Document:

exv4w2

Exhibit 4.2

Execution Copy

REGISTRATION RIGHTS AGREEMENT

by and among

Alta Mesa Holdings, LP,

Alta Mesa Finance Services Corp.,

the Guarantors party hereto,

and

Wells Fargo Securities, LLC,

as representative of the Initial Purchasers

Dated as of October 13, 2010

 

 

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of
October 13, 2010, by and among Alta Mesa Holdings, LP, a Texas limited partnership (the “Company”),
Alta Mesa Finance Services Corp., a Delaware corporation (“FinCo,” and together with the Company,
the “Issuers”), the entities listed as signatory guarantors hereto (collectively, the
“Guarantors”), and Wells Fargo Securities, LLC, as the representative of the initial purchasers
listed on Schedule 1 to the Purchase Agreement (each an “Initial Purchaser” and, collectively, the
“Initial Purchasers”), each of whom has agreed to purchase the Issuers’ 9 5/8% Senior Notes due
2018 (the “Notes”), fully and unconditionally guaranteed by the Guarantors (the “Guarantees”)
pursuant to the Purchase Agreement (as defined below). The Notes and the Guarantees attached
thereto are herein collectively referred to as the “Securities.”

     This Agreement is made pursuant to the Purchase Agreement, dated October 7, 2010 (the
“Purchase Agreement”), by and among the Issuers, the Guarantors and the Initial Purchasers (i) for
the benefit of the Initial Purchasers and (ii) for the benefit of the holders from time to time of
Transfer Restricted Securities, including the Initial Purchasers. In order to induce the Initial
Purchasers to purchase the Securities, the Issuers have agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers, as set forth in Section 6(k) of the Purchase Agreement.

     The parties hereby agree as follows:

     SECTION 1. Definitions.

     As used in this Agreement, the following capitalized terms shall have the following meanings:

     Additional Interest: As defined in Section 5 hereof.

     Advice: As defined in Section 6(c) hereof.

     Affiliate. As defined in Rule 144 promulgated by the Commission.

     Agreement: As defined in the preamble hereto.

     Broker-Dealer: Any broker or dealer registered under the Exchange Act.

     Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which
banking institutions or trust companies located in New York, New York are authorized or obligated
to be closed.

     Closing Date: The date of this Agreement.

     Commission: The Securities and Exchange Commission.

     Company: As defined in the preamble hereto.

 

 

     Consummate: A registered Exchange Offer shall be deemed “Consummated” for purposes of this
Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the
Exchange Offer Registration Statement relating to the Exchange Securities to be issued in the
Exchange Offer, (ii) the maintenance of such Registration Statement being continuously effective
and the keeping of the Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof, and (iii) the delivery by the Issuers to the Registrar under the
Indenture of Exchange Securities in the same aggregate principal amount as the aggregate principal
amount of Transfer Restricted Securities that were tendered by Holders thereof pursuant to the
Exchange Offer.

     Controlling Person: As defined in Section 8(a) hereof.

     Exchange Act: The Securities Exchange Act of 1934, as amended.

     Exchange Date: As defined in Section 3(a) hereto.

     Exchange Offer: The registration by the Issuers under the Securities Act of the Exchange
Securities pursuant to a Registration Statement pursuant to which the Issuers offer the Holders of
all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Exchange Securities in an aggregate
principal amount equal to the aggregate principal amount of the Transfer Restricted Securities
tendered in such exchange offer by such Holders with terms that are identical in all respects to
the Transfer Restricted Securities (except that Exchange Securities will not contain terms with
respect to any increase in annual interest rate as described herein and the transfer restrictions).

     Exchange Offer Registration Statement: The Registration Statement relating to the Exchange
Offer, including the related Prospectus.

     Exchange Securities: The 9 5/8% Senior Notes due 2018, of the same series under the Indenture
as the Transfer Restricted Securities, including the Guarantees, to be offered to Holders in
exchange for Transfer Restricted Securities pursuant to this Agreement.

     Fin Co.: As defined in the preamble hereto.

     FINRA: Financial Industry Regulatory Authority, Inc.

     Guarantees: As defined in the preamble hereto.

     Guarantors: As defined in the preamble hereto.

     Holders: As defined in Section 2(b) hereof.

     Indemnified Holder: As defined in Section 8(a) hereof.

     Indenture: The Indenture, dated as of October 13, 2010, by and among the Issuers, the
Guarantors and Wells Fargo Bank, National Association, as trustee (the “Trustee”), pursuant to

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which the Securities are to be issued, as such Indenture is amended or supplemented from time
to time in accordance with the terms thereof.

     Initial Placement: The issuance and sale by the Issuers of the Securities to the Initial
Purchasers pursuant to the Purchase Agreement.

     Initial Purchasers: As defined in the preamble hereto.

     Initial Securities: The Securities issued and sold by the Issuers to the Initial Purchasers
pursuant to the Purchase Agreement on the Closing Date.

     Issuers: As defined in the preamble hereto.

     Notes: As defined in the preamble hereto.

     Person: An individual, partnership, corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.

     Prospectus: The prospectus included in a Registration Statement, as amended or supplemented
by any prospectus supplement and by all other amendments thereto, including post-effective
amendments, and all material incorporated by reference into such Prospectus.

     Purchase Agreement: As defined in the preamble hereto.

     Registration Actions: As defined in Section 4(c) hereof.

     Registration Default: As defined in Section 5 hereof.

     Registration Statement: Any registration statement of the Issuers relating to (a) an offering
of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, which is filed pursuant to the
provisions of this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.

     Securities: As defined in the preamble hereto.

     Securities Act: The Securities Act of 1933, as amended.

     Shelf Filing Deadline: As defined in Section 4(a) hereof.

     Shelf Registration Statement: As defined in Section 4(a) hereof.

     Suspension Period: As defined in Section 4(c) hereof.

     Transfer Restricted Securities: The Securities; provided that the Securities shall cease to
be Transfer Restricted Securities on the earliest to occur of (i) the date on which a Registration
Statement with respect to such Securities has become effective under the Securities Act and such
Securities have been exchanged and are entitled to be resold to the public by the Holder thereof

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without complying with the prospectus delivery requirements of the Securities Act, or such
Security has been disposed of pursuant to such Registration Statement, (ii) if a Shelf Registration
Statement is required to be filed in accordance with Section 4 hereof, the expiration of the period
set forth in the final sentence of Section 4(a), (iii) the date upon which such Security is sold
pursuant to Rule 144 under circumstances in which any legend borne by such Security relating to
restrictions on the transferability thereof, under the Securities Act or otherwise, is removed, or
the restrictive CUSIP number is redesignated as non-restrictive by the Issuer or pursuant to the
Indenture or (iv) the date on which such Securities cease to be outstanding.

     Trust Indenture Act: The Trust Indenture Act of 1939, as amended.

     Underwritten Registration or Underwritten Offering: A registration in which securities of the
Issuers are sold to an underwriter for reoffering to the public.

     SECTION 2. Securities Subject to This Agreement.

     (a) Transfer Restricted Securities. The securities entitled to the benefits of this
Agreement are the Transfer Restricted Securities.

     (b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of
Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted
Securities.

     SECTION 3. Registered Exchange Offer.

     (a) Unless the Exchange Offer shall not be permissible under applicable law or Commission
policy (after the procedures set forth in Section 6(a) hereof have been complied with), or there
are no Transfer Restricted Securities outstanding, the Issuers and the Guarantors shall (i) cause
to be filed with the Commission an Exchange Offer Registration Statement, (ii) use their
commercially reasonable efforts to cause such Exchange Offer Registration Statement to be declared
effective, (iii) in connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause such Exchange Offer
Registration Statement to become effective, (B) if applicable, file a post-effective amendment to
such Exchange Offer Registration Statement pursuant to Rule 430A under the Securities Act and (C)
use their commercially reasonable efforts to cause all necessary filings in connection with the
registration and qualification of the Exchange Securities to be made under the state securities or
blue sky laws of such jurisdictions to permit Consummation of the Exchange Offer; provided,
however, that none of the Issuers or the Guarantors shall be required to (x) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(a) or (y) take any action which would subject it to
general service of process or taxation in any such jurisdiction where it is not then so subject and
(iv) upon the effectiveness of such Exchange Offer Registration Statement, commence the Exchange
Offer. Each of the Issuers and the Guarantors shall use their commercially reasonable efforts to
Consummate the Exchange Offer not later than 360 days following the Closing Date (or if such 360th
day is not a Business Day, the next succeeding Business Day) (the “Exchange Date”). The Exchange
Offer Registration Statement shall be on the appropriate form permitting registration of the
Exchange Securities to be offered

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in exchange for the Transfer Restricted Securities and to permit resales of Transfer
Restricted Securities held by Broker-Dealers as contemplated by Section 3(c) hereof.

     (b) The Issuers and the Guarantors shall use their commercially reasonable efforts to
cause the Exchange Offer Registration Statement to be effective continuously and shall keep the
Exchange Offer open for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 Business Days after the date notice of the Exchange Offer
is mailed to the Holders; provided, further, that such period shall be extended by the number of
days in any Suspension Period. The Issuers shall cause the Exchange Offer to comply in all
material respects with all applicable federal and state securities laws. No securities other than
the Exchange Securities shall be included in the Exchange Offer Registration Statement. The
Issuers shall use their commercially reasonable efforts to cause the Exchange Offer to be
Consummated by the Exchange Date.

     (c) The Issuers shall indicate in a “Plan of Distribution” section contained in the
Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who
holds Transfer Restricted Securities that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer Restricted Securities
acquired directly from the Issuers), may exchange such Transfer Restricted Securities pursuant to
the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the
meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of
the Securities Act in connection with any resales of the Exchange Securities received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the
delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such “Plan of Distribution” section shall also contain all other information with
respect to such resales by Broker-Dealers that the Commission may require in order to permit such
resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or
disclose the amount of Transfer Restricted Securities held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the date of this
Agreement.

     The Issuers and the Guarantors shall use their commercially reasonable efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and amended as required
by the provisions of Section 6(c) hereof to the extent necessary to ensure that it is available for
resales of Transfer Restricted Securities acquired by Broker-Dealers for their own accounts as a
result of market-making activities or other trading activities, and to ensure that it conforms in
all material respects with the requirements of this Agreement, the Securities Act and the policies,
rules and regulations of the Commission as announced from time to time, for a period ending on the
earlier of (i) one year from the date on which the Exchange Offer Registration Statement is
declared effective and (ii) the date on which a Broker-Dealer is no longer required to deliver a
prospectus in connection with market-making or other trading activities.

     The Issuers shall provide sufficient copies of the latest version of such Prospectus to
Broker-Dealers promptly upon request at any time during such one year (or shorter as provided in
the foregoing sentence) period in order to facilitate such resales.

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     SECTION 4. Shelf Registration.

     (a) Shelf Registration. If (i) the Issuers are not required to file an Exchange Offer
Registration Statement or to consummate the Exchange Offer solely because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a)
hereof have been complied with), (ii) for any reason the Exchange Offer is not Consummated by the
Exchange Date, or (iii) prior to the Exchange Date: (A) the Initial Purchasers request from the
Issuers with respect to Transfer Restricted Securities held by them not eligible to be exchanged
for Exchange Securities in the Exchange Offer, (B) with respect to any Holder of Transfer
Restricted Securities such Holder notifies the Issuers that (i) such Holder is prohibited by
applicable law or Commission policy from participating in the Exchange Offer, (ii) such Holder may
not resell the Exchange Securities acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder, or (iii) such Holder is
a Broker-Dealer and holds Transfer Restricted Securities acquired directly from the Issuers or one
of their affiliates or (C) in the case of any Initial Purchaser, such Initial Purchaser notifies
the Issuers it will not receive Exchange Securities in exchange for Transfer Restricted Securities
constituting any portion of such Initial Purchaser’s unsold allotment, the Issuers and the
Guarantors shall:

     (x) use their commercially reasonable efforts to cause to be filed a shelf
registration statement pursuant to Rule 415 under the Securities Act, which may be an
amendment to the Exchange Offer Registration Statement (in either event, the “Shelf
Registration Statement”), on or prior to the 45th day after the date on which the Issuers
receive such notice from a Holder of Transfer Restricted Securities or an Initial Purchaser
(such date being the “Shelf Filing Deadline”), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities the Holders of which shall have
provided the information required pursuant to Section 4(b) hereof; and

     (y) use their commercially reasonable efforts to cause such Shelf Registration
Statement to be declared effective as promptly as practicable, but no later than (A) 120
days (or if such 120th day is not a Business Day the next succeeding Business Day), or (B)
180 days if the Shelf Registration Statement is not reviewed by the Commission (or if such
180th day is not a Business Day, the next succeeding Business Day), after such time such
obligation to file first arises; provided that the Issuers and the Guarantors shall not be
required to cause such Shelf Registration Statement to be declared effective earlier than
the 360th day following the Closing Date (or if such 360th day is not a Business Day, the
next succeeding Business Day).

     Each of the Issuers and the Guarantors shall use their commercially reasonable efforts to keep
such Shelf Registration Statement continuously effective, supplemented and amended as required by
the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for resales of Transfer Restricted Securities by the Holders of such Securities entitled
to the benefit of this Section 4(a), and to ensure that it conforms in all material respects with
the requirements of this Agreement, the Securities Act and the policies, rules and regulations of
the Commission as announced from time to time, from the date on which the Shelf Registration
Statement is declared effective by the Commission until the expiration of the one-year period

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referred to in Rule 144 applicable to securities held by non-affiliates under the Securities
Act (or shorter period that will terminate when all the Transfer Restricted Securities covered by
such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement.

     (b) Provision by Holders of Certain Information in Connection with the Shelf Registration
Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted
Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such
Holder furnishes to the Issuers in writing, within 10 Business Days after receipt of a request
therefor, such information as the Issuers may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each Holder
as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the
Issuers all information required to be disclosed in order to make the information previously
furnished to the Issuers by such Holder not materially misleading.

     (c) Suspension. Notwithstanding anything to the contrary and subject to the limitation
set forth in the next succeeding paragraph, at any time after the effectiveness of the Shelf
Registration Statement, the Issuers and the Guarantors shall be entitled to suspend their
obligation to file any amendment to the Shelf Registration Statement, furnish any supplement or
amendment to a Prospectus included in the Shelf Registration Statement, make any other filing with
the Commission, cause the Shelf Registration Statement or other filing with the Commission to
remain effective or take any similar action (collectively, “Registration Actions”) upon (A) the
issuance by the Commission of a stop order suspending the effectiveness of the Shelf Registration
Statement or the initiation of proceedings with respect to the Shelf Registration Statement under
Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the existence of any
fact as a result of which the Shelf Registration Statement would or shall contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or the related Prospectus would or shall
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (C) the occurrence or existence of any corporate
development that, in the good faith determination of the Board of Directors of the general partner
of Parent, makes it appropriate to postpone or suspend the availability of the Shelf Registration
Statement and the related Prospectus. Upon the occurrence of any of the conditions described in
clause (A), (B) or (C) above, the Issuers shall give prompt notice (a “Suspension Notice”) thereof
to the Holders. Upon the termination of such condition, the Issuers shall give prompt notice
thereof to the Holders and shall promptly proceed with all Registration Actions that were suspended
pursuant to this paragraph.

     The Issuers may only suspend Registration Actions pursuant to the preceding paragraph for one
or more periods (each, a “Suspension Period”) not to exceed, in the aggregate, (x) forty-five (45)
days in any three month period or (y) ninety (90) days in any twelve month period. Any Suspension
Period will not alter the obligations of the Issuers to pay Additional Interest under the
circumstances set forth in Section 5 hereof, if applicable. Each Suspension Period shall be deemed
to begin on the date the relevant Suspension Notice is given to the Holders and shall be deemed to
end on the earlier to occur of (1) the date on which the Issuers give the Holders a notice that the
Suspension Period has terminated and (2) the date on which the number

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of days during which a Suspension Period has been in effect exceeds, in the aggregate, (x)
forty-five (45) days in any three month period or (y) ninety (90) days in any twelve month period.

     SECTION 5. Additional Interest.

     If (i) the Exchange Offer has not been Consummated on or prior to the date specified for such
consummation in this Agreement, (ii) any Shelf Registration Statement, if required hereby, has not
been declared effective by the Commission on or prior to the date specified for such effectiveness
in this Agreement or (iii) any Registration Statement required by this Agreement has been declared
effective but ceases to be effective at any time at which it is required to be effective under this
Agreement (other than during a Suspension Period), as applicable (each such event referred to in
clauses (i) through (iii), a “Registration Default”), the Issuers hereby agree that the interest
rate borne by the Transfer Restricted Securities shall be increased by 1.00% per annum following
the occurrence of any Registration Default (such increase, “Additional Interest”). Following the
cure of all Registration Defaults relating to the particular Transfer Restricted Securities the
interest rate borne by the relevant Transfer Restricted Securities will be reduced to the original
interest rate borne by such Transfer Restricted Securities; provided, however, that, if after any
such reduction in interest rate, a different Registration Default occurs, the interest rate borne
by the relevant Transfer Restricted Securities shall again be increased pursuant to the foregoing
provisions.

     Notwithstanding the foregoing, (i) the amount of Additional Interest pursuant to this Section
5 shall not increase because more than one Registration Default has occurred and is continuing and
(ii) a Holder of Transfer Restricted Securities who is not entitled to the benefits of the Shelf
Registration Statement shall not be entitled to Additional Interest with respect to a Registration
Default that pertains to the Shelf Registration Statement.

     All accrued Additional Interest shall be payable to the Holders entitled thereto, in the
manner provided for the payment of interest in the Indenture, as more fully set forth in the
Indenture and the Securities. All obligations of the Issuers and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive until such time as all
such obligations with respect to such security shall have been satisfied in full.

     SECTION 6. Registration Procedures.

     (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the
Issuers and the Guarantors shall comply with all of the provisions of Section 6(c) hereof, shall
use their commercially reasonable efforts to effect such exchange to permit the sale of Transfer
Restricted Securities being sold in accordance with the intended method or methods of distribution
thereof set forth in the Registration Statement. As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Issuers, prior to the Consummation thereof, a
written representation to the Issuers (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of any of the Issuers, (B) it is not engaged in, and does not intend to engage in, and
has no arrangement or understanding with any Person to participate in, a distribution of the

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Exchange Securities to be issued in the Exchange Offer and (C) it is acquiring the Exchange
Securities in its ordinary course of business. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Issuers’ preparations for the Exchange
Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using
the Exchange Offer to participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement
rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988),
as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar
no-action letters (which may include any no-action letter obtained pursuant to clause (i) above),
and (2) must comply with the registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction and that such a secondary resale transaction
should be covered by an effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of
Exchange Securities obtained by such Holder in exchange for Transfer Restricted Securities acquired
by such Holder directly from the Issuers.

     (b) Shelf Registration Statement. If required pursuant to Section 4, in connection with
the Shelf Registration Statement, each of the Issuers and the Guarantors shall comply with all the
provisions of Section 6(c) hereof and shall use its commercially reasonable efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof set forth in such Shelf Registration
Statement, and pursuant thereto each of the Issuers and the Guarantors will as promptly as
practicable prepare and file with the Commission a Registration Statement relating to the
registration on any appropriate form under the Securities Act, which form shall be available for
the sale of the Transfer Restricted Securities in accordance with the intended method or methods of
distribution thereof set forth in such Shelf Registration Statement.

     (c) General Provisions. Except as otherwise provided herein, in connection with any
Registration Statement and any Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities (including, without limitation, any Registration Statement and
the related Prospectus required to permit resales of Transfer Restricted Securities by
Broker-Dealers), each of the Issuers and the Guarantors shall:

     (i) use its commercially reasonable efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for the period
specified in Section 3 or 4 hereof, as applicable; upon the occurrence of any event that
would cause any such Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective and usable for
re-sale of Transfer Restricted Securities during the period required by this Agreement, the
Issuers shall file as promptly as practicable an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such misstatement or omission, and, in
the case of either clause (A) or (B), use their commercially reasonable efforts to cause
such amendment to be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

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     (ii) prepare and file with the Commission such amendments and post-effective
amendments to the applicable Registration Statement as may be necessary to keep the
Registration Statement effective for the applicable period set forth in Section 3 or 4
hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply in
all material respects with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to the Prospectus;

     (iii) advise the underwriter(s), if any, and selling Holders as promptly as
practicable and, if requested by such Persons, to confirm such advice in writing, (A) when
the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and,
with respect to any Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Securities Act or of
the suspension by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated
by reference therein untrue, or that requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the statements therein (with
respect to the Prospectus, in light of the circumstances under which they were made) not
misleading. If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or blue sky laws,
each of the Issuers and the Guarantors shall use its commercially reasonable efforts to
obtain the withdrawal or lifting of such order at the earliest practicable time;

     (iv) in the case of a Shelf Registration Statement or if a Prospectus is required
to be delivered by any Broker-Dealer in the case of an Exchange Offer, furnish without
charge to each of the Initial Purchasers, each selling Holder named in any Registration
Statement, and each of the underwriter(s), if any, before filing with the Commission, copies
of any Registration Statement or any Prospectus included therein or any amendments or
supplements to any such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration Statement), and
permit one legal counsel to the Initial Purchasers and such Holders and underwriter(s), if
any, with an opportunity to review and comment upon any such

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Registration Statement or Prospectus (including all such documents incorporated by
reference) at least five (5) Business Days prior to their filing with the Commission and
upon all amendments and supplements thereto such lesser period prior to their filing with
the Commission as shall be reasonable and appropriate under the circumstances, and the
Issuers shall not file any documents to which such legal counsel to the Initial Purchasers
and such Holders and underwriter(s), if any, reasonably objects in writing (it being agreed
that such writing may for this purpose be in electronic format). Notwithstanding the
foregoing, the Issuers shall not be required to take any actions under this Section 6(c)(iv)
that are not, in the reasonable opinion of counsel for the Issuers, in compliance with
applicable law or to include any disclosure which at the time would have an adverse effect
on the business or operations of the Issuers and/or their subsidiaries, as determined in
good faith by the Issuers;

     (v) in the case of a Shelf Registration Statement or if a Prospectus is required to
be delivered by any Broker-Dealer in the case of an Exchange Offer, make available at
reasonable times for inspection by the Initial Purchasers, the managing underwriter(s), if
any, participating in any disposition pursuant to such Registration Statement and one firm
of legal counsel or accountant retained by such Initial Purchasers or any of the
underwriter(s), all financial and other records, pertinent corporate documents and
properties of each of the Issuers and the Guarantors reasonably requested by any such
Persons and cause the Issuers’ and the Guarantors’ officers, directors and employees to
supply all information reasonably requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement or any post-effective amendment
thereto subsequent to the filing thereof and prior to its effectiveness and to participate
in meetings with investors to the extent reasonably requested by the managing
underwriter(s), if any;

     (vi) if requested by any selling Holders or the underwriter(s), if any, promptly
incorporate in any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included therein, including, without
limitation, information relating to the “Plan of Distribution” of the Transfer Restricted
Securities, information with respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being paid therefor and any
other terms of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Issuers are notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;

     (vii) use its commercially reasonable efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate principal amount of
Securities covered thereby or the underwriter(s), if any;

     (viii) in the case of a Shelf Registration Statement, furnish to each selling
Holder and each of the underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each amendment

11

 

thereto, including financial statements and schedules (without documents incorporated
by reference therein or exhibits thereto, unless requested);

     (ix) deliver to (A) in the case of an Exchange Offer, each Broker-Dealer who
submits a written request to the Issuers and (ii) in the case of a Shelf Registration
Statement, each selling Holder and each of the underwriter(s), if any, without charge, as
many copies of the Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; each of the Issuers and the
Guarantors hereby consents to the use of the Prospectus and any amendment or supplement
thereto by each of the selling Holders and each of the underwriter(s), if any, in connection
with the offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;

     (x) in the case of a Shelf Registration Statement, enter into such agreements
(including an underwriting agreement), and make such customary representations and
warranties, and take all such other customary and appropriate actions in connection
therewith in order to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all
to such extent as may be reasonably requested by any Holder of Transfer Restricted
Securities or underwriter in connection with any sale or resale pursuant to any Shelf
Registration Statement contemplated by this Agreement; and whether or not an underwriting
agreement is entered into and whether or not the registration is an Underwritten
Registration, each of the Issuers and the Guarantors shall:

     (A) to the extent reasonably requested, furnish to each Initial Purchaser,
each selling Holder and each underwriter, if any, in such substance and scope as
they may reasonably request and as are customarily made by issuers to underwriters
in primary underwritten offerings, upon the effectiveness of the Shelf Registration
Statement:

     (1) a certificate, dated the date of effectiveness of the Shelf
Registration Statement signed by (y) the President or any Vice President and
(z) a principal financial or accounting officer of each of the Issuers and
the Guarantors, confirming, as of the date thereof, the matters set forth in
paragraphs (g) and (h) of Section 6 of the Purchase Agreement and such other
matters as such parties may reasonably request;

     (2) an opinion of counsel for the Issuers and the Guarantors,
covering substantially the subject matter of the opinion delivered pursuant
to Section 6(a) of the Purchase Agreement, dated the date of effectiveness
of the Shelf Registration Statement; and

     (3) a customary comfort letter, dated the date of effectiveness of
the Shelf Registration Statement, from the Issuers’ independent accountants,
in the customary form and covering matters of the type customarily requested
to be covered in comfort letters by underwriters in connection with primary
underwritten offerings, and covering or affirming

12

 

the matters set forth in the comfort letters delivered pursuant to
Section 6(c) of the Purchase Agreement;

     (B) set forth in full or incorporate by reference in the underwriting
agreement, if any, the indemnification provisions and procedures of Section 8 hereof
with respect to all parties to be indemnified pursuant to said Section; and

     (C) deliver such other documents and certificates as may be reasonably
requested by such parties and as are customarily delivered in similar offerings to
evidence compliance with Section 6(c)(x)(A) hereof and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Issuers or any of the Guarantors pursuant to this Section 6(c)(x), if any.

     If at any time the representations and warranties of the Issuers and the Guarantors
contemplated by the certificate furnished pursuant to Section 6(c)(x)(A)(1) hereof cease to be true
and correct, the Issuers or the Guarantors shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall
confirm such advice in writing;

     (xi) in the case of a Shelf Registration Statement, prior to any public offering of
Transfer Restricted Securities, use its commercially reasonable efforts to cooperate with
the selling Holders, the underwriter(s), if any, and their respective counsel in connection
with the registration and qualification of the Transfer Restricted Securities under the
state securities or blue sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may reasonably request in writing by the time the Shelf Registration
Statement is declared effective by the Commission, and use its commercially reasonable
efforts to do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however, that none of the Issuers nor the Guarantors shall
be required to register or qualify as a foreign corporation where it is not then so
qualified or to take any action that would subject it to the service of process in suits or
to taxation in any jurisdiction where it is not then so subject;

     (xii) issue, upon the request of any Holder of Transfer Restricted Securities
covered by the Exchange Offer Registration Statement, Exchange Securities having an
aggregate principal amount equal to the aggregate principal amount of Transfer Restricted
Securities surrendered to the Issuers by such Holder in exchange therefor or being sold by
such Holder; such Exchange Securities to be registered in the name of such Holder or in the
name of the purchaser(s) of such Securities, as the case may be; in return, the Transfer
Restricted Securities held by such Holder, if in certificated form, shall be surrendered to
the Issuers for cancellation;

     (xiii) cooperate with the selling Holders and the underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and registered in such names

13

 

as the Holders or the underwriter(s), if any, may request at least three Business Days
prior to any sale of Transfer Restricted Securities made by such Holders or underwriter(s);

     (xiv) use its commercially reasonable efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in Section 6(c)(xi) hereof;

     (xv) if any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist
or have occurred, use its commercially reasonable efforts to prepare a supplement or
post-effective amendment to the Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not
contain at the time of such delivery any untrue statement of any material fact or omit to
state any material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;

     (xvi) provide a CUSIP number for all Securities not later than the effective date
of the Registration Statement covering such Securities and provide the Trustee under the
Indenture with printed certificates for such Securities which are in a form eligible for
deposit with the Depository Trust Company and take all other action necessary to ensure that
all such Securities are eligible for deposit with the Depository Trust Company;

     (xvii) reasonably cooperate and assist in any filings required to be made with
FINRA and in the performance of any due diligence investigation by any underwriter
(including any “qualified independent underwriter”) that is required to be retained in
accordance with the rules and regulations of FINRA;

     (xviii) otherwise use its commercially reasonable efforts to comply in all material
respects with all applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated earnings statement
meeting the requirements of Rule 158 under the Securities Act (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal quarter in which
Transfer Restricted Securities are sold to underwriters in a firm commitment or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with
the first month of the Issuers’ first fiscal quarter commencing after the effective date of
the Registration Statement;

     (xix) cause the Indenture to be qualified under the Trust Indenture Act not later
than the effective date of the first Registration Statement required by this Agreement, and,
in connection therewith, cooperate with the Trustee and the Holders of Securities to effect
such changes to the Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the Trust Indenture Act; and to execute and use its
commercially reasonable efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents required to be

14

 

filed with the Commission to enable such Indenture to be so qualified in a timely
manner; and

     (xx) in the case of a Shelf Registration Statement, cause all Securities covered by
the Registration Statement to be listed on each securities exchange or automated quotation
system on which similar securities issued by Issuers are then listed if reasonably requested
by the Holders of a majority in aggregate principal amount of Securities or the managing
underwriter(s), if any.

     Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any
notice from the Issuers of (i) the existence of any fact of the kind described in Section
6(c)(iii)(D) hereof or (ii) the commencement of a Suspension Period, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration
Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(xv) hereof, or until it is advised in writing (the “Advice”) by the
Issuers that the use of the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so directed by the
Issuers, each Holder will deliver to the Issuers (at the Issuers’ expense) all copies, other than
permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice. In the event the
Issuers shall give any such notice, the time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the
number of days during the period from and including the date of the giving of such notice pursuant
to Section 6(c)(iii)(D) or Section 4(c), as the case may be, hereof to and including the date when
each selling Holder covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or shall have received
the Advice.

     SECTION 7. Registration Expenses.

     (a) All expenses incident to the Issuers’ and the Guarantor’s performance of or compliance
with this Agreement will be borne by the Issuers and the Guarantors, jointly and severally,
regardless of whether a Registration Statement becomes effective, including, without limitation:
(i) all registration and filing fees and expenses (including filings made by any Initial Purchaser
or Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent
underwriter” and its counsel that may be required by the rules and regulations of FINRA)); (ii) all
fees and expenses of compliance with federal securities and state securities or blue sky laws;
(iii) all expenses of printing (including printing certificates for the Exchange Securities to be
issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and
telephone; (iv) all fees and disbursements of counsel for the Issuers and the Guarantors and,
subject to Section 7(b) hereof, the Holders of Transfer Restricted Securities; (v) all application
and filing fees in connection with listing the Exchange Securities on a securities exchange or
automated quotation system pursuant to the requirements thereof; and (vi) all fees and
disbursements of independent certified public accountants of the Issuers and the Guarantors
(including the expenses of any special audit and comfort letters required by or incident to such
performance).

15

 

     Each of the Issuers and the Guarantors will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit and the fees and expenses of any
Person, including special experts, retained by the Issuers or the Guarantors.

     (b) In connection with any Shelf Registration Statement, the Issuers and the Guarantors,
jointly and severally, will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable and documented fees and disbursements of not more than one counsel, who shall be Vinson
& Elkins L.L.P. or such other counsel as may be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Shelf Registration Statement is
being prepared.

     Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder’s Transfer Restricted Securities pursuant to a
Shelf Registration Statement.

     SECTION 8. Indemnification.

     (a) The Issuers and the Guarantors, jointly and severally, agree to indemnify and hold
harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred
to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the
officers, directors and employees of any Holder (any Person referred to in clause (i), (ii) or
(iii) may hereinafter be referred to as an “Indemnified Holder”) from and against any and all
losses, claims, damages, liabilities, judgments, actions and expenses (including, without
limitation, and as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing, settling, compromising, paying or defending any claim or action, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, including the reasonable
and documented out-of-pocket fees and expenses of outside counsel to any Indemnified Holder), joint
or several, directly or indirectly caused by, related to, based upon, arising out of or in
connection with any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission
or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the indemnification provided for in this Section 8 does not
apply to any loss, claim, damage, liability or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission that is made in reliance upon and in
conformity with information furnished in writing to the Issuers or Guarantors by any Holder or any
underwriter, expressly for use therein. This indemnity agreement shall be in addition to any
liability which the Issuers or any of the Guarantors may otherwise have.

In case any action or proceeding (including any governmental or regulatory investigation or
proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to
which indemnity may be sought against the Issuers or the Guarantors, such Indemnified Holder (or
the Indemnified Holder controlled by such controlling person) shall promptly notify the

16

 

Issuers and the Guarantors in writing; provided, however, that the failure to give such notice
shall not relieve any of the Issuers or the Guarantors of its obligations pursuant to this
Agreement to the extent it is not materially prejudiced as a result of such failure. If such
Indemnified Holder is entitled to indemnification under this Section 8 with respect to any action
or proceeding brought by a third party, the Issuers and the Guarantors shall be entitled to assume
the defense of any such action or proceeding with counsel reasonably satisfactory to such
Indemnified Holder. Upon assumption by the Issuers and the Guarantors of the defense of any such
action or proceeding, such Indemnified Holder shall have the right to participate in such action or
proceeding and to retain its own counsel but the Issuers and the Guarantors shall not be liable for
any legal fees and expenses of other counsel subsequently incurred by the Indemnified Holder in
connection with the defense thereof unless (i) the Issuers and the Guarantors have agreed to pay
such fees and expenses, (ii) the Issuers and the Guarantors shall have failed to employ counsel
reasonably satisfactory to such Indemnified Holder in a timely manner or (iii) such Indemnified
Holder shall have been advised by counsel that there are actual or potential conflicting interests
between the Issuers, the Guarantors and the Indemnified Holder, including situations in which there
are one or more legal defenses available to the Indemnified Holder that are inconsistent with or
additional to those available to the Issuers and the Guarantors; provided, however, that the
Issuers and the Guarantors shall not, in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings arising out of the same
general allegations or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified
Holders. The Issuers and the Guarantors shall not consent to the terms of any compromise or
settlement of any action defended by the Issuers and the Guarantors in accordance with the
foregoing without the prior written consent of the Indemnified Holder unless such compromise or
settlement (i) includes an unconditional release of the Indemnified Holder from all liability
arising out of such action, claim, litigation or proceeding and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on behalf of the Indemnified
Holder. The Issuers and the Guarantors shall not be required to indemnify the Indemnified Holders
under this Section 8 for any amount paid or payable by the Indemnified Holders in connection with
the settlement of any action, proceeding or investigation without the written consent of the
Issuers and the Guarantors, which consent shall not be unreasonably withheld.

