Document:

Exhibit 10.33
 

.SEPARATION
AGREEMENT

AND GENERAL
RELEASE OF CLAIMS

 

1.            Philip
C.S. Yin (“Executive”) has been employed by AXT, Inc. (the “Company”) as
its Chief Executive Officer since on or about February 7, 2005 pursuant to
a written employment agreement of that date (“Employment Agreement”).  Executive’s employment with the Company has
now terminated, and it is the Company’s desire to provide Executive with the
separation benefits described in the Employment Agreement as well as additional
separation benefits, and to resolve any claims that Executive has or may have
against the Company.  Accordingly,
Executive and the Company agree as set forth below.  This Agreement will become effective on the
eighth day after it is signed by Executive, provided that Executive has not
revoked this Agreement (by written notice to the Chairman of the Company’s
Board of Directors) prior to that date.

 

2.            The
Company and Executive agree that Executive’s employment with the Company
terminated effective as of March 31, 2009 (the “Termination Date”).  Executive hereby confirms his resignation of
any positions that he held as an officer of the Company (including the
positions of Chairman of the Board and Chief Executive Officer), effective as
of March 17, 2009, and also hereby confirms his resignation from any
positions that he held as an officer, director, or employee of any direct or
indirect subsidiary of the Company effective as of March 17, 2009.

 

3.            Subject
to Executive’s compliance with the terms of this Agreement, including the
release of claims in Paragraphs 4 and 5, the Company will provide Executive
with the following:

 

(a)           a lump sum severance payment, which
payment will be in an amount equal to one years’ base salary at Executive’s
final base salary rate ($340,000), less the outstanding Cash Advances (defined
below), and less applicable withholding; this severance payment will be made to
Executive on April 30, 2009;

 

(b)           in the event Executive timely elects
to obtain continued group health insurance coverage under COBRA following the
Termination Date, the Company will pay the full premiums for such coverage
through the earlier of (i) March 31, 2010, or (ii) the date on
which Executive first becomes eligible to obtain other comparable group health
insurance coverage; thereafter, Executive may elect to purchase continued group
health insurance coverage under COBRA at his own expense;

 

(c)           with respect to any equity awards
previously granted to Executive by the Company that were fully or partially
unvested as of the Termination Date (including any stock options or restricted
stock awards), the vesting of such awards shall accelerate and all such awards
shall be fully vested as of the Termination Date; and

 

(d)           with respect to any stock options
previously granted to Executive by the Company that remained unexercised as of
the Termination Date, the period in which Executive may exercise such options
shall be extended until the earlier of (i) September 30, 2010, or (ii) the
date on which each particular option expires by its terms. For purposes of
Paragraph 3(a) above, the “Cash Advances” are those cash advances
previously made to Executive by the Company in the amount of $11,812.20 for personal expenses.

 

Executive acknowledges and agrees that he has been
paid all wages that he earned during his employment with the Company,
including, but not limited to, any base salary, unused paid time off, and
bonuses. Executive further acknowledges and agrees that he shall not be
entitled to any payments or benefits from the Company other than those
expressly set forth in this Paragraph 3.

 

4.            In
consideration of the payments and benefits described in Paragraph 3,
Executive and his successors release the Company, its parents, divisions,
direct and indirect subsidiaries, and affiliated entities, and each of their
respective current and former shareholders, investors, directors, officers,
employees, agents, attorneys, insurers, legal successors and assigns of and
from any and all claims, actions and causes of action, whether now known or
unknown, which Executive now has, or at any other time had, or shall or may
have against those released parties based upon or arising out of any matter,
cause, fact, thing, act or omission whatsoever occurring or existing at any
time up to and including the date on which Executive signs this Agreement,
including, but not limited to, any claims of breach of contract, wrongful
termination, retaliation, fraud, defamation, infliction of emotional distress
or national origin, race, age, sex, sexual orientation, disability or other
discrimination or harassment under the Civil 

 

 

Rights Act of 1964, the
Age Discrimination In Employment Act of 1967, the Americans with Disabilities
Act, the Fair Employment and Housing Act or any other applicable law.  Notwithstanding the above
release of claims, it is expressly understood that this release does not apply
to, and shall not be construed as, a waiver or release of (a) any
claims or rights that cannot lawfully be released by private agreement,
including statutory indemnity rights under California Labor Code Section 2802,
or (b) any right
of Executive to indemnification under the articles of incorporation or bylaws
of the Company or any indemnity agreement between the Company and Executive,
and the Company shall continue to indemnify Executive against any costs or
expenses (including attorneys’ fees), judgments, fines, losses, claims, damages
or liabilities incurred in connection with any claim, action, suit, proceeding
or investigation, whether civil, criminal, administrative or investigative, by
reason of the fact that Executive was a director, officer, employee or agent of
the Company, whether asserted or claimed prior to, at or after the date of
Executive’s termination of employment, to the fullest extent permitted under
applicable law.

 

5.            Executive
acknowledges that he has read section 1542 of the Civil Code of the State of
California, which states in full:

 

A general release
does not extend to claims which the creditor does not know or suspect to exist
in his or her favor at the time of executing the release, which if known by him
or her must have materially affected his or her settlement with the debtor.

 

Executive waives any rights that he has or may have
under section 1542 (or any similar provision of the laws of any other jurisdiction)
to the full extent that he may lawfully waive such rights pertaining to this
general release of claims, and affirms that he is releasing all known and
unknown claims that he has or may have against the parties listed above.

 

6.            Executive
acknowledges and agrees that he shall continue to be bound by and comply with
the terms of any proprietary rights, assignment of inventions, and/or
confidentiality agreements between the Company and Executive.  To the extent he has not done so
already,  Executive will promptly return
to the Company, in good working condition, all Company property and equipment
that is in Executive’s possession or control, including, but not limited to,
any files, records, computers, computer equipment, cell phones, credit cards,
keys, programs, manuals, business plans, financial records, and all documents
(whether in paper or electronic form, and any copies thereof) that Executive
prepared or received in the course of his employment with the Company.

 

7.            Executive
agrees that he will not, at any time in the future, knowingly or intentionally
disparage the Company in any manner that is harmful to the Company, its
business reputation, its products or services, or its financial viability, or
to the personal or business reputations of the Company’s officers, directors,
or employees.  The Company agrees that
its executive officers and the members of its Board of Directors will not, at
any time in the future, disparage Executive in any manner that is harmful to
Executive’s personal or business reputation. 
The provisions of this Paragraph 7 shall not apply to any statements
that are made in response to any investigation, administrative process, legal
proceeding, subpoena or other legal process. 
In the event the Company is solicited by any party seeking comment or
recommendations as to the Executive’s abilities for subsequent employment, the
Company’s comments shall be limited to confirmation of the Executive’s
position, his salary, dates of employment and scope of responsibility while employed
by the Company.  The provisions of this
Paragraph 7 shall not apply to any statements that are made truthfully in
response to a subpoena or other compulsory legal process.

 

8.            Executive
agrees that for a period of one year following the Termination Date, he will
not, on behalf of herself or any other person or entity, directly or indirectly
solicit any employee of the Company to terminate his/her employment with the
Company.

 

9.            If any provision of this Agreement is deemed invalid,
illegal, or unenforceable, that provision will be modified so as to make it
valid, legal, and enforceable, or if it cannot be so modified, it will be
stricken from this Agreement, and the validity, legality, and enforceability of
the remainder of the Agreement shall not in any way be affected.  In the event of any legal action relating to
or arising out of this Agreement, the prevailing party shall be entitled to
recover from the losing party its attorneys’ fees and costs incurred in that
action.  The parties agree that the Employment
Agreement is hereby terminated and of no further force or effect following the
Termination Date, except with respect to Sections 10 and 12-19 thereof, which
shall remain in full force and effect.

 

2

 

10.          The
Company intends that income provided to the Executive pursuant to this
Agreement will not be subject to taxation under Section 409A of the
Internal Revenue Code (“Section 409A”). 
The provisions of this Agreement shall be interpreted and construed in
favor of satisfying any applicable requirements of Section 409A of the
Code.  However,
the Company does not guarantee any particular tax effect for income provided to
the Executive pursuant to this Agreement.  In any event, except for the Company’s
responsibility to withhold applicable income and employment taxes from
compensation paid or provided to the Executive, the Company shall not be
responsible for the payment of any applicable taxes incurred by the Executive
on compensation paid or provided to the Executive pursuant to this
Agreement.  In the
event that any compensation to be paid or provided to Executive pursuant to
this Agreement may be subject to the excise tax described in Section 409A,
the Company may delay such payment for the minimum period required in order to
avoid the imposition of such excise tax.

 

11.          This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior negotiations and agreements
between the parties, whether written or oral, with the exception of any stock
option or other equity agreements between the parties and any agreements
described in Paragraph 6.  This Agreement
may not be modified or amended except by a document signed by an authorized
officer of the Company and Executive. 
This Agreement will be governed by and construed in accordance with the
laws of the State of California without reference to principles of conflicts of
law.

 

EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED TO
CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT HE IS GIVING
UP ANY LEGAL CLAIMS (AS DESCRIBED ABOVE IN PARAGRAPHS 4 AND 5) HE HAS AGAINST
THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT.  EXECUTIVE FURTHER UNDERSTANDS THAT HE MAY HAVE
UP TO 21 DAYS TO CONSIDER THIS AGREEMENT, THAT HE MAY REVOKE IT AT ANY
TIME DURING THE 7 DAYS AFTER HE SIGNS IT, AND THAT IT SHALL NOT BECOME
EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED. 
EXECUTIVE ACKNOWLEDGES THAT HE IS SIGNING THIS AGREEMENT KNOWINGLY,
WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS
DESCRIBED IN PARAGRAPH 3, WHICH COMPENSATION AND BENEFITS HE WOULD NOT
OTHERWISE BE ENTITLED TO RECEIVE.

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   Dated:
  April 16, 2009

  	
   

  	
   

  	
  /s/ PHILIP C. S. YIN

  
	
   

  	
   

  	
   

  	
  Philip C.S. Yin

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AXT, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated: April 17, 2009

  	
  By: 

  	
   

  	
  /s/ JESSE CHEN

  
	
   

  	
   

  	
   

  	
  Jesse Chen

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its: 

  	
   

  	
  Chairman of the Board

  

 

3Exhibit 10.1

	
   

  

 

CREDIT AGREEMENT

 

dated as of April 14, 2009

 

among

 

CIMAREX ENERGY CO.,

as Borrower,

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

 

BANK OF AMERICA, N.A. and WELLS FARGO BANK,

NATIONAL ASSOCIATION

as Co-Syndication Agents,

 

COMPASS BANK,

and DEUTSCHE BANK SECURITIES INC.,

as Co-Documentation Agents,

 

and

 

The Lenders Party Hereto

 

 

J.P. MORGAN SECURITIES INC.,

Sole Lead Arranger and Sole Bookrunner

	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
  DEFINITIONS
  AND ACCOUNTING MATTERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Terms Defined Above

  	
  6

  
	
  Section 1.02

  	
  Certain Defined Terms

  	
  6

  
	
  Section 1.03

  	
  Types of Loans and Borrowings

  	
  27

  
	
  Section 1.04

  	
  Terms Generally; Rules of
  Construction

  	
  27

  
	
  Section 1.05

  	
  Accounting Terms and
  Determinations; GAAP

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
  THE CREDITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Commitments

  	
  28

  
	
  Section 2.02

  	
  Loans and Borrowings

  	
  28

  
	
  Section 2.03

  	
  Requests for Borrowings

  	
  29

  
	
  Section 2.04

  	
  Interest Elections

  	
  30

  
	
  Section 2.05

  	
  Funding of Borrowings

  	
  31

  
	
  Section 2.06

  	
  Termination, Reduction and
  Increase of Aggregate Maximum Credit Amounts

  	
  32

  
	
  Section 2.07

  	
  Borrowing Base

  	
  34

  
	
  Section 2.08

  	
  Letters of Credit

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
  PAYMENTS OF
  PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Repayment of Loans

  	
  41

  
	
  Section 3.02

  	
  Interest

  	
  41

  
	
  Section 3.03

  	
  Alternate Rate of Interest

  	
  42

  
	
  Section 3.04

  	
  Prepayments

  	
  42

  
	
  Section 3.05

  	
  Fees

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  PAYMENTS;
  PRO RATA TREATMENT; SHARING OF SET-OFFS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Payments Generally; Pro Rata
  Treatment; Sharing of Set-offs

  	
  45

  
	
  Section 4.02

  	
  Presumption of Payment by the
  Borrower

  	
  46

  
	
  Section 4.03

  	
  Payments and Deductions to a
  Defaulting Lender

  	
  47

  
	
  Section 4.04

  	
  Disposition of Proceeds

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  INCREASED
  COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Increased Costs

  	
  49

  
	
  Section 5.02

  	
  Break Funding Payments

  	
  50

  
	
  Section 5.03

  	
  Taxes

  	
  51

  
	
  Section 5.04

  	
  Mitigation Obligations;
  Replacement of Lenders

  	
  53

  
	
  Section 5.05

  	
  Illegality

  	
  53

  

 

i

 

	
  ARTICLE VI

  	
   

  
	
  CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
   

  
	
  Section 6.01

  	
  Effective Date

  	
  54

  
	
  Section 6.02

  	
  Each Credit Event

  	
  56

  
	
  ARTICLE VII

  	
   

  
	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  Section 7.01

  	
  Organization; Powers

  	
  57

  
	
  Section 7.02

  	
  Authority; Enforceability

  	
  57

  
	
  Section 7.03

  	
  Approvals; No Conflicts

  	
  57

  
	
  Section 7.04

  	
  Financial Condition; No
  Material Adverse Change

  	
  58

  
	
  Section 7.05

  	
  Litigation

  	
  58

  
	
  Section 7.06

  	
  Environmental Matters

  	
  58

  
	
  Section 7.07

  	
  Compliance with the Laws and
  Agreements; No Defaults

  	
  60

  
	
  Section 7.08

  	
  Investment Company Act

  	
  60

  
	
  Section 7.09

  	
  Taxes

  	
  60

  
	
  Section 7.10

  	
  ERISA

  	
  60

  
	
  Section 7.11

  	
  Disclosure; No Material
  Misstatements

  	
  61

  
	
  Section 7.12

  	
  Insurance

  	
  62

  
	
  Section 7.13

  	
  Restriction on Liens

  	
  62

  
	
  Section 7.14

  	
  Subsidiaries; Foreign
  Operations

  	
  62

  
	
  Section 7.15

  	
  Location of Business and
  Offices

  	
  62

  
	
  Section 7.16

  	
  Properties; Titles, Etc.

