Document:

Employment Agreement - Michael H. Hickey

 Exhibit 10.17 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (this “Agreement”), effective as of August 1, 2005 (the “Effective Date”), is between Rosetta Resources
Inc., a Delaware corporation (“Employer”), and Michael H. Hickey (“Executive”). 
  
 1. Definitions. As used in this Agreement, the following terms have the following meanings: 
  
 (a) “Affiliate” means, with respect to any entity,
any other corporation, organization, association, partnership, sole proprietorship or other type of entity, whether incorporated or unincorporated, directly or indirectly controlling or controlled by or under direct or indirect common control with
such entity. 
  
 (b) “Annual Period”
means the time period of each year beginning on the first day of the Employment Term and ending on the day before the anniversary of that date. 
  
 (c) “Board” means the Board of Directors of Employer. 
  
 (d) “Cause” means a finding by the Board of acts or omissions constituting, in the Board’s
reasonable judgment, (i) a breach of duty by Executive in the course of his employment involving fraud, acts of dishonesty (other than inadvertent acts or omissions), disloyalty to Employer or its Affiliates, or moral turpitude constituting
criminal felony; (ii) conduct by Executive that is materially detrimental to Employer, monetarily or otherwise, or reflects unfavorably on Employer or Executive to such an extent that Employer’s best interests reasonably require the
termination of Executive’s employment; (iii) acts or omissions of Executive materially in violation of his obligations under this Agreement or at law; (iv) Executive’s failure to comply with or enforce Employer’s policies
concerning equal employment opportunity, including engaging in sexually or otherwise harassing conduct; (v) Executive’s repeated insubordination; (vi) Executive’s failure to comply with or enforce, in any material respect, all
other personnel policies of Employer or its Affiliates; (vii) Executive’s failure to devote his full working time and best efforts to the performance of his responsibilities to Employer or its Affiliates; (viii) Executive’s
conviction of, or entry of a plea agreement or consent decree or similar arrangement with respect to a felony or any violation of federal or state securities laws; or (ix) Executive’s failure to maintain a law license in good standing in
the State of Texas. 
  
 (e) “Corporate
Change” means (i) the dissolution or liquidation of Employer; (ii) a reorganization, merger or consolidation of Employer with one or more corporations (other than a merger or consolidation effecting a reincorporation of Employer in
another state or any other merger or consolidation 

 in which the shareholders of the surviving corporation and their proportionate interests therein
immediately after the merger or consolidation are substantially identical to the shareholders of Employer and their proportionate interests therein immediately prior to the merger or consolidation) (collectively, a “Corporate Change
Merger”); (iii) the sale of all or substantially all of the assets of Employer or an affiliate as defined in the Employer’s long-term incentive plan; or (iv) the occurrence of a Change in Control. A “Change in Control”
shall be deemed to have occurred if (x) individuals who were directors of Employer immediately prior to a Control Transaction shall cease, within two years of such Control Transaction to constitute a majority of the Board of Directors of
Employer (or of the Board of Directors of any successor to Employer or to a company which has acquired all or substantially all its assets) other than by reason of an increase in the size of the membership of the applicable Board that is approved by
at least a majority of the individuals who were directors of Employer immediately prior to such Control Transaction or (y) any entity, person or Group acquires shares of Employer in a transaction or series of transactions that result in such
entity, person or Group directly or indirectly owning beneficially 50% or more of the outstanding shares of Common Stock. As used herein, “Control Transaction” means (A) any tender offer for or acquisition of capital stock of Employer
pursuant to which any person, entity, or Group directly or indirectly acquires beneficial ownership of 20% or more of the outstanding shares of Common Stock; (B) any Corporate Change Merger of Employer; (C) any contested election of
directors of Employer; or (D) any combination of the foregoing, any one of which results in a change in voting power sufficient to elect a majority of the Board of Directors of Employer. As used herein, “Group” means persons who act
“in concert” as described in Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as amended. Notwithstanding the foregoing, “Corporate Change” shall not include the Acquisition, the Offering or any public
offering of equity of Employer pursuant to a registration that is effective under the Securities Act of 1933, as amended. 
  
 (f) “Competitor” means any person or entity that is engaged in the acquisition, exploration, development and production of oil
and gas properties in competition with the activities of Employer or an Affiliate. 
  
 (g) “Confidential Information” means any information about Rosetta or its Affiliates that is protected by the attorney-client
privilege and any unprivileged information relating to Rosetta or its Affiliates or furnished to Executive by reason of Executive’s legal representation of Rosetta or its Affiliates and Executive’s employment by Rosetta, including, without
limitation, all documents or information, in whatever form or medium, concerning or evidencing sales; costs; pricing; strategies; forecasts and long range plans; financial and tax information; personnel information; business, marketing and
operational projections, plans and opportunities; customer, vendor, and supplier information; geological and geophysical maps, data, interpretations, and analyses; project and prospect locations and leads; well logs, interpretations, and analyses;

  

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 and production information; but excluding any such information that is or becomes generally available to
the public other than as a result of any breach of this Agreement or other unauthorized disclosure by Executive. 
  
 (h) “Employment Termination Date” means the effective date of termination of Executive’s employment as established under
Paragraph 6(g). 
  
 (i) “Good Reason”
means any of the following actions if taken without Executive’s prior written consent: (i) any material failure by Employer to comply with its obligations under Paragraph 5; (ii) any material failure by Employer to comply with its
obligations under Paragraphs 12 or 20; (iii) any demotion of Executive as evidenced by a material reduction in Executive’s responsibilities, duties, compensation, or benefits; or (iv) any permanent relocation of Executive’s place
of business to a location 50 miles or more from the then-current location. Neither a transfer of employment among Employer and any of its Affiliates, a change in the co-employment relationship, nor a mere change in job title constitutes “Good
Reason.” 
  
 (j) “Inability to
Perform” means and shall be deemed to have occurred if Executive has been determined under Employer’s long-term disability plan to be eligible for long-term disability benefits. In the absence of Executive’s participation in,
application for benefits under, or existence of such a plan, “Inability to Perform” means a finding by the Board in its sole judgment that Executive is, despite any reasonable accommodation required by law, unable to perform the essential
functions of his position because of an illness or injury for (i) 60% or more of the normal working days during six consecutive calendar months or (ii) 40% or more of the normal working days during twelve consecutive calendar months.

  
 (k) “Work Product” means all ideas,
works of authorship, inventions, and other creations, whether or not patentable, copyrightable, or subject to other intellectual-property protection, that are made, conceived, developed or worked on in whole or in part by Executive while employed by
Employer and/or any of its Affiliates, that relate in any manner whatsoever to the business, existing or proposed, of Employer and/or any of its Affiliates, or any other business or research or development effort in which Employer and/or any of its
Affiliates engages during Executive’s employment. 
  
 2.
Employment. Employer agrees to employ Executive (directly or through an Affiliate), and Executive agrees to be employed, for the period set forth in Paragraph 3. Executive will be employed in the position and with the duties and
responsibilities set forth in Paragraph 4(a) and upon the other terms and conditions set out in this Agreement. Employer and Executive agree that such employment may be through a co-employment relationship with a professional employer organization.

  

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 3. Term. Executive’s employment shall commence on the Effective Date and shall be for an
initial term of one Annual Period (the “Employment Term”), unless sooner terminated as provided in this Agreement. Subject to earlier termination as provided in this Agreement, the Employment Term shall be automatically extended for an
additional Annual Period unless either Executive or Employer gives written notice to the other six months or more prior to the end of the initial term or, if the Agreement has been automatically extended beyond the initial term, six months or more
prior to the end of the additional Annual Period. In the event of such an automatic extension, each additional Annual Period shall be part of the “Employment Term.” Upon such timely written notice, Executive’s employment and this
Agreement will end upon the expiration of the Employment Term. The ending of Executive’s employment as a result of the expiration of the Employment Term shall not constitute a termination of employment by either party under this Agreement.

  
 4. Position and Duties. 
  
 (a) Executive shall be employed as Vice President and
General Counsel. In such capacity, Executive, subject to the ultimate control and direction of the Chief Executive Officer of Employer, shall have such duties, functions, responsibilities, and authority as are from time to time delegated to
Executive by the Chief Executive Officer of Employer; provided, however, that such duties, functions, responsibilities, and authority are reasonable and customary for a person serving in the same or similar capacity of an enterprise comparable to
Employer. 
  
 (b) During the Employment Term,
Executive shall devote his full time, skill, and attention and his best efforts to the business and affairs of Employer to the extent necessary to discharge fully, faithfully, and efficiently the duties and responsibilities delegated and assigned to
Executive in or pursuant to this Agreement, except for usual, ordinary, and customary periods of vacation and absence due to illness or other disability. 
  
 (c) In connection with Executive’s employment under this Agreement, Executive shall be based in Houston, Texas, or at any other place
where the principal executive offices of Employer may be located during the Employment Term. Executive also will engage in such travel as the performance of Executive’s duties in the business of Employer may require. 
  
 (d) All services that Executive may render to Employer or
any of its Affiliates in any capacity during the Employment Term shall be deemed to be services required by this Agreement and the consideration for such services is that provided for in this Agreement. 
  
 (e) Executive hereby acknowledges that he has read and is
familiar with Employer’s policies regarding business ethics and conduct, and will comply with all such provisions, and any amendments thereto, during the Employment Term. 
  

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 5. Compensation and Related Matters. 
  
 (a) Base Salary. During each Annual Period of the
Employment Term, Employer shall pay to Executive for his services under this Agreement an annual base salary (“Base Salary”). The Base Salary on the Effective Date shall be $210,000.00. The Base Salary is subject to annual adjustments
beginning in January 2006, at the discretion of the Board, but in no event shall Employer pay Executive a Base Salary less than that set forth above without the consent of Executive. The Base Salary shall be payable in installments in accordance
with the general payroll practices of Employer, or as otherwise mutually agreed upon. 
  
 (b) Annual Incentives. During the Employment Term, Executive will participate in any incentive compensation plan (ICP) applicable
to Executive’s position, as may be adopted by Employer from time to time and in accordance with the terms of such plan(s). Subject to approval of the ICP by the Board, Executive’s target award opportunity for the period commencing on the
Effective Date and ending on December 31, 2005, will be based upon 40% of Executive’s Base Salary paid to Executive by Employer prorated for the number of months in such period as compared to a full year and shall be subject to such other
terms, conditions and restrictions as may be established by the Board or the ICP committee. The provisions of this Paragraph 5(b) are subject to the approval of the ICP plan by the Board, and, if required by such Board, the shareholders of Employer.

  
 (c) Long-Term Incentives. During the
Employment Term, Executive will participate in Employer’s long-term incentive (LTI) plan applicable to Executive’s position, in accordance with the terms of such plan(s). The provisions of this Paragraph 5(c) and Paragraph 5(d) below are
subject to the approval of the LTI plan by the Board and shareholders of Employer. Except as provided in Paragraph 5(d), Executive will participate in such LTI plan award opportunities as may be determined by the Board or the LTI committee, as
applicable. 
  
 (d) Special Equity Grants.
On the Effective Date, Executive will be granted the following awards pursuant to the terms of the LTI plan: 
  
 (i) A nonqualified stock option to purchase 26,250 shares of Employer’s common stock, which option will have a ten year term and vest in accordance
with the following schedule: (A) 25% of such shares (if a fractional number, then the next lower whole number) will vest and become purchasable on the Effective Date; (B) an additional 25% of such shares (if a fractional number, then the
next lower whole number) will vest and become purchasable on the first anniversary of the Effective Date, provided 
  

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 Executive is in the continuous service of Employer or an Affiliate until such vesting
date; (C) an additional 25% of such shares (if a fractional number, then the next lower whole number) will vest and become purchasable on the second anniversary of the Effective Date, provided Executive is in the continuous service of Employer
or an Affiliate until such vesting date; and (D) the remaining shares will vest and become purchasable on the third anniversary of the Effective Date, provided Executive is in the continuous service of Employer or an Affiliate until such
vesting date. 
  
 (ii) 6,000 shares of regular restricted common
stock in Employer, which will vest as follows: (A) 25% of such shares (if a fractional number, then the next lower whole number) will vest on the first anniversary of the Effective Date, provided Executive is in the continuous service of
Employer or an Affiliate until such vesting date; (B) an additional 25% of such shares (if a fractional number, then the next lower whole number) will vest on the second anniversary of the Effective Date, provided Executive is in the continuous
service of Employer or an Affiliate until such vesting date; and (C) the remaining shares will vest on the third anniversary of the Effective Date, provided Executive is in the continuous service of Employer or an Affiliate until such vesting
date. 
  
 (iii) 12,000 shares of bonus restricted common stock
in Employer, which will vest in full on the later to occur of (A) the day following the effective date of the Employer’s initial registration statement under the Securities Act of 1933, as amended, with respect to the Employer’s
common stock or (B) the day following the expiration of any lock up or other restrictive agreement entered into by Executive with any investment banking firm in connection with such initial registration, provided Executive is in the continuous
service of Employer or an Affiliate until and on such vesting date. 
  
 The special equity grants provided for in this Paragraph 5(d) shall be subject to the terms of the LTI plan and such other terms, conditions and restrictions as may be established by the Board or the LTI plan committee. 
  
 (e) Employee Benefits. During the Employment Term,
Executive shall be entitled to participate in all employee benefit plans, programs, and arrangements that are generally made available by Employer to its similarly situated employees, including without limitation Employer’s life insurance,
long-term disability, and health plans. Executive agrees to cooperate and participate in any medical or physical examinations as may be required by any insurance company in connection with the applications for such life and/or disability insurance
policies. 
  

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 (f) Expenses. Executive shall be entitled to receive reimbursement for all
reasonable expenses incurred by Executive in performing his duties and responsibilities under this Agreement, consistent with Employer’s policies or practices for reimbursement of expenses incurred by other senior executives of Employer
(“Business Expenses”). 
  
 (g)
Vacations. During each Annual Period of the Employment Term, Executive shall be eligible for four weeks’ paid vacation, as well as sick pay and other paid and unpaid time off in accordance with the policies and practices of Employer.
Executive agrees to use his vacation and other paid time off at such times that are (i) consistent with the proper performance of his duties and responsibilities and (ii) mutually convenient for Employer and Executive. 
  
 (h) Fringe Benefits. During the Employment Term,
Executive shall be entitled to the perquisites and other fringe benefits that are made available by Employer to its senior executives generally and to such perquisites and fringe benefits that are made available by Employer to Executive in
particular, subject to any applicable terms and conditions of any specific perquisite or other fringe benefit. 
  
 6. Termination of Employment and Agreement. 
  
 (a) Death. Executive’s employment and this Agreement shall terminate automatically upon his death. 
  
 (b) Inability to Perform. Employer may terminate this
Agreement or this Agreement and Executive’s employment for Inability to Perform. 
  
 (c) Termination by Employer for Cause. Employer may terminate Executive’s employment and this Agreement for Cause by providing
Executive with a Notice of Termination as set out in Paragraph 6(f). Before terminating Executive’s employment and this Agreement for Cause, Employer must provide Executive with written notice of its intent to do so, which notice must specify
the particular circumstances or events that Employer contends gives rise to the existence of Cause; provided, however, that if Employer intends to exercise its right to terminate Executive’s employment and this Agreement in whole or part under
provisions (v) or (vi) of the definition of Cause, Employer must first provide Executive with a reasonable period of time to correct those circumstances or events Employer contends give rise to the existence of Cause under such
provision(s) (the “Correction Period”), but only to the extent Employer determines that they may reasonably be corrected. A 30-day Correction Period shall be presumptively reasonable. Executive will be given the opportunity within 30
calendar days of his receipt of Employer’s written notice of its intent to 
  

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 terminate Executive’s employment and this Agreement for Cause to defend himself with respect the
circumstances or events specified in such notice and in a manner and under such procedures as the Chief Executive Officer of Employer may establish. Nothing in this Paragraph 6(c) precludes informal discussions between Executive and Employer
regarding such circumstances or events. 
  
 (d)
Termination by Executive for Good Reason. Executive may terminate his employment and this Agreement for Good Reason. To exercise his right to terminate for Good Reason, Executive must provide written notice to Employer of his belief that Good
Reason exists, and that notice shall describe the circumstance(s) believed to constitute Good Reason. If such circumstance(s) may reasonably be corrected, Employer shall have 30 days to effect a correction. If not corrected within that 30-day
period, Executive may submit a Notice of Termination; provided, however, that the Notice of Termination invoking Executive’s right to terminate his employment for Good Reason must be given no later than 60 days after the date Good Reason first
arose; otherwise, Executive is deemed to have accepted the circumstance(s), or the Employer’s correction of such circumstance(s), that may have given rise to the existence of Good Reason. 
  
 (e) Termination by Either Party Without Cause or Without
Good Reason. Either Employer or Executive may terminate Executive’s employment and this Agreement without Cause or Good Reason upon at least 60 days’ prior written notice to the other party. 
  
 (f) Notice of Termination. Any termination of
Executive’s employment or, pursuant to Paragraph 6(b), a termination of this Agreement alone, by Employer or by Executive (other than a termination pursuant to Paragraph 6(a)) shall be communicated by a Notice of Termination. A “Notice of
Termination” is a written notice that must (i) indicate the specific termination provision in this Agreement relied upon; (ii) in the case of a termination for Inability to Perform, Cause, or Good Reason, set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision invoked; and (iii) if the termination is by Executive under Paragraph 6(e), or by Employer for any reason, specify
the Employment Termination Date or, pursuant to Paragraph 6(b), the date of termination of this Agreement. The failure by Employer or Executive to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Cause
or Good Reason shall not waive any right of Employer or Executive or preclude either of them from asserting such fact or circumstance in enforcing or defending their rights. 
  
 (g) Employment Termination Date. The Employment Termination Date, whether occurring before or after a
Corporate Change, shall be as follows: (i) if Executive’s employment is terminated by his death, the date of his death; (ii) if Executive’s employment is terminated by Employer because of his Inability to Perform or for Cause,
the date specified in the Notice of Termination, which date 
  

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 shall be no earlier than the date such notice is given; (iii) if Executive’s employment is
terminated by Executive for Good Reason, the date on which the Notice of Termination is given; or (iv) if the termination is under Paragraph 6(e), the date specified in the Notice of Termination, which date shall be no earlier than 60 days
after the date such notice is given. 
  
 (h)
Deemed Resignation. In the event of termination of Executive’s employment, Executive agrees that if at such time he is a member of the Board or is an officer of Employer or a director or officer of any of its Affiliates, he shall be
deemed to have resigned from such position(s) effective on the Employment Termination Date, unless the Board notifies Executive prior to the Employment Termination Date of the Board’s desire that Executive remain a member of the Board, in which
case Executive shall not be deemed to have resigned his position as a member of the Board merely by virtue of the termination of his employment. Executive agrees to execute and deliver any documents evidencing his resignation from such positions
that Employer may reasonably request. 
  
 7. Compensation Upon
Termination of Employment or Expiration of Employment Term. 
  
 (a) Death. If Executive’s employment is terminated by reason of Executive’s death, Employer shall pay to such person as Executive shall designate in a written notice to Employer (or, if no such person
is designated, to his estate) any unpaid portion of Executive’s Base Salary through the Employment Termination Date (the “Compensation Payment”), any earned but unused vacation (the “Vacation Payment”), and any unreimbursed
Business Expenses, at the time and in the manner required by applicable law. 
  
 (b) Inability to Perform. If Executive’s employment and this Agreement is terminated by reason of Executive’s Inability to Perform, Employer shall pay to Executive the Compensation Payment, the
Vacation Payment, and any unreimbursed Business Expenses at the time and in the manner required by applicable law. 
  
 (c) Termination by Executive Without Good Reason. If Executive’s employment is terminated by Executive pursuant to and in
compliance with Paragraph 6(e), Employer shall pay to Executive the Compensation Payment, the Vacation Payment, and any unreimbursed Business Expenses, at the time and in the manner required by applicable law. 
  
 (d) Termination for Cause. If Executive’s
employment is terminated by Employer for Cause, Employer shall pay to Executive the Compensation Payment, the Vacation Payment, and any unreimbursed Business Expenses, at the time and in the manner required by applicable law. 
  

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 (e) Termination Without Cause or With Good Reason; Expiration of Employment Term.

  
 (i) If Executive’s employment is terminated by Employer
for any reason other than death, Inability to Perform, or Cause, or is terminated by Executive for Good Reason, during the Employment Term, or if either Employer or Executive gives timely notice pursuant to Paragraph 3 and Executive’s
employment and this Agreement therefore ends upon the expiration of the Employment Term, Employer shall pay to Executive the Compensation Payment, the Vacation Payment, and any unreimbursed Business Expenses, at the time and in the manner required
by applicable law. 
  
 (ii) In addition, if Executive’s
employment is terminated by Employer for any reason other than death, Inability to Perform, or Cause, or is terminated by Executive for Good Reason, during the Employment Term, or if Employer gives timely notice pursuant to Paragraph 3 and
Executive’s employment and this Agreement therefore ends upon the expiration of the Employment Term, Employer shall pay or provide to Executive in lieu of any other severance or separation benefits, at the time and in the manner provided in
Paragraph 7(e)(iii), the following if, within 45 days after the Employment Termination Date or the expiration of the Employment Term, as applicable, Executive has signed a general release agreement in a form acceptable to Employer and Executive does
not revoke such release: 
  
 (A)
Executive’s Base Salary for one year from the Employment Termination Date or the expiration of the Employment Term, as applicable; 
  
 (B) ICP award at the target level for one year, based on the ICP award for the performance period in effect on the Employment Termination
Date or the expiration of the Employment Term, as applicable; 
  
 (C) Full and immediate vesting of all Employer stock options and restricted stock awards held by Executive as of the Employment Termination Date or the expiration of the Employment Term, as applicable; 
  
 (D) With respect to Employer stock options that are vested
prior to the Employment Termination Date or the expiration of the Employment Term, as applicable, Executive will have twelve months after the Employment Termination Date or the expiration of the Employment Term, as applicable, to exercise such stock
options. 
  

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 Notwithstanding the foregoing, Employer’s obligation under this Paragraph 7(e)(ii)
is limited as follows: 
  
 (X) If, in the
reasonable judgment of Employer, Executive engages in any conduct that materially violates Paragraph 8 or engages in any of the Restricted Activities described in Paragraph 9, Employer’s obligation to make payments to Executive under this
Paragraph 7(e)(ii), if any such obligation remains, shall end as of the date Employer so notifies Executive in writing; and 
  
 (Y) If Executive is arrested or indicted for any felony criminal offense or any violation of federal or state securities laws, or has any
civil enforcement action brought against him by any regulatory agency, for actions or omissions related to his employment with Employer or any of its Affiliates, or if Employer reasonably believes that Executive has committed any act or omission
that would have entitled Employer to terminate his employment for Cause, whether such act or omission was committed during his employment with Employer or any of its Affiliates or thereafter, Employer may suspend any payments remaining under this
Paragraph 7(e)(ii) until the final resolution of such criminal or civil proceedings or until such earlier date on which the Board has made a final determination as to whether Executive committed such an act or omission. If Executive is found guilty
or enters into a plea agreement, consent decree, or similar arrangement with respect to any such criminal or civil proceedings, or if the Board determines that Executive has committed such an act or omission, (1) Employer’s obligation to
provide the payments set out in this Paragraph 7(e)(ii) shall immediately end, and (2) Executive shall repay to Employer any amounts paid to him pursuant to this Paragraph 7(e)(ii) within 30 days after a written request to do so by Employer. If
any such criminal or civil proceedings do not result in a finding of guilt or the entry of a plea agreement or consent decree or similar arrangement, or the Board determines that Executive has not committed such an act or omission, Employer shall
pay to Executive any payments that it has suspended, with interest on such suspended payments at its cost of funds, and shall make any remaining payments due under this Paragraph 7(e)(ii). 
  

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 (iii) The payments provided for under Paragraph 7(e)(ii)(A) shall be paid at the time and in the manner
such Base Salary would have been paid had there been no termination of employment, unless such payments may not be begun before the date that is six months after the date of Executive’s separation from service (or, if earlier, the date of death
of Executive) as provided in Section 409A(a)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) in order to meet the requirements of Section 409A of the Code, as determined by Employer in its sole judgment, in which
case the sum of the payments that otherwise would have been made during such six-month period shall be paid in a single lump-sum payment as soon as administratively practicable following the date that is six months after the date of Executive’s
separation from service (or, if earlier, the date of death of Executive) and any remaining payments provided for under Paragraph 7(e)(ii) shall be paid at the time and in the manner such Base Salary would have been paid had there been no termination
of employment. The payments provided for under Paragraph 7(e)(ii)(B) shall be made in a single lump sum on the date that is six months after the date of Executive’s separation from service (or, if earlier, the date of death of Executive) as
provided in Section 409A(a)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) in order to meet the requirements of Section 409A of the Code. 
  
 (f) Termination or Expiration of Employment Term Following Corporate Change. 
  
 (i) If, within the two-year period following a Corporate Change,
Executive’s employment with Employer or an Affiliate or successor of Employer is terminated for any reason other than death, Inability to Perform, or Cause, is terminated by Executive for Good Reason, or if Employer or an Affiliate or successor
of Employer gives timely notice pursuant to Paragraph 3 and Executive’s employment and this Agreement therefore ends upon the expiration of the Employment Term, Executive will be paid the Compensation Payment, the Vacation Payment and any
unreimbursed Business Expenses, at the time and in the manner required by applicable law. In addition, if, within 45 days after the Employment Termination Date or the expiration of the Employment Term, as applicable, Executive has signed a general
release agreement in a form acceptable to Employer and Executive does not revoke such release, in lieu of any other payments under Paragraph 7(e)(ii), (A) Executive shall be paid a lump-sum amount 
  

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 equivalent to (x) 2 times the sum of Executive’s then-current Base Salary, and
(y) 2 times the target ICP award for the performance period in which the Corporate Change occurs, and (B) any unvested Employer stock options and restricted stock will be immediately vested and Executive will have twelve months following
the Employment Termination Date or expiration of the Employment Term, as applicable, to exercise the Employer stock options. The additional payments provided for in Paragraph 7(f)(i)(A) shall be paid as soon as administratively practicable following
the date that is six months after the date of Executive’s separation from service (or, if earlier, the date of death of Executive) as provided in Section 409A(a)(2) of the Code. 
  