     (b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to
indemnify and hold harmless the Issuers, the Guarantors and their respective directors, officers of
the Issuers and the Guarantors who sign a Registration Statement, and any Person controlling
(within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the
Issuers or any of the Guarantors, and the respective officers, directors and employees,
representatives and agents of each such Person, to the same extent as the foregoing indemnity from
the Issuers and the Guarantors to each of the Indemnified Holders, but only with respect to claims
and actions based on information furnished in writing by such Holder expressly for use in any
Registration Statement. In case any action or proceeding shall be brought against the Issuers, the
Guarantors or their respective directors or officers or any such controlling person in respect of
which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall
have the rights and duties given the Issuers and the Guarantors, and the Issuers, the Guarantors,
their respective directors and officers and any such controlling person shall have the rights and
duties given to each Holder by the preceding paragraph.

17

 

     (c) If the indemnification provided for in this Section 8 is unavailable to an indemnified
party under Section 8(a) or (b) hereof (other than by reason of exceptions provided in those
Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses
referred to therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative benefits received by the Issuers and the Guarantors, on the one
hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the
Issuers and the Guarantors shall be deemed to be equal to the total gross proceeds to the Issuers
and the Guarantors from the Initial Placement), the amount of Additional Interest which did not
become payable as a result of the filing of the Registration Statement resulting in such losses,
claims, damages, liabilities, judgments actions or expenses, and such Registration Statement, or if
such allocation is not permitted by applicable law, the relative fault of the Issuers and the
Guarantors, on the one hand, and the Holders, on the other hand, in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative fault of the Issuers, on the one hand,
and of the Indemnified Holder, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Issuers or any of
the Guarantors, on the one hand, or the Indemnified Holders, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a) hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or defending any action
or claim.

     The Issuers, the Guarantors and each Holder of Transfer Restricted Securities agree that it
would not be just and equitable if contribution pursuant to this Section 8(c) were determined by
pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 8, none of the Holders (and the related Indemnified Holders) shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the total discount
received by such Holder with respect to the Initial Securities exceeds the amount of any damages
which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to
contribute pursuant to this Section 8(c) are several in proportion to the respective principal
amount of Initial Securities held by each of the Holders hereunder and not joint.

     SECTION 9. Rule 144A.

18

 

     Each of the Issuers and the Guarantors hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial
owner of Transfer Restricted Securities in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A under the Securities Act.

     SECTION 10. Participation in Underwritten Registrations.

     No Holder may participate in any Underwritten Registration hereunder unless such Holder (a)
agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements
and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the terms of such
underwriting arrangements.

     SECTION 11. Selection of Underwriters.

     The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who
desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any
such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will
administer such offering will be selected by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities included in such offering; provided, however, that
such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the
Issuers.

     SECTION 12. Miscellaneous.

     (a) Remedies. Each of the Issuers, the Guarantors and the Initial Purchasers hereby
agrees that monetary damages would not be adequate compensation for any loss incurred by reason of
a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any
action for specific performance that a remedy at law would be adequate.

     (b) No Inconsistent Agreements. Each of the Issuers and the Guarantors will not on or
after the date of this Agreement enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with
and are not inconsistent with the rights granted to the holders of an Issuer’s or any of the
Guarantors’ securities under any agreement in effect on the date hereof.

     (c) Adjustments Affecting the Securities. The Issuers will not take any action, or permit
any change to occur, with respect to the Securities that would materially and adversely affect the
ability of the Holders to Consummate any Exchange Offer.

     (d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified
or supplemented, and waivers or consents to or departures from the provisions hereof may not be
given unless the Issuers have (i) in the case of Section 5 hereof and this Section 12(d)(i),
obtained the written consent of Holders of all outstanding Transfer

19

 

Restricted Securities and (ii) in the case of all other provisions hereof, obtained the
written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted
Securities (excluding any Transfer Restricted Securities held by the Issuers or their respective
Affiliates). Notwithstanding the foregoing, a waiver or consent or departure from the provisions
hereof that relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the
Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being
tendered or registered; provided, however, that, with respect to any matter that directly or
indirectly affects the rights of any Initial Purchaser hereunder, the Issuers shall obtain the
written consent of each such Initial Purchaser with respect to which such amendment, qualification,
supplement, waiver, consent or departure is to be effective.

     (e) Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, first-class mail (registered or certified, return
receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:

     (i) if to a Holder, at the address set forth on the records of the Trustee under
the Indenture, with a copy to the Trustee under the Indenture; and

     (ii) if to the Issuers or the Guarantors:

Alta Mesa Holdings, LP

15415 Katy Freeway, Suite 800

Houston, Texas 77094

Attention: Harlan H. Chappelle

Telephone: 281-530-0991

Internet electronic mail: hchappelle@altamesa.net

     (iii) with a copy to (which shall not constitute notice or service of process
pursuant to this Agreement):

Haynes & Boone L.L.P.

1221 McKinney, Suite 2100

Houston, Texas 77010

Facsimile: (713) 236-5557

Attention: William B. Nelson

Internet electronic mail: bill.nelson@haynesboone.com

     All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.

20

 

     Copies of all such notices, demands or other communications shall be concurrently delivered by
the Person giving the same to the Trustee at the address specified in the Indenture.

     (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties, including, without limitation, and without
the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder. Nothing herein shall be deemed to permit any assignment, transfer or
other disposition of Transfer Restricted Securities in violation of the terms of the Purchase
Agreement or the Indenture.

     (g) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES THEREOF.

     (j) Severability. In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.

     (k) Entire Agreement. This Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Issuers with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and understandings between
the parties with respect to such subject matter.

[The remainder of this page intentionally left blank.]

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	ALTA MESA HOLDINGS, LP

 	 
	 	By: 	Alta Mesa Holdings GP, LLC, 	 
	 	 	as general partner 	 
	 
	 	 	 
	 	By:  	 /s/ Harlan H. Chappelle
 	 
	 	 	Harlan H. Chappelle 	 
	 	 	Chief Executive Officer 	 
	 
	 	ALTA MESA FINANCE SERVICES CORP.

 	 
	 	By:  	/s/ Harlan H. Chappelle	 
	 	 	Harlan H. Chappelle 	 
	 	 	Chief Executive Officer 	 

S-1

 

	 	 	 	 	 

	 	 	 	 	 
	 	GUARANTORS:

ARI DEVELOPMENT, LLC

ALTA MESA DRILLING, LLC

ALTA MESA GP, LLC

ALTA MESA ACQUISITION SUB, LLC

ALTA MESA SERVICES, LP

CAIRN ENERGY USA, LLC

HILLTOP ACQUISITION LLC

LOUISIANA ONSHORE PROPERTIES LLC

THE MERIDIAN PRODUCTION, LLC

THE MERIDIAN RESOURCE, LLC

THE MERIDIAN RESOURCE &

     EXPLORATION LLC

TMR DRILLING, LLC

VIRGINIA OIL AND GAS, LLC

SUNDANCE ACQUISITION, LLC

TE TMR,LLC

TMR EQUIPMENT, LLC

NEW EXPLORATION TECHNOLOGIES

     COMPANY, L.L.C.

FBB ANADARKO, LLC

LOUISIANA EXPLORATION & ACQUISITION

     PARTNERHIP, LLC

BRAYTON MANAGEMENT GP, LLC

BRAYTON MANAGEMENT GP II, LLC

 	 
	 	Each by:  	/s/ Harlan H. Chappelle	 
	 	 	Harlan H. Chappelle 	 
	 	 	Its Chief Executive Officer 	 

S-2

 

	 	 	 	 	 

	 	 	 	 	 
	 	GUARANTORS (cont’d.):

ARANSAS RESOURCES, L.P.

BUCKEYE PRODUCTION COMPANY, LP

LOUISIANA EXPLORATION &

     ACQUISITIONS, LP

NAVASOTA RESOURCES, LTD., LLP

NUECES RESOURCES, LP

OKLAHOMA ENERGY ACQUISITIONS, LP

TEXAS ENERGY ACQUISITIONS, LP

GALVESTON BAY RESOURCES, LP

PETRO ACQUISITIONS, LP

PETRO OPERATING COMPANY, LP

Each by: Alta Mesa GP, LLC

 	 

	 	 	 	 	 
	 	By:  	/s/ Harlan H. Chappelle	 
	 	 	Harlan H. Chappelle 	 
	 	 	Chief Executive Officer 	 

S-3

 

     The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date
first above written:

WELLS FARGO SECURITIES, LLC

Acting severally on behalf of themselves

   and as Representative of the several Initial Purchasers

	 	 	 	 	 
	By:  	/s/ Jeff Gore
	 
	 	Name:  	Jeff Gore	 
	 	Title:  	Managing Director 	 
	 

S-4exv10w1

Exhibit 10.1

EXECUTION VERSION

 

$500,000,000

SIXTH AMENDED AND RESTATED CREDIT AGREEMENT

Among

ALTA MESA HOLDINGS, LP

as Borrower,

THE LENDERS PARTY HERETO FROM TIME TO TIME

as Lenders,

and

WELLS FARGO BANK, N.A.

as Administrative Agent and as Issuing Lender

May 13, 2010

 

Wells Fargo Securities, LLC and Union Bank, N.A.

as Co-Lead Arrangers

Union Bank, N.A.

as Syndication Agent

Toronto Dominion (New York) LLC

as Documentation Agent

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	2	 
	Section 1.01 Certain Defined Terms
	 	 	2	 
	Section 1.02 Computation of Time Periods
	 	 	23	 
	Section 1.03 Accounting Terms; Changes in GAAP
	 	 	23	 
	Section 1.04 Types of Advances
	 	 	24	 
	Section 1.05 Miscellaneous
	 	 	24	 
	ARTICLE II CREDIT FACILITIES
	 	 	24	 
	Section 2.01 Commitment for Advances
	 	 	24	 
	Section 2.02 Borrowing Base
	 	 	25	 
	Section 2.03 Method of Borrowing
	 	 	28	 
	Section 2.04 Reduction of the Commitments
	 	 	31	 
	Section 2.05 Prepayment of Advances
	 	 	31	 
	Section 2.06 Repayment of Advances
	 	 	34	 
	Section 2.07 Letters of Credit
	 	 	34	 
	Section 2.08 Fees
	 	 	38	 
	Section 2.09 Interest
	 	 	38	 
	Section 2.10 Payments and Computations
	 	 	39	 
	Section 2.11 Sharing of Payments, Etc.
	 	 	40	 
	Section 2.12 Breakage Costs
	 	 	40	 
	Section 2.13 Increased Costs
	 	 	41	 
	Section 2.14 Taxes
	 	 	42	 
	Section 2.15 Designation of a Different Lending Office
	 	 	43	 
	Section 2.16 Replacement of Lender
	 	 	44	 
	Section 2.17 Payments and Deductions to a Defaulting Lender
	 	 	44	 
	ARTICLE III CONDITIONS
	 	 	46	 
	Section 3.01 Conditions Precedent to Effectiveness
	 	 	46	 
	Section 3.02 Conditions Precedent to All Borrowings
	 	 	51	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	52	 
	Section 4.01 Existence; Restricted Subsidiaries
	 	 	52	 
	Section 4.02 Power
	 	 	52	 
	Section 4.03 Authorization and Approvals
	 	 	52	 
	Section 4.04 Enforceable Obligations
	 	 	53	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	Section 4.05 Financial Statements
	 	 	53	 
	Section 4.06 True and Complete Disclosure
	 	 	53	 
	Section 4.07 Litigation; Compliance with Laws
	 	 	53	 
	Section 4.08 Use of Proceeds
	 	 	54	 
	Section 4.09 Investment Company Act
	 	 	54	 
	Section 4.10 Taxes
	 	 	54	 
	Section 4.11 Pension Plans
	 	 	55	 
	Section 4.12 Condition of Property; Casualties
	 	 	55	 
	Section 4.13 No Burdensome Restrictions; No Defaults
	 	 	56	 
	Section 4.14 Environmental Condition
	 	 	56	 
	Section 4.15 Permits, Licenses, Etc.
	 	 	56	 
	Section 4.16 Gas Contracts
	 	 	57	 
	Section 4.17 Liens; Titles, Leases, Etc.
	 	 	57	 
	Section 4.18 Solvency and Insurance
	 	 	57	 
	Section 4.19 Material Agreements
	 	 	57	 
	Section 4.20 Hedging Agreements
	 	 	58	 
	Section 4.21 OFAC
	 	 	58	 
	ARTICLE V AFFIRMATIVE COVENANTS
	 	 	58	 
	Section 5.01 Compliance with Laws, Etc.
	 	 	58	 
	Section 5.02 Maintenance of Insurance
	 	 	58	 
	Section 5.03 Preservation of Corporate Existence, Etc.
	 	 	59	 
	Section 5.04 Payment of Taxes, Etc.
	 	 	60	 
	Section 5.05 Visitation Rights
	 	 	60	 
	Section 5.06 Reporting Requirements
	 	 	60	 
	Section 5.07 Maintenance of Property
	 	 	63	 
	Section 5.08 Agreement to Pledge
	 	 	63	 
	Section 5.09 Use of Proceeds
	 	 	64	 
	Section 5.10 Title Evidence
	 	 	64	 
	Section 5.11 Further Assurances; Cure of Title Defects
	 	 	64	 
	Section 5.12 Material Agreements
	 	 	65	 
	Section 5.13 Leases; Development and Maintenance
	 	 	65	 
	Section 5.14 Designations with Respect to Subsidiaries
	 	 	65	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	Section 5.15 Designation of Senior Debt
	 	 	66	 
	ARTICLE VI NEGATIVE COVENANTS
	 	 	66	 
	Section 6.01 Liens, Etc.
	 	 	66	 
	Section 6.02 Debts, Guaranties, and Other Obligations
	 	 	68	 
	Section 6.03 Agreements Restricting Liens and Distributions
	 	 	69	 
	Section 6.04 Merger or Consolidation; Asset Sales; Hedge Terminations
	 	 	70	 
	Section 6.05 Restricted Payments
	 	 	70	 
	Section 6.06 Investments
	 	 	71	 
	Section 6.07 Affiliate Transactions
	 	 	71	 
	Section 6.08 Compliance with ERISA
	 	 	71	 
	Section 6.09 Sale-and-Leaseback
	 	 	72	 
	Section 6.10 Change of Business
	 	 	72	 
	Section 6.11 Organizational Documents, Name Change; Change in Accounting
	 	 	72	 
	Section 6.12 Use of Proceeds; Letters of Credit
	 	 	72	 
	Section 6.13 Gas Imbalances, Take-or-Pay or Other Prepayments
	 	 	73	 
	Section 6.14 Limitation on Hedging
	 	 	73	 
	Section 6.15 Reserved
	 	 	74	 
	Section 6.16 Additional Subsidiaries
	 	 	74	 
	Section 6.17 Current Ratio
	 	 	74	 
	Section 6.18 Leverage Ratio
	 	 	74	 
	Section 6.19 Interest Coverage Ratio
	 	 	74	 
	Section 6.20 Orion
	 	 	74	 
	Section 6.21 Account Payables
	 	 	74	 
	Section 6.22 Subordinated Debt
	 	 	74	 
	Section 6.23 Additional Subordinated Debt
	 	 	75	 
	ARTICLE VII EVENTS OF DEFAULT; REMEDIES
	 	 	75	 
	Section 7.01 Events of Default
	 	 	75	 
	Section 7.02 Optional Acceleration of Maturity
	 	 	77	 
	Section 7.03 Automatic Acceleration of Maturity
	 	 	78	 
	Section 7.04 Right of Set-off
	 	 	78	 
	Section 7.05 Non-exclusivity of Remedies
	 	 	78	 
	Section 7.06 Application of Proceeds
	 	 	79	 

-iii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VIII THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER
	 	 	79	 
	Section 8.01 Authorization and Action
	 	 	79	 
	Section 8.02 Administrative Agent’s Reliance, Etc.
	 	 	80	 
	Section 8.03 The Administrative Agent and Its Affiliates
	 	 	80	 
	Section 8.04 Lender Credit Decision
	 	 	80	 
	Section 8.05 Indemnification
	 	 	80	 
	Section 8.06 Successor Administrative Agent and Issuing Lender
	 	 	81	 
	Section 8.07 Additional Agents
	 	 	82	 
	Section 8.08 Collateral Matters
	 	 	82	 
	ARTICLE IX MISCELLANEOUS
	 	 	83	 
	Section 9.01 Amendments, Etc.
	 	 	83	 
	Section 9.02 Notices, Etc.
	 	 	84	 
	Section 9.03 No Waiver; Remedies
	 	 	84	 
	Section 9.04 Costs and Expenses
	 	 	84	 
	Section 9.05 Binding Effect
	 	 	84	 
	Section 9.06 Lender Assignments and Participations
	 	 	84	 
	Section 9.07 Indemnification; Waiver
	 	 	86	 
	Section 9.08 Confidentiality
	 	 	87	 
	Section 9.09 Execution in Counterparts
	 	 	88	 
	Section 9.10 Survival of Representations, Etc.
	 	 	88	 
	Section 9.11 Severability
	 	 	88	 
	Section 9.12 Business Loans
	 	 	88	 
	Section 9.13 Governing Law; Submission to Jurisdiction
	 	 	88	 
	Section 9.14 WAIVER OF JURY TRIAL
	 	 	89	 
	Section 9.15 Subordination and Intercreditor Agreement; Fortis Assignment
	 	 	89	 
	Section 9.16 USA Patriot Act
	 	 	89	 
	Section 9.17 PRIOR OR ORAL AGREEMENTS
	 	 	89	 

	 	 	 	 	 

	EXHIBITS:
	 	 	 	 
	 

	Exhibit A
	 	—	 	Form of Assignment and Acceptance
	Exhibit B
	 	—	 	Form of Compliance Certificate
	Exhibit C-1
	 	—	 	Form of Guaranty
	Exhibit C-2
	 	—	 	Form of Limited Recourse Guaranty
	Exhibit D
	 	—	 	Form of Mortgage

-iv-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page  

	Exhibit E
	 	—	 	Form of Note
	Exhibit F
	 	—	 	Form of Notice of Borrowing
	Exhibit G
	 	—	 	Form of Notice of Conversion or Continuation
	Exhibit H
	 	—	 	Form of Pledge Agreement
	Exhibit I
	 	—	 	Form of Security Agreement
	Exhibit J
	 	—	 	Form of Transfer Letters
	Exhibit K
	 	—	 	Form of Borrower's Counsel Opinion
	Exhibit L
	 	—	 	Form of Subordination and Intercreditor Agreement
	 
	 	 	 	 
	SCHEDULES:
	 	 	 	 
	 
	 	 	 	 
	Schedule I
	 	—	 	Borrower, Administrative Agent, and Lender Information
	Schedule II
	 	—	 	Initial Borrowing Base and Pro Rata Shares
	Schedule 1.01
	 	—	 	CIT/Orion Collateral
	Schedule 4.01
	 	—	 	Equity Interests
	Schedule 4.05
	 	—	 	Permitted Debt
	Schedule 4.19
	 	—	 	Material Agreements
	Schedule 4.20
	 	—	 	Hedging Agreements

-v-

 

SIXTH AMENDED AND RESTATED CREDIT AGREEMENT

     This Sixth Amended and Restated Credit Agreement dated as of May 13, 2010 (the “Credit
Agreement”) is among Alta Mesa Holdings, LP, a Texas limited partnership (“Borrower”),
the lenders party hereto from time to time (“Lenders”), and Wells Fargo Bank, N.A., as
administrative agent for such Lenders (in such capacity, the “New Administrative Agent”)
and as issuing lender for such Lenders (in such capacity, the “New Issuing Lender”).

     A. The Borrower is a party to that certain Fifth Amended and Restated Credit Agreement dated
November 13, 2008 among the Borrower, the lenders party thereto on the date hereof (the
“Existing Lenders”), and Union Bank, N.A. (f/k/a Union Bank of California, N.A.),
as administrative agent for such Existing Lenders (in such capacity, the “Existing
Administrative Agent”) and as issuing lender for such Existing Lenders (in such capacity, the
“Existing Issuing Lender”), as heretofore amended (as so amended, the “Existing Credit
Agreement”).

     B. In order to secure the full and punctual payment and performance of the loans under the
Existing Credit Agreement, the Borrower and its Restricted Subsidiaries (as defined below) executed
and delivered mortgages, collateral assignments, security agreements and financing statements
(collectively, the “Existing Security Instruments”) granting a mortgage lien and continuing
security interest in and to the collateral described in such Existing Security Instruments.

     C. Pursuant to that certain Assignment (as defined below), inter alia, (i) the Existing
Administrative Agent has resigned as “Administrative Agent” under the Existing Credit Agreement and
has assigned all Existing Liens (as defined below) held by the Existing Administrative Agent under
the Existing Security Instruments to the New Administrative Agent as the “Administrative Agent”
thereunder, and (ii) the Existing Issuing Lender has resigned as the “Issuing Lender” under the
Existing Credit Agreement.

     D. Furthermore, in connection with the Merger (as defined below), and if the Fortis Assignment
is entered into, concurrent with the entering into of this Agreement (i) the Merger Company Debt
(as defined below) is being assigned to the Lenders, (ii) all liens and security interests securing
the Merger Company Debt is being assigned to the New Administrative Agent, and (iii) the Borrower
is assuming the Merger Company Debt.

     E. The Borrower, the Lenders, the New Issuing Lender (hereinafter referred to as the
“Issuing Lender”), the New Administrative Agent (hereinafter referred to as the
“Administrative Agent”) and the New Lenders (as hereinafter defined), desire to (i) amend
and restate (but not extinguish) the Existing Credit Agreement in its entirety as hereinafter set
forth herein, (ii) have the obligations of the Borrower hereunder continue to be secured by the
liens and security interests created under the Existing Security Instruments, (iii) if the Fortis
Assignment is entered into, the Merger Company Debt is renewed and rearranged under this Agreement
as part of the Obligations (as defined below) as set forth herein, and (iv) have the Obligations be
secured by the liens and security interest previously securing the Merger Company Debt.

     F. It is the intention of the parties hereto that this Credit Agreement is an amendment and
restatement of the Existing Credit Agreement, and is not a new or substitute credit agreement or
novation of the Existing Credit Agreement.

     NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants
herein contained, the parties hereto (i) do hereby agree that the Existing Credit Agreement is
amended

1

 

and restated (but not substituted or extinguished) in its entirety as set forth herein, and
(ii) do hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

     Section 1.01 Certain Defined Terms. As used in this Agreement, the terms defined
above shall have the meanings set forth therein and the following terms shall have the following
meanings (unless otherwise indicated, such meanings to be equally applicable to both the singular
and plural forms of the terms defined):

     “Acceptable Security Interest” in any Property means a Lien which (a) exists in favor
of the Administrative Agent for the benefit of the Secured Parties, (b) is superior to all Liens or
rights of any other Person in the Property encumbered thereby, other than Permitted Subject Liens,
(c) secures the Obligations, and (d) is perfected and enforceable.

     “Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any of its Restricted
Subsidiaries (a) acquires any going business or all or substantially all of the assets of any firm,
corporation, general partnership, limited liability partnership or limited liability company, or
division thereof, whether through the purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a corporation which
have ordinary voting power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage or voting power) of
the outstanding ownership interests of a partnership or limited liability company.

     “Additional Subordinated Debt” means any term (and not “revolving”) indebtedness of
the Borrower for borrowed money, including any such Debt evidenced by bonds, debentures, notes or
other similar instruments, or any redeemable preferred equity of the Borrower, in any event, issued
after the Effective Date; provided that:

     (a) the agreements and instruments governing such Debt shall not contain (i) any affirmative
or negative covenant (including financial covenants) that is materially more restrictive than those
set forth in this Agreement; provided that the inclusion of any covenant that is customary with
respect to such type of Debt and that is not found in this Agreement shall not be deemed to be more
restrictive for purposes of this clause (a)(i), (ii) any restriction on the ability of the Borrower
or any of its Restricted Subsidiaries to amend, modify, restate or otherwise supplement this
Agreement or the other Loan Documents, (iii) any restrictions on the ability of any Subsidiary of
the Borrower to guarantee the Obligations (as such Obligations may be amended, supplemented,
modified, or amended and restated but not increased), provided that a requirement that any such
Subsidiary also guarantee such Debt shall not be deemed to be a violation of this clause (ii), (iv)
any restrictions on the ability of any Subsidiary or the Borrower to pledge assets as collateral
security for the Obligations (as such Obligations may be amended, supplemented, modified, or
amended and restated but not increased) other than, with respect to such Debt that is secured, any
such restrictions that are no less favorable to the Lenders than restrictions in the Subordination
and Intercreditor Agreement or which are otherwise satisfactory to the Administrative Agent and the
Required Lenders; provided that, in any event, a requirement that such Debt be secured in
compliance with clause (b) below shall not be deemed to be a violation of this clause (iv), (v) any
restrictions on the ability of any Subsidiary or the Borrower to incur Debt under this Agreement or
any other Loan Document other than a restriction as to the outstanding principal amount of such
Debt in excess of $500,000,000; and (vi) a scheduled maturity date that is earlier than November
13, 2013, (vii) any amortization or other mandatory

2

 

principal payments other than at the scheduled maturity thereof, or (viii) any Lien securing
such Debt unless such Lien covers the same assets which serve as collateral for the Obligations
pursuant to Loan Documents and such Lien is subordinated to the Liens securing the Obligations;
provided that, any Debt issued under the Subordinated Credit Agreement as in effect on the date
hereof shall be deemed to satisfy this clause (a);

     (b) if such Debt is secured, such Debt and the Liens securing such Debt are subordinated to
the Obligations and the Liens securing the Obligations pursuant to a subordination agreement the
terms of which are no less favorable to the Lenders than the terms of the Subordination and
Intercreditor Agreement or which are otherwise satisfactory to the Administrative Agent and the
Required Lenders; and

     (c) if such Debt is preferred equity, such Debt shall not be secured and shall not, by its
terms (or by the terms of any security or instrument into which it is convertible or for which it
is exchangeable or exercisable), or upon the happening of any event, (i) mature (excluding any
maturity as the result of an optional redemption by the Borrower) or be mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or be redeemable at the option of the holder
thereof, in whole or in part, on or prior to November 12, 2013, (ii) be convertible into or
exchangeable or exercisable (unless at the sole option of the Borrower) for (A) debt securities or
other Debt or (B) any Equity Interests with terms set forth in the immediately preceding clause
(ii), in each case at any time on or prior to the first anniversary of the Maturity Date, or (iii)
contain any repurchase or payment obligation which may come into effect prior to the first
anniversary of the Maturity Date.

     “Adjusted EBITDAX” means:

     (a) for the fiscal quarter ending June 30, 2010, the sum of (a) the EBITDAX for the Borrower
and its consolidated Restricted Subsidiaries (other than the Merger Company and its consolidated
Subsidiaries) for the four fiscal quarter period then ended plus (b) the EBITDAX of the Merger
Company and its consolidated Subsidiaries for the fiscal quarter then ended multiplied by four;

     (b) for the fiscal quarter ending September 30, 2010, the sum of (a) the EBITDAX for the
Borrower and its consolidated Restricted Subsidiaries (other than the Merger Company and its
consolidated Subsidiaries) for the four fiscal quarter period then ended plus (b) the EBITDAX of
the Merger Company and its consolidated Subsidiaries for the two fiscal quarters then ended
multiplied by two;

     (c) for the fiscal quarter ending December 31, 2010, the sum of (a) the EBITDAX for the
Borrower and its consolidated Restricted Subsidiaries (other than the Merger Company and its
consolidated Subsidiaries) for the four fiscal quarter period then ended plus (b) the EBITDAX of
the Merger Company and its consolidated Subsidiaries for the three fiscal quarters then ended
multiplied by 4/3; and

     (d) for each fiscal quarter ending on or after March 31, 2011, the EBITDAX for the Borrower
and its consolidated Restricted Subsidiaries for the four fiscal quarter period then ended.

     “Adjusted Reference Rate” means, for any day, the fluctuating rate per annum of
interest equal to the greatest of (a) the Reference Rate in effect on such day, (b) the Federal
Funds Rate in effect on such day plus 1/2 of 1% and (c) the Daily One-Month LIBOR plus 1.00%. Any
change in the Adjusted Reference Rate due to a change in the Reference Rate, Daily One-Month LIBOR
or the Federal Funds Rate shall be effective on the effective date of such change in the Prime
Rate, Daily One-Month LIBOR or the Federal Funds Rate.

3

 

     “Administrative Agent” means Wells Fargo Bank, N.A. in its capacity as agent pursuant
to Article VIII, and any successor agent pursuant to Section 8.06.

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

     “Advance” means an advance by a Lender to the Borrower pursuant to Section 2.01(a) or
Section 2.01(b) as part of a Borrowing and refers to a Reference Rate Advance or a Eurodollar Rate
Advance.

     “Affiliate” means, as to any Person, any other Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under common control with,
such Person or any Subsidiary of such Person. The term “control” (including the terms “controlled
by” or “under common control with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through ownership
of a Control Percentage, by contract, or otherwise.

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

     “Applicable Margin” means, with respect to any Advance, (a) during any time when an
Event of Default under Section 7.01(a) or Section 7.01(e) exists, 3% per annum plus the rate per
annum set forth in the pricing grid set forth below for the relevant Type of such Advance based on
the present Utilization Level applicable at such time, (b) during any time when any other Event of
Default exists and upon election by the Required Lenders (or the Administrative Agent at the
direction of the Required Lenders), 3% per annum plus the rate per annum set forth in the pricing
grid set forth below for the relevant Type of such Advance based on the present Utilization Level
applicable at such time, and (c) at any other time, the rate per annum set forth in the pricing
grid set forth below for the relevant Type of such Advance based on the relevant Utilization Level
applicable at such time. The Applicable Margin for any Advance shall change when and as the
relevant Utilization Level changes.

	 	 	 	 	 	 	 	 	 
	Borrowing Base Utilization	 	Applicable Margin	 
	 	 	Eurodollar Rate	 	Reference Rate	 
	 	 	Advance	 	Advance	 
	Greater than or equal to 90%
	 	 	3.25	%	 	 	2.25	%
	Greater than or equal to 75% but less
than 90%
	 	 	3.00	%	 	 	2.00	%
	Greater than or equal to 50% but less
than 75%
	 	 	2.75	%	 	 	1.75	%
	Less than 50%
	 	 	2.50	%	 	 	1.50	%

     “Assignment” means that certain Resignation of Agent and Assignment of Security
Instruments and Liens dated as of May 13, 2010 among the Borrower, the Existing Administrative
Agent, the Administrative Agent, the Existing Issuing Lender and the Issuing Lender.

     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the
form of the attached Exhibit A.

     “Banking Services” means each and any of the following bank services provided to the
Borrower or any Restricted Subsidiary by any Lender or any Affiliate of a Lender: (a) commercial
credit cards, (b)

4

 

stored value cards and (c) treasury management services (including, without limitation,
controlled disbursement, automated clearinghouse transactions, return items, overdrafts and
interstate depository network services).

     “Banking Services Obligations” means any and all obligations of the Borrower or any
Restricted Subsidiary, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor) in connection with Banking Services.

     “Borrowing” means a borrowing consisting of Advances made on the same day by the
Lenders pursuant to Section 2.01(a) or Section 2.01(b).

     “Borrowing Base” means at any particular time, the Dollar amount determined by the
Lenders to be the Borrowing Base in accordance with Section 2.02.

     “Borrowing Base Deficiency” means, at any time, an amount equal to the excess of (a)
the sum of the aggregate outstanding amount of the Advances plus the Letter of Credit
Exposure over (b) the lesser of the Borrowing Base and the aggregate Commitments.

     “Brayton” means Brayton Resources, L.P., a Texas limited partnership.

     “Brayton Pledge Agreement” means the Amended and Restated Pledge Agreement executed by
Frio Pecan Farm, LP, Flatmax Energy, L.P. and Brayton Management GP, LLC dated of even date
herewith and made in favor of the Administrative Agent.

     “Business Day” means (a) a day of the year other than (i) a Saturday or a Sunday or
(ii) a legal holiday on which banks are required or authorized to close in Dallas, Texas or Los
Angeles, California and (b) if the applicable Business Day relates to any Eurodollar Rate Advances,
then in addition to the requirements of clause (a) above, a day on which dealings are carried on by
banks in the London interbank market.

     “Capital Expenditures” means, for the Borrower and its Restricted Subsidiaries for any
period, the aggregate of all expenditures and costs paid, or if applicable, budgeted to be paid, by
the Borrower and such Restricted Subsidiaries during such period that are for items which should be
capitalized in accordance with GAAP, including intangible drilling and development expenditures.

     “Capital Leases” means, as applied to any Person, any lease of any Property by such
Person as lessee that would, in accordance with GAAP, be required to be classified and accounted
for as a capital lease on the balance sheet of such Person.

     “Cash Collateral Account” means a special interest bearing cash collateral account
pledged by the Borrower to the Issuing Lender containing cash deposited pursuant to Sections
2.04(c), 2.05(b), 2.07(j), 7.02(b), or 7.03(b) hereof to be maintained with the Issuing Lender in
accordance with Section 2.07(g).