  	
  63

  
	
  Section 7.17

  	
  Maintenance of Properties

  	
  63

  
	
  Section 7.18

  	
  Gas Imbalances, Prepayments

  	
  64

  
	
  Section 7.19

  	
  Marketing of Production

  	
  64

  
	
  Section 7.20

  	
  Swap Agreements

  	
  64

  
	
  Section 7.21

  	
  Use of Loans and Letters of
  Credit

  	
  65

  
	
  Section 7.22

  	
  Solvency

  	
  65

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
   

  
	
  AFFIRMATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 8.01

  	
  Financial Statements; Other
  Information

  	
  65

  
	
  Section 8.02

  	
  Notices of Material Events

  	
  68

  
	
  Section 8.03

  	
  Existence; Conduct of Business

  	
  68

  
	
  Section 8.04

  	
  Payment of Obligations

  	
  68

  
	
  Section 8.05

  	
  Performance of Obligations
  under Loan Documents

  	
  68

  
	
  Section 8.06

  	
  Operation and Maintenance of
  Properties

  	
  69

  
	
  Section 8.07

  	
  Insurance

  	
  69

  
	
  Section 8.08

  	
  Books and Records; Inspection
  Rights

  	
  70

  
	
  Section 8.09

  	
  Compliance with Laws

  	
  70

  
	
  Section 8.10

  	
  Environmental Matters

  	
  70

  
	
  Section 8.11

  	
  Further Assurances

  	
  71

  
	
  Section 8.12

  	
  Reserve Reports

  	
  71

  
	
  Section 8.13

  	
  Title Information

  	
  72

  
	
  Section 8.14

  	
  Additional Collateral;
  Additional Guarantors

  	
  73

  
	
  Section 8.15

  	
  ERISA Compliance

  	
  74

  
	
  Section 8.16

  	
  Swap Agreement Termination

  	
  74

  
	
  Section 8.17

  	
  Marketing Activities

  	
  75

  

 

ii

 

	
  ARTICLE IX

  	
   

  
	
  NEGATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Financial Covenants

  	
  75

  
	
  Section 9.02

  	
  Debt

  	
  75

  
	
  Section 9.03

  	
  Liens

  	
  76

  
	
  Section 9.04

  	
  Dividends, Distributions and
  Redemptions; Repayment of Senior Notes

  	
  77

  
	
  Section 9.05

  	
  Investments, Loans and Advances

  	
  78

  
	
  Section 9.06

  	
  Nature of Business

  	
  79

  
	
  Section 9.07

  	
  Limitation on Leases

  	
  79

  
	
  Section 9.08

  	
  Proceeds of Notes

  	
  80

  
	
  Section 9.09

  	
  ERISA Compliance

  	
  80

  
	
  Section 9.10

  	
  Sale or Discount of Receivables

  	
  80

  
	
  Section 9.11

  	
  Mergers, Etc.

  	
  80

  
	
  Section 9.12

  	
  Sale of Properties

  	
  81

  
	
  Section 9.13

  	
  Environmental Matters

  	
  81

  
	
  Section 9.14

  	
  Transactions with Affiliates

  	
  82

  
	
  Section 9.15

  	
  Subsidiaries

  	
  82

  
	
  Section 9.16

  	
  Negative Pledge Agreements;
  Dividend Restrictions

  	
  82

  
	
  Section 9.17

  	
  Swap Agreement

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
  EVENTS OF
  DEFAULT; REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Events of Default

  	
  83

  
	
  Section 10.02

  	
  Remedies

  	
  85

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  
	
  THE AGENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Appointment; Powers

  	
  86

  
	
  Section 11.02

  	
  Duties and Obligations of Administrative
  Agent

  	
  86

  
	
  Section 11.03

  	
  Action by Administrative Agent

  	
  87

  
	
  Section 11.04

  	
  Reliance by Administrative
  Agent

  	
  87

  
	
  Section 11.05

  	
  Subagents

  	
  88

  
	
  Section 11.06

  	
  Resignation or Removal of
  Administrative Agent

  	
  88

  
	
  Section 11.07

  	
  Agents as Lenders

  	
  88

  
	
  Section 11.08

  	
  No Reliance

  	
  88

  
	
  Section 11.09

  	
  Administrative Agent
  May File Proofs of Claim

  	
  89

  
	
  Section 11.10

  	
  Authority of Administrative
  Agent to Release Collateral and Liens

  	
  90

  
	
  Section 11.11

  	
  The Arranger, the Syndication
  Agents and the Documentation Agents

  	
  90

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01

  	
  Notices

  	
  90

  
	
  Section 12.02

  	
  Waivers; Amendments

  	
  91

  
	
  Section 12.03

  	
  Expenses, Indemnity; Damage
  Waiver

  	
  92

  
	
  Section 12.04

  	
  Successors and Assigns

  	
  94

  
	
  Section 12.05

  	
  Survival; Revival;
  Reinstatement

  	
  97

  

 

iii

 

	
  Section 12.06

  	
  Counterparts; Integration;
  Effectiveness

  	
  98

  
	
  Section 12.07

  	
  Severability

  	
  98

  
	
  Section 12.08

  	
  Right of Setoff

  	
  98

  
	
  Section 12.09

  	
  GOVERNING LAW; JURISDICTION;
  CONSENT TO SERVICE OF PROCESS

  	
  99

  
	
  Section 12.10

  	
  Headings

  	
  100

  
	
  Section 12.11

  	
  Confidentiality

  	
  100

  
	
  Section 12.12

  	
  Interest Rate Limitation

  	
  101

  
	
  Section 12.13

  	
  EXCULPATION PROVISIONS

  	
  101

  
	
  Section 12.14

  	
  Collateral Matters; Swap
  Agreements

  	
  102

  
	
  Section 12.15

  	
  No Third Party Beneficiaries

  	
  102

  
	
  Section 12.16

  	
  USA Patriot Act Notice

  	
  102

  

 

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 Holme,
  Roberts & Owen 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 Pledge
  Agreement

  
	
  Exhibit G

  	
  Form of Assignment and
  Assumption

  
	
  Exhibit H-1

  	
  Form of Maximum Credit Amount
  Increase Agreement

  
	
  Exhibit H-2

  	
  Form of Additional Lender
  Agreement

  
	
  Exhibit I

  	
  Form of Reserve Report
  Certificate

  
	
   

  	
   

  
	
  Schedule 1.01

  	
  Existing Letters of Credit

  
	
  Schedule 7.05

  	
  Litigation

  
	
  Schedule 7.10

  	
  ERISA

  
	
  Schedule 7.14

  	
  Subsidiaries and Partnerships

  
	
  Schedule 7.18

  	
  Gas Imbalances

  
	
  Schedule 7.19

  	
  Marketing Contracts

  
	
  Schedule 7.20

  	
  Swap Agreements

  
	
  Schedule 9.05

  	
  Investments

  

 

v

 

THIS CREDIT AGREEMENT dated as of April 14,
2009 is among: Cimarex Energy Co., 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; JPMorgan Chase Bank, N.A. (in its individual
capacity, “JPMorgan”), as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the “Administrative
Agent”); Bank of America, N.A. and Wells Fargo Bank, National Association,
as Co-Syndication Agents for the Lenders (in such capacity, together with their
successors in such capacity, the “Syndication Agents”); Compass Bank and
Deutsche Bank Securities Inc., as Co-Documentation Agents for the Lenders (in
such capacity, together with its successors in such capacity, the “Documentation
Agents”).

 

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.

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

“Agents”
means, collectively, the Administrative Agent, the Syndication Agents and the
Documentation Agents; and “Agent” shall mean either the Administrative Agent,
the individual Syndication Agents or the individual Documentation Agents, as
the context requires.

 

“Aggregate
Maximum Credit Amounts” at any time shall equal the sum of the Maximum
Credit Amounts, as the same may be increased, reduced or terminated pursuant to
Section 2.06.

 

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

 

“Alternate
Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in
effect on such day plus 1⁄2 of 1.0% and (c) the Adjusted LIBO Rate for
a one month Interest Period on such day (or if such day is not a Business Day,
the immediately preceding Business Day) plus 1.0%.  Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted
LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO
Rate, respectively.

 

“Applicable
Margin” means, for any day, with respect to any ABR Loan or Eurodollar
Loan, 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

  	
   

  	
  <25%

  	
   

  	
  3 25% but
  <50%

  	
   

  	
  3 50% but
  <75%

  	
   

  	
  3 75% but
  <90%

  	
   

  	
  3 90%

  	
   

  
	
  Eurodollar Loans

  	
   

  	
  2.000%

  	
   

  	
  2.250%

  	
   

  	
  2.500%

  	
   

  	
  2.750%

  	
   

  	
  3.000%

  	
   

  
	
  ABR Loans

  	
   

  	
  1.125%

  	
   

  	
  1.375%

  	
   

  	
  1.625%

  	
   

  	
  1.875%

  	
   

  	
  2.125%

  	
   

  

 

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) and
until such Reserve Report is delivered, 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; provided that if the Commitments
have terminated or 

 

7

 

expired, the Applicable Percentages
shall be determined based upon Commitments most recently in effect.

 

“Approved
Counterparty” means (a) any Lender or any Affiliate of a Lender and, (b) any
other Person whose long term senior unsecured debt rating is A-/A3 by S&P
or Moody’s (or their equivalent) or higher.

 

“Approved
Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

 

“Approved
Petroleum Engineers” means (a) Netherland, Sewell &
Associates, Inc., (b) Ryder Scott Company Petroleum Consultants,
L.P., (c) DeGolyer and MacNaughton and (d) any other independent
petroleum engineers reasonably acceptable to the Administrative Agent.

 

“Arranger”
means J.P. Morgan Securities Inc., in its capacities as the sole lead arranger
and sole bookrunner hereunder.

 

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

 

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

 

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

 

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

 

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

 

“Borrowing
Base Deficiency” occurs if at any time the total Revolving Credit Exposures
exceeds the Borrowing Base then in effect.

 

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

 

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

 

8

 

“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
banks are open for dealings in dollar deposits in the London interbank market.

 

“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.

 

“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 Interests representing
more than 35.0% 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 by
any Governmental Authority 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 U.S. 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).  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.

 

“Consolidated
Net Income” means with respect to the Borrower and the Consolidated
Subsidiaries, for any period, the aggregate of the net income (or loss) of the
Borrower and the Consolidated Subsidiaries after allowances for taxes for such
period determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded from such net income (to the extent otherwise
included therein) the following: (a) the net income of any Person in which
the Borrower or any Consolidated Subsidiary has an interest (which interest

 

9

 

does not cause the net income of such
other Person to be consolidated with the net income of the Borrower and the
Consolidated Subsidiaries in accordance with GAAP), except to the extent of the
amount of dividends or distributions actually paid in cash during such period
by such other Person to the Borrower or to a Consolidated Subsidiary, as the
case may be; (b) the net income (but not loss) during such period of any
Consolidated Subsidiary to the extent that the declaration or payment of
dividends or similar distributions or transfers or loans by that Consolidated
Subsidiary is not at the time permitted by operation of the terms of its
charter or any agreement, instrument or Governmental Requirement applicable to
such Consolidated 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 and (d) any gains or losses
attributable to writeups or writedowns of assets, including ceiling test
writedowns; and provided further that if the Borrower or any Consolidated
Subsidiary shall acquire or dispose of any Property during such period, then
Consolidated Net Income shall be calculated after giving pro forma effect to such acquisition or
disposition in accordance with GAAP, as if such acquisition, disposition or
redesignation had occurred on the first day of such period.

 

“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.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  For the purposes of this definition, and
without limiting the generality of the foregoing, any Person that owns directly
or indirectly 10% or more of the Equity Interests having ordinary voting power
for the election of the directors or other governing body of a Person (other
than as a limited partner of such other Person) will be deemed to “control”
such other Person.  “Controlling”
and “Controlled” have meanings correlative thereto.

 

“Credit
Party” means the Borrower and each Guarantor.

 

“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; (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 (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; (i) obligations
to deliver commodities, goods or services, including, without limitation, 

 

10

 

Hydrocarbons, in consideration of one
or more advance payments, 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.

 

“Defaulting
Lender” means any Lender, as reasonably determined by the Administrative
Agent, that has (a) failed to fund any portion of its Loans or
participations in Letters of Credit within three Business Days of the date
required to be funded by it hereunder, (b) notified the Borrower, the
Administrative Agent, the Issuing Bank or any Lender in writing that it does
not intend to comply with any of its funding obligations under this Agreement
or has made a public statement to the effect that it does not intend to comply
with its funding obligations under this Agreement, (c) failed, within
three Business Days after request by the Administrative Agent, to confirm that
it will comply with the terms of this Agreement relating to its obligations to
fund prospective Loans and participations in then outstanding Letters of
Credit, (d) otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within
three Business Days of the date when due, unless the subject of a good faith
dispute, or (e) become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent
to, approval of or acquiescence in any such proceeding or appointment or has a
parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent
to, approval of or acquiescence in any such proceeding or appointment.

 

“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.

 

11

 

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

 

“EBITDA”
means, for any period, the sum of Consolidated Net Income for such period plus
the following expenses or charges to the extent deducted from Consolidated Net
Income in such period: interest, income taxes, depreciation, depletion,
amortization and other similar noncash charges, 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).

 

“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, the preservation or reclamation of natural
resources, or the management, Release or threatened Release of any Hazardous
Materials, in effect in any and all jurisdictions in which the Borrower or any
Subsidiary is conducting, or at any time has conducted, business, or where any
Property of the Borrower or any Subsidiary is located, including, 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 Law, as amended, and other environmental
conservation or protection Governmental Requirements.

 

“Environmental
Permit” means any permit, registration, license, notice, approval, consent,
exemption, variance, or other authorization required under or issued pursuant
to applicable Environmental Laws.

 

“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 (other than any Debt security which by its terms is convertible
at the option of the holder into Equity Interests).

 

“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.

 

“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.

 

12

 

“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, customs
authorities 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 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 Subsidiary or materially
impair the value of such Property subject thereto; (e) Liens arising
solely by virtue of any statutory or common law provision relating to banker’s
liens, rights of set-off or similar rights and remedies and burdening only
deposit accounts or other funds maintained with a creditor depository
institution, provided that no such deposit account is a dedicated cash
collateral account or is subject to restrictions against access by the
depositor in excess of those set forth by regulations promulgated by the Board
and no such deposit account is intended by the Borrower or any of its
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 Subsidiary for the purpose
of roads, pipelines, transmission lines, transportation lines, distribution
lines for the removal of gas, oil, coal or other minerals or timber, and other
like purposes, or for the joint or common use of real estate, rights of way, facilities
and equipment, that do not secure any monetary obligations 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 Subsidiary or materially
impair the value of such Property subject thereto; (g) Liens on cash or
securities pledged to secure performance of tenders, surety and appeal bonds,
government contracts, performance and return of money bonds, bids, trade
contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business and (h) judgment
and attachment Liens not giving rise to an Event of Default, provided that any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment shall not have been finally terminated 

 

13

 

or the period within which such
proceeding may be initiated shall not have expired and no action to enforce
such Lien has been commenced; and 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 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 (however denominated) by the United States of America (or any
political subdivision thereof) or such other jurisdiction under the laws of
which such recipient is organized or is resident 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 or by any jurisdiction
described in (a) above and (c) in the case of a Foreign Lender or
Foreign Issuing Bank (other than an assignee pursuant to a request by the
Borrower under Section 5.04(a)), any withholding tax that is imposed on
amounts payable to such Foreign Lender or Foreign Issuing Bank at the time such
Foreign Lender or Foreign Issuing Bank becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender’s or
Foreign Issuing Bank’s failure to comply with Section 5.03(e), except to
the extent that such Foreign Lender or Foreign Issuing Bank (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts with respect to such withholding tax
pursuant to Section 5.03(a) or Section 5.03(c).