 (ii) In the event that it is determined that any payment (other than the
Gross-Up payment provided for in this Paragraph 7(f)(ii)) or distribution by Employer or any of its Affiliates to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of
any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control”
of Employer, within the meaning of Section 280G of the Code or any successor provision thereto (such tax being hereafter referred to as the “Excise Tax”), then Executive will be entitled to receive an additional payment or payments (a
“Gross-Up Payment”). The Gross-Up Payment will be in an amount such that, after payment by Executive of all taxes, including any Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payment. For purposes of determining the amount of the Gross-Up Payment, Executive will be considered to pay (x) federal income taxes at the highest rate in effect in the year in which the Gross-Up Payment will be
made and (y) state and local income taxes at the highest rate in effect in the state or locality in which the Gross-Up Payment would be subject to state or local tax, net of the maximum reduction in federal income tax that could be obtained
from deduction of such state and local taxes. The determination of whether an Excise Tax would be imposed, the amount of such Excise Tax, and the calculation of the amounts referred to in this Paragraph 7(f)(ii) will be made at the expense of
Employer by Employer’s regular independent accounting firm (the “Accounting Firm”), which shall provide 
  

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 detailed supporting calculations. Any determination by the Accounting Firm will be
binding upon Employer and Executive. The Gross-Up Payment will be paid to Executive as soon as administratively practicable following the later of (i) the date that is six months after the date of Executive’s separation from service (or,
if earlier, the date of death of Executive) as provided in Section 409A(a)(2) of the Code, or (ii) the date Executive is required to pay the excise tax imposed by Section 4999 of the Code. 
  
 (g) Health Insurance. In addition, if
Executive’s employment with Employer or an Affiliate or successor of Employer is terminated or ends under the circumstances set forth in Paragraph 7(f), Executive will receive, in addition to any other payments due under this Agreement, the
following benefit: if, at the time of the Employment Termination Date or the expiration of the Employment Term, as applicable, Executive participates in one or more health plans offered or made available by Employer and Executive is eligible for and
elects to receive continued coverage under such plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any successor law, Employer will reimburse Executive during 12-month period following the
Employment Termination Date or the expiration of the Employment Term, as applicable, for the difference between the total amount of the monthly COBRA premiums for the same coverage as in effect on the Employment Termination Date or the expiration of
the Employment Term, as applicable, that are actually paid by Executive for such continued health plan benefits and the total monthly amount of the same premiums charged to active senior executives of Employer for health insurance coverage.
Provided, however, that Employer’s reimbursement obligation under this Paragraph 7(g) shall terminate upon the earlier of (i) the expiration of the time period described above or (ii) the date Executive becomes eligible for health
insurance coverage under a subsequent employer’s plan without being subject to any preexisting-condition exclusion under that plan, which occurrence Executive shall promptly report to Employer. 
  
 (h) Exclusive Compensation and Benefits. The
compensation and benefits described in this Paragraph 7, along with the associated terms for payment, constitute all of Employer’s obligations to Executive with respect to the termination of Executive’s employment with Employer and/or its
Affiliates. However, nothing in this Agreement is intended to limit any earned, vested benefits (other than any entitlement to severance or separation pay, if any) that Executive may have under the applicable provisions of any benefit plan of
Employer in which Executive is participating at the time of the termination of employment. 
  
 (i) Compliance with Code Section 409A. Any provision of this Agreement to the contrary notwithstanding, all compensation
payable pursuant to this Agreement that is determined by Employer in its sole judgment to be subject 
  

 14 

 to Section 409A of the Code shall be paid in a manner that Employer in its sole judgment determines
meets the requirements of Section 409A of the Code and any related rules, regulations or other guidance, even if meeting such requirements would result in a delay in the time of payment of such compensation. 
  
 (j) Payment after Executive’s Death. In the
event of Executive’s death after he becomes entitled to a payment or payments pursuant to this Paragraph 7, any remaining unpaid amounts shall be paid, at the time and in the manner such payments otherwise would have been paid to Executive, to
such person as Executive shall designate in a written notice to Employer (or, if no such person is designated, to his estate). 
  
 (k) Offset. The Executive agrees that Employer may set off against, and Executive authorizes Employer to deduct from, any payments
due to the Executive, or to his heirs, legal representatives, or successors, as a result of the termination of the Executive’s employment any amounts which may be due and owing to Employer or any of its Affiliates by the Executive, whether
arising under this Agreement or otherwise. 
  
 8. Confidential
Information. 
  
 (a) Executive acknowledges
and agrees that (i) Employer and its Affiliates are engaged in a highly competitive business; (ii) Employer and its Affiliates have expended considerable time and resources to develop goodwill with their customers, vendors, and others, and
to create, protect, and exploit Confidential Information; (iii) Employer must continue to prevent the dilution of its and its Affiliates’ goodwill and unauthorized use or disclosure of its Confidential Information to avoid irreparable harm
to its legitimate business interests; (iv) given his position and responsibilities, he is a fiduciary of Rosetta and its Affiliates; (v) his status as a fiduciary and the proper functioning of the legal system require the preservation by
him of the Confidential Information during his employment with Rosetta and thereafter; (vi) he is obligated by the Texas Rules of Disciplinary Conduct and the common law during his employment with Rosetta and thereafter to protect and reserve
Rosetta and its Affiliates’ Confidential Information and not to use the Confidential Information to the disadvantage of Rosetta or its Affiliates or for his own or a third party’s benefit; (vii) in the oil and gas acquisition,
exploration, development and production business, his participation in or direction of Employer’s or its Affiliates’ day-to-day operations, strategic planning, and legal affairs, are an integral part of Employer’s continued success
and goodwill; (viii) given his position and responsibilities, he necessarily will be creating Confidential Information that belongs to Employer and enhances Employer’s goodwill, and in carrying out his responsibilities he in turn will be
relying on Employer’s goodwill and the disclosure by Employer to him of Confidential Information; (ix) he will have access to Confidential Information that could be used by any Competitor of 
  

 15 

 Employer in a manner that would irreparably harm Employer’s competitive position in the marketplace
and dilute its goodwill; and (x) he necessarily would use or disclose Confidential Information if he were to engage in competition with Employer. 
  
 (b) Employer acknowledges and agrees that Executive must have and continue to have throughout his employment the benefits and use of its
and its Affiliates’ goodwill and Confidential Information in order to properly carry out his responsibilities. Employer accordingly promises upon execution and delivery of this Agreement to provide Executive immediate access to Confidential
Information and to authorize him to engage in activities that will create new and additional Confidential Information. 
  
 (c) Employer and Executive thus acknowledge and agree that during Executive’s employment with Employer and upon execution and
delivery of this Agreement he (i) will receive and will continue to receive Confidential Information that is unique, proprietary, and valuable to Employer and/or its Affiliates; (ii) will create and will continue to create Confidential
Information that is unique, proprietary, and valuable to Employer and/or its Affiliates; and (iii) will benefit and will continue to benefit, including without limitation by way of increased earnings and earning capacity, from the goodwill
Employer and its Affiliates have generated and from the Confidential Information. 
  
 (d) Accordingly, Executive acknowledges and agrees that at all times during his employment by Employer and/or any of its Affiliates and
thereafter: 
  
 (i) he will comply in all
respects with the Texas Disciplinary Rules of Professional Conduct (“Rules”); 
  
 (ii) all Confidential Information shall remain and be the sole and exclusive property of Employer and/or its Affiliates; 
  
 (iii) he will protect and safeguard all Confidential
Information; 
  
 (iv) he will hold all
Confidential Information in strictest confidence and not, directly or indirectly, disclose or divulge any Confidential Information to any person other than an officer, director, or employee of, or legal counsel for, Employer or its Affiliates, to
the extent necessary for the proper performance of his responsibilities unless authorized to do so by Employer or compelled to do so by law or valid legal process, or required to do so by the Rules; 
  
 (iv) if he believes he is compelled by law or valid legal
process or required by the Rules to disclose or divulge any Confidential Information, he will notify Employer in writing sufficiently in advance of any such disclosure to allow Employer the opportunity to defend, limit, or otherwise protect its
interests against such disclosure; 
  

 16 

 (v) at the end of his employment with Employer for any reason or at the request of
Employer at any time, he will return to Employer all Confidential Information and all copies thereof, in whatever tangible form or medium, including electronic; and 
  
 (vi) absent the promises and representations of Executive in this Paragraph 8 and in Paragraph 9, Employer
would require him immediately to return any tangible Confidential Information in his possession, would not provide Executive with new and additional Confidential Information, would not authorize Executive to engage in activities that will create new
and additional Confidential Information, and would not enter or have entered into this Agreement. 
  
 9. Nondisparagement and Nonsolicitation Obligations. In consideration of Employer’s promises to provide Executive with Confidential
Information and to authorize him to engage in activities that will create new and additional Confidential Information upon execution and delivery of this Agreement, and the other promises and undertakings of Employer in this Agreement, Executive
agrees that, while he is employed by Employer and/or any of its Affiliates and for a 2-year period following the end of that employment for any reason, he shall not engage in any of the following activities (the “Restricted Activities”):

  
 (a) He will not directly or indirectly
disparage Employer or its Affiliates, any products, services, or operations of Employer or its Affiliates, or any of the former, current, or future officers, directors, or employees of Employer or its Affiliates; 
  
 (b) He will not, whether on his own behalf or on behalf of
any other individual, partnership, firm, corporation or business organization, either directly or indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce, persuade, or entice, any person who is then employed by or otherwise
engaged to perform services for Employer or its Affiliates to leave that employment or cease performing those services; and 
  
 (c) He will not, whether on his own behalf or on behalf of any other individual, partnership, firm, corporation or business organization,
either directly or indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce, persuade, or entice, any person who is then a customer, supplier, or vendor of Employer or any of its Affiliates to cease being a customer, supplier,
or vendor of Employer or any of its Affiliates or to divert all or any part of such person’s or entity’s business from Employer or any of its Affiliates. 
  
 Executive acknowledges and agrees that the restrictions contained in Paragraphs 8 and 9 are designed to and
do comply with Executive’s obligations 
  

 17 

 under the Rules; are ancillary to an otherwise enforceable agreement, including without limitation the
mutual promises and undertakings set forth in Paragraph 8; that Employer’s promises and undertakings set forth in Paragraph 8 and Executive’s position and responsibilities with Employer give rise to Employer’s interest in restricting
Executive’s post-employment activities; that such restrictions are designed to enforce Executive’s promises and undertakings set forth in this Paragraph 9 and his obligations and duties owed to Employer and its Affiliates under the Rules
and at common law; that the restrictions are reasonable and necessary, are valid and enforceable under Texas law, and do not impose a greater restraint than necessary to protect Employer’s goodwill, Confidential Information, and other
legitimate business interests; that he will immediately notify Employer in writing should he believe or be advised that the restrictions are not, or likely are not, valid or enforceable under Texas law, the Rules, or the law or disciplinary or
ethical rules of any other state or regulatory body that he contends or is advised is applicable; that the mutual promises and undertakings of Employer and Executive under Paragraphs 8 and 9 are not contingent on the duration of Executive’s
employment with Employer; and that absent the promises and representations made by Executive in this Paragraph 9 and Paragraph 8, Employer would require him to return any Confidential Information in his possession, would not provide Executive with
new and additional Confidential Information, would not authorize Executive to engage in activities that will create new and additional Confidential Information, and would not enter or have entered into this Agreement. 
  
 10. Intellectual Property. 
  
 (a) In consideration of Employer’s promises and
undertakings in this Agreement, Executive agrees that all Work Product will be disclosed promptly by Executive to Employer, shall be the sole and exclusive property of Employer, and is hereby assigned to Employer, regardless of whether (i) such
Work Product was conceived, made, developed or worked on during regular hours of his employment or his time away from his employment, (ii) the Work Product was made at the suggestion of Employer; or (iii) the Work Product was reduced to
drawing, written description, documentation, models or other tangible form. Without limiting the foregoing, Executive acknowledges that all original works of authorship that are made by Executive, solely or jointly with others, within the scope of
his employment and that are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C., Section 101), and are therefore owned by Employer from the time of creation.

  
 (b) Executive agrees to assign, transfer, and
set over, and Executive does hereby assign, transfer, and set over to Employer, all of his right, title and interest in and to all Work Product, without the necessity of any further compensation, and agrees that Employer is entitled to obtain and
hold in its own name all patents, copyrights, and other rights in respect of all Work Product. Executive agrees to (i) cooperate with Employer during and after his employment 
  

 18 

 with Employer in obtaining patents or copyrights or other intellectual-property protection for all Work
Product; (ii) execute, acknowledge, seal, and deliver all documents tendered by Employer to evidence its ownership thereof throughout the world; and (iii) cooperate with Employer in obtaining, defending, and enforcing its rights therein.

  
 (c) Executive represents that there are no
other contracts to assign inventions or other intellectual property that are now in existence between Executive and any other person or entity. Executive further represents that he has no other employment or undertakings that might restrict or
impair his performance of this Agreement. Executive will not in connection with his employment by Employer, use or disclose to Employer any confidential, trade secret, or other proprietary information of any previous employer or other person that
Executive is not lawfully entitled to disclose. 
  
 11.
Reformation. If the provisions of Paragraphs 8, 9, or 10 are ever deemed by a court to exceed the limitations permitted by applicable law, Executive and Employer agree that such provisions shall be, and are, automatically reformed to the
maximum limitations permitted by such law. 
  
 12.
Indemnification and Insurance. Employer shall indemnify Executive to the fullest extent permitted by the laws of the State of Delaware. In addition, Employer shall indemnify Executive in accordance with Employer’s certificate of
incorporation and bylaws and pursuant to Employer’s standard indemnification agreement, and shall provide him with coverage under any directors’ and officers’ liability insurance policies, in each case on terms not less favorable than
those provided to any of its other directors and officers as in effect from time to time. 
  
 13. Assistance in Litigation. During the Employment Term and thereafter, Executive shall, upon reasonable notice, furnish such information and proper assistance to Employer or any of its Affiliates as may
reasonably be required by Employer in connection with any litigation in which Employer or any of its Affiliates is, or may become, a party. Employer shall reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive in
rendering such assistance, but shall have no obligation to compensate Executive for his time in providing information and assistance in accordance with this Paragraph 13. 
  
 14. No Obligation to Pay. With regard to any payment due to Executive under this Agreement, it shall not be a breach
of any provision of this Agreement for Employer to fail to make such payment to Executive if (i) Employer is legally prohibited from making the payment; (ii) Employer would be legally obligated to recover the payment if it was made; or
(iii) Executive would be legally obligated to repay the payment if it was made. 
  
 15. Withholding Taxes. Employer shall withhold from any payments to be made to Executive pursuant to this Agreement such amounts (including Social Security and Medicare contributions and federal income taxes)
as shall be required by federal, state, and local withholding tax laws. 
  

 19 

 16. Notices. All notices, requests, demands, and other communications required or permitted to be
given or made by either party shall be in writing and shall be deemed to have been duly given or made (a) when delivered personally, or (b) when deposited in the United States mail, first class registered or certified mail, postage
prepaid, return receipt requested, to the party for which intended at the following addresses (or at such other addresses as shall be specified by the parties by like notice, except that notices of change of address shall be effective only upon
receipt): 
  
 (i) If to Employer, at: 
  
   Rosetta Resources Inc. 
   Attn: Chief Executive Officer 
   717 Texas 
   Suite 2800 
   Houston, Texas 77002 
  
 (ii) If to Executive, at Executive’s then-current home address on file with Employer. 
  
 17. Injunctive Relief. Executive acknowledges and agrees that Employer would not have an adequate remedy at law and
would be irreparably harmed in the event that any of the provisions of Paragraphs 8, 9, and 10 were not performed in accordance with their specific terms or were otherwise breached. Accordingly, Executive agrees that Employer shall be entitled to
equitable relief, including preliminary and permanent injunctions and specific performance, in the event Executive breaches or threatens to breach any of the provisions of such Paragraphs, without the necessity of posting any bond or proving special
damages or irreparable injury. Such remedies shall not be deemed to be the exclusive remedies for a breach or threatened breach of this Agreement by Executive, but shall be in addition to all other remedies available to Employer at law or equity.

  
 18. Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Executive as the result of
employment by another employer after the date of termination of Executive’s employment with Employer, or otherwise. 
  

 20 

 19. Binding Effect; No Assignment by Executive; No Third Party Benefit. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors, and assigns; provided, however, that Executive shall not assign or otherwise transfer this Agreement or any of his rights or
obligations under this Agreement. Employer is authorized to assign or otherwise transfer this Agreement or any of its rights or obligations under this Agreement to an Affiliate of Employer. Executive shall not have any right to pledge, hypothecate,
anticipate, or in any way create a lien upon any payments or other benefits provided under this Agreement; and no benefits payable under this Agreement shall be assignable in anticipation of payment either by voluntary or involuntary acts, or by
operation of law, except by will or pursuant to the laws of descent and distribution. Nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties, and their respective heirs, legal
representatives, successors, and permitted assigns, any rights, benefits, or remedies of any nature whatsoever under or by reason of this Agreement. 
  
 20. Assumption by Successor. Employer shall ensure that any successor or assignee (whether direct or indirect, by purchase, merger, consolidation,
or otherwise) to all or substantially all the business and/or assets of the Employer or the oil and gas acquisition, exploration, development and production business of the Employer, either by operation of law or written agreement, assumes the
obligations of this Agreement (the “Assumption Obligation”). If Employer fails to fulfill the Assumption Obligation, such failure shall be considered Good Reason; provided, however, that the compensation to which Executive would be
entitled to upon a termination for Good Reason pursuant to Paragraph 7(e) shall be the sole remedy of Executive for any failure by Employer to fulfill the Assumption Obligation. As used in this Agreement, “Employer” shall include any
successor or assignee (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all the business and/or assets of Employer or the oil and gas exploration, development and production business of the
Employer that executes and delivers the agreement provided for in this Paragraph 20 or that otherwise becomes obligated under this Agreement by operation of law. 
  
 21. Legal Fees and Expenses. Employer will reimburse the Executive for all reasonable legal fees and expenses
incurred by the Executive in connection with the preparation, review, and negotiation of this Agreement prior to its execution. 
  
 22. Governing Law; Venue. This Agreement and the employment of Executive shall be governed by the laws of the State of Texas except for its laws
with respect to conflict of laws. The exclusive forum for any lawsuit arising from or related to Executive’s employment or this agreement shall be a state or federal court in Harris County, Texas. This provision does not prevent Employer from
removing to an Appropriate federal court any action brought in state court. EXECUTIVE HEREBY CONSENTS TO, AND WAIVES ANY OBJECTIONS TO, REMOVAL TO FEDERAL COURT BY EMPLOYER OF ANY ACTION BROUGHT AGAINST IT BY EXECUTIVE. 
  

 21 

 23. JURY TRIAL WAIVER. IN THE EVENT THAT ANY DISPUTE ARISING FROM OR RELATED TO THIS AGREEMENT
OR EXECUTIVE’S EMPLOYMENT WITH EMPLOYER RESULTS IN A LAWSUIT, BOTH EMPLOYER AND EXECUTIVE MUTUALLY WAIVE ANY RIGHT THEY MAY OTHERWISE HAVE FOR A JURY TO DECIDE THE ISSUES IN THE LAWSUIT, REGARDLESS OF THE PARTY OR PARTIES ASSERTING CLAIMS IN
THE LAWSUIT OR THE NATURE OF SUCH CLAIMS. EMPLOYER AND EXECUTIVE IRREVOCABLY AGREE THAT ALL ISSUES IN SUCH A LAWSUIT SHALL BE DECIDED BY A JUDGE RATHER THAN A JURY. 
  
 24. Entire Agreement. This Agreement contains the entire agreement between the parties concerning the subject matter
hereof and supersedes all prior agreements and understandings, written and oral, between the parties with respect to the subject matter of this Agreement. 
  
 25. Modification; Waiver. No person, other than pursuant to a resolution duly adopted by the members of the Board, shall have authority on behalf
of Employer to agree to modify, amend, or waive any provision of this Agreement. Further, this Agreement may not be changed orally, but only by a written agreement signed by the party against whom any waiver, change, amendment, modification or
discharge is sought to be enforced. Executive acknowledges and agrees that no breach by Employer of this Agreement or failure to enforce or insist on its rights under this Agreement shall constitute a waiver or abandonment of any such rights or
defense to enforcement of such rights. 
  
 26.
Construction. This Agreement is to be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. 
  
 27. Severability. If any provision of this Agreement shall be determined by a court to be invalid or unenforceable, the remaining provisions of
this Agreement shall not be affected thereby, shall remain in full force and effect, and shall be enforceable to the fullest extent permitted by applicable law. 
  

28. Counterparts. This Agreement may be executed by the parties in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement. 
  

 22 

 IN WITNESS WHEREOF, Employer has caused this Agreement to be executed on its behalf by its duly
authorized officer, and Executive has executed this Agreement, effective as of the date first set forth above. 
  

					
	EMPLOYER	  	EXECUTIVE
		
	 ROSETTA RESOURCES INC.
	  	 MICHAEL H. HICKEY

			
	 By:
	 	  

	  	  

	 Printed Name:
	 	  

	  	 
	 Title:
	 	  

	  	 

  

 23Senior Revolving Credit Agreement

 Exhibit 10.18 
  
 Execution Version 
  
 SENIOR REVOLVING CREDIT AGREEMENT 
  
 DATED AS OF 
 JULY 7, 2005 
  
 AMONG 
  
 ROSETTA RESOURCES INC., 
 AS BORROWER, 
  
 BNP PARIBAS, 
 AS ADMINISTRATIVE AGENT,

  
 AND 
  
 THE LENDERS PARTY
HERETO 
  
 SOLE
LEAD ARRANGER AND SOLE BOOKRUNNER 
  
 BNP PARIBAS 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 	  	ARTICLE I	  	 
	 	  	DEFINITIONS AND ACCOUNTING MATTERS	  	 
			
	Section 1.01	  	Terms Defined Above	  	1
	Section 1.02	  	Certain Defined Terms	  	1
	Section 1.03	  	Types of Loans and Borrowings	  	23
	Section 1.04	  	Terms Generally; Rules of Construction	  	23
	Section 1.05	  	Accounting Terms and Determinations; GAAP	  	24
			
	 	  	ARTICLE II	  	 
	 	  	THE CREDITS	  	 
			
	Section 2.01	  	Commitments	  	24
	Section 2.02	  	Loans and Borrowings	  	24
	Section 2.03	  	Requests for Borrowings	  	25
	Section 2.04	  	Interest Elections	  	26
	Section 2.05	  	Funding of Borrowings	  	27
	Section 2.06	  	Termination and Reduction of Aggregate Maximum Credit Amounts	  	28
	Section 2.07	  	Borrowing Base	  	29
	Section 2.08	  	Letters of Credit	  	31
			
	 	  	ARTICLE III	  	 
	 	  	PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES	  	 
			
	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	  	 
			
	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	  	 
			
	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	  	44
	Section 5.05	  	Illegality	  	45

  

 i 

					
	 	  	ARTICLE VI	  	 
	 	  	CONDITIONS PRECEDENT	  	 
			
	Section 6.01	  	Effective Date	  	45
	Section 6.02	  	Each Credit Event	  	49
			
	 	  	ARTICLE VII	  	 
	 	  	REPRESENTATIONS AND WARRANTIES	  	 
			
	Section 7.01	  	Organization; Powers	  	50
	Section 7.02	  	Authority; Enforceability	  	50
	Section 7.03	  	Approvals; No Conflicts	  	50
	Section 7.04	  	Financial Condition; No Material Adverse Change	  	50
	Section 7.05	  	Litigation	  	51
	Section 7.06	  	Environmental Matters	  	51
	Section 7.07	  	Compliance with the Laws and Agreements; No Defaults	  	52
	Section 7.08	  	Investment Company Act	  	53
	Section 7.09	  	Public Utility Holding Company Act	  	53
	Section 7.10	  	Taxes	  	53
	Section 7.11	  	ERISA	  	53
	Section 7.12	  	Disclosure; No Material Misstatements	  	54
	Section 7.13	  	Insurance	  	55
	Section 7.14	  	Restriction on Liens	  	55
	Section 7.15	  	Subsidiaries	  	55
	Section 7.16	  	Location of Business and Offices	  	55
	Section 7.17	  	Properties; Titles, Etc	  	56
	Section 7.18	  	Maintenance of Properties	  	57
	Section 7.19	  	Gas Imbalances, Prepayments	  	57
	Section 7.20	  	Marketing of Production	  	57
	Section 7.21	  	Swap Agreements	  	58
	Section 7.22	  	Use of Loans and Letters of Credit	  	58
	Section 7.23	  	Solvency	  	58
	Section 7.24	  	Specified Senior Indebtedness	  	58
	Section 7.25	  	Acquisition Documents; Separation Documents	  	58
			
	 	  	ARTICLE VIII	  	 
	 	  	AFFIRMATIVE COVENANTS	  	 
			
	Section 8.01	  	Financial Statements; Ratings Change; Other Information	  	59
	Section 8.02	  	Notices of Material Events	  	62
	Section 8.03	  	Existence; Conduct of Business	  	63
	Section 8.04	  	Payment of Obligations	  	63
	Section 8.05	  	Performance of Obligations under Loan Documents	  	63
	Section 8.06	  	Operation and Maintenance of Properties	  	63
	Section 8.07	  	Insurance	  	64
	Section 8.08	  	Books and Records; Inspection Rights	  	64
	Section 8.09	  	Compliance with Laws	  	65
	Section 8.10	  	Environmental Matters	  	65
	Section 8.11	  	Further Assurances	  	66

  

 ii 

					
	Section 8.12	  	Reserve Reports	  	66
	Section 8.13	  	Title Information	  	67
	Section 8.14	  	Additional Collateral; Additional Guarantors	  	68
	Section 8.15	  	ERISA Compliance	  	69
	Section 8.16	  	Unrestricted Subsidiaries	  	70
	Section 8.17	  	Marketing Activities	  	70
	Section 8.18	  	Swap Agreements	  	70
	Section 8.19	  	Control Agreement	  	71
			
