e) Seller and Buyer shall execute and deliver the Preliminary Settlement Statement; 
 (f) Buyer shall
deliver the certificate described in Section 10.1(b); 
 (g) Seller shall deliver the certificate described in
Section 10.2(b); 
 (h) Buyer shall deliver the Closing Amount by a wire transfer of immediately available funds to an account
designated by Seller; 
 (i) Seller shall execute and deliver to Buyer affidavits of non-foreign status and no requirement for withholding
under Section 1445 of the Code; 
 (j) Seller shall deliver documentation evidencing the release of the mortgage and termination of the
financing statements on the Properties in favor of JPMorgan Chase Bank, N.A., as Administrative Agent for the lenders specified in such mortgage; 
 (k) The Escrow Agreement shall be executed by Seller, Buyer and the Escrow Agent in substantially the form of Exhibit H attached hereto, and Buyer shall make the deposit into the Escrow Account provided for in
Section 4.2(c)(ii); 
 (l) Seller and Buyer shall execute and deliver a registration rights agreement in customary form providing
Seller “piggyback” registration rights with respect to the Shares until the first anniversary of the Closing Date; and 
 (m)
Seller and Buyer shall take such other actions and deliver such other documents as are contemplated by this Agreement. 
 ARTICLE XIII
 
 POST-CLOSING OBLIGATIONS 
 13.1 Post-Closing Adjustments. 
 (a) Preparation and Payment of Final Purchase Price. As
soon as practicable after the Closing, but in no event later than 90 days after Closing, Seller, with assistance from Buyer’s staff, will prepare and deliver to Buyer, in accordance with customary industry accounting practices, the final
settlement statement (the “Final Settlement Statement”) setting forth (i) each adjustment or payment that was not finally determined as of the Closing and showing the calculation of such adjustment, and (ii) the
resulting final purchase price for the 

  

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Assets equal to the Closing Amount adjusted by the amounts in the foregoing clause (i) (the “Final Purchase Price”). As soon as
practicable after receipt of the Final Settlement Statement, but in no event later than on or before 30 days after receipt of Seller’s proposed Final Settlement Statement, Buyer shall deliver to Seller a written report containing any changes
that Buyer proposes to make to the Final Settlement Statement. Buyer’s failure to deliver to Seller a written report detailing proposed changes to the Final Settlement Statement by that date shall be deemed an acceptance by Buyer of the Final
Settlement Statement as submitted by Seller. The parties shall agree with respect to the changes proposed by Buyer, if any, no later than 45 days after receipt of Seller’s proposed Final Settlement Statement. The date upon which such agreement
is reached or upon which the Final Purchase Price is established shall be referred to herein as the “Final Settlement Date.” If the Final Purchase Price is more than the Closing Amount, Buyer shall pay Seller the amount of
such difference. If the Final Purchase Price is less than the Closing Amount, Seller shall pay to Buyer the amount of such difference. Payment shall be made by wire transfer in immediately available funds. Payment by Buyer or Seller, as the case may
be, shall be within five days of the Final Settlement Date. 
 (b) Final Settlement Dispute Resolution. If the parties are unable to
resolve a dispute as to the Final Purchase Price by 45 days after Buyer’s receipt of Seller’s proposed Final Settlement Statement, the parties shall submit the dispute to binding arbitration to be conducted in accordance with the following
procedures by a mutually acceptable independent public accounting firm selected by the parties (the “Accountants”). No later than 20 days after initiating the arbitration procedure, the Accountants shall conduct a hearing, at
which time the parties shall present such evidence and witnesses as they may choose, with or without counsel. Adherence to formal rules of evidence shall not be required, but the Accountants shall consider any evidence and testimony that they
determine to be relevant, in accordance with procedures that they determine to be appropriate. The Accountants shall render their written decision specifically establishing the Final Purchase Price within 30 days after the hearing, which decision
shall be final, conclusive and binding on Seller and Buyer. A decision may be filed in any court of competent jurisdiction and may be enforced by any party as a final judgment of such court. Without the consent of Seller and Buyer, the arbitration
shall not determine any issues other than adjustments to be made pursuant to Sections 2.7 and 13.1(a); all other disputes shall be handled pursuant to the provisions of Sections 4.5, 5.5 and 15.16. The costs of the
Accountants shall be borne one-half by Seller and one-half by Buyer. 
 13.2 Proceeds and Expenses. 
 Subject to the terms of this Agreement, from and after the Closing, Buyer shall be entitled to, and Seller shall promptly turn over to Buyer, all proceeds
received by Seller relating to the Assets for periods from and after the Effective Time and Buyer shall be liable for all costs and expenses attributable to the Assets for periods from and after the Effective Time. Buyer shall promptly turn over to
Seller all proceeds of production relating to the Assets, and all reimbursements of expenses previously paid by Seller, which are received by Buyer after the date hereof and which are attributable to the Assets for any period of time prior to the
Effective Time. 
  