 

“Existing
Credit Agreement” means that certain Amended and Restated Credit Agreement
dated as of June 13, 2005, among the Borrower, the lenders party thereto,
and JPMorgan, as administrative agent thereunder, as amended by that certain
First Amendment to Amended and Restated Credit Agreement effective December 15,
2005, as further amended by that certain Second Amendment to Amended and
Restated Credit Agreement effective December 31, 2007 and as may be
further amended, supplemented or modified.

 

“Existing
Letter of Credit” means the letters of credit issued under the Existing
Credit Agreement listed on Schedule 1.01.

 

“Existing
Senior Notes” means, collectively, the following senior unsecured notes
issued by the Borrower:  those certain
$350.0 million 7.125% Senior Notes due 2017; and $21.2 million floating rate
Convertible Notes due 2023.

 

“Fee
Letter” means that certain letter agreement dated February 27, 2009
between Borrower, Administrative Agent and Arranger related to the payment of
certain fees by the Borrower.

 

“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 

 

14

 

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.

 

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

 

“Foreign
Issuing Bank” means any
Issuing Bank that is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code.

 

“Foreign
Lender” means any Lender that is not a “United States person” within the
meaning of section 7701(a)(30) of the Code.

 

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

 

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

 

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

 

“Governmental
Requirement” means any law, statute, code, ordinance, order, determination,
rule, regulation, judgment, decree, injunction, franchise, permit, certificate,
license, rules of common law, authorization or other directive or
requirement, whether now or hereinafter in effect, of any Governmental
Authority.

 

“Guarantors”
means:

 

(a)           each Material Domestic Subsidiary,
and

 

(b)           each other Domestic Subsidiary that
guarantees any Senior Notes or is otherwise required to guarantee the
Indebtedness pursuant to Section 8.14(b)(ii).

 

“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.

 

“Hazardous
Material” means any substance regulated or as to which liability might
arise under any applicable Environmental Law including:  (a) any chemical, compound, material,
product, byproduct, substance or waste defined as or included in the definition
or meaning of “hazardous substance,” “hazardous material,” “hazardous waste,” “solid
waste,” “toxic waste,” 

 

15

 

“extremely hazardous substance,” “toxic
substance,” “contaminant,” “pollutant,” or words of similar meaning or import
found in any applicable Environmental Law; (b) Hydrocarbons, petroleum
products, petroleum substances, natural gas, oil, oil and gas waste, crude oil,
and any components, fractions, or derivatives thereof; and (c) radioactive
materials, explosives, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon, infectious or medical wastes.

 

“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.

 

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

 

“Indebtedness”
means any and all amounts owing or to be owing by the Borrower, any 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 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 (after giving
effect to all netting agreements relating to such Swap Agreements), (c) obligations
under all Treasury Management Agreements with Lenders or Affiliates of Lenders
while such Person (or in the case of its Affiliate, the Person affiliated
therewith) is a Lender hereunder and (d) all renewals, extensions and/or
rearrangements of any of the above.

 

“Indemnified
Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee”
has the meaning assigned to such term in Section 12.03(b).

 

“Indentures”
means, collectively, the indentures, supplemental indentures or other
agreements under or pursuant to which the Senior Notes are issued including,
without limitation, (i) that certain Indenture dated as of December 17,
2003 by Magnum Hunter Resources, Inc. (predecessor-in-interest to the
Borrower), as Issuer and the Subsidiary Guarantors party thereto, as
supplemented by that certain First Supplemental Indenture dated as of June 6,
2005, as further supplemented by that certain Second Supplemental Indenture
dated as of June 7, 2005 and as further supplemented by that certain Third
Supplemental Indenture dated as of June 13, 2005, 

 

16

 

and (ii) that certain Indenture
dated as of May 1, 2007 by Borrower, as Issuer and U.S. Bank National
Association, as Trustee.

 

“Information
Memorandum” means the Confidential Information Memorandum dated March 2009
relating to the Borrower and the Transactions.

 

“Initial
Reserve Report” means the report of DeGolyer and MacNaughton dated as of January 19,
2009, with respect to certain Oil and Gas Properties of the Borrower and its
Subsidiaries as of December 31, 2008.

 

“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
the aggregate gross interest expense of the Borrower and the Consolidated
Subsidiaries for such period, including to the extent included in interest
expense under GAAP:  (a) amortization
of debt discount, (b) capitalized interest and (c) the portion of any
payments or accruals under Capital Leases allocable to interest expense, plus
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).

 

17

 

“Investment”
means, for any Person: (a) the acquisition (whether for cash, Property,
services or securities or otherwise) of Equity Interests of any other Person or
any agreement to make any such acquisition (including, without limitation, any “short
sale” or any sale of any securities at a time when such securities are not
owned by the Person entering into such short sale); (b) the making of any
deposit with, or advance, loan or capital contribution to, assumption of Debt
of, purchase or other acquisition of any other Debt or equity participation or
interest in, or other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such Person, but
excluding any such advance, loan or extension of credit having a term not
exceeding ninety (90) days representing the purchase price of inventory or
supplies sold by such Person in the ordinary course of business); (c) the
purchase or acquisition (in one or a series of transactions) of Property of
another Person that constitutes a business unit or (d) the entering into
of any guarantee of, or other contingent obligation (including the deposit of
any Equity Interests to be sold) with respect to, Debt or other liability of
any other Person and (without duplication) any amount committed to be advanced,
lent or extended to such Person.

 

“IRS”
means the U.S. Internal Revenue Service.

 

“Issuing
Bank” means JPMorgan, in its capacity as the issuer of Letters of Credit
hereunder.  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.

 

“Krug
Litigation” means the lawsuit filed in the Tulsa County District Court in
the matter H.B. Krug et. al. vs. Helmerich & Payne, Inc.,
and the judgment rendered against the Borrower (having assumed the liabilities
of Helmericah & Payne, Inc.), in the approximate amount of
$120,000,000, together with interest and related litigation expenses.

 

“LC
Commitment” at any time means Eighty Million dollars ($80,000,000).

 

“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, and any Person that shall have become a party hereto as an
Additional Lender pursuant to Section 2.06(c).

 

“Letter
of Credit” means any Existing Letter of Credit or any letter of credit
issued pursuant to this Agreement.

 

18

 

“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 (rounded upwards, if necessary, to the next 1/100 of 1%)
appearing on Reuters Screen LIBOR01 Page (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, to the next 1/100 of 1%) at
which dollar deposits of an amount comparable to such Eurodollar Borrowing and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.

 

“Lien”
means any interest in Property securing an obligation owed to, or a claim by, a
Person other than the owner of the Property, whether such interest is based on
the common law, statute or contract, and whether such obligation or claim is
fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes or (b) production payments and the like
payable out of Oil and Gas Properties. 
The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations. For the
purposes of this Agreement, the Borrower and its 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, if any, the Fee Letter, the
Letter of Credit Agreements, the Letters of Credit and the Security
Instruments.

 

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

 

“Majority
Lenders” means, at any time while no Loans or LC Exposure are outstanding,
Lenders having more than fifty percent (50.0%) of the Aggregate Maximum Credit
Amounts; and at any time while any Loans or LC Exposure are outstanding,
Lenders holding more than fifty percent (50.0%) of the outstanding aggregate
principal amount of the Loans and participation interests in Letters of Credit
(without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c)).

 

19

 

“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 Subsidiaries taken as a whole, (b) the
ability of the Borrower or any Guarantor to perform any of its obligations
under any Loan Document to which it is a party, (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, but, to the extent not resulting in
an Event of Default under Section 10.01(k), shall exclude the entry of any
final, non-appealable order or judgment in the Krug Litigation and the payment
of such judgment.

 

“Material
Domestic Subsidiary” means, as of any date, any Domestic Subsidiary that (a) is
a Wholly-Owned Subsidiary and (b) together with its Subsidiaries, owns
Property which represents more than 3% of the consolidated assets of the Borrower
and its Subsidiaries or property which is responsible for more than 3% of the
consolidated net sales or of the consolidated net income of the Borrower and
its Subsidiaries, in each case, as would be shown in the consolidated financial
statements of the Borrower and its Subsidiaries as at the beginning of the
twelve-month period ending with the month in which such determination is made
(or if financial statements have not been delivered hereunder for that month
which begins the twelve-month period, then the financial statements delivered
hereunder for the quarter ending immediately prior to that month); provided
that in no event shall a Subsidiary that has incurred or is otherwise liable in
respect of Non-Recourse Debt be a Material Domestic Subsidiary.

 

“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 any Subsidiary in an aggregate principal amount exceeding
$25,000,000.  For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of the
Borrower or any Subsidiary in respect of any Swap Agreement at any time shall
be the Swap Termination Value.

 

“Maturity
Date” means April 14, 2012.

 

“Maximum
Credit Amount” means, as to each Lender, the amount set forth opposite such
Lender’s name on Annex I under the caption “Maximum Credit Amounts”, as the
same may be (a) reduced or terminated from time to time in connection with
a reduction or termination of the Aggregate Maximum Credit Amounts pursuant to Section 2.06(b),
(b) increased from time to time pursuant to Section 2.06(c) or (c) modified
from time to time pursuant to any assignment permitted by Section 12.04(b).

 

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

 

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

 

“Mortgaged
Property” means any Property owned by the Borrower or any Guarantor which
is subject to the Liens existing and to exist under the terms of the Security
Instruments.

 

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

 

20

 

“Non-Defaulting
Lender” means, at any time, each Lender that is not a Defaulting Lender at
such time.

 

“Non-Recourse
Debt” means any Debt of any Subsidiary which is not a Guarantor, 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 Subsidiary
to be performed, satisfied, and paid only out of, the Property of such
Subsidiary and/or one or more of its subsidiaries and/or any other Person
(other than Borrower and/or any other Subsidiary) and (ii) shall have no
direct or indirect recourse (including by way of guaranty, support or
indemnity) to the Borrower or any Subsidiary or to any of the Property of
Borrower or any 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.

 

“Oil
and Gas Properties” means (a) Hydrocarbon Interests; (b) the
Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all
presently existing or future unitization, pooling agreements and declarations
of pooled units and the units created thereby (including without limitation all
units created under orders, regulations and rules of any Governmental
Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all
operating agreements, contracts and other agreements, including production
sharing contracts and agreements, which relate to any of the Hydrocarbon
Interests or the production, sale, purchase, 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.

 

“Organizational
Documents” means, with respect to any Person, (a) in the case of any
corporation, the certificate of incorporation and by-laws (or similar
documents) of such Person, (b) in the case of any limited liability
company, the certificate of formation and limited liability company agreement
(or similar documents) of such Person, (c) in the case of any limited 

 

21

 

partnership, the certificate of
formation and limited partnership agreement (or similar documents) of such
Person, (d) in the case of any general partnership, the partnership
agreement (or similar document) of such Person and (e) in any other case,
the functional equivalent of the foregoing.

 

“Other
Taxes” means any and all present or future stamp or documentary taxes or
any other excise or Property taxes, charges or similar levies imposed by any
Governmental Authority 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).

 

“Permitted
Additional Senior Notes” means any unsecured senior or senior subordinated
notes issued after the date hereof by the Borrower under Section 9.02(g).

 

“Permitted
Refinancing Debt” means Debt (for purposes of this definition, “new Debt”)
incurred in exchange for, or proceeds of which are used to refinance, all of
any other Debt (the “Refinanced Debt”); provided that (a) such new
Debt is in an aggregate principal amount not in excess of the sum of (i) the
aggregate principal amount then outstanding of the Refinanced Debt (or, if the
Refinanced Debt is exchanged or acquired for an amount less than the principal
amount thereof to be due and payable upon a declaration of acceleration
thereof, such lesser amount) and (ii) an amount necessary to pay any fees
and expenses, including premiums, related to such exchange or refinancing; (b) such
new Debt has a stated maturity no earlier than the stated maturity of the
Refinanced Debt and an average life no shorter than the average life of the
Refinanced Debt; (c) such new Debt has a market rate of interest; (d) such
new Debt is governed by an indenture, loan agreement, credit agreement or
similar document, and related documentation containing customary terms and
conditions for Debt of its type or like tenor and amount, reasonably
satisfactory to the Administrative Agent and (e) if the Refinanced Debt is
subordinated in right of payment to the Indebtedness, such new Debt (and
any guarantees thereof) is subordinated in right of payment to the Indebtedness
(or, if applicable, the Guaranty Agreement) to at least the same extent as the
Refinanced Debt and is otherwise subordinated on terms substantially the same
as those in the Refinanced Debt or otherwise reasonably satisfactory to the
Administrative Agent.

 

“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 

 

22

 

reference rate of interest, taking into
account such factors as the Administrative Agent may deem appropriate; it being
understood that many of the Administrative Agent’s commercial or other loans
are priced in relation to such rate, that it is not necessarily the lowest or
best rate actually charged to any customer and that the Administrative Agent
may make various commercial or other loans at rates of interest having no
relationship to such rate.

 

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

 

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

 

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

 

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

 

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

 

“Refinanced
Debt” has the meaning assigned such term in the definition of “Permitted
Refinancing Debt”.

 

“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.

 

“Release”
means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping,
leaching, dumping, or disposing.

 

“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 are 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 are 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 such Letters of Credit (without regard to any sale
by a Lender of a participation in any Loan under Section 12.04(c)).

 

23

 

“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
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 economic assumptions consistent with
the Administrative Agent’s lending requirements at the time.

 

“Reserve
Report Certificate” means a certificate of a Responsible Officer in
substantially the form of Exhibit I attached hereto certifying as the
matters set forth in Section 8.12(c).

 

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

 

“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in the
Borrower or any of its Subsidiaries, or any payment (whether in cash,
securities or other Property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancellation
or termination of any such Equity Interests in the Borrower or any of its
Subsidiaries.

 

“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.

 

“Riley
Ridge Gas Plant and Related Assets” means that certain natural gas and
helium processing plant (as of the Effective Date, to be constructed) on a
33.83 acre parcel in Section 16, T29N, R114W, 6th PM, Sublette County,
Wyoming pursuant to the terms of that certain Special Use Lease dated effective
September 1, 2008 from the Wyoming Board of Land Commissioners, as Lessor,
to Cimarex Energy Co., as Lessee, and the related equipment, fixtures,
processing, through-put and transportation contracts related to the operation
of such plant.

 

“Riley
Ridge SPV” means the Person of which the Borrower directly or indirectly
owns not less than 50% of the issued and outstanding Equity Interests formed
solely for the purpose of owning the Riley Ridge Gas Plant and Related Assets
or such Person’s interests therein and operating such Property.

 

“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.

 

24

 

“Security
Instruments” means the Guaranty 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
Treasury Management Agreements) in connection with, or as security for the
payment or performance of the Indebtedness, the Notes, this Agreement, or
reimbursement obligations under the Letters of Credit, as such agreements may
be amended, modified, supplemented or restated from time to time.

 

“Senior
Notes” means the Existing Senior Notes, any Permitted Additional Senior
Notes and any Permitted Refinancing Debt in respect thereof and any guarantees
thereof by a Guarantor.

 

“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, with respect to any Person (the “parent”) at any date, any other
Person whose Equity Interests representing more than 50% of the equity or more
than 50% of the ordinary voting power (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) or,
in the case of a partnership, any general partnership interests are, as of such
date, owned, controlled or held by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.

 

“Subsidiary”
means any subsidiary of the Borrower.