	 	  	ARTICLE IX	  	 
	 	  	NEGATIVE COVENANTS	  	 
			
	Section 9.01	  	Financial Covenants	  	71
	Section 9.02	  	Debt	  	71
	Section 9.03	  	Liens	  	72
	Section 9.04	  	Dividends, Distributions and Redemptions	  	72
	Section 9.05	  	Investments, Loans and Advances	  	73
	Section 9.06	  	Designation and Conversion of Restricted and Unrestricted Subsidiaries; Debt of Unrestricted Subsidiaries	  	75
	Section 9.07	  	Nature of Business; International Operations	  	75
	Section 9.08	  	Limitation on Leases	  	76
	Section 9.09	  	Proceeds of Notes	  	76
	Section 9.10	  	ERISA Compliance	  	76
	Section 9.11	  	Sale or Discount of Receivables	  	77
	Section 9.12	  	Mergers, Etc	  	77
	Section 9.13	  	Sale of Properties	  	78
	Section 9.14	  	Environmental Matters	  	79
	Section 9.15	  	Transactions with Affiliates	  	79
	Section 9.16	  	Subsidiaries	  	79
	Section 9.17	  	Negative Pledge Agreements	  	79
	Section 9.18	  	Gas Imbalances, Take-or-Pay or Other Prepayments	  	79
	Section 9.19	  	Swap Agreements	  	80
	Section 9.20	  	Acquisition and Separation Documents	  	80
	Section 9.21	  	Gas Sales Contracts	  	81
			
	 	  	ARTICLE X	  	 
	 	  	EVENTS OF DEFAULT; REMEDIES	  	 
			
	Section 10.01	  	Events of Default	  	81
	Section 10.02	  	Remedies	  	84
			
	 	  	ARTICLE XI	  	 
	 	  	THE AGENTS	  	 
			
	Section 11.01	  	Appointment; Powers	  	85
	Section 11.02	  	Duties and Obligations of Administrative Agent	  	85
	Section 11.03	  	Action by Administrative Agent	  	86
	Section 11.04	  	Reliance by Administrative Agent	  	87
	Section 11.05	  	Subagents	  	87
	Section 11.06	  	Resignation or Removal of Administrative Agent	  	87

  

 iii 

					
	Section 11.07	  	Agents as Lenders	  	88
	Section 11.08	  	No Reliance	  	88
	Section 11.09	  	Administrative Agent May File Proofs of Claim	  	88
	Section 11.10	  	Authority of Administrative Agent to Release Collateral and Liens	  	89
	Section 11.11	  	The Arranger, and other Agents	  	89
			
	 	  	ARTICLE XII	  	 
	 	  	MISCELLANEOUS	  	 
			
	Section 12.01	  	Notices	  	89
	Section 12.02	  	Waivers; Amendments	  	90
	Section 12.03	  	Expenses, Indemnity; Damage Waiver.	  	91
	Section 12.04	  	Successors and Assigns	  	94
	Section 12.05	  	Survival; Revival; Reinstatement	  	97
	Section 12.06	  	Counterparts; Integration; Effectiveness	  	97
	Section 12.07	  	Severability	  	98
	Section 12.08	  	Right of Setoff	  	98
	Section 12.09	  	GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS	  	98
	Section 12.10	  	Headings	  	99
	Section 12.11	  	Confidentiality	  	99
	Section 12.12	  	Interest Rate Limitation	  	100
	Section 12.13	  	Specified Senior Indebtedness	  	101
	Section 12.14	  	Collateral Matters; Swap Agreements	  	101
	Section 12.15	  	No Third Party Beneficiaries	  	101
	Section 12.16	  	USA Patriot Act Notice	  	101

  
  

 iv 

 ANNEXES, EXHIBITS AND SCHEDULES 
  

			
	Annex I	  	List of Maximum Credit Amounts
		
	Exhibit A	  	Form of Note
	Exhibit B	  	Form of Borrowing Request
	Exhibit C	  	Form of Interest Election Request
	Exhibit D	  	Form of Compliance Certificate
	Exhibit E-1	  	Form of Legal Opinion of Thompson & Knight LLP, special counsel to the Borrower
	Exhibit E-2	  	Form of Legal Opinion of Local Counsel
	Exhibit F-1	  	Security Instruments
	Exhibit F-2	  	Form of Guaranty and Collateral Agreement
	Exhibit G	  	Form of Assignment and Assumption
		
	Schedule 7.05	  	Litigation
	Schedule 7.15	  	Subsidiaries and Partnerships; Unrestricted Subsidiaries
	Schedule 7.19	  	Gas Imbalances
	Schedule 7.20	  	Marketing Contracts
	Schedule 9.05	  	Investments

  

 v 

 THIS SENIOR REVOLVING CREDIT AGREEMENT dated as of July 7, 2005, is among: Rosetta Resources Inc.,
a corporation duly formed and existing under the laws of the State of Delaware (the “Borrower”); each of the Lenders from time to time party hereto; and BNP Paribas (in its individual capacity, “BNP Paribas”), as
administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”). 
  
 R E C I T A L S 
  
 A. The Borrower has requested that the Lenders provide certain loans to and extensions of credit on behalf of the Borrower. 
  
 B. The Lenders have agreed to make such loans and extensions of credit
subject to the terms and conditions of this Agreement. 
  
 C. 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. 
  
 “Acceptable Collateral” means: (a) letters of credit having terms satisfactory to the Administrative Agent issued by a 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, (b) if the counterparty to a Gas Sales Contract is a “forward contract merchant” (as defined in the
United States Federal Bankruptcy Code) acting in such capacity, the posting of cash collateral to the Margin Account in accordance with Section 9.21, (c) cash prepayment for gas purchases and (d) such other forms of collateral as may be approved by
the Majority Lenders. 
  
 “Acquisition” means the
acquisition by the Borrower of all of the Equity Interests of certain Subsidiaries of Calpine pursuant to the terms and conditions of the Acquisition Documents. 

 “Acquisition Documents” means (a) the Purchase and Sale Agreement, (b) the Transfer and
Assumption Agreement, (c) the Transition Services Agreement and (d) all bills of sale, assignments, agreements, instruments and documents executed and delivered in connection therewith, as amended. 
  
 “Acquisition Properties” means the Oil and Gas Properties
and other properties acquired directly or indirectly by the Borrower or any Guarantor pursuant to the Acquisition Documents. 
  
 “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. 
  
 “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent. 
  
 “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, and any syndication agent, documentation agent or
similar agent that hereafter becomes a party hereto, and “Agent” shall mean either the Administrative Agent or such other 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 Senior Revolving 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 Grid	 
					
	 Borrowing Base Utilization Percentage
	  	<50	%	 	3	50% < 75	%	 	3	75% <90	%	 	3	90% <100	%
	 LIBOR Margin
	  	1.625	%	 	 	1.875	%	 	 	2.125	%	 	 	2.375	%
	 ABR Margin
	  	0.125	%	 	 	0.375	%	 	 	0.625	%	 	 	0.875	%
	 Commitment Fee Rate
	  	0.500	%	 	 	0.500	%	 	 	0.375	%	 	 	0.375	%

  

 2 

 Each change in the Applicable Margin shall apply during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date of the next such change, provided, however, that if at any time the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then the “Applicable
Margin” means the rate per annum set forth on the grid when the Borrowing Base Utilization Percentage is at its highest level. 
  
 “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. 
  
 “Approved Counterparty” means (a) any Lender or any Affiliate of a Lender or (b) any other Person whose long term senior unsecured debt rating is A/A2 by S&P or Moody’s (or their equivalent)
or higher or (c) any other Person from time to time approved by the Majority Lenders. 
  
 “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 Netherland, Sewell & Associates, Inc. and any other independent
petroleum engineers reasonably acceptable to the Administrative Agent and the Borrower. 
  
 “Approved Purchaser” means a Person whose long term senior unsecured debt rating from S&P is at least “BBB+” or whose obligations are unconditionally guaranteed pursuant to a guaranty of
payment by a Person (the “Approved Purchaser Guarantor”) whose long term senior unsecured debt rating from S&P is at least “BBB+”, in either case at the time such Gas Sales Contract is entered into, provided that if
such Person’s (or Approved Purchaser Guarantor’s, if applicable) long term senior unsecured debt rating from S&P subsequently is downgraded to “BBB with negative outlook” or to “BBB-” or below, the Person will cease
to be an Approved Purchaser until such time as such Person’s (or such Approved Purchaser Guarantor’s, if applicable) long term senior unsecured debt rating is upgraded to “BBB with no negative outlook” or “BBB+” or
above. 
  
 “Arranger” means BNP Paribas, in its
capacity 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 G or any other form approved by the Administrative Agent. 
  

 3 

 “Availability Period” means the period from and including the Effective Date to but
excluding the Termination Date. 
  
 “Board” means
the Board of Governors of the Federal Reserve System of the United States of America or any successor Governmental Authority. 
  
 “Borrowing” means Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which
a single Interest Period is in effect. 
  
 “Borrowing
Base” means at any time an amount equal to the amount determined in accordance with Section 2.07, as the same may be adjusted from time to time pursuant to Section 8.13(c) or Section 9.13(e). 
  
 “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 total 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; and if such day relates to a Borrowing or continuation of, a payment or prepayment of principal of or interest on, or a conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Borrower with respect to any such Borrowing or continuation, payment, prepayment, conversion or Interest Period, any day which is also a day on which dealings in dollar deposits are carried out in the London interbank market. 
  
 “Calpine” means Calpine Corporation, a Delaware corporation.

  
 “Calpine Gas Contracts” means all Gas Sales
Contracts between the Borrower or any of its Subsidiaries and Calpine or any of its Subsidiaries. 
  
 “Capital Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP,
recorded as capital leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent thereunder. 
  
 “Casualty Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by
condemnation or similar proceeding of, any Property of the Borrower or any of its Restricted Subsidiaries having a fair market value in excess of $1,000,000. 
  
 “Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) of Equity 
  

 4 

 Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of the Borrower or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed
by directors so nominated. 
  
 “Change in Law”
means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or
(c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 5.01(b)), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. 
  
 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute. 
  
 “Commitment” means, with respect to each Lender, the
commitment of such Lender to make Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may
be (a) modified from time to time pursuant to Section 2.06 and (b) modified from time to time pursuant to assignments by or to such Lender pursuant to Section 12.04(b), and “Commitments” means the aggregate amount of the Commitments of all
Lenders. The amount representing each Lender’s Commitment shall at any time be the lesser of such Lender’s Maximum Credit Amount and such Lender’s Applicable Percentage of the then effective Borrowing Base. 
  
 “Commitment Fee Rate” has the meaning set forth in the
definition of “Applicable Margin”. 
  
 “Consolidated Net Income” means with respect to 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 in which the Borrower or any Consolidated Restricted Subsidiary has an interest (which interest does not cause the net income of such other Person to be consolidated with the net income of the Borrower and the Consolidated
Restricted Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions actually paid in cash during such period by such other Person to the 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 operation of the terms of its charter or any agreement, instrument or Governmental Requirement applicable to such Consolidated Restricted Subsidiary or is otherwise restricted or prohibited, in each case
determined in accordance with GAAP; (c) any extraordinary non-cash gains or losses during such period, (d) non-cash gains or losses under 
  

 5 

 FAS 133 resulting from the net change in Borrower’s mark-to-market portfolio of commodity price risk management
activities during that period and (e) any gains or losses attributable to writeups or writedowns of assets, including ceiling test writedowns; and provided further that for purposes of calculating the financial ratio in Section 9.01(a), if the
Borrower or any Consolidated Restricted Subsidiary shall acquire or dispose of any material Property or a Subsidiary shall be redesignated as either an Unrestricted Subsidiary or a Restricted Subsidiary, in any case, during the period of four fiscal
quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements are available and up to and including the date of the consummation of such acquisition, disposition or
redesignation, then Consolidated Net Income shall be calculated after giving pro forma effect to such acquisition (including the revenues of the Properties acquired), merger, disposition or redesignation, as if such acquisition, merger,
disposition or redesignation had occurred on the first day of such period. 
  
 “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 shall be (or should have been) consolidated with the financial statements of the Borrower in accordance with GAAP. 
  
 “Consolidated Unrestricted Subsidiaries” means any Unrestricted Subsidiaries that are Consolidated Subsidiaries. 
  
 “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. 
  
 “Control Agreement”
means the Account Control Agreement by and among the Borrower, the Administrative Agent and the depository bank named therein, granting the Administrative Agent “control” over the Margin Account, to be executed pursuant to Section 8.19.

  
 “Debt” means, for any Person, the sum of the
following (without duplication): (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all obligations of such Person (whether contingent or
otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts payable and all accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of Property or services
that are more than ninety (90) days past the date of invoice other than those which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d) all obligations under
Capital Leases; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in the other clauses of this definition) of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured
by) a Lien on any Property of such Person, whether or not such Debt is assumed by such Person; (g) all Debt 
  

 6 

 (as defined in the other clauses of this definition) of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the Debt (howsoever such assurance shall be made) to the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee or assurance against loss; (h) all obligations or
undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the Debt or Property of others to insure a creditor against a loss; (i) obligations to deliver commodities, goods or
services, including, without limitation, Hydrocarbons, in consideration of one or more advance payments made more than one month in advance of the month in which the commodities, goods or services are to be delivered, other than gas balancing
arrangements in the ordinary course of business; (j) obligations to pay for goods or services even if such goods or services are not actually received or utilized by such Person; (k) any Debt of a partnership for which such Person is liable either
by agreement, by operation of law or by a Governmental Requirement but only to the extent of such liability; (l) Disqualified Capital Stock; and (m) the undischarged balance of any production payment created by such Person or for the creation of
which such Person directly or indirectly received payment. The Debt of any Person shall include all obligations of such Person of the character described above to the extent such Person remains legally liable in respect thereof notwithstanding that
any such obligation is not included as a liability of such Person under GAAP. 
  
 “Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. 
  
 “Disqualified Capital Stock” means any Equity Interest that,
by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event, matures or is mandatorily redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is convertible or exchangeable for Debt or redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified
Capital Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is one year after the earlier of (a) the Maturity Date and (b) the date on which there are no Loans, LC Exposure or other obligations hereunder
outstanding and all of the Commitments are terminated. 
  
 “dollars” or “$” refers to lawful money of the United States of America. 
  
 “Domestic Subsidiary” means any Restricted 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 the following expenses or charges to the extent deducted from Consolidated Net Income in such period: interest, letter of credit fees,
income and franchise taxes, depreciation, depletion, amortization and other similar noncash charges and exploration expenses, minus all noncash income added to Consolidated Net Income. 
  
 “Effective Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived
in accordance with Section 12.02). 
  

 7 

 “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 Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous
Materials Transportation Act, as amended, and other environmental conservation or protection Governmental Requirements. The term “oil” shall have the meaning specified in OPA, the terms “hazardous substance” and
“release” (or “threatened release”) have the meanings specified in CERCLA, the terms “solid waste” and “disposal” (or “disposed”) have the meanings specified in
RCRA and the term “oil and gas waste” shall have the meaning specified in Section 91.1011 of the Texas Natural Resources Code (“Section 91.1011”); provided, however, that (a) in the event either OPA, CERCLA, RCRA or
Section 91.1011 is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and (b) to the extent the laws of the state or other jurisdiction in which any
Property of 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 or (f) any other event or condition which might constitute grounds under section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan. 
  

 8 

 “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate. 
  
 “Event of Default” has the meaning assigned such term in Section 10.01. 
  
 “Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental charges or levies which are
not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens in connection with workers’ compensation, unemployment insurance or other
social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (c) statutory
landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens arising by operation of law in the
ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties each of which is in respect of obligations that are not delinquent or which are being contested in good faith by appropriate
action and for which adequate reserves have been maintained in accordance with GAAP; (d) contractual Liens which arise in the ordinary course of business under real property leases, operating agreements, joint venture agreements, oil and gas
partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements,
overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other
disposal agreements, seismic or other geophysical permits or agreements, and other agreements which are usual and customary in the oil and gas business and are for claims which are not delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in accordance with GAAP, provided that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for
which such Property is held by the Borrower or any Restricted Subsidiary or materially impair the value of such Property subject thereto; (e) Liens 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, servitudes, permits,
conditions, covenants, exceptions or reservations in any Property of the Borrower or any Restricted Subsidiary that do not secure any Debt 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, 
  

 9 

 statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of
business; (h) Liens arising under Uniform Commercial Code financing filings regarding operating leases which are not Synthetic Leases entered into by Borrower and Restricted Subsidiaries in the ordinary course of business covering only the Property
under such lease and (i) 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 divest title to such Lien has been commenced; provided, further that Liens described in clauses (a) through (e) shall remain “Excepted
Liens” only for so long as no action to divest title to 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, the 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 net income by the United States of America or such other jurisdiction under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which 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 or Section 5.03(c). 
  
 “FAS 133” means Statement of Financial Accounting Standard
133 (and any statements replacing, modifying or superceding such statement) adopted by the Financial Accounting Standards Board. 
  
 “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 necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it. 
  
 “Financial
Officer” means, for any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person. Unless otherwise specified, all references herein to a Financial Officer means a Financial Officer of the
Borrower. 
  

 10 

 “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. 
  
 “Gas Sales
Contract” means any contract for the purchase and sale of gas. 
  
 “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, the 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, collectively: 
  

	 	•	 	Rosetta Resources California, LLC; 

  

	 	•	 	Rosetta Resources Offshore, LLC; 

  

	 	•	 	Rosetta Resources Rockies, LLC; 

  

	 	•	 	Rosetta Resources Texas GP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP; 

  

	 	•	 	Calpine Natural Gas Holdings, LLC; 

  

	 	•	 	Calpine Natural Gas GP, LLC; 

  

	 	•	 	Calpine Natural Gas L.P.; 

  

 11 

	 	•	 	each Subsidiary that guarantees the Indebtedness pursuant to Section 8.14(b); and 

  

	 	•	 	any other Person that must guarantee the Indebtedness in order for the Borrower to comply with Section 9.04(b)(ii)(D). 

  
 “Guaranty Agreement” means an agreement executed by the
Guarantors in substantially the form of Exhibit F-2 unconditionally guarantying on a joint and several basis, payment of the Indebtedness, as the same may be amended, modified or supplemented from time to time. 
  
 “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. 
  
 “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. Unless otherwise indicated herein, each reference to the term “Hydrocarbon Interests” shall mean Hydrocarbon Interests of the Borrower and the Restricted
Subsidiaries. 
  
 “Hydrocarbons” means oil, gas,
casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom. Unless otherwise indicated herein, each reference to the term
“Hydrocarbons” shall mean Hydrocarbons of the Borrower and the Restricted Subsidiaries. 
  
 “Indebtedness” means any and all amounts owing or to be owing by the Borrower, any Restricted Subsidiary or any Guarantor whether direct
or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising: (a) to the Administrative Agent, the 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 Restricted Subsidiary and such Lender or Affiliate of a Lender while such Person (or in the case of its Affiliate, the Person affiliated therewith) is a Lender hereunder and
(c) all renewals, extensions and/or rearrangements of any of the above. 
  
 “Indemnified Taxes” means Taxes other than Excluded Taxes. 
  
 “Initial Borrowing Base” has the meaning assigned such term in Section 2.07(a). 
  
 “Initial Reserve Report” means the report of Netherland, Sewell & Associates, Inc. dated as of January 26, 2005, with respect to
certain Oil and Gas Properties of Calpine and its Subsidiaries as of December 31, 2004, as rolled forward to April 30, 2005 by the report of Netherland, Sewell & Associates, Inc. dated as of June 5, 2005. 
  

 12 

 “Intercreditor Agreement” means in respect of the Second Lien Term Loan Agreement, the
terms of subordination as attached as Annex II to the Second Lien Term Loan Agreement, as the same may from time to time be amended, modified, supplemented or restated. 
  
 “Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in
accordance with Section 2.04. 
  
 “Interest
Expense” means, for any period, the sum (determined without duplication) of (a) all cash dividends paid on the Borrower’s preferred Equity Interests and (b) the aggregate gross interest expense of the Borrower and the Consolidated
Restricted Subsidiaries for such period, including to the extent included in interest expense under GAAP: (i) amortization of debt discount, (ii) capitalized interest and (iii) the portion of any payments or accruals under Capital Leases allocable
to interest expense, plus the portion of any payments or accruals under Synthetic Leases allocable to interest expense whether or not the same constitutes interest expense under GAAP. 
  
 “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March, June, September
and December and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period. 
  
 “Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months (or, with the consent of each Lender, nine or twelve months) thereafter, as the Borrower may elect; provided, that (a) if any
Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing. 
  
 “Interim Redetermination” 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

  

 13 

 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 ninety (90) days representing the purchase price of inventory or supplies sold by such Person in the ordinary
course of business) or (c) the entering into of any guarantee of, or other contingent obligation (including the deposit of any Equity Interests to be sold) with respect to, Debt of any other Person and (without duplication) any amount committed to
be advanced, lent or extended to such Person. 
  
 “Issuing
Bank” means BNP Paribas, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.08(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to
be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. 
  
 “LC Commitment” at any time means Fifty Million Dollars
($50,000,000). 
  
 “LC Disbursement” means a
payment made by the Issuing Bank pursuant to a Letter of Credit. 
  
 “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that 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 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 the Issuing Bank relating to any Letter of Credit. 
  
 “LIBO Rate” means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate 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 (rounded upwards, if necessary, 
  

 14 

 to the next 1/16 of 1%) 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. For the purposes of this Agreement, the Borrower and its Restricted Subsidiaries shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, or leases
under a financing lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing. 
  
 “Loan Documents” means this Agreement, the Notes, the Letter of Credit Agreements, the Letters of Credit,
the Security Instruments and the Intercreditor Agreement. 
  
 “Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement. 
  
 “Majority Lenders” means, at any time while no Loans or LC Exposure is outstanding, Lenders having at least sixty-six and two-thirds
percent (66-2/3%) of the Aggregate Maximum Credit Amounts; and at any time while any Loans or LC Exposure is outstanding, Lenders holding at least sixty-six and two-thirds percent (66-2/3%) of the outstanding aggregate principal amount of the Loans
or participation interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c)). 
  
 “Margin Account” has the meaning assigned to such term in Section 9.21. 
  
 “Marketing Agreement” means the Service Agreement between Calpine Producer Services, L.P. and the Borrower.

  
 “Material Adverse Effect” means a material
adverse change in, or material adverse effect on (a) the business, operations, Property, condition (financial or otherwise) or prospects of the Borrower and the Restricted Subsidiaries taken as a whole, (b) the ability of the Borrower, any
Restricted Subsidiary or any Guarantor to perform any of its obligations under any Loan Document, (c) the validity or enforceability of any Loan Document or (d) the rights and remedies of or benefits available to the Administrative Agent, any other
Agent, the Issuing Bank or any Lender under any Loan Document. 
  
 “Material Indebtedness” means Debt (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Restricted Subsidiaries in an aggregate
principal amount exceeding $5,000,000. 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 Swap
Termination Value. 
  

 15 

 “Maturity Date” means July 7, 2009. 
  
 “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) or (b) modified from time to time pursuant to any assignment permitted by Section 12.04(b). 
  
 “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 Guarantor which is subject to the Liens existing and to exist under the terms of the Security Instruments. 
  
 “Multiemployer Plan” means a Plan which is a multiemployer plan as defined in section 3(37) or 4001 (a)(3) of ERISA. 
  
 “New Borrowing Base Notice” has the meaning assigned such
term in Section 2.07(d). 
  
 “Non-Recourse Debt”
means any Debt of any Unrestricted Subsidiary, in each case in respect of which: (a) the holder or holders thereof (i) shall have recourse only to, and shall have the right to require the obligations of such Unrestricted Subsidiary to be performed,
satisfied, and paid only out of, the Property of such Unrestricted Subsidiary and/or one or more of its Subsidiaries (but only to the extent that such Subsidiaries are Unrestricted Subsidiaries) and/or any other Person (other than Borrower and/or
any Restricted Subsidiary) 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,
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. 
  
 “Offering Memorandum” means that certain Offering Memorandum dated June 30, 2005 from the Borrower related
to the offering of 45,312,500 shares of its common stock. 
  
 “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, 
  

 16 

 sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all
Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the
Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described
or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests
or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas
wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts,
engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing. Unless otherwise indicated herein, each reference to the term “Oil and Gas Properties” shall mean Oil and Gas Properties of the Borrower and the Restricted Subsidiaries.

  
 “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. 
  
 “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. 
  
 “Prime Rate” means the rate of interest per annum publicly announced from time to time by the Administrative Agent 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. 
  

 17 

 “Private Placement” means the issuance and sale of common stock of the Borrower pursuant
to the Offering Memorandum. 
  
 “Property” means
any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract rights. 
  
 “Proposed Borrowing Base” has the meaning assigned to such term in Section 2.07(c)(i). 
  
 “Proposed Borrowing Base Notice” has the meaning assigned to
such term in Section 2.07(c)(ii). 
  
 “Purchase and Sale
Agreement” means the Purchase and Sale Agreement among Calpine, Calpine Gas Holdings LLC, Calpine Fuels Corporation, and the Borrower, dated July 7, 2005. 
  
 “Purchaser” has the meaning assigned such term in Section 9.21. 
  
 “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 advisors (including attorneys, accountants and experts) of such
Person and such Person’s Affiliates. 
  
 “Remedial
Work” has the meaning assigned such term in Section 8.10(a). 
  
 “Required Lenders” means, at any time while no Loans or LC Exposure is outstanding, Lenders having in excess of seventy-five percent (75%) of the Aggregate Maximum Credit Amounts; and at any time while any Loans or LC
Exposure is outstanding, Lenders holding in excess of seventy-five percent (75%) of the outstanding aggregate principal amount of the Loans or participation interests in such Letters of Credit (without regard to any sale by a Lender of a
participation in any Loan under Section 12.04(c)). 
  

 18 

 “Reserve Report” means a report, in form and substance reasonably satisfactory to the
Administrative Agent, setting forth, as of each January 1st or July 1st (or such other date in the event of an Interim Redetermination) the oil and gas reserves attributable to the 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. 
  
 “Responsible
Officer” means, as to any Person, the Chief Executive Officer, the President, any Financial Officer or any Executive Vice President or other 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. 
  
 “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. 
  
 “Second Lien Notes” means the $100,000,000 Second Lien Term Notes issued pursuant to the Second Lien Term Loan Agreement, together with
all amendments, modifications, replacements, extensions and rearrangements thereof permitted by Section 9.04(b). 
  
 “Second Lien Term Loan Agreement” means that certain Second Lien Term Loan Credit Agreement dated as of the date hereof among the
Borrower, BNP Paribas, as the Second Lien Administrative Agent, and the lenders party thereto, together with all amendments, modifications and supplements thereto permitted by Section 9.04(b). 
  