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 13.3 Records. 
 As soon as practicable after Closing, Seller shall transfer the Records to Buyer. Seller may retain copies of the Records or, in the case of such files and records as to which the Lands comprise less than all of the
land covered or affected thereby, originals of the Records (at Seller’s option). In the event that Seller does not retain originals or copies of certain Records, Seller shall have the right to review and copy the Records during standard
business hours upon reasonable notice for so long as Buyer retains the Records. Buyer agrees that the Records will be maintained in compliance with all applicable Laws governing document retention. 
 13.4 Suspense Accounts. 
 Seller shall transfer to Buyer only those monies held in suspense by Seller at Closing that relate to royalties and overriding royalties as to which Buyer shall be responsible for distribution after Closing. In addition to the information
set forth on Schedule 6.16, Seller agrees to provide to Buyer any information reasonably requested by Buyer regarding all of Seller’s accounts holding monies in suspense that will be transferred to Buyer together with a written
explanation (as contained in Seller’s files) of why such monies are held in suspense or other information identifying the proper disposition of such monies. Buyer agrees to take and apply such monies in a manner consistent with applicable Law
and with prudent oil and gas business practices and to indemnify Seller against any claim relating to the failure to pay such funds after the Closing in accordance with the instructions or information delivered to Buyer by Seller. 
 13.5 Sales Tax. 
 Buyer shall
pay all sales and transfer taxes, if any, occasioned by the sale of the Assets to Buyer and all documentary, filing and recording fees required in connection with the filing and recording of the assignments of the Assets to Buyer. 
 13.6 Further Assurances. 
 From
time to time after Closing, Seller and Buyer shall each execute, acknowledge and deliver to the other such further instruments and take such other action as may be reasonably requested in order to accomplish more effectively the purposes of the
transactions contemplated by this Agreement. 
 13.7 Release of Escrow Funds and Shares. 
 Upon the expiration of Seller’s indemnity obligations set forth in Sections 14.1(a), (b), 14.1(c) and (e) (which expiration is on
February 28, 2008 pursuant to Sections 14.6(a) and (b)), Seller shall be entitled to receive all amounts and/or Shares remaining in the Escrow Account except for those amounts subject to a timely Claim Notice by Buyer under
Section 14.8(a). If at such time such a Claim Notice is pending but only Shares remain on deposit with the Escrow Agent, Buyer and Seller, acting reasonably, will agree to a number of Shares to be retained by the Escrow Agent as would
provide reasonable adequate security for Buyer’s claim. 
  

 40 

 13.8 Removal of Name. 
 As promptly as practicable, but in any case within 30 days after the Closing Date, Buyer shall eliminate the name “Laramie Energy, LLC” and any
variants thereof from the Assets acquired pursuant to this Agreement and, except with respect to such grace period for eliminating existing usage, shall have no right to use any logos, trademarks or trade names belonging to Seller or any of its
Affiliates. 
 ARTICLE XIV  
 INDEMNIFICATION 
 14.1 Indemnification by Seller. 
 From and after Closing, Seller shall indemnify, defend and hold the Buyer Indemnified Parties harmless from and against any and all Losses arising out of
or resulting from: 
 (a) any representations and warranties made by Seller in Article VI of this Agreement not being true and accurate
when made or at Closing (disregarding any qualifications with respect to materiality or material adverse effect); 
 (b) any failure by
Seller to perform in all respects any of its covenants, agreements, or obligations in this Agreement or in any agreement delivered by Seller at Closing (disregarding any qualifications with respect to materiality or material adverse effect);