 

“Swap
Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement, whether exchange traded,
“over-the-counter” or otherwise, involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions.

 

25

 

“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
Subsidiaries on a consolidated basis, excluding (i) non-cash obligations
under FAS 133 and (ii) accounts payable and other obligations or
liabilities (for the deferred purchase price of Property or services) from time
to time incurred in the ordinary course of business which are not greater than
ninety (90) days past the date of invoice or delinquent or which are being contested
in good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP.

 

“Transactions”
means, with respect to (a) the Borrower, the execution, delivery and
performance by the Borrower of this Agreement and each other Loan Document to
which it is a party, the borrowing of Loans, the use of the proceeds thereof
and the Existing Letters of Credit and the issuance of Letters of Credit
hereunder, and the grant of Liens by the Borrower on Mortgaged Properties and
other Properties pursuant to the Security Instruments and (b) each
Guarantor, the execution, delivery and performance by such Guarantor of each
Loan Document to which it is a party, 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.

 

“Treasury
Management Agreements” means any agreements regarding bank services
provided to any Credit Party for commercial credit cards, stored value cards
and treasury management services, including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, overdrafts
and interstate depository network services.

 

26

 

“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.

 

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

 

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

 

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

 

27

 

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 $500,000 and not less than $3,000,000.  At the time that each ABR Borrowing is made,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000; provided that an ABR Borrowing may be in
a lesser 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 eight Eurodollar Borrowings outstanding.  Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to elect to
convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.

 

(d)                                 Notes.  If requested
by a Lender, the Loans made by 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, (ii) any Lender that becomes
a party hereto pursuant to an Assignment and Assumption, as of the effective
date of the Assignment and Assumption, or (iii) any Lender that becomes a
party hereto in connection with an increase in the Aggregate Maximum Credit
Amounts pursuant to Section 2.06(c), as of the effective date of such
increase, payable to the order of such Lender in a principal amount equal to
its Maximum Credit Amount as in effect on such date, and otherwise duly completed.  In the event that any Lender’s Maximum Credit

 

28

 

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 or e-mail, with respect to the initial
Borrowing on the date of closing, and  by
telephone or e-mail, with respect to each subsequent Borrowing, (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 11:00 a.m., New York City
time, on the date of the proposed Borrowing; provided that no such notice shall
be required for any deemed request of an ABR Borrowing to finance the
reimbursement of an LC Disbursement as provided in Section 2.08(e).  Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in substantially the
form of Exhibit B and signed by the Borrower.  Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:

 

(i)                                     the aggregate amount of the requested
Borrowing;

 

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

 

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

 

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

 

(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

 

29

 

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 by the time
that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election.  Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent of a written Interest Election Request
in substantially the form of Exhibit C and signed by the Borrower.

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

(e)           Effect
of Failure to Deliver Timely Interest Election Request and Events of Default
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 2:00 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  or such other account designated by Borrower 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.

 

(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 together
with the accrued interest thereon without duplication, 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 

 

31

 

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, Reduction and Increase 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
$10,000,000 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(b), 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.  Any termination or reduction of the Aggregate
Maximum Credit Amounts shall be permanent and may not be reinstated except
pursuant to Section 2.06(c).  Each
reduction of the Aggregate Maximum Credit Amounts shall be made ratably among
the Lenders in accordance with each Lender’s Applicable Percentage.

 

(c)                                  Optional Increase in Aggregate Maximum
Credit Amounts.

 

(i)                                     Subject to the conditions set forth in Section 2.06(c)(ii),
the Borrower may increase the Aggregate Maximum Credit Amounts then in effect
without the prior consent of the Lenders but with the prior written consent of
the Administrative Agent by increasing the Maximum Credit Amount of a Lender or
by causing a Person that at such time is not a Lender to become a Lender (an “Additional
Lender”).

 

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

 

(A)          such
increase shall not be less than $50,000,000 unless the Administrative Agent
otherwise consents, and no such increase shall be permitted if after giving
effect thereto the Aggregate Maximum Credit Amounts would exceed
$1,000,000,000;

 

32

 

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

 

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

 

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

 

(E)           if
the Borrower elects to increase the Aggregate Maximum Credit Amounts by
increasing the Maximum Credit Amount of a Lender, the Borrower and such Lender
shall execute and deliver to the Administrative Agent a certificate
substantially in the form of Exhibit H-1 (a “Maximum Credit Amount
Increase Certificate”), together with a processing and recordation fee of
$3,500, and, if requested, the Borrower shall deliver 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, and otherwise duly completed; and

 

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

 

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

 

(iv)                              Upon its receipt of a duly completed
Maximum Credit Amount Increase Certificate or an Additional Lender Certificate,
executed by the Borrower and the Lender or the Borrower and the Additional
Lender party thereto, as applicable, the processing and recording fee referred
to in Section 2.06(c)(ii), the Administrative Questionnaire referred to 

 

33

 

in Section 2.06(c)(ii), if applicable, and the written consent of
the Administrative Agent to such increase required by Section 2.06(c)(i),
the Administrative Agent shall accept such Maximum Credit Amount Increase
Certificate or Additional Lender Certificate and record the information
contained therein in the Register required to be maintained by the
Administrative Agent pursuant to Section 12.04(b)(iv).  No increase in the Aggregate Maximum Credit
Amounts shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this Section 2.06(c)(iv).

 

Section 2.07                                Borrowing Base.

 

(a)                                  Initial Borrowing Base. 
For the period from and including the Effective Date to but excluding
the first Redetermination Date, the amount of the Borrowing Base shall be
$1,000,000,000.  Notwithstanding the
foregoing, the Borrowing Base may be subject to further adjustments from time
to time pursuant to Section 2.07(e), Section 2.07(f), Section 8.13(c) or
Section 9.12.

 

(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 Administrative Agent, the Issuing
Bank and the Lenders on April 1st and October 1st of each year,
commencing October 1, 2009.  In
addition, the Borrower may, by notifying the Administrative Agent thereof, and the
Administrative Agent may, at the direction of the Required 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 Reserve Report
Certificate, 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 in its sole discretion and consistent with its normal
oil and gas lending criteria as it exists at the particular time.

 

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

 

34

 

(A)          in
the case of a Scheduled Redetermination (1) if the Administrative Agent
shall have received the Engineering Reports required to be delivered by the
Borrower pursuant to Section 8.12(a) and (c) in a timely and
complete manner, then on or before the March 15th and September 15th
of such year following the date of delivery or (2) if the Administrative
Agent shall not have received the Engineering Reports required to be delivered
by the Borrower pursuant to Section 8.12(a) and (c) in a timely
and complete manner, then promptly after the Administrative Agent has received
complete Engineering Reports from the Borrower and 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 in their sole discretion 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 in their sole discretion
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 the Lenders to ascertain
the highest Borrowing Base then acceptable to all of the Lenders or a number of
Lenders sufficient to constitute the Required Lenders, as applicable, and, so
long as such amount does not increase the Borrowing Base then in effect, such
amount shall become the new Borrowing Base, effective on the date specified in Section 2.07(d).

 

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

 

35

 

the Borrower pursuant to Section 8.12(a) and (c) in a
timely and complete manner, then on the April 1st or October 1st, as
applicable, following such notice, or (B) if the Administrative Agent
shall not have received the Engineering Reports required to 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 New
Borrowing Base 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 2.07(e),
Section 2.07(f), Section 8.13(c) or Section 9.12, whichever
occurs first.  Notwithstanding the
foregoing, no Scheduled Redetermination or Interim Redetermination shall become
effective until the New Borrowing Base Notice related thereto is received by
the Borrower.

 

(e)                                  Reduction of Borrowing Base Upon Issuance
of Permitted Additional Senior Notes.  Upon the
issuance of any Permitted Additional Senior Notes in accordance with Section 9.02(g) (other
than Permitted Additional Senior Notes constituting Permitted Refinancing Debt
up to the original principal amount of the refinanced Existing Senior Notes),
the Borrowing Base then in effect shall be reduced by an amount equal to the
product of 0.30 multiplied by the stated principal amount of such Permitted
Additional Senior Notes (without regard to any initial issue discount), and the
Borrowing Base as so reduced shall become the new Borrowing Base immediately
upon the date of such issuance, effective and applicable to the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders on such date until the
next redetermination or modification thereof hereunder.

 

(f)                                    Reduction of Borrowing Base Upon
Termination of Hedge Positions. If the Borrower or any Subsidiary shall terminate or
create any off-setting positions in respect of any hedge positions (whether
evidenced by a floor, put or Swap Agreement) upon which the Lenders relied in
determining the Borrowing Base, then the Borrowing Base shall be
contemporaneously reduced in an amount determined by the Required Lenders equal
to the economic value of such hedge positions.

 

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 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.

 

36

 

(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 five (5) 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;

 

(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.

 

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

 

(d)                                 Participations. 
On the date of closing with respect to Existing Letters of Credit and 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 

 

37

 

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 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 not less than $1,000,000, the
Borrower shall, subject to the conditions to Borrowing set forth herein, be
deemed to have requested, and the Borrower does hereby request under such
circumstances, that such payment be financed with an ABR Borrowing in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR
Borrowing.  If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice,
each Lender shall pay to the Administrative Agent its Applicable Percentage of
the payment then due from the Borrower, in the same manner as provided in Section 2.05
with respect to Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank 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 

 

38

 

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 of 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 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 substantial 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

 

39

 

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)                                     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(i),
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 Subsidiary described in Section 10.01(h), Section 10.01(i) or
Section 10.01(j).  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(i) 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, over such
account.  Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Administrative Agent to
reimburse 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 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) 

 

40

 

shall be returned to the Borrower within three Business Days after all
Events of Default have been cured or waived.

 

(j)                                     Existing Letters of Credit.          The
parties hereto acknowledge that on and after the date of closing the Existing
Letters of Credit shall be Letters of Credit issued by the Issuing Bank
indicated as such on Schedule 1.01 for the account of the Borrower pursuant to
this Agreement.

 

(k)                                  Outstanding Letters of Credit. If requested by any Lender, the
Administrative Agent shall provide the requesting Lender with a list of all
outstanding Letters of Credit.

 

ARTICLE III

Payments of Principal and Interest; Prepayments; Fees

 

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

 

Section 3.02                                Interest.

 

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

 

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

 

(c)                                  Post-Default Rate. 
Notwithstanding the foregoing, (i) if a Default or an Event of
Default has occurred and is continuing, the Required Lenders may, at their
option, by notice to the Borrower declare that no Borrowing may be made as, converted
into or continued as a Eurodollar Borrowing, (ii) during the continuance
of an Event of Default the Required Lenders may, at their option, by notice to
the Borrower, declare that (A) each Eurodollar Borrowing shall bear
interest for the remainder of the applicable Interest Period plus 2% per annum,
(B) each ABR Borrowing shall bear interest at a rate per annum equal to
the Alternate Base Rate in effect from time to time plus 2% per annum and (C) the
fees described in Section 3.05(b) shall be increased by 2% per annum,
provided that, during the continuance of an Event of Default under Section 10.01(h) or
Section 10.01(i), the interest rates forth in clauses (A) and (B) above
and the increase in the Letter of Credit fee set forth in clause (C) above
shall be applicable to all Borrowings without any election or action on the
part of the Administrative Agent or any Lender.

 

(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 

 

41

 

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.

 

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 either as an ABR Borrowing or at an alternate rate of
interest determined by the Majority Lenders as their cost of funds.

 

Section 3.04                                Prepayments.

 

(a)                                  Optional Prepayments. Subject to any break funding costs
payable pursuant to Section 5.02 and prior notice in accordance with Section 3.04(b),
the Borrower shall have the right at any time and from time to time to (i) prepay
any ABR Borrowing in whole in or in part, in a minimum aggregate amount of
$1,000,000 or any integral multiple of $500,000 in excess thereof or if less
than $1,000,000, the remaining balance of the ABR Loans, and (ii) prepay
any Eurodollar Borrowing in whole in or in part, in a minimum aggregate amount
of $3,000,000 or any integral multiple of $500,000 in excess thereof or if less
than $3,000,000, the remaining balance of such Eurodollar Borrowing.

 

(b)                                 Notice and Terms of Optional Prepayment. 
The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in 

 

42

 

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

 

(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(i).

 

(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(i).  The Borrower shall be obligated to make such
prepayments in six equal monthly installments, the first of which shall be due
on the thirtieth day following receipt of the New Borrowing Base Notice in
accordance with Section 2.07(d); 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 2.07(f), if the total Revolving Credit Exposures exceed the
Borrowing Base as adjusted, then the Borrower shall (A) prepay the
Borrowings in an aggregate principal amount equal to such excess, and (B) if
any excess remains after prepaying all of the Borrowings as a result of an LC
Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
equal to such excess to be held as cash collateral as provided in Section 2.08(j).  The Borrower shall be obligated to make such
prepayment and/or deposit of cash collateral on the date it or any Subsidiary
receives cash proceeds as a result of such termination, creation of offsetting
positions or disposition, as applicable; 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)                              Upon any adjustment to the Borrowing Base
pursuant to Section 2.07(e) or Section 9.12, if the total
Revolving Credit Exposures exceeds the Borrowing Base as 

 

43

 

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(i).  The Borrower shall be obligated to make such
prepayment and/or deposit of cash collateral either on the date it or any
Subsidiary receives cash proceeds as a result of such disposition or on the
date the Permitted Additional Senior Notes are issued, as applicable; 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.

 

(v)                                 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.

 

(vi)                              Each prepayment of Borrowings pursuant to
this Section 3.04(b) shall be applied ratably to the Loans included
in the prepaid Borrowings.  Prepayments
pursuant to this Section 3.04(b) 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.

 

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 rate per annum of
0.50% on the average daily amount of the unused amount of each Lender’s
Applicable Percentage of the Borrowing Base 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 

 

44

 

Lender ceases to have any LC Exposure, (ii) to the Issuing Bank a
fronting fee, which shall accrue at the rate of 0.125% 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 $125 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 written demand.  Any other fees payable to the Issuing Bank
pursuant to this Section 3.05(a) 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.

 

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.

 

45

 

(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 returned to the extent of such recovery, without interest,
and (ii) the provisions of this Section 4.01(c) shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this Section 4.01(c) shall
apply).  The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

Section 4.02                                Presumption of Payment by the Borrower. 
Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or 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.

 

46

 

Section 4.03                                Payments and Deductions to a Defaulting Lender.

 

(a)                                  If any Lender shall fail to make any
payment required to be made by it pursuant to Section 2.05(a), 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 in cash.

 

(b)                                 If a Defaulting Lender (or a Lender who
would be a Defaulting Lender but for the expiration of the relevant grace
period) as a result of the exercise of a set-off shall have received a payment
in respect of its Revolving Credit Exposure which results in its Revolving
Credit Exposure being less than its Applicable Percentage of the aggregate
Revolving Credit Exposures, then no payments will be made to such Defaulting
Lender until such time as such Defaulting Lender shall have complied with Section 4.03(c) and
all amounts due and owing to the Lenders has been equalized in accordance with
each Lender’s respective pro rata share of the Indebtedness.  Further, if at any time prior to the
acceleration or maturity of the Loans, the Administrative Agent shall receive
any payment in respect of principal of a Loan or a reimbursement of an LC
Disbursement while one or more Defaulting Lenders shall be party to this
Agreement, the Administrative Agent shall apply such payment first to the
Borrowing(s) for which such Defaulting Lender(s) shall have failed to
fund its pro rata share until such time as such Borrowing(s) are paid in
full or each Lender (including each Defaulting Lender) is owed its Applicable
Percentage of all Loans then outstanding. 
After acceleration or maturity of the Loans, subject to the first
sentence of this Section 4.03(b), all principal will be paid ratably as
provided in Section 10.02(c).