 “Second Lien Term Loan Documents” means the Second Lien Term
Loan Agreement, the Second Lien Notes and any “Loan Documents” (as defined therein), in each case, together with all amendments, modifications and supplements thereto permitted by Section 9.04(b). 
  

 19 

 “Security Instruments” means the Guaranty Agreement, the Control Agreement, mortgages,
deeds of trust and other agreements, instruments or certificates described or referred to in Exhibit F-1, and any and all other agreements, instruments, consents or certificates now or hereafter executed and delivered by the 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.

  
 “Seller” has the meaning assigned such term
in Section 9.21. 
  
 “Separation” means the
following transactions: 
  
 (a) STEP I: Calpine causes the
formation of new indirect subsidiaries and enters into the Transfer and Assumption Agreement; 
  
 (b) STEP II: Calpine, the Borrower and the other parties thereto enter into the Purchase and Sale Agreement; 
  
 (c) STEP III: Calpine causes the domestic oil and gas assets subject of the Transfer and Assumption Agreement to be transferred to the newly formed
subsidiaries; 
  
 (d) STEP IV: The following fundings occur:

  
 (i) the Private Placement is completed and
net proceeds therefrom in the amount of not less than $550,000,000 are applied to the purchase price of the Acquisition and other Transaction costs and expenses; 
  
 (ii) funding occurs hereunder in the principal amount of not more than $247,500,000 and the proceeds thereof
are applied to the purchase price of the Acquisition and other Transaction costs and expenses; and 
  
 (iii) funding occurs under the Senior Term Loan Agreement in the principal amount of $100,000,000 and the proceeds thereof are applied to
the purchase price of the Acquisition and other Transaction costs and expenses; 
  
 (e) STEP V: the Acquisition is consummated and the Borrower acquires the Equity Interests of Rosetta Resources California, LLC, Rosetta Resources Offshore, LLC, Rosetta Resources Rockies, LLC, Rosetta Resources Texas
GP, LLC and Rosetta Resources Texas LP, LLC; and 
  
 (f) STEP VI:
The Borrower enters into the Transition Services Agreement and such other documents referenced therein. 
  

 20 

 “Separation Documents” means the following agreements as such documents exist on the
date hereof, in each case, together with all amendments, modifications and supplements thereto permitted by Section 9.20: 
  
 (a) Purchase and Sale Agreement; 
  
 (b) Transfer and Assumption Agreement; 
  
 (c) Transition Services Agreement; 
  
 (d) Marketing Agreement; and 
  
 (e) all other agreements, instruments and documents executed in connection with the Separation. 
  
 “September Reserve Report” has the meaning assigned to such
term in Section 2.07(b). 
  
 “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 with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. 
  
 “Subsidiary” means: (a) any Person of which at least a
majority of the outstanding Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors, manager or other governing body of such Person (irrespective of whether or not at the time Equity Interests
of any other class or classes of such Person shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by the 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. Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a
Subsidiary of the Borrower. 
  
 “Swap Agreement”
means any agreement with respect to any swap, forward, future or derivative transaction, collar 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 
  

 21 

 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; provided further, that no options to purchase tangible Property for cash (other than currency
options) shall be a Swap Agreement. 
  
 “Swap Termination
Value” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements have
been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Agreements,
as determined by the counterparties to such Swap Agreements. 
  
 “Synthetic Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, treated as operating leases on the financial statements of the Person liable (whether
contingently or otherwise) for the payment of rent thereunder and which were properly treated as indebtedness for borrowed money for purposes of U.S. federal income taxes, if the lessee in respect thereof is obligated to either purchase for an
amount in excess of, or pay upon early termination an amount in excess of, 80% of the residual value of the Property subject to such operating lease upon expiration or early termination of such lease. 
  
 “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. 
  
 “Total Debt” means, at any date, all Debt of the Borrower and the Consolidated Restricted Subsidiaries on a consolidated basis, excluding
non-cash obligations under FAS 133. 
  
 “Transactions” means, with respect to (a) the Borrower, the execution, delivery and performance by the Borrower of this Agreement and each other Loan Document, Acquisition Document and Separation Document to which it is a
party, the Acquisition, the Separation, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder, and the Borrower’s grant of the security interests and provision of collateral under the Security
Instruments and (b) each Guarantor, the execution, delivery and performance by such Guarantor of each Loan Document, Acquisition Document and Separation Document to which it is a party, the Acquisition, the Separation, 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 under the Security Instruments, and the grant of Liens by such Guarantor on
Mortgaged Properties and other Properties pursuant to the Security Instruments. 
  

 22 

 “Transfer and Assumption Agreement” means the Transfer and Assumption Agreement dated
July 7, 2005 by and among Calpine, and the subsidiaries of Calpine Gas Holdings LLC identified therein. 
  
 “Transition Services Agreement” means the Transition Services Agreement dated July 7, 2005 by and among Calpine, Calpine Fuels
Corporation, the Borrower and Calpine Natural Gas, L.P. 
  
 “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 7.15 or which the Borrower has designated in writing to the Administrative Agent to be an Unrestricted Subsidiary pursuant to Section 9.06. 
  
 “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 by the Borrower and
one or more of the Wholly-Owned Subsidiaries. 
  
 Section 1.03
Types of Loans and Borrowings. For purposes of this Agreement, Loans and Borrowings, respectively, may be classified and referred to by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).

  
 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. 
  

 23 

 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 as in effect at such time; provided that upon the occurrence of any change in GAAP after the Effective Date, Borrower shall disclose 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) any such change, and no such change shall modify or affect the manner in which compliance with the covenants contained herein is
computed such that all such computations shall be conducted utilizing financial information presented consistently with prior periods, unless the Borrower and the Majority Lenders shall otherwise agree in writing. 
  
 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. 
  
 (c) Minimum Amounts; Limitation on Number of Borrowings. At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $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 8 Eurodollar 
  

 24 

 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. The Loans made by each 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 date of this Agreement or (ii) any Lender that becomes a party hereto pursuant to an Assignment and Assumption, as of the effective date of the Assignment
and Assumption, payable to the order of such Lender in a principal amount equal to its Maximum Credit Amount as in effect on such date, and otherwise duly completed. In the event that any Lender’s Maximum Credit Amount increases or decreases
for any reason (whether pursuant to Section 2.06, Section 12.04(b) or otherwise), the Borrower shall deliver or cause to be delivered on the effective date of such increase or decrease, a new Note payable to the order of 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. 
  
 Section 2.03 Requests for
Borrowings. To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone, fax (or transmit by electronic communication, if arrangements for doing so have been approved by the Administrative Agent) (a)
in the case of a Eurodollar 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
Business Day of the proposed Borrowing; provided that no such notice shall be required for any deemed request of an ABR Borrowing to finance the reimbursement of an LC Disbursement as provided in Section 2.08(e). Each such telephonic (or electronic
communication) 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 substantially the form of Exhibit B and signed by the Borrower. Each
such telephonic, electronic communication, 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”; 
  

 25 

 (v) the amount of the then effective Borrowing Base, the current total Revolving Credit Exposures
(without regard to the requested Borrowing) and the pro forma total Revolving Credit Exposures (giving effect to the requested Borrowing); and 
  
 (vi) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.05.

  
 If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Each Borrowing Request
shall constitute a representation that the amount of the requested Borrowing shall not cause the total Revolving Credit Exposures to exceed the total Commitments (i.e., the lesser of the Aggregate Maximum Credit Amounts and the then effective
Borrowing Base). 
  
 Promptly following receipt of a Borrowing Request in
accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing. 
  
 Section 2.04 Interest Elections. 
  
 (a) Conversion and Continuance. Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.04. The Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. 
  
 (b) Interest Election Requests. To make an election pursuant to this
Section 2.04, the Borrower shall notify the Administrative Agent of such election by telephone, fax (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) 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 (or electronic communication) 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 substantially the form of Exhibit C and signed by the Borrower. 
  
 (c) Information in Interest Election Requests. Each telephonic,
electronic communication 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); 
  

 26 

 (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; Effect of Events of Default and Borrowing Base Deficiencies 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 or a Borrowing Base Deficiency has occurred and is continuing: (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing (and any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective) and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. 
  
 Section 2.05 Funding of Borrowings. 
  
 (a) Funding by Lenders. Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 1:00 p.m., New York 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 New York, New York and designated by the Borrower in the applicable Borrowing Request; provided that ABR Loans made
to finance the reimbursement of an LC Disbursement as provided in Section 2.08(e) shall be remitted by the Administrative Agent to the Issuing Bank. 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. 
  

 27 

 (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. 
  
 (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; provided that a notice of termination of the Aggregate Maximum Credit Amounts delivered by the Borrower may state that
such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not
satisfied. 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. 
  

 28 

 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 $275,000,000 (the “Initial Borrowing Base”). Notwithstanding the foregoing, the Borrowing Base may be subject to further adjustments from time to time pursuant to
Section 6.01(r), Section 8.13(c) or Section 9.13. 
  
 (b)
Scheduled and Interim Redeterminations. The Borrowing Base shall be redetermined semi-annually in accordance with this Section 2.07 (a “Scheduled Redetermination”), and, subject to Section 2.07(d), such redetermined Borrowing
Base shall become effective and applicable to the Borrower, the Agents, the Issuing Bank and the Lenders on April 1st and October 1st of each year, commencing April 1, 2006; and, on or before October 30, 2005, the Borrower shall deliver to the
Administrative Agent a Reserve Report with an “as of” date of September 30, 2005 (the “September Reserve Report”) together with a certificate in form reasonably satisfactory to the Administrative Agent. In addition, the
Borrower may, by notifying the Administrative Agent thereof, and the Administrative Agent may, at the direction of the Majority Lenders, by notifying the Borrower thereof, one time during any 12-month period, each elect to cause the Borrowing Base
to be redetermined between Scheduled Redeterminations (an “Interim Redetermination”) in accordance with this Section 2.07. 
  
 (c) Scheduled and Interim Redetermination Procedure. 
  
 (i) Each Scheduled Redetermination and each Interim Redetermination shall be effectuated as follows: Upon receipt by the Administrative Agent of (A) the
Reserve Report and the certificate required to be delivered by the Borrower to the Administrative Agent, in the case of a Scheduled Redetermination, pursuant to Section 8.12(a) and Section 8.12(c), and, in the case of an Interim Redetermination,
pursuant to Section 8.12(b) and Section 8.12(c), and (B) such other reports, data and supplemental information, including, without limitation, the information provided pursuant to Section 8.12(c), as may, from time to time, be reasonably requested
by the 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 its sole discretion, 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 and customary oil and gas lending
criteria as it exists at the particular time. In no event shall the Proposed Borrowing Base exceed the Aggregate Maximum Credit Amounts. 
  
 (ii) The Administrative Agent shall notify the Borrower and the Lenders of the Proposed Borrowing Base (the “Proposed Borrowing Base
Notice”): 
  
 (A) in the case of a Scheduled
Redetermination (1) if the Administrative Agent shall have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on or 
  

 29 

 before March 15th and September 15th of such year following the date of delivery (or in the case of the September Reserve
Report, 15 days after the delivery of the Engineering Reports prepared in connection with such report) or (2) if the Administrative Agent shall not have received the Engineering Reports required to be delivered by the Borrower pursuant to Section
8.12(a) and (c) in a timely and complete manner, then promptly after the Administrative Agent has received complete Engineering Reports from the Borrower and has had a reasonable opportunity to determine the Proposed Borrowing Base in accordance
with Section 2.07(c)(i); and 
  
 (B) in the case of an Interim
Redetermination, promptly, and in any event, within fifteen (15) days after the Administrative Agent has received the required Engineering Reports. 
  
 (iii) Any Proposed Borrowing Base that would increase the Borrowing Base then in effect must be approved or deemed to have been approved
by all of the Lenders as provided in this Section 2.07(c)(iii), and any Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in effect must be approved or be deemed to have been approved by the Required Lenders as provided
in this Section 2.07(c)(iii). Upon receipt of the Proposed Borrowing Base Notice, each Lender shall have fifteen (15) days to agree with the Proposed Borrowing Base or disagree with the Proposed Borrowing Base by proposing an alternate Borrowing
Base. If at the end of such fifteen (15) days, any Lender has not communicated its approval or disapproval in writing to the Administrative Agent, such silence shall be deemed to be an approval of the Proposed Borrowing Base. If, at the end of such
15-day period, all of the Lenders, in the case of a Proposed Borrowing Base that would increase the Borrowing Base then in effect, or the Required Lenders, in the case of a Proposed Borrowing Base that would decrease or maintain the Borrowing Base
then in effect, have approved or deemed to have approved, as aforesaid, then the Proposed Borrowing Base shall become the new Borrowing Base, effective on the date specified in Section 2.07(d). If, however, at the end of such 15-day period, all of
the Lenders or the Required Lenders, as applicable, have not approved or deemed to have approved, as aforesaid, then the Administrative Agent shall poll, (A) in the case of an increase in the Borrowing Base, the Lenders to ascertain the highest
Borrowing Base then acceptable to all of the Lenders, and (B) in the case of a decrease in or maintenance of the Borrowing Base, the Lenders to ascertain the highest Borrowing Base then acceptable to a number of Lenders sufficient to constitute the
Required Lenders, then such amount shall become the new Borrowing Base, effective on the date specified in Section 2.07(d). 
  
 (d) Effectiveness of a Redetermined Borrowing Base. After a redetermined Borrowing Base is approved or is deemed to have been approved by all of
the Lenders or the Required Lenders, as applicable, pursuant to Section 2.07(c)(iii), the Administrative Agent shall notify the Borrower and the Lenders of the amount of the redetermined Borrowing Base (the “New Borrowing Base
Notice”), and such amount shall become the new Borrowing Base, effective and applicable to the Borrower, the Administrative Agent, the Issuing Bank and the Lenders: 
  
 (i) in the case of a Scheduled Redetermination, (A) if the Administrative Agent shall have received the Engineering Reports
required to be delivered by 
  

 30 

 the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on the April 1st or October 1st
(or in the case of the September Reserve Report, 15 days after the delivery of the New Borrowing Base Notice delivered in connection with such report), as applicable, following such notice, or (B) if the Administrative Agent shall not have received
the Engineering Reports required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on the Business Day next succeeding delivery of such notice; and 
  
 (ii) in the case of an Interim Redetermination, on the Business Day next
succeeding delivery of such notice. 
  
 Such amount shall then become the
Borrowing Base until the next Scheduled Redetermination Date, the next Interim Redetermination Date or the next adjustment to the Borrowing Base under Section 8.13(c) or Section 9.13, 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 the issuance of 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 the Issuing Bank, at any time and from time to time during the Availability Period; provided that the
Borrower may not request the issuance, amendment, renewal or extension of Letters of Credit hereunder if a Borrowing Base Deficiency exists at such time or would exist as a result thereof. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control. 
  
 (b) Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit
by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (not less than three (3) Business Days in advance of the requested date of issuance, amendment,
renewal or extension) a notice: 
  
 (i) requesting the issuance
of a Letter of Credit or identifying the Letter of Credit to be amended, renewed or extended; 
  
 (ii) specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day); 
  
 (iii) specifying the date on which such Letter of Credit is to expire (which shall comply with Section 2.08(c)); 
  
 (iv) specifying the amount of such Letter of Credit; 
  

 31 

 (v) specifying the name and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit; and 
  
 (vi) specifying the amount of the then effective Borrowing Base and whether a Borrowing Base Deficiency exists at such time, the current total Revolving Credit Exposures (without regard to the requested Letter of
Credit or the requested amendment, renewal or extension of an outstanding Letter of Credit) and the pro forma total Revolving Credit Exposures (giving effect to the requested Letter of Credit or the requested amendment, renewal or extension
of an outstanding Letter of Credit). 
  
 Each notice shall constitute a
representation that after giving effect to the requested issuance, amendment, renewal or extension, as applicable, (i) the LC Exposure shall not exceed the LC Commitment and (ii) the total Revolving Credit Exposures shall not exceed the total
Commitments (i.e. the lesser of the Aggregate Maximum Credit Amounts and the then effective Borrowing Base). 
  
 If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit; provided, in the event of
any conflict between such standard form and the terms of the Loan Documents, the terms of the Loan Documents shall control. 
  
 (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, which may be provided for in such Letter of Credit, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the
Maturity Date. 
  
 (d) Participations. By the issuance of a
Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in Section 2.08(e), or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this Section 2.08(d) in
respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default, the existence
of a Borrowing Base Deficiency 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 the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower
shall reimburse such LC Disbursement by paying to 
  

 32 

 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 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. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of
the payment then due from the Borrower, in the same manner as provided in Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this Section 2.08(e), the Administrative
Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this Section 2.08(e) to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Lender pursuant to this Section 2.08(e) to reimburse the Issuing Bank for any LC Disbursement (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 the Issuing Bank under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such Letter of Credit or any Letter of Credit Agreement, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the
provisions of this Section 2.08(f), constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required

  

 33 

 to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes
beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank
shall be deemed to have exercised all requisite care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to
be in compliance with the terms of a Letter of Credit, the Issuing Bank 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. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand
for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement. 
  
 (h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, until the Borrower shall have reimbursed the Issuing Bank for such LC Disbursement (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 the
Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to Section 2.08(e) to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment. 
  
 (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. One or more Lenders may become issuers of Letters of Credit hereunder (each, an “Additional Issuing
Bank”) at any time by written agreement among the Borrower and the Issuing Banks hereunder at such time. The Administrative Agent shall notify the Lenders of any such replacement or Additional Issuing Bank. At the time any such replacement
shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 3.05(b). From and after the effective date of any such replacement or addition, (i) the successor or Additional
Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to
such Additional Issuing Bank, such successor or to any previous Issuing 
  

 34 

 Bank, or to such Additional Issuing Bank, such successor and all previous Issuing Banks, as the context shall require.
After the replacement of the Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit issued by
it prior to such replacement, but shall not be required to issue additional Letters of Credit. 
  
 (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 the Issuing Bank and the Lenders, an exclusive first priority and continuing perfected security interest in and Lien on such account and all cash, checks, drafts,
certificates and instruments, if any, from time to time deposited or held in such account, all deposits or wire transfers made thereto, any and all investments purchased with funds deposited in such account, all interest, dividends, cash,
instruments, financial assets and other Property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing, and all proceeds, products, accessions, rents, profits, income and benefits
therefrom, and any substitutions and replacements therefor. The Borrower’s obligation to deposit amounts pursuant to this Section 2.08(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, the Issuing Bank, the Administrative Agent, the Lenders or any other Person for any reason whatsoever. Such deposit shall be held as
collateral securing the payment and performance of the Borrower’s and the 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. Other than any interest earned on the investment of such deposits, which investments shall be made at the direction of the Borrower in Investments of the type described in Section 9.05(c), (d), (e) or (f) 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 the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated, be applied to satisfy other obligations of the Borrower and the Guarantors under this Agreement or the other Loan Documents. If the Borrower is required to provide an amount of cash collateral hereunder 
  

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 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. 
  
 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) Late Payment 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 two percent (2%) plus the rate applicable to ABR Loans as provided in Section 3.02(a), but in no event to exceed the Highest Lawful Rate. 
  
 (d) Interest Payment Dates. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and on the Termination Date; provided that (i) interest accrued pursuant to Section 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. 
  
 (e) Interest Rate Computations. All interest hereunder shall be computed on the basis of a year of 360 days, unless
such computation would exceed the Highest Lawful Rate, in which case interest shall be computed on the basis of a year of 365 days (or 366 days in a leap year), except that interest computed by reference to the Alternate Base Rate at times when the
Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error, and be binding upon the parties hereto. 
  

 36 

 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) or 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, of the Business Day of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid. Promptly following receipt of
any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of
the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 3.02.

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

 37 

 (ii) Upon any redetermination of or adjustment to the amount of the Borrowing Base in accordance with
Section 2.07 or Section 8.13(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 such prepayment and/or deposit of cash collateral in an amount equal to at least fifty percent (50%) of such excess within sixty (60) days following its receipt of the New Borrowing Base Notice in accordance with Section
2.07(d) or the date the adjustment occurs, with the balance of such excess being due and payable within one hundred twenty (120) days following the receipt of such New Borrowing Base Notice or the date the adjustment occurs; 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 9.13, 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 Restricted Subsidiary
receives cash 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. 
  
 (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. 
  

 38 

 Section 3.05 Fees. 
  
 (a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee, which shall accrue at the applicable Commitment Fee Rate on the average daily amount of the unused amount of the Commitment of such Lender during the period from and including the date of this Agreement to but excluding the
Termination Date. Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the Termination Date, commencing on the first such date to occur after the date hereof. All commitment
fees shall be computed on the basis of a year of 360 days, unless such computation would exceed the Highest Lawful Rate, in which case interest shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and shall be payable
for the actual number of days elapsed (including the first day but excluding the last day). 
  
 (b) Letter of Credit Fees. The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall
accrue at the same Applicable Margin used to determine the interest rate applicable to Eurodollar Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure, (ii) to the Issuing Bank a
fronting fee, which shall accrue at the rate of 0.15% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the date of this
Agreement to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, provided that in no event shall such fee be less than $500 during any quarter, and (iii) to the 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 date of this Agreement; provided that all such fees shall be payable on the
Termination Date and any such fees accruing after the Termination Date shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this Section 3.05(b) shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days, unless such computation would exceed the Highest Lawful Rate, in which case interest shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and shall be
payable for the actual number of days elapsed (including the first day but excluding the last day). 
  
 (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. 
  
 (d) Borrowing Base Increase Fees. The Borrower agrees to pay to the Administrative Agent, for the account of each Lender then party to this Agreement, ratably in accordance with its Applicable Percentage, a
Borrowing Base increase fee to be agreed by the Lenders and the Borrower on the amount of any increase of the Borrowing Base over the highest Borrowing Base previously in effect, payable on the effective date of any such increase to the Borrowing
Base. 
  

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

 40 

 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 the Issuing Bank that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or 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. 
  

 41 

 ARTICLE V 
 Increased Costs; Break Funding Payments; Taxes; Illegality 
  
 Section 5.01 Increased Costs. 
  
 (a) Eurodollar Changes in Law. If any Change in Law shall: 
  
 (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or 
  
 (ii) impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender;

  
 and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered. 
  
 (b) Capital Requirements. If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered. 
  
 (c) Certificates. A certificate of
a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in Section 5.01(a) or (b) shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof. 
  
 (d) Effect of Failure or Delay in Requesting Compensation. Failure or
delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section 5.01 for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. 
  

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 Section 5.02 Break Funding Payments. In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan into an ABR Loan other than on the last day of the Interest Period
applicable thereto, or (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to Section 5.04(b), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not
occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement
of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. 
  
 A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 5.02 shall be delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 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 or any Guarantor shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 5.03), 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 or such Guarantor shall make such deductions and (iii) the Borrower or such Guarantor shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law. 
  
 (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 the Issuing Bank, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative 
  

 43 

 Agent, such Lender or the 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. A certificate of the Administrative Agent, a Lender or the 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 or a Guarantor to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence
of such payment reasonably satisfactory to the Administrative Agent. 
  
 (e) 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. 
  
 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 in connection with any such designation or assignment. 
  
 (b) Replacement of Lenders. 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, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.04(b)), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the 
  

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 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, in the event that it becomes unlawful for any Lender or its applicable lending office to honor its obligation to make or maintain Eurodollar Loans either
generally or having a particular Interest Period hereunder, then (a) such Lender shall promptly notify the Borrower and the Administrative Agent thereof and such Lender’s obligation to make such Eurodollar Loans shall be suspended (the
“Affected Loans”) until such time as such Lender may again make and maintain such Eurodollar Loans and (b) all Affected Loans which would otherwise be made by such Lender shall be made instead as ABR Loans (and, if such Lender so
requests by notice to the Borrower and the Administrative Agent, all Affected Loans of such Lender then outstanding shall be automatically converted into ABR Loans on the date specified by such Lender in such notice) and, to the extent that Affected
Loans are so made as (or converted into) ABR Loans, all payments of principal which would otherwise be applied to such Lender’s Affected Loans shall be applied instead to its ABR Loans. 
  
 ARTICLE VI 
 Conditions Precedent 
  
 Section 6.01 Effective Date. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 12.02): 
  
 (a) The Administrative Agent, the Arranger and the Lenders shall have received all commitment, facility and agency fees and all other fees and amounts due and payable on or prior to the Effective Date, including, to the extent invoiced two
Business Days prior to the Effective Date, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder (including, without limitation, the fees and expenses of Vinson & Elkins L.L.P.,
counsel to the Administrative Agent). 
  
 (b) The Administrative
Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Borrower and each Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of the Borrower or such Guarantor to
execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of the Borrower or such Guarantor (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 
  

 45 

 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 (or other organizational documents) of the Borrower and such Guarantor, certified as being true and complete. The Administrative Agent and the Lenders may
conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. 
  
 (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good
standing of the Borrower and each Guarantor. 
  
 (d) The
Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and properly executed by a Responsible Officer 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 date hereof. 
  
 (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 described on Exhibit F-1. In connection with the execution and delivery of the
Security Instruments, the Administrative Agent shall: 
  
 (i) be
reasonably satisfied that the Security Instruments create first priority, perfected Liens (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)
on at least 80% of the total value of the Oil and Gas Properties evaluated in the Initial Reserve Report; 
  
 (ii) have received certificates, together with undated, blank stock or equity powers for each such certificate, to the extent any issued and outstanding
Equity Interests of any Guarantor is certificated; 
  
 (iii) be
reasonably satisfied that all Property constituting security for the Second Lien Term Loan Agreement is subject to a first priority, perfected Lien in favor of the Administrative Agent under the Security Instruments. 
  
 (h) The Administrative Agent shall have received a certificate of a
Responsible Officer of the Borrower certifying that (i) the Borrower has sold, or contemporaneously with the initial funding hereunder is selling, not less than 45,312,500 shares of common stock of the Borrower pursuant to the Private Placement
which shall result in gross cash proceeds of not less than $550,000,000 and (ii) funding under the Second Lien Term Loan Agreement has occurred, or is occurring contemporaneously with the initial funding hereunder, which shall result in gross cash
proceeds of $100,000,000. 
  

 46 

 (i) The Administrative Agent shall have received an opinion of (i) Thompson & Knight L.L.P., special
counsel to the Borrower, substantially in the form of Exhibit E-1 hereto, and (ii) local counsel in California, substantially in the form of Exhibit E-2. 
  