 (c) with respect to the Properties, any Environmental Obligations accruing prior to the Effective Time; provided, however, that
Seller’s indemnity pursuant to this clause (c) shall not include any Losses that relate to (i) any Environmental Defects identified by Buyer before the Notice Deadline and covered by Article V, including, without limitation,
(A) Environmental Defects for which and to the extent that the Purchase Price was reduced at Closing, and (B) Environmental Defects for which Seller has completed remediation as required by Section 5.3, (ii) the
acquisition or installation by Buyer of compliance technology or equipment due to changes after the Effective Time in Environmental Laws, or (iii) environmental conditions that become Environmental Obligations solely due to changes in
Environmental Laws on or after the Effective Time; 
 (d) the Existing Seller Claims and the Notice of Violation disclosed on Scheduled
6.10; and 
 (e) except with respect to matters specifically addressed in clauses (a) through (d) above, all Operating Costs
attributable to the ownership or operation of the Assets prior to the Effective Time. 
 14.2 Assumption of Certain
Liabilities. Upon Closing, and subject to Seller’s indemnification obligation set forth in Section 14.1 above for the period it remains in effect, Buyer shall assume and timely and fully pay, perform and otherwise discharge,
without recourse to the Seller Indemnified Parties, all obligations and Liabilities, direct or indirect, known or unknown, asserted or unasserted, absolute or contingent, arising under or with respect to the ownership or operation of the Assets and
regardless of whether the same accrued or otherwise arose before, on or after the Effective Time, including, without limitation: 
 (a) the
condition of the Properties on the date of Closing (including, without limitation, all obligations to properly plug and abandon, or replug and re-abandon, wells located on the Properties, to restore the surface of the Properties and to comply with,
or to bring the Properties into compliance with, Environmental Laws, including conducting any remediation activities which may be required on or otherwise in connection with activities on the Properties), regardless of whether such condition or the
events giving rise to such condition arose or occurred before or after the Closing, and 
  

 41 

 (b) the proper payment of any rentals and royalties with respect to the Properties (all of the above
items in this Section 14.2 being called the “Assumed Obligations”). 
 THE FOREGOING ASSUMPTIONS AND INDEMNIFICATIONS
SHALL APPLY WHETHER OR NOT SUCH DUTIES, OBLIGATIONS OR LIABILITIES, OR SUCH CLAIMS, ACTIONS, CAUSES OF ACTION, LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES ARISE OUT OF (i) NEGLIGENCE (INCLUDING SOLE NEGLIGENCE, SIMPLE NEGLIGENCE, CONCURRENT
NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE, BUT EXPRESSLY NOT INCLUDING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF ANY INDEMNIFIED PARTY, OR (ii) STRICT LIABILITY. 
 14.3 Indemnification by Buyer. 
 From and after Closing, Buyer shall indemnify, defend and hold
the Seller Indemnified Parties harmless from and against any and all Losses arising arise out of or resulting from: 
 (a) any representations
or warranties made by Buyer in Article VII of this Agreement not being true and accurate when made or at Closing; 
 (b) any failure
by Buyer to perform any of its covenants, agreements, or obligations in this Agreement or in any agreement delivered by Buyer at Closing; and 
 (c) the Assumed Obligations. 
 14.4 Mutual Releases. 
 Buyer shall be deemed to have released the Seller Indemnified Parties, at Closing, from any and all Losses for which Buyer has agreed to indemnify the
Seller Indemnified Parties hereunder, and Seller shall be deemed to have released the Buyer Indemnified Parties, at Closing, from any and all Losses for which Seller has agreed to indemnify the Buyer Indemnified Parties hereunder. 
 14.5 Limitations on Indemnification. 
 Notwithstanding anything herein to the contrary: 
 (a) The indemnity, defense and hold harmless obligations set forth in Sections
14.1 and 14.3 shall not apply to (i) any amount that was taken into account as an adjustment to the Purchase Price pursuant to the provisions hereof, and (ii) any party’s costs and expenses with respect to the negotiation
and consummation of this Agreement and the purchase and sale of the Assets. 
  