 

(c)                                  Notwithstanding
any provision of this Agreement to the contrary, if any Lender becomes a
Defaulting Lender, then the following provisions shall apply for so long as
such Lender is a Defaulting Lender:

 

(i)                                     Fees shall cease to accrue on the
unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 3.05.

 

(ii)                                  The Commitment of such Defaulting Lender
shall not be included in determining whether all Lenders, the Required Lenders
or the Majority Lenders have taken or may take any action hereunder (including
any consent to any amendment or waiver pursuant to Section 12.02),
provided that any waiver, amendment or modification requiring the consent of
all Lenders or each affected Lender shall require the consent of such
Defaulting Lender; and provided further that any redetermination or affirmation
of the Borrowing Base shall occur without the participation of a Defaulting
Lender, but the Commitment (i.e. the Applicable Percentage of the Borrowing
Base of a Defaulting Lender) may not be increased without the consent of such
Defaulting Lender.

 

(iii)                               If any LC Exposure exists at the time a Lender becomes
a Defaulting Lender then:

 

(A)                              all or any part of such LC Exposure shall
be reallocated among the Non-Defaulting Lenders in accordance with their
respective Applicable Percentages (for the purposes of such reallocation the
Defaulting Lender’s Commitment shall be disregarded 

 

47

 

in determining the Non-Defaulting Lender’s Applicable Percentage) but
only to the extent (x) the sum of all Non-Defaulting Lenders’ Revolving Credit
Exposures plus such Defaulting Lender’s LC Exposure does not exceed the total
of all Non-Defaulting Lenders’ Commitments, (y) the conditions set forth
in Section 6.02 are satisfied at such time and (z) the sum of each
Non-Defaulting Lender’s Revolving Credit Exposure plus its reallocated share of
such Defaulting Lender’s LC Exposure does not exceed such Non-Defaulting Lender’s
Commitment;

 

(B)                                if the reallocation described in clause (A) above
cannot, or can only partially, be effected, then the Borrower shall within one
Business Day following notice by the Administrative Agent cash collateralize
such Defaulting Lender’s LC Exposure (after giving effect to any partial
reallocation pursuant to clause (A) above) in accordance with the
procedures set forth in Section 10.02 for so long as such LC Exposure is
outstanding;

 

(C)                                if the Borrower cash collateralizes any
portion of such Defaulting Lender’s LC Exposure pursuant to this Section 4.03
then the Borrower shall not be required to pay any fees to such Defaulting
Lender pursuant to Section 3.05(b) with respect to such Defaulting
Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is
cash collateralized;

 

(D)                               if the LC Exposure of the Non-Defaulting
Lenders is reallocated pursuant to Section 4.03(c), then the fees payable
to the Lenders pursuant to Section 3.05(a) and Section 3.05(b) shall
be adjusted in accordance with such Non-Defaulting Lenders’ Applicable
Percentages; or

 

(E)                                 if any Defaulting Lender’s LC Exposure is
neither cash collateralized nor reallocated pursuant to Section 4.03(c)(iii),
then, without prejudice to any rights or remedies of the Issuing Bank or any
Lender hereunder, all commitment fees that otherwise would have been payable to
such Defaulting Lender (solely with respect to the portion of such Defaulting
Lender’s Commitment that was utilized by such LC Exposure) and letter of credit
fees payable under Section 3.05(b) with respect to such Defaulting
Lender’s LC Exposure shall be payable to the Issuing Bank until such LC
Exposure is cash collateralized and/or reallocated.

 

(d)                                 So long as any Lender is a Defaulting
Lender, the Issuing Bank shall not be required to issue, amend or increase any
Letter of Credit, unless it is satisfied that the related exposure will be 100%
covered by the Commitments of the Non-Defaulting Lenders and/or cash collateral
will be provided by the Borrower in accordance with Section 4.03(c), and
participating interests in any such newly issued or increased Letter of Credit
shall be allocated among Non-Defaulting Lenders in a manner consistent with Section 2.08(d) (and
Defaulting Lenders shall not participate therein).

 

(e)                                  In the event that the Administrative
Agent, the Borrower and the Issuing Bank each agrees that a Defaulting Lender
has adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the
inclusion of such Lender’s Commitment and on such date, if necessary as a
result of a Loan funding pursuant to Section 2.08(e), such Lender shall
purchase at par such of the Loans of 

 

48

 

the other Lenders  as the
Administrative shall determine may be necessary in order for such Lender to
hold such Loans in accordance with its Applicable Percentage.

 

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 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
Guarantors.

 

ARTICLE V

Increased Costs; Break Funding Payments; Taxes; Illegality

 

Section 5.01                                Increased Costs.

 

(a)                                  Eurodollar Changes in Law. 
If any Change in Law (other than a Change in Law with respect to
Indemnified Taxes or Other Taxes, which shall be governed exclusively by Section 5.03,
or Excluded Taxes) 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

 

49

 

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 365 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 365-day period referred to above shall
be extended to include the period of retroactive effect thereof.

 

Section 5.02           Break Funding Payments. 
In the event of (a) the payment of any principal of any Eurodollar
Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any
Eurodollar Loan into an ABR Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow, convert, continue
or prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto, 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.

 

50

 

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 or withholding for any Indemnified Taxes or Other Taxes;
provided that if the Borrower or any Guarantor shall be required by applicable
law to deduct or withhold 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 or withholdings (including deductions or
withholdings applicable to additional sums payable under this Section 5.03(a)),
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions or
withholdings been made, (ii) the Borrower or such Guarantor shall make
such deductions or withholdings 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
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(c) 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)           Status of Lenders and Issuing Bank. 
Any Foreign Lender or Foreign Issuing Bank 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 is resident for tax purposes,
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. In addition, any
Lender, if requested by the Borrower or the Administrative Agent, shall deliver
such other documentation prescribed by applicable law or reasonably requested
by the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine 

 

51

 

whether or not such Lender is subject to backup
withholding or information reporting requirements.

 

Without limiting the generality of the foregoing, each
Foreign Lender and Foreign Issuing Bank shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Foreign Lender or
Foreign Issuing Bank becomes a Lender or Issuing Bank under this Agreement (and
from time to time thereafter upon the reasonable request of the Borrower or the
Administrative Agent, but only if such Foreign Lender or Foreign Issuing Bank
is legally entitled to do so), whichever of the following is applicable:

 

(i)            two (2) properly completed and
executed IRS Forms W-8BEN claiming eligibility for benefits of an income tax
treaty to which the United States of America is a party,

 

(ii)           two (2) properly completed and
executed IRS Forms W-8ECI,

 

(iii)          in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) two (2) properly completed and
executed IRS Forms W-8BEN,

 

(iv)          two (2) properly completed and
executed Forms W-8IMY (together with forms listed under clauses (i) through
(iii) or (v) hereof, as may be required), or

 

(v)           any other form prescribed by applicable
law as a basis for claiming exemption from or a reduction in U.S. federal
withholding tax properly completed and executed together with any supplementary
documentation as may be prescribed by applicable law to permit the Borrower and
the Administrative Agent to determine the withholding or deduction required to
be made.

 

(f)                                    Tax Refunds.  If the Administrative Agent or a Lender or
Issuing Bank determines, in its sole discretion, that it has received a refund
of any Indemnified Taxes or Other Taxes as to which it has been indemnified by
the Borrower or any Guarantor or with respect to which the Borrower or any
Guarantor has paid additional amounts pursuant to this Section 5.03, it
shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower or such Guarantor
under this Section 5.03 with respect to the Indemnified Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender or Issuing Bank and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender or Issuing Bank, agrees to repay the amount
paid over to the Borrower or any Guarantor (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender or Issuing Bank in the event the
Administrative Agent 

 

52

 

or such Lender or Issuing Bank
is required to repay such refund to such Governmental Authority.  This Section 5.03  shall
not be construed to require the Administrative Agent or any Lender or Issuing
Bank to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrower or any other Person.

 

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 any Credit Party is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender or indemnify 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 reasonable 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 any Credit Party is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender or indemnify any Lender pursuant to Section 5.03,
or if any Lender becomes a Defaulting Lender, 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 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 

 

53

 

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, 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 communications in connection with this Agreement and
the transactions contemplated hereby, (iii) specimen signatures of such
authorized officers, and (iv) the 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.

 

54

 

(f)            The Administrative Agent shall have
received from each party thereto duly executed counterparts (in such number as
may be requested by the Administrative Agent) of the Security Instruments,
including the Guaranty Agreement and the other Security Instruments described
on Exhibit F-1 and shall provide each Lender with fully executed copies
thereof.  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 proviso at the end of such definition) on at least
75% of the total value of the Oil and Gas Properties evaluated in the Initial
Reserve Report; and

 

(ii)           have received certificates, together with
undated, blank stock powers for each such certificate, representing all of the
issued and outstanding Equity Interests of each of the Guarantors.

 

(g)           The Administrative Agent shall have
received an opinion of (i) Holme Roberts & Owen LLP, special
counsel to the Borrower, substantially in the form of Exhibit E-1 hereto,
and (ii) local counsel in each of the following states: Colorado, Kansas,
Louisiana, Mississippi, New Mexico, Oklahoma and Wyoming and any other
jurisdictions requested by the Administrative Agent, substantially in the form
of Exhibit E-2 hereto.

 

(h)           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 7.12.

 

(i)            The Administrative Agent shall have
received title information as the Administrative Agent may reasonably require
satisfactory to the Administrative Agent setting forth the status of title to
at least 75% of the total value of the Oil and Gas Properties evaluated in the Initial
Reserve Report.

 

(j)            The Administrative Agent shall be
reasonably satisfied with the environmental condition of the Oil and Gas
Properties of the Borrower and its Subsidiaries.

 

(k)           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.

 

(l)            The Administrative Agent shall have
received the financial statements referred to in Section 7.04(a) and
the Initial Reserve Report accompanied by a Reserve Report Certificate.

 

(m)          The Administrative Agent shall have
received appropriate UCC search certificates reflecting no prior Liens
encumbering the Properties of the Borrower and the Subsidiaries for each of the
following jurisdictions: Delaware, Texas 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.

 

55

 

(n)           The Existing Credit Agreement shall have
been repaid and terminated and all Liens related thereto shall be fully
released.

 

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

 

The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the
obligations of the Lenders to make Loans and of 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 April 30, 2009 (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 (including any Loan made or Letter
of Credit issued (including for the purpose of the Existing Letters of Credit)
on the initial date of Borrowing), is subject to the satisfaction of the
following conditions:

 

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

 

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

 

(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, would
not conflict with, or cause any Lender or the Issuing Bank to violate or
exceed, any applicable Governmental Requirement, and no Change in Law shall have
occurred, and no litigation shall be pending or threatened, which does or, with
respect to any threatened litigation, seeks to, enjoin, prohibit or restrain,
the making or repayment of any Loan, the issuance, amendment, renewal,
extension or repayment of any Letter of Credit or any participations therein or
the consummation of the transactions contemplated by this Agreement or any
other Loan Document.

 

56

 

(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 (e).

 

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 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 powers and have been duly authorized by all necessary corporate and,
if required, stockholder 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 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) the recording and
filing of the Security Instruments as required by this Agreement and (ii) those
third party approvals or consents which, if not made or obtained, would not
cause a Default hereunder, could not reasonably be expected to have a Material
Adverse Effect 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
Subsidiary or any order of any Governmental Authority, (c) will not
violate or result in a default under any 

 

57

 

indenture, agreement or other instrument binding upon
the Borrower or any Subsidiary or its Properties, or give rise to a right thereunder
to require any payment to be made by the Borrower or such Subsidiary and (d) will
not result in the creation or imposition of any Lien on any Property of the
Borrower or any 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 its consolidated balance sheet and statements of operations,
stockholders’ equity and comprehensive income (loss), and cash flows as of and
for the fiscal year ended December 31, 2008, reported on by KPMG LLP,
independent public accountants.  Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
Consolidated Subsidiaries as of such date and for such period in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes
in the case of the unaudited quarterly financial statements.

 

(b)           Since December 31, 2008, (i) there
has been no event, development or circumstance that has had or could reasonably
be expected to have a Material Adverse Effect and (ii) the business of the
Borrower and its Subsidiaries has been conducted only in the ordinary course
consistent with past business practices.

 

(c)           Neither the Borrower nor any 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 or
any Subsidiary (i) not fully covered by insurance (except for normal
deductibles) as to which there is a reasonable possibility of an adverse
determination that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, or (ii) that
involve any Loan Document or the Transactions.

 

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

 

Section 7.06           Environmental Matters. 
Except for such matters as set forth on Schedule 7.06 or that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:

 

58

 

(a)           the Borrower and the Subsidiaries and
each of their respective Properties and operations thereon are, and within all
applicable statute of limitation periods have been, in compliance with all
applicable Environmental Laws.

 

(b)           the Borrower and the Subsidiaries have
obtained all Environmental Permits required for their respective operations and
each of their Properties, with all such Environmental Permits being currently
in full force and effect, and none of Borrower or the Subsidiaries has received
any written notice or otherwise has knowledge that any such existing
Environmental Permit will be revoked or that any application for any new
Environmental Permit or renewal of any existing Environmental Permit will be protested
or denied.

 

(c)           there are no claims, demands, suits,
orders, inquiries, or proceedings concerning any violation of, or any liability
(including as a potentially responsible party) under, any applicable
Environmental Laws that is pending or, to Borrower’s knowledge, threatened
against the Borrower or any Subsidiary or any of their respective Properties or
as a result of any operations at such Properties.

 

(d)           none of the Properties of the Borrower or
any Subsidiary contain or have contained any: 
(i) underground storage tanks; (ii) asbestos-containing
materials; (iii) landfills or dumps; (iv) hazardous waste management
units as defined pursuant to RCRA or any comparable state law; or (v) sites
on or nominated for the National Priority List promulgated pursuant to CERCLA
or any state remedial priority list promulgated or published pursuant to any
comparable state law.

 

(e)           there has been no Release or, to the
Borrower’s knowledge, threatened Release, of Hazardous Materials at, on, under
or from the Borrower’s or any Subsidiary’s Properties, there are no
investigations, remediations, abatements, removals, or monitorings of Hazardous
Materials required under applicable Environmental Laws at such Properties and,
to the knowledge of the Borrower, none of such Properties are adversely
affected by any Release or threatened Release of a Hazardous Material
originating or emanating from any other real property.

 

(f)            neither the Borrower nor any Subsidiary
has received any written notice asserting an alleged liability or obligation
under any applicable Environmental Laws with respect to the investigation,
remediation, abatement, removal, or monitoring of any Hazardous Materials at,
under, or Released or threatened to be Released from any real properties
offsite the Borrower’s or any Subsidiary’s Properties and, to the Borrower’s
knowledge, there are no conditions or circumstances that could reasonably be
expected to result in the receipt of such written notice.