     “CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, state and local analogs, and all rules and regulations and requirements
thereunder in each case as now or hereafter in effect.

     “Change in Control” means the occurrence of any of the following events: (a) the
General Partner ceases to be the sole general partner of the Borrower, (b) the Borrower, directly
or indirectly, ceases to own 100% of the Equity Interests of the Restricted Subsidiaries other than
Orion, Brayton and ARI, (c) Michael

5

 

Ellis and Harlan Chappelle, collectively, ceases to own at least 51% of the Ordinary Units of
the Borrower, (d) the Class B Limited Partner ceases to own at least 100% of the Class B Units of
the Borrower, or (e) Denham, directly or indirectly, ceases to own at least 50% of the Equity
Interests of the Class B Limited Partner.

     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority.

     “CIT/ORION Collateral” shall have the meaning assigned in Schedule 1.01 hereof.

     “Class B Limited Partner” means Alta Mesa Investment Holdings, Inc., a Delaware
corporation.

     “Class B Units” means the Class B Shares issued under the Partnership Agreement.

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

     “Collateral” means (a) all “Collateral,” “Pledged Collateral,” and “Mortgaged
Properties” (as defined in each of the Mortgages, the Security Agreements, and the Pledge
Agreements, as applicable) or similar terms used in the Security Instruments, and (b) all amounts
contained in the Borrower’s and its Restricted Subsidiaries’ Cash Collateral Accounts.

     “Commitment” means, for any Lender, the amount set opposite such Lender’s name on the
Schedule II hereof as its Commitment, or if such Lender has entered into any Assignment and
Acceptance, as set forth for such Lender as its Commitment in the Register maintained by the
Administrative Agent pursuant to Section 9.06(c), as such amount may be reduced or terminated
pursuant to Section 2.04 or Article VII or otherwise under this Agreement. The aggregate amount of
the Commitments on the date hereof is $500,000,000.

     “Commitment Termination Date” means the earlier of (a) the Maturity Date and (b) the
earlier termination in whole of the Commitments pursuant to Section 2.04 or Article VII.

     “Compliance Certificate” means a compliance certificate in the form of the attached
Exhibit B signed by a Responsible Officer of the Borrower.

     “Consolidated Net Income” means, with respect to any Person and its consolidated
Subsidiaries (or in the case of the Borrower, its consolidated Restricted Subsidiaries), for any
period, the net income (or loss) for such period after taxes, as determined in accordance with
GAAP, excluding, however, (a) extraordinary items, including (i) any net non-cash gain or loss
during such period arising from the sale, exchange, retirement or other disposition of capital
assets (such term to include all fixed assets and all securities) other than in the ordinary course
of business and (ii) any write-up or write-down of assets and (b) the cumulative effect of any
change in GAAP.

     “Control Percentage” means, with respect to any Person, the percentage of the
outstanding Equity Interest (including any options, warrants or similar rights to purchase such
Equity Interest) of such Person having ordinary voting power which gives the direct or indirect
holder of such Equity Interest the power to elect a majority of the board of directors (or other
applicable governing body) of such Person.

6

 

     “Controlled Group” means all members of a controlled group of corporations and all
businesses (whether or not incorporated) under common control which, together with the Borrower,
are treated as a single employer under Section 414 of the Code.

     “Convert,” “Conversion,” and “Converted” each refers to a conversion
of Advances of one Type into Advances of another Type pursuant to Section 2.03(b).

     “Credit Extensions” means (a) an Advance made by any Lender and (b) the issuance,
increase, or extension of any Letter of Credit by the Issuing Lender.

     “Daily One-Month LIBOR” means, for any day, the rate of interest equal to the
Eurodollar Rate then in effect for delivery of funds for a one (1) month period.

     “Debt,” for any Person, means without duplication:

     (a) indebtedness of such Person for borrowed money, including, without limitation, obligations
under letters of credit and agreements relating to the issuance of letters of credit or acceptance
financing;

     (b) obligations of such Person evidenced by bonds, debentures, notes or other similar
instruments;

     (c) obligations of such Person to pay the deferred purchase price of Property or services
(including, without limitation, obligations that are non-recourse to the credit of such Person but
are secured by the assets of such Person, but excluding trade accounts payable);

     (d) obligations of such Person as lessee under Capital Leases and obligations of such Person
in respect of synthetic leases;

     (e) obligations of such Person under any Hedge Contract;

     (f) obligations of such Person owing in respect of redeemable preferred stock or other
preferred equity interest of such Person;

     (g) any obligations of such Person owing in connection with any volumetric or production
prepayments;

     (h) obligations of such Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) of such Person to purchase or otherwise acquire, or otherwise
to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (g) above;

     (i) indebtedness or obligations of others of the kinds referred to in clauses (a) through (h)
secured by any Lien on or in respect of any Property of such Person; and

     (j) all liabilities of such Person in respect of unfunded vested benefits under any Plan.

     “Debt Incurrence Proceeds” means, with respect to any Additional Subordinated Debt,
all cash and cash equivalent investments received by the Borrower from such Additional Subordinated
Debt after payment of, or provision for, all underwriter fees and expenses, original issued
discount, securities and exchange commission and blue sky fees, printing costs, fees and expenses
of accountants, lawyers and

7

 

other professional advisors, brokerage commissions and other out-of-pocket fees and expenses
actually incurred in connection with such Additional Subordinated Debt; provided that, an original
issued discount shall not reduce the amount of such Debt Incurrence Proceeds unless such discount
is due and payable at or immediately following the closing of such Additional Subordinated Debt and
such discount has not already been taken into account to reduce the amount of proceeds received by
the Borrower from such Additional Subordinated Debt.

     “Default” means (a) an Event of Default or (b) any event or condition which with
notice or lapse of time or both would become an Event of Default.

     “Defaulting Lender” means any Lender that (a) has failed to fund its Pro Rata Share of
any Advance or participation in Letter of Credit Obligations required to be funded by it hereunder
within one Business Day of the date required to be funded by it hereunder unless such failure has
been cured within three Business Days (or such longer time period accepted by the Borrower and the
Administrative Agent), (b) has otherwise failed to pay over to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute or unless such failure has been cured
within three Business Days (or such longer time period accepted by the Administrative Agent or such
other Lender, as applicable), (c) has notified the Administrative Agent, or has stated publicly,
that it will not comply with any such obligations hereunder, or (d) as to which a Lender Insolvency
Event has occurred and is continuing with respect to such Lender. Any determination that a Lender
is a Defaulting Lender will be made by the Administrative Agent in its sole discretion acting in
good faith; provided, that a Lender shall not become a Defaulting Lender solely as the result of
the acquisition or maintenance of an ownership interest in such Lender or its Parent Company by a
governmental authority or an instrumentality thereof.

     “Denham” means Denham Commodity Partners Fund IV LP, a Delaware limited partnership.

     “Denham Equity Investment” means $50,000,000 in equity capital contribution made by
Denham in the Borrower in respect of Class B Units.

     “Disposition” means any sale, lease, transfer, assignment, farm-out, conveyance, or
other disposition of any Property (including any working interest, overriding royalty interest,
production payments, net profits interest, royalty interest, or mineral fee interest).

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

     “EBITDAX” means without duplication, for any Person and its consolidated Subsidiaries
(or in the case of the Borrower, its consolidated Restricted Subsidiaries) for any period (it being
understood that, for the Borrower, no amounts of the Unrestricted Subsidiaries of the Borrower
shall be taken into account in calculating EBITDAX and only such pro-rated amounts of Orion
attributable to the Borrower’s equity ownership therein shall be taken into account in calculating
EBITDAX), (a) Consolidated Net Income for such period plus (b) to the extent deducted in
determining Consolidated Net Income, Interest Expense, income taxes, depreciation, amortization,
exploration expenses, and other non-cash charges for such period, including non-cash losses under
SFAS 133 as a result of changes in the fair market value of derivatives, minus (c) to the
extent included in determining Consolidated Net Income, non-cash income for such period, including
non-cash income under SFAS 133 as a result of changes in the fair market value of derivatives;
provided that, solely for purposes of determining the leverage ratio required under Section
6.18 below, such EBITDAX shall be subject to pro forma adjustments for Acquisitions (but excluding
the Merger) assuming that such Acquisitions had occurred on the first day of the determination
period, which adjustments shall be calculated in a manner reasonably acceptable to the
Administrative Agent.

8

 

     “Effective Date” means May 13, 2010.

     “Eligible Assignee” means (a) any Lender (other than a Defaulting Lender), (b) any
Subsidiary or Affiliate of a Lender (other than a Defaulting Lender), and (c) any commercial bank
or other financial institution approved by the Administrative Agent, the Issuing Lender, and
provided that no Event of Default is then outstanding, the Borrower, in each case which approval
shall not be unreasonably withheld; provided that, in no event shall any natural person or any
Subsidiary or any other Affiliate of the Borrower qualify as an Eligible Assignee.

     “Engineering Report” means either an Independent Engineering Report or an Internal
Engineering Report.

     “Environment” or “Environmental” shall have the meanings set forth in 43
U.S.C. 9601(8) (1988).

     “Environmental Claim” means any third party (including governmental agencies and
employees) action, lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent
agreement or notice of potential or actual responsibility or violation (including claims or
proceedings under the Occupational Safety and Health Acts or similar laws or requirements relating
to health or safety of employees) that seeks to impose liability under any Environmental Law.

     “Environmental Law” means, as to the Borrower or its Restricted Subsidiaries, all
Legal Requirements or common law theories applicable to the Borrower or its Restricted Subsidiaries
arising from, relating to, or in connection with the Environment, health, or safety, including
without limitation CERCLA, relating to (a) pollution, contamination, injury, destruction, loss,
protection, cleanup, reclamation or restoration of the air, surface water, groundwater, land
surface or subsurface strata, or other natural resources; (b) solid, gaseous or liquid waste
generation, treatment, processing, recycling, reclamation, cleanup, storage, disposal or
transportation; (c) exposure to pollutants, contaminants, hazardous substances, medical infections,
or toxic substances, materials or wastes; (d) the safety or health of employees; or (e) the
manufacture, processing, handling, transportation, distribution in commerce, use, storage or
disposal of hazardous substances, medical infections, or toxic substances, materials or wastes.

     “Environmental Permit” means any permit, license, order, approval, registration or
other authorization under any Environmental Law.

     “Equity Interest” means with respect to any Person, any shares, interests,
participation, or other equivalents (however designated) of corporate stock, membership interests
or partnership interests (or any other ownership interests) of such Person, including any options,
warrants or similar rights to purchase such Equity Interest.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated thereunder.

     “Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of
the Federal Reserve Board (or any successor), as in effect from time to time.

     “Eurodollar Base Rate” means (a) in determining Eurodollar Rate for purposes of the
“Daily One Month LIBOR”, the rate per annum for Dollar deposits quoted by the Administrative Agent
for the purpose of calculating effective rates of interest for loans making reference to the “Daily
One-Month LIBOR”, as the inter-bank offered rate in effect from time to time for delivery of funds
for one (1) month in amounts approximately equal to the principal amount of the applicable
Advances; provided that, the

9

 

Administrative Agent may base its quotation of the inter-bank offered rate upon such offers or
other market indicators of the inter-bank market as the Administrative Agent in its reasonable
discretion deems appropriate including, but not limited to, the rate determined under the following
clause (b), and (b) in determining Eurodollar Rate for all other purposes, the rate per annum
(rounded upward to the nearest whole multiple of 1/8th of 1%) equal to the interest rate per annum
set forth on the Reuters Reference LIBOR1 page as the London Interbank Offered Rate, for deposits
in Dollars at 11:00 a.m. (London, England time) two Business Days before the first day of the
applicable Interest Period and for a period equal to such Interest Period; provided that,
if such quotation is not available for any reason, then for purposes of this clause (b), Eurodollar
Base Rate shall then be the rate determined by the Administrative Agent to be the rate at which
deposits in Dollars for delivery on the first day of such Interest Period in immediately available
funds in the approximate amount of the Advances being made, continued or converted by the Lenders
and with a term equivalent to such Interest Period would be offered by the Administrative Agent’s
London Branch (or other branch or Affiliate of the Administrative Agent, or in the event that the
Administrative Agent does not have a London branch, the London branch of a Lender chosen by the
Administrative Agent) to major banks in the London or other offshore inter-bank market for Dollars
at their request at approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.

     “Eurodollar Rate” means for any Interest Period with respect to any Eurodollar Rate
Advance, a rate per annum determined by the Administrative Agent (which determination shall be
conclusive in the absence of manifest error) pursuant to the following formula:

	 	 	 	 	 

	 	Eurodollar Rate = 	 	Eurodollar Base Rate	 

	 	 	 
	 
	
	
	1.00 — Eurodollar Rate Reserve Percentage	

     “Eurodollar Rate Advance” means an Advance that bears interest as provided in Section
2.09(a)(ii).

     “Eurodollar Rate Reserve Percentage” of any Lender for the Interest Period for any
Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average of such percentages for
those days in such Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Federal Reserve Board for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental, or other marginal
reserve requirement) for such Lender with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to such Interest Period.

     “Event of Default” has the meaning specified in Section 7.01.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Lender or any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower hereunder),
any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to
such Foreign Lender’s failure or inability (other

10

 

than as a result of a Change in Law) to comply with clause (B) of Section 2.14(d)(ii), except
to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.14(a).

     “Expiration Date” means, with respect to any Letter of Credit, the date on which such
Letter of Credit will expire or terminate in accordance with its terms.

     “Existing Indebtedness” shall mean the “Obligations” as defined under the Existing
Credit Agreement outstanding as of the date hereof.

     “Existing Liens” shall mean the Liens securing the Existing Indebtedness in effect as
of the date hereof.

     “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for any such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing selected by it.

     “Federal Reserve Board” means the Board of Governors of the Federal Reserve System or
any of its successors.

     “Fee Letters” means (a) that certain letter agreement dated February 19, 2010 from
Wells Fargo Bank, N.A. and Wells Fargo Securities, LLC to the Borrower and (b) that certain
administrative agent fee letter agreement dated February 19, 2010 from Wells Fargo Bank, N.A. and
Wells Fargo Securities, LLC to the Borrower.

     “Financial Statements” means the audited financial statements including the balance
sheet of the Borrower and its consolidated Subsidiaries for the fiscal year ended December 31, 2007
and December 31, 2008, and the related statements of income, cash flow, and retained earnings of
the Borrower and its consolidated Subsidiaries for such fiscal year ends (with attached auditor’s
report) and referred to in Section 4.05, copies of which have been delivered to the Administrative
Agent and the Lenders.

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

     “Fortis Assignment” means that certain Assignment of Deeds of Trust, Notes, Liens and
Other Rights and Amendment to Deeds of Trusts dated as of May 13, 2010 among the Borrower, the
Administrative Agent and Fortis Capital Corp., in its capacity as the administrative agent under
the Merger Company Credit Agreement, and the lenders party thereto.

     “GAAP” means United States generally accepted accounting principles as in effect from
time to time, applied on a basis consistent with the requirements of Section 1.03.

     “General Partner” means Alta Mesa Holdings GP, LLC, a Texas limited liability company.

11

 

     “Governmental Authority” means, as to any Person in connection with any subject, any
foreign, national, state or provincial governmental authority, or any political subdivision of any
state thereof, or any agency, department, commission, board, authority or instrumentality, bureau
or court, in each case having jurisdiction over such Person or such Person’s Property in connection
with such subject.

     “Guarantor” means each entity executing a Guaranty, including (a) General Partner and
(b) each Restricted Subsidiary of the Borrower.

     “Guaranty” means (a) a Guaranty in substantially the form of the attached Exhibit C-1
and executed by a Guarantor other than Orion, (b) a Limited Recourse Guaranty in substantially the
form of the attached Exhibit C-2 and executed by Orion, and (c) such other forms of guaranty
acceptable to the Administrative Agent whereby the guarantors named therein guaranties the
Obligations, and “Guaranties” shall mean all such guaranties collectively.

     “Hazardous Substance” means the substances identified as such pursuant to CERCLA and
those regulated under any other Environmental Law, including without limitation pollutants,
contaminants, petroleum, petroleum products, radionuclides, radioactive materials, and medical and
infectious waste.

     “Hazardous Waste” means the substances regulated as such pursuant to any Environmental
Law.

     “Hedge Contract” means (a) any and all interest rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, deferred premium commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or forward bond price or
forward bond index transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any related schedules, a “Master
Agreement”).

     “Hydrocarbon Hedge Agreement” means a Hedge Contract that is intended to reduce or
eliminate the risk of fluctuations in the price of Hydrocarbons.

     “Hydrocarbons” means oil, gas, coal seam gas, coalbed methane, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons
produced or to be produced in conjunction therewith from a well bore and all products, by-products,
and other substances derived therefrom or the processing thereof, and all other minerals and
substances produced in conjunction with such substances, including, but not limited to, sulfur,
geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores, or substances of
value and the products and proceeds therefrom.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Independent Engineer” means T.J. Smith & Company, Inc., Von Gonten & Associates, or
another independent, third-party engineering firm acceptable to the Administrative Agent in its
reasonable judgment.

12

 

     “Independent Engineering Report” means a report, in form and substance satisfactory to
the Administrative Agent and each of the Lenders, prepared by an Independent Engineer, addressed to
the Administrative Agent and the Lenders with respect to the Oil and Gas Properties owned by the
Borrower or its Restricted Subsidiaries (or to be acquired by the Borrower or any of its Restricted
Subsidiaries, as applicable) that are or are to be included in the Borrowing Base, which report
shall (a) specify the location, quantity, and type of the estimated Proven Reserves attributable to
such Oil and Gas Properties, (b) contain a projection of the rate of production of such Oil and Gas
Properties, (c) contain an estimate of the net operating revenues to be derived from the production
and sale of Hydrocarbons from such Proven Reserves based on product price and cost escalation
assumptions specified by the Administrative Agent and the Lenders, and (d) contain such other
information as is customarily obtained from and provided in such reports or is otherwise reasonably
requested by the Administrative Agent or any Lender.

     “Interest Expense” means, for any Person and its consolidated Subsidiaries (or in the
case of the Borrower, its consolidated Restricted Subsidiaries) for any period, total interest,
letter of credit fees, and other fees and expenses incurred in connection with any Debt for such
period, whether paid or accrued, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and
net costs under Interest Hedge Agreements, all as determined in conformity with GAAP.

     “Interest Hedge Agreement” means a Hedge Contract between the Borrower and one or more
financial institutions providing for the exchange of nominal interest obligations between the
Borrower and such financial institution or the cap of the interest rate on any Debt of the
Borrower.

     “Interest Period” means, for each Eurodollar Rate Advance comprising part of the same
Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the
Conversion of any Reference Rate Advance into a Eurodollar Rate Advance and ending on the last day
of the period selected by the Borrower pursuant to the provisions below and Section 2.03 and,
thereafter, each subsequent period commencing on the last day of the immediately preceding Interest
Period and ending on the last day of the period selected by the Borrower pursuant to the provisions
below and Section 2.03. The duration of each such Interest Period shall be one month, three
months, or six months, in each case as the Borrower may, upon notice received by the Administrative
Agent not later than 12:00 p.m. (noon) (Dallas, Texas time) / 10:00 a.m. (Los Angeles time) on the
third Business Day prior to the first day of such Interest Period, select; provided,
however, that:

     (a) the Borrower may not select any Interest Period that ends after the Maturity Date;

     (b) Interest Periods commencing on the same date for Advances comprising part of the same
Borrowing shall be of the same duration;

     (c) whenever the last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and

     (d) any Interest Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar month in which it would have
ended if there were a numerically corresponding day in such calendar month.

13

 

     “Internal Engineering Report” means a report, in form and substance satisfactory to
the Administrative Agent and each Lender, prepared by the Borrower and certified by a Responsible
Officer of the Borrower, addressed to the Administrative Agent and the Lenders with respect to the
Oil and Gas Properties owned by the Borrower or any Restricted Subsidiary (or to be acquired by the
Borrower or any Restricted Subsidiary, as applicable), that are or are to be included in the
Borrowing Base, which report shall (a) specify the location, quantity, and type of the estimated
Proven Reserves attributable to such Oil and Gas Properties, (b) contain a projection of the rate
of production of such Oil and Gas Properties, (c) contain an estimate of the net operating revenues
to be derived from the production and sale of Hydrocarbons from such Proven Reserves based on
product price and cost escalation assumptions specified by the Administrative Agent and the
Lenders, and (d) contain such other information as is customarily obtained from and provided in
such reports or is otherwise reasonably requested by the Administrative Agent or any Lender.

     “Issuing Lender” means Wells Fargo Bank, N.A. and any successor issuing bank pursuant
to Section 8.06.

     “Leases” means all oil and gas leases, oil, gas and mineral leases, oil, gas and
casinghead gas leases or any other instruments, agreements, or conveyances under and pursuant to
which the lessee thereof has or obtains the right to enter upon lands and explore for, drill, and
develop such lands for the production of Hydrocarbons.

     “Legal Requirement” means, as to any Person, any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or official interpretation of any of the foregoing)
of, and the terms of any license or permit issued by, any Governmental Authority, including, but
not limited to, Regulations D, T, U, and X, that is applicable to such Person.

     “Lender Insolvency Event” means that (a) a Lender or its Parent Company is insolvent,
or is generally unable to pay its debts as they become due, or admits in writing its inability to
pay its debts as they become due, or makes a general assignment for the benefit of its creditors,
or (b) such Lender or its Parent Company is the subject of a bankruptcy, insolvency,
reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor
or sequestrator or the like has been appointed for such Lender or its Parent Company, or such
Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or
acquiescence in any such proceeding or appointment.

     “Lenders” means a party hereto that (a) is a lender listed on the signature pages of
this Agreement on the date hereof or (b) is an Eligible Assignee that became a lender under this
Agreement pursuant to Section 2.15 or 9.06.

     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Borrower and the Administrative Agent.

     “Letter of Credit” means, individually, any standby letter of credit issued or deemed
issued by the Issuing Lender for the account of the Borrower in connection with the Commitments and
that is subject to this Agreement, including the Existing Letters of Credit, and “Letters of
Credit” means all such letters of credit collectively.

     “Letter of Credit Application” means the Issuing Lender’s standard form letter of
credit application for standby letters of credit that has been executed by the Borrower and
accepted by the Issuing Lender in connection with the issuance of a Letter of Credit.

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     “Letter of Credit Documents” means all Letters of Credit, Letter of Credit
Applications, and agreements, documents, and instruments entered into in connection therewith or
relating thereto.

     “Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate undrawn
maximum face amount of each Letter of Credit at such time plus (b) the aggregate unpaid
amount of all Reimbursement Obligations at such time.

     “Letter of Credit Obligations” means any obligations of the Borrower under this
Agreement in connection with the Letters of Credit, including the Reimbursement Obligations.

     “Lien” means any mortgage, lien, pledge, assignment, charge, deed of trust, security
interest, hypothecation, preference, deposit arrangement or encumbrance (or other type of
arrangement having the practical effect of the foregoing) to secure or provide for the payment of
any obligation of any Person, whether arising by contract, operation of law, or otherwise
(including, without limitation, the interest of a vendor or lessor under any conditional sale
agreement, synthetic lease, Capital Lease, or other title retention agreement).

     “Liquid Investments” means:

     (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States maturing within 180 days from the date of any
acquisition thereof;

     (b) (i) negotiable or nonnegotiable certificates of deposit, time deposits, or other similar
banking arrangements maturing within 180 days from the date of acquisition thereof (“bank debt
securities”), issued by (A) any Lender (or any Affiliate of any Lender) or (B) any other bank or
trust company so long as such certificate of deposit is pledged to secure the Borrower’s or any
Restricted Subsidiaries’ ordinary course of business bonding requirements, or any other bank or
trust company which has primary capital of not less than $500,000,000, if at the time of deposit or
purchase, such bank debt securities are rated not less than “AA” (or the then equivalent) by the
rating service of Standard & Poor’s Ratings Group or of Moody’s Investors Service, Inc., and (ii)
commercial paper issued by (A) any Lender (or any Affiliate of any Lender) or (B) any other Person
if at the time of purchase such commercial paper is rated not less than “A-1” (or the then
equivalent) by the rating service of Standard & Poor’s Ratings Group or not less than “P-1” (or the
then equivalent) by the rating service of Moody’s Investors Service, Inc., or upon the
discontinuance of both of such services, such other nationally recognized rating service or
services, as the case may be, as shall be selected by the Borrower with the consent of the Required
Lenders;

     (c) deposits in money market funds investing exclusively in investments described in clauses
(a) and (b) above;

     (d) repurchase agreements relating to investments described in clauses (a) and (b) above with
a market value at least equal to the consideration paid in connection therewith, with any Person
who regularly engages in the business of entering into repurchase agreements and has a combined
capital surplus and undivided profit of not less than $500,000,000, if at the time of entering into
such agreement the debt securities of such Person are rated not less than “AA” (or the then
equivalent) by the rating service of Standard & Poor’s Ratings Group or of Moody’s Investors
Service, Inc.; and

     (e) such other instruments (within the meaning of Article 9 of the Texas Business and Commerce
Code) as the Borrower may request and the Administrative Agent may approve in writing.

15

 

     “Loan Documents” means this Agreement, the Notes, the Letter of Credit Documents, the
Guaranties, the Security Instruments, the Fee Letters, and each other agreement, instrument, or
document executed by the Borrower or any of its Restricted Subsidiaries or any of their officers at
any time in connection with this Agreement.

     “Material Adverse Change” means (a) a material adverse change in the business, assets
(including the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries (when taken
as a whole)), condition (financial or otherwise), or results of operations of the Borrower and its
Restricted Subsidiaries, since December 31, 2008, (b) a material adverse effect on the Borrower’s
ability to perform its obligations under this Agreement, any Note, any other Loan Document, (c) a
material adverse effect on the Borrower’s ability to perform its obligations under Hedge Contracts
with Swap Counterparties, taken as a whole, or (d) a material adverse effect on the Restricted
Subsidiaries’ (when taken as a whole) ability to perform its obligations under this Agreement, any
Guaranty, any Note, any other Loan Document, or any Hedge Contract with a Swap Counterparty.

     “Maturity Date” means November 13, 2012.

     “Maximum Rate” means the maximum nonusurious interest rate under applicable law
(determined under such laws after giving effect to any items which are required by such laws to be
construed as interest in making such determination, including without limitation if required by
such laws, certain fees and other costs).

     “Merger” means the merger of the Merger Company into Alta Mesa Acquisition Sub, LLC,
pursuant the Merger Agreement whereby the Merger Company becomes a wholly owned Subsidiary of the
Borrower.

     “Merger Agreement” means that certain Agreement and Plan of Merger dated as of
December 22, 2009 among the Borrower, Alta Mesa Acquisition Sub, LLC, and the Merger Company as
such agreement was filed by the Merger Company under a Form 8-K filing with the Securities and
Exchange Commission on December 22, 2009 and as such agreement may have been amended, supplemented
or otherwise modified prior to the Effective Date so long as such amendment, supplement, and
modification are not materially adverse to the Lenders (unless otherwise approved by the
Administrative Agent).

     “Merger Company” means The Meridian Resource Corporation, a Texas corporation.

     “Merger Company Credit Agreement” means that certain Amended and Restated Credit
Agreement dated as of December 23, 2004, among the Merger Company, Fortis Capital Corp. as
administrative agent, and the lenders party thereto, as heretofore amended.

     “Merger Company Debt” means all outstanding Debt of the Merger Company under the
Merger Company Credit Agreement.

     “Mortgage” means any mortgage or deed of trust executed by any one or more of the
Borrower or its Restricted Subsidiaries in favor of the Administrative Agent for the ratable
benefit of the Secured Parties in substantially the form of the attached Exhibit D or such other
form as may be requested by the Administrative Agent, in each case as the same may be amended,
modified, partially released or cancelled, restated or supplemented from time-to-time, together
with any assumptions or assignments of the obligations thereunder by the Borrower or its Restricted
Subsidiaries, and “Mortgages” shall mean all of such Mortgages collectively.

     “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA.

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     “Net Cash Proceeds” means (a) with respect to any Disposition of Oil and Gas
Properties of the Borrower or any Restricted Subsidiary that have a positive value in the most
recently delivered Engineering Report or in the Engineering Report evaluated for the then effective
Borrowing Base, all cash and Liquid Investments received by the Borrower or any of its Restricted
Subsidiaries from such Disposition after payment of, or provision for, all estimated cash taxes
attributable to such Disposition and payable by the Borrower or such Restricted Subsidiary, and
other reasonable out of pocket fees and expenses actually incurred by the Borrower or such
Restricted Subsidiary directly in connection with such Disposition, and (b) with respect to any
novation, assignment, unwinding, termination, or amendment of any hedge position or any other
Hedging Contract by the Borrower or any Restricted Subsidiary, the sum of the cash and Liquid
Investments received by the Borrower or any Restricted Subsidiary in connection with such
transaction after giving effect to any netting agreements.

     “Non-Consenting Lender” means any Lender that does not consent to a proposed
amendment, waiver, consent or release with respect to this Agreement or any other Loan Document
that requires the consent of each Lender.

     “Non-Defaulting Lender” means any Lender that is not then a Defaulting Lender.

     “Note” means a promissory note of the Borrower payable to the order of any Lender, in
substantially the form of the attached Exhibit E, evidencing indebtedness of the Borrower to such
Lender resulting from Advances owing to such Lender.

     “Notice of Borrowing” means a notice of borrowing in the form of the attached Exhibit
F signed by a Responsible Officer of the Borrower.

     “Notice of Conversion or Continuation” means a notice of conversion or continuation in
the form of the attached Exhibit G signed by a Responsible Officer of the Borrower.

     “Obligations” means (a) all principal, interest, fees, reimbursements,
indemnifications, and other amounts payable by the Borrower or any Restricted Subsidiary to the
Administrative Agent, the Issuing Lender or the Lenders under the Loan Documents, including without
limitation, the Letter of Credit Obligations, (b) all obligations of the Borrower or any of its
Restricted Subsidiaries owing to any Swap Counterparty under any Hedge Contract; provided
that, (i) when any Swap Counterparty assigns or otherwise transfers any interest held by it under
any Hedge Contract to any other Person pursuant to the terms of such agreement, the obligations
thereunder shall constitute Obligations only if such assignee or transferee is also then a Lender
or an Affiliate of a Lender and (ii) if a Swap Counterparty ceases to be a Lender hereunder or an
Affiliate of a Lender hereunder, obligations owing to such Swap Counterparty shall be included as
Obligations only to the extent such obligations arise from transactions under such individual Hedge
Contracts (and not the Master Agreement between such parties) entered into at the time such Swap
Counterparty was a Lender hereunder or an Affiliate of a Lender hereunder (or lender under the
Existing Credit Agreement, or an Affiliate thereof, at the time such Hedge Contract was entered
into), without giving effect to any extension, increases, or modifications thereof which are made
after such Swap Counterparty ceases to be a Lender hereunder or an Affiliate of a Lender hereunder,
and (c) the Banking Services Obligations.

     “OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

     “Oil and Gas Properties” means fee mineral interests, term mineral interests, Leases,
subleases, farm-outs, royalties, overriding royalties, net profit interests, carried interests,
production payments and similar mineral interests, and all unsevered and unextracted Hydrocarbons
in, under, or attributable to such oil and gas Properties and interests, or any interest therein.

17

 

     “Ordinary Units” means the general and the limited partnership interests in the
Borrower issued under the Partnership Agreement other than the Class B Units.

     “Orion” means Orion Operating Company, LP, a Texas limited partnership.

     “Orion Drilling” means Orion Drilling Company LLC, a Texas limited liability company.

     “Orion EBITDAX” means without duplication, for Orion for any period (a) Orion Net
Income for such period plus (b) to the extent deducted in determining Orion Net Income,
Orion Interest Expense, income taxes, depreciation, amortization, exploration expenses and other
non-cash charges for such period. For purposes of this definition, (i) “Orion Net Income” means,
for Orion, for any period, the net income (or loss) for such period after taxes, as determined in
accordance with GAAP, excluding, however, (a) extraordinary items, including (i) any net non-cash
gain or loss during such period arising from the sale, exchange, retirement or other disposition of
capital assets (such term to include all fixed assets and all securities) other than in the
ordinary course of business and (ii) any write-up or write-down of assets and (b) the cumulative
effect of any change in GAAP, and (ii) “Interest Expense” means, for Orion for any period, total
interest, letter of credit fees, and other fees and expenses incurred in connection with any Debt
for such period, whether paid or accrued, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing
and net costs under Interest Hedge Agreements, all as determined in conformity with GAAP.

     “Other Taxes” has the meaning set forth in Section 2.14(b).

     “Parent Company” means, with respect to a Lender, the bank holding company (as defined
in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning,
beneficially or of record, directly or indirectly, a majority of the shares of such Lender.

     “Partners” means the General Partner and each of the limited partners party to the
Partnership Agreement.

     “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of Alta Mesa Holdings, LP.

     “Patriot Act” means the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)).

     “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA.

     “PDNP Reserves” means Proven Reserves which are categorized as both “Developed” and
“Non-Producing” in the definitions promulgated by the Society of Petroleum Evaluation Engineers and
the World Petroleum Congress as in effect at the time in question.

     “PDP Reserves” means Proven Reserves which are categorized as both “Developed” and
“Producing” in the definitions promulgated by the Society of Petroleum Evaluation Engineers and the
World Petroleum Congress as in effect at the time in question.

     “Permit” means any approval, certificate of occupancy, consent, waiver, exemption,
variance, franchise, order, permit, authorization, right or license of or from any Governmental
Authority, including without limitation, an Environmental Permit.

18

 

     “Permitted Liens” means the Liens permitted to exist pursuant to Section 6.01.

     “Permitted Subject Liens” means Permitted Liens other than the judgment Liens
permitted under clause (l) of Section 6.01.