 (j) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower is carrying insurance in
accordance with Section 7.13. 
  
 (k) The Administrative Agent
shall be reasonably satisfied with the status of title to at least 80% of the total value of the Oil and Gas Properties evaluated in the Initial Reserve Report. 
  

(l) The Administrative Agent shall be reasonably satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and its
Restricted Subsidiaries (including the Acquisition Properties). 
  
 (m) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower has received all consents and approvals required by Section 7.03. 
  
 (n) The Administrative Agent shall have received the financial statements
referred to in Section 7.04(a) and the Initial Reserve Report accompanied by a certificate covering the matters described in Section 8.12(c). 
  
 (o) The Administrative Agent shall have received a copy, certified by a Responsible Officer of the Borrower as true and complete, of each of the
following: (i) the Offering Memorandum and any SEC Filings made by Calpine or the Borrower in respect of the Private Placement, (ii) the Acquisition Documents, (iii) all opinions delivered by the sellers’ counsel and the Borrower’s
counsel, pursuant to the Purchase/Placement Agreement dated June 30, 2005 between the Borrower and Friedman, Billings, Ramsey & Co., Inc., as initial purchaser and addressed to the Lenders (or reliance letters to the effect that the Lenders may
rely on such opinions) and (iv) the Separation Documents. 
  
 (p)
The Administrative Agent shall be satisfied with the terms, conditions and documentation of the Acquisition, the Separation and any other matters as the Administrative Agent deems necessary. 
  
 (q) The Administrative Agent shall have received appropriate UCC search
certificates reflecting no prior Liens encumbering the Properties of the Borrower and the Restricted Subsidiaries for each of the following jurisdictions: Arkansas, California, Colorado, Delaware, Kansas, Louisiana, Mississippi, Montana, New Mexico,
North Dakota, Oklahoma, Texas and Wyoming 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. 
  
 (r) The Administrative Agent shall have received (i) a certificate of a
Responsible Officer of the Borrower certifying: (A) that the Borrower is concurrently consummating the Acquisition in accordance with the terms of the Acquisition Documents (with all of the material 
  

 47 

 conditions precedent thereto having been satisfied in all material respects by the parties thereto) and acquiring the
Acquisition Properties contemplated by the Acquisition Documents; (B) as to the final purchase price for the Acquisition Properties after giving effect to all adjustments as of the closing date contemplated by the Acquisition Documents and
specifying, by category, the amount of such adjustment; (C) that the list of the Acquisition Properties which have been excluded from the Acquisition pursuant to the terms of the Acquisition Documents as a result of third party consents attached to
the Purchase and Sale Agreement is a true and complete list thereof; and (D) that the list of Acquisition Properties which are subject to preferential purchase rights attached to the Purchase and Sale Agreement is a true and complete list thereof;
and (ii) such other related documents and information as the Administrative Agent shall have reasonably requested. 
  
 The Borrower recognizes and agrees that (a) it shall have delivered to the Administrative Agent notice of any price adjustments to the purchase price of
the Acquisition for the items listed in (B) above not less than one (1) day prior to the Effective Date and (b) if the aggregate net present value of excluded properties, as reflected in the Initial Reserve Report, is greater than $75,000,000, then
the Initial Borrowing Base shall be reduced as of the Effective Date by an amount equal to the value, if any, assigned to the Property described in (C) above in the Initial Reserve Report, which shall become the new Borrowing Base until the next
redetermination or modification thereof hereunder. 
  
 (s) The
Administrative Agent shall have received evidence satisfactory to it, and a certificate of a Responsible Officer of the Borrower certifying, that on a pro forma basis after giving effect to the proceeds of the initial funding hereunder, the Borrower
has liquidity (which shall include undrawn amounts under this Agreement) of not less than ten percent (10%) of the Initial Borrowing Base. 
  
 (t) The Administrative Agent shall be satisfied that there is no litigation seeking to enjoin or prevent the Acquisition, the Separation, the Private
Placement or the financing contemplated hereby or by the Second Lien Term Loan Agreement. 
  
 (u) The Administrative Agent shall have received evidence satisfactory to it that all Liens on the Acquisition Properties associated with any credit facilities and funded Debt have been released or terminated and that
arrangements satisfactory to the Administrative Agent have been made for recording and filing of such releases. 
  
 (v) The Administrative Agent shall have received a certificate from Calpine granting the Administrative Agent the right to rely upon the relevant
representation in the Purchase and Sale Agreement from each seller that is it “not insolvent” and “will not be rendered insolvent” as such terms are used in applicable state and federal fraudulent conveyance or transfer laws.

  
 (w) 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 
  

 48 

 obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 12.02) at or prior to 2:00 p.m., New York City time, on July 31, 2005 (and, in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time). 
  
 Section 6.02 Each Credit
Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing (including the initial funding), and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following
conditions: 
  
 (a) At the time of and immediately after giving
effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing. 
  
 (b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, no Material Adverse Effect shall have occurred and be continuing. 
  
 (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 as of such specified earlier date. 
  
 (d) The making of
such Loan or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, shall not be prohibited by any Governmental Requirement and shall not subject any Lender or any Issuing bank to any penalty or other onerous
condition under or pursuant to any such Governmental Requirement. 
  
 (e) The receipt by the Administrative Agent of a Borrowing Request in accordance with Section 2.03 or a request for a Letter of Credit in accordance with Section 2.08(b), as applicable. 
  
 Each request for a Borrowing and each request for the 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 Section 6.02(e). 
  

 49 

 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, and has all material governmental licenses, authorizations, consents and approvals necessary, to own its assets and to carry on its business as now conducted, and is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required, except where failure to have such power, authority, licenses, authorizations, consents, approvals and qualifications could not reasonably be expected to have a Material Adverse Effect. 

 
 Section 7.02 Authority; Enforceability. The Transactions are within
the Borrower’s and each Guarantor’s corporate, company or partnership powers and have been duly authorized by all necessary corporate, company or partnership and, if required, stockholder, member or partner action (including, without
limitation, any action required to be taken by any class of directors of the Borrower or any other Person, whether interested or disinterested, in order to ensure the due authorization of the Transactions). Each Loan Document, Acquisition Document
and Separation Document to which the Borrower and each Guarantor is a party has been duly executed and delivered by the Borrower and such Guarantor and constitutes a legal, valid and binding obligation of the Borrower and such Guarantor, as
applicable, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law. 
  
 Section 7.03 Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any other third Person (including shareholders
or any class of directors, whether interested or disinterested, of the Borrower or any other Person), nor is any such consent, approval, registration, filing or other action necessary for the validity or enforceability of any Loan Document or the
consummation of the transactions contemplated thereby, except such as have been obtained or made and are in full force and effect other than (i) filings and approvals that will have been obtained prior to the Effective Date or are customarily
obtained following an acquisition of Oil and Gas Properties, (ii) the recording and filing of the Security Instruments as required by this Agreement and (iii) those third party approvals or consents which, if not made or obtained, would not cause a
Default hereunder, could not reasonably be expected to have a Material Adverse Effect or do not have an adverse effect on the enforceability of the Loan Documents, (b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any Restricted Subsidiary or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any
Restricted Subsidiary or its Properties, or give rise to a right thereunder to require any payment to be made by the Borrower or such Restricted Subsidiary and (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 Change 
  
 (a) The Borrower has heretofore furnished to the Lenders the following financial statements contained in the Offering Memorandum: (i) its audited combined
balance sheet, 
  

 50 

 combined statements of operations, combined statements of cash flows and combined statements of changes in owner’s
net investment as of and for the fiscal years ended December 31, 2003 and December 31, 2004 for the domestic Oil and Gas Properties of Calpine and its Affiliates and (ii) its historical unaudited pro forma statement of operations for the fiscal year
ended December 31, 2004, historical unaudited pro forma statement of operations for the 3-month period ended March 31, 2005 and historical unaudited pro forma balance sheet at March 31, 2005. 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 dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the unaudited quarterly financial statements. 
  
 (b) (i) There has been no event, development or circumstance that has had a Material Adverse Effect and (ii) the material business of the Borrower and its Restricted Subsidiaries has been conducted in the ordinary course consistent with
past business practices. 
  
 (c) Neither the Borrower nor any
Restricted Subsidiary has on the date hereof any material Debt (including Disqualified Capital Stock) or any contingent liabilities, off-balance sheet liabilities or partnerships, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in the Financial Statements. 
  
 Section 7.05 Litigation. 
  
 (a) Except as set forth on Schedule 7.05, there are no actions, suits, investigations or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower, any Restricted Subsidiary or involving the Acquisition or the Separation (i) not fully covered by insurance (except for normal deductibles and
reasonable self-insurance) as to which there is a reasonable possibility of an adverse determination that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (ii) that
involve any Loan Document, any Acquisition Document, any Separation Document or the Transactions, (iii) that could impair the consummation of the Acquisition on the time and in the manner contemplated by the Acquisition Documents, or (iv) that could
impair the consummation of the Separation on the time and in the manner contemplated by the Separation Documents. 
  
 (b) Since the date of this Agreement, there has been no change in the status of the matters disclosed in Schedule 7.05 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect. 
  
 Section 7.06 Environmental Matters. Except as could not be reasonably expected to have a Material Adverse Effect (or with respect to (c), (d) and
(e) below, where the failure to take such actions could not be reasonably expected to have a Material Adverse Effect): 
  
 (a) neither any Property of the Borrower or any Restricted Subsidiary nor the operations conducted thereon violate any order or requirement of any court
or Governmental Authority or any Environmental Laws. 
  

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 (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 threatened action, suit, investigation, inquiry or proceeding by or before any
court or Governmental Authority or to any remedial obligations under Environmental Laws. 
  
 (c) all notices, permits, licenses, exemptions, approvals or similar authorizations, if any, required to be obtained or filed in connection with the operation or use of any and all Property of 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 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 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. 
  
 (f) to the extent applicable, all Property of the Borrower and each Restricted Subsidiary currently satisfies all design,
operation, and equipment requirements imposed by the OPA, and the Borrower does not have any reason to believe that such Property, to the extent subject to the OPA, will not be able to maintain compliance with the OPA requirements during the term of
this Agreement. 
  
 (g) 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, 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. 
  

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 (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. 
  
 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 Public Utility Holding Company Act. Neither the Borrower nor any Subsidiary is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” or a “public
utility” within the meaning of, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended. 
  
 Section 7.10 Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the 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. The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of Taxes and other governmental charges are, in the reasonable opinion of the Borrower, adequate. No Tax Lien has been filed and, to the knowledge of the Borrower, no claim is being asserted with respect to any such Tax or
other such governmental charge. 
  
 Section 7.11 ERISA.

  
 (a) The Borrower, the Subsidiaries and each ERISA Affiliate
have complied in all material respects with ERISA and, where applicable, the Code regarding each Plan. 
  
 (b) Each Plan is, and has been, maintained in substantial compliance with ERISA and, where applicable, the Code. 
  
 (c) No act, omission or transaction has occurred which could result in
imposition on the Borrower, any Subsidiary or any ERISA Affiliate (whether directly or indirectly) of (i) either a civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under section 409 of ERISA. 
  

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 (d) No Plan (other than a defined contribution plan) or any trust created under any such Plan has been
terminated since September 2, 1974. No liability to the PBGC (other than for the payment of current premiums which are not past due) by the Borrower, any Subsidiary or any ERISA Affiliate has been or is expected by the Borrower, any Subsidiary or
any ERISA Affiliate to be incurred with respect to any Plan. No ERISA Event with respect to any Plan has occurred. 
  
 (e) Full payment when due has been made of all amounts which the Borrower, the Subsidiaries or any ERISA Affiliate is required under the terms of each
Plan or applicable law to have paid as contributions to such Plan as of the date hereof, and no accumulated funding deficiency (as defined in section 302 of ERISA and section 412 of the Code), whether or not waived, exists with respect to any Plan.

  
 (f) The actuarial present value of the benefit liabilities
under each Plan which is subject to Title IV of ERISA does not, as of the end of the Borrower’s most recently ended fiscal year, exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA)
of such Plan allocable to such benefit liabilities. The term “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA. 
  
 (g) Neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors, maintains, or contributes to an employee
welfare benefit plan, as defined in section 3(1) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by the Borrower, a Subsidiary or any ERISA
Affiliate in its sole discretion at any time without any material liability. 
  
 (h) Neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors, maintains or contributes to, or has at any time in the six-year period preceding the date hereof sponsored, maintained or contributed to,
any Multiemployer Plan. 
  
 (i) Neither the Borrower, the
Subsidiaries nor any ERISA Affiliate is required to provide security under section 401(a)(29) of the Code due to a Plan amendment that results in an increase in current liability for the Plan. 
  
 Section 7.12 Disclosure; No Material Misstatements. The Borrower has
disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Restricted Subsidiaries is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the Offering Memorandum, as of the Effective Date, nor any of the other reports, financial statements, certificates or other information 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), taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the

  

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 time. Except with respect to required notices under Section 8.02(d), there is no fact peculiar to the Borrower or any
Restricted Subsidiary which could reasonably be expected to have a Material Adverse Effect or in the future is reasonably likely to have a Material Adverse Effect and which has not been set forth in this Agreement or the Loan Documents or the other
documents, certificates and statements furnished to the Administrative Agent or the Lenders by or on behalf of the Borrower or any Restricted Subsidiary prior to, or on, the date hereof pursuant to a notice under Section 8.02 in connection with the
transactions contemplated hereby. There are no statements or conclusions in any Reserve Report which are based upon or include misleading information or fail to take into account material information regarding the matters reported therein, it being
understood that projections concerning volumes attributable to the Oil and Gas Properties and production and cost estimates contained in each Reserve Report are necessarily based upon professional opinions, estimates and projections and that the
Borrower and the Restricted Subsidiaries do not warrant that such opinions, estimates and projections will ultimately prove to have been accurate. 
  
 Section 7.13 Insurance. The Borrower has, and has caused all its Restricted Subsidiaries to have, (a) all insurance policies sufficient for the
compliance by each of them with all material Governmental Requirements and all material agreements, (b) insurance coverage in at least amounts and against such risk (including, without limitation, public liability) that are usually insured against
by companies similarly situated and engaged in the same or a similar business for the assets and operations of the Borrower and its Restricted Subsidiaries and (c) identified to the Administrative Agent the amounts and matters for which the Borrower
or its Restricted Subsidiaries have self-insurance. The Administrative Agent and the Lenders have been named as additional insureds in respect of such liability insurance policies and the Administrative Agent has been named as loss payee with
respect to Property loss insurance. 
  
 Section 7.14
Restriction on Liens. Neither the Borrower nor any of the Restricted Subsidiaries is a party to any material agreement or arrangement (other than Capital Leases creating Liens permitted by Section 9.03(c), but then only on the Property
subject of such Capital Lease, or subject to any order, judgment, writ or decree, which either restricts or purports to restrict its ability to grant Liens to the Administrative Agent and the Lenders on or in respect of their Properties to secure
the Indebtedness and the Loan Documents. 
  
 Section 7.15
Subsidiaries. Except as set forth on Schedule 7.15 or as disclosed in writing to the Administrative Agent (which shall promptly furnish a copy to the Lenders), which shall be a supplement to Schedule 7.15, the Borrower has no Subsidiaries and
the Borrower has no Foreign Subsidiaries. Schedule 7.15 identifies each Subsidiary as either Restricted or Unrestricted, and each Restricted Subsidiary on such schedule is a Wholly-Owned Subsidiary. 
  
 Section 7.16 Location of Business and Offices. 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 Rosetta Resources Inc.; and the organizational identification number of the Borrower in its jurisdiction of
organization is 3980164 (or, in each case, as set forth in a notice delivered to the Administrative Agent pursuant to Section 8.01(m) in accordance with Section 12.01). The Borrower’s principal place of business and chief executive offices are
located at the address specified in Section 12.01 (or as set forth in a notice delivered pursuant to Section 8.01(m) and Section 12.01(c)). Each Restricted Subsidiary’s jurisdiction of 
  

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 organization, name as listed in the public records of its jurisdiction of organization, organizational identification
number in its jurisdiction of organization, and the location of its principal place of business and chief executive office is stated on Schedule 7.15 (or as set forth in a notice delivered pursuant to Section 8.01(m)). 
  
 Section 7.17 Properties; Titles, Etc. 
  
 (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 material personal Properties, in each case, free and clear of all Liens except Liens permitted by Section 9.03. After
giving full effect to the Excepted Liens, the Borrower or the Restricted Subsidiary specified as the owner owns the net interests in production in all material respects attributable to the Hydrocarbon Interests as reflected in the most recently
delivered Reserve Report, and the ownership of such Properties shall not in any material respect obligate the 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 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. 
  
 (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 agreement, which could reasonably be expected to have a Material Adverse Effect. 
  
 (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 all material respects in the same manner as its business has been conducted prior to the
date hereof. 
  
 (d) All of the Properties of the Borrower and the
Restricted Subsidiaries which are reasonably necessary for the operation of their businesses are in good working condition and are maintained in accordance with prudent business standards, except for such failure as to condition or maintenance as
could not be reasonably expected to have a Material Adverse Effect. 
  
 (e) The Borrower and each Restricted Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual Property material to its business, and the use thereof by the Borrower and such Restricted
Subsidiary does not infringe upon the rights of any other Person that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Borrower and its Restricted Subsidiaries either own or have valid
licenses or other rights to use all databases, geological data, geophysical data, engineering data, seismic data, maps, interpretations and other technical information used in their businesses as presently conducted, subject to the limitations
contained in the agreements governing the use of the same, which limitations are customary for companies engaged in the business of the exploration and production of Hydrocarbons, with such exceptions as could not reasonably be expected to have a
Material Adverse Effect. 
  

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 Section 7.18 Maintenance of Properties. Except for such acts or failures to act as could not be
reasonably expected to have a Material Adverse Effect, the Oil and Gas Properties (and Properties unitized therewith) of the Borrower and its Restricted Subsidiaries have been maintained, operated and developed in a good and workmanlike manner and
in conformity with all Governmental Requirements and in conformity with the provisions of all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas
Properties of the Borrower and its Restricted Subsidiaries. Specifically in connection with the foregoing, except for those as could not be reasonably expected to have a Material Adverse Effect, (i) no Oil and Gas Property of the Borrower or any
Restricted Subsidiary is subject to having allowable production reduced below the full and regular allowable (including the maximum permissible tolerance) because of any overproduction (whether or not the same was permissible at the time) and (ii)
none of the wells comprising a part of the Oil and Gas Properties (or Properties unitized therewith) of the Borrower or any Restricted Subsidiary is deviated from the vertical more than the maximum permitted by Governmental Requirements, and such
wells are, in fact, bottomed under and are producing from, and the well bores are wholly within, the Oil and Gas Properties (or in the case of wells located on Properties unitized therewith, such unitized Properties) of the Borrower or such
Restricted Subsidiary. All pipelines, wells, gas processing plants, platforms and other material improvements, fixtures and equipment owned in whole or in part by the Borrower or any of its Restricted Subsidiaries that are necessary to conduct
normal operations are being maintained in a state adequate to conduct normal operations, and with respect to such of the foregoing which are operated by the Borrower or any of its Restricted Subsidiaries, in a manner consistent with the
Borrower’s or its Restricted Subsidiaries’ past practices (other than those the failure of which to maintain in accordance with this Section 7.18 could not reasonably be expected to have a Material Adverse Effect). 
  
 Section 7.19 Gas Imbalances, Prepayments. Except as set forth on
Schedule 7.19 or on the most recent certificate delivered pursuant to Section 8.12(c) on a net basis there are no gas imbalances, take or pay or other prepayments which would require the Borrower or any of its Restricted Subsidiaries to deliver
Hydrocarbons produced from the Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor exceeding one-half bcf of gas (on an mcf equivalent basis) in the aggregate. 
  
 Section 7.20 Marketing of Production. Except for contracts listed and
in effect on the date hereof on Schedule 7.20, and thereafter either disclosed in writing to the Administrative Agent or included in the most recently delivered Reserve Report (with respect to all of which contracts the Borrower represents that it
or its Restricted Subsidiaries are receiving a price for all production sold thereunder which is computed substantially in accordance with the terms of the relevant contract and are not having deliveries curtailed substantially below the subject
Property’s delivery capacity), no material agreements exist which are not cancelable on 60 days notice or less without penalty or detriment for the sale of production from the Borrower’s or its Restricted Subsidiaries’ Hydrocarbons
(including, without limitation, calls on or other rights to purchase, production, whether or not the same are currently being exercised) that (a) pertain to the sale of production at a fixed price and (b) have a maturity or expiry date of longer
than six (6) months from the date hereof. 
  

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 Section 7.21 Swap Agreements. The Swap Agreements required by Section 8.18 or listed in the
reports required to be delivered by the Borrower pursuant to Section 8.01(e) constitute all Swap Agreements of the Borrower and each Restricted Subsidiary. 
  
 Section 7.22 Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used to provide working capital for
exploration and production operations, to pay for the Acquisition and related expenses, the acquisition, exploration and development of additional Oil and Gas Properties, and for general corporate purposes. The Borrower and its Restricted
Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of
Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board. 
  
 Section 7.23 Solvency. 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 Guarantors, taken as
a whole, will exceed the aggregate Debt of the Borrower and the Guarantors on a consolidated basis, as the Debt becomes absolute and matures, (b) each of the Borrower and the Guarantors will not have incurred or intended to incur, and will not
believe that it will incur, 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 Guarantors 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 Guarantors will not have
(and will have no reason to believe that it will have thereafter) unreasonably small capital for the conduct of its business. 
  
 Section 7.24 Specified Senior Indebtedness. The Indebtedness of the Borrower constitutes “Senior Indebtedness” and “Specified Senior
Indebtedness,” and the Indebtedness of each Guarantor under the Loan Documents to which it is a party constitutes “Guarantor Senior Indebtedness” and “Specified Guarantor Senior Indebtedness,” in each case, under and as
defined in the Second Lien Term Loan Documents. 
  
 Section 7.25
Acquisition Documents; Separation Documents. The copies of the Acquisition Documents and Separation Documents previously delivered by the Borrower to the Administrative Agent are true, accurate and complete and have not been amended or
modified in any material manner, other than pursuant to amendments or modifications previously delivered to the Administrative Agent. No party to any Acquisition Document or Separation Document is in default in respect of any material term or
obligation thereunder. The consideration paid or to be paid for the assets subject of the Acquisition represents “reasonably equivalent value” for such assets. 
  

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

  
 (a) Annual Financial Statements. As soon as available,
but in any event in accordance with then applicable law and not later than 90 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash
flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing (without a “going concern”
or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of
operations of the 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 in accordance with then applicable law and not later than 45 days after
the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its unaudited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the 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. Concurrently with any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a certificate of a Financial Officer in substantially the
form of Exhibit D hereto (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Section 8.13(b) and Section 9.01 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 7.04 and,
if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate. 
  
 (d) Certificate of Financial Officer — Consolidating Information. If, at any time, all of the Consolidated Subsidiaries of the Borrower are
not Consolidated Restricted 
  

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 Subsidiaries, then concurrently with any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a
certificate of a Financial Officer setting forth consolidating spreadsheets that show all Consolidated Unrestricted Subsidiaries and the eliminating entries, in such form as would be presentable to the auditors of the Borrower. 
  
 (e) Certificate of Financial Officer – Swap Agreements.
Concurrently with any delivery of financial statements under Section 8.01(a) and Section 8.01(b) (and from time to time to disclose new Swap Agreements), a certificate of a Financial Officer, in form and substance satisfactory to the Administrative
Agent, setting forth as of the last Business Day of such fiscal quarter or fiscal year (or such other date as specified in such certificate), a true and complete list of all Swap Agreements of the Borrower and each Restricted Subsidiary, the
material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark-to-market value therefor, any new credit support agreements relating thereto not required by Section 8.18 or otherwise
previously disclosed to Administrative Agent pursuant to this Section 8.01(e), any margin required or supplied under any credit support document, and the counterparty to each such agreement. 
  
 (f) Insurance Coverage. Concurrently with any delivery of financial
statements under Section 8.01(a), a certificate of insurance coverage from each insurer with respect to the insurance required by Section 8.07, in form and substance satisfactory to the Administrative Agent, and, if requested by the Administrative
Agent or any Lender, all copies of the applicable policies. 
  
 (g) Other Accounting Reports. Promptly upon receipt thereof, a copy of each other report submitted to the Borrower or any of its Subsidiaries by independent accountants in connection with any annual, interim or special audit made by
them of the books of the Borrower or any such Subsidiary, and a copy of any response by the Borrower or any such Subsidiary, or the Board of Directors of the Borrower or any such Subsidiary, to such report. 
  
 (h) SEC and Other Filings; Reports to Shareholders. Promptly after the
same become publicly available, copies of all registration statements or reports filed by the Borrower or any Subsidiary with the SEC on Form S-1, S-3, S-4, 10-K, 10-Q, 8-K or 12b-25, or filed or furnished with any national securities exchange, or
copies of any financial statements, reports, notices or proxy statements distributed by the Borrower to its shareholders generally, as the case may be. 
  
 (i) 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, indenture, loan or credit or other similar agreement, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this
Section 8.01. 
  
 (j) Lists of Purchasers. Concurrently
with the delivery of any Reserve Report to the Administrative Agent pursuant to Section 8.12, a list of Persons purchasing Hydrocarbons from the Borrower and its Restricted Subsidiaries constituting at least 80% of the total revenues from such
purchases for the six-month period ending on the date of such Reserve Report (such list to include and specify in descending order the largest purchasers of Hydrocarbons for such 
  

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 period based on the percentage of total revenues that each such purchaser represents); and during the continuance of a
Default, promptly upon the request therefor by the Administrative Agent or any Lender, a list of all Persons purchasing Hydrocarbons from the Borrower and its Restricted Subsidiaries for the six-month period ending on the date of such request.

  
 (k) Notice of Sales of Oil and Gas Properties. In the
event the Borrower or any Restricted Subsidiary enters into any agreement to sell, transfer, assign or otherwise dispose of any Oil or Gas Properties, including in connection with the exercise of any preferential purchase rights under the
Acquisition Documents, or any Equity Interests in any Subsidiary in accordance with Section 9.13, prior written notice of such disposition, the price thereof and the anticipated date of closing and any other details thereof requested by the
Administrative Agent or any Lender. 
  
 (l) 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. 
  