 

(g)           there has been no exposure of any Person
or Property to any Hazardous Materials as a result of or in connection with the
operations and businesses of any of the Borrower’s or the Subsidiaries’
Properties that could reasonably be expected to form the basis for a claim for
damages or compensation.

 

(h)           The Borrower and the Subsidiaries have
provided to the Lenders complete and correct copies of all environmental site
assessment reports, investigations, studies, analyses,

 

59

 

and correspondence on environmental matters (including matters relating
to any alleged non-compliance with or liability under Environmental Laws) that
are in any of the Borrower’s or the Subsidiaries’ possession or control and
relating to their respective Properties or operations thereon.

 

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

 

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

 

(b)           Neither
the Borrower nor any 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 Subsidiary to Redeem or make any offer to Redeem under any
indenture, note, credit agreement or instrument (including, without limitation,
the Indentures and the Senior Notes) pursuant to which any Material
Indebtedness is outstanding or by which the Borrower or any Subsidiary or any
of their Properties is bound, except that pursuant to the terms of the Borrower’s
Floating Rate Convertible Notes due 2023, the Borrower was and is required to
make an offer to Redeem all of such notes on December 15 of each of 2008,
2013 and 2015. The Borrower made the offer to Redeem its Floating Rate
Convertible Notes due 2023 on December 15, 2008 and purchased all of the
notes that were validly tendered into the offer.

 

(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           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 by or with respect to it 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 7.10           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.

 

60

 

(b)           Except as
disclosed on Schedule 7.10, each Plan is, and has been, established and
maintained in substantial compliance with its terms, 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), (l) or (m) 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, except as where such penalty
or damages would not have a Material Adverse Effect.

 

(d)           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, except where a failure would not have a 
Material Adverse Effect.

 

(e)           Except as
disclosed in Schedule 7.10, 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.

 

(f)            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 employee pension benefit
plan, as defined in section 3(2) of ERISA, that is subject to Title IV of
ERISA, section 302 of ERISA or section 412 of the Code.

 

Section 7.11           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 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
Information Memorandum nor any of the other reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower or
any Subsidiary to the Administrative Agent or any Lender or any of their
Affiliates in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or under any other Loan Document (as
modified or supplemented by other information so furnished) 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 time.  There is no fact peculiar to the Borrower or
any Subsidiary which could reasonably be expected to have a Material Adverse
Effect or in the future is reasonably likely to have a Material Adverse Effect
and which has not been set forth in this Agreement or the Loan Documents or the
other documents, certificates and statements furnished to the Administrative
Agent or the Lenders by or on behalf of the Borrower or any Subsidiary 

 

61

 

prior to, or on, the date hereof 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 of the Borrower
and the Subsidiaries 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 Subsidiaries do not warrant that such
opinions, estimates and projections will ultimately prove to have been
accurate.

 

Section 7.12           Insurance.  The Borrower
has, and has caused all of its Subsidiaries to have, (a) all insurance
policies sufficient for the compliance by each of them with all material
Governmental Requirements and all material agreements and (b) insurance
coverage in at least amounts and against such risk (including, without
limitation, public liability) that are usually insured against by companies
similarly situated and engaged in the same or a similar business for the assets
and operations of the Borrower and its Subsidiaries. The Administrative Agent
and the Lenders have been named as additional insureds in respect of such
liability insurance policies and the Administrative Agent has been named as
loss payee with respect to Property loss insurance.

 

Section 7.13           Restriction on Liens. 
Neither the Borrower nor any of the Subsidiaries is a party to any
material agreement or arrangement, 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 7.14           Subsidiaries; Foreign Operations. 
Except as set forth on Schedule 7.14 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 7.14, the Borrower has no Subsidiaries
and the Borrower has no Foreign Subsidiaries. 
Schedule 7.14 identifies each Subsidiary as either Domestic or Foreign,
and each Subsidiary on such schedule is a Wholly-Owned Subsidiary.

 

Section 7.15           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
Cimarex Energy Co.; and the organizational identification number of the
Borrower in its jurisdiction of organization is 3433321 (or, in each case, as
set forth in a notice delivered to the Administrative Agent pursuant to Section 8.01(k) 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(k) and in accordance with Section 12.01).  Each Subsidiary’s jurisdiction of
organization, name as listed in the public records of its jurisdiction of
organization, organizational identification number in its jurisdiction of
organization, and the location of its principal place of business and chief executive
office is stated on Schedule 7.15 (or as set forth in a notice delivered
pursuant to Section 8.01(k) accordance with Section 12.01).

 

62

 

Section 7.16           Properties; Titles, Etc.

 

(a)           Each of
the Borrower and the Subsidiaries has, in all material respects, good and
defensible title to the Oil and Gas Properties evaluated in the most recently
delivered Reserve Report and good title to all its personal Properties, 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 Subsidiary
specified as the owner owns, in all material respects, the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most
recently delivered Reserve Report, and the ownership of such Properties shall
not in any material respect obligate the Borrower or such 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
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 Subsidiaries are valid and subsisting, in full force and
effect, and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, 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
Subsidiaries including, without limitation, all easements and rights of way,
include all rights and Properties necessary to permit the Borrower and the
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 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.

 

(e)           The
Borrower and each 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 Subsidiary does not
infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.  The
Borrower and its 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.

 

Section 7.17           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 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 

 

63

 

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
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 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 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 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 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 Subsidiaries, in a manner consistent with the Borrower’s
or its Subsidiaries’ past practices (other than those the failure of which to
maintain in accordance with this Section 7.17 could not reasonably be
expected to have a Material Adverse Effect).

 

Section 7.18           Gas Imbalances, Prepayments. 
Except as set forth on Schedule 7.18 or on the most recent Reserve
Report Certificate, on a net basis there are no gas imbalances, take or pay or
other prepayments which would require the Borrower or any of its Subsidiaries
to deliver Hydrocarbons produced from their Oil and Gas Properties at some
future time without then or thereafter receiving full payment therefor
exceeding two (2) Bcf of gas (on an mcf equivalent basis) in the
aggregate.

 

Section 7.19           Marketing of Production. 
Except for contracts listed and in effect on the date hereof on Schedule
7.19, 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 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 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.

 

Section 7.20           Swap Agreements. 
Schedule 7.20, as of the date hereof, and after the date hereof, each
report required to be delivered by the Borrower pursuant to Section 8.01(d),
sets forth, a true and complete list of all Swap Agreements of the Borrower and
each Subsidiary, the material terms thereof (including the type, term,
effective date, termination date and notional amounts or volumes), the net mark
to market value thereof, all credit support agreements relating thereto
(including any margin required or supplied) and the counterparty to each such
agreement.

 

64

 

Section 7.21           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 refinance
Debt under the Existing Credit Agreement and for general corporate
purposes.  The Borrower and its
Subsidiaries are not engaged principally, or as one of its or their important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying margin stock (within
the meaning of Regulation T, U or X of the Board).  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 7.22           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.

 

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 (other than contingent indemnification
obligations) shall have been paid in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lenders that:

 

Section 8.01           Financial Statements; Other Information. 
The Borrower will furnish to the Administrative Agent 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 KPMG, LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied.

 

65

 

(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 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 December 31, 2008 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 — Swap Agreements. 
Concurrently with any delivery of financial statements under Section 8.01(a) and
Section 8.01(b), 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, a true and complete
list of all Swap Agreements of the Borrower and each 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 listed on Schedule 7.20, any
margin required or supplied under any credit support document, and the
counterparty to each such agreement.

 

(e)           Certificate
of Insurer — Insurance Coverage. 
Concurrently with any delivery of financial statements under Section 8.01(a),
a certificate of insurance coverage from each insurer or its authorized agent
or broker 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.

 

(f)            Other
Accounting Reports.  Promptly upon
receipt thereof, a copy of each other report or letter 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 letter or report.

 

(g)           SEC and
Other Filings; Reports to Shareholders. 
Promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other 

 

66

 

materials filed by
the Borrower or any Subsidiary with the SEC, or with any national securities
exchange, or distributed by the Borrower to its shareholders generally, as the
case may be.

 

(h)           Notices
Under Material Instruments.  Promptly
after the furnishing thereof, copies of any financial statement, report or
notice furnished to or by any Person pursuant to the terms of 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 including but not
limited to copies of any financial or other report or notice delivered to, or
received from, any holder of Senior Notes or Permitted Refinancing Debt (or the
notes evidencing the same).

 

(i)            Lists
of Purchasers.  If requested in
connection 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 or any Subsidiary accounting for at least 80% of the revenues
resulting from the sale of all Hydrocarbons in the one-year period prior to the
“as of” date of such Reserve Report.

 

(j)            Issuance
of Permitted Additional Senior Notes; Permitted Refinancing Debt.  In the event the Borrower intends to issue
Permitted Additional Senior Notes or to refinance any Debt with the proceeds of
Permitted Refinancing Debt, reasonable prior written notice of such intended
offering therefor, the amount thereof and the anticipated date of closing and
will furnish a copy of the preliminary offering memorandum (if any) and the
final offering memorandum (if any).

 

(k)           Information
Regarding Borrower and Guarantors. 
Prompt written notice (and in any event within thirty (30) 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.

 

(l)            Production
Report and Lease Operating Statements. 
In connection with the delivery of any Reserve Report, 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.

 

(m)          Notices
of Certain Changes.  Promptly, but in
any event within five (5) Business Days after the execution thereof,
copies of any amendment, modification or supplement to the Organizational
Documents, any preferred stock designation or any other organic document of the
Borrower or any Subsidiary.

 

67

 

(n)           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 and any reports or other
information required to be filed with respect thereto under the Code or 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.

 

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 a Material
Adverse Effect; and

 

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

 

Each
notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

 

Section 8.03           Existence; Conduct of Business. 
The Borrower will, and will cause each Material 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 9.11.

 

Section 8.04           Payment of Obligations. 
The Borrower will, and will cause each 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 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 Subsidiary to, do and perform every act and discharge all of the
obligations to be 

 

68

 

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 Subsidiary
to:

 

(a)           operate
its Oil and Gas Properties and other material Properties or cause such Oil and
Gas Properties and other material Properties to be operated in a careful and
efficient manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance with
all Governmental Requirements, including, without limitation, applicable 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, except, in
each case, where the failure to comply could not reasonably be expected to have
a Material Adverse Effect.

 

(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 good repair, working order and efficiency (ordinary wear and tear
excepted) all of its material 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 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

 

69

 

and such policies shall name the Administrative Agent and the Lenders
as “additional insureds” and provide that the insurer will endeavor to give at
least 30 days prior notice of any cancellation to the Administrative Agent.

 

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

 

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

 

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 Release or threaten to Release, and
shall cause each Subsidiary not to Release or threaten to Release, any
Hazardous Material on, under, about or from any of the Borrower’s or its
Subsidiaries’ Properties or any other property offsite the Property to the
extent caused by the Borrower’s or any of its Subsidiaries’ operations except
in compliance with applicable Environmental Laws, the Release or threatened
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 Environmental Permits, 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 Release or threatened Release of any Hazardous Material
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; (v) conduct, and
cause its Subsidiaries to conduct, their respective operations and businesses
in a manner that will not expose any Property or Person to Hazardous Materials
that could reasonably be expected to form the basis for a claim for damages or
compensation; and (vi) 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 

 

70

 

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 ten Business 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 Person against the Borrower or its
Subsidiaries or their Properties of which the Borrower has knowledge in
connection with any Environmental Laws if the Borrower could reasonably
anticipate that such action will result in liability (whether individually or
in the aggregate) that would have a Material Adverse Effect.

 

(c)           The Borrower will, and will cause each
Subsidiary to, provide environmental assessments, audits and tests in
accordance with the most current version of the American Society of Testing
Materials standards upon request by the Administrative Agent and the Lenders
and no more than once per year in the absence of any Event of Default (or as
otherwise required to be obtained by the Administrative Agent or the Lenders by
any Governmental Authority), in connection with any future acquisitions of Oil
and Gas Properties or other Properties.

 

Section 8.11           Further Assurances.  The
Borrower at its sole expense will, and will cause each 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 Subsidiary, as the case may be, in the
Loan Documents, including the Notes, or to further evidence and more fully
describe the collateral intended as security for the Indebtedness, or to
correct any omissions in this Agreement or the Security Instruments, or to
state more fully the obligations secured therein, or to perfect, protect or preserve
any Liens created pursuant to this Agreement or any of the Security Instruments
or the priority thereof, or to make any recordings, file any notices or obtain
any consents, all as may be reasonably necessary or appropriate, in the sole
discretion of the Administrative Agent, in connection therewith.

 

Section 8.12           Reserve Reports.

 

(a)           On or before March 1st and September 1st
of each year, commencing September 1, 2009, the Borrower shall furnish to
the Administrative Agent and the Lenders a Reserve Report evaluating the oil
and gas reserves attributable to the Oil and Gas Properties of the Borrower and
its Domestic Subsidiaries as of the immediately preceding January 1st and July 1st located within
the geographic boundaries of the United States of America (or the Outer
Continental Shelf adjacent to the United States of America).  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 shall be 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.

 

71

 

(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
Reserve Report Certificate certifying that in 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
Subsidiaries owns, in all material respects, 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 7.18 with respect to its Oil and Gas Properties evaluated in
such Reserve Report which would require the Borrower or any 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 7.19 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 the percentage of the total value of the
Oil and Gas Properties that the value of such Mortgaged Properties represent in
compliance 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 acceptable to
the Administrative Agent covering enough of the Oil and Gas Properties
evaluated by such Reserve Report that were not included in the immediately
preceding Reserve Report, so that the Administrative Agent shall have received
together with title information previously delivered to the Administrative
Agent, satisfactory title information on at least 75% of the total 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 title
defects or exceptions exist with respect to such additional Properties, either (i) cure
any such title defects or exceptions (including defects or exceptions as to
priority) which are not permitted by Section 9.03 raised by such information,
(ii) substitute acceptable Mortgaged 

 

72

 

Properties with no title defects or exceptions except for Excepted
Liens (other than Excepted Liens described in clauses (e), (g) and (h) of
such definition) having an equivalent value or (iii) deliver title
information in form and substance acceptable to the Administrative Agent so
that the Administrative Agent shall have received, together with title
information previously delivered to the Administrative Agent, satisfactory
title information on at least 75% of the value of the Oil and Gas Properties
evaluated by such Reserve Report.

 

(c)           If the Borrower is unable to cure any
title defect requested by the Administrative Agent or the Lenders to be cured
within the 60-day period or the Borrower does not comply with the requirements
to provide acceptable title information covering 75% of the value of the Oil
and Gas Properties evaluated in the most recent Reserve Report, such default
shall not be a Default, but instead the Administrative Agent and/or the
Required Lenders shall have the right to exercise the following remedy in their
sole discretion from time to time, and any failure to so exercise this remedy
at any time shall not be a waiver as to future exercise of the remedy by the
Administrative Agent or the Lenders.  To
the extent that the Administrative Agent or the Required Lenders are not
satisfied with title to any Mortgaged Property after the 60-day period has
elapsed, such unacceptable Mortgaged Property shall not count towards the 75%
requirement, and the Administrative Agent may send a notice to the Borrower and
the Lenders that the then outstanding Borrowing Base shall be reduced by an
amount as determined by the Required Lenders to cause the Borrower to be in
compliance with the requirement to provide acceptable title information on 75%
of the value of the Oil and Gas Properties. 
This new Borrowing Base shall become effective immediately after receipt
of such notice.