 42 

 (b) Seller shall have no liability or obligation for any Losses under this Article XIV (excluding
Section 14.1(d)) unless the aggregate Losses which the Buyer Indemnified Parties are entitled to recover under this Article XIV exceed one percent (1%) of the Purchase Price (the “Indemnity
Deductible”). 
 (c) In addition, in no event shall Seller be obligated under this Agreement to indemnify Buyer for an aggregate
amount of Losses (excluding Losses under Section 14.1(d)) in excess of the $12,500,000 of the Purchase Price plus the aggregate Current Market Value of the Shares retained in the Escrow Account after Closing. 
 (d) Except with respect to Seller’s indemnification obligations under Section 14.1(d), Buyer’s sole recourse (absent fraud) for
indemnification claims shall be to the Escrow Account, first to the cash on deposit therein until no such cash remains and second to the Shares. With respect to Buyer indemnification claims that are satisfied by delivery of Shares,
such Shares shall be valued at their Current Market Value calculated as of the date such Shares are released from the Escrow Account for delivery to Buyer in satisfaction of the applicable claim(s). 
 14.6 Survival Provisions. 
 (a)
Representations and Warranties. Except as otherwise specifically provided in this Section 14.6, the representations and warranties of Seller and Buyer in Articles VI and VII of this Agreement, and the parties’
indemnities with respect thereto, shall survive Closing until February 28, 2008, except that the representations and warranties of Seller in Sections 6.1 through 6.5, and the representations and warranties of Buyer in Sections
7.1 through 7.8, and Seller’s and Buyer’s respective indemnities with respect thereto, shall survive Closing indefinitely. 
 (b) Covenants and Agreements. The indemnifications of Seller contained in Section 14.1(b) shall survive Closing until February 28, 2008. The covenants, agreements, or obligations of Seller and Buyer in
Section 13.7 shall survive Closing until the Escrow Account balance is reduced to zero and the covenants, agreements, or obligations of Seller and Buyer in Article VIII, Article XIII (other than Section 13.7)
and Section 15.18 of this Agreement, and the parties’ indemnities with respect thereto, shall survive Closing until May 31, 2008. 
 (c) Other Obligations. The indemnifications and releases of Seller and Buyer contained in Sections 3.2, 5.1(b), 5.3, 9.2, 13.5, 14.1(d), 14.3(c), and 14.4
shall survive Closing and the termination of this Agreement indefinitely. 
 14.7 Certain Disclaimers. 
 THE PARTIES AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE OPERATIVE, THE DISCLAIMERS OF WARRANTIES CONTAINED IN THIS SECTION 14.7 ARE
“CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER. THE EXPRESS REPRESENTATIONS AND 

  

 43 

 
WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT, AND THE TITLE WARRANTIES IN THE CONVEYANCES OF THE PROPERTIES, THE LLC INTERESTS AND THE OTHER ASSETS TO BE
DELIVERED AT CLOSING, (COLLECTIVELY “SELLER’S WARRANTIES”) ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. SELLER EXPRESSLY DISCLAIMS ANY AND ALL SUCH
OTHER REPRESENTATIONS AND WARRANTIES. WITHOUT LIMITATION OF THE FOREGOING AND EXCEPT FOR SELLER’S WARRANTIES, THE ASSETS SHALL BE CONVEYED PURSUANT HERETO WITHOUT (A) ANY WARRANTY OR REPRESENTATION, WHETHER EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, RELATING TO (I) TITLE TO THE ASSETS, THE CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO THE MODELS OR SAMPLES OF MATERIALS OR MERCHANTABILITY OF ANY EQUIPMENT OR ITS FITNESS FOR ANY PURPOSE, (II) THE
ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO BUYER IN CONNECTION WITH THIS AGREEMENT, (III) PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF
HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE PROPERTIES OR THE ABILITY OR POTENTIAL OF THE PROPERTIES TO PRODUCE HYDROCARBONS, (IV) THE ENVIRONMENTAL CONDITION OF THE PROPERTIES, BOTH SURFACE AND SUBSURFACE, (V) ANY IMPLIED OR EXPRESS
WARRANTY OF NON-INFRINGEMENT, OR (VI) ANY OTHER MATTERS CONTAINED IN ANY MATERIALS FURNISHED OR MADE AVAILABLE TO BUYER BY SELLER OR BY SELLER’S AGENTS OR REPRESENTATIVES, OR (B) ANY OTHER EXPRESS, IMPLIED, STATUTORY OR OTHER WARRANTY OR
REPRESENTATION WHATSOEVER. BUYER SHALL HAVE INSPECTED, OR WAIVED (AND UPON CLOSING SHALL BE DEEMED TO HAVE WAIVED) ITS RIGHT TO INSPECT, THE ASSETS FOR ALL PURPOSES, AND SUBJECT TO THE TERMS OF THIS AGREEMENT, SATISFIED ITSELF AS TO THEIR PHYSICAL
AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS SPECIFICALLY RELATED TO THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID WASTES, ASBESTOS AND OTHER MAN MADE FIBERS, OR NORM. BUYER IS
RELYING SOLELY UPON THE TERMS OF THIS AGREEMENT AND ITS OWN INSPECTION OF THE ASSETS, AND BUYER, SUBJECT TO THE TERMS OF THIS AGREEMENT, SHALL ACCEPT ALL OF THE SAME IN THEIR “AS IS, WHERE IS” CONDITION. 
 14.8 Procedure. 
 The
indemnifications contained in Sections 14.1 and 14.3 shall be implemented as follows: 
 (a) Claim Notice. The party
seeking indemnification under the terms of this Agreement (the “Indemnified Party”) shall submit a written notice (a “Claim Notice”) to the other party (the “Indemnifying
Party”) which, to be effective, must state: (i) the amount of each payment claimed by an Indemnified Party to be owing, to the extent then quantifiable; (ii) the basis for such claim, with supporting documentation; and
(iii) a list identifying to the extent 