 (m) Information Regarding Borrower and Guarantors. Prompt written
notice (and in any event within ten (10) days prior thereto) of any change (i) in the Borrower or any Guarantor’s corporate name or in any trade name used to identify such Person in the conduct of its business or in the ownership of its
Properties, (ii) in the location of the Borrower or any Guarantor’s chief executive office or principal place of business, (iii) in the Borrower or any Guarantor’s identity or corporate structure or in the jurisdiction in which such Person
is incorporated or formed, (iv) in the Borrower or any Guarantor’s jurisdiction of organization or such Person’s organizational identification number in such jurisdiction of organization, and (v) in the Borrower or any Guarantor’s
federal taxpayer identification number. 
  
 (n) Production
Report and Lease Operating Statements. Within 60 days after the end of each fiscal quarter, a report setting forth, for each calendar month during the then current fiscal year to date, the volume of production and sales attributable to
production (and the prices at which such sales were made and the revenues derived from such sales) for each such calendar month from the Oil and Gas Properties, and setting forth the related ad valorem, severance and production taxes and lease
operating expenses attributable thereto and incurred for each such calendar month. 
  
 (o) Notices of Certain Changes. Promptly, but in any event within five (5) Business Days after the execution thereof, copies of any material amendment, modification or supplement to the certificate or articles
of incorporation, by-laws, any preferred stock designation or any other organic document of the Borrower or any Restricted Subsidiary. 
  
 (p) Ratings Change. Promptly after Moody’s or S&P shall have announced a change in the rating, established or deemed to have been
established for the Borrower or any Material Indebtedness, written notice of such rating change. 
  
 (q) Notices Relating to Acquisition. In the event that after the Effective Date: (i) the Borrower is required to honor any preferential purchase
right in respect of any Non-Consent Properties (as defined in Section 2.3.2 of the Purchase and Sale Agreement) which has not been 
  

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 waived, (ii) any matter being disputed in accordance with the terms of the Acquisition Documents is resolved or (iii) the
Borrower and the seller(s) calculate and agree upon the “Final Settlement Statement” as contemplated by Section 15.1 of the Purchase and Sale Agreement and in accordance therewith, then, in each such case, the Borrower shall promptly give
the Administrative Agent notice in reasonable detail of such circumstances and such information as to show compliance with Section 6.01(r) in the case of a purchase price adjustment or Section 9.13 in the case of preferential purchase rights being
exercised. 
  
 (r) 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. 
  
 (s) Delivery of Information Electronically. Notices to the Administrative Agent and the Lenders under this Section
8.01 may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent, including broadcast email to the Lenders that the available information has been made available to the Lenders on either the
Borrower’s “Intralinks” page or the Borrower’s website at www.rosettaresources.com. Notwithstanding the foregoing, any such information included in materials otherwise filed with the SEC may be delivered
electronically and if so delivered, shall be deemed to have been delivered on the date on which the Borrower posts such documents, or provides a link thereto, and notifies Administrative Agent of such posting or link. 
  
 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, or the threat in writing of, any action, suit, proceeding, investigation or arbitration by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof not
previously disclosed in writing to the Lenders or any material adverse development in any action, suit, proceeding, investigation or arbitration (whether or not previously disclosed to the Lenders) that, in either case, if adversely determined,
could reasonably be expected to result in liability in excess of $2,000,000 not fully covered by insurance, subject to normal deductibles and reasonable self-insurance; 
  
 (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $1,000,000; 
  
 (d) Calpine shall fail to make any payment in respect of any Calpine Gas Contract or post any margin required by the terms thereof within one Business Day
of when the same shall become due and payable, whether at the due date thereof, upon acceleration, termination or otherwise; and 
  

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 (e) 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 is located or the ownership of its Properties requires such qualification, except where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 9.12. 
  
 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 (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Restricted Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect or result in the seizure or levy of any Property of the Borrower or any Subsidiary. 
  
 Section 8.05 Performance of Obligations under Loan Documents. The Borrower will pay the Notes according to the reading, tenor and effect thereof,
and the Borrower will, and will cause each Restricted Subsidiary to, do and perform every act and discharge all of the obligations to be performed and discharged by them under the Loan Documents, including, without limitation, this Agreement, at the
time or times and in the manner specified. 
  
 Section 8.06
Operation and Maintenance of Properties. The Borrower, at its own expense, will, and will cause each Restricted Subsidiary to, except in each case where the failure to comply could not reasonably be expected to have a Material Adverse Effect:

  
 (a) operate its Oil and Gas Properties and other material
Properties or cause such Oil and Gas Properties and other material Properties to be operated in a careful and efficient manner in accordance with the practices of the industry and in compliance with all applicable contracts and agreements and in
compliance with all Governmental Requirements, including, without limitation, applicable pro ration requirements and Environmental Laws, and all applicable laws, rules and regulations of every other Governmental Authority from time to time
constituted to regulate the development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons and other minerals therefrom. 
  
 (b) keep and maintain all Property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, preserve,
maintain and keep in 
  

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 good repair, working order and efficiency (ordinary wear and tear excepted) all of its Oil and Gas Properties and other
material Properties, including, without limitation, all equipment, machinery and facilities. 
  
 (c) promptly pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all delay rentals, royalties, expenses and indebtedness accruing under the leases or other agreements
affecting or pertaining to its Oil and Gas Properties and will do all other things necessary to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder. 
  
 (d) promptly perform or make reasonable and customary efforts to cause to be
performed, in accordance with industry standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties and other material Properties.

  
 (e) operate its Oil and Gas Properties and other material
Properties or cause or make reasonable and customary efforts to cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in material compliance with all applicable contracts
and agreements and in compliance in all material respects with all Governmental Requirements. 
  
 (f) to the extent the Borrower is not the operator of any Property, the Borrower shall use reasonable efforts to cause the operator to comply with this Section 8.06. 
  
 Section 8.07 Insurance. The 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 name the Administrative Agent and the Lenders as “additional insureds” and provide that the insurer will endeavor to give at least 30 days prior notice of any cancellation to the Administrative Agent. So long as no
Event of Default has occurred and is continuing, except as otherwise required by Section 9.12, the Borrower or applicable Restricted Subsidiary shall be entitled to use the proceeds received from any insurance policy as a result of a Casualty Event
(without regarding to the threshold in the definition thereof) to repair or replace the Property of the Borrower or such Restricted Subsidiary subject to such Casualty Event or to otherwise enhance the value of the collateral for the Indebtedness.

  
 Section 8.08 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. 
  

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 Section 8.09 Compliance with Laws. The Borrower will, and will cause each Restricted Subsidiary
to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its Property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. 
  
 Section 8.10 Environmental Matters.

  
 (a) The Borrower shall at its sole expense: (i) comply, and
shall cause its Properties and operations and each Subsidiary and each Subsidiary’s Properties and operations to comply, with all applicable Environmental Laws, the breach of which could be reasonably expected to have a Material Adverse Effect;
(ii) not dispose of or otherwise release, and shall cause each Subsidiary not to dispose of or otherwise release, any oil, oil and gas waste, hazardous substance, or solid waste on, under, about or from any of the Borrower’s or its
Subsidiaries’ Properties or any other Property to the extent caused by the Borrower’s or any of its Subsidiaries’ operations except in compliance with applicable Environmental Laws, the disposal or release of which could reasonably be
expected to have a Material Adverse Effect; (iii) timely obtain or file, and shall cause each Subsidiary to timely obtain or file, all notices, permits, licenses, exemptions, approvals, registrations or other authorizations, if any, required under
applicable Environmental Laws to be obtained or filed in connection with the operation or use of the Borrower’s or its Subsidiaries’ Properties, which failure to obtain or file could reasonably be expected to have a Material Adverse
Effect; (iv) promptly commence and diligently prosecute to completion, and shall cause each Subsidiary to promptly commence and diligently prosecute to completion, any assessment, evaluation, investigation, monitoring, containment, cleanup, removal,
repair, restoration, remediation or other remedial obligations (collectively, the “Remedial Work”) in the event any Remedial Work is required or reasonably necessary under applicable Environmental Laws because of or in connection
with the actual or suspected past, present or future disposal or other release of any oil, oil and gas waste, hazardous substance or solid waste on, under, about or from any of the Borrower’s or its Subsidiaries’ Properties, which failure
to commence and diligently prosecute to completion could reasonably be expected to have a Material Adverse Effect; and (v) establish and implement, and shall cause each Subsidiary to establish and implement, such procedures as may be necessary to
continuously determine and assure that the Borrower’s and its Subsidiaries’ obligations under this Section 8.10(a) are timely and fully satisfied, which failure to establish and implement could reasonably be expected to have a Material
Adverse Effect. 
  
 (b) The Borrower will promptly, but in no
event later than five days of the occurrence of a triggering event, notify the Administrative Agent and the Lenders in writing of any threatened action, investigation or inquiry by any Governmental Authority or any threatened demand or lawsuit by
any landowner or other third party against the Borrower or its Subsidiaries or their Properties of which the Borrower has knowledge in connection with any Environmental Laws (excluding routine testing and corrective action) if the Borrower
reasonably anticipates that such action will result in liability (whether individually or in the aggregate) in excess of $500,000, not fully covered by insurance, subject to normal deductibles. 
  

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 Section 8.11 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 reasonable 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 Guarantor where permitted by law. A carbon, photographic or other reproduction of the Security Instruments or any financing
statement covering the Mortgaged Property or any part thereof shall be sufficient as a financing statement where permitted by law. 
  
 Section 8.12 Reserve Reports. 
  
 (a) On or before March 1st and September 1st of each year, commencing March 1, 2006, the Borrower shall furnish to the Administrative Agent and the
Lenders a Reserve Report. The Reserve Report as of January 1 of each year shall be prepared by one or more Approved Petroleum Engineers, and the July 1 Reserve Report of each year (and the September Reserve Report) shall be prepared by or under the
supervision of the chief engineer of the Borrower who shall certify (i) there are no statements or conclusions in such Reserve Report which are based upon or include misleading information or fail to take into account material information regarding
the matters reported therein, it being understood that projections concerning volumes attributable to the Oil and Gas Properties and production and cost estimates contained in any 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, and (ii) to have been prepared in accordance with the
procedures used in the immediately preceding January 1 Reserve Report. 
  
 (b) In the event of an Interim Redetermination, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report prepared by or under the supervision of the chief engineer of the Borrower who shall certify such
Reserve Report to be true and accurate and to have been prepared in accordance with the procedures used in the immediately preceding January 1 Reserve Report. For any Interim Redetermination requested by the Administrative Agent or the Borrower
pursuant to Section 2.07(b), the Borrower shall provide such Reserve Report with an “as of” date as required by the Administrative Agent as soon as possible, but in any event no later than thirty (30) days following the receipt of such
request. 
  
 (c) With the delivery of each Reserve Report, the
Borrower shall provide to the Administrative Agent and the Lenders a certificate from a Responsible Officer certifying that in 
  

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 all material respects: (i) the information contained in the Reserve Report and any other information delivered in
connection therewith is true and correct, (ii) the Borrower or its Restricted Subsidiaries owns good and defensible title to the Oil and Gas Properties evaluated in such Reserve Report and such Properties are free of all Liens except for Liens
permitted by Section 9.03, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments in excess of the volume specified in Section 7.19 with respect to its Oil and Gas
Properties evaluated in such Reserve Report which would require the Borrower or any Restricted Subsidiary to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving
full payment therefor, (iv) none of their Oil and Gas Properties have been sold since the date of the last Borrowing Base determination except as set forth on an exhibit to the certificate, which certificate shall list all of its Oil and Gas
Properties sold and in such detail as reasonably required by the Administrative Agent, (v) attached to the certificate is a list of all marketing agreements entered into subsequent to the later of the date hereof or the most recently delivered
Reserve Report which the Borrower could reasonably be expected to have been obligated to list on Schedule 7.20 had such agreement been in effect on the date hereof and (vi) attached thereto is a schedule of the Oil and Gas Properties evaluated by
such Reserve Report that are Mortgaged Properties and demonstrating that the percentage of the Borrowing Base that the value of such Mortgaged Properties complies with Section 8.14(a). 
  
 Section 8.13 Title Information. 
  
 (a) On or before the delivery to the Administrative Agent and the Lenders of each Reserve Report required by Section
8.12(a), the Borrower will deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall be satisfied with the status of title to at least 80% of the value of the Oil and Gas
Properties evaluated by such Reserve Report. 
  
 (b) If the
Borrower has provided title information for additional Properties under Section 8.13(a), the Borrower shall, within 60 days of notice from the Administrative Agent that material title defects or exceptions exist with respect to such additional
Properties, either (i) cure any such material title defects or exceptions (including defects or exceptions as to priority) which are not permitted by Section 9.03 raised by such information, (ii) substitute acceptable Mortgaged Properties with no
material title defects or exceptions except for Excepted Liens having an equivalent value or (iii) deliver title information in form and substance acceptable to the Administrative Agent so that the Administrative Agent shall be satisfied with the
status of title to at least 80% 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 to the Oil and Gas Properties evaluated in the most recent Reserve Report, such default shall not be a Default, but instead the Administrative Agent and/or
the Majority Lenders shall have the right to exercise the following remedy in their sole discretion from time to time, and any failure to so exercise this remedy at any time shall not be a waiver as to future exercise of the remedy by the
Administrative Agent or the Lenders. To the extent that any material title defect exists with respect to any Mortgaged Property after the 60-day period has elapsed, the Administrative Agent 
  

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 may send a notice to the Borrower and the Lenders that the then outstanding Borrowing Base shall be reduced by an amount
as determined by the Majority Lenders to cause the Borrower to be in compliance with the requirement to provide acceptable title information to the Oil and Gas Properties. This new Borrowing Base shall become effective immediately after receipt of
such notice. 
  
 Section 8.14 Additional Collateral; Additional
Guarantors. 
  
 (a) In connection with each redetermination
of the Borrowing Base, the Borrower shall review the Reserve Report and the list of current Mortgaged Properties (as described in Section 8.12(c)(vi)) to ascertain whether the Mortgaged Properties represent at least 80% of the total value of the Oil
and Gas Properties evaluated in the most recently completed Reserve Report after giving effect to exploration and production activities, acquisitions, dispositions and production. In the event that the Mortgaged Properties do not represent at least
80% of such total value, then the Borrower shall, and shall cause its Restricted Subsidiaries to, grant, within thirty (30) days of delivery of the certificate required under Section 8.12(c), to the Administrative Agent as security for the
Indebtedness a first-priority Lien interest (provided that Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof may exist, but subject to the provisos at the end of such definition) on additional Oil and Gas
Properties not already subject to a Lien of the Security Instruments such that after giving effect thereto, the Mortgaged Properties will represent at least 80% of 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. In order to comply with the foregoing, if any Restricted Subsidiary places a Lien on its Oil and Gas Properties and such Restricted Subsidiary is not a Guarantor, then it shall become a
Guarantor and comply with Section 8.14(b). 
  
 (b) The Borrower
shall cause each Domestic Subsidiary to guarantee the Indebtedness pursuant to the Guaranty Agreement. In connection with any such guaranty, the Borrower shall, or shall cause such Domestic Subsidiary to, promptly, but in any event no later than 15
days after the formation or acquisition (or other similar event) of such Domestic Subsidiary, (A) execute and deliver a supplement to the Guaranty Agreement executed by such Subsidiary, (B) pledge all of the Equity Interests of such Domestic
Subsidiary (including, without limitation, delivery of original stock certificates evidencing the Equity Interests of such Domestic Subsidiary, together with an appropriate undated stock powers for each certificate duly executed in blank by the
registered owner thereof) and (C) execute and deliver such other additional closing documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent. 
  
 (c) In the event that the Borrower or any Domestic Subsidiary creates or
becomes the owner of a Foreign Subsidiary, then the Borrower shall promptly, or shall cause such Domestic Subsidiary to promptly, but in any event no later than 15 days after the date of becoming an owner thereof, (i) pledge 65% of all the Equity
Interests of such Foreign Subsidiary (including, without limitation, delivery of original stock certificates evidencing such Equity Interests of such Foreign Subsidiary, together with appropriate stock powers for each certificate 
  

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 duly executed in blank by the registered owner thereof) and (ii) execute and deliver such other additional closing
documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent. 
  
 (d) The Borrower shall cause any Person that must guarantee the Indebtedness in order for the Borrower to be in compliance with Section 9.04(b)(ii)(D) to
guarantee the Indebtedness pursuant to the Guaranty Agreement. In connection with any such guaranty, the Borrower shall, or shall cause such Person to, promptly, but in any event no later than 15 days after the date required thereby, (i) execute and
deliver a supplement to the Guaranty Agreement executed by such Person and (ii) execute and deliver such other additional closing documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent. If at any time
such Person is not otherwise required to guarantee the Indebtedness hereunder (whether pursuant to the other provisions of this Section 8.14 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 Second Lien Notes, 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) The Borrower agrees that it will not, and will not permit any Restricted Subsidiary to, grant a Lien on any Property to
secure the Second Lien Notes without first (i) giving fifteen (15) days’ prior written notice to the Administrative Agent thereof and (ii) granting to the Administrative Agent to secure the Indebtedness a first-priority, perfected Lien on this
same Property pursuant to Security Instruments in form and substance satisfactory to the Administrative Agent. In connection therewith, the Borrower shall, or shall cause its Restricted Subsidiaries to, execute and deliver such other additional
closing documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent. 
  
 Section 8.15 ERISA Compliance. The Borrower will promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to promptly furnish to
the Administrative Agent (i) upon request promptly after the filing thereof with the United States Secretary of Labor, the Internal Revenue Service or the PBGC, copies of each annual and other report with respect to each Plan or any trust created
thereunder, (ii) immediately upon becoming aware of the occurrence of any ERISA Event described in Section 8.02(c) or of any “prohibited transaction,” as described in section 406 of ERISA or in section 4975 of the Code, in connection with
any Plan or any trust created thereunder, a written notice signed by the President or the principal Financial Officer, the Subsidiary or the ERISA Affiliate, as the case may be, specifying the nature thereof, what action the Borrower, the Subsidiary
or the ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken or proposed by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto, and (iii) 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. With respect to each Plan (other than a Multiemployer Plan), the Borrower will, and will cause each Subsidiary and ERISA
Affiliate to, (i) satisfy in full and in a timely manner, without incurring any late payment or underpayment charge or penalty and without giving rise to any Lien, all of the contribution and funding requirements of section 412 of the Code
(determined without regard to subsections (d), (e), (f) 
  

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 and (k) thereof) and of section 302 of ERISA (determined without regard to sections 303, 304 and 306 of ERISA), and (ii)
pay, or cause to be paid, to the PBGC in a timely manner, without incurring any late payment or underpayment charge or penalty, all premiums required pursuant to sections 4006 and 4007 of ERISA. 
  
 Section 8.16 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 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. 
  
 (c) will not permit any Unrestricted Subsidiary to hold any Equity Interest in, or any Debt of, the Borrower or any Restricted Subsidiary. 
  
 Section 8.17 Marketing Activities. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, engage in marketing activities for any Hydrocarbons or enter into any contracts related thereto other than (i) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from
their proved Oil and Gas Properties during the period of such contract, (ii) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from proved Oil and Gas Properties of third parties during the period of such
contract associated with the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries that the Borrower or one of its Restricted Subsidiaries has the right to market pursuant to joint operating agreements, unitization agreements or
other similar contracts that are usual and customary in the oil and gas business and (iii) other contracts for the purchase and/or sale of Hydrocarbons of third parties (A) which have generally offsetting provisions (i.e. corresponding pricing
mechanics, delivery dates and points and volumes) such that no material “position” is taken and (B) for which appropriate credit support has been taken to alleviate the material credit risks of the counterparty thereto. 
  
 Section 8.18 Swap Agreements. On or before July 15, 2005, the Borrower
shall enter into one or more Swap Agreements (i) with one or more Approved Counterparties and (ii) which have aggregate notional volumes of approximately (A) 80% of the reasonably estimated natural gas production from its proved developed, producing
Oil and Gas Properties as determined by reference to the Initial Reserve Report and (B) 20% of the reasonably estimated natural gas production from its proved developed, non-producing Oil and Gas Properties as determined by reference to the Initial
Reserve Report, in each case for each year during the period commencing with the Effective Date and ending on December 31, 2009. Thereafter, the Borrower shall maintain the hedge position established by the Swap Agreements required under this
Section 8.18 during the period specified therein and shall neither assign, terminate nor unwind any such Swap Agreements nor sell any Swap Agreements if the effect of such action (when taken 
  

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 together with any other Swap Agreements executed contemporaneously with the taking of such action) would have the effect
of canceling its positions under such Swap Agreements required hereby. 
  
 Section 8.19 Control Agreement. Within fourteen days after the Effective Date, the Borrower shall deliver a fully executed Control Agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent.

  
 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 Financial Covenants. 
  
 (a) Ratio of Total Debt to EBITDAX. The Borrower will not, at any
time, permit its ratio of (i) Total Debt as of such time to (ii) EBITDAX for the period of four fiscal quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements are available
to be greater than 3.5 to 1.0. 
  
 (b) Current Ratio. The
Borrower will not permit, as of the last day of any fiscal quarter, its ratio of (i) consolidated current assets (including the unused amount of the total Commitments, but excluding non-cash assets under FAS 133) to (ii) consolidated current
liabilities (excluding non-cash obligations under FAS 133, outstanding Letters of Credit, and current maturities under this Agreement or the Second Term Loan Agreement) to be less than 1.0 to 1.0. 
  
 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) Debt of the Borrower and its Restricted Subsidiaries existing on the date
hereof that is reflected in the Financial Statements. 
  
 (c) Debt
under Capital Leases not to exceed $5,000,000. 
  
 (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. 
  

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 (e) intercompany Debt between the Borrower and any Restricted Subsidiary or between Restricted
Subsidiaries to the extent permitted by Section 9.05(g); provided that such Debt is not held, assigned, transferred, negotiated or pledged to any Person other than the Borrower or one of its Restricted 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) endorsements of negotiable instruments for collection in the ordinary course of business. 
  
 (g) Debt under the Second Lien Notes and any guarantees thereof, the
principal amount of which Debt does not exceed $100,000,000 in the aggregate, and any refinancing or replacement thereof, subject to subordination provisions substantially as provided in the Second Lien Notes as confirmed by Administrative Agent.

  
 (h) other Debt not to exceed $5,000,000 in the aggregate at
any one time outstanding. 
  
 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 Capital Leases permitted by Section 9.02(c) but only on the Property under lease. 
  
 (d) Liens on Property not constituting collateral for the Indebtedness and
not otherwise permitted by the foregoing clauses of this Section 9.03; provided that the aggregate principal or face amount of all Debt secured under this Section 9.03(d) shall not exceed $5,000,000 at any time. 
  
 (e) Liens on Property securing the Second Lien Notes and any guaranties
thereof as permitted by Section 9.02(g); provided, however, that (i) such Liens securing such Debt are subordinate to the Liens securing the Indebtedness, this Agreement and the other Loan Documents pursuant to the Intercreditor Agreement and (ii)
both before and after giving effect to the incurrence of any such Lien, the Borrower is in compliance with Section 8.14(e). 
  
 Section 9.04 Dividends, Distributions and Redemptions. 
  
 (a) 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 (i) 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), (ii) Subsidiaries may declare and pay dividends ratably with respect to their 
  

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 Equity Interests, (iii) 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 and (iv) within 14 days of the Effective Date, the Borrower may purchase or redeem its shares owned by Calpine Gas Holdings, LLC at a price not to exceed $1.

  
 (b) Redemption of Second Lien Notes; Amendment of Second
Lien Term Loan Documents. The Borrower will not, and will not permit any Restricted Subsidiary to: (i) prior to the date that is ninety-one (91) days after the Maturity Date, call, make or offer to make any optional or voluntary Redemption of or
otherwise optionally or voluntarily Redeem (whether in whole or in part) the Second Lien Notes, provided that the Borrower may optionally prepay the Second Lien Notes, including refinancings thereof, if (A) no Default or Event of Default has
occurred and is continuing or would exist after giving effect to such prepayment or refinancing, and (B) after giving effect to such prepayment or refinancing, the Borrower would have at least $15,000,000 of unused availability under the
Commitments, (ii) amend, modify, waive or otherwise change, consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Second Lien Term Loan Document if (A) the effect thereof would be to shorten the maturity
of the Second Lien Notes or shorten the average life or increase the amount of any payment of principal thereof or increase the rate or add call or pre-payment premiums or shorten any period for payment of interest thereon, (B) such action requires
the payment of a consent fee (howsoever described), (C) such action adds additional Property as collateral to secure the Second Lien Notes unless the Borrower complies with Section 8.14(e) or (D) such action adds any covenants or defaults without
this Agreement being contemporaneously amended to add substantially similar covenants or defaults, provided that the foregoing shall not prohibit the execution of supplemental agreements to add guarantors if required by the terms thereof provided
that any such guarantor also guarantees the Indebtedness pursuant to the Guaranty Agreement and each of the Borrower and such guarantor otherwise complies with Section 8.14(d), and (iii) designate any Debt (other than obligations of the Borrower and
the Restricted Subsidiaries pursuant to the Loan Documents) as “Specified Senior Indebtedness” or “Specified Guarantor Senior Indebtedness” or give any such other Debt any other similar designation. 
  
 Section 9.05 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 9.05. 
  
 (b) accounts receivable arising in the ordinary course of business.

  
 (c) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency thereof, in each case maturing within one year from the date of creation thereof. 
  
 (d) commercial paper maturing within one year from the date of creation thereof rated in the highest grade by S&P or Moody’s. 
  

 73 

 (e) deposits maturing within one year from the date of creation thereof with, including certificates of
deposit issued by, any Lender or any office located in the United States of any other bank or trust company which is organized under the laws of the United States or any state thereof, has capital, surplus and undivided profits aggregating at least
$100,000,000 (as of the date of such bank or trust company’s most recent financial reports) and has a short term deposit rating of no lower than A2 or P2, as such rating is set forth from time to time, by S&P or Moody’s, respectively
or, in the case of any Foreign Subsidiary, a bank organized in a jurisdiction in which the Foreign Subsidiary conducts operations having assets in excess of $500,000,000 (or its equivalent in another currency). 
  
 (f) deposits in money market funds investing exclusively in Investments
described in Section 9.05(c), Section 9.05(d) or Section 9.05(e). 
  