     “Person” means an individual, partnership, corporation (including a business trust),
joint stock company, limited liability corporation or company, limited liability partnership,
trust, unincorporated association, joint venture or other entity, or a government or any political
subdivision or agency thereof or any trustee, receiver, custodian or similar official.

     “Plan” (whether or not capitalized) means an employee benefit plan (other than a
Multiemployer Plan) maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code.

     “Pledge Agreements” means (a) the Second Amended and Restated Pledge Agreement in
substantially the form of the attached Exhibit H, executed by the Borrower or any of its Restricted
Subsidiaries or any of the Guarantors, as the same may be amended, modified, restated or
supplemented from time to time, and (b) the Brayton Pledge Agreement.

     “Pro Rata Share” means, with respect to any Lender, (a) with respect to amounts owing
under the Commitments, (i) if such Commitments have not been canceled, the ratio (expressed as a
percentage) of such Lender’s uncancelled Commitment at such time to the aggregate uncancelled
Commitments at such time or (ii) if the aggregate Commitments have been terminated, the Pro Rata
Share of such Lender as determined pursuant to the preceding clause (i) immediately prior to such
termination, or (b) with respect to amounts owing generally under this Agreement and the other Loan
Documents, the ratio (expressed as a percentage) of the Commitment of such Lender to the aggregate
Commitments of all the Lenders (or if such Commitments have been terminated, the ratio (expressed
as a percentage) of Credit Extensions owing to such Lender to the aggregate Credit Extensions owing
to all such Lenders).

     “Property” of any Person means any property or assets (whether real, personal, or
mixed, tangible or intangible) of such Person.

     “Proven Reserves” means, at any particular time, the estimated quantities of
Hydrocarbons which geological and engineering data demonstrate with reasonable certainty to be
recoverable in future years from known reservoirs attributable to Oil and Gas Properties under then
existing economic and operating conditions (i.e., prices and costs as of the date the estimate is
made).

     “PUD Reserves” means Proven Reserves which are categorized as “Undeveloped” in the
definitions promulgated by the Society of Petroleum Evaluation Engineers and the World Petroleum
Congress as in effect at the time in question.

     “Reference Rate” means the fluctuating per annum rate of interest established from
time to time by the Administrative Agent at its principal office in San Francisco as its prime
rate, which rate may not be the lowest rate of interest charged by such Lender to its customers and
whether or not the Borrower has notice thereof.

     “Reference Rate Advance” means an Advance which bears interest as provided in Section
2.09(a)(i).

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     “Refinancing Debt” means Additional Subordinated Debt which is the result of either
(i) a refinancing or other restructuring of all or any portion of the Obligations as a term loan
facility, or (ii) any refinancing of the Subordinated Debt outstanding on the Effective Date.

     “Register” has the meaning set forth in paragraph (c) of Section 9.06.

     “Regulations D, T, U, and X” mean Regulations D, T, U, and X of the Federal Reserve
Board, as the same is from time to time in effect, and all official rulings and interpretations
thereunder or thereof.

     “Reimbursement Obligations” means all of the obligations of the Borrower to reimburse
the Issuing Lender for amounts paid by the Issuing Lender under Letters of Credit as established by
the Letter of Credit Applications and Section 2.07(d).

     “Release” has the meaning set forth in CERCLA or under any other Environmental Law.

     “Required Lenders” means, at any time, Lenders holding 66-2/3% of the Commitments or,
if the Commitments have been terminated, the outstanding principal amount of the Advances and
Letter of Credit Exposure; provided that, if there are two or more Lenders, the Commitment
of, and the portion of the Advances and Letter of Credit Exposure held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders
unless all Lenders are Defaulting Lenders.

     “Response” has the meaning set forth in CERCLA or under any other Environmental Law.

     “Responsible Officer” means (a) with respect to any Person that is a corporation, such
Person’s Chief Executive Officer, President, Chief Financial Officer (or other financial officer),
or Vice President, (b) with respect to any Person that is a limited liability company, a manager or
the Responsible Officer of such Person’s managing member or manager, and (c) with respect to any
Person that is a general partnership or a limited liability partnership, the Responsible Officer of
such Person’s general partner or partners.

     “Restricted Payment” means, with respect to any Person, (a) any direct or indirect
dividend or distribution (whether in cash, securities or other Property) in respect of the Equity
Interest of such Person or any direct or indirect payment of any kind or character (whether in
cash, securities or other Property) in consideration for or otherwise in connection with any
retirement, purchase, redemption or other acquisition of any Equity Interest of such Person, or any
options, warrants or rights to purchase or acquire any such Equity Interest of such Person or (b)
principal or interest payments (in cash, Property or otherwise) on, or redemptions of, subordinated
debt of such Person; provided that the term “Restricted Payment” shall not include any
dividend or distribution payable solely in Equity Interests of the Borrower or warrants, options or
other rights to purchase such Equity Interests.

     “Restricted Subsidiary” means each Subsidiary of the Borrower that is not an
Unrestricted Subsidiary.

     “Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of
the government of a country, (c) an organization directly or indirectly controlled by a country or
its government, (d) a Person resident in a country, in each case, that is subject to a country
sanctions program administered and enforced by OFAC.

     “Sanctioned Person” means a person named on the list of Specially Designated Nationals
maintained by OFAC.

20

 

     “Secured Parties” means the Administrative Agent, the Issuing Lender, the Lenders, and
the Swap Counterparties.

     “Security Agreements” means the Security Agreements, each in substantially the form of
the attached Exhibit I, executed by the Borrower or any Restricted Subsidiary, as the same may be
amended, modified, partially released, or supplemented from time to time.

     “Security Instruments” means, collectively, (a) the Mortgages, (b) the Transfer
Letters, (c) the Pledge Agreements, (d) the Security Agreements, (e) the WI/NRI Agreement, (f) each
other agreement, instrument or document executed at any time in connection with the Pledge
Agreements, the Security Agreements, or the Mortgages, (g) each agreement, instrument or document
executed in connection with the Cash Collateral Account, and (h) each other agreement, instrument
or document executed at any time in connection with securing the Obligations.

     “Senior Unsecured Notes” means Additional Subordinated Debt issued by the Borrower in
the form of senior, unsecured notes offered after the Effective Date.

     “Solvent” means, with respect to any Person as of the date of any determination, that
on such date (a) the fair value of the Property of such Person (both at fair valuation and at
present fair saleable value) is greater than the total liabilities, including contingent
liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person is able to realize upon its assets and
pay its debts and other liabilities, contingent obligations, and other commitments as they mature
in the normal course of business, (d) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s Property would constitute unreasonably small
capital after giving due consideration to current and anticipated future capital requirements and
current and anticipated future business conduct and the prevailing practice in the industry in
which such Person is engaged. In computing the amount of contingent liabilities at any time, such
liabilities shall be computed at the amount which, in light of the facts and circumstances existing
at such time, represents the amount that can reasonably be expected to become an actual or matured
liability.

     “Specified Representations”: means (a) the representations made by the Merger Company
in the Merger Agreement, but only to the extent that such representations are material to the
interests of the Lenders and the Borrower or its Subsidiary has the right to terminate its
obligations under the Merger Agreement in the event that any such representations are not true and
(b) the representations and warranties set forth in Sections 4.01, 4.02, 4.03, 4.04, 4.08, 4.09,
4.18, 4.20 and 4.21.

     “Subsidiary” of a Person means any corporation or other entity of which more than 50%
of the outstanding Equity Interests having ordinary voting power under ordinary circumstances to
elect a majority of the board of directors or similar governing body of such corporation or other
entity (irrespective of whether at such time Equity Interests of any other class or classes of such
corporation or other entity shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by such Person, by such
Person and one or more Subsidiaries of such Person or by one or more Subsidiaries of such Person.
Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary
of the Borrower.

     “Subordinated Agent” means UnionBanCal Equities Inc., or such other Subordinated
Lender serving in the capacity as the “administrative agent” under the Subordinated Credit
Agreement to the

21

 

extent permitted under the Subordinated Credit Agreement and the Subordination and
Intercreditor Agreement.

     “Subordinated Credit Agreement” means the Subordinated Credit Agreement dated as of
November 13, 2008 among the Borrower, the Subordinated Agent and the Subordinated Lenders, as
amended, restated, supplemented or otherwise modified but only to the extent permitted under the
terms of the Subordination and Intercreditor Agreement.

     “Subordinated Debt” means the “Obligations” as defined in the Subordinated Credit
Agreement.

     “Subordinated Lenders” means the lenders party to the Subordinated Credit Agreement
from time to time.

     “Subordinated Loan Documents” means the Subordinated Credit Agreement, the promissory
notes executed and delivered pursuant to the Subordinated Credit Agreement, and each other
agreement, instrument, or document executed by the Borrower or any of its Subsidiaries or any of
their Responsible Officers in connection with the Subordinated Credit Agreement.

     “Subordination and Intercreditor Agreement” mean that certain Amended and Restated
Subordination and Intercreditor Agreement substantially in the form of the attached Exhibit L and
dated the date hereof, and as in effect on the date hereof and thereafter as amended from time to
time in accordance with the terms hereof and thereof.

     “Swap Counterparty” means (a) any Lender or Affiliate of a Lender that is a
counterparty to any Hedge Contract with the Borrower or any Restricted Subsidiary listed on
Schedule 4.20 and (b) any counterparty to any other Hedge Contract with the Borrower or any
Restricted Subsidiary; provided that such counterparty is a Lender or an Affiliate of a Lender.
For the avoidance of doubt, “Swap Counterparty” shall not include any participant of a Lender
pursuant to Section 9.06(e) other than to the extent such participant is otherwise a Lender or an
Affiliate of a Lender.

     “Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority, including
any interest, additions to tax or penalties applicable thereto.

     “Termination Event” means (a) a Reportable Event described in Section 4043 of ERISA
and the regulations issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the Borrower or any of
its Affiliates from a Plan during a plan year in which it was a “substantial employer” as defined
in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC, or (e) any other event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.

     “Transactions” means, collectively, (a) the Merger, (b) the initial borrowings and
other extensions of credit under this Agreement, including the renewal, extension, and
rearrangement (but not substitution or extinguishment) of advances under the Existing Credit
Agreement as Advances under this Agreement pursuant to the terms of this Agreement, (c) either, (i)
the assignment of the Merger Company Debt pursuant to the Fortis Assignment, or (ii) the payment in
full of the Merger Company Debt and (d) the payment of fees, commissions and expenses in connection
with each of the foregoing.

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     “Transfer Letters” means, collectively, the letters in lieu of transfer orders in
substantially the form of the attached Exhibit J and executed by the Borrower or any Restricted
Subsidiary executing a Mortgage, as each of the same may be amended, modified or supplemented from
time-to-time.

     “Triggering Event” means (a) the Disposition of Oil and Gas Properties of the Borrower
or any Restricted Subsidiary that have a positive value in the most recently delivered Engineering
Report or in the Engineering Report evaluated for the then effective Borrowing Base, and (b) the
novation, assignment, unwinding, termination, or amendment of a hedge position or Hedge Contract
considered by the Administrative Agent in determining the then effective Borrowing Base.

     “Type” has the meaning set forth in Section 1.04.

     “Unrestricted Subsidiary” means (a) LEADS Resources, LLC, (b) Louisiana Exploration &
Acquisition Partnership, LLC, (c) Alta Mesa Drilling, LLC, (d) Sundance Acquisition Corporation,
(e) TE TMR Corp., (f) TMR Equipment Corporation, (g) FBB Anadarko Corp., (h) New Exploration
Technologies Co., LLC, and (i) any other Subsidiary of the Borrower that has been designated as an
Unrestricted Subsidiary in compliance with Section 5.14.

     “Unused Commitment Amount” means, with respect to a Lender at any time, (a) the lesser
of (i) such Lender’s Commitment at such time and (ii) such Lender’s Pro Rata Share of the Borrowing
Base in effect at such time minus, in each case, (b) the sum of (i) the aggregate
outstanding principal amount of all Advances owed to such Lender at such time plus (ii)
such Lender’s Pro Rata Share of the aggregate Letter of Credit Exposure at such time (including any
such Letter of Credit Exposure that has been reallocated pursuant to Section 2.17(c)(i)).

     “Utilization Level” means the applicable category (being Level I, Level II, Level III,
or Level IV) of pricing criteria contained in Schedule I, which is based, at any time of its
determination, on the percentage obtained by dividing (a) the outstanding principal amount of the
Advances and the Letter of Credit Exposure at such time by (b) the lesser of (i) the aggregate
Commitments and (ii) the Borrowing Base in effect at such time.

     “WI/NRI Agreement” means that certain WI/NRI Agreement dated of even date herewith and
entered into among the Borrower, the Restricted Subsidiaries party thereto and the Administrative
Agent and setting forth therein certain representations and warranties of the Restricted
Subsidiaries as to the quantum and nature of the record title interests of such Restricted
Subsidiaries in and to certain Oil and Gas Properties.

     Section 1.02 Computation of Time Periods. In this Agreement, with respect to the
computation of periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each means “to but excluding.”

     Section 1.03 Accounting Terms; Changes in GAAP. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at the time of
delivery thereof) be prepared, in accordance with GAAP applied on a basis consistent with those
used in the preparation of the latest financial statements furnished to the Lenders hereunder
(which prior to the delivery of the first financial statements under Section 5.06 hereof, shall
mean the Financial Statements). All calculations made for the purposes of determining compliance
with this Agreement shall (except as otherwise expressly provided herein) be made by application of
GAAP applied on a basis consistent with those used in the preparation of the annual or quarterly
financial statements furnished to the Lenders pursuant to Section 5.06 hereof most

23

 

recently delivered prior to or concurrently with such calculations (or, prior to the delivery
of the first financial statements under Section 5.06 hereof, used in the preparation of the
Financial Statements). If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth herein, and either the Borrower or the Required Lenders
shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof in light of such
change in GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein, and (b) the Borrower shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP. In addition, all
calculations and defined accounting terms used herein shall, unless expressly provided otherwise,
when referring to any Person, refer to such Person on a consolidated basis and mean such Person and
its consolidated Subsidiaries.

     Section 1.04 Types of Advances. Advances are distinguished by “Type”. The “Type” of
an Advance refers to the determination whether such Advance is a Eurodollar Rate Advance or
Reference Rate Advance.

     Section 1.05 Miscellaneous. Article, Section, Schedule, and Exhibit references are to
Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified.
All references to instruments, documents, contracts, and agreements are references to such
instruments, documents, contracts, and agreements as the same may be amended, supplemented, and
otherwise modified from time to time, unless otherwise specified and shall include all schedules
and exhibits thereto unless otherwise specified. The words “hereof,” “herein,” and “hereunder” and
words of similar import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. The term “including” means “including, without
limitation,”. Paragraph headings have been inserted in this Agreement as a matter of convenience
for reference only and it is agreed that such paragraph headings are not a part of this Agreement
and shall not be used in the interpretation of any provision of this Agreement.

ARTICLE II

CREDIT FACILITIES

     Section 2.01 Commitment for Advances.

     (a) Advances. Each Lender severally agrees, on the terms and conditions set forth in
this Agreement, to make Advances to the Borrower from time to time on any Business Day during the
period from the date of this Agreement until the Commitment Termination Date in an amount for each
Lender not to exceed such Lender’s Unused Commitment Amount. Each Borrowing shall, in the case of
Borrowings consisting of Reference Rate Advances, be in an aggregate amount not less than the
lesser of (i) $500,000 and (ii) the Unused Commitment Amount, and in integral multiples of $100,000
in excess thereof, and in the case of Borrowings consisting of Eurodollar Rate Advances, be in an
aggregate amount not less than $1,000,000 and in integral multiples of $500,000 in excess thereof,
and in each case shall consist of Advances of the same Type made on the same day by the Lenders
ratably according to their respective Commitments. Within the limits of each Lender’s Commitment,
and subject to the terms of this Agreement, the Borrower may from time to time borrow, prepay, and
reborrow Advances.

     (b) Outstanding Advances under Existing Credit Agreement and Merger Company Debt. The
parties hereto acknowledge and agree that, effective as of the date hereof, (i) in order to

24

 

accommodate and orderly effect the reallocations, adjustments, acquisitions and decreases
effected under clause (c) below, all outstanding Advances under the Existing Credit Agreement on
the date hereof will be refinanced with the initial Advances to be made under this Agreement on the
Effective Date; and (iii) if the Fortis Assignment is entered into, the outstanding principal
amount of loans constituting Merger Company Debt are being acquired with the initial Advances to be
made under this Agreement on the Effective Date. Such Existing Indebtedness under the Existing
Credit Agreement, and if the Fortis Assignment is entered into, the Merger Company Debt shall be
assigned, renewed, extended, and rearranged as Obligations outstanding pursuant to the terms of
this Agreement.

     (c) Assignments, New Lenders and Reallocation of Commitments and Advances. The Lenders
have agreed among themselves, in consultation with the Borrower, to reallocate their respective
Commitments (as defined in the Existing Credit Agreement) and to, among other things, allow each of
Capital One, N.A., Texas Capital Bank, N.A., Toronto Dominion (New York) LLC, and ING Capital LLC
to become a party to this Agreement as a Lender, (each a “New Lender”) by acquiring an
interest in the aggregate Commitments (as defined in the Existing Credit Agreement), and to adjust
such Commitment of the other Lenders (each an “Adjusting Lender”). The Administrative
Agent and the Borrower hereby consent to such reallocation and each New Lender’s acquisition of,
and each Adjusting Lender’s adjustment of, an interest in the Commitments and the Existing Lenders’
partial assignments of their respective Commitments (as defined in the Existing Credit Agreement).
On the Effective Date and after giving effect to such reallocations, adjustments, acquisitions and
decreases, the Commitment of each Lender shall be as set forth on Schedule II. With respect to
such reallocations, adjustments, acquisitions and decreases, each New Lender and Adjusting Lender
shall be deemed to have acquired the Commitment allocated to it from each of the other Lenders
pursuant to the terms of the Assignment and Acceptance attached as an exhibit to the Existing
Credit Agreement as if each such New Lender and Adjusting Lender had executed such Assignment and
Acceptance with respect to such allocation, adjustment, acquisition and decrease. The Lenders
shall make all appropriate adjustments and payments between and among themselves to account for the
revised Pro Rata Shares resulting from the Lenders’ Commitments under this Agreement.

     (d) Notes. The indebtedness of the Borrower to each Lender resulting from the
Advances owing to such Lender shall be evidenced by a Note of the Borrower payable to the order of
such Lender.

     Section 2.02 Borrowing Base.

     (a) Borrowing Base. The initial Borrowing Base in effect as of the date of this
Agreement has been set by the Administrative Agent and the Lenders and acknowledged by the Borrower
as $285,000,000 and each Lender’s Pro Rata Share of such initial Borrowing Base, as of the date of
this Agreement, are set forth on Schedule II. Such initial Borrowing Base shall remain in effect
until the next redetermination made pursuant to this Section 2.02. The Borrowing Base shall be
determined in accordance with the standards set forth in Section 2.02(d) and is subject to periodic
redetermination pursuant to Sections 2.02(b) and 2.02(c) and is subject to mandatory reductions
pursuant to Section 2.02(e).

     (b) Calculation of Borrowing Base.

          (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or
before May 1, 2010, an Independent Engineering Report dated effective as of the immediately
preceding January 1, and, in any case, such other information as may be reasonably requested by the
Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be
included in the Borrowing Base. On or before June 1, 2010, and based on such Independent
Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender
the

25

 

Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the
Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance
with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of
all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of
the amount of the Borrowing Base as so redetermined. The Borrower shall deliver to the
Administrative Agent and each of the Lenders on or before each April 1, beginning April 1, 2011, an
Independent Engineering Report dated effective as of the immediately preceding January 1, and, in
any case, such other information as may be reasonably requested by the Administrative Agent or any
Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base.
Within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent
Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender
the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the
Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance
with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of
all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of
the amount of the Borrowing Base as so redetermined.

          (ii) The Borrower shall deliver to the Administrative Agent and each Lender on or before each
October 1, beginning October 1, 2010, an Internal Engineering Report dated effective as of the
immediately preceding July 1, and such other information as may be reasonably requested by the
Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be
included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’
receipt of such Internal Engineering Report and other information, (A) the Administrative Agent
shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined
Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the
Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base
shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly
notify the Borrower in writing of the amount of the Borrowing Base as so redetermined.

          (iii) In the event that the Borrower does not furnish to the Administrative Agent and the
Lenders the Independent Engineering Report, Internal Engineering Report, or other information
specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and
the Required Lenders (except that any increase in the Borrowing Base shall require the consent of
all the Lenders) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base
from time-to-time thereafter in their sole discretion until the Administrative Agent and the
Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other
information, as applicable, whereupon the Administrative Agent and the Required Lenders (except
that any increase in the Borrowing Base shall require the consent of all the Lenders) shall
redetermine the Borrowing Base as otherwise specified in this Section 2.02.

          (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and
the Lenders shall constitute a representation and warranty by the Borrower to the Administrative
Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the
Oil and Gas Properties specified therein with at least 85% (by value) of the Proven Reserves
covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except
Permitted Liens), (B) on and as of the date of such Engineering Report, the PDP Reserves identified
therein were developed for Hydrocarbons, and the wells pertaining to such Oil and Gas Properties
that are described therein as producing wells (“Wells”), were each producing Hydrocarbons in paying
quantities, except for Wells that were utilized as water or gas injection wells or as water
disposal wells, (C) the descriptions of quantum and nature of the record title interests of the
Borrower and its Restricted Subsidiaries, as applicable, set forth in such Engineering Report
include the entire record title interests of the Borrower and its Restricted Subsidiaries in such
Oil and Gas Properties, are complete and

26

 

accurate in all respects, and take into account all Permitted Liens, (D) there are no
“back-in” or “reversionary” interests held by third parties which could reduce the interests of the
Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in
Engineering Report, (E) no operating or other agreement to which the Borrower or any of its
Restricted Subsidiaries is a party or by which the Borrower or any of its Restricted Subsidiaries
is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its
Restricted Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater
than the record title interest of the Borrower or any of its Restricted Subsidiaries in such
portion of the such Oil and Gas Properties as set forth in such Engineering Report, except in the
event the Borrower or any of its Restricted Subsidiaries is obligated under an operating agreement
to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the
Restricted Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and
Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all
Permitted Liens afford the Borrower or the applicable Restricted Subsidiary not less than those net
interests (expressed as a fraction, percentage or decimal) in the production from or which is
allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and
(ii) will cause the Borrower or the applicable Restricted Subsidiary to bear not more than that
portion (expressed as a fraction, percentage or decimal), specified as working interest in such
Engineering Report, of the costs of drilling, developing and operating the wells identified in such
Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas
Properties.

     (c) Interim Redeterminations. In addition to the Borrowing Base redeterminations
provided for in Section 2.02(b) and based on such information as the Administrative Agent and the
Lenders deem relevant (but in accordance with Section 2.02(d)):

     (i) at the election of the Required Lenders, the Administrative Agent and the Lenders
may make one additional redetermination of the Borrowing Base during any six-month period
between scheduled redeterminations;

     (ii) at the request of the Borrower, the Administrative Agent and the Lenders may make
one additional redetermination of the Borrowing Base during any six-month period between
scheduled redeterminations; and

     (iii) if at any time the Borrower ceases to directly or indirectly own at least 90% of
the Equity Interests in Orion or at least 90% of the Equity Interests in Brayton, the
Administrative Agent and the Lenders may make additional redeterminations of the Borrowing
Base at such times.

The party requesting the redetermination shall give the other party at least 10 days’ prior written
notice that a redetermination of the Borrowing Base pursuant to this paragraph (c) is to be
performed; provided that, no such prior written notice shall be required for any redetermination
made by the Lenders during the existence of an Event of Default. In connection with any
redetermination of the Borrowing Base under this Section 2.02(c), the Borrower shall provide the
Administrative Agent and the Lenders with such information regarding the Borrower and its
Restricted Subsidiaries’ business (including, without limitation, its Oil and Gas Properties, the
Proven Reserves, and production relating thereto) as the Administrative Agent or any Lender may
request, including an updated Independent Engineering Report. The Administrative Agent shall
promptly notify the Borrower in writing of each redetermination of the Borrowing Base pursuant to
this Section 2.02(c) and the amount of the Borrowing Base as so redetermined.

     (d) Standards for Redetermination. Each redetermination of the Borrowing Base by the
Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole
discretion

27

 

of the Administrative Agent and the Lenders (but in accordance with the other provisions of
this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’
customary internal standards and practices for valuing and redetermining the value of Oil and Gas
Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction
with the most recent Independent Engineering Report or Internal Engineering Report, as applicable,
or other information received by the Administrative Agent and the Lenders relating to the Proven
Reserves of the Borrower and its Restricted Subsidiaries (it being agreed that only such pro-rated
amounts of the Proven Reserves of Orion which are attributable to the Borrower’s equity ownership
therein shall be considered in calculating the Borrowing Base), and (iv) based upon the estimated
value of the Proven Reserves owned by the Borrower and its Restricted Subsidiaries as determined by
the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the
Administrative Agent and the Lenders may also consider the business, financial condition, and Debt
obligations of the Borrower and its Restricted Subsidiaries and such other factors as the
Administrative Agent and the Lenders customarily deem appropriate, including without limitation,
commodity price assumptions, projections of production, operating expenses, general and
administrative expenses, capital costs, working capital requirements, liquidity evaluations,
dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges
that the determination of the Borrowing Base contains a value cushion (market value in excess of
loan value), which is essential for the adequate protection of the Administrative Agent and the
Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base
unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of
title reasonably satisfactory in form and substance to the Administrative Agent covering at least
80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto (or in the
case of the initial Borrowing Base set on the Effective Date, at least 70% (by value) of the Proven
Reserves and the Oil and Gas Properties related thereto), and (B) Mortgages and such other Security
Instruments requested by the Administrative Agent to the extent necessary to cause the
Administrative Agent to have an Acceptable Security Interest in at least 85% (by value) of the
Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the
Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base
under this Section 2.02, the Borrowing Base shall be equal (i) to the redetermined amount or (ii)
such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent
and the Lenders, provided that the Borrower shall not request that the Borrowing Base be
reduced to a level that would result in a Borrowing Base Deficiency, until the Borrowing Base is
subsequently redetermined in accordance with this Section 2.02.

     (e) Mandatory Reductions in the Borrowing Base. In addition to the Borrowing Base
redeterminations provided for otherwise in this Section 2.02, the Borrowing Base shall be
automatically reduced as follows:

     (i) Effective immediately upon the issuance of Senior Unsecured Notes by the Borrower
or any Restricted Subsidiary, the Borrowing Base shall automatically reduce on the effective
date of such issuance by an amount equal to 25% of (A) the Debt Incurrence Proceeds
resulting from such issuance minus (B) the amount thereof applied to pay principal,
interest, premium, fees and other amounts owed in respect of outstanding Subordinated Debt.

     (ii) Effective immediately upon the issuance of any Additional Subordinated Debt (other
than Senior Unsecured Notes and any Refinancing Debt) by the Borrower or any Restricted
Subsidiary, the Borrowing Base shall automatically reduce on the effective date of such
issuance by an amount equal to 25% of (A) the Debt Incurrence Proceeds resulting from such
issuance minus (B) the amount thereof applied to pay principal, interest, premium,
fees and other amounts owed in respect of outstanding Subordinated Debt (other than
repayments of any increases in principal of Subordinated Debt effected after the Effective
Date and any interest accrued on such increased principal amount).

28

 

     (iii) Effective immediately upon the occurrence of a Triggering Event, the Borrowing
Base shall automatically reduce on the date such Triggering Event is effected by an amount
equal to (A) in the case of a Disposition of Oil and Gas Properties, the value, if any,
assigned such Oil and Gas Properties under the then effective Borrowing Base, as reasonably
determined by the Administrative Agent, and (B) in the case of a hedge position or Hedge
Contract that has been novated, assigned, unwound, terminated, or amended, the value, if
any, assigned such hedge position or Hedge Contract under the then effective Borrowing Base,
as reasonably determined by the Administrative Agent.

     Section 2.03 Method of Borrowing.

     (a) Notice. Each Borrowing shall be made pursuant to a Notice of Borrowing (or by
telephone notice promptly confirmed in writing by a Notice of Borrowing), given not later than
11:00 a.m. (Dallas, Texas time) (i) on the third Business Day before the date of the proposed
Borrowing, in the case of a Borrowing comprised of Eurodollar Rate Advances or (ii) on the Business
Day of the proposed Borrowing, in the case of a Borrowing comprised of Reference Rate Advances, by
the Borrower to the Administrative Agent, which shall in turn give to each Lender prompt notice of
such proposed Borrowing by telecopier. Each Notice of a Borrowing shall be given in writing,
including by telecopier, specifying the information required therein. In the case of a proposed
Borrowing comprised of Eurodollar Rate Advances, the Administrative Agent shall promptly notify
each Lender of the applicable interest rate under Section 2.09(a)(ii). Each Lender shall, before
11:00 a.m. (Dallas, Texas time) on the date of such Borrowing, make available for the account of
its applicable Lending Office to the Administrative Agent at its address referred to in Section
9.02, or such other location as the Administrative Agent may specify by notice to the Lenders, in
same day funds, in the case of a Borrowing, such Lender’s Pro Rata Share of such Borrowing. After
the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent shall make such funds available to the Borrower
at its account with the Administrative Agent.

     (b) Conversions and Continuations. The Borrower may elect to Convert or continue any
Borrowing under this Section 2.03 by delivering an irrevocable Notice of Conversion or Continuation
to the Administrative Agent at the Administrative Agent’s office no later than 11:00 a.m. (Dallas,
Texas time) (i) on the date which is at least three Business Days in advance of the proposed
Conversion or continuation date in the case of a Conversion to or a continuation of a Borrowing
comprised of Eurodollar Rate Advances and (ii) on the Business Day of the proposed Conversion in
the case of a Conversion to a Borrowing comprised of Reference Rate Advances. Each such Notice of
Conversion or Continuation shall be in writing or by telephone notice promptly confirmed
immediately in writing specifying the information required therein. Promptly after receipt of a
Notice of Conversion or Continuation under this Section, the Administrative Agent shall provide
each Lender with a copy thereof and, in the case of a Conversion to or a continuation of a
Borrowing comprised of Eurodollar Rate Advances, notify each Lender of the applicable interest rate
under Section 2.09(a)(ii).

     (c) Certain Limitations. Notwithstanding anything to the contrary contained in
paragraphs (a) and (b) above:

          (i) at no time shall there be more than four Interest Periods applicable to outstanding
Eurodollar Rate Advances and the Borrower may not select Eurodollar Rate Advances for any Borrowing
at any time that a Default has occurred and is continuing;

          (ii) if any Lender shall, at least one Business Day before the date of any requested
Borrowing, Conversion, or continuation, notify the Administrative Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it unlawful, or that any
central

29

 

bank or other Governmental Authority asserts that it is unlawful, for such Lender or its
applicable Lending Office to perform its obligations under this Agreement to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate Advances, the right of the Borrower to select
Eurodollar Rate Advances from such Lender shall be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer exist, and the
Advance made by such Lender in respect of such Borrowing, Conversion, or continuation shall be a
Reference Rate Advance;

          (iii) if the Administrative Agent is unable to determine the Eurodollar Rate for Eurodollar
Rate Advances comprising any requested Borrowing, the right of the Borrower to select Eurodollar
Rate Advances for such Borrowing or for any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Advance comprising such Borrowing shall be a Reference Rate
Advance;

          (iv) if the Required Lenders shall, at least one Business Day before the date of any requested
Borrowing, notify the Administrative Agent that the Eurodollar Rate for Eurodollar Rate Advances
comprising such Borrowing will not adequately reflect the cost to such Lenders of making or funding
their respective Eurodollar Rate Advances, as the case may be, for such Borrowing, the right of the
Borrower to select Eurodollar Rate Advances for such Borrowing or for any subsequent Borrowing
shall be suspended until the Administrative Agent shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist, and each Advance comprising such
Borrowing shall be a Reference Rate Advance; and

          (v) if the Borrower shall fail to select the duration or continuation of any Interest Period
for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of
“Interest Period” in Section 1.01 and paragraph (b) above, the Administrative Agent shall forthwith
so notify the Borrower and the Lenders and such Advances shall be made available to the Borrower on
the date of such Borrowing as Reference Rate Advances or, if existing Eurodollar Rate Advances,
Convert into Reference Rate Advances.

     (d) Notices Irrevocable. Each Notice of Borrowing and Notice of Conversion or
Continuation shall be irrevocable and binding on the Borrower. In the case of any Borrowing for
which the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Lender against any loss, out-of-pocket cost, or expense incurred by
such Lender as a result of any failure by the Borrower to fulfill on or before the date specified
in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III
including, without limitation, any loss (including any loss of anticipated profits), cost, or
expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such
Advance, as a result of such failure, is not made on such date.

     (e) Administrative Agent Reliance. Unless the Administrative Agent shall have
received notice from a Lender before the date of any Borrowing that such Lender shall not make
available to the Administrative Agent such Lender’s Pro Rata Share of a Borrowing, the
Administrative Agent may assume that such Lender has made its Pro Rata Share of such Borrowing
available to the Administrative Agent on the date of such Borrowing in accordance with paragraph
(a) of this Section 2.03 and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the extent that any
Lender shall not have so made its Pro Rata Share of such Borrowing available to the Administrative
Agent (the “Non-Funding Lender”), such Non-Funding Lender and the Borrower severally agree to
immediately repay to the Administrative Agent on demand such corresponding amount, together with
interest on such amount, for each day from the date

30

 

such amount is made available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable on such day
to Advances comprising such Borrowing and (ii) in the case of such Non-Funding Lender, the Federal
Funds Rate for such day. If such Non-Funding Lender shall repay to the Administrative Agent such
corresponding amount and interest as provided above, such corresponding amount so repaid shall
constitute such Non-Funding Lender’s Advance as part of such Borrowing for purposes of this
Agreement even though not made on the same day as the other Advances comprising such Borrowing.