  

 44 

 
reasonably possible each separate item of Loss for which payment is so claimed. The amount claimed shall be paid by such Indemnifying Party as and to, and
only to, the extent required herein within 30 days after receipt of the Claim Notice or after the amount of such payment has been finally established, whichever last occurs. 
 (b) Information. Within 60 days after notification to an Indemnified Party with respect to any claim or legal action or other matter that may
result in a Loss for which indemnification may be sought under this Article XIV, but in any event in time sufficient for the Indemnifying Party to contest any action, claim, proceeding or other matter that has become the subject of
proceedings before any court or tribunal, such Indemnified Party shall give written notice of such claim, legal action or other matter to the Indemnifying Party and, at the request of such Indemnifying Party, shall furnish the Indemnifying Party or
its counsel with copies of all pleadings and other information with respect to such claim, legal action or other matter and shall, at the election of the Indemnifying Party made within 60 days after receipt of such notice, permit the Indemnifying
Party to assume control of such claim, legal action or other matter (to the extent only that such claim, legal action or other matter relates to a Loss for which the Indemnifying Party is liable), including the determination of all appropriate
actions, the negotiation of settlements on behalf of the Indemnified Party, and the conduct of litigation through attorneys of the Indemnifying Party’s choice; provided, however, that no such settlement can result in any liability or
cost to the Indemnified Party for which it is not entitled to be indemnified hereunder, or subject the Indemnified Party to any declaratory, injunctive or other equitable relief or to regulatory sanctions or restrictions, without its consent. If the
Indemnifying Party elects to assume control: (i) any expense incurred by the Indemnified Party thereafter for investigation or defense of the matter shall be borne by the Indemnified Party; and (ii) the Indemnified Party shall give all
reasonable information and assistance, other than pecuniary, that the Indemnifying Party shall deem necessary to the proper defense of such claim, legal action, or other matter. In the absence of such an election, the Indemnified Party will use
reasonable efforts to defend, at the Indemnifying Party’s expense, any claim, legal action or other matter to which the Indemnifying Party’s indemnification under this Article XIV applies until the Indemnifying Party assumes such
defense, and, if the Indemnifying Party fails to assume such defense within the time period provided above, settle the same in the Indemnified Party’s reasonable discretion at the Indemnifying Party’s expense. 
 (c) Dispute. If the existence of a valid claim or amount to be paid by an Indemnifying Party is in dispute, the parties agree to submit
determination of the existence of a valid claim or the amount to be paid pursuant to the Claim Notice to the dispute resolution mechanism set forth in Section 15.16. 
 14.9 Reservation as to Non-Parties. 
 Nothing herein is intended to limit or otherwise waive any recourse Buyer may have against any Person other than the Seller Indemnified Parties, or which Seller may have against any Person other than Buyer, for any obligations or
liabilities which may be incurred with respect to the Assets. 
  