 (g) Investments (i) made by the Borrower in or to the Guarantors, (ii) made by any Restricted Subsidiary in or to the Borrower or any Guarantor, (iii) made by the Borrower or any Restricted Subsidiary in or to all other Domestic
Subsidiaries which are not Guarantors in an aggregate amount at any one time outstanding not to exceed $500,000 and (iv) made by the Borrower or any Restricted Subsidiary in or to any Foreign Subsidiary, provided that no less than 85% of the
aggregate net present value (discounted at 10% and using pricing assumptions consistent with SEC reporting requirements at such time) of the combined Borrower’s and Restricted Subsidiaries’ Oil and Gas Properties are located inside the
United States and Canada. 
  
 (h) subject to the limits in Section
9.07, 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 primarily engaged in oil and gas exploration, development, production, processing and related activities, including transportation, (ii) the interest in such venture is acquired in
the 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 $5,000,000. 
  
 (i)
subject to the limits in Section 9.07, Investments in direct ownership interests in additional Oil and Gas Properties and gas gathering systems related thereto or related to farm-out, farm-in, joint operating, joint venture or area of mutual
interest agreements, gathering systems, pipelines or other similar arrangements which are usual and customary in the oil and gas exploration and production business located within the geographic boundaries of the United States of America.

  
 (j) loans or advances to employees, officers or directors in
the ordinary course of business of the Borrower or any of its Restricted Subsidiaries, in each case only as permitted by applicable law, including Section 402 of the Sarbanes Oxley Act of 2002, but in any event not to exceed $100,000 in the
aggregate at any time. 
  
 (k) Investments in stock, obligations
or securities received in settlement of debts arising from Investments permitted under this Section 9.05 owing to the Borrower or any Restricted Subsidiary as a result of a bankruptcy or other insolvency proceeding of the obligor in 
  

 74 

 respect of such debts 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 9.05(k) exceeds $1,000,000. 
  
 (l) Investments in Unrestricted Subsidiaries, provided that (i) the aggregate
amount of all such Investments at any one time shall not exceed $25,000,000 (or its equivalent in other currencies as of the date of Investment) and (ii) after giving effect to such Investment, the Borrower would have at least $10,000,000 in unused
availability under the Commitments. 
  
 Section 9.06
Designation and Conversion of Restricted and Unrestricted Subsidiaries; Debt of Unrestricted Subsidiaries. 
  
 (a) Unless designated as an Unrestricted Subsidiary on Schedule 7.15 as of the date hereof or thereafter, assuming compliance with Section 9.06(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 9.05(l). Except as provided in this Section 9.06(b), no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. 
  
 (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 8.14, Section 8.16 and Section 9.16. Any such designation shall be treated as
a cash dividend in an amount equal to the lesser of the fair market value of the Borrower’s direct and indirect ownership interest in such Subsidiary or the amount of the Borrower’s cash investment previously made for purposes of the
limitation on Investments under Section 9.05(l). 
  
 (d) The
Borrower shall not permit the aggregate principal amount of all Non-Recourse Debt outstanding at any one time to exceed $25,000,000. 
  
 Section 9.07 Nature of Business; International Operations. 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. From and after the date hereof, the Borrower and its Domestic Subsidiaries will not acquire or make any other expenditure
(whether such expenditure is capital, operating or otherwise) in or 
  

 75 

 related to, any Oil and Gas Properties not located within the geographical boundaries of the United States. For the
avoidance of doubt, any Foreign Subsidiary may (i) acquire and make expenditures in or related to Oil and Gas Properties located within the geographical boundaries of Canada, and (ii) acquire and make expenditures in or related to Oil and Gas
Properties, in an amount not to exceed fifteen percent (15%) of the aggregate net present value (discounted at 10% and using pricing assumptions consistent with SEC reporting requirements at such time) of the Oil and Gas Properties of the Borrower
and its Restricted Subsidiaries, located outside the geographical boundaries of the United States and Canada. 
  
 Section 9.08 Limitation on Leases. The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer to
exist any obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal but excluding Capital Leases and leases of Hydrocarbon Interests), under leases or lease agreements which would cause the aggregate amount of
all payments made by the Borrower and the Restricted Subsidiaries pursuant to all such leases or lease agreements, including, without limitation, any residual payments at the end of any lease, to exceed $5,000,000 in any period of twelve consecutive
calendar months during the life of such leases. 
  
 Section 9.09
Proceeds of Notes. The Borrower will not permit the proceeds of the Notes to be used for any purpose other than those permitted by Section 7.22. Neither the Borrower nor any Person acting on behalf of the Borrower has taken or will take any
action which might cause any of the Loan Documents to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in
effect or as the same may hereinafter be in effect. If requested by the Administrative Agent, the 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 ERISA Compliance. The Borrower will not, and will not permit any Subsidiary to, at any time: 
  
 (a) engage in, or permit any ERISA Affiliate to engage in, any transaction
in connection with which the Borrower, a Subsidiary or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code. 
  
 (b) terminate, or permit any ERISA Affiliate to
terminate, any Plan in a manner, or take any other action with respect to any Plan, which could result in any liability of the Borrower, a Subsidiary or any ERISA Affiliate to the PBGC. 
  
 (c) fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the
provisions of any Plan, agreement relating thereto or applicable law, the Borrower, a Subsidiary or any ERISA Affiliate is required to pay as contributions thereto. 
  

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 (d) permit to exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding deficiency
within the meaning of section 302 of ERISA or section 412 of the Code, whether or not waived, with respect to any Plan. 
  
 (e) permit, or allow any ERISA Affiliate to permit, the actuarial present value of the benefit liabilities under any Plan maintained by the Borrower, a
Subsidiary or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities.
The term “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA. 
  
 (f) contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any
Multiemployer Plan. 
  
 (g) acquire, or permit any ERISA Affiliate
to acquire, an interest in any Person that causes such Person to become an ERISA Affiliate with respect to the Borrower or a Subsidiary or with respect to any ERISA Affiliate of the Borrower or a Subsidiary if such Person sponsors, maintains or
contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (i) any Multiemployer Plan, or (ii) any other Plan that is subject to Title IV of ERISA under which the actuarial present
value of the benefit liabilities under such Plan exceeds the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities. 
  
 (h) incur, or permit any ERISA Affiliate to incur, a liability to or on
account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA. 
  
 (i) contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by such entities in their sole discretion at any time without any material liability. 
  
 (j) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an
increase in current liability such that the Borrower, a Subsidiary or any ERISA Affiliate is required to provide security to such Plan under section 401(a)(29) of the Code. 
  
 Section 9.11 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. 
  
 Section 9.12 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 permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of 
  

 77 

 (whether in one transaction or in a series of transactions) all or substantially all of its Property to any other Person
(whether now owned or hereafter acquired) (any such transaction, a “consolidation”), or liquidate or dissolve; provided that the Borrower or any Restricted Subsidiary may participate in a consolidation with any other Person; provided that:

  
 (a) any Restricted Subsidiary (including a Foreign
Subsidiary) may participate in a consolidation with the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or any other Restricted Subsidiary that is a Domestic Subsidiary (provided that if one of such parties to
the consolidation is a Foreign Subsidiary, such Domestic Subsidiary shall be the continuing or surviving Person) and if one of such Restricted Subsidiaries is a Wholly-Owned Subsidiary, then the surviving Person shall be a Wholly-Owned Subsidiary;
and 
  
 (b) any Foreign Subsidiary of the Borrower may participate
in a consolidation with any one or more Foreign Subsidiaries; provided that if one of such Foreign Subsidiaries is a Wholly-Owned Subsidiary, the survivor shall be a Wholly-Owned Subsidiary. 
  
 Section 9.13 Sale of Properties. The Borrower will not, and will not
permit any Restricted Subsidiary to, sell, assign, farm-out, convey or otherwise transfer any Property except for (a) the sale of Hydrocarbons in the ordinary course of business; (b) farmouts of undeveloped acreage or undrilled depths and
assignments in connection with such farmouts; (c) the sale or transfer of (i) 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 or
(ii) Oil and Gas Properties or interests therein or Restricted Subsidiaries owning Oil and Gas Properties to which there were no proved reserves attributed in the most recent Reserve Report delivered to the Lenders; (d) the sale, transfer or other
disposition of Equity Interests in Unrestricted Subsidiaries; (e) the sale or other disposition (including Casualty Events) of any Oil and Gas Property or any interest therein or any Restricted Subsidiary owning 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, interest therein or Restricted Subsidiary subject of such sale or other disposition (as
reasonably determined by the board of directors of the Borrower and, if requested by the Administrative Agent, the Borrower shall deliver a certificate of a Responsible Officer of the Borrower certifying to that effect), (ii) if the fair market
value of such sale or other disposition (including asset swaps) of Oil and Gas Properties or Restricted Subsidiary owning Oil and Gas Property included in the most recently delivered Reserve Report (whether made for non-cash consideration or
otherwise) during any period between two successive Scheduled Redetermination Dates exceeds five percent (5%) of the Borrowing Base in effect at such time (as determined by the Administrative Agent), individually or in the aggregate, then the
Borrowing Base shall be reduced, effective immediately upon such sale or disposition, by an amount equal to the value, if any, assigned such Properties in the most recently delivered Reserve Report, (iii) if any such sale or other disposition is of
a Restricted Subsidiary owning Oil and Gas Properties, such sale or other disposition shall include all the Equity Interests of such Restricted Subsidiary (unless such Restricted Subsidiary is contemporaneously therewith being designated as an
Unrestricted Subsidiary pursuant to Section 9.06(b)); and (f) sales and other dispositions of Properties not regulated by Section 9.13(a) to (e) having a fair market value not to exceed $2,500,000 during any 6-month period. 
  

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 Section 9.14 Environmental Matters. The Borrower will not, and will not permit any Restricted
Subsidiary to, cause or permit any of its Property to be in violation of, or do anything or permit anything to be done which will subject any such Property to any Remedial Work under any Environmental Laws, assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property where such violations or remedial obligations could reasonably be expected to have a Material Adverse Effect. 
  
 Section 9.15 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 otherwise permitted under this Agreement and are upon fair and reasonable terms no less favorable to it than it would obtain in a comparable arm’s length transaction with a
Person not an Affiliate. 
  
 Section 9.16 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 8.14(b) and Section 8.14(c). 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 9.13(e). 
  
 Section 9.17 Negative Pledge Agreements. 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 permitted by Section 9.03(c) or Section 9.03(d) or any contract, agreement or understanding creating Liens permitted by Section 9.03(d) (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 9.18 Gas Imbalances, Take-or-Pay or Other Prepayments. The Borrower will not, and will not permit any Restricted Subsidiary to, allow gas imbalances, 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 to exceed
500,000 Mcf of gas (on an Mcfe equivalent basis) in the aggregate. 
  

 79 

 Section 9.19 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) those Swap Agreements required under Section 8.18; (b) Swap Agreements in respect of commodities (including price Swap Agreements, basis differential Swap Agreements, caps, collars,
floors and other similar agreements described in the definition of “Swap Agreements”) (i) with an Approved Counterparty, (ii) the notional volumes for which, from the Effective Date until December 31, 2009, (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 (A) 85% of the reasonably anticipated projected production (as shown in the most recent Reserve
Report) from proved, developed, producing Oil and Gas Properties for each month during the period during which such Swap Agreement is in effect and (B) 20% of the reasonably anticipated projected production (as shown in the most recent Reserve
Report) from proved, developed, non-producing Oil and Gas Properties for each month during the period during which such Swap Agreement is in effect and (iii) the notional volumes for which, after December 31, 2009, (when aggregated with other
commodity price Swap Agreements then in effect other than basis differential swaps) do not exceed 75% of the reasonably anticipated projected production (as shown in the most recent Reserve Report) from proved, developed, producing Oil and Gas
Properties for each month during the period during which such Swap Agreement is in effect; provided, however, that for purposes of this Section 9.19(b), put options and price floors for crude oil and natural gas shall be disregarded; and (c) Swap
Agreements in respect of interest rates with an Approved Counterparty, as follows: (i) Swap Agreements effectively converting interest rates from fixed to floating, the notional amounts of which (when aggregated with all other Swap Agreements of the
Borrower and its Restricted Subsidiaries then in effect effectively converting interest rates from fixed to floating) do not exceed 50% of the then outstanding principal amount of the Borrower’s Debt for borrowed money which bears interest at a
fixed rate (after netting out any Swap Agreements then in effect effectively converting interest rates from floating to fixed) and (ii) Swap Agreements effectively converting interest rates from floating to fixed, the notional amounts of which (when
aggregated with all other Swap Agreements of the Borrower and its Restricted Subsidiaries then in effect effectively converting interest rates from floating to fixed) do not exceed 75% of the then outstanding principal amount of the Borrower’s
Debt for borrowed money which bears interest at a floating rate (after netting out any Swap Agreements then in effect effectively converting interest rates from floating to fixed). In no event shall any Swap Agreement contain any current
requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral or margin, other than letters of credit permitted by this Agreement (in an amount not to exceed $50,000,000 in the aggregate), to secure their
obligations under such Swap Agreement or to cover market exposures. 
  
 Section 9.20 Acquisition and Separation Documents. The Borrower will not, and will not permit any of its Subsidiaries to, amend, modify or supplement any of the Acquisition Documents or the Separation Documents if the effect thereof
could reasonably be expected to have a Material Adverse Effect (and provided that the Borrower promptly furnishes to the Administrative Agent a copy of such amendment, modification or supplement). 
  

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 Section 9.21 Gas Sales Contracts. The Borrower will not, and will not permit any of its
Subsidiaries to (the Borrower or any such Subsidiary being the “Seller” for purposes of this Section), enter into any Gas Sales Contract (i) such Gas Sales Contract is with a counterparty (the “Purchaser”) who is an
Approved Purchaser at the time such Gas Sales Contract is entered into or the Purchaser has posted Acceptable Collateral to secure the Purchaser’s obligations thereunder, (ii) the terms of such Gas Sales Contract provide that if the Purchaser
is not, or is no longer, an Approved Purchaser, such counterparty will, within three (3) Business Days, post Acceptable Collateral to secure the Purchaser’s obligations thereunder, (iii) the terms of such Gas Sales Contract provide that upon
the failure to provide such Acceptable Collateral, the Seller may immediately terminate such Gas Sales Contract and sell the volumes of gas subject of the Gas Sales Contract to third party Purchasers and (iv) the proceeds of such Gas Sales Contract
shall be deposited directly into the account of the Seller. Such Gas Sales Contract may also provide that if following any posting of Acceptable Collateral the Purchaser becomes an Approved Purchaser, any Acceptable Collateral previously posted by
such Purchaser shall be immediately released and returned to such Purchaser; provided that, notwithstanding the foregoing, the Seller may enter into one or more Gas Sales Contracts which do not comply with the requirements of this sentence so long
as the unpaid Exposure on all such Gas Sales Contracts does not, in the aggregate, exceed $2,500,000 at any one time. The terms of any Gas Sales Contract that contemplates the posting of Acceptable Collateral of the type described in clause (b) of
the definition thereof shall require (A) the Seller, for each day during any delivery month, to calculate and notify the Purchaser of the Seller’s Exposure (as defined below) for the prior day (or “days” in the event any day or days
are skipped) and (B) the Purchaser to deliver to the Seller, by the close of business on the day next following the date of such notice, to the deposit account maintained with the depository bank, in each case, specified in the Control Agreement
(the “Margin Account”), collateral in the form of cash in an amount equal to such Exposure. For purposes of this Section, the term “Exposure” means, for any day, the volume of physical gas flow delivered during the
previous day multiplied by the contract price therefor. Any such Gas Sales Contract shall provide that (i) if at any time the Purchaser fails to pay any amount when due (after giving effect to any applicable grace periods), the Seller may apply any
posted collateral in respect of such Gas Sales Contract to amounts then due thereunder and (ii) upon the payment in full of the invoice price for any delivery month, the amount of cash collateral posted by the Purchaser in respect of such delivery
month shall be returned to the Purchaser. Any such Gas Sales Contract may provide that any posted collateral at any time held in the Margin Account in excess of the amount required to be posted at such time may be applied toward the payment of gas
in respect of the relevant delivery month. 
  
 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. 
  

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 (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 or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect when made or deemed made in any material respect. 
  
 (d) the Borrower or any Restricted Subsidiary shall fail to observe or
perform any covenant, condition or agreement contained in Section 8.02, Section 8.14 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. 
  
 (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 following the expiration of any applicable grace period therefor. 
  
 (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
and such event or condition continues beyond any applicable grace period therefor. 
  
 (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 30 days or an order or decree approving or ordering any of the
foregoing shall be entered. 
  

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 (i) the Borrower or 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) (i) one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 (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) or (ii) any one or more non-monetary judgments that
have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, 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 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) the Intercreditor Agreement, after delivery thereof shall for any reason, except to the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding and enforceable in accordance with its terms against
the Borrower or any party thereto or holder of the Debt subordinated thereby or shall be repudiated by any of them, or cause the payment of the obligations of the Second Lien Notes to be senior or pari passu in right to the payment of obligations of
this Agreement, or any payment by the Borrower or any Guarantor in violation of the terms of the Intercreditor Agreement. 
  
 (n) 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 (i) $2,500,000 in any year or (ii) $5,000,000 for all periods. 
  

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 (o) Calpine Energy Services L.P., as purchaser, fails to post Acceptable Collateral in respect of any Gas
Sales Contract with the Borrower or any Restricted Subsidiary when due as required by Section 9.21 and the Seller fails to (i) exercise its right to terminate such Gas Sales Contract no later than the second Business Day of such failure by such
purchaser and (ii) sell the volumes of gas subject of such Gas Sales Contract to third party Purchasers in accordance with the provisions of Section 9.21 no later than the second Business Day after such failure by such purchaser. 
  
 (p) 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, to payment or reimbursement of that portion of the Indebtedness constituting fees, expenses and
indemnities payable to the Administrative Agent in its capacity as such; 
  

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 (ii) second, pro rata to payment or reimbursement of that portion of the Indebtedness
constituting fees, expenses and indemnities payable to the Lenders; 
  
 (iii) third, pro rata to payment of accrued interest on the Loans; 
  
 (iv) fourth, 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; 
  
 (v) fifth, pro rata to any other Indebtedness; 
  
 (vi) sixth, to serve as cash collateral to be held by the
Administrative Agent to secure the LC Exposure; and 
  
 (vii)
seventh, 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 the 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 have no 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 
  

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 conditions set forth herein or in any other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in ARTICLE VI or elsewhere herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent or as to those conditions precedent expressly required to be to the Administrative Agent’s satisfaction, (vi) the existence, value, perfection or priority of any collateral security or the financial or
other condition of the 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. 
  
 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, no Agent other than the Administrative Agent 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. 
  

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 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 the Issuing
Bank hereby waives the right to dispute the Administrative Agent’s record of such statement, except in the case of gross negligence or willful misconduct by the Administrative Agent. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. The Administrative
Agent may deem and treat the payee of any Note as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof permitted hereunder shall have been filed with the Administrative Agent. 

 
 Section 11.05 Subagents. The Administrative Agent may perform any
and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. 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 Administrative Agent. 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, the 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, subject to the approval of 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 the Issuing Bank, appoint a successor Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. 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. 
  

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 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 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 the Arranger shall have any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the 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 Vinson &
Elkins L.L.P. is acting in this transaction as special counsel to the Administrative Agent only, except to the extent otherwise expressly stated in any legal opinion or any Loan Document. Each other party hereto will consult with its own legal
counsel to the extent that it deems necessary in connection with the Loan Documents and the matters contemplated therein. 
  
 Section 11.09 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

  

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 (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 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 11.10 Authority of Administrative Agent to Release Collateral and Liens. Each Lender and the Issuing Bank hereby authorizes the
Administrative Agent to release any collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents. Each Lender and the Issuing Bank hereby authorizes the Administrative Agent to execute and deliver to the Borrower,
at the Borrower’s sole cost and expense, any and all releases of Liens, termination statements, assignments or other documents reasonably requested by the Borrower in connection with any sale or other disposition of Property to the extent such
sale or other disposition is permitted by the terms of Section 9.13 or is otherwise authorized by the terms of the Loan Documents. 
  
 Section 11.11 The Arranger, and other Agents. None of the Arranger, any syndication agent or any documentation agent hereunder shall have any
duties, responsibilities or liabilities under this Agreement or 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 717 Texas, Suite 2800, Houston, Texas 77002, Attention: Chief Financial Officer (Telephone No. 713-335-4000); 
  
 (ii) if to the Administrative Agent, to it at 919 Third Avenue, New York, New York 10022, Attention: Millie Carillo, Loan Assistant (Telecopy No. (212)
841-2683), with a copy to 1200 Smith Street, Suite 3100, Houston, Texas 77002, Attention: Donna Verwold (Telecopy No. (713) 659-6915); 
  

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 (iii) if to the Issuing Bank, to it at 919 Third Avenue, New York, New York 10022, Attention: Millie
Carillo, Loan Assistant (Telecopy No. (212) 841-2683), with a copy to 1200 Smith Street, Suite 3100, Houston, Texas 77002, Attention: Donna Verwold (Telecopy No. (713) 659-6915; and 
  
 (iv) if to any other Lender, 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. 
  
 (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 other Agent, the Issuing Bank or any Lender to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power or privilege, or any abandonment or discontinuance of steps to enforce such right, power or privilege, under any of the Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under any of the Loan Documents preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies of the
Administrative Agent, any other Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by 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 other Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time. 
  
 (b) Neither this Agreement nor any provision hereof nor any Security Instrument nor any provision thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the 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 
  

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 written consent of each Lender, decrease or maintain the Borrowing Base without the consent of the Required Lenders, or
modify Section 2.07 in any manner without the consent of each Lender, (iii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, or reduce any other Indebtedness
hereunder or under any other Loan Document, without the written consent of each Lender affected thereby, (iv) postpone the scheduled date of payment 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, (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
8.14, Section 9.19, Section 10.02(c) or Section 12.14 or change the definition of the terms “Domestic Subsidiary”, “Foreign Subsidiary” or “Subsidiary”, without the written consent of each Lender, (vii) release any
Guarantor (except as set forth in the Guaranty Agreement), release any of the collateral (other than as provided in Section 11.10), or reduce the percentage set forth in Section 8.14(a) to less than 80%, 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” or “Majority Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Loan Documents or make any determination or grant any consent hereunder or any other Loan Documents, without the written consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent, any other Agent, or the Issuing Bank hereunder or under any other Loan Document without the prior written consent of the Administrative Agent, such other Agent or the
Issuing Bank, as the case may be. Notwithstanding the foregoing, any supplement to Schedule 7.15 (Subsidiaries) shall be effective simply by delivering to the Administrative Agent a supplemental schedule clearly marked as such and, upon receipt, the
Administrative Agent will promptly deliver a copy thereof to the Lenders. 
  
 Section 12.03 Expenses, Indemnity; Damage Waiver. 
  
 (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including, without limitation, the reasonable fees, charges and disbursements of counsel
and other outside consultants for the Administrative Agent, the reasonable travel, photocopy, mailing, courier, telephone and other similar expenses, including all Intralinks expenses, and the cost of environmental audits and surveys and
appraisals, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration (both before and after the execution hereof and including advice of counsel to the
Administrative Agent as to the rights and duties of the Administrative Agent and the Lenders with respect thereto) of this Agreement and the other Loan Documents and any amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all costs, expenses, Taxes, assessments and other charges incurred by any Agent or any Lender in connection with any filing, registration,
recording or perfection of any security interest contemplated by this Agreement or any Security Instrument or any other document referred to therein, (iii) all reasonable out-of-pocket expenses incurred by 
  

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 the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, (iv) all out-of-pocket expenses incurred by any Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for any Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement or any other Loan Document, including its rights under this Section 12.03, or in connection with the Loans made or Letters of Credit issued hereunder, including, without
limitation, all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. 
  
 (b) THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ISSUING BANK, THE ARRANGER 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 REASONABLE FEES, CHARGES AND DISBURSEMENTS OF ANY
COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT,
(ii) THE FAILURE OF THE 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 THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE
PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF
THE BUSINESS OF THE 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, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS
WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (ix) 
  

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 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
RESULTED FROM THE BREACH OF ANY OBLIGATION OF SUCH INDEMNITEE UNDER ANY LOAN DOCUMENT OR THE GROSS NEGLIGENCE, WILFUL MISCONDUCT, OR VIOLATION OF LAW 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 the
Issuing Bank under Section 12.03(a) or (b), each Lender severally agrees to pay to such Agent, the Arranger or the Issuing Bank, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid 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 the 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 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. 
  

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 (e) All amounts due under this Section 12.03 shall be payable not later than 10 days after written demand
therefor. 
  
 Section 12.04 Successors and Assigns.

  
 (a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this Section 12.04. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in Section 12.04(c)) and, to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 
  
 (b) (i) Subject to the conditions set forth in 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 Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is
continuing; 
  

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 (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, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice. 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, the Issuing Bank and each
Lender. 
  
 (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 and, if required hereunder, applicable tax forms (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). 
  

 95 

 (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or the 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, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement 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, without limitation, 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.

  
 (e) Notwithstanding any other provisions of this Section
12.04, 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. 
  

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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, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest
on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any 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 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.  
  

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

  
 Section 12.07 Severability. Any provision of this
Agreement or any other Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 
  
 Section 12.08 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations (of whatsoever kind, including, without limitations obligations under Swap Agreements) at any time owing by such Lender or Affiliate to or for 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 MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, 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 NON-EXCLUSIVE
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) 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 THIS
SECTION 12.09. 
  
 Section 12.10 Headings. Article and
Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 
  
 Section 12.11 Confidentiality. Each of the Administrative Agent, the
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 
  

 99 

 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 or (ii) any actual or prospective counterparty (or its advisors) to any Swap Agreement relating to the Borrower and its obligations, (g) with the
consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 12.11 or (ii) becomes available to the Administrative Agent, the 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 Subsidiary relating to the Borrower or any Subsidiary and
their businesses, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower or a Subsidiary; provided that, in the case of information
received from the Borrower or any 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 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 stated 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 
  

 100 

 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 Specified Senior Indebtedness. The Parties acknowledge and agree that the Indebtedness hereunder is
specifically designated “Specified Senior Indebtedness” as required by the Second Lien Term Loan Documents. 
  