     (f) Lender Obligations Several. The failure of any Non-Funding Lender to make the
Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, to make its Advance on the date of such Borrowing. No Lender shall be
responsible for the failure of any other Lender to make the Advance to be made by such other Lender
on the date of any Borrowing.

     Section 2.04 Reduction of the Commitments.

     (a) The Borrower shall have the right, upon at least three Business Days’ notice to the
Administrative Agent, to terminate in whole or reduce ratably in part the unused portion of the
Commitment; provided that each partial reduction shall be in the aggregate amount of
$3,000,000 or in integral multiples of $1,000,000 in excess thereof.

     (b) Other than as provided in Section 2.04(c) below, any reduction and termination of the
Commitments pursuant to this Section 2.04 shall be applied ratably to each Lender’s Commitment and
shall be permanent, with no obligation of the Lenders to reinstate such Commitments.

     (c) In the event of a Defaulting Lender, the Borrower, at the Borrower’s election may elect to
terminate such Defaulting Lender’s Commitment hereunder; provided that (i) such termination
must be of the Defaulting Lender’s entire Commitment, (ii) subject to the set-off rights set forth
in the immediately following sentence, the Borrower shall pay all amounts owed by the Borrower to
such Defaulting Lender under this Agreement and under the other Loan Documents (including principal
of and interest on the Advances owed to such Defaulting Lender, accrued commitment fees, and letter
of credit fees but specifically excluding any amounts owing under Section 2.12 as result of such
payment of Advances) and shall deposit with the Administrative Agent into the Cash Collateral
Account cash collateral in the amount equal to such Defaulting Lender’s ratable share of the Letter
of Credit Exposure, including any such Letter of Credit Exposure that has been reallocated pursuant
to Section 2.17(c)(i); (iii) a Defaulting Lender’s Commitment may be terminated by the Borrower
under this Section 2.04(c) if and only if at such time, the Borrower has elected, or is then
electing, to terminate the Commitments of all then existing Defaulting Lenders. With respect to
the amounts described in clause (ii) above which would be payable by the Borrower to the Defaulting
Lender (but not including any deposits that the Borrower is required to make with respect to the
Letter of Credit Exposure), the Borrower may set-off and apply any amounts owing from such
Defaulting Lender or Affiliate thereof to the Borrower under any Hedge Contract against any such
amounts payable to the Defaulting Lender. Upon written notice to the Defaulting Lender and
Administrative Agent of the Borrower’s election to terminate a Defaulting Lender’s Commitment
pursuant to this clause (c) and the payment and deposit of amounts required to be made by the
Borrower under clause (ii) above, (A) such Defaulting Lender shall cease to be a “Lender” hereunder
for all purposes except that such Lender’s rights under Sections 2.13, 2.14, and 9.07 shall
continue with respect to events and occurrences occurring before or concurrently with its ceasing
to be a “Lender” hereunder, (B) such Defaulting Lender’s Commitment shall be deemed terminated, and
(C) such Defaulting Lender shall be relieved of its obligations hereunder, provided that, any such
termination will not be deemed to be a waiver or release of any claim by Borrower, the
Administrative Agent or any Lender may have against such Defaulting Lender.

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     Section 2.05 Prepayment of Advances.

     (a) Optional. The Borrower may prepay the Advances, after giving by 10:00 a.m.
(Dallas, Texas time) (i) in the case of Eurodollar Rate Advances, at least three Business Days’ or
(ii) in the case of Reference Rate Advances, same Business Day’s, irrevocable prior written notice
(or irrevocable telephone notice promptly confirmed in writing) to the Administrative Agent stating
the proposed date and aggregate principal amount of such prepayment. If any such notice is given,
the Borrower shall prepay the Advances in whole or ratably in part in an aggregate principal amount
equal to the amount specified in such notice, together with accrued interest to the date of such
prepayment on the principal amount prepaid and amounts, if any, required to be paid pursuant to
Section 2.12 as a result of such prepayment being made on such date; provided, however,
that each partial prepayment with respect to: (A) any amounts prepaid in respect of Eurodollar
Rate Advances shall be applied to Eurodollar Rate Advances comprising part of the same Borrowing;
(B) any amounts prepaid in respect of Reference Rate Advances shall be made in a minimum amount of
$1,000,000 and in integral multiples of $500,000 in excess thereof, and (C) any prepayments made in
respect of Borrowings comprised of Eurodollar Rate Advances shall be made in a minimum amount of
$3,000,000 and in integral multiples of $1,000,000 in excess thereof and in an aggregate principal
amount such that after giving effect thereto such Borrowing shall have a remaining principal amount
outstanding with respect to such Borrowings of at least $1,000,000. Full prepayments of any
Borrowing are permitted without restriction of amounts.

     (b) Borrowing Base Deficiencies.

          (i) Other than as provided in clause (ii) and clause (iii) below, if a Borrowing Base
Deficiency exists, then the Borrower shall, after receipt of written notice from the Administrative
Agent regarding such deficiency, take any of the following actions (and the failure of the Borrower
to take such actions to remedy such Borrowing Base Deficiency shall constitute an Event of
Default):

               (A) prepay the Advances or, if the Advances have been repaid in full, make deposits into the
Cash Collateral Account to provide cash collateral for the Letter of Credit Exposure, such that the
Borrowing Base Deficiency is cured within 10 days after the date such deficiency notice is received
by the Borrower from the Administrative Agent;

               (B) pledge as Collateral for the Obligations additional Oil and Gas Properties acceptable to
the Administrative Agent and the Required Lenders such that the applicable Borrowing Base
Deficiency is cured within 10 days after the date of such notice by the Administrative Agent is
received;

               (C) (1) deliver within 10 days after the date such deficiency notice is received by the
Borrower from the Administrative Agent, written notice to the Administrative Agent indicating the
Borrower’s election to repay the Advances and make deposits into the Cash Collateral Account to
provide cash collateral for the Letters of Credit, each in five monthly installments equal to
one-fifth of such Borrowing Base Deficiency with the first such installment due 30 days after the
date such deficiency notice is received by the Borrower from the Administrative Agent and each
following installment due 30 days after the preceding installment and (2) to make such payments and
deposits within such time period; or

               (D) (1) deliver within 10 days after the date such deficiency notice is received by the
Borrower to the Administrative Agent written notice to the Administrative Agent indicating the
Borrower’s election to combine the options provided in clause (B) and clause (C) above, and also
indicating the amount to be prepaid in installments and the amount to be provided as additional

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Collateral, and (2) make such five equal consecutive monthly installments and deliver such
additional Collateral within the time required under clause (B) and clause (C) above.

The failure of the Borrower to deliver an election notice pursuant to the terms of this clause
(b)(i) shall be deemed to be an election by the Borrower of the option set forth in clause (C)
above.

          (ii) Upon each reduction of the Borrowing Base under Section 2.02(e)(i) or (ii) resulting from
the issuance of Additional Subordinated Debt, if a Borrowing Base Deficiency then exists or results
therefrom, then the Borrower shall prepay the Advances or, if the Advances have been repaid in
full, make deposits into the Cash Collateral Account to provide cash collateral for the Letter of
Credit Exposure, in an amount equal to (A) such portion of the Borrowing Base Deficiency resulting
from such reduction plus (B) if a Borrowing Base Deficiency exists prior to such reduction,
then an amount equal to the lesser of (i) the Debt Incurrence Proceeds of such Additional
Subordinated Debt and (ii) such portion of the Borrowing Base Deficiency in existence immediately
prior to such reduction.

          (iii) Upon each reduction of the Borrowing Base under Section 2.02(e)(iii) from the occurrence
of a Triggering Event, if a Borrowing Base Deficiency then exists or results therefrom, then the
Borrower shall prepay the Advances or, if the Advances have been repaid in full, make deposits into
the Cash Collateral Account to provide cash collateral for the Letter of Credit Exposure, in an
amount equal to (A) such portion of the Borrowing Base Deficiency resulting from such reduction
plus (B) if a Borrowing Base Deficiency exists prior to such reduction, then an amount
equal to the lesser of (i) the Net Cash Proceeds of such Triggering Event and (ii) such portion of
the Borrowing Base Deficiency in existence immediately prior to such reduction.

          (iv) Each prepayment pursuant to this Section 2.05(b) shall be accompanied by accrued interest
on the amount prepaid to the date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.12 as a result of such prepayment being made on such date. Each prepayment
under this Section 2.05(b) shall be applied to the Advances as determined by the Administrative
Agent.

     (c) Reduction of Commitments.

          (i) On the date of each reduction of the aggregate Commitments pursuant to Section 2.04, the
Borrower agrees to make a prepayment in respect of the outstanding amount of the Advances to the
extent, if any, that the aggregate unpaid principal amount of all Advances plus the Letter
of Credit Exposure exceeds the lesser of (A) the aggregate Commitments, as so reduced, and (B) the
Borrowing Base.

          (ii) Each prepayment pursuant to this Section 2.05(c) shall be accompanied by accrued interest
on the amount prepaid to the date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.12 as a result of such prepayment being made on such date. Each prepayment
under this Section 2.05(c) shall be applied to the Advances as determined by the Administrative
Agent and agreed to by the Lenders in their sole discretion.

     (d) Illegality. If any Lender shall notify the Administrative Agent and the Borrower
that the adoption of or any change in any applicable Legal Requirement or in the interpretation of
any applicable Legal Requirement by any Governmental Authority makes it unlawful, or that any
central bank or other Governmental Authority asserts that it is unlawful for such Lender or its
applicable Lending Office to perform its obligations under this Agreement to maintain any
Eurodollar Rate Advances of such Lender then outstanding hereunder, (i) the Borrower shall, no
later than 11:00 a.m. (Dallas, Texas time) and if not prohibited by law, (A) on the last day of the
Interest Period for each outstanding Eurodollar Rate Advance made by such Lender, or (B) if
required by such notice, on the second Business Day following its receipt

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of such notice, either prepay all of the Eurodollar Rate Advances made by such Lender then
outstanding or Convert all of the Eurodollar Rate Advances made by such Lender then outstanding to
Reference Rate Advances, and, in either case, pay all accrued interest on the principal amount
prepaid or Converted to the date of such prepayment or Conversion and amounts, if any, required to
be paid pursuant to Section 2.12 as a result of such prepayment or Conversion being made on such
date, (ii) to the extent the principal amount of Eurodollar Rate Advances are prepaid, such Lender
shall simultaneously make a Reference Rate Advance to the Borrower on such date in an amount equal
to the aggregate principal amount of the Eurodollar Rate Advances prepaid to such Lender, and (iii)
the right of the Borrower to select Eurodollar Rate Advances from such Lender for any subsequent
Borrowing shall be suspended until such Lender giving notice referred to above shall notify the
Administrative Agent that the circumstances causing such suspension no longer exist.

     (e) No Additional Right; Ratable Prepayment. The Borrower shall have no right to
prepay any principal amount of any Advance except as provided in Section 2.04(c) and this Section
2.05, and all notices given pursuant to this Section 2.05 shall be irrevocable and binding upon the
Borrower. Each payment of any Advance pursuant to this Section 2.05 shall be made in a manner such
that all Advances comprising part of the same Borrowing are paid in whole or ratably in part other
than Advances owing to a Defaulting Lender as provided in Section 2.17.

     Section 2.06 Repayment of Advances. The Borrower shall repay to the Administrative
Agent for the ratable benefit of the Lenders the outstanding principal amount of each Advance,
together with any accrued interest on the Commitment Termination Date or such earlier date pursuant
to Section 7.02 or Section 7.03.

     Section 2.07 Letters of Credit.

     (a) Commitment. From time to time from the date of this Agreement until 30 days prior
to the Commitment Termination Date, at the request of the Borrower, the Issuing Lender shall, on
the terms and conditions hereinafter set forth, issue, increase, or extend the Expiration Date of,
Letters of Credit for the account of the Borrower on any Business Day. No Letter of Credit will be
issued, increased, or extended:

          (i) if such issuance, increase, or extension would cause the Letter of Credit Exposure to
exceed the lesser of (A) $15,000,000 and (B) the lesser of (1) the aggregate Commitments at such
time and (2) the Borrowing Base in effect at such time minus, in each case under this clause (B),
the sum of the aggregate outstanding principal amount of all Advances at such time;

          (ii) if such Letter of Credit has an Expiration Date later than the earlier of (A) one year
after the date of issuance thereof (or, in the case of any extension thereof, one year after the
date of such extension) and (B) ten days prior to the Commitment Termination Date;

          (iii) unless the Letter of Credit Documents are in form and substance acceptable to the
Issuing Lender in its sole discretion;

          (iv) unless such Letter of Credit is a standby letter of credit not supporting the repayment
of indebtedness for borrowed money of any Person;

          (v) unless the Borrower has delivered to the Issuing Lender a completed and executed Letter of
Credit Application; provided that, if the terms of any such Letter of Credit Application conflicts
with the terms of this Agreement, the terms of this Agreement shall control;

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          (vi) unless such Letter of Credit is governed by (A) the Uniform Customs and Practice for
Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600, or (B)
the International Standby Practices (ISP98), International Chamber of Commerce Publication No. 590,
in either case, including any subsequent revisions thereof approved by a Congress of the
International Chamber of Commerce and adhered to by the Issuing Lender;

          (vii) if any order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or
any Legal Requirement applicable to the Issuing Lender or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lender
shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with
respect to such Letter of Credit any restriction, reserve or capital requirement (for which the
Issuing Lender is not otherwise compensated hereunder) not in effect on the date hereof, or shall
impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on
the date hereof and which the Issuing Lender in good faith deems material to it;

          (viii) if the issuance of such Letter of Credit would violate one or more policies of the
Issuing Lender applicable to letters of credit generally;

          (ix) except as otherwise agreed by the Issuing Lender, if Letter of Credit is to be
denominated in a currency other than Dollars; or

          (x) a default of any Lender’s obligations to fund under Section 2.07(d) exists or any Lender
is at such time a Defaulting Lender hereunder, unless the Issuing Lender has entered into
satisfactory arrangements with the Borrower or such Lender to eliminate the Issuing Lender’s risk
with respect to such Lender.

     (b) Participations. Upon (A) the date of the issuance or increase of a Letter of
Credit, and (B) the date hereof as to the deemed issuance of the Existing Letters of Credit under
Section 2.07(h), the Issuing Lender shall be deemed to have sold to each other Lender having a
Commitment and each other Lender having a Commitment shall have been deemed to have purchased from
the Issuing Lender a participation in the related Letter of Credit Obligations equal to such
Lender’s Pro Rata Share at such date and such sale and purchase shall otherwise be in accordance
with the terms of this Agreement. The Issuing Lender shall promptly notify each such participant
Lender having a Commitment by telephone or telecopy of each Letter of Credit issued, increased, or
extended or converted and the actual dollar amount of such Lender’s participation in such Letter of
Credit.

     (c) Issuing. Each Letter of Credit shall be issued, increased, or extended pursuant
to a Letter of Credit Application (or by telephone notice promptly confirmed in writing by a Letter
of Credit Application), given not later than 10:00 a.m. (Dallas, Texas time) on the fifth Business
Day before the date of the proposed issuance, increase, or extension of the Letter of Credit, and
the Issuing Lender shall give to each other Lender prompt notice thereof by telex, telephone or
telecopy. Each Letter of Credit Application shall be delivered by facsimile or by mail specifying
the information required therein; provided that if such Letter of Credit Application is
delivered by facsimile, the Borrower shall follow such facsimile with an original by mail. After
the Issuing Lender’s receipt of such Letter of Credit Application (by facsimile or by mail) and
upon fulfillment of the applicable conditions set forth in Article III, the Issuing Lender shall
issue, increase, or extend such Letter of Credit for the account of the Borrower. Each Letter of
Credit Application shall be irrevocable and binding on the Borrower.

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     (d) Reimbursement. The Borrower hereby agrees to pay on demand to the Issuing Lender
an amount equal to any amount paid by the Issuing Lender under any Letter of Credit. In the event
the Issuing Lender makes a payment pursuant to a request for draw presented under a Letter of
Credit and such payment is not promptly reimbursed by the Borrower upon demand, the Issuing Lender
shall give the Administrative Agent notice of the Borrower’s failure to make such reimbursement and
the Administrative Agent shall promptly notify each Lender having a Commitment of the amount
necessary to reimburse the Issuing Lender. Upon such notice from the Administrative Agent, each
Lender shall promptly reimburse the Issuing Lender for such Lender’s Pro Rata Share of such amount,
and such reimbursement shall be deemed for all purposes of this Agreement to be an Advance to the
Borrower transferred at the Borrower’s request to the Issuing Lender. If such reimbursement is not
made by any Lender to the Issuing Lender on the same day on which the Administrative Agent notifies
such Lender to make reimbursement to the Issuing Lender hereunder, such Lender shall pay interest
on its Pro Rata Share thereof to the Issuing Lender at a rate per annum equal to the Federal Funds
Rate. The Borrower hereby unconditionally and irrevocably authorizes, empowers, and directs the
Administrative Agent and the Lenders to record and otherwise treat such reimbursements to the
Issuing Lender as Reference Rate Advances under a Borrowing requested by the Borrower to reimburse
the Issuing Lender that have been transferred to the Issuing Lender at the Borrower’s request.

     (e) Obligations Unconditional. The obligations of the Borrower under this Agreement
in respect of each Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances, including, without
limitation, the following circumstances:

          (i) any lack of validity or enforceability of any Letter of Credit Documents;

          (ii) any amendment or waiver of, or any consent to or departure from, any Letter of Credit
Documents;

          (iii) the existence of any claim, set-off, defense, or other right which the Borrower may have
at any time against any beneficiary or transferee of such Letter of Credit (or any Persons for whom
any such beneficiary or any such transferee may be acting), the Issuing Lender, or any other person
or entity, whether in connection with this Agreement, the transactions contemplated in this
Agreement or in any Letter of Credit Documents, or any unrelated transaction;

          (iv) any statement or any other document presented under such Letter of Credit proving to be
forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;

          (v) payment by the Issuing Lender under such Letter of Credit against presentation of a draft
or certificate which does not comply with the terms of such Letter of Credit; or

          (vi) any other circumstance or happening whatsoever, whether or not similar to any of the
foregoing.

provided, however, that nothing contained in this paragraph (e) shall be deemed to
constitute a waiver of the Borrower’s rights under Section 2.07(f) below.

     (f) Liability of Issuing Lender. The Borrower assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such
Letter of Credit. Neither the Issuing Lender nor any of its officers or directors shall be liable
or responsible for:

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          (i) the use which may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith;

          (ii) the validity, sufficiency, or genuineness of documents, or of any endorsement thereon,
even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent,
or forged;

          (iii) payment by the Issuing Lender against presentation of documents which do not comply with
the terms of a Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the relevant Letter of Credit; or

          (iv) any other circumstances whatsoever in making or failing to make payment under any Letter
of Credit (INCLUDING THE ISSUING LENDER’S OWN NEGLIGENCE),

except that the Borrower shall have a claim against the Issuing Lender, and the Issuing
Lender shall be liable to the Borrower, to the extent of any direct, as opposed to consequential,
damages suffered by the Borrower which a court determines in a final, non-appealable judgment were
caused by the Issuing Lender’s willful misconduct or gross negligence in determining whether
documents presented under a Letter of Credit comply with the terms of such Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that
appear on their face to be in order, without responsibility for further investigation, regardless
of any notice or information to the contrary.

     (g) Cash Collateral Account.

          (i) If the Borrower is required to deposit funds in the Cash Collateral Account pursuant to
Sections 2.04(c), 2.05(b), 2.17, 7.02(b), or 7.03(b), then the Borrower and the Administrative
Agent shall establish the Cash Collateral Account and the Borrower shall execute any documents and
agreements, including the Administrative Agent’s standard form assignment of deposit accounts, that
the Administrative Agent requests in connection therewith to establish the Cash Collateral Account
and grant the Administrative Agent a first priority security interest in such account and the funds
therein. The Borrower hereby pledges to the Administrative Agent and grants the Administrative
Agent a security interest in the Cash Collateral Account, whenever established, all funds held in
the Cash Collateral Account from time to time, and all proceeds thereof as security for the payment
of the Obligations.

          (ii) So long as no Default or Event of Default exists, (A) the Administrative Agent may apply
the funds held in the Cash Collateral Account only to the reimbursement of any Letter of Credit
Obligations, and (B) the Administrative Agent shall release to the Borrower at the Borrower’s
written request any funds held in the Cash Collateral Account in an amount up to but not exceeding
the excess, if any (immediately prior to the release of any such funds), of the total amount of
funds held in the Cash Collateral Account over the Letter of Credit Exposure. During the existence
of any Default or Event of Default, the Administrative Agent may apply any funds held in the Cash
Collateral Account to the Obligations in any order determined by the Administrative Agent,
regardless of any Letter of Credit Exposure that may remain outstanding. The Issuing Lender may in
its sole discretion at any time direct the Administrative Agent to release to the Borrower any
funds held in the Cash Collateral Account.

          (iii) The Administrative Agent shall exercise reasonable care in the custody and preservation
of any funds held in the Cash Collateral Account which may bear interest or be invested in the
Administrative Agent’s reasonable discretion and the Administrative Agent shall be deemed to have
exercised such care if such funds are accorded treatment substantially equivalent to that which the
Administrative Agent accords its own Property, it being understood that the Administrative Agent
shall

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not have any responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.

     (h) Existing Letters of Credit. The Issuing Lender, the Lenders and the Borrower agree
that effective as of the Effective Date, the Existing Letters of Credit shall be deemed to have
been issued and maintained under, and to be governed by the terms and conditions of, this
Agreement.

     (i) Defaulting Lender. If, at any time, a Defaulting Lender exists hereunder, then,
at the request of the Issuing Lender subject to Section 2.17(c), the Borrower shall deposit funds
with Administrative Agent into the Cash Collateral Account an amount equal to such Defaulting
Lender’s Pro Rata Share of the Letter of Credit Exposure.

     Section 2.08 Fees.

     (a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for the
account of each Lender having a Commitment a commitment fee equal to 0.50% per annum of the daily
Unused Commitment Amount of such Lender, from the date of this Agreement until the Commitment
Termination Date; provided that, no Commitment Fee shall accrue on the Commitment of a Defaulting
Lender during the period such Lender remains a Defaulting Lender. The commitment fees shall be due
and payable quarterly in arrears on the last day of each March, June, September, and December
commencing on June 30, 2010 and continuing thereafter through and including the Commitment
Termination Date.

     (b) Letter of Credit Fees.

          (i) Letter of Credit Fees. Subject to Sections 2.17(c)(iii) and (iv), the Borrower
agrees to pay (A) to the Administrative Agent for the pro rata benefit of the Lenders having a
Commitment a per annum letter of credit fee for each Letter of Credit issued hereunder in an amount
equal to the greater of (1) Applicable Margin for Eurodollar Rate Advances times the daily maximum
amount available to be drawn under such Letter of Credit and (2) $750, and (B) to the Issuing
Lender, a fronting fee for each Letter of Credit equal to 0.25% per annum times on the face amount
of such Letter of Credit. The fronting fee shall be payable annually in advance on the date of the
issuance of the Letter of Credit, and, in the case of an increase or extension only, on the date of
such increase or such extension. The fee set forth in (A) above shall be computed on a quarterly
basis in arrears and be due and payable on the last day of each March, June, September, and
December commencing June 30, 2010.

          (ii) The Borrower also agrees to pay to the Issuing Lender such other usual and customary fees
associated with any transfers, amendments, drawings, negotiations or reissuances of any Letters of
Credit.

     (c) Facility and Other Fees. To the extent not otherwise included under Section
2.08(a) and (b), the Borrower agrees to pay to the Administrative Agent the fees required to be
paid under the Fee Letters.

     Section 2.09 Interest.

     (a) Applicable Interest Rates. The Borrower shall pay interest on the unpaid
principal amount of each Advance made by each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:

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          (i) Reference Rate Advances. If such Advance is a Reference Rate Advance, a rate per
annum equal at all times to the Adjusted Reference Rate in effect from time to time plus
the Applicable Margin in effect from time to time, payable quarterly in arrears on the last day of
each calendar quarter and on the date such Reference Rate Advance shall be paid in full.

          (ii) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance, a rate
per annum equal at all times during the Interest Period for such Advance to the Eurodollar Rate for
such Interest Period plus the Applicable Margin in effect from time to time, payable on the
last day of such Interest Period, and, in the case of six-month Interest Periods, on the day that
occurs during such Interest Period three months from the first day of such Interest Period.

     (b) Usury Recapture.

          (i) If, with respect to any Lender, the effective rate of interest contracted for under the
Loan Documents, including the stated rates of interest and fees contracted for hereunder and any
other amounts contracted for under the Loan Documents that are deemed to be interest, at any time
exceeds the Maximum Rate, then the outstanding principal amount of the loans made by such Lender
hereunder shall bear interest at a rate which would make the effective rate of interest for such
Lender under the Loan Documents equal the Maximum Rate until the difference between the amounts
which would have been due at the stated rates and the amounts that were due at the Maximum Rate
(the “Lost Interest”) has been recaptured by such Lender.

          (ii) If, when the loans made hereunder are repaid in full, the Lost Interest has not been
fully recaptured by such Lender pursuant to the preceding paragraph, then, to the extent permitted
by law, for the loans made hereunder by such Lender the interest rates charged under Section 2.09
hereunder shall be retroactively increased such that the effective rate of interest under the Loan
Documents was at the Maximum Rate since the effectiveness of this Agreement to the extent necessary
to recapture the Lost Interest not recaptured pursuant to the preceding sentence and, to the extent
allowed by law, the Borrower shall pay to such Lender the amount of the Lost Interest remaining to
be recaptured by such Lender.

          (III) NOTWITHSTANDING THE FOREGOING OR ANY OTHER TERM IN THIS AGREEMENT AND THE LOAN DOCUMENTS
TO THE CONTRARY, IT IS THE INTENTION OF EACH LENDER AND THE BORROWER TO CONFORM STRICTLY TO ANY
APPLICABLE USURY LAWS. ACCORDINGLY, IF ANY LENDER CONTRACTS FOR, CHARGES, OR RECEIVES ANY
CONSIDERATION THAT CONSTITUTES INTEREST IN EXCESS OF THE MAXIMUM RATE, THEN ANY SUCH EXCESS SHALL
BE CANCELED AUTOMATICALLY AND, IF PREVIOUSLY PAID, SHALL AT SUCH LENDER’S OPTION BE APPLIED TO THE
OUTSTANDING AMOUNT OF THE ADVANCES MADE HEREUNDER BY SUCH LENDER OR BE REFUNDED TO THE BORROWER.

     Section 2.10 Payments and Computations.

     (a) Payment Procedures. The Borrower shall make each payment under this Agreement and
under the Notes not later than 12:00 p.m. (noon) (Dallas, Texas time) on the day when due in
Dollars to the Administrative Agent at the location referred to in the Notes (or such other
location as the Administrative Agent shall designate in writing to the Borrower) in same day funds
without deduction, setoff, or counterclaim of any kind. The Administrative Agent shall promptly
thereafter cause to be distributed like funds relating to the payment of principal, interest or
fees ratably (other than amounts payable solely to the Administrative Agent, the Issuing Lender, or
a specific Lender pursuant to Section 2.08(c), 2.12, 2.13, 2.14, 8.05, or 9.07, but after taking
into account payments effected pursuant to Section 9.04) in accordance with each Lender’s Pro Rata
Share to the Lenders for the account of their

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respective applicable Lending Offices, and like funds relating to the payment of any other amount payable
to any Lender or the Issuing Lender to such Lender for the account of its applicable Lending
Office, in each case to be applied in accordance with the terms of this Agreement.

     (b) Computations. All computations of interest and fees shall be made by the
Administrative Agent, on the basis of a year of 360 days for the actual number of days (including
the first day, but excluding the last day) occurring in the period for which such interest or fees
are payable. Each determination by the Administrative Agent of an interest rate or fee shall be
conclusive and binding for all purposes, absent manifest error.

     (c) Non-Business Day Payments. Whenever any payment shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of payment of interest or
fees, as the case may be; provided, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.

     (d) Administrative Agent Reliance. Unless the Administrative Agent shall have
received written notice from the Borrower prior to the date on which any payment is due to the
Lenders that the Borrower shall not make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender
on such date an amount equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each Lender shall repay to
the Administrative Agent forthwith on demand such amount distributed to such Lender, together with
interest, for each day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent, at the Federal Funds Rate for such day.

     Section 2.11 Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on
account of the Advances or Letter of Credit Obligations made by it in excess of its Pro Rata Share
of payments on account of the Advances or Letter of Credit Obligations obtained by all the Lenders
(other than as a result of a termination of a Defaulting Lender’s Commitment under Section
2.04(c)), such Lender shall notify the Administrative Agent and forthwith purchase from the other
Lenders such participations in the Advances made by them or Letter of Credit Obligations held by
them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with
each of them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded
and such Lender shall repay to the purchasing Lender the purchase price to the extent of such
Lender’s ratable share (according to the proportion of (a) the amount of the participation sold by
such Lender to the purchasing Lender as a result of such excess payment to (b) the total amount of
such excess payment) of such recovery, together with an amount equal to such Lender’s ratable share
(according to the proportion of (i) the amount of such Lender’s required repayment to the
purchasing Lender to (ii) the total amount of all such required repayments to the purchasing
Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the
total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section 2.11 may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount of such
participation. The provisions of this Section 2.11 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 Advances or participations in Letter of Credit

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Exposure to any assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this Section 2.11 shall apply).

     Section 2.12 Breakage Costs. If (a) any payment of principal of any Eurodollar Rate
Advance or any Conversion of a Eurodollar Rate Advance is made other than on the last day of the
Interest Period for such Advance, whether as a result of any payment or Conversion pursuant to
Section 2.05, the acceleration of the maturity of the Notes pursuant to Article VII, or otherwise,
or (b) the Borrower fails to make a principal or interest payment with respect to any Eurodollar
Rate Advance on the date such payment is due and payable, the Borrower shall, within 10 days of any
written demand sent by any Lender to the Borrower through the Administrative Agent, pay to the
Administrative Agent for the account of such Lender any amounts required to compensate such Lender
for any additional losses, out-of-pocket costs or expenses that it may reasonably incur as a result
of such payment or nonpayment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.

     Section 2.13 Increased Costs. If any Change in Law shall (a) impose, modify or deem
applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in the Eurodollar Rate) or the Issuing Lender;
(b) subject any Lender or the Issuing Lender to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Rate
Advance made by it, or change the basis of taxation of payments to such Lender or the Issuing
Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.14 and
the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the
Issuing Lender); or (c) impose on any Lender or the Issuing Lender or the London interbank market
any other condition, cost or expense affecting this Agreement or Eurodollar Rate Advances made by
such Lender or any Letter of Credit or participation therein; and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar
Advance (or of maintaining its obligation to make any such Advance), or to increase the cost to
such Lender or the Issuing Lender of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce
the amount of any sum received or receivable by such Lender or the Issuing Lender hereunder
(whether of principal, interest or any other amount) then, within thirty (30) days after demand by
such Lender or the Issuing Lender, the Borrower will pay to such Lender or the Issuing Lender, as
the case may be, such additional amount or amounts as will compensate such Lender or the Issuing
Lender, as the case may be, for such additional costs incurred or reduction suffered. A
certificate as to the amount of such increased cost and detailing the calculation of such cost
submitted to the Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.

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

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Lender’s or the Issuing Lender’s holding company for any such reduction suffered. A
certificate as to such amounts and detailing the calculation of such amounts submitted to the
Borrower by such Lender or the Issuing Lender shall be conclusive and binding for all purposes,
absent manifest error. The Borrower shall pay such Lender or the Issuing Lender, as the case may
be, the amount shown as due on any such certificate within thirty (30) days after receipt thereof.

     (b) Letters of Credit. If any Change in Law shall either (i) impose, modify, or deem
applicable any reserve, special deposit, or similar requirement against letters of credit issued
by, or assets held by, or deposits in or for the account of, the Issuing Lender or (ii) impose on
the Issuing Lender any other condition regarding the provisions of this Agreement relating to the
Letters of Credit or any Letter of Credit Obligations, and the result of any event referred to in
the preceding clause (i) or (ii) shall be to increase the cost to the Issuing Lender of issuing or
maintaining any Letter of Credit (which increase in cost shall be determined by the Issuing
Lender’s reasonable allocation of the aggregate of such cost increases resulting from such event),
then, upon demand by the Issuing Lender, the Borrower shall pay to the Issuing Lender, from time to
time as specified by the Issuing Lender, additional amounts which shall be sufficient to compensate
the Issuing Lender for such increased cost. A certificate as to such increased cost incurred by
the Issuing Lender, as a result of any event mentioned in clause (i) or (ii) above, and detailing
the calculation of such increased costs submitted by the Issuing Lender to the Borrower, shall be
conclusive and binding for all purposes, absent manifest error.

     (c) Delay in Requests. Failure or delay on the part of any Lender or the Issuing
Lender to demand compensation pursuant to this Section 2.13 shall not constitute a waiver of such
Lender’s or the Issuing Lender’s right to demand such compensation, provided that the
Borrower shall not be required to compensate a Lender or the Issuing Lender pursuant to this
Section 2.13 for any increased costs incurred or reductions suffered more than nine months prior to
the date that such Lender or the Issuing Lender, 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
Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine-month period referred to above
shall be extended to include the period of retroactive effect thereof).

     Section 2.14 Taxes.

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

     (b) Other Taxes. Without limiting the provisions of clause (a) above, the Borrower
agrees to pay any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this
Agreement, the Notes, or the other Loan Documents (hereinafter referred to as “Other
Taxes”).

     (c) Indemnification. THE BORROWER INDEMNIFIES EACH LENDER, THE ISSUING LENDER, AND
THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF INDEMNIFIED

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TAXES OR OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY INDEMNIFIED TAXES OR OTHER TAXES
IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 2.14) PAID BY SUCH LENDER, THE
ISSUING LENDER, OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING
INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR
OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED. EACH PAYMENT REQUIRED TO BE MADE BY THE BORROWER
IN RESPECT OF THIS INDEMNIFICATION SHALL BE MADE TO THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF ANY
PARTY CLAIMING SUCH INDEMNIFICATION WITHIN 30 DAYS FROM THE DATE THE BORROWER RECEIVES WRITTEN
DEMAND THEREFOR FROM THE ADMINISTRATIVE AGENT ON BEHALF OF ITSELF AS ADMINISTRATIVE AGENT, THE
ISSUING LENDER, OR ANY SUCH LENDER.