 45 

 14.10 Exclusive Remedy. 
 The sole and exclusive remedy of Buyer with respect to the Assets shall be pursuant to the express provisions of this Agreement. Without limitation of the
foregoing, if the Closing occurs the sole and exclusive remedy of Buyer, for any and all (a) claims relating to any representations, warranties, covenants and agreements that are contained in this Agreement or in any certificate delivered at
Closing, (b) other claims pursuant to or in connection with this Agreement, and (c) other claims relating to the Assets and the purchase and sale thereof, shall be any right to indemnification from such claims that is expressly provided in
this Article XIV, and if no such right of indemnification is expressly provided, then such claims are hereby waived to the fullest extent permitted by law. If the Closing occurs, Buyer shall also be deemed to have waived, to the fullest
extent permitted under applicable law, any right to contribution against Seller (including, without limitation, any contribution claim arising under any applicable Environmental Law) and any and all other rights, claims and causes of action it may
have against Seller arising under or based on any federal, state or local statute, law, ordinance, rule or regulation or common law or otherwise. 
 14.11 Waiver of Right to Rescission. 
 Seller and Buyer acknowledge that the payment of money, as limited by the terms
of this Agreement, shall be adequate compensation for breach of any representation, warranty, covenant or agreement contained herein or for any other claim arising in connection with or with respect to the transactions contemplated in this
Agreement. As the payment of money shall be adequate compensation, Buyer and Seller waive any right to rescind this Agreement or any of the transactions contemplated hereby. 
 ARTICLE XV  
 MISCELLANEOUS 
 15.1 Schedules and Exhibits. 
 The Schedules and Exhibits referred to in this Agreement are hereby incorporated in this Agreement by reference and constitute a part of this Agreement. 
 15.2 Expenses. 
 Except as otherwise specifically provided, all fees, costs and expenses
incurred by Buyer or Seller in negotiating this Agreement or in consummating the transactions contemplated by this Agreement shall be paid by the party incurring the same, including, without limitation, engineering, land, title, legal and accounting
fees, costs and expenses. 
 15.3 Notices. 
 All notices and communications required or permitted under this Agreement shall be in writing and addressed as set forth below. Any communication or delivery hereunder shall be deemed to have been duly made and the
receiving party charged with notice (a) if personally delivered, when received, (b) if sent by telecopy or facsimile transmission, when received, (c) if mailed, five business days after mailing, certified mail, return receipt
requested, or (d) if sent by overnight courier, one day after sending. All notices shall be addressed as follows: 
  

 46 

 If to Seller: 
 Laramie Energy, LLC 
 1512 Larimer Street, Suite 1000 
 Denver, Colorado 80202 
 Attention: Robert S.
Boswell 
 Fax: (303) 339-4399 
 With a copy to: 
 Holme Roberts & Owen LLP 
 1700 Lincoln street, Suite 4400 
 Denver,
Colorado 80203 
 Attention: Phillip R. Clark 
 Fax: (303) 866-0200 
 If to Buyer: 
 Plains Exploration & Production Company 
 700 Milam, Suite 3100 
 Houston, Texas 77002 
  

			
	 Attention:
	 	John F. Wombwell
		
		 	Executive Vice President and General Counsel

 Fax: (713) 579-6231 
  

 47 

 Any party may, by written notice so delivered to the other parties, change the address or individual to which delivery
shall thereafter be made. 
 15.4 Amendments. 
 Except for waivers specifically provided for in this Agreement, this Agreement may not be amended nor any rights hereunder waived except by an instrument in writing signed by the party to be charged with such
amendment or waiver and delivered by such party to the party claiming the benefit of such amendment or waiver. 
 15.5
Assignment. 
 Prior to the Closing, neither Buyer nor Seller may assign all or any portion of their respective rights or delegate
all or any portion of their respective duties hereunder. 
 15.6 Announcements. 
 Seller and Buyer shall to the extent reasonably possible consult with each other with regard to all press releases and other announcements issued after
the date of execution of this Agreement and prior to the Closing Date concerning this Agreement or the transactions contemplated hereby. 
 15.7 Headings. 
 The headings of the Articles and Sections of this Agreement are for guidance and convenience of
reference only and shall not limit or otherwise affect any of the terms or provisions of this Agreement. 
 15.8 Counterparts.