 

Section 8.14           Additional
Collateral; Additional Guarantors.

 

(a)           In connection with each redetermination
of the Borrowing Base, the Borrower shall review the Reserve Report and the
list of current Mortgaged Properties (as described in Section 8.12(c)(vi))
to ascertain whether the Mortgaged Properties represent at least 75% (unless
the Aggregate Maximum Credit Amount is greater than $800,000,000 then 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 75% (unless the Aggregate Maximum Credit Amount is
greater than $800,000,000 then 80%) of such total value, then the Borrower
shall, and shall cause its Subsidiaries to, grant, within thirty (30) days of
delivery of the Reserve Report Certificate, 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 75% (unless the Aggregate Maximum
Credit Amount is greater than $800,000,000 then 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 Subsidiary places a Lien on its Oil and Gas
Properties and such Subsidiary is not a Guarantor, then it shall become a
Guarantor and comply with Section 8.14(b).

 

73

 

(b)           In the event that (i) the Borrower
determines that any Subsidiary is a Material Domestic Subsidiary or (ii) any
Domestic Subsidiary guarantees any of the Senior Notes or incurs or guarantees
$25,000,000 or more of Debt (other than Non-Recourse Debt), the Borrower shall
promptly cause such Subsidiary to guarantee the Indebtedness pursuant to the
Guaranty Agreement.  In connection with
any such guaranty, the Borrower shall, or shall cause such Subsidiary to, (A) execute
and deliver a supplement to the Guaranty Agreement executed by such Subsidiary,
(B) pledge all of the Equity Interests of such new Subsidiary (including,
without limitation, delivery of original stock certificates evidencing the
Equity Interests of such Subsidiary, together with an appropriate undated stock
powers for each certificate duly executed in blank by the registered owner
thereof) owned by the Borrower or such Domestic Subsidiary 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
becomes the owner of a Foreign Subsidiary which has total assets in excess of
$20,000,000, then the Borrower shall promptly, or shall cause such Domestic
Subsidiary to promptly, pledge Equity Interests representing 65% of the total
combined voting power of all classes of stock entitled to vote and 100% of any
other class of stock 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 duly executed in blank by the registered owner thereof) owned by
the Borrower or such Domestic Subsidiary and 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) promptly
after the filing thereof with the United States Secretary of Labor or the
Internal Revenue Service, copies of each annual and other report with respect
to each Plan or any trust created thereunder, and (ii) immediately upon
becoming aware of the occurrence of any non-exempt “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 a
Responsible Officer of the Borrower, 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 or the
Department of Labor with respect thereto.

 

Section 8.16           Swap Agreement Termination. 
To the extent the Borrower or a Subsidiary changes the material terms of
any Swap Agreement, terminates any such Swap Agreement or enters into a new
Swap Agreement which has the effect of creating an off-setting position, the
Borrower will give the Lenders prompt written notice of such event if, with
respect to any commodity-price Swap Agreement, the product of (a) the
notional volumes of such commodity-price Swap Agreement times (b) the
excess of (i) the strike or fixed rate payor price over (ii) the “price
deck” used in calculating the Borrowing Base for the relevant commodities,
exceeds in the aggregate during such period the lesser of (y) $50,000,000
or (z) 3% of the then effective Borrowing Base, and concurrently with such
notice the Required Lenders shall have the right to adjust the Borrowing Base
in accordance with Section 2.07(f).

 

74

 

Section 8.17           Marketing Activities.  The
Borrower will not, and will not permit any of its 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 Subsidiaries
that the Borrower or one of its 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 “position” is taken and (B) for
which appropriate credit support has been taken to alleviate the material
credit risks of the counterparty thereto.

 

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 (other than contingent indemnification obligations) 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 EBITDA. 
The Borrower will not, at any time, permit its ratio of Total Debt as of
such time to EBITDA for the 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 and current
maturities under this Agreement) to be less than 1.0 to 1.0.

 

Section 9.02           Debt.  The Borrower
will not, and will not permit any 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 Subsidiaries
existing on the date hereof that is reflected in the Financial Statements,
including the Existing Senior Notes, and any Permitted Refinancing Debt in
respect thereof.

 

75

 

(c)           accounts payable and accrued expenses,
liabilities or other obligations to pay the deferred purchase price of Property
or services, from time to time incurred in the ordinary course of business
which are not greater than ninety (90) days past the date of invoice or
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)           Debt associated with bonds or surety
obligations required by Governmental Requirements in connection with the
operation of the Oil and Gas Properties.

 

(e)           intercompany Debt between the Borrower
and any Subsidiary or between 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 Wholly-Owned
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)           Permitted Additional Senior
Notes issued by the Borrower provided that (i) at the time of incurring
such Debt (A) no Default has occurred and is then continuing and (B) no
Default would result from the incurrence of such Debt after giving effect to
the incurrence of such Debt (and any concurrent repayment of Debt with the
proceeds of such incurrence), (ii) such Debt does not have any scheduled
amortization prior to one year after the Maturity Date, (iii) such Debt
does not mature sooner than five years after its issuance, (iv) the terms of
such Debt are not materially more onerous, taken as a whole, than the terms of
this Agreement and the other Loan Documents (v) such Debt and any
guarantees thereof are on prevailing market terms for similar situated
companies and (vi) the Borrowing Base is reduced as pursuant to Section 2.07(f) and
prepayment is made to the extent required by Section 3.04(c)(iv); and any
Permitted Refinancing Debt in respect thereof.

 

(h)           Indebtedness of
Borrower in respect of guarantee obligations of Subsidiaries which do not in the aggregate exceed
$50,000,000 at any one time outstanding.

 

(i)            Non-Recourse Debt of (i) the Riley
Ridge SPV not to exceed $300,000,000 and (ii) other Subsidiaries not to
exceed $100,000,000 in the aggregate at any one time outstanding.

 

(j)            other Debt not to exceed $40,000,000 in
the aggregate at any one time outstanding.

 

Section 9.03           Liens.  The Borrower
will not, and will not permit any 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.

 

76

 

(c)           Liens securing any Permitted Refinancing
Debt provided that any such Permitted Refinancing Debt is not secured by any
additional or different Property not securing the Refinanced Debt.

 

(d)           Liens on (i) any Property of the
Riley Ridge SPV and on the Equity Interests of the Riley Ridge SPV to secure
the Debt permitted under clause (i) of Section 9.02(i), and (ii) on
Property not included in the Borrowing Base and pledged to secure Non-Recourse
Debt under clause (ii) of Section 9.02(i).

 

Section 9.04           Dividends, Distributions and Redemptions;
Repayment of Senior Notes.

 

(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 Equity Interests,

 

(iii)          any
Subsidiary may declare or make any Restricted Payments to the Borrower or to a
Wholly-Owned Subsidiary,

 

(iv)          if the Borrowing Base Utilization
Percentage is less than 50%, any Subsidiary may declare or make any Restricted
Payments, and

 

(v)           the Borrower may make Restricted Payments
if as of the date such Restricted Payment is made

 

(A)                              the then current Borrowing Base
Utilization Percentage is less than 50% and no Default or Event of Default
exists (after giving effect to such Restricted Payment), or

 

(B)                                the then current Borrowing Base
Utilization Percentage is greater than or equal to 50%, and no Default, Event
of Default or Borrowing Base Deficiency exists (after giving effect to such
Restricted Payment) and such Restricted Payments do not exceed an amount equal
to

 

(1)            50% of the Consolidated Net Income of the
Borrower for the period commencing July 1, 2009 through the last day of
the most recent fiscal quarter for which financial statements are available
prior to the date of such Restricted Payment, taken as a single accounting
period, plus

 

(2)            $35,000,000 during each fiscal year less

 

77

 

(3)           all Restricted Payments made after the
Effective Date under clause (A) of this Section 9.04(a)(v).

 

(b)           Redemption of Senior Notes; Amendment of
Indentures.  The Borrower will not, and will not permit any
Subsidiary to, prior to the date that is ninety-one (91) days after the
Maturity Date:  (i) 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 Senior Notes or any
Permitted Refinancing Debt in respect thereof; provided that (A) the
Borrower may Redeem the Senior Notes with the proceeds of any Permitted
Refinancing Debt or with the net cash proceeds of any sale of Equity Interests
(other than Disqualified Capital Stock) of the Borrower and (B) the
Borrower may Redeem any or all of its outstanding Floating Rate Convertible Senior
Notes due 2023 in an aggregate principal amount not to exceed $20,000,000, or (ii) amend,
modify, waive or otherwise change, consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Senior Notes,
any Permitted Refinancing Debt or the Indentures if (A) the effect thereof
would be to shorten its maturity or average life or increase the amount of any
payment of principal thereof or increase the rate or shorten any period for
payment of interest thereon or (B) such action requires the payment of a
consent fee (howsoever described), provided that the foregoing shall not
prohibit the execution of supplemental indentures associated with the
incurrence of Permitted Additional Senior Notes to the extent permitted by Section 9.02(g),
the execution of other indentures or agreements in connection with the issuance
of Permitted Refinancing Debt or the execution of supplemental indentures to
add guarantors if required by the terms of any Indenture provided such Person
complies with Section 8.14(b).

 

Section 9.05           Investments, Loans and Advances. 
The Borrower will not, and will not permit any 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.

 

(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 

 

78

 

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 Subsidiary in or to the Borrower
or any Guarantor, and (iii) made by the Borrower or any Guarantor in or to
any Subsidiary which is not a Guarantor which do not exceed 5% in the aggregate
of the consolidated quarterly revenues of the Borrower as of the most recently
delivered consolidated quarterly financial statements.

 

(h)           subject to the limits in Section 9.06,
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 Subsidiary with others in the ordinary course
of business; provided that (i) any such venture is engaged exclusively in oil and gas
exploration, development, production, processing and related activities,
including transportation, (ii) the interest in such venture is acquired in the
ordinary course of business and on fair and reasonable terms and (iii) such venture interests acquired and
capital contributions made (valued as of the date such interest was acquired or
the contribution made) do not exceed, in the aggregate at any time outstanding
an amount equal to $50,000,000.

 

(i)            Investments 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 Subsidiary as a
result of a bankruptcy or other insolvency proceeding of the obligor in respect
of such debts or upon the enforcement of any Lien in favor of the Borrower or
any of its Subsidiaries.

 

(j)            Investments in the Riley Ridge SPV in the
form of the capital contribution of the Riley Ridge Gas Plant and Related
Assets to the Riley Ridge SPV.

 

(k)           other Investments not to exceed
$20,000,000 in the aggregate during any fiscal year.

 

Section 9.06           Nature of Business. 
The Borrower will not, and will not permit any Subsidiary to, allow any
material change to be made in the character of its business as an independent
oil and gas exploration and production company.

 

Section 9.07           Limitation on Leases. 
The Borrower will not, and will not permit any 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 Subsidiaries pursuant to all such leases or lease agreements, including,
without limitation, any residual payments at the end of any lease, to exceed
$50,000,000 in any period of twelve consecutive calendar months during the life
of such leases.

 

79

 

Section 9.08                                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 7.21.  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 9.09                                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), (l) or
(m) of section 502 of ERISA or a tax imposed by Chapter 43 of
Subtitle D of the Code except where such penalty or tax would not have a
Material Adverse Effect.

 

(b)                                 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 except where failure would not have a
Material Adverse Effect.

 

(c)                                  contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate to
contribute to or assume an obligation to contribute to (i) 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 material liability in excess of
$25,000,000, or (ii) any employee pension benefit plan, as defined in
section 3(2) of ERISA, that is subject to Title IV of ERISA, section 302
of ERISA or section 412 of the Code.

 

Section 9.10                                Sale or Discount of
Receivables.  Except for receivables
obtained by the Borrower or any 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
Subsidiary to, discount or sell (with or without recourse) any of its notes
receivable or accounts receivable.

 

Section 9.11                                Mergers, Etc.  The Borrower will not, and will not permit
any 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 (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 (a) any Subsidiary may participate
in a consolidation with the

 

80

 

Borrower so long as the Borrower shall be the continuing or surviving
entity, (b) any Subsidiary may participate in a consolidation with any
other Subsidiary (provided that if one of such Subsidiaries is a Wholly-Owned
Subsidiary, then the surviving Person shall be a Wholly-Owned Subsidiary) or (c) so
long as no Default or Event of Default exists or results from such
consolidation, the Borrower or any Subsidiary may participate in a
consolidation with any other Person whose total assets and total liabilities do
not exceed $100,000,000 respectively, provided that either the Borrower or the
Subsidiary, as applicable, shall be the continuing or surviving entity.

 

Section 9.12                                Sale of Properties.  The Borrower will not, and will not permit
any Subsidiary to, sell, assign, farm-out, convey or otherwise transfer any
Property (other than to the Borrower or any Guarantor) except for (a) the
sale of Hydrocarbons in the ordinary course of business; (b) farmouts of
undeveloped acreage to which no proved reserves are attributable and
assignments in connection with such farmouts; (c) the sale or transfer of
equipment that is no longer necessary for the business of the Borrower or such
Subsidiary or is replaced by equipment of at least comparable value and use; (d) the
sale or other disposition of any Oil and Gas Property or any interest therein
or any Subsidiary owning Oil and Gas Properties; provided that (i) either (A) at
least 75% of the consideration received in respect of such sale or other
disposition shall be cash and any portion of the non-cash consideration
received (to the extent constituting an Investment) is permitted under Section 9.05
or (B) such consideration consists of Oil and Gas Properties which qualify
for nonrecognition of gain or loss under the provisions of Section 1031 of
the Code (provided that notwithstanding the foregoing, if a Borrowing Base
Deficiency results from such disposition, the cash portion of the consideration
shall be an amount at least sufficient to pay such Borrowing Base Deficiency
under Section 3.04(c)(iv)), (ii) 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 Subsidiary
subject of such sale or other disposition (and if such sale is for Oil and Gas
Properties having a fair market value in excess of $50,000,000, 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), (iii) if such sale or
other disposition of Oil and Gas Property or Subsidiary owning Oil and Gas
Properties included in the most recently delivered Reserve Report during any
period between two successive Scheduled Redetermination Dates has a fair market
value in excess of five percent (5%) of the then effective Borrowing Base, the
Borrowing Base shall be reduced, effective immediately upon such sale or
disposition, by an amount equal to the value, if any, assigned such Property in
the most recently delivered Reserve Report and (iv) if any such sale or
other disposition is of a Subsidiary owning Oil and Gas Properties, such sale
or other disposition shall include all the Equity Interests of such Subsidiary;
(e) sales and other dispositions of Properties not regulated by Section 9.12(a) to
(d) having a fair market value not to exceed $200,000,000 during any
12-month period; and (f) the sale of the Riley Ridge Gas Plant and Related
Assets to the Riley Ridge SPV.

 

Section 9.13                                Environmental
Matters.  The Borrower will not, and
will not permit any Subsidiary to, cause or permit any of its Property to be in
violation of, or do anything or permit anything to be done which will subject
any such Property to a Release or threatened Release of Hazardous Materials,
exposure to any Hazardous Materials, or to any Remedial Work under any
Environmental Laws, assuming disclosure to the applicable Governmental
Authority of all

 

81

 

relevant facts, conditions and circumstances, if any, pertaining to
such Property where such violations, Release or threatened Release, exposure,
or Remedial work could reasonably be expected to have a Material Adverse
Effect.