     (d) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under 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 or reasonably requested by
the Borrower or the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without withholding or at a
reduced rate of withholding. Without limiting the generality of the foregoing, in the event that
the Borrower is resident for tax purposes in the United States of America, any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the request of the Borrower or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of
the following is applicable: (i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United States of America is
a party; (ii) duly completed copies of Internal Revenue Service Form 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) duly completed copies of Internal Revenue
Service Form W-8BEN, or (v) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly completed together with
such supplementary documentation as may be prescribed by applicable law to permit the Borrower to
determine the withholding or deduction required to be made.

     (e) Treatment of Certain Refunds. If the Administrative Agent, a Lender or the
Issuing Lender determines, in its reasonable discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.14, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 2.14 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such
Lender or the Issuing Lender, as the case may be, 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, such Lender or the Issuing Lender, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the
Issuing Lender in the event the Administrative Agent, such Lender or the Issuing Lender is required
to repay such refund to such Governmental Authority. This paragraph shall not be construed to
require

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the Administrative Agent, any Lender or the Issuing Lender to make available its tax returns
(or any other information relating to its taxes that it deems confidential) to the Borrower or any
other Person.

     Section 2.15 Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.13, or requires the Borrower to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, then
such Lender shall use reasonable efforts to designate a different lending office for funding or
booking its Advances hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.14, 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.

     Section 2.16 Replacement of Lender. If (i) any Lender requests compensation under
Section 2.13 or requires that the Borrower pay any additional amount pursuant to Section 2.14, (ii)
any Lender suspends its obligation to continue, or Convert Advances into, Eurodollar Rate Advances
pursuant to Section 2.03(c)(ii) or Section 2.11, (iii) any Lender is a Defaulting Lender, or (iv)
any Lender is a Non-Consenting Lender (any such Lender, a “Subject Lender”), then (A) in
the case of a Defaulting Lender, the Administrative Agent may, upon notice to the Subject Lender
and the Borrower, require such Subject Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents required by, Section
9.06), all of its interests, rights and obligations under this Agreement and the related Loan
Documents to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may
be another Lender, if a Lender accepts such assignment) and (B) in the case of any Subject Lender,
including a Defaulting Lender, the Borrower may, upon notice to the Subject Lender and the
Administrative Agent and at the Borrower’s sole cost and expense, require such Subject Lender to
assign, without recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 9.06), all of its interests, rights and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided that:

(A) as to assignments required by the Borrower, the Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 9.06;

(B) such Subject Lender shall have received payment of an amount equal to the outstanding
principal of its Advances and participations in outstanding Letter of Credit Obligations,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 2.12) from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the Applicable Borrower
(in the case of all other amounts);

(C) in the case of any such assignment resulting from a claim for compensation under Section
2.13, such assignment will result in a reduction in such compensation or payments thereafter;

(D) such assignment does not conflict with applicable Legal Requirements; and

(E) with respect to a Non-Consenting Lender, the proposed amendment, waiver, consent or release
with respect to this Agreement or any other Loan Document has been approved by the Required
Lenders and such amendment, waiver, consent or release can be effected as a result of the
assignment contemplated by this Section.

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A Lender shall not be required to make any such assignment or 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. Solely for purposes of effecting the assignment
required for a Defaulting Lender under this Section 2.15 and to the extent permitted under
applicable Legal Requirements, each Lender hereby designates and appoints the Administrative Agent
as true and lawful agent and attorney-in-fact, with full power and authority, for and on behalf of
and in the name of such Lender to execute, acknowledge and deliver the Assignment and Acceptance
required hereunder if such Lender was a Defaulting Lender and such Lender shall be bound thereby as
fully and effectively as if such Lender had personally executed, acknowledged and delivered the
same. In lieu of the Borrower or the Administrative Agent replacing a Defaulting Lender as
provided in this Section 2.16, the Borrower may terminate such Defaulting Lender’s Commitment as
provided in Section 2.04.

     Section 2.17 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
2.01(a), Section 2.07(d), or Section 2.10(d) 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 as a result of the exercise of a set-off shall have received a
payment in respect of its outstanding Advances or pro rata share of Letter of Credit Exposure which
results in its outstanding Advances and share of Letter of Credit Exposure being less than its Pro
Rata Share of the aggregate outstanding Advances and Letter of Credit Exposure, then no payments
will be made to such Defaulting Lender until such time as all amounts due and owing to the Lenders
have been equalized in accordance with each Lender’s respective pro rata share of the aggregate
outstanding Advances and Letter of Credit Exposure. Further, if at any time prior to the
acceleration or maturity of the Advances, the Administrative Agent shall receive any payment in
respect of principal of an Advance or a Reimbursement Obligation while one or more Defaulting
Lenders shall be party to this Agreement, the Administrative Agent shall apply such payment first
to the Borrowings 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 Pro Rata Share of all Advances then outstanding. After acceleration or maturity
of the Advances, subject to the first sentence of this Section 2.17(b), all principal will be paid
ratably as provided in Section 2.11.

     (c) If any Letter of Credit Exposure exists at the time a Lender becomes a Defaulting Lender
then:

     (i) such Letter of Credit Exposure shall be automatically reallocated among the Non-Defaulting
Lenders in accordance with their respective Pro Rata Share of such Defaulting Lender’s share of the
Letter of Credit Exposure (and each Lender is deemed to have purchased and assigned such
participation interest in such reallocated portion of the Letter of Credit Exposure) but only to
the extent that (A) the sum of each Non-Defaulting Lender’s outstanding Advances plus its share of
the Letter of Credit Exposure, after giving effect to the reallocation provided herein, does not
exceed the lesser of such Non-Defaulting Lender’s Pro Rata Share of the Borrowing Base and such
Non-Defaulting Lender’s Commitment, and (B) the conditions set forth in Section 3.02 are satisfied
at such time; provided that, such reallocation will constitute a waiver or release of any claim the
Borrower, the Administrative Agent, the Issuing Lender or any other Lender may have against such
Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender;

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          (ii) if the reallocation described in clause (i) 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 share of the Letter of Credit Exposure (after
giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the
procedures set forth in Section 2.07(g) for so long as such Letter of Credit Exposure is
outstanding;

          (iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s Letter of
Credit Exposure pursuant to this Section 2.17 then the Borrower shall not be required to pay any
fees to such Defaulting Lender pursuant to Section 2.08 (b) with respect to such Defaulting
Lender’s Letter of Credit Exposure during the period such Defaulting Lender’s Letter of Credit
Exposure is cash collateralized;

          (iv) if the Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated pursuant to
clause (i) above, then the fees payable to the Lenders pursuant to Section 2.08(b) shall be
adjusted in accordance with such Non-Defaulting Lenders’ Pro Rata Share;

          (v) if any Defaulting Lender’s share of the Letter of Credit Exposure is neither cash
collateralized nor reallocated pursuant to the preceding provisions, then, without prejudice to any
rights or remedies of the Issuing Lender or any Lender hereunder, all letter of credit fees payable
under Section 2.08(b) with respect to such Defaulting Lender’s share of the Letter of Credit
Exposure shall be payable to the Issuing Lender until such Letter of Credit Exposure is cash
collateralized and/or reallocated.

     (d) In the event that the Administrative Agent, the Borrower and the Issuing Lender each
agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a
Defaulting Lender, then (i) the Letter of Credit Exposure of the Lenders shall be readjusted to
reflect the inclusion of such Lender’s Commitment and on such date such Lender shall be deemed to
have purchased at par such of the Advances or participations in Letters of Credit of the other
Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to
hold such Advances and Letter of Credit Exposure in accordance with its Pro Rata Share, and (ii) if
no Default exists, then any cash collateral posted by the Borrower pursuant to clause (c)(ii) above
with respect to such Lender shall be returned to the Borrower.

ARTICLE III

CONDITIONS

     Section 3.01 Conditions Precedent to Effectiveness. The effectiveness of this
Agreement and the amendment and restatement of the Existing Credit Agreement is subject to the
conditions precedent that:

     (a) Documentation. The Administrative Agent shall have received the following duly
executed by all the parties thereto, in form and substance satisfactory to the Administrative
Agent, and where applicable, in sufficient copies for each Lender:

          (i) this Agreement, a Note payable to the order of each Lender in the amount of its
Commitment, the Guaranties, the Pledge Agreements, the Security Agreements, the Subordination and
Intercreditor Agreement, and new Mortgages or reaffirmation of existing Mortgages which
collectively (A) encumber at least 85% of all of the Borrower’s and its Restricted Subsidiaries’
(including the Merger Company’s) Proven Reserves and Oil and Gas Properties (other than the Proven
Reserves of Orion), and (B) encumber such percentage of Orion’s Proven Reserves and Oil and Gas
Properties attributable to the

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Borrower’s equity ownership therein, and each of the other Loan Documents, and all attached
exhibits and schedules;

          (ii) a favorable opinion of the Borrower’s and the Restricted Subsidiaries’ counsel dated as
of the date of this Agreement and substantially in the form of the attached Exhibit K, covering the
matters discussed in such Exhibit and such other matters as the Administrative Agent, on behalf of
the Lenders, may reasonably request;

          (iii) copies, certified as of the date of this Agreement by a Responsible Officer of the
Borrower of (A) the resolutions of the board of directors of the General Partner, as general
partner of the Borrower, approving the Loan Documents to which the Borrower is a party and
authorizing the entering into of Hedge Contracts, (B) the Partnership Agreement, (C) the
certificate of limited partnership of the Borrower duly certified by the Secretary of State of the
State of Texas, and (D) the limited liability company agreement of the General Partner, (E) the
certificate of formation of the General Partner duly certified by the Secretary of State of the
State of Texas, (F) all other documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, the Note, and the other Loan
Documents;

          (iv) certificates of a Responsible Officer of the Borrower certifying the names and true
signatures of the officers authorized to sign this Agreement, the Notes, Notices of Borrowing,
Notices of Conversion or Continuation, and the other Loan Documents and Hedge Contracts to which
the Borrower is a party;

          (v) copies, certified as of the date of this Agreement by a Responsible Officer or the
secretary or an assistant secretary of each Restricted Subsidiary (including the Merger Company,
after giving effect to the Merger) of (A) the resolutions of the board of directors or managers (or
other applicable governing body) of such Restricted Subsidiary approving the Loan Documents to
which it is a party and authorizing the entering into of Hedge Contracts, (B) the articles or
certificate (as applicable) of incorporation (or organization) of such Restricted Subsidiary
certified by the Secretary of State for the state of organization, (C) the bylaws or other
governing documents of such Restricted Subsidiary, and (D) all other documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to the Guaranty, the
Security Instruments, and the other Loan Documents and Hedge Contracts to which such Restricted
Subsidiary is a party;

          (vi) a certificate of a Responsible Officer of each Restricted Subsidiary certifying the names
and true signatures of officers of such Restricted Subsidiary authorized to sign the Guaranty,
Security Instruments and the other Loan Documents and Hedge Contracts to which such Restricted
Subsidiary is a party;

          (vii) certificates of good standing for the Borrower, the General Partner, and each Restricted
Subsidiary in each state in which each such Person is organized or qualified to do business, which
certificate shall be (A) dated a date not sooner than 14 days prior to the date of this Agreement
or (B) otherwise effective on the Effective Date;

          (viii) a certificate dated as of the date of this Agreement from the Responsible Officer of
the Borrower stating that (A) all representations and warranties of the Borrower set forth in this
Agreement are true and correct in all material respects as of such date (except in the case of
representations and warranties that are made solely as of an earlier date or time, which
representations and warranties shall be true and correct in all material respects as of such
earlier date or time); (B) no Default has occurred and is continuing; and (C) the conditions in
clauses (a), (b), (c), and (h) — (n) of this Section 3.01 have been met;

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          (ix) appropriate UCC-1 and UCC-3 Financing Statements covering the Collateral for filing with
the appropriate authorities and any other documents, agreements or instruments necessary to create
an Acceptable Security Interest in such Collateral;

          (x) certificates evidencing the Equity Interests required in connection with the Pledge
Agreements and powers executed in blank for each such certificate;

          (xi) insurance certificates naming the Administrative Agent loss payee or additional insured,
as applicable, and evidencing insurance that meet the requirements of this Agreement and the
Security Instruments, and that are otherwise satisfactory to the Administrative Agent;

          (xii) the initial Engineering Report dated effective a date acceptable to the Administrative
Agent;

          (xiii) a certificate of the chief financial officer of the Borrower, in form and substance
reasonably satisfactory to the Administrative Agent, attesting to the Solvency (i) of the Borrower
and its Restricted Subsidiaries (other than the Merger Company), taken as a whole, immediately
before giving effect to the Transactions, and (ii) of the Borrower and its Restricted Subsidiaries
(including the Merger Company), taken as a whole, immediately after giving effect to the
Transactions; and

          (xiv) such other documents, governmental certificates, agreements and lien searches as the
Administrative Agent or any Lender may reasonably request.

     (b) Payment of Fees. On or prior to the date of this Agreement, the Borrower shall
have paid the fees required by Section 2.08(c) and all costs and expenses that have been invoiced
and are payable pursuant to Section 9.04.

     (c) Delivery of Financial Statements. The Administrative Agent and the Lenders shall
have received true and correct copies of (i) satisfactory audited consolidated financial statements
for the Borrower and its Subsidiaries for the fiscal years 2007 and 2008, and interim unaudited
financial statements for each fiscal quarter ended since the last audited financial statements,
(ii) satisfactory audited consolidated financial statements for the Merger Company and its
subsidiaries for the three fiscal years most recently ended for which financial statements are
available and interim unaudited financial statements for each quarterly period ended since the last
audited financial statements for which financial statements are available, (iii) pro forma
consolidated financial statements for the Borrower and its Subsidiaries for the four-quarter period
most recently ended prior to the Effective Date for which financial statements are available giving
pro forma effect to the Transactions and a pro forma balance sheet of the Borrower and its
Subsidiaries as of the Effective Date giving pro forma effect to the Transactions and (iv)
projections prepared by management of balance sheets, income statements and cashflow statements of
the Borrower and its Subsidiaries, which will be quarterly for the first year after the Effective
Date and annually thereafter until the Maturity Date (and which projections shall not be
inconsistent with information provided to the Administrative Agent prior to February 19, 2010).

     (d) Security Instruments. The Administrative Agent shall have received all
appropriate evidence required by the Administrative Agent and the Lenders in their sole discretion
necessary to determine that the Administrative Agent (for its benefit and the benefit of the
Secured Parties) shall have an Acceptable Security Interest in the Collateral (which shall include
at least 85% of all of the Borrower’s and its Restricted Subsidiaries’ Proven Reserves and Oil and
Gas Properties (as set forth in the Independent Engineering Report dated as of January 1, 2010
covering Oil and Gas Properties of the Borrower and its Subsidiaries (excluding the Merger Company)
and the Independent Engineering Report dated as of February 1, 2010 prepared by T.J. Smith covering
Oil and Gas Properties of the Merger

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Company and its Subsidiaries)) and that all actions or filings necessary to protect, preserve
and validly perfect such Liens have been made, taken or obtained, as the case may be, and are in
full force and effect.

     (e) Title. The Administrative Agent shall be satisfied in its sole discretion with
the title to the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries and that
such Oil and Gas Properties constitute at least 70% of the present value of the Proven Reserves
categorized as “total proved” of the Borrower and its Restricted Subsidiaries as determined by the
Administrative Agent in its sole discretion.

     (f) Environmental. The Administrative Agent shall have received such environmental
assessments or other reports as it may reasonably require and shall be satisfied with the condition
of the Oil and Gas Properties with respect to the Borrower’s compliance with Environmental Laws.

     (g) No Default. No Default shall have occurred and be continuing.

     (h) Representations and Warranties. The representations and warranties contained in
Article IV hereof and in each other Loan Document shall be true and correct in all material
respects as of the Effective Date (except in the case of representations and warranties which are
made solely as of an earlier date or time, which representations and warranties shall be true and
correct in all material respects as of such earlier date or time); provided that, in any event,
such materiality qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof.

     (i) Material Adverse Change. Since December 31, 2008, there shall not having occurred
(A) any material adverse condition or material adverse change in or affecting, or the occurrence of
any circumstance or condition that could reasonably be expected to result in a material adverse
change in, or have a material adverse effect on, the business, operations, condition (financial or
otherwise), assets, liabilities (whether actual or contingent) or prospects of the Borrower and its
Subsidiaries, taken as a whole or the Merger Company and its Subsidiaries, taken as a whole, except
to the extent any such change or event is disclosed in public filings made by the Merger Company
with the Securities and Exchange Commission since such date but prior to February 19, 2010
(including any such disclosure in respect of the nature, magnitude or consequences of such change
or event) or (B) any event or occurrence that is reasonably likely to prevent or materially delay
the consummation of the Merger. Furthermore, (1) no event or circumstance that could cause a
“Target Material Adverse Effect” as defined in the Merger Agreement, shall have occurred, and (2)
the Administrative Agent shall not have become aware since February 19, 2010 of any material
information or other matter that is inconsistent in a material and adverse manner with any due
diligence, information or matter (including any financial information and projections previously
delivered to the Administrative Agent) disclosed or known to the Administrative Agent prior to
February 19, 2010.

     (j) No Proceeding or Litigation; No Injunctive Relief. No action, suit, investigation
or other proceeding (including, without limitation, the enactment or promulgation of a statute or
rule) by or before any arbitrator or any Governmental Authority shall be threatened or pending and
no preliminary or permanent injunction or order by a state or federal court shall have been entered
(i) in connection with (A) any of the Oil and Gas Properties or other Properties of the Borrower
and its Restricted Subsidiaries or (B) this Agreement or any transaction contemplated hereby, (ii)
in connection with the Acquisition or any other portion of the Transactions, or (iii) which, in any
case, in the judgment of the Administrative Agent, could reasonably be expected to result in a
Material Adverse Change.

     (k) Consents, Licenses, Approvals, etc. The Administrative Agent shall have received
true copies (certified to be such by the Borrower or other appropriate party) of all consents,
licenses and

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approvals required in accordance with applicable Legal Requirements, or in accordance
with any document, agreement, instrument or arrangement to which the Borrower, or any the Restricted
Subsidiary is a party, in connection with the execution, delivery, performance, validity and
enforceability of this Agreement, the other Loan Documents, and the Merger Agreement. In addition,
the Borrower and each Restricted Subsidiary shall have all such material consents, licenses and
approvals required in connection with the continued operation of the Borrower or any Restricted
Subsidiary, and such approvals shall be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on this Agreement and the
actions contemplated hereby, including the Transactions.

     (l) Material Contracts. The Borrower shall have delivered to the Administrative Agent
copies of all material contracts, agreements, or instruments listed on Schedule 4.19.

     (m) Notice of Borrowing. The Administrative Agent shall have received a Notice of
Borrowing from the Borrower in the form of Exhibit F, with appropriate insertions and executed by a
duly authorized Responsible Officer of the Borrower.

     (n) Subordinated Facility. The Administrative Agent shall have received evidence
satisfactory to it that the Subordinated Credit Agreement has been amended to conform the covenants
set forth therein to be consistent with the changes to the covenants effected by this Agreement.

     (o) Equity Commitment. The Administrative Agent shall have received evidence
satisfactory to it that Denham (or such other holder of common equity of the Borrower acceptable to
the Administrative Agent) has made, contemporaneously with the initial funding hereunder, the
Denham Equity Investment.

     (p) Payment or Assignment of Other Debt. The Administrative Agent shall have received
evidence satisfactory to it that, contemporaneously with the initial funding hereunder, either (i)
the Fortis Assignment is effective or (ii) the Merger Company Debt shall have been paid in full and
the Administrative Agent shall have received “pay-off” letters in form and substance reasonably
satisfactory to the Administrative Agent with respect to such Debt evidencing such payment in full
and the termination of any commitments to lend in connection therewith; and arrangements
satisfactory to the Administrative Agent shall have been made for the termination and release of
all Liens securing such Debt.

     (q) Merger. The Merger shall have been, or shall contemporaneously with the Effective
Date be, consummated substantially pursuant to the terms of the Merger Agreement. Furthermore, the
Administrative Agent shall have received (i) a true and complete copy of the Merger Agreement and
each other agreement, instrument, or document executed by the Borrower or any of its Subsidiaries
or any of their Responsible Officers at any time in connection with the Merger Agreement on or
before the date hereof, certified as such by the Borrower, and (ii) evidence of all consents and
approvals received pursuant to the Merger Agreement.

     (r) Availability. The Administrative Agent shall be satisfied that as of the
Effective Date, after giving effect to Transactions, the aggregate Unused Commitment Amount is
greater than or equal to 10% of the lesser of the Borrowing Base and the aggregate Commitments in
effect on the Effective Date.

     (s) Hedging Agreements. Schedule 4.20 shall have set forth therein a complete list of
all Hedge Contracts in effect on the Effective Date unless otherwise agreed by the Administrative
Agent in its reasonable discretion. The Borrower shall have entered into Hedge Contracts to effect
the hedge positions for the volumes, years and forecasted production set forth in Schedule 4.20.

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     (t) Corporate Structure. The corporate and capital structure of the Borrower and its
Subsidiaries upon the Effective Date, after giving effect to the Transactions, shall be reasonably
satisfactory to the Administrative Agent.

     (u) USA Patriot Act. The Administrative Agent shall have received all documentation
and other information that is required by regulatory authorities under applicable “know your
customer” and anti-money-laundering rules and regulations, including, without limitation, the
Patriot Act.

     (v) Use of Proceeds. The Administrative Agent shall be satisfied that as of the
Effective Date, the proceeds of the initial funding hereunder and the proceeds of the cash equity
contribution required under clause (o) above shall be applied as detailed by the Borrower to the
Administrative Agent prior to the Effective Date.

     Section 3.02 Conditions Precedent to All Borrowings. The obligation of each Lender to
make an Advance on the occasion of each Borrowing and of the Issuing Lender to issue, increase, or
extend any Letter of Credit and of any reallocation of Letter of Credit Exposure provided in
Section 2.17(c)(i), shall be subject to the further conditions precedent that on the date of such
Borrowing or the date of the issuance, increase, or extension of such Letter of Credit or the date
of such reallocation:

     (a) the following statements shall be true (and each of the giving of the applicable Notice of
Borrowing, Notice of Conversion or Continuation, or Letter of Credit Application and the acceptance
by the Borrower of the proceeds of such Borrowing or the issuance, increase, or extension of such
Letter of Credit shall constitute a representation and warranty by the Borrower or the reallocation
of the Letter of Credit Exposure that on the date of such Borrowing or on the date of such
issuance, increase, or extension of such Letter of Credit or the date of such reallocation, as
applicable, such statements are true):

     (i) (A) with respect to the Advances made and/or the Letters of Credit to be issued on the
Effective Date, the Specified Representations shall be true and correct in all material respects
(except that such materiality qualifier shall not be applicable to any representation or warranty
that already is qualified or modified by materiality in the text thereof) and (B) with respect to
any Borrowings made and/or Letters of Credit issued, amended, renewed or extended and/or
reallocations of Letter of Credit Exposure made after the Effective Date, all representations and
warranties contained in Article IV of this Agreement and the representations and warranties
contained in the Security Instruments, the Guaranties, and each of the other Loan Documents are
true and correct in all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof) on and as of the date of such Borrowing or the date of the
issuance, increase, or extension of such Letter of Credit, before and after giving effect to such
Borrowing or to the issuance, increase, or extension of such Letter of Credit and to the
application of the proceeds from such Borrowing, as though made on and as of such date (except in
the case of representations and warranties which are made solely as of an earlier date or time,
which representations and warranties shall be true and correct in all material respects as of such
earlier date or time, except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof); and

     (ii) (A) in respect of Borrowings to occur on the Effective Date, no Event of Default shall
have occurred and be continuing; provided that, the existence or non-existence of any Event of
Default with respect to a breach of representations and warranties as of the Effective Date shall
relate only to a breach of the Specified Representations, and (B) at all other times, no Default
has occurred and is continuing or would result from such Borrowing or from the application of the
proceeds therefrom, or would result from the issuance, increase, or extension of such Letter of
Credit;

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     (b) the Administrative Agent shall have received such other approvals, opinions, or documents
as any Lender through the Administrative Agent may reasonably request.

Each request for a Borrowing and each request for the issuance, amendment, renewal or extension of
any Letter of Credit and each reallocation of Letter of Credit Exposure shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as to the matters
specified in this Section 3.02. Notwithstanding anything herein to the contrary, even though the
making of representations and warranties that are not Specified Representations is not a condition
to the Borrowings made on the Effective Date, the Borrower shall be deemed to have made all the
representations and warranties contained in this Agreement in connection with such Borrowings, and
the making of the Advances consisting of the Borrowings by the Lenders shall not constitute a
waiver by the Lenders of any Event of Default that occurs by reason of breach of any such
representation and warranty.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants as follows:

     Section 4.01 Existence; Restricted Subsidiaries. The Borrower is (a) a limited
partnership duly organized and validly existing under the laws of Texas and (b) in good standing
and qualified to do business as a foreign corporation in each jurisdiction where its ownership or
lease of Property or conduct of its business requires such qualification. Each Restricted
Subsidiary of the Borrower is (i) duly organized, validly existing, and in good standing (if
applicable) under the laws of its jurisdiction of formation and (ii) in good standing and qualified
to do business as a foreign corporation or other foreign business entity in each jurisdiction where
its ownership or lease of Property or conduct of its business requires such qualification. As of
the date of this Agreement, the Borrower has no Subsidiaries other than listed on Schedule 4.01 and
the Borrower owns no other Equity Interests in any Person except in such Subsidiaries and otherwise
as set forth in Schedule 4.01.

     Section 4.02 Power. The execution, delivery, and performance by the Borrower and by
each Restricted Subsidiary of this Agreement, the Notes, and the other Loan Documents to which it
is a party, and the Merger Agreement and the consummation of the transactions contemplated hereby
and thereby, including the Transactions, (a) are within the Borrower’s and such Restricted
Subsidiaries’ governing powers, (b) have been duly authorized by all necessary governing action,
(c) do not contravene (i) the Borrower’s or any Restricted Subsidiary’s certificate or articles of
incorporation or formation, limited partnership agreement, bylaws, limited liability company
agreement, or other similar governance documents or (ii) any law or any contractual restriction
binding on or affecting the Borrower or any Restricted Subsidiary, and (d) will not result in or
require the creation or imposition of any Lien prohibited by this Agreement. At the time of each
Advance and the issuance, extension or increase of a Letter of Credit, such Advance and such Letter
of Credit, and the use of the proceeds of such Advance and such Letter of Credit, will be within
the Borrower’s governing powers, will have been duly authorized by all necessary partnership
action, will not contravene (i) the Borrower’s certificate of limited partnership, limited
partnership agreement, or other organizational documents, or (ii) any law or any contractual
restriction binding on or affecting the Borrower and will not result in or require the creation or
imposition of any Lien prohibited by this Agreement.

     Section 4.03 Authorization and Approvals. No consent, order, authorization, or
approval or other action by, and no notice to or filing with, any Governmental Authority or any
other Person is required for the due execution, delivery, and performance by the Borrower of this
Agreement, the Notes, or the other Loan Documents to which the Borrower is a party, or the Merger
Agreement, or by each

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Restricted Subsidiary of its Guaranty or the other Loan Documents to which it is a party or
the consummation of the transactions contemplated thereby, including the Transactions, except for
(a) the filing of UCC-1 Financing Statements and the Mortgages in the state and county filing
offices and (b) those consents and approvals that have been obtained or made on or prior to the
date of this Agreement and that are in full force and effect. At the time of each Borrowing and
each issuance, increase or extension of a Letter of Credit, no authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority will be required for such
Borrowing or such issuance, increase or extension of such Letter of Credit or the use of the
proceeds of such Borrowing or such Letter of Credit, except for (i) the filing of any additional
UCC-1 Financing Statements and the Mortgages in the state and county filing offices and (ii) those
consents and approvals that have been obtained or made on or prior to the date of such Borrowing,
which are, as of the date of such Borrowing, in full force and effect.

     Section 4.04 Enforceable Obligations. This Agreement, the Notes, and the other Loan
Documents to which the Borrower is a party have been duly executed and delivered by the Borrower
and the other Loan Documents to which each Restricted Subsidiary is a party have been duly executed
and delivered by its Restricted Subsidiaries. Each Loan Document is the legal, valid, and binding
obligation of the Borrower and each Restricted Subsidiary that is a party to it, enforceable
against the Borrower and each such Restricted Subsidiary in accordance with its terms, except as
such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium, or similar law affecting creditors’ rights generally and by general principles of
equity. As of the Effective Date, the Denham Equity Investment is the legal, valid, and binding
obligation of the Class B Limited Partner enforceable against the Class B Limited Partner in
accordance with the terms of the Partnership Agreement, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors’ rights generally and by general principles of equity.

     Section 4.05 Financial Statements.

     (a) The Borrower has delivered to the Administrative Agent and the Lenders copies of the
Financial Statements, and the Financial Statements are accurate and complete in all material
respects and present fairly in all material respects the consolidated financial condition of
Borrower and its Subsidiaries as of their respective dates and for their respective periods in
accordance with GAAP. All projections, estimates, and pro forma financial information furnished by
the Borrower, whether pursuant to financial statements or in connection with other information
delivered to any Lender or the Administrative Agent, were prepared on the basis of assumptions,
data, information, tests, or conditions believed to be reasonable at the time such projections,
estimates, and pro forma financial information were made in light of current and foreseeable
conditions (it being understood that projections as to future events are not to be viewed as facts
and that actual results may differ from projected results).

     (b) Since December 31, 2008, no event or circumstance that could cause a Material Adverse
Change has occurred.

     (c) As of the date of this Agreement and after giving effect to the making of the initial
Advances or the issuance of the initial Letters of Credit, neither the Borrower nor any Restricted
Subsidiary has any Debt other than (i) the Debt listed on Schedule 4.05, (ii) the Obligations under
this Agreement and “Obligations” under the Subordinated Credit Agreement and (iii) the Obligations
arising under the Hedge Contracts described under Schedule 4.20.

     Section 4.06 True and Complete Disclosure. All factual information (excluding
estimates) heretofore or contemporaneously furnished by or on behalf of the Borrower or any of its
Restricted Subsidiaries in writing to any Lender or the Administrative Agent for purposes of or in
connection with this Agreement, any other Loan Document or any transaction contemplated hereby or
thereby is, and all

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other such factual information hereafter furnished by or on behalf of the Borrower and its
Restricted Subsidiaries in writing to the Administrative Agent or any of the Lenders shall be, true
and accurate in all material respects on the date as of which such information is dated or
certified and does not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained therein not misleading at such time.

     Section 4.07 Litigation; Compliance with Laws.

     (a) There is no pending or, to the knowledge of the Borrower, threatened action or proceeding
affecting the Borrower or any of its Restricted Subsidiaries before any court, Governmental
Authority or arbitrator that could reasonably be expected to cause a Material Adverse Change or
which purports to affect the legality, validity, binding effect or enforceability of this
Agreement, any Note, or any other Loan Document. Additionally, there is no pending or, to the best
knowledge of the Borrower, threatened action or proceeding instituted against the Borrower or any
of its Restricted Subsidiaries which seeks to adjudicate the Borrower or any of its Restricted
Subsidiaries as bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee or other similar official for it or
for any substantial part of its Property.

     (b) The Borrower and its Restricted Subsidiaries have complied in all material respects with
all material statutes, rules, regulations, orders, and restrictions of any Governmental Authority
having jurisdiction over the conduct of their respective businesses or the ownership of their
respective Property. The offer, sale, and issuance of all outstanding Equity Interests in the
Borrower have been made in compliance with all applicable Legal Requirements, including without
limitation federal and state Legal Requirements relating to the offer and sale of securities.

     Section 4.08 Use of Proceeds. The proceeds of the Advances will be used by the
Borrower for the purposes described in Section 5.09. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U). No proceeds of any Advance will be used to purchase or carry any margin stock in
violation of Regulation T, U or X.

     Section 4.09 Investment Company Act. Neither the Borrower nor any of its Restricted
Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

     Section 4.10 Taxes.

     (a) Reports and Payments. All Returns (as defined below in clause (c) of this
Section) required to be filed by or on behalf of the Borrower, its Restricted Subsidiaries, or any
member of the Controlled Group (hereafter collectively called the “Tax Group”) have been duly filed
on a timely basis or appropriate extensions have been obtained, except where the failure to so file
would not be reasonably expected to cause a Material Adverse Change and such Returns are and will
be true, complete, and correct in all material respects; and all Taxes shown to be payable on the
Returns or on subsequent assessments with respect thereto will have been paid in full on a timely
basis, and no other Taxes will be payable by the Tax Group with respect to items or periods covered
by such Returns, except in each case to the extent of (i) reserves reflected in the Interim
Financial Statements or (ii) taxes that are being contested in good faith. The reserves for
accrued Taxes reflected in the financial statements delivered to the Lenders under this Agreement
are adequate in the aggregate for the payment of all unpaid Taxes, whether or not disputed, for the
period ended as of the date thereof and for any period prior thereto, and for which the

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Tax Group may be liable in its own right, as withholding agent or as a transferee of the
assets of, or successor to, any Person.

     (b) Taxes Definition. “Taxes” in this Section 4.10 shall mean all taxes, charges,
fees, levies, or other assessments imposed by any federal, state, local, or foreign taxing
authority, including without limitation, income, gross receipts, excise, real or personal property,
sales, occupation, use, service, leasing, environmental, value added, transfer, payroll, and
franchise taxes (and including any interest, penalties, or additions to tax attributable to or
imposed on with respect to any such assessment).