 This Agreement may be executed by Buyer and Seller in any number of counterparts, each of which shall be deemed an original instrument, but
all of which together shall constitute but one and the same instrument. 
 15.9 References. 
 References made in this Agreement, including use of a pronoun, shall be deemed to include where applicable, masculine, feminine, singular or plural,
individuals or entities. 
 15.10 Governing Law; Jurisdiction; Venue; Jury Waiver. 
 The validity of the various conveyances affecting the title to real property shall be governed by and construed in accordance with the laws of Colorado.
This Agreement and the transactions contemplated hereby or dispute resolution conducted pursuant hereto shall be construed in accordance with, and governed by, the laws of the State of Colorado, without regard to conflicts of laws. Except for
matters submitted to arbitration under Sections 4.4, 5.5 and 13.1(b), and subject to the provisions of Section 15.16, all of the Parties hereto consent to personal jurisdiction in the State of Colorado for any action
arising out of this Agreement or the 

  

 48 

 
transactions contemplated hereby. Except as provided in the immediately preceding sentence, all actions or proceedings with respect to, arising directly or
indirectly in connection with, out of, related to, or from this Agreement or the transactions contemplated hereby shall be exclusively litigated in Colorado state courts located in the City and County of Denver, Colorado or in Federal courts for the
District of Colorado. Each Party hereto waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any action, suit or proceeding arising out of or related to this Agreement. 
 15.11 Entire Agreement. 
 This
Agreement, the Exhibits and Schedules hereto, the Escrow Agreement and the Transition Services Agreement constitute the entire understanding among the parties, their respective partners, members, managers, shareholders, officers, directors and
employees with respect to the subject matter hereof, superseding all negotiations, prior discussions and prior agreements and understandings relating to such subject matter. 
 15.12 Knowledge and Reasonable and Commercially Reasonable Efforts. 
 The knowledge or best knowledge of a party, or similar phrases, shall mean, for purposes of this Agreement, the actual knowledge of the party at the time
the assertion regarding knowledge is made. If the party is a corporation or other entity other than a natural person, such actual knowledge must be on the part of the Person having supervising management authority over the matters to which such
knowledge pertains. Reasonable or commercially reasonable efforts as used in this Agreement do not include the obligation to pay consideration. 
 15.13 Binding Effect. 
 This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto,
and their respective successors and assigns. 
 15.14 No Third-Party Beneficiaries. 
 This Agreement is intended only to benefit the parties hereto and their respective permitted successors and assigns. 
 15.15 Waiver of Compliance with Bulk Transfer Laws. 
 Buyer waives compliance with any applicable bulk transfer laws relating to the transactions contemplated by this Agreement. 
 15.16 Dispute Resolution. 
 (a) After giving effect to the provisions of
Section 4.4, Section 5.5 and Section 13.1(b), and except to the extent a party deems it reasonably necessary to seek immediate injunctive or equitable relief, in which event a party may seek such relief to protect
its interests, if a dispute arises out of or in connection with this Agreement, the parties shall first attempt to resolve the dispute in accordance with this Section 15.16. 
  