 

Section 9.14                                Transactions with
Affiliates.  The Borrower will not,
and will not permit any 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. Notwithstanding the foregoing, this
Section 9.14 shall not prohibit the Borrower or any Subsidiary from
transferring any Equity Interests in a Subsidiary to the Borrower or another
Subsidiary; provided, that (i) if the transferor is the Borrower or a
Guarantor, the transferee must be the Borrower or another Guarantor, and (ii) if
the Administrative Agent has a Lien on the Equity Interests being transferred
to secure the Indebtedness, the Administrative Agent must have a Lien on such
Equity Interests (of the same priority) following the transfer.

 

Section 9.15                                Subsidiaries.  The Borrower will not, and will not permit
any Subsidiary to, create or acquire any additional 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 Subsidiary to, sell, assign or otherwise dispose of any Equity Interests in
any Subsidiary except in compliance with Section 9.12(d).

 

Section 9.16                                Negative Pledge
Agreements; Dividend Restrictions. 
The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or suffer to exist any contract, agreement or understanding
(other than this Agreement or the Security Instruments and agreements
evidencing Non-Recourse Debt, but then only on the Property subject to the
Liens securing such Debt or in the case of the Riley Ridge SPV, Liens permitted
by Section 9.03(d)(i) and Liens on distributions from the Riley Ridge
SPV) 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 to secure the Indebtedness or restricts any 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.

 

Section 9.17                                Swap Agreement.  The Borrower will not, and will not permit
any Subsidiary to, enter into any Swap Agreements with any Person other than (a) Swap
Agreements in respect of commodities (i) with an Approved Counterparty and
(ii) the notional volumes for which (when aggregated with other commodity
Swap Agreements then in effect other than basis differential swaps on volumes
already hedged pursuant to other Swap Agreements) do not exceed, as of the date
such Swap Agreement is executed, 85% of the reasonably anticipated projected
production from proved, developed, producing Oil and Gas Properties for each
month during the period during which such Swap Agreement is in effect for each
of crude oil and natural gas, calculated separately, and (b) Swap Agreements
in respect of interest rates with an Approved Counterparty, as follows:  (i) Swap Agreements effectively
converting interest

 

82

 

rates from fixed to floating, the notional amounts of which (when aggregated
with all other Swap Agreements of the Borrower and its 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 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 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.

 

ARTICLE X

Events of Default; Remedies

 

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

 

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

 

(b)                                 the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in Section 10.01(a)) payable
under any Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of five days.

 

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

 

(d)                                 the
Borrower or any Subsidiary shall fail to observe or perform any covenant, condition
or agreement contained in Section 8.01(h), Section 8.01(k), Section 8.02,
Section 8.03, Section 8.14 or in Article IX.

 

(e)                                  the
Borrower or any 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(a) or Section 10.01(c))
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 Subsidiary otherwise becoming aware of such default.

 

(f)                                    the
Borrower or any 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.

 

83

 

(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 Subsidiary to make an offer in respect
thereof.

 

(h)                                 an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect
of the Borrower or any 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
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.

 

(i)                                     the
Borrower or any 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 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; or any stockholder of the Borrower
shall make any request or take any action for the purpose of calling a meeting
of the stockholders of the Borrower to consider a resolution to dissolve and
wind-up the Borrower’s affairs.

 

(j)                                     the
Borrower or any Subsidiary shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due.

 

(k)                                  one
or more judgments for the payment of money in an aggregate amount in excess of
$25,000,000 (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) and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed.

 

(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 Subsidiary or
any of their Affiliates shall so state in writing.

 

84

 

(m)                               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(i)), 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(i)),
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)                                  Except
as otherwise provided in Section 4.03, 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;

 

(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 and in
Clause (c) under Treasury Management Agreements;

 

(v)                                 fifth, pro rata to any other Indebtedness;

 

85

 

(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 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

 

86

 

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,
neither the Syndication Agents nor the Documentation Agents shall have any
obligation to perform any act in respect thereof.  The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Majority Lenders or the Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 12.02),
and otherwise the Administrative Agent shall not be liable for any action taken
or not taken by it hereunder or under any other Loan Document or under any
other document or instrument referred to or provided for herein or therein or
in connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE,
except for its own gross negligence or willful misconduct.

 

Section 11.04                          Reliance by Administrative
Agent.  The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed
or sent by the proper Person.  The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon and each of the Borrower, the Lenders
and 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

 

87

 

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, in
consultation with the Borrower, to appoint a successor.  If no successor shall have been so appointed
by the Majority Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation or removal of the
retiring Agent, then the retiring Agent may, on behalf of the Lenders and 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.

 

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.  

 

88

 

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

 

(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.

 

89

 

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 9.12 or is otherwise
authorized by the terms of the Loan Documents.

 

Section 11.11                        The Arranger, the Syndication Agents and
the Documentation Agents.  The Arranger, the Syndication
Agents and the Documentation Agents shall have no duties, responsibilities or
liabilities under this Agreement and the other Loan Documents other than their
duties, responsibilities and liabilities in their capacity as Lenders
hereunder.

 

ARTICLE XII

Miscellaneous

 

Section 12.01                        Notices.

 

(a)                                  Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to Section 12.01(b)),
all notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:

 

(i)                                     if to the Borrower, to it at 1700 Lincoln
Street, Suite 1800 Denver, Colorado 80203, Attention of Paul Korus or
Sherri Nitta (Telecopy No. (303) 285-0229);

 

(ii)                                  if to the Administrative Agent or to
JPMorgan Chase Bank, N.A., as the Issuing Bank, to JPMorgan Chase Bank, N.A.,
Mid-Corp Loan Administration, 10 South Dearborn, Floor 07, Chicago, IL 60603-2003,
Attention of Teresita R. Siao (Facsimile No. 312-385-7096), with a copy to
JPMorgan Chase Bank, N.A., 712 Main Street, Floor 8 South, Houston, TX 77002,
Attention of Ryan Fuessel (Facsimile No. 713-216-7770); and

 

(iii)                               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 2.08(j),
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 

 

90

 

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; provided that no such
agreement shall (i) increase the Commitment or the Maximum Credit Amount
of any Lender without the written consent of such Lender, (ii) increase
the Borrowing Base without the written consent of each Lender, decrease or
maintain the Borrowing Base without the consent of the Required Lenders, or
modify Section 2.07 in any manner without the consent of each Lender;
provided that a Scheduled Redetermination may be postponed by the Required Lenders,
(iii) reduce the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, or reduce
any other Indebtedness hereunder or under any other Loan Document, without the
written consent of each Lender affected thereby, (iv) postpone the scheduled
date of payment or prepayment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or any
other Indebtedness hereunder or under any other Loan Document, or reduce the
amount of, waive or excuse any such payment, or postpone or extend the
Termination Date without the written consent of each Lender affected thereby, (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(b), Section 6.01,
Section 8.14, Section 10.02(c) or Section 12.14, (vii) release
any Guarantor (except as set forth in the Guaranty Agreement), release all or
substantially all of the collateral (other than as 

 

91

 

provided in Section 11.10), or reduce the percentage set forth in Section 8.14(a) to
less than 75%, 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 7.14
(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, the
Arranger and their Affiliates, including, without limitation, the reasonable
fees, charges and disbursements of counsel and other outside consultants for
the Administrative Agent, the reasonable travel, photocopy, mailing, courier,
telephone and other similar expenses, and the cost of environmental invasive
and non-invasive assessments and 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 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 ARRANGER, THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY
OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”)
AGAINST, AND DEFEND AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES,
CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE
FEES, CHARGES AND 

 

92

 

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 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 OR
OPERATIONS, INCLUDING, THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED
RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF
HAZARDOUS MATERIALS ON OR AT ANY OF THEIR PROPERTIES, (ix) THE BREACH OR
NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (x) THE PAST OWNERSHIP BY
THE BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON
ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME,
COULD RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT,
DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT
OR ARRANGEMENT FOR DISPOSAL OF HAZARDOUS MATERIALS 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 

 

93

 

CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE
GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF SUCH INDEMNITEE.

 

(c)                                  To the extent that the Borrower fails to
pay any amount required to be paid by it to any Agent, the Arranger or 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.

 

(e)                                  All amounts due under this Section 12.03
shall be payable promptly 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 

 

94

 

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 if such assignment is to a Lender, an Affiliate
of a Lender, an Approved Fund or, if an Event of Default has occurred and is
continuing, is to 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;

 

(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 

 

95

 

obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits and subject to the
obligations 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 (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in Section 12.04(b) and any written consent to such assignment
required by Section 12.04(b), the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this Section 12.04(b).

 

(c)

 

(i)                                     Any Lender may, without the consent of
the Borrower, the Administrative Agent or 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.  

 

96

 

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 (which
consent, if any, expressly acknowledges any additional obligations of the
Borrower in respect of Indemnified Taxes or Other Taxes).  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.

 

Section 12.05                        Survival; Revival; Reinstatement.

 

(a)                                  All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, any other
Agent, 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 

 

97

 

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.

 

(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 

 

98

 

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
Subsidiary against any of and all the obligations of the Borrower or any
Subsidiary owed to such Lender now or hereafter existing under this Agreement
or any other Loan Document, irrespective of whether or not such Lender shall
have made any demand under this Agreement or any other Loan Document and
although such obligations may be unmatured. 
The rights of each Lender under this Section 12.08 are in addition
to other rights and remedies (including other rights of setoff) which such
Lender or its Affiliates may have.

 

Section 12.09                        GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS.

 

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

 

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

 

(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,

 

99

 

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 or any self-regulatory authority, (c)
to the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement or any other
Loan Document, (e) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section 12.11, to (i) any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement 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 

 

100

 

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 computed at the
Highest Lawful Rate applicable to such Lender pursuant to this Section 12.12
and (ii) in respect of any subsequent interest computation period the
amount of interest otherwise payable to such Lender would be less than the
amount of interest payable to such Lender computed at the Highest Lawful Rate
applicable to such Lender, then the amount of interest payable to such Lender
in respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Lender until the total
amount of interest payable to such Lender shall equal the total amount of
interest which would have been payable to such Lender if the total amount of
interest had been computed without giving effect to this Section 12.12.

 

Section 12.13         EXCULPATION
PROVISIONS.  EACH OF THE PARTIES HERETO SPECIFICALLY
AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT
AND IS FULLY 

 

101

 

INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND
EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL
COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS
ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT
IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS
OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH
LIABILITY.  EACH PARTY HERETO AGREES AND
COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT “CONSPICUOUS.”

 

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; provided that if a Person or its Affiliate ceases to be a
Lender solely because the Revolving Credit Exposures have been paid in full and
the Commitments terminated, then the Liens securing such Swap Agreements shall
continue in favor of such Person until those obligations are paid in full in
cash or otherwise expire or are terminated. 
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]

 

102

 

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

 

	
   

  	
  CIMAREX ENERGY CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Paul Korus

  
	
   

  	
   

  	
  Vice President,
  Chief Financial Officer, and Treasurer

  

 

[Signature Page- Credit
Agreement]

 

1

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Brian P. Orlando

  
	
   

  	
   

  	
  Vice President

  

 

[Signature Page- Credit
Agreement]

 

2

 

	
   

  	
  BANK OF AMERICA, N.A., as
  Co-Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit
Agreement]

 

3

 

	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION, as Co-Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit
Agreement]

 

4

 

	
   

  	
  COMPASS BANK, as
  Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit
Agreement]

 

5

 

	
   

  	
  DEUTSCHE BANK SECURITIES INC.,
  as Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit
Agreement]

 

6

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Brian P. Orlando

  
	
   

  	
   

  	
  Vice President

  

 

[Signature Page- Credit
Agreement]

 

7

 

	
   

  	
  COMPASS BANK, as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature
Page- Credit Agreement]

 

8

 

	
   

  	
  BANK OF AMERICA, N.A., as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature
Page- Credit Agreement]

 

9

 

	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION,
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit Agreement]

 

10

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY AMERICAS,
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit Agreement]

 

11

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit
Agreement]

 

12

 

	
   

  	
  COMERICA BANK, as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit
Agreement]

 

13

 

	
   

  	
  CALYON NEW YORK BRANCH,
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit Agreement]

 

14

 

	
   

  	
  CAPITAL ONE, N.A.,
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit Agreement]

 

15

 

	
   

  	
  BANK OF OKLAHOMA, N.A., as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit
Agreement]

 

16

 

	
   

  	
  SUNTRUST BANK, as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit
Agreement]

 

17

 

	
   

  	
  UNION BANK OF CALIFORNIA, N.A.,
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit Agreement]

 

18

 

	
   

  	
  NATIXIS, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit Agreement]

 

19

 

	
   

  	
  BANK OF SCOTLAND plc,
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[Signature Page- Credit Agreement]

 

20

 

ANNEX I

LIST OF MAXIMUM CREDIT AMOUNTS

 

Aggregate Maximum
Credit Amounts

 

	
  Name of Lender

  	
   

  	
  Applicable

  Percentage

  	
   

  	
  Maximum Credit

  Amount

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  12.5000

  	
  %

  	
  $

  	
  100,000,000.00

  	
   

  
	
  Compass Bank

  	
   

  	
  10.0000

  	
  %

  	
  $

  	
  80,000,000.00

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  10.0000

  	
  %

  	
  $

  	
  80,000,000.00

  	
   

  
	
  Wells Fargo Bank, National Association

  	
   

  	
  10.0000

  	
  %

  	
  $

  	
  80,000,000.00

  	
   

  
	
  Deutsche Bank Trust Company Americas

  	
   

  	
  10.0000

  	
  %

  	
  $

  	
  80,000,000.00

  	
   

  
	
  U.S. Bank National Association

  	
   

  	
  7.5000

  	
  %

  	
  $

  	
  60,000,000.00

  	
   

  
	
  Comerica Bank

  	
   

  	
  6.2500

  	
  %

  	
  $

  	
  50,000,000.00

  	
   

  
	
  Calyon New York Branch

  	
   

  	
  6.2500

  	
  %

  	
  $

  	
  50,000,000.00

  	
   

  
	
  Capital One, N.A.

  	
   

  	
  6.2500

  	
  %

  	
  $

  	
  50,000,000.00

  	
   

  
	
  Bank of Oklahoma, N.A.

  	
   

  	
  4.6875

  	
  %

  	
  $

  	
  37,500,000.00

  	
   

  
	
  SunTrust Bank

  	
   

  	
  4.6875

  	
  %

  	
  $

  	
  37,500,000.00

  	
   

  
	
  Union Bank of California, N.A.

  	
   

  	
  4.3750

  	
  %

  	
  $

  	
  35,000,000.00

  	
   

  
	
  Natixis

  	
   

  	
  4.3750

  	
  %

  	
  $

  	
  35,000,000.00

  	
   

  
	
  Bank of Scotland plc

  	
   

  	
  3.1250

  	
  %

  	
  $

  	
  25,000,000.00

  	
   

  
	
  TOTAL

  	
   

  	
  100.0000

  	
  %

  	
  $

  	
  800,000,000.00

  	
   

  

 

I-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]