     (c) Returns Definition. “Returns” in this Section 4.10 shall mean any federal, state,
local, or foreign report, estimate, declaration of estimated Tax, information statement or return
relating to, or required to be filed in connection with, any Taxes, including any information
return or report with respect to backup withholding or other payments of third parties.

     Section 4.11 Pension Plans. All Plans are in compliance in all material respects with
all applicable provisions of ERISA. No Termination Event has occurred with respect to any Plan,
and each Plan has complied with and been administered in all material respects in accordance with
applicable provisions of ERISA and the Code. No “accumulated funding deficiency” (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed under Section 4971 of
the Code. No Reportable Event has occurred with respect to any Multiemployer Plan, and each
Multiemployer Plan has complied with and been administered in all material respects with applicable
provisions of ERISA and the Code. The present value of all benefits vested under each Plan (based
on the assumptions used to fund such Plan) did not, as of the last annual valuation date applicable
thereto, exceed the value of the assets of such Plan allocable to such vested benefits. Neither
the Borrower nor any member of the Controlled Group has had a complete or partial withdrawal from
any Multiemployer Plan for which there is any withdrawal liability. As of the most recent
valuation date applicable thereto, neither the Borrower nor any member of the Controlled Group
would become subject to any liability under ERISA if the Borrower or any member of the Controlled
Group has received notice that any Multiemployer Plan is insolvent or in reorganization. Based
upon GAAP existing as of the date of this Agreement and current factual circumstances, the Borrower
has no reason to believe that the annual cost during the term of this Agreement to the Borrower or
any member of the Controlled Group for post-retirement benefits to be provided to the current and
former employees of the Borrower or any member of the Controlled Group under Plans that are welfare
benefit plans (as defined in Section 3(1) of ERISA) could, in the aggregate, reasonably be expected
to cause a Material Adverse Change.

     Section 4.12 Condition of Property; Casualties. Each of the Borrower and its
Restricted Subsidiaries has good and defensible title to, or a valid leasehold interest in, or has
the right to use pursuant to valid licenses, all of its Oil and Gas Properties as is customary in
the oil and gas industry in all material respects, free and clear of all Liens, except for
Permitted Liens. The material Properties owned or leased by the Borrower or any of its Restricted
Subsidiaries in the continuing operations of the Borrower and each of its Restricted Subsidiaries
are in good repair, working order and operating condition (subject to normal wear and tear). Since
December 31, 2008, neither the business nor the material Properties of the Borrower and each of its
Restricted Subsidiaries (other than the Properties of the Merger Company), taken as a whole, has
been materially and adversely affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of
Property or cancellation of contracts, Permits, or concessions by a Governmental Authority, riot,
activities of armed forces, or acts of God or of any public enemy. Since December 31, 2008,
neither the business nor the material properties of the Merger Company and its Subsidiaries, taken
as a whole, has been materially and adversely affected as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of Property or cancellation of contracts, Permits, or concessions by a
Governmental Authority, riot, activities of

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armed forces, or acts of God or of any public enemy except to the extent any such change or
event is disclosed in public filings made by the Merger Company with the Securities and Exchange
Commission since such date but prior to February 19, 2010 (including any such disclosure in respect
of the nature, magnitude or consequences of such change or event) and no event or circumstance that
could cause a “Target Material Adverse Effect” as defined in the Merger Agreement has have
occurred. Since the Effective Date, neither the business nor the material Properties of the
Borrower and each of its Restricted Subsidiaries, taken as a whole, has been materially and
adversely affected as a result of any fire, explosion, earthquake, flood, drought, windstorm,
accident, strike or other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, Permits, or concessions by a Governmental Authority, riot, activities of
armed forces, or acts of God or of any public enemy.

     Section 4.13 No Burdensome Restrictions; No Defaults.

     (a) Neither the Borrower nor any of its Restricted Subsidiaries is a party to any indenture,
loan, or credit agreement or any lease or other agreement or instrument or subject to any charter
or corporate restriction or provision of applicable law or governmental regulation that could
reasonably be expected to cause a Material Adverse Change. Neither the Borrower nor any of its
Restricted Subsidiaries is in default in any material respect under or with respect to any
contract, agreement, lease, or other instrument to which the Borrower or any Restricted Subsidiary
is a party. Neither the Borrower nor any of its Restricted Subsidiaries has received any notice of
default under any material contract, agreement, lease, or other instrument to which the Borrower or
such Restricted Subsidiary is a party.

     (b) No Default has occurred and is continuing.

     Section 4.14 Environmental Condition.

     (a) Permits, Etc. The Borrower and its Restricted Subsidiaries (i) have obtained all
Environmental Permits required under Environmental Law for the ownership and operation of their
respective Properties and the conduct of their respective businesses; (ii) have at all times been
and are in material compliance with all terms and conditions of such Permits and with all other
material requirements of applicable Environmental Laws; (iii) have not received notice of any
outstanding material violation or alleged violation of any Environmental Law or Permit; and (iv)
are not subject to any actual, pending or to the Borrower’s knowledge, threatened Environmental
Claim, that could reasonably be expected to cause a Material Adverse Change.

     (b) Certain Liabilities. To the Borrower’s actual knowledge, none of the present or
previously owned, leased or operated Property of the Borrower or any Restricted Subsidiary,
wherever located, (i) has been placed on or proposed to be placed on the National Priorities List,
the Comprehensive Environmental Response Compensation Liability Information System list, or their
state or local analogs, or have been otherwise investigated, designated, listed, or identified as a
potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other
response activity under any Environmental Laws; (ii) is subject to a Lien, arising under or in
connection with any Environmental Laws, that attaches to any revenues or to any Property owned,
leased or operated by the Borrower or any of its Restricted Subsidiaries, wherever located, that
could reasonably be expected to cause a Material Adverse Change; or (iii) has been the site of any
Release of Hazardous Substances or Hazardous Wastes from present or past operations that has caused
at the site or at any third-party site any condition that has resulted in or could reasonably be
expected to result in the need for Response that would cause a Material Adverse Change.

     (c) Certain Actions. Without limiting the foregoing, (i) all necessary notices have
been properly filed, and no further action is required under current Environmental Law as to each
Response or

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other restoration or remedial project undertaken by the Borrower or its Restricted
Subsidiaries on any of their presently or formerly owned, leased or operated Property and (ii)
there are no facts, circumstances, conditions or occurrences with respect to any Property owned,
leased or operated by the Borrower or any of its Restricted Subsidiaries that could reasonably be
expected to form the basis of an Environmental Claim under Environmental Laws that could reasonably
be expected to result in a Material Adverse Change.

     Section 4.15 Permits, Licenses, Etc. The Borrower and its Restricted Subsidiaries
possess all authorizations, Permits, licenses, patents, patent rights or licenses, trademarks,
trademark rights, trade names rights and copyrights which are material to the conduct of their
business. The Borrower and its Restricted Subsidiaries manage and operate their business in all
material respects in accordance with all applicable Legal Requirements and good industry practices.

     Section 4.16 Gas Contracts. Neither the Borrower nor any of its Restricted
Subsidiaries, as of the date hereof, (a) is obligated in any material respect by virtue of any
prepayment made under any contract containing a “take-or-pay” or “prepayment” provision or under
any similar agreement to deliver Hydrocarbons produced from or allocated to any of the Borrower’s
and its Restricted Subsidiaries’ Oil and Gas Properties at some future date without receiving full
payment therefor at the time of delivery or (b) except as has been disclosed to the Administrative
Agent, has produced gas, in any material amount, subject to balancing rights of third parties or
subject to balancing duties under governmental requirements.

     Section 4.17 Liens; Titles, Leases, Etc. None of the Property of the Borrower or any
of the Restricted Subsidiaries is subject to any Lien other than Permitted Liens. On the date of
this Agreement, all governmental actions and all other filings, recordings, registrations, third
party consents and other actions which are necessary to create and perfect the Liens provided for
in the Security Instruments will have been made, obtained and taken in all relevant jurisdictions.
Other than to the extent such could not reasonably be expected to cause a Material Adverse Change,
(i) all leases and agreements for the conduct of business of the Borrower and its Restricted
Subsidiaries are valid and subsisting, in full force and effect and there exists no default or
event of default or circumstance which with the giving of notice or lapse of time or both would
give rise to a default by the Borrower or any Restricted Subsidiary, or to the Borrower’s
knowledge, by any of the other parties thereto, under any such leases or agreements. Neither the
Borrower nor any of its Restricted Subsidiaries is a party to any agreement or arrangement (other
than this Agreement and the Security Instruments and the Subordinated Loan Documents), or subject
to any order, judgment, writ or decree, that either restricts or purports to restrict its ability
to grant Liens to secure the Obligations against their respective Properties.

     Section 4.18 Solvency and Insurance. Before and after giving effect to the making of
the initial Advances, the Borrower and each of its Restricted Subsidiaries is Solvent.
Furthermore, each of the Borrower and its Restricted Subsidiaries carry insurance required under
Section 5.02 of this Agreement.

     Section 4.19 Material Agreements. Schedule 4.19 sets forth a complete and correct
list of all material agreements, leases, indentures, purchase agreements, obligations in respect of
letters of credit, guarantees, joint venture agreements, and other instruments in effect or to be
in effect as of the date hereof (other than the agreements set forth in Schedule 4.20) providing
for, evidencing, securing or otherwise relating to any Debt of the Borrower or any of its
Restricted Subsidiaries, and all obligations of the Borrower or any of its Restricted Subsidiaries
to issuers of surety or appeal bonds issued for account of the Borrower or any such Restricted
Subsidiary, and such list correctly sets forth the names of the debtor or lessee and creditor or
lessor with respect to the Debt or lease obligations outstanding or to be outstanding and the
Property subject to any Lien securing such Debt or lease obligation. Also set forth on

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Schedule 4.19 hereto is a complete and correct list, as of the date of this Agreement, of all
material agreements and other instruments of the Borrower and its Restricted Subsidiaries relating
to the purchase, transportation by pipeline, gas processing, marketing, sale and supply of natural
gas and other Hydrocarbons and which either (a) has a term longer than 12 months or (b) provides
for liabilities of the Borrower and its Restricted Subsidiaries in excess of $3,000,000. To the
extent requested, the Borrower has heretofore delivered to the Administrative Agent and the Lenders
a complete and correct copy of all such material credit agreements, indentures, purchase
agreements, contracts, letters of credit, guarantees, joint venture agreements, or other
instruments, including any modifications or supplements thereto, as in effect on the date hereof.

     Section 4.20 Hedging Agreements. Schedule 4.20 sets forth, as of the date of this
Agreement, a true and complete list of all Hedge Contracts of the Borrower and each Restricted
Subsidiary, the material terms thereof (including the type, term, effective date, termination date
and notional amounts or volumes), the net mark to market value thereof, all credit support
agreements relating thereto (including any margin required or supplied), and the counterparty to
each such agreement.

     Section 4.21 OFAC. Neither the Borrower nor any of its Subsidiaries is in violation
of any of the country or list based economic and trade sanctions administered and enforced by OFAC.
Neither the Borrower nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned
Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments
in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds of any Advance
will be used to fund any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Entity.

ARTICLE V

AFFIRMATIVE COVENANTS

     So long as any Note or any amount under any Loan Document shall remain unpaid, any Letter of
Credit shall remain outstanding, or any Lender shall have any Commitment hereunder, the Borrower
agrees, unless the Required Lenders shall otherwise consent in writing, to comply with the
following covenants.

     Section 5.01 Compliance with Laws, Etc. The Borrower shall comply, and cause each of
its Restricted Subsidiaries to comply, in all material respects with all applicable Legal
Requirements. Without limiting the generality and coverage of the foregoing, the Borrower shall
comply, and shall cause each of its Restricted Subsidiaries to comply, in all material respects,
with all Environmental Laws and all laws, regulations, or directives with respect to equal
employment opportunity and employee safety in all jurisdictions in which the Borrower, or any of
its Restricted Subsidiaries do business; provided, however, that this Section 5.01 shall
not prevent the Borrower or any of its Restricted Subsidiaries from, in good faith and with
reasonable diligence, contesting the validity or application of any such Legal Requirements by
appropriate legal proceedings. Without limitation of the foregoing, the Borrower shall, and shall
cause each of its Restricted Subsidiaries to, (a) maintain and possess all authorizations, Permits,
licenses, trademarks, trade names, rights and copyrights which are necessary to the conduct of its
business and (b) obtain, as soon as practicable, all consents or approvals required from any states
of the United States (or other Governmental Authorities) necessary to grant the Administrative
Agent an Acceptable Security Interest in the Borrower’s and its Restricted Subsidiaries’ Oil and
Gas Properties.

     Section 5.02 Maintenance of Insurance.

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     (a) The Borrower shall, and shall cause each of its Restricted Subsidiaries to, procure and
maintain or shall cause to be procured and maintained continuously in effect policies of insurance
in form and amounts and issued by companies, associations, or organizations reasonably satisfactory
to the Administrative Agent, covering such casualties, risks, perils, liabilities and other hazards
reasonably required by the Administrative Agent. In addition, the Borrower shall, and shall cause
each of its Restricted Subsidiaries to, comply with all requirements regarding insurance contained
in the Security Instruments.

     (b) All certified copies of policies or certificates thereof, and endorsements and renewals
thereof shall be delivered to and retained by the Administrative Agent. All policies of insurance
shall either have attached thereto a Lender’s loss payable endorsement for the benefit of the
Administrative Agent, as loss payee in form reasonably satisfactory to the Administrative Agent or
shall name the Administrative Agent as an additional insured, as applicable. The Borrower shall
furnish the Administrative Agent with a certificate of insurance or a certified copy of all
policies of insurance required. All policies or certificates of insurance shall set forth the
coverage, the limits of liability, the name of the carrier, the policy number, and the period of
coverage. In addition, all policies of insurance required under the terms hereof shall contain an
endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms
of such policy notwithstanding any act of negligence of the Borrower, or a Restricted Subsidiary or
any party holding under the Borrower or a Restricted Subsidiary which might otherwise result in a
forfeiture of the insurance and the further agreement of the insurer waiving all rights of setoff,
counterclaim or deductions against the Borrower and its Restricted Subsidiaries. All such policies
shall contain a provision that notwithstanding any contrary agreements between the Borrower, its
Restricted Subsidiaries, and the applicable insurance company, such policies will not be canceled,
allowed to lapse without renewal, surrendered or amended (which provision shall include any
reduction in the scope or limits of coverage) without at least 30 days’ prior written notice to the
Administrative Agent. In the event that, notwithstanding the “lender’s loss payable endorsement”
requirement of this Section 5.02, the proceeds of any insurance policy described above are paid to
the Borrower or a Restricted Subsidiary, except as permitted under Section 5.02(c) below, the
Borrower shall deliver such proceeds to the Administrative Agent immediately upon receipt.

     (c) Prior to the occurrence and continuance of an Event of Default, (i) up to $3,000,000 of
the proceeds of any insurance policy shall be paid directly to the Borrower or the applicable
Restricted Subsidiary of the Borrower to repair or replace the damaged or destroyed Property
covered by such policy; provided that the Borrower or the applicable Restricted Subsidiary
shall make such repair or replace such Property within 120 days from the receipt of such proceeds
and (ii) the remaining amount of such proceeds and any amount of proceeds that were paid to the
Borrower or Restricted Subsidiary as permitted under clause (i) above and not used toward the
repair or replacement of such Property within the 120 days required under such clause (i), shall be
paid directly to the Administrative Agent and if necessary, assigned to the Administrative Agent to
be, at the election of the Administrative Agent, (A) applied in accordance with Section 7.06 of
this Agreement, whether or not the Obligations are then due and payable, or (B) returned to the
Borrower or the applicable Restricted Subsidiary of the Borrower to repair or replace the damaged
or destroyed Property covered by such policy or to invest in other Oil and Gas Properties within
the limits set forth in Section 6.06 hereof.

     (d) After the occurrence and during the continuance of an Event of Default, all proceeds of
insurance, including any casualty insurance proceeds, property insurance proceeds, proceeds from
actions, and any other proceeds, shall be paid directly to the Administrative Agent and if
necessary, assigned to the Administrative Agent, to be applied in accordance with Section 7.06 of
this Agreement, whether or not the Obligations are then due and payable.

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     (e) In the event that any insurance proceeds are paid to the Borrower or any of its Restricted
Subsidiaries in violation of clause (c) or clause (d), the Borrower or such Restricted Subsidiary
shall hold the proceeds in trust for the Administrative Agent, segregate the proceeds from the
other funds of the Borrower or such Restricted Subsidiary, and promptly pay the proceeds to the
Administrative Agent with any necessary endorsement. Upon the request of the Administrative Agent,
each of the Borrower and its Restricted Subsidiaries shall execute and deliver to the
Administrative Agent any additional assignments and other documents as may be necessary or
desirable to enable the Administrative Agent to directly collect the proceeds as set forth herein.

     Section 5.03 Preservation of Corporate Existence, Etc. The Borrower shall (a)
preserve and maintain, and cause each of its Restricted Subsidiaries to preserve and maintain, its
limited partnership, corporate or limited liability company, as applicable, existence (except as
otherwise permitted pursuant to Section 6.04), rights, franchises, and privileges in the
jurisdiction of its incorporation or organization, as applicable, and (b) qualify and remain
qualified, and cause each such Restricted Subsidiary to qualify and remain qualified, as a foreign
corporation or such other foreign business entity in each jurisdiction in which qualification is
necessary or desirable in view of its business and operations or the ownership of its Properties,
in each case, where failure to qualify or preserve and maintain its rights and franchises could
reasonably be expected to cause a Material Adverse Change.

     Section 5.04 Payment of Taxes, Etc. The Borrower shall pay and discharge, and cause
each of its Restricted Subsidiaries to pay and discharge, before the same shall become delinquent,
(a) all taxes, assessments, and governmental charges or levies imposed upon it or upon its income
or profits or Property that are material in amount, prior to the date on which penalties attach
thereto and (b) all lawful claims that are material in amount which, if unpaid, might by law become
a Lien upon its Property; provided, however, that neither the Borrower nor any such
Restricted Subsidiary shall be required to pay or discharge any such tax, assessment, charge, levy,
or claim which is being contested in good faith and by appropriate proceedings, and with respect to
which reserves in conformity with GAAP have been provided.

     Section 5.05 Visitation Rights. At any reasonable time and from time to time, upon
reasonable notice, the Borrower shall, and shall cause its Restricted Subsidiaries to, permit the
Administrative Agent and any Lender or any of their respective agents or representatives thereof,
to (a) examine and make copies of and abstracts from the records and books of account of, and visit
and inspect at their reasonable discretion the Properties of, the Borrower and any such Restricted
Subsidiary and (b) discuss the affairs, finances and accounts of the Borrower and any such
Restricted Subsidiary with any of their respective officers or directors.

     Section 5.06 Reporting Requirements. The Borrower shall furnish to the Administrative
Agent and each Lender:

     (a) Annual Financials. For each fiscal year of the Borrower and its consolidated
Subsidiaries ended on or ending after December 31, 2009, as soon as available but in any event not
later than 120 days after the end of such fiscal year, (i) (A) a copy of the annual audited
financial report for such year for the Borrower and its consolidated Subsidiaries, including
therein the Borrower’s and its consolidated Subsidiaries’ balance sheets as of the end of such
fiscal year and the Borrower’s and its consolidated Subsidiaries’ statements of income, cash flows,
and retained earnings, in each case certified by independent certified public accountants
reasonably acceptable to the Administrative Agent, and including any management letters delivered
by such accountants to the Borrower or any Subsidiary in connection with such audit, (B) a
certificate of such accounting firm to the Administrative Agent and the Lenders stating that such
audit was conducted by such accounting firm in accordance with generally accepted auditing
standards, and (C) a Compliance Certificate executed by a Responsible Officer of the

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Borrower and (ii) a copy of the unaudited annual consolidating financial statements, if any,
of each of its Subsidiaries, including therein such Subsidiary’s balance sheet and statements of
income, cash flows, and retained earnings for such fiscal year;

     (b) Quarterly Financials. As soon as available and in any event not later than 45
days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower
and its consolidated Subsidiaries, commencing with the fiscal quarter ended March 31, 2010, (i) the
unaudited balance sheet and the statements of income, cash flows, and retained earnings of the
Borrower and its consolidated Subsidiaries for the period commencing at the end of the previous
year and ending with the end of such fiscal quarter, all in reasonable detail and duly certified
with respect to such consolidated statements (subject to year-end audit adjustments) by a
Responsible Officer of the Borrower as having been prepared in accordance with GAAP and (ii) a
Compliance Certificate executed by the Responsible Officer of the Borrower;

     (c) Capital Expenditures. As soon as available and in any event not later than 45
days after the end of each fiscal year, a budget detailing the projected Capital Expenditures of
the Borrower and its Restricted Subsidiaries for the immediately subsequent fiscal year;

     (d) Oil and Gas Engineering Reports.

          (i) As soon as available but in any event on or before each April 1 of each year, an
Independent Engineering Report dated effective as of January 1 for such year;

          (ii) As soon as available but in any event on or before October 1 of each year, an Internal
Engineering Report dated effective as of the immediately preceding July 1; and

          (iii) Such other information as may be reasonably requested by the Administrative Agent or any
Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base.

     (e) Production Reports. As soon as available and in any event within 45 days after
the end of each fiscal quarter, commencing with the fiscal quarter ended March 31, 2010, a report
certified by a Responsible Officer of the Borrower in form and substance reasonably satisfactory to
the Administrative Agent prepared by the Borrower covering each of the Oil and Gas Properties of
the Borrower and its Restricted Subsidiaries and detailing on a quarterly basis (i) the production
and associated lease operating statements for the Oil and Gas Properties of the Borrower and its
Restricted Subsidiaries containing Proven Reserves in form and substance reasonably satisfactory to
the Administrative Agent, together with a certificate signed by a Responsible Officer of the
Borrower as to the truth and accuracy of such analyses in all material respects; (ii) any changes
to any producing reservoir, production equipment, or producing well from the report delivered for
the preceding fiscal quarter, which changes could cause a Material Adverse Change and (iii) any
sales of the Borrower’s or any Restricted Subsidiaries’ Oil and Gas Properties since the delivery
of the report for the preceding fiscal quarter;

     (f) Defaults. As soon as possible and in any event within three business days after
an officer of the Borrower or a Restricted Subsidiary has knowledge of (i) the occurrence of any
Default or (ii) the occurrence of any default under any instrument or document evidencing Debt of
the Borrower or any Restricted Subsidiary having an aggregate principal amount in excess
$1,000,000, in each case which Default or default is continuing on the date of such statement, a
statement of a Responsible Officer of the Borrower setting forth the details of such Default or
default, as applicable, and the actions which the Borrower or such Restricted Subsidiary has taken
and proposes to take with respect thereto;

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     (g) Quarterly Report on Hedging and Deferred Purchase Obligations. Concurrent with
the delivery of the financial statements required under Section 5.06(a) and 5.06(b) above, a
statement prepared by Borrower and certified as being true and correct in all material respects by
a Responsible Officer of Borrower, setting forth in reasonable detail:

          (i) all Hydrocarbon Hedge Agreements to which any production of oil, gas or other Hydrocarbons
from the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries is then subject,
together with a statement of Borrower’s position with respect to each such Hydrocarbon Hedge
Agreement; provided, however, if the price of any of the oil, gas or other Hydrocarbons
produced from such Oil and Gas Properties is subject to a Hydrocarbon Hedge Agreement, then
Borrower shall promptly notify the Administrative Agent and the Lenders if such Hydrocarbon Hedge
Agreement is terminated, modified, amended or altered prior to the end of its contractual term, or
if there is an amendment, adjustment or modification of the price of any of the oil, gas or other
Hydrocarbons produced from such Oil and Gas Properties that is subject to or established by a
Hydrocarbon Hedge Agreement; and

          (ii) all Debt incurred in the form of deferred purchase price of Oil and Gas Property as
permitted under Section 6.02(c) or 6.02(d), including the crude oil or natural gas pricing
thresholds which would trigger a payment thereunder; provided, however, the Borrower shall
promptly notify the Administrative Agent and the Lenders if there is an amendment, adjustment or
modification of such pricing thresholds.

     (h) Termination Events. As soon as possible and in any event (i) within 30 days after
the Borrower or any member of the Controlled Group knows or has reason to know that any Termination
Event described in clause (a) of the definition of Termination Event with respect to any Plan has
occurred, and (ii) within ten days after the Borrower or any member of the Controlled Group knows
or has reason to know that any other Termination Event with respect to any Plan has occurred, a
statement of a Responsible Officer of the Borrower describing such Termination Event and the
action, if any, which the Borrower or such Controlled Group member proposes to take with respect
thereto;

     (i) Termination of Plans. Promptly and in any event within five Business Days after
receipt thereof by the Borrower or any member of the Controlled Group from the PBGC, copies of each
notice received by the Borrower or any such member of the Controlled Group of the PBGC’s intention
to terminate any Plan or to have a trustee appointed to administer any Plan;

     (j) Other ERISA Notices. Promptly and in any event within five Business Days after
receipt thereof by the Borrower or any member of the Controlled Group from a Multiemployer Plan
sponsor, a copy of each notice received by the Borrower or any member of the Controlled Group
concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA;

     (k) Environmental Notices. Promptly upon the receipt thereof by the Borrower or any
of its Restricted Subsidiaries, a copy of any form of request, notice, summons or citation received
from the Environmental Protection Agency, or any other Governmental Authority, concerning (i)
violations or alleged violations of Environmental Laws, which seeks to impose liability therefor
and could cause a Material Adverse Change, (ii) any action or omission on the part of the Borrower
or any Restricted Subsidiary in connection with Hazardous Waste or Hazardous Substances that could
reasonably result in the imposition of liability therefor that could cause a Material Adverse
Change, including without limitation any information request related to, or notice of, potential
responsibility under CERCLA, or (iii) concerning the filing of a Lien upon, against or in
connection with the Borrower or any Restricted Subsidiary, or any of their leased or owned
Property, wherever located;

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     (l) Other Governmental Notices. Promptly and in any event within five Business Days
after receipt thereof by the Borrower or any Restricted Subsidiary, a copy of any notice, summons,
citation, or proceeding seeking to modify in any material respect, revoke, or suspend any material
contract, license, permit or agreement with any Governmental Authority;

     (m) Material Changes. Prompt written notice of any condition or event of which the
Borrower has knowledge, which condition or event has resulted or could reasonably be expected to
result in a Material Adverse Change, including breach or non-performance of, or any default under,
a material agreement of the Borrower or any Restricted Subsidiary;

     (n) Disputes, Etc. Prompt written notice of (i) any claims, legal or arbitration
proceedings, proceedings before any Governmental Authority, or disputes affecting the Borrower, or
any of its Restricted Subsidiaries, in any event, of which the Borrower has knowledge that could
reasonably be expected to cause a Material Adverse Change, or any material labor controversy of
which the Borrower or any of its Restricted Subsidiaries has knowledge resulting in or reasonably
considered to be likely to result in a strike against the Borrower or any of its Restricted
Subsidiaries and (ii) any claim, judgment, Lien or other encumbrance (other than a Permitted Lien)
affecting any Property of the Borrower or any Restricted Subsidiary if the value of the claim,
judgment, Lien, or other encumbrance affecting such Property shall exceed $1,000,000;

     (o) Other Accounting Reports. Promptly upon receipt thereof, a copy of each other
report or letter submitted to the Borrower or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the books of the Borrower and
its Subsidiaries, and a copy of any response by the Borrower or any Subsidiary of the Borrower, or
the board of directors or managers (or other applicable governing body) of the Borrower or any
Subsidiary of the Borrower, to such letter or report;

     (p) Notices Under Other Loan Agreements. Promptly after the furnishing thereof,
copies of any statement, report or notice furnished to any Person pursuant to the terms of any
indenture, loan or credit or other similar agreement relating to Debt of the Borrower or its
Restricted Subsidiaries in an aggregate principal amount in excess of $1,000,000, other than this
Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision
of this Section 5.06;

     (q) Notices of Hedge Contracts. The Borrower shall promptly, and in any event one
Business Day after such event, notify the Administrative Agent if any hedge position or Hedge
Contract is to be novated, assigned, unwound, terminated, or amended.

     (r) Other Information. Such other information respecting the business or Properties,
or the condition or operations, financial or otherwise, of the Borrower or any of its Restricted
Subsidiaries, as any Lender through the Administrative Agent may from time to time reasonably
request. The Administrative Agent agrees to provide the Lenders with copies of any material
notices and information delivered solely to the Administrative Agent pursuant to the terms of this
Agreement.

     Section 5.07 Maintenance of Property. The Borrower shall, and shall cause each of its
Restricted Subsidiaries to, maintain their owned, leased, or operated Property in good condition
and repair (normal wear and tear excepted) and shall abstain, and cause each of its Restricted
Subsidiaries to abstain from, knowingly or willfully permitting the commission of waste or other
injury, destruction, or loss of natural resources, or the occurrence of pollution, contamination,
or any other condition in, on or about the owned, leased or operated Property involving the
Environment that could reasonably be expected to result in Response activities and that could
reasonably be expected to cause a Material Adverse Change.

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     Section 5.08 Agreement to Pledge. The Borrower shall, and shall cause each Restricted
Subsidiary to, grant to the Administrative Agent an Acceptable Security Interest in any Property of
the Borrower or any Restricted Subsidiary now owned or hereafter acquired promptly after receipt of
a written request from the Administrative Agent; provided that (a) in no event shall the
Administrative Agent be permitted to request or the Borrower be required to grant an Acceptable
Security Interest in any Oil and Gas Properties that exceeds 85% by value of all of the Borrower’s
and its Restricted Subsidiaries’ Proven Reserves and Oil and Gas Properties, and (b)
notwithstanding the foregoing 85% limitation, the Borrower shall cause Orion to grant to the
Administrative Agent an Acceptable Security Interest in 90% of Orion’s interest in its Oil and Gas
Properties. In furtherance of the foregoing clause (b), within 3 Business Days after the
acquisition by Orion of Oil and Gas Properties, the Borrower shall give the Administrative Agent
written notice thereof.

     Section 5.09 Use of Proceeds. The Borrower shall use the proceeds of the Advances and
Letters of Credit (a) to fund a portion of the purchase price under the Merger Agreement, (b) for
the payment of obligations outstanding under the Existing Credit Agreement as provided in Section
2.01(b), (c) to refinance the Merger Company Debt, (d) for the payment of fees, expenses and
transaction costs, including legal expenses, associated with the foregoing, and (e) for working
capital and other general partnership purposes.

     Section 5.10 Title Evidence. Within 60 days after the Effective Date, and from time
to time thereafter upon the reasonable request of the Administrative Agent, the Borrower shall take
such actions and execute and deliver such documents and instruments as the Administrative Agent
shall require to ensure that the Administrative Agent shall, at all times, have received
satisfactory title information (including, if requested, supplemental or new title opinions
addressed to it), which title information (a) shall collectively cover at least 80% of the present
value of the Proven Reserves of the Borrower and its Restricted Subsidiaries as determined by the
Administrative Agent, (b) shall be in form and substance acceptable to the Administrative Agent in
its sole discretion, and (c) if requested by the Administrative Agent, shall include opinions
regarding the before payout and after payout ownership interests held by the Borrower and the
Borrower’s Restricted Subsidiaries for all wells located on the Oil and Gas Properties covered
thereby as to the ownership of Oil and Gas Properties of the Borrower and its Restricted
Subsidiaries.

     Section 5.11 Further Assurances; Cure of Title Defects. The Borrower shall, and shall
cause each Restricted Subsidiary to, cure promptly any defects in the creation and issuance of the
Notes and the execution and delivery of the Security Instruments and this Agreement. The Borrower
hereby authorizes the Lenders or the Administrative Agent to file any financing statements without
the signature of the Borrower to the extent permitted by applicable law in order to perfect or
maintain the perfection of any security interest granted under any of the Loan Documents. The
Borrower at its expense will, and will cause each Restricted Subsidiary to, promptly execute and
deliver to the Administrative Agent upon its reasonable request all such other documents,
agreements and instruments to comply with or accomplish the covenants and agreements of the
Borrower or any Restricted Subsidiary, as the case may be, in the Security Instruments and this
Agreement, or to further evidence and more fully describe the collateral intended as security for
the Notes, or to correct any omissions in the Security Instruments, or to state more fully the
security obligations set out herein or in any of the Security Instruments, or to perfect, protect
or preserve any Liens created pursuant to any of the Security Instruments, or to make any
recordings, to file any notices or obtain any consents, all as may be necessary or appropriate in
connection therewith or to enable the Administrative Agent to exercise and enforce its rights and
remedies with respect to any Collateral. Within 60 days after (a) a request by the Administrative
Agent or the Lenders to cure any title defects or exceptions that are not Permitted Liens raised by
such information or (b) a notice by the Administrative Agent that the Borrower has failed to comply
with Section 5.10 above, the Borrower shall (i) cure such title defects or exceptions that are not
Permitted Liens or substitute acceptable Oil and Gas

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Properties with no title defects or exceptions except for Permitted Liens covering Collateral
of an equivalent value and (ii) deliver to the Administrative Agent satisfactory title evidence
(including supplemental or new title opinions meeting the foregoing requirements) in form and
substance acceptable to the Administrative Agent in its reasonable business judgment as to the
Borrower’s and its Restricted Subsidiaries’ ownership of such Oil and Gas Properties and the
Administrative Agent’s Liens and security interests therein as are required to maintain compliance
with Section 5.10. In addition, the Borrower shall cause the Administrative Agent to, at all
times, have an Acceptable Security Interest in at least 85% of all of the Borrower’s and its
Restricted Subsidiaries’ Proven Reserves and Oil and Gas Properties.

     Section 5.12 Material Agreements. The Borrower shall, and shall cause each Restricted
Subsidiary to, comply with all material terms, conditions, or covenants of any material contract or
agreement to which the Borrower or any of its Restricted Subsidiaries is a party or by which they
or their Properties may be bound except to the extent where the failure to do so could not
reasonably be expected to cause a Material Adverse Change.

     Section 5.13 Leases; Development and Maintenance. The Borrower will, and will cause
its Restricted Subsidiaries to, except to the extent failure to do any of the matters set forth
below would not have a Material Adverse Change: (a) pay and discharge promptly, or cause to be
paid and discharged promptly, all rentals, delay rentals, royalties, overriding royalties, payments
out of production and other indebtedness or obligations accruing under, and perform or cause to be
performed each and every act, matter or thing required by each and all of, the oil and gas leases
and all other agreements and contracts constituting or affecting the Oil and Gas Properties of the
Borrower and its Restricted Subsidiaries (except where the amount thereof is being contested in
good faith by appropriate proceedings), (b) do all other things necessary to keep unimpaired its
rights thereunder and prevent any forfeiture thereof or default thereunder, and operate or cause to
be operated such Properties as a prudent operator would in accordance with industry standard
practices and in compliance with all applicable proration and conservation Legal Requirements and
any other Legal Requirements of every Governmental Authority, whether state, federal, municipal or
other jurisdiction, from time to time constituted to regulate the development and operations of oil
and gas properties and the production and sale of oil, gas and other Hydrocarbons therefrom, and
(c) maintain (or cause to be maintained) the Leases, wells, units and acreage to which the Oil and
Gas Properties of the Borrower and its Restricted Subsidiaries pertain in a prudent manner
consistent with industry standard practices.

     Section 5.14 Designations with Respect to Subsidiaries.

     (a) Any newly acquired or formed Subsidiary shall be deemed a Restricted Subsidiary unless
designated by Borrower as an Unrestricted Subsidiary in accordance with the terms of this Section
5.14(a).

          (i) The Borrower may not acquire or form any such new Restricted Subsidiary nor may it
designate any Unrestricted Subsidiary as a Restricted Subsidiary unless each of the following
conditions are satisfied:

                    (A) immediately before and after giving effect to such acquisition or formation of a
Restricted Subsidiary, no Default or Event of Default shall exist and be continuing;

                    (B) after giving effect to such acquisition or formation of a Restricted Subsidiary, the
Borrower would be permitted to incur at least $1 of additional Indebtedness in accordance with the
provisions of Section 6.02;

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                    (C) contemporaneously with the acquisition or formation of a Restricted Subsidiary, such
Restricted Subsidiary shall execute and deliver to the Administrative Agent a Guaranty, a Pledge
Agreement, a Security Agreement, and a Mortgage, and such other Security Instruments as the
Administrative Agent or the Required Lenders may reasonably request and the equity holder of such
Subsidiary executing and delivering to the Administrative Agent a Pledge Agreement pledging 100% of
the Equity Interest of such Subsidiary along with the certificates pledged thereby, if any, and
appropriately executed powers in blank, if applicable;

                    (D) contemporaneously with the acquisition or formation of a Restricted Subsidiary, the
Borrower or such Restricted Subsidiary shall have delivered such certificates, opinions of counsel,
title opinions, or other documents as the Administrative Agent may reasonably request relating to
such Restricted Subsidiary; and

                    (E) the Borrower shall otherwise be in compliance with Section 5.08.

          (ii) The Borrower shall deliver to the Administrative Agent and each Bank, within 20 Business
Days after any such designation, a certificate of a Responsible Officer of Borrower stating the
effective date of such designation and stating that the foregoing conditions have been satisfied.
Such certificate shall be accompanied by a schedule setting forth in reasonable detail the
calculations demonstrating compliance with such conditions, where appropriate.

     (b) The Borrower shall not designate any Restricted Subsidiary as an Unrestricted Subsidiary.

     (c) In the case of the acquisition or formation of a Restricted Subsidiary, such new
Restricted Subsidiary shall be deemed to have made or acquired all Investments owned by it and
incurred all Indebtedness and other obligations owing by it and all Liens to which it or any of its
properties are subject, on the date of such designation, acquisition, or formation.

     Section 5.15 Designation of Senior Debt. The Borrower shall, and shall cause each
Restricted Subsidiary to, designate all Obligations as “designated senior indebtedness” under any
subordinated note or indenture documents applicable to it, to the extent provided for therein,
including but not limited to the Senior Unsecured Notes.

ARTICLE VI

NEGATIVE COVENANTS

     So long as any Note or any amount under any Loan Document shall remain unpaid, any Letter of
Credit shall remain outstanding, or any Lender shall have any Commitment, the Borrower agrees,
unless the Required Lenders otherwise consent in writing, to comply with the following covenants.

     Section 6.01 Liens, Etc. The Borrower shall not create, assume, incur, or suffer to
exist, or permit any of its Restricted Subsidiaries to create, assume, incur, or suffer to exist,
any Lien on or in respect of any of its Property whether now owned or hereafter acquired, or assign
any right to receive income, except that the Borrower and its Restricted Subsidiaries may create,
incur, assume, or suffer to exist:

     (a) Liens granted under a Loan Document and securing the Obligations;

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     (b) (i) Liens securing the Subordinated Debt to the extent permitted under the Subordination
and Intercreditor Agreement, and (ii) Liens securing Additional Subordinated Debt permitted
pursuant to Section 6.02(k);

     (c) purchase money Liens or purchase money security interests upon or in any equipment
acquired or held by the Borrower or any of its Restricted Subsidiaries in the ordinary course of
business prior to or at the time of the Borrower’s or such Restricted Subsidiary’s acquisition of
such equipment; provided that, the Debt secured by such Liens (i) was incurred solely for
the purpose of financing the acquisition of such equipment, and does not exceed the aggregate
purchase price of such equipment, (ii) is secured only by such equipment and not by any other
Properties of the Borrower or its Restricted Subsidiaries, and (iii) is permitted under Section
6.02(e);

     (d) Liens securing Capital Leases; provided that the Debt secured by such Liens (i) is
secured only by the Property leased under such Capital Leases and not any other Properties of the
Borrower or any of its Restricted Subsidiaries and (ii) is permitted under Section 6.02(e);

     (e) Liens for taxes, assessments, or other governmental charges or levies not yet due or that
(provided foreclosure, sale, or other similar proceedings shall not have been initiated) are being
contested in good faith by appropriate proceedings, and such reserve as may be required by GAAP
shall have been made therefor;

     (f) Liens in favor of vendors, carriers, warehousemen, repairmen, mechanics, workmen,
materialmen, construction, or similar Liens arising by operation of law in the ordinary course of
business in respect of obligations that are not yet due or that are being contested in good faith
by appropriate proceedings, provided that such reserve as may be required by GAAP shall
have been made therefor;

     (g) Liens to operators and non-operators under joint operating agreements arising in the
ordinary course of the business of the Borrower or the relevant Restricted Subsidiary to secure
amounts owing, which amounts are not yet due or are being contested in good faith by appropriate
proceedings, if such reserve as may be required by GAAP shall have been made therefor;

     (h) royalties, overriding royalties, net profits interests, production payments, reversionary
interests, calls on production, preferential purchase rights and other burdens on or deductions
from the proceeds of production, that do not secure Debt for borrowed money and that are taken into
account in computing the net revenue interests and working interests of the Borrower or any of its
Restricted Subsidiaries warranted in the Security Instruments or in this Agreement;

     (i) Liens arising in the ordinary course of business out of pledges or deposits under workers’
compensation laws, unemployment insurance, old age pensions or other social security or retirement
benefits, or similar legislation or to secure public or statutory obligations of the Borrower;

     (j) Liens arising under operating agreements, unitization and pooling agreements and orders,
farmout agreements, gas balancing agreements and other agreements, in each case that are customary
in the oil, gas and mineral production business and that are entered into in the ordinary course of
business that are taken into account in computing the net revenue interests and working interests
of the Borrower or any of its Restricted Subsidiaries warranted in the Security Instruments or in
this Agreement, to the extent that any such Lien referred to in this clause does not materially
impair the use of the Property covered by such Lien for the purposes for which such Property is
held by the Borrower or any Restricted Subsidiary or materially impair the value of such Property
subject thereto;

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     (k) easements, rights-of-way, restrictions, and other similar encumbrances, and minor defects
in the chain of title that are customarily accepted in the oil and gas financing industry,
including in respect of surface operations or for pipelines or power lines, none of which
materially interfere with the ordinary conduct of the business of Borrower or any Restricted
Subsidiary or materially detract from the value or use of the Property to which they apply;

     (l) judgment liens in respect of judgments that do not constitute an Event of Default under
Section 7.01(f);

     (m) rights reserved to or vested in any Governmental Authority to control or regulate any
Property of the Borrower or any of its Restricted Subsidiaries, or to use such Property;
provided that, such rights (a) could not reasonably be expected to materially impair the
use of such Property for the purpose for which it is held by the Borrower or any such Restricted
Subsidiary and (b) could not reasonably be expected to materially diminish the value of such
Property;

     (n) Liens existing on the Effective Date in favor of The CIT Group/Equipment Financing, Inc.,
as administrative agent and Liens existing on the Effective Date in favor of Orion Drilling;
provided that, in any event, (A) such Liens encumber only the CIT/ORION Collateral and not
any other Properties of the Borrower or any of its Restricted Subsidiaries, (B) with respect to the
Debt secured by the Liens in favor of The CIT Group/Equipment Financing, Inc., as administrative
agent, such Debt is permitted under Section 6.02(l), and (C) with respect to the Debt secured by
the Liens in favor of Orion Drilling Company, LLC, such Debt is permitted under Section 6.02(m);
and

     (o) Liens encumbering cash, cash equivalents, and certificates of deposits, and security in
the form of letters of credit, in any case, arising in the ordinary course of business to secure
the Debt permitted under Section 6.02(g) below.

     Section 6.02 Debts, Guaranties, and Other Obligations. The Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, create, assume, suffer to exist, or in any
manner become or be liable in respect of, any Debt except:

     (a) Debt of the Borrower and its Restricted Subsidiaries under the Loan Documents;

     (b) Debt listed on Part A of Schedule 4.05 and any renewals, extensions, or replacements
thereof; provided that the amount of such Debt may not be increased;

     (c) Debt in the form of obligations for the deferred purchase price of Oil and Gas Property
acquired in the ordinary course of business which is listed on Part B of Schedule 4.05 and incurred
prior to November 14, 2007; provided that, such Debt (i) is not yet past due and payable or (ii) is
being contested in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been established;

     (d) Debt in the form of obligations for the deferred purchase price of Oil and Gas Property
acquired in the ordinary course of business and incurred after November 14, 2007, which (i) is not
yet past due and payable or is being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP have been established; (ii) is payable solely out
of production revenues generated from the purchased Oil and Gas Properties; (iii) is due if, and
only if, prices for crude oil or natural gas, as applicable, exceed certain thresholds agreed to
between the seller and the buyer; (iv) cannot be accelerated or demanded for any reason unless and
until such Debt becomes due as permitted in clause (iii) above; and (v) does not accrue any
interest; provided that, the aggregate

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amount of Debt incurred by the Borrower and its Subsidiaries as permitted under this paragraph
(d) shall not exceed $20,000,000;

     (e) Debt secured by the Liens permitted under paragraphs (c) or (d) of Section 6.01 in an
aggregate amount not to exceed $2,500,000 at any time;

     (f) Debt under Hedge Contracts that are not prohibited by the terms of Section 6.14; provided
that (i) such Debt shall not be secured, other than such Debt owing to Swap Counterparties which
are secured under the Loan Documents, (ii) such Debt shall not obligate the Borrower or any of its
Subsidiaries to any margin call requirements, and (iii) the deferred premium payments associated
with such Hedge Contracts shall be limited to the deferred premium payments for put option
contracts which are secured under the Loan Documents; provided that, the sum of (A) aggregate
outstanding amount of such deferred premium payments plus (B) the outstanding unsecured Debt
permitted under clause (m) below, shall not exceed $3,000,000;

     (g) Debt consisting of sureties or bonds provided to any Governmental Authority or other
Person and assuring payment of contingent liabilities of the Borrower or any of its Restricted
Subsidiaries in connection with the operation of the Oil and Gas Properties, including with respect
to plugging, facility removal and abandonment of its Oil and Gas Properties;

     (h) Debt of the Borrower to any Restricted Subsidiary and of any Restricted Subsidiary to the
Borrower or any other Restricted Subsidiary; provided that, such Debt is fully subordinated
to the Obligations on terms acceptable to the Administrative Agent;

     (i) the Subordinated Debt outstanding on the Effective Date subject to the terms of the
Subordination and Intercreditor Agreement;

     (j) Senior Unsecured Notes and the guaranties given by Restricted Subsidiaries with respect
thereto; provided that (i) the principal amount of such Debt shall not exceed $300,000,000 in the
aggregate, (ii) the Borrowing Base is reduced if and to the extent required by Section 2.02(e), and
(iii) the Debt Incurrence Proceeds thereof shall be applied, first to repay in full Subordinated
Debt and second to make the payments, if any, required under Section 2.05(b)(ii);

     (k) Additional Subordinated Debt of the Borrower (other than Senior Unsecured Notes) and the
guaranties given by Restricted Subsidiaries with respect thereto; provided that, (i) the principal
sum of the Subordinated Debt permitted under clause (i) above and the Debt permitted under this
clause (k) shall not exceed $65,000,000 in the aggregate, (ii) the Borrowing Base is reduced if and
to the extent required by Section 2.02(e), and (iii) the Debt Incurrence Proceeds thereof shall be
applied to make the payments, if any, required under Section 2.05(b)(ii);

     (l) Debt outstanding on the Effective Date and owing to the lenders under that certain Credit
Agreement dated as of May 2, 2008 among TMR Drilling LLC, The CIT Group/Equipment Financing, Inc.,
as administrative agent, and the lenders party thereto from time to time, and any renewals or
extensions thereof; provided that, the outstanding principal amount of such Debt shall not exceed
$5,500,000;

     (m) Guarantee of (i) The Meridian Resource & Exploration LLC’s obligations owing to Orion
Drilling under (A) that certain Drilling Bid Proposal and Daywork Drilling Contract — US, dated as
of February 12, 2007 between The Meridian Resource & Exploration LLC and Orion Drilling and (B)
that certain Drilling Bid Proposal and Daywork Drilling Contract — US, dated as of September 4,
2008 between The Meridian Resource & Exploration LLC and Orion Drilling; (ii) TMR Drilling LLC’s

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obligations owing to Orion Drilling under that certain Equipment Lease (Rig No. 8) dated as of
February 12, 2007; and (iii) any Restricted Subsidiary’s obligations owing to Orion Drilling under
(A) that certain Forbearance and Amendment Agreement made by and among Orion Drilling, TMR Drilling
LLC, The Meridian Resource & Exploration LLC and the Merger Company, dated as of September 3, 2009,
(B) that certain Intercreditor and Subordination Agreement made by and among Orion Drilling, and
The CIT Group/Equipment Financing, Inc., and (C) that certain Security Agreement made by and
between Orion Drilling, TMR Drilling and The Meridian Resource & Exploration LLC, dated as of
September 3, 2009; provided that, in any event under the preceding clauses (i) — (iii),
(x) such obligations owing to Orion Drilling are ordinary course, trade payable obligations or
other contractual obligations arising under such contracts and agreements as in effect on the
Effective Date and not indebtedness for borrowed money, (y) such guarantee may cover all of the
foregoing obligations irrespective of any discharge or voidness of such obligations in any
bankruptcy or receivership of TMR Drilling LLC, any bankruptcy or receivership of The Meridian
Resource & Exploration LLC or any bankruptcy or receivership of both TMR Drilling LLC and The
Meridian Resource & Exploration LLC, and (z) the Borrower or any of its Subsidiaries must have the
option, pursuant to the forbearance agreement described in clause (A) as in effect on the date
hereof, to fully satisfy any and all such obligations and guarantees thereof by transferring the
CIT/Orion Collateral to Orion Drilling; and

     (n) Other unsecured Debt; provided that, the sum of (i) the aggregate outstanding principal
amount of such unsecured Debt plus (ii) the aggregate outstanding amount of the deferred premium
payments permitted under clause (f) above, shall not exceed $3,000,000.

     Section 6.03 Agreements Restricting Liens and Distributions. The Borrower shall not,
nor shall it permit any of its Restricted Subsidiaries to, create, incur, assume or permit to exist
any contract, agreement or understanding (other than this Agreement and the Security Instruments or
the Subordinated Loan Documents) that in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien on any of its Property, whether now owned or hereafter acquired,
to secure the Obligations or restricts any Restricted Subsidiary from paying dividends to the
Borrower, or that requires the consent of or notice to other Persons in connection therewith;
provided, that the foregoing shall not apply to (i) restrictions and conditions imposed by
Legal Requirements, (ii) customary restrictions or conditions imposed by any agreement relating to
other secured Debt permitted by this Agreement if such restrictions or conditions apply only to the
Property securing such Debt, and (iii) restrictions on the granting, conveying, creation or
imposition of any Lien to secure the Obligations contained in any agreement or instrument governing
secured Additional Subordinated Debt so long as such restrictions are no less favorable to the
Lenders than the restrictions set forth in the Subordination and Intercreditor Agreement or which
are otherwise satisfactory to the Administrative Agent and the Required Lenders.

     Section 6.04 Merger or Consolidation; Asset Sales; Hedge Terminations.

     (a) (i) Without the consent of all the Lenders (other than a Defaulting Lender), the Borrower
shall not merge or consolidate with or into any other Person other than with a Restricted
Subsidiary with the Borrower being the surviving entity; provided that at the time thereof
and immediately after giving effect thereto no Default shall have occurred and the Administrative
Agent shall continue to have an Acceptable Security Interest in the Collateral. (ii) The Borrower
shall not permit any of its Restricted Subsidiaries to merge or consolidate with or into any other
Person other than the merger of a Restricted Subsidiary into the Borrower pursuant to the
immediately preceding sentence or another Restricted Subsidiary; provided that at the time
thereof and immediately after giving effect thereto no Default shall have occurred and the
Administrative Agent shall continue to have an Acceptable Security Interest in the Collateral.

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     (b) The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to make any
Disposition or to novate, assign, unwind, terminate, or amend a hedge position or Hedge Contract
other than:

     (i) the sale of Hydrocarbons or Liquid Investments in the ordinary course of business;

     (ii) the Disposition of equipment that is (A) obsolete, worn out, depleted or
uneconomic and disposed of in the ordinary course of business, (B) no longer necessary for
the business of such Person, or (C) contemporaneously replaced by equipment of at least
comparable value and use;

     (iii) the Disposition of Property to the Borrower or a Restricted Subsidiary of the
Borrower; provided that at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing and the Administrative Agent shall
continue to have an Acceptable Security Interest in the Collateral;

     (iv) if no Event of Default then exists, the Disposition of Property which (A) does not
constitute Proven Reserves and (B) does not constitute Collateral or is not otherwise
required under this Agreement to be Collateral; and

     (v) if no Event of Default then exists, any Triggering Event; provided that,
(A) before or after giving effect to such Triggering Event, the aggregate amount of all such
Triggering Events effected during the six month period between scheduled redeterminations of
the Borrowing Base shall not exceed 5% of the Borrowing Base then in effect, (B) the
consideration received in respect of such Triggering Event shall be equal to or greater than
the fair market value of the Properties subject to such Triggering Event, (C) if such
Triggering Event is a Disposition and such Disposition is of a Restricted Subsidiary owning
Oil and Gas Properties, such sale or other disposition shall include all the Equity
Interests of such Restricted Subsidiary, and (D) the Borrower shall have made the payments,
if any, required under Section 2.05(b)(iii).

     Section 6.05 Restricted Payments. The Borrower shall not, nor shall it permit any of
its Restricted Subsidiaries to, make any Restricted Payments, except that if no Default or Event of
Default has occurred both before and after giving effect to the making of such Restricted Payment,
(a) the Restricted Subsidiaries may make Restricted Payments to the Borrower, (b) the Borrower may
make Restricted Payments to its Equity Interest holders in an amount equal to the income tax
liabilities of such Person attributable to the earnings of the Borrower, (c) in addition to the
foregoing permitted distribution for tax liabilities, the Borrower may make Restricted Payments to
its Equity Interest holders in an aggregate amount not to exceed $1,050,000, (d) Orion may make
Restricted Payments to its Equity Holders; provided that the aggregate amount of such Restricted
Payments made by Orion in any fiscal year to Equity Holders other than the Borrower shall not
exceed 10% of Orion EBITDAX for such fiscal year, and (e) the Borrower may pay the Subordinated
Debt to the extent not prohibited under Section 6.22.

     Section 6.06 Investments. The Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, make or permit to exist any loans, advances, or capital contributions
to, or make any investment in (including, without limitation, the making of any Acquisition), or
purchase or commit to purchase any stock or other securities or evidences of indebtedness of or
interests in any Person, except:

     (a) Liquid Investments;

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     (b) trade and customer accounts receivable which are for goods furnished or services rendered
in the ordinary course of business and are payable in accordance with customary trade terms;

     (c) loans, advances, and investments by the Borrower in and to Restricted Subsidiaries and
investments, loans and advances by Restricted Subsidiaries in and to other Restricted Subsidiaries
and the Borrower;

     (d) creation of any additional Restricted Subsidiaries in compliance with Section 6.16;

     (e) investments in Orion as permitted under Section 6.20; and

     (f) other investments, loans or advances not otherwise permitted by this Section 6.06 in an
aggregate amount not to exceed $5,000,000 at any time.

     Section 6.07 Affiliate Transactions. The Borrower shall not, nor shall it permit any
of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of transactions (including, but not limited to, the purchase, sale, lease or
exchange of Property, the making of any investment, the giving of any guaranty, the assumption of
any obligation or the rendering of any service) with any of their Affiliates (other than
transactions among the Borrower and its Restricted Subsidiaries) unless such transaction or series
of transactions is on terms no less favorable to the Borrower or the Restricted Subsidiary, as
applicable, than those that could be obtained in a comparable arm’s length transaction with a
Person that is not such an Affiliate.

     Section 6.08 Compliance with ERISA. The Borrower shall not, nor shall it permit any
of its Restricted Subsidiaries to, directly or indirectly, (a) engage in, or permit any Restricted
Subsidiary to engage in, any transaction in connection with which the Borrower or any Controlled
Group member could be subjected to either a civil penalty assessed pursuant to section 502(c), (i)
or (l) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code; (b) terminate, or permit
any Restricted Subsidiary to terminate, any Plan in a manner, or take any other action with respect
to any Plan, which could result in any liability to the Borrower or any Controlled Group member to
the PBGC; (c) fail to make, or permit any Restricted Subsidiary 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 or any Controlled Group member is required to pay as contributions
thereto; (d) permit to exist, or allow any Restricted Subsidiary to permit to exist, any
accumulated funding deficiency within the meaning of Section 302 of ERISA or section 412 of the
Code, whether or not waived, with respect to any Plan; (e) permit, or allow any Restricted
Subsidiary to permit, the actuarial present value of the benefit liabilities (as “actuarial present
value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA) under
any Plan maintained by the Borrower or any Controlled Group member which is regulated under Title
IV of ERISA to exceed the current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities; (f) assume
an obligation to contribute to, or permit any Restricted Subsidiary to assume an obligation to
contribute to, any Multiemployer Plan; (g) acquire, or permit any Restricted Subsidiary to acquire,
an 80% or greater interest in any Person if such Person sponsors, maintains or contributes to, or
at any time in the six-year period preceding such acquisition has sponsored, maintained, or
contributed to, (1) any Multiemployer Plan, or (2) any other Plan that is subject to Title IV of
ERISA, and in either case, the actuarial present value of the benefit liabilities under such Plan
exceeds the current value of the assets (computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit liabilities, and the withdrawal
liability, if assessed, could reasonably be expected to result in a Material Adverse Change; (h)
incur, or permit any Restricted Subsidiary to incur, a liability to or on account of a Plan under
sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; (i) assume an obligation to contribute to,
or permit any Restricted Subsidiary to assume an obligation to contribute to, any employee welfare
benefit

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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 without any material liability; (j) amend or permit any
Restricted Subsidiary to amend, a Plan resulting in an increase in current liability such that the
Borrower or any Controlled Group member is required to provide security to such Plan under section
401(a)(29) of the Code; or (k) permit to exist any occurrence of any Reportable Event (as defined
in Title IV of ERISA), or any other event or condition, which presents a material (in the opinion
of the Required Lenders) risk of such a termination by the PBGC of any Plan that could reasonably
be expected to result in a Material Adverse Change.

     Section 6.09 Sale-and-Leaseback. The Borrower shall not, nor shall it permit any of
its Restricted Subsidiaries to, sell or transfer to a Person any Property, whether now owned or
hereafter acquired, if at the time or thereafter the Borrower or a Restricted Subsidiary shall
lease as lessee such Property or any part thereof or other Property that the Borrower or a
Restricted Subsidiary intends to use for substantially the same purpose as the Property sold or
transferred, except for the sale-and-leaseback of furniture, fixtures, and equipment not to exceed
$5,000,000.

     Section 6.10 Change of Business. The Borrower shall not, nor shall it permit any of
its Restricted Subsidiaries to, make any material change in the character of its business as an
independent oil and gas exploration and production company, nor will the Borrower or any Restricted
Subsidiary operate or carry on business in any jurisdiction other than the United States, including
the Gulf of Mexico.

     Section 6.11 Organizational Documents, Name Change; Change in Accounting. The
Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, amend, supplement,
modify or restate their articles or certificate of incorporation or formation, limited partnership
agreement, bylaws, limited liability company agreements, or other equivalent organizational
documents, or amend its name or change its jurisdiction of incorporation, organization or formation
without prior written notice to, and prior consent of, the Administrative Agent. The Borrower and
the Guarantors shall not, and shall not permit any Restricted Subsidiary to, make any significant
change in accounting treatment or reporting practices, except as required by GAAP (and then subject
to Section 1.03), or change the fiscal year of the Borrower or of any Restricted Subsidiary;
provided following the Merger, Borrower shall convert the method of accounting for the
Merger Company from “full cost accounting” to “successful efforts accounting.”

     Section 6.12 Use of Proceeds; Letters of Credit. The Borrower will not permit the
proceeds of any Advance or Letters of Credit to be used for any purpose other than those permitted
by Section 5.09. The Borrower will not engage in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation U). Neither the Borrower
nor any Person acting on behalf of the Borrower shall take, nor permit any of the Borrower’s
Restricted Subsidiaries to take any action which might cause any of the Loan Documents to violate
Regulation T, U or X or any other regulation of the Board of Governors of the Federal Reserve
System 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, including
without limitation, the use of the proceeds of any Advance or Letters of Credit to purchase or
carry any margin stock in violation of Regulation T, U or X.

     Section 6.13 Gas Imbalances, Take-or-Pay or Other Prepayments. The Borrower shall
not, nor shall it permit any of its Restricted Subsidiaries to, allow on a net basis, gas
imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the
Borrower or any Restricted Subsidiary that would require the Borrower or any Restricted Subsidiary
to deliver their respective Hydrocarbons produced on a monthly basis from such Oil and Gas
Properties at some future time without then or thereafter receiving full payment therefor other
than that which do not result in the Borrower or any Restricted Subsidiary having net aggregate
liability in excess of $3,000,000.

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     Section 6.14 Limitation on Hedging.

     (a) Speculative Purposes. The Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to purchase, assume, or hold a speculative position in any commodities
market or futures market or enter into any Hedge Contract for speculative purposes.

     (b) Risk Management; Term. The Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to be party to or otherwise enter into any Hedge Contract that (i) is
entered into for reasons other than as a part of its normal business operations as a risk
management strategy and/or hedge against changes resulting from market conditions related to the
Borrower’s operations or (ii) is longer than five years in duration.

     (c) Additional Limitations on Hedging. The Borrower shall not, nor shall it permit
any of its Restricted Subsidiaries to, be party to or enter into any Hydrocarbon Hedge Contract;
provided that, the Borrower and its Restricted Subsidiaries may be party to and enter into
Hydrocarbon Hedge Contract covering PDP Reserves subject to the following limitations:

     (i) other than as provided in the immediately following clause (ii) and clause (iii),
before and after giving effect to such Hydrocarbon Hedge Contract, no more than 85% of the
anticipated production of gas volumes and no more than 85% of the anticipated production of
oil volumes, in either case, attributable to the Borrower’s and its Restricted Subsidiaries’
PDP Reserves, as reflected in the most recently delivered Engineering Report delivered
pursuant to Section 2.02(b) and calculated on an aggregate basis for the Borrower and its
Restricted Subsidiaries’, taken as a whole, may be covered by Hydrocarbon Hedge Contracts;

     (ii) the volume limitations in clause (i) shall not apply to put option contracts that
are not related to corresponding calls, collars or swaps;

     (iii) the volume limitations in clause (i) shall not apply to the anticipated
production of Hydrocarbons which are the subject of an Acquisition prior to effecting such
Acquisition;

     (iv) such Hydrocarbon Hedge Contracts shall otherwise comply with the terms of this
Agreement.

     Section 6.15 Post-Closing Hedging. On or prior to two Business Days after the
Effective Date, the Borrower shall have entered into Hedge Contracts to effect the hedge positions
for the volumes, years and forecasted production necessary in order to create an additional
$1,400,000 of value attributable to the Oil and Gas Properties considered for the initial Borrowing
Base hereunder, in any event, as reasonably determined by the Administrative Agent using its
customary pricing data.

     Section 6.16 Additional Subsidiaries. The Borrower shall not, nor shall it permit any
of its Restricted Subsidiaries to, create or acquire any additional Subsidiaries without (a) the
prior written notice to the Administrative Agent and (b) being in compliance with Section 5.14.

     Section 6.17 Current Ratio. The Borrower shall not permit the ratio of, as of the
last day of each fiscal quarter of the Borrower, beginning with the fiscal quarter ending June 30,
2010, the Borrower’s and its consolidated Restricted Subsidiaries’ (it being understood that no
amounts of the Unrestricted Subsidiaries of the Borrower shall be taken into account in calculating
this ratio and only such pro-rated amounts of Orion attributable to the Borrower’s equity ownership
therein shall be taken into account in calculating this ratio) (a) consolidated current assets to
(b) consolidated current liabilities, to be less than 1.00 to 1.00. For purposes of this
calculation (i) “current assets” shall include, as of the

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date of calculation, the Unused Commitment Amount but shall exclude any asset representing a
valuation account arising from the application of SFAS 133 or 143, and (ii) “current liabilities”
shall exclude, as of the date of calculation, the current portion of long—term Debt existing under
this Agreement and the current portion of long-term Debt existing under the Subordinated Credit
Agreement and any liabilities representing a valuation account arising from the application of SFAS
133 and 143.

     Section 6.18 Leverage Ratio. The Borrower shall not permit, as of the end of each
fiscal quarter, beginning with the fiscal quarter ending June 30, 2010, the ratio of (a) all Debt
(other than obligations under Hedge Contracts) of the Borrower and its Restricted Subsidiaries (it
being understood that only such pro-rated amounts of Orion’s Debt attributable to the Borrower’s
equity ownership therein shall be taken into account in calculating this ratio) as of such fiscal
quarter end to (b) the Adjusted EBITDAX, to be greater than 4.00 to 1.00.

     Section 6.19 Interest Coverage Ratio. The Borrower shall not permit, as of the end of
each fiscal quarter, beginning with the fiscal quarter ending June 30, 2010, the ratio of (a) the
Adjusted EBITDAX to (b) the Interest Expense, to be less than 3.00 to 1.00.

     Section 6.20 Orion. Notwithstanding anything to the contrary contained herein,
including any provision of this Article VI, the Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to (i) create, assume, incur or suffer to exist any Lien on or in respect
of any of its Property for the benefit of Orion, (ii) sell, assign, pledge, or otherwise transfer
any of its Properties to Orion, or (iii) make or permit to exist any loans, advances, or capital
contributions to, or make any investment in, or purchase or commit to purchase any stock or other
securities or evidences of indebtedness of or interests in, Orion or in any Properties of Orion
(collectively, “Orion Investments”); provided that, the Borrower may, and may
permit its Restricted Subsidiaries to, make or permit to exist such Orion Investments which are
otherwise permitted under the terms hereof and which individually or in the aggregate do not exceed
$10,000,000 a year.

     Section 6.21 Account Payables. The Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, allow any of its trade payables or other accounts payable to be
outstanding for more than 90 days (except (a) in cases where any such trade payable is being
disputed in good faith and adequate reserves under GAAP have been established and (b) for such
payables, which in the aggregate, do not exceed $250,000).

     Section 6.22 Subordinated Debt. Except as otherwise permitted by the terms of the
Subordination and Intercreditor Agreement, the Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, (a) make any optional, mandatory or scheduled payments on account of
principal (whether by redemption, purchase, retirement, defeasance, set-off or otherwise),
interest, premiums and fees in respect of the Subordinated Debt, or (b) amend, supplement or
otherwise modify the terms of the Subordinated Debt; provided that, upon the issuance of Senior
Unsecured Notes in compliance with Section 6.02(j), the Borrower may use the Debt Incurrence
Proceeds thereof to repay the Subordinated Debt so long as no Event of Default has occurred and is
continuing or would result therefrom.

     Section 6.23 Additional Subordinated Debt. The Borrower shall not, nor shall it
permit any of its Restricted Subsidiaries to make any payments on account of principal (whether by
redemption, purchase, retirement, defeasance, set-off or otherwise), interest, premiums and fees in
respect of any Additional Subordinated Debt prior to the scheduled maturity thereof in any manner,
or make any payment in violation of any subordination term applicable thereto.

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ARTICLE VII

EVENTS OF DEFAULT; REMEDIES

     Section 7.01 Events of Default. The occurrence of any of the following events shall
constitute an “Event of Default” under any Loan Document:

     (a) Payment. The Borrower (i) shall fail to pay when due any principal under the
Notes or any other Loan Document or (ii) shall fail to pay any interest, fees, reimbursements,
indemnifications, or other amounts due and payable hereunder, under the Notes, or under any other
Loan Document and such failure shall continue for a period of three Business Days after the