 49 

 (b) Upon the occurrence of a dispute, any party may deliver a notice to another party requesting that the
dispute be referred to senior management of the disputing parties. Such notice shall specify the names of senior management of the notifying party and a schedule of their availability during the succeeding 20 business day period. Any dispute notice
shall be delivered promptly after the dispute arises. 
 (c) Within five days after receipt of a dispute notice, the other party shall
provide a response notice specifying the names of senior management nominated by the responding party to attempt to resolve the dispute and a schedule of their availability during the 15 business day period following the date of delivery of the
response notice. 
 (d) During the 15-day period following delivery of the response notice, the nominated members of senior management of
both disputing parties shall meet or confer as frequently as possible and shall attempt in good faith to resolve the dispute. During the conduct of the dispute resolution procedures pursuant to this Section, (i) the disputing parties shall
continue to perform their obligations under this Agreement, and (ii) neither disputing party shall exercise any other remedies hereunder arising by virtue of the matters in dispute. 
 (e) In the event the disputing parties are unable to resolve a dispute within such 15-day period in accordance with the procedures specified in clauses
(a) through (d) above, either disputing party shall thereafter have the right to pursue any and all of its remedies arising hereunder by virtue of the matters in dispute. 
 15.17 Disclaimer of Representations and Warranties. 
 Except as expressly set forth in this Agreement, the parties hereto each disclaim all liability and responsibility for any other representation, warranty, statements or communications (orally or in writing) to any
other party (including, but not limited to, any information contained in any opinion, information or advice that may have been provided to any such party by any partner, officer, member, trustee, beneficiary, stockholder, director, employee, agent,
consultant, member, representative or contractor of such disclaiming party or its Affiliates or any engineer or engineering firm, or other agent, consultant or representative) wherever and however made, including, but not limited to, those made in
any data room and any supplements or amendments thereto or during any negotiations. Without limiting the generality of the foregoing, none of the parties makes any representation or warranty as to (a) the amount, value, quality or
deliverability of petroleum, natural gas or other reserves attributable to the Properties, (b) any geological, engineering or other interpretations of economic valuation, or (c) predictions as to when any event will or will not occur or is
likely to occur. 
 15.18 Confidentiality. 
 No party shall disclose directly or indirectly without the prior written consent of the other parties the terms of this Agreement or any information provided by the parties in connection with the transactions
contemplated hereby to a Third Party (other than the employees, lenders, royalty owners, counsel, accountants and other agents of the party, or prospective purchasers of all or substantially all of a party’s assets or of any rights under this
Agreement, provided such Persons shall have agreed to keep such terms confidential) except (i) in order to comply with any 

  

 50 

 
applicable Law or the requirements of any stock exchange on which any securities of such Party are listed or admitted for trading, (ii) to the extent
necessary for the authorization or enforcement of this Agreement, or (iii) to the extent necessary to implement this Agreement. Each party shall notify the other parties of any proceeding of which it is aware which may result in disclosure of
the terms of any transaction. The parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with this confidentiality obligation. 
 15.19 Construction. 
 Each
party has been represented by counsel in connection with the negotiation and drafting of this Agreement. All presumptions concerning interpretation of this Agreement based on drafting responsibility or otherwise shall be deemed waived. 

[Remainder of page intentionally left blank] 
  

 51 

 This Agreement is executed on the dates set forth in signature blocks below but is effective as of the
date first set forth above. 
  

			
	 SELLER:

	
	LARAMIE ENERGY, LLC
		
	By:	 	 /s/ Robert S. Boswell

		 	Robert S. Boswell, Chairman and
		 	Chief Executive Officer
		
	Date:	 	April 18, 2007
	
	BUYER:
	
	PLAINS EXPLORATION & PRODUCTION COMPANY
		
	By:	 	 /s/ James C. Flores

		 	James C. Flores
		 	Chairman, President and Chief Executive Officer
		
	Date:	 	April 18, 2007

 TABLE OF EXHIBITS AND SCHEDULES 
  

					
	 Exhibits
	  	 Title
	  	Page
	A	  	Description of Leases	  	A-1
	A-1	  	Permits	  	A-1-1
	B	  	Wells and Well Locations/Allocated Value	  	B-1
	C	  	Field and Gathering Assets	  	C-1
	D	  	Hidden Creek Pipeline	  	D-1
	E	  	Form of Assignment and Bill of Sale	  	E-1
	F	  	Form of LLC Assignment	  	F-1
	G	  	Form of Transition Services Agreement	  	G-1
	H	  	Form of Escrow Agreement	  	H-1
			
	 Schedules
	  	 Title
	  	 
	6.6	  	Existing Seller Claims	  	6.6-1
	6.8	  	Seller’s Conflicts	  	6.8-1
	6.10	  	Environmental Conditions	  	6.10-1
	6.11	  	Pending Tax Disputes	  	6.11-1
	6.13	  	Material Contracts	  	6.13-1
	6.16	  	Suspense Accounts	  	6.16-1
	6.19	  	Well Status	  	6.19-1
	6.20	  	Laramie Land Assets	  	6.20-1
	6.21	  	AFEs; Operations	  	6.21-1
	6.22	  	Change in Condition	  	6.22-2
	8.1(a)(ii)	  	Interim Period Expenditures	  	8.1(a)(ii)-1
	8.2(c)	  	Bonds, Letters of Credit and Guarantees	  	8.2(c)-1
	8.4	  	Certain Employees	  	8.4-1

  

 1

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