 Section 12.14 Collateral Matters; Swap Agreements. The benefit of the Security Instruments and of the provisions of this Agreement relating to any
collateral securing the Indebtedness shall also extend to and be available to those Lenders or their Affiliates which are counterparties to any Swap Agreement with the Borrower or any of its Subsidiaries 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 while such Person or its Affiliate is a Lender, but only while such Person or its Affiliate is a Lender, including any Swap Agreements between such
Persons in existence prior to the date hereof. No Lender or any Affiliate of a Lender shall have any voting rights under any Loan Document as a result of the existence of obligations owed to it under any such Swap Agreements. 
  
 Section 12.15 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. 
  
 SIGNATURES BEGIN NEXT PAGE

  

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

					
	BORROWER:	 	ROSETTA RESOURCES INC.
			
	 	 	By:	 	  

	 	 	Name:	 	B. A. Berilgen
	 	 	Title:	 	President and Chief Executive Officer

  

 [Signature Page- Credit Agreement] 
 1 

					
	ADMINISTRATIVE AGENT:	 	BNP PARIBAS,
	 	 	as Administrative Agent
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  

 [Signature Page- Credit Agreement] 
 2 

					
	LENDER:	 	BNP PARIBAS,
	 	 	as Lender
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  

 [Signature Page- Credit Agreement] 
 1 

 ANNEX I 
 LIST OF MAXIMUM CREDIT AMOUNTS 
  
 Aggregate Maximum Credit Amounts 
  

							
	 Name of Lender

	  	Applicable
Percentage

	 	 	Maximum
Credit Amount

	 BNP Paribas
	  	100.00	%	 	$	400,000,000
	 TOTAL
	  	100.00	%	 	$	400,000,000

  

 Annex I - 1 

 EXHIBIT A 
 FORM OF NOTE 
  

			
	$[            ]	 	[                    ],
200              

  
 FOR VALUE RECEIVED,
Rosetta Resources Inc., a Delaware corporation (the “Borrower”) hereby promises to pay to the order of [            ] (the “Lender”), at the principal
office of BNP Paribas, as administrative agent (the “Administrative Agent”), at [            ], the principal sum of
[            ] Dollars ($[            ]) (or such lesser amount as shall equal the aggregate unpaid principal amount of the Loans
made by the Lender to the Borrower under the Credit Agreement, as hereinafter defined), in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts provided in the Credit Agreement,
and to pay interest on the unpaid principal amount of each such Loan, at such office, in like money and funds, for the period commencing on the date of such Loan until such Loan shall be paid in full, at the rates per annum and on the dates provided
in the Credit Agreement. 
  
 The date, amount, Type, interest
rate, Interest Period and maturity of each Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, may be endorsed by
the Lender on the schedules attached hereto or any continuation thereof or on any separate record maintained by the Lender. Failure to make any such notation or to attach a schedule shall not affect any Lender’s or the Borrower’s rights or
obligations in respect of such Loans or affect the validity of such transfer by any Lender of this Note. 
  
 This Note is one of the Notes referred to in the Senior Revolving Credit Agreement dated as of July 7, 2005 among the Borrower, the Administrative Agent,
and the other agents and lenders signatory thereto (including the Lender), and evidences Loans made by the Lender thereunder (such Senior Revolving Credit Agreement as the same may be amended, supplemented or restated from time to time, the
“Credit Agreement”). Capitalized terms used in this Note have the respective meanings assigned to them in the Credit Agreement. 
  
 This Note is issued pursuant to the Credit Agreement and is entitled to the benefits provided for in the Credit Agreement and the other Loan Documents.
The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events, for prepayments of Loans upon the terms and conditions specified therein and other provisions relevant to this Note. 

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

 Exhibit A-1 

			
	ROSETTA RESOURCES INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
  

 Exhibit A 
 2 

 EXHIBIT B 
 FORM OF BORROWING REQUEST 
  
 [                    ], 200[  ] 
  
 ROSETTA RESOURCES INC., a Delaware corporation (the “Borrower”), pursuant to Section 2.03 of the Credit Agreement dated as of July 7,
2005 (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”) among the Borrower, BNP Paribas, as Administrative Agent and the other agents and lenders (the
“Lenders”) which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in the Credit Agreement), hereby requests a Borrowing as follows: 
  
 (i) Aggregate amount of the requested Borrowing is
$[            ]; 
  
 (ii) Date of such Borrowing is [            ], 200[  ]; 
  
 (iii) Requested Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing]; 
  
 (iv) In the case of a Eurodollar Borrowing, the initial Interest Period applicable thereto is
[            ]; 
  
 (v) Amount of Borrowing Base in effect on the date hereof is $[            ]; 
  
 (vi) Total Revolving Credit Exposures on the date hereof (i.e., outstanding principal amount of Loans and total LC Exposure)
is $[            ]; and 
  
 (vii) Pro forma total Revolving Credit Exposures (giving effect to the requested Borrowing) is $[            ]; and 
  
 (viii) Location and number of the Borrower’s account to which funds are
to be disbursed, which shall comply with the requirements of Section 2.05 of the Credit Agreement, is as follows: 
  
 [                                      
                  ] 
  
 [                                      
                  ] 
  
 [                                      
                  ] 
  
 [                                      
                  ] 
  
 [                                      
                  ] 
  

 Exhibit B-1 

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

			
	ROSETTA RESOURCES INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 Exhibit B-2 

 EXHIBIT C 
 FORM OF INTEREST ELECTION REQUEST 
  
 [                    ], 200[  ] 
  
 ROSETTA RESOURCES INC., a Delaware corporation (the “Borrower”), pursuant to Section 2.04 of the Credit Agreement dated as of July 7,
2005 (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”) among the Borrower, BNP Paribas, as Administrative Agent and the other agents and lenders (the
“Lenders”) which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in the Credit Agreement), hereby makes an Interest Election Request as follows: 
  
 (i) The Borrowing to which this Interest Election Request applies, and if
different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information specified pursuant to (iii) and (iv) below shall be specified for each
resulting Borrowing) is [            ]; 
  
 (ii) The effective date of the election made pursuant to this Interest Election Request is
[                    ], 200[  ];[and] 
  
 (iii) The resulting Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing][; and] 
  
 [(iv) [If the resulting Borrowing is a Eurodollar Borrowing] The Interest Period applicable to the resulting Borrowing after
giving effect to such election is [            ]]. 
  
 The undersigned certifies that he/she is the [            ] of the Borrower, and that as such
he/she is authorized to execute this certificate on behalf of the Borrower. The undersigned further certifies, represents and warrants on behalf of the Borrower that the Borrower is entitled to receive the requested continuation or conversion under
the terms and conditions of the Credit Agreement. 
  

			
	ROSETTA RESOURCES INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 Exhibit C-1 

 EXHIBIT D 
 FORM OF 
 COMPLIANCE CERTIFICATE 
  
 The undersigned hereby certifies that he/she is the
[            ] of ROSETTA RESOURCES INC., a Delaware corporation (the “Borrower”), and that as such he/she is authorized to execute this certificate on behalf of the
Borrower. With reference to the Credit Agreement dated as of July 7, 2005 (together with all amendments, restatements, supplements or other modifications thereto being the “Agreement”) among the Borrower, BNP Paribas, as
Administrative Agent, and the other agents and lenders (the “Lenders”) which are or become a party thereto, and such Lenders, the undersigned represents and warrants as follows (each capitalized term used herein having the same
meaning given to it in the Agreement unless otherwise specified): 
  
 (a) The representations and warranties of the Borrower contained in Article VII of the Agreement and in the Loan Documents and otherwise made in writing by or on behalf of the Borrower pursuant to the Agreement and the Loan Documents were
true and correct when made, and are repeated at and as of the time of delivery hereof and are true and correct in all material respects at and as of the time of delivery hereof, except to the extent such representations and warranties are expressly
limited to an earlier date or the Majority Lenders have expressly consented in writing to the contrary. 
  
 (b) The Borrower has performed and complied with all agreements and conditions contained in the Agreement and in the Loan Documents required to be
performed or complied with by it prior to or at the time of delivery hereof [or specify default and describe]. 
  
 (c) No change has occurred, either in any case or in the aggregate, in the condition, financial or otherwise, of the Borrower or any Restricted Subsidiary
which could reasonably be expected to have a Material Adverse Effect [or specify event]. 
  
 (d) There exists no Default or Event of Default [or specify Default and describe]. 
  
 (e) Attached hereto are the detailed computations necessary to determine whether the Borrower is in compliance with Section 9.01 and Section 8.14 as of
the end of the [fiscal quarter][fiscal year] ending [            ]. 
  
 EXECUTED AND DELIVERED this [            ] day of
[            ]. 
  

			
	ROSETTA RESOURCES INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 Exhibit D - 1 

 EXHIBIT E-1 
 FORM OF LEGAL OPINION 
  

 Exhibit E-1 - 1 

 EXHIBIT E-2 
 FORM OF LEGAL OPINION OF LOCAL COUNSEL 
  
 July 7, 2005 
  
 Each of the Addressees Listed in

 the Attached Schedule I 
  

	Re:	Credit Agreement dated as July 7, 2005 among Rosetta Resources Inc., a Delaware corporation (the “Borrower”), the financial institutions now or hereafter party
thereto (the “Lenders”), BNP Paribas, as administrative agent and collateral agent for the Lenders (in such capacity, the “Collateral Agent”), and the other agents party thereto (the “Credit
Agreement”). 

  
 Ladies and Gentlemen:

  
 We have acted as special
[                    ] counsel to the Borrower and
[                    ], a [                    ]
(“Mortgagor”), in connection with the execution and delivery of that certain [Describe Mortgage/Deed of Trust] (the “Mortgage”). This opinion is being furnished to you pursuant to Section 6.01(i) of the
Credit Agreement. All capitalized terms not defined herein shall have the same meanings assigned to them in the Credit Agreement. For purposes of this opinion letter, the term “State” means the State of
[                    ]. In rendering the opinions set forth below, we have reviewed an execution copy of the following documents and instruments, as
the same are being executed as of the date hereof (the “Loan Documents”): 
  
 [(A)] the Mortgage[; and] 
  

	 	[(B)	UCC-1 Financing Statement, with the Mortgagor, as debtor, and the Collateral Agent, as secured party, covering as-extracted collateral and goods that are or are to become fixtures,
to be filed in connection with the Mortgage (the “Financing Statement”)].1

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

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

 

 Exhibit E-2 - 1 

 Based upon the foregoing, and subject to the assumptions, qualifications, exceptions and limitations set
forth herein, it is our opinion that: 
  
 1. The Mortgage,
including the acknowledgment thereto, [and the Financing Statement,] is [are] in a form satisfactory for recordation in the official public records of real property in each county in the State where any portion of the Mortgaged Property is located.

  
 2. The descriptions of those portions of the Mortgaged
Property located within the State which are shown on Exhibit “A” attached to the Mortgage are legally sufficient descriptions for the purpose of creating and maintaining the Liens purported to be created by the Mortgage and for the
purposes of all applicable recording, filing and registration laws in the State. 
  
 3. The Mortgagor is duly qualified to do business and own its properties in, and is in good standing as a foreign corporation in, the State, under the laws of the State. 
  
 4. The Mortgage constitutes the legal, valid and binding obligation of the
Mortgagor enforceable against the Mortgagor in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to or affecting creditors’ rights generally
and general principles of equity. 
  
 5. The Mortgage is effective
to create in favor of the Collateral Agent (or the Trustee named therein, as applicable) for the benefit of the Collateral Agent and the Lenders, for the payment of the obligations described therein, a valid mortgage Lien on all of the
Mortgagor’s right, title and interest in and to the portion of the Mortgaged Property constituting real property described in the Mortgage as being mortgaged thereby and a valid security interest in all of the Mortgagor’s right, title and
interest in and to as-extracted collateral located in each county in which the Mortgaged Property is situated and all fixtures located on the real property described in the Mortgage. 
  
 6. Fully executed counterparts of the Mortgage [and the Financing Statement] should be filed for record in each county in
the State where any portion of the Mortgaged Property is located [or if other, please specify]. Other than the foregoing, no authorization, consent, approval, license or exemption of, or filing or registration with, any Governmental Authority of the
State is necessary for either the due execution and delivery by the Mortgagor of the Mortgage, the perfection of the Liens intended to be created thereby or with the holding and enforcement by the Collateral Agent of the Mortgage or the obligations
secured thereby. 
  
 7. After the recordings and filings specified
in paragraph 6 have occurred, the Liens created by the Mortgage on that portion of the Mortgaged Property constituting real property will be effective against third parties and the Liens created by the Mortgage on that portion of the Mortgaged
Property constituting as-extracted collateral and fixtures will be perfected. 
  

 Exhibit E-2 - 2 

 8. After the recordings and filings specified in paragraph 6 have occurred, no instruments need be
recorded, registered or filed or re-recorded, re-registered or re-filed in any public office in the State in connection with the execution and delivery of the Mortgage in order to maintain the perfection and priority of the Liens created thereby
after the date of recordation, other than [state rule if necessary] and continuation statements as required by the Uniform Commercial Code as in effect in the State. 
  
 9. No state or local recording tax, stamp tax or other similar fee, tax or governmental charge (other than statutory filing
and recording fees to be paid upon the filing of the Mortgage [or the Financing Statement]) is required to be paid in connection with the filing and recording of [either] the Mortgage [or the Financing Statement][, except as follows: explain if
necessary]. 
  
 10. The execution and delivery by the Mortgagor of
the Mortgage do not, and the performance by the Mortgagor of its obligations thereunder will not, result in any violation by the Mortgagor of any laws, rules or regulations of the State which, in our experience, exercising customary professional
diligence, are normally applicable to transactions of the type contemplated by the Loan Documents. 
  
 11. A [            ] state court of competent jurisdiction or a federal court sitting in the
State of competent jurisdiction and applying conflicts of laws principles of the State, if properly presented with a choice of law issue, will honor the choice of New York law to govern the Credit Agreement, the Notes and the Mortgage that state
such documents shall be governed by the laws of the State of New York. 
  
 12. The Lenders and the Collateral Agent are not required to qualify to transact business in the State nor will they incur any tax imposed by the State (including without limitation, any tax imposed by the State on interest or on revenue
paid in respect of the obligations secured by the Mortgage), nor is any approval, authorization, license, permit, declaration, consent or order of, exemption by, or registration, recording, notice or filing with, any Governmental Authority of the
State required with respect to the Collateral Agent or any Lender, solely as a result of the transaction to which this opinion letter refers, or the execution, recording or holding by the Collateral Agent or any Lender of the Mortgage or the
indebtedness or other obligations secured thereby, or the creation or perfection of the Liens pursuant to the Mortgage. However, we express no opinion as to the necessity of qualifying to transact business in the State of (i) as a result of other
business transactions by the Lenders or the Collateral Agent in the State, or (ii) if the beneficiary under the Mortgage acquires, holds, and operates any portion of the real property described in the Mortgage by foreclosure sale, by deed in lieu of
foreclosure, or otherwise, or if such beneficiary operates such real property itself or through an agent or independent contractor. 
  
 13. The Mortgage contains the terms and provisions necessary to enable the Collateral Agent (or the Trustee named therein, as applicable) following a
default under the Mortgage, to exercise the essential rights and remedies which are customarily available to a real estate lienholder under the laws of the State. 
  

 Exhibit E-2 - 3 

 14. The laws (statutory or otherwise) of the State do not require a lienholder to make an election of
remedies where such lienholder holds a Lien on both the real and personal property of a debtor or require a lienholder to take recourse first or solely against its collateral located in the State. 
  
 15. The Loans evidenced by the Notes and the Credit Agreement will not
violate any applicable usury laws of the State, or other applicable laws of the State regulating the interest rate, fees and other charges that may be collected with respect to the Loans. 
  
 The foregoing opinions are subject to the following additional assumptions and qualifications: 
  
 [add appropriate qualifications, if any]. 
  
 This opinion letter is given solely for the benefit and use of you and your
counsel in connection with the transactions contemplated by the Loan Documents and may not, without our prior written consent, be (a) relied upon or furnished to any Person other than you and your counsel and Persons who become Lenders after the
date hereof and their counsel, or (b) relied upon by you and your counsel or such Lenders and their counsel for any other purpose. 
  
 Very truly yours, 
  
  

 Exhibit E-2 - 4 

 EXHIBIT F-1 
 SECURITY INSTRUMENTS 
  
 1)
Guaranty and Collateral Agreement dated as of July 7, 2005 by the Borrower, the Restricted Subsidiaries party thereto as Guarantors, in favor of the Administrative Agent and the Lenders. 
  
 2) Financing Statements in respect of item 1, by (if necessary): 
  

	 	•	 	Rosetta Resources Inc.; 

  

	 	•	 	Rosetta Resources California, LLC; 

  

	 	•	 	Rosetta Resources Offshore, LLC; 

  

	 	•	 	Rosetta Resources Rockies, LLC; 

  

	 	•	 	Rosetta Resources Texas GP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP; 

  

	 	•	 	Calpine Natural Gas Holdings, LLC; 

  

	 	•	 	Calpine Natural Gas GP, LLC; and 

  

	 	•	 	Calpine Natural Gas L.P. 

  
 3) Undated stock or unit powers executed in blank with LLC or LP Certificates attached for the following entities: 
  

	 	•	 	Rosetta Resources California, LLC; 

  

	 	•	 	Rosetta Resources Offshore, LLC; 

  

	 	•	 	Rosetta Resources Rockies, LLC; 

  

	 	•	 	Rosetta Resources Texas GP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP; 

  

	 	•	 	Calpine Natural Gas Holdings, LLC; 

  

 Exhibit F-1 - 1 

	 	•	 	Calpine Natural Gas GP, LLC; and 

  

	 	•	 	Calpine Natural Gas L.P. 

  
 4) Deed of Trust, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated as of July 7, 2005 by Rosetta
Resources Texas LP, as mortgagor, in favor of Evans Swann, as Trustee, for the benefit the Administrative Agent, the Lenders and others. (Texas) 
  
 5) Financing Statement in respect of item 4. 
  
 6) Deed of Trust, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated as of July 7, 2005 by Calpine
Natural Gas L.P., as mortgagor, in favor of Evans Swann, as Trustee, for the benefit the Administrative Agent, the Lenders and others. (Texas) 
  
 7) Financing Statement in respect of item 6. 
  
 8) Deed of Trust, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement dated as of July 7, 2005 by Rosetta
Resources California, LLC, as mortgagor, in favor of Evans Swann, as Trustee, for the benefit the Administrative Agent, the Lenders and others. (California) 
  
 9) Financing Statement in respect of item 8. 
  
 10) Fee Letter with Administrative Agent. 
  

 Exhibit F-1 - 2 

 EXHIBIT F-2 
 FORM OF GUARANTY AND COLLATERAL AGREEMENT 
  

 Exhibit F-2 - 1 

 EXHIBIT G 
 FORM OF ASSIGNMENT AND ASSUMPTION 
  
 This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part
of this Assignment and Assumption as if set forth herein in full. 
  
 For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any
letters of credit and guarantees included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any
Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor. 
  

					
	1.	  	Assignor:	  	                                      
                                      
        
			
	2.	  	Assignee:	  	                                      
                                      
        
	 	  	 	  	[and is an Affiliate/Approved Fund of [identify Lender]2
			
	3.	  	Borrower:	  	Rosetta Resources Inc.
			
	4.	  	Administrative Agent:	  	BNP Paribas, as the administrative agent under the Credit Agreement
			
	5.	  	Credit Agreement:	  	The Credit Agreement dated as of July 7, 2005 among Rosetta Resources Inc., the Lenders parties thereto, BNP Paribas, as Administrative Agent, and the other agents parties
thereto

	2	Select as applicable. 

  

 Exhibit G - 1 

	6.	Assigned Interest: 

  

										
	 Commitment Assigned

	  	Aggregate Amount of
Commitment/Loans
for all Lenders

	  	Amount of
Commitment/Loans
Assigned

	  	Percentage Assigned of
Commitment/Loans3

	 
	 	  	$	            	  	$	            	  	            	%
	 	  	$	            	  	$	            	  	            	%
	 	  	$	            	  	$	            	  	            	%

  
 Effective Date:
                         , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] 
  
 The terms set forth in this Assignment and Assumption are hereby agreed to: 
  

			
	ASSIGNOR
	
	[NAME OF ASSIGNOR]
		
	By:	 	  

	Title:	 	 
		
	ASSIGNEE	 	 
	
	[NAME OF ASSIGNEE]
		
	By:	 	  

	Title:	 	 

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

  

 Exhibit G - 2 

 Consented to and Accepted: 
  

			
	BNP Paribas, as
	    Administrative Agent
		
	By	 	  

	Title:	 	 
		
	By	 	  

	Title:	 	 
	
	[Consented to:]4
	
	Rosetta Resources Inc.
		
	By	 	  

	Title:	 	  

	4	To be added only if the consent of the Borrower and/or other parties (e.g. Issuing Bank) is required by the terms of the Credit Agreement. 

 

 Exhibit G - 3 

 ANNEX 1 
  
 ROSETTA RESOURCES INC. SENIOR REVOLVING CREDIT AGREEMENT 
  
 STANDARD TERMS AND CONDITIONS FOR 
 ASSIGNMENT
AND ASSUMPTION 
  
 1. Representations and Warranties.

  
 1.1 Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit
Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under
any Loan Document. 
  
 1.2. Assignee. The Assignee (a)
represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall
be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of
the most recent financial statements delivered pursuant to Section 8.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the
Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii)
it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 
  

2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date. 
  
 3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in
accordance with, the law of the State of New York. 
  

 Exhibit G - 4 

 SCHEDULE 7.05 
 LITIGATION 
  
 None

  

 Schedule 7.05 - 1 

 SCHEDULE 7.15 
 SUBSIDIARIES AND PARTNERSHIPS; UNRESTRICTED SUBSIDIARIES 
  

					
	 Subsidiary

	  	 Owner(s)

	  	 Interest(s)

	Calpine Natural Gas GP, LLC	  	Rosetta Resources Inc.	  	100% (Restricted Subsidiary)
	Calpine Natural Gas Holdings, LLC	  	Rosetta Resources Inc.	  	100% (Restricted Subsidiary)
	Calpine Natural Gas L.P.	  	 Calpine Natural Gas Holdings, LLC
 Calpine Natural Gas
GP, LLC
	  	 99% (Restricted Subsidiary)
 1%

	Rosetta Resources California, LLC	  	Rosetta Resources Inc.	  	100% (Restricted Subsidiary)
	Rosetta Resources Offshore, LLC	  	Rosetta Resources Inc.	  	100% (Restricted Subsidiary)
	Rosetta Resources Rockies, LLC	  	Rosetta Resources Inc.	  	100% (Restricted Subsidiary)
	Rosetta Resources Texas GP, LLC	  	Rosetta Resources Inc.	  	100% (Restricted Subsidiary)
	Rosetta Resources Texas LP, LLC	  	Rosetta Resources Inc.	  	100% (Restricted Subsidiary)
	Rosetta Resources Texas LP	  	 Rosetta Resources Texas LP, LLC
 Rosetta Resources
Texas GP, LLC
	  	 99% (Restricted Subsidiary)
 1%

  
 Rosetta Resources California, LLC

  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988722 

  

	 	•	 	Taxpayer Identification Number: 51-0546842 

  

	 	•	 	Location of chief executive office: c/o Calpine Corporation, 717 Texas, Suite 2800, Houston, Texas 77002 

  

	 	•	 	Other names and trade names used in the past five years: None 

  
 Rosetta Resources Offshore, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3989132 

  

	 	•	 	Taxpayer Identification Number: 51-0546843 

  

	 	•	 	Location of chief executive office: c/o Calpine Corporation, 717 Texas, Suite 2800, Houston, Texas 77002 

  

	 	•	 	Other names and trade names used in the past five years: None 

  
 Rosetta Resources Rockies, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988719 

  

	 	•	 	Taxpayer Identification Number: 51-0546844 

  

	 	•	 	Location of chief executive office: c/o Calpine Corporation, 717 Texas, Suite 2800, Houston, Texas 77002 

  

	 	•	 	Other names and trade names used in the past five years: None 

  

 Schedule 7.15 - 1 

 Rosetta Resources Texas LP 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3993646 

  

	 	•	 	Taxpayer Identification Number: 41-2179091 

  

	 	•	 	Location of chief executive office: c/o Calpine Corporation, 717 Texas, Suite 2800, Houston, Texas 77002 

  

	 	•	 	Other names and trade names used in the past five years: None 

  
 Rosetta Resources Texas GP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988077 

  

	 	•	 	Taxpayer Identification Number: 51-0546839 

  

	 	•	 	Location of chief executive office: c/o Calpine Corporation, 717 Texas, Suite 2800, Houston, Texas 77002 

  

	 	•	 	Other names and trade names used in the past five years: None 

  
 Rosetta Resources Texas LP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988727 

  

	 	•	 	Taxpayer Identification Number: 51-0546841 

  
 Location of chief executive office: c/o Corporation Services Company, 2711 Centerville Rd., Suite 400, Wilmington, Delaware 19808 
  

	Other	names and trade names used in the past five years: None 

  
 Calpine Natural Gas L.P. 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3518137 

  

	 	•	 	Taxpayer Identification Number: 71-0882453 

  

	 	•	 	Location of chief executive office: c/o Calpine Corporation, 717 Texas, Suite 2800, Houston, Texas 77002  

  

	 	•	 	Other names and trade names used in the past five years: None 

  
 Calpine Natural Gas Holdings, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3980115 

  

	 	•	 	Taxpayer Identification Number: 20-2943018 

  

	 	•	 	Location of chief executive office: c/o Corporation Services Company, 2711 Centerville Rd., Suite 400, Wilmington, Delaware 19808 

  

	 	•	 	Other names and trade names used in the past five years: None 

  
 Calpine Natural Gas GP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

 Schedule 7.15 - 2 

	 	•	 	Delaware Secretary of State File Number 3518133 

  

	 	•	 	Taxpayer Identification Number: 27-0011349 

  

	 	•	 	Location of chief executive office: c/o Calpine Corporation, 717 Texas, Suite 2800, Houston, Texas 77002 

  

	 	•	 	Other names and trade names used in the past five years: None 

  

 Schedule 7.15 - 3 

 SCHEDULE 7.19 
 GAS IMBALANCES 
  
 None.

  

 Schedule 7.19 - 1 

 SCHEDULE 7.20 
 MARKETING CONTRACTS 
  
 None. 
  

 Schedule 7.20 - 1 

 SCHEDULE 9.05 
 INVESTMENTS 
  
 19% equity
investment in LOTO Energy, LLC 
  

 Schedule 9.05 - 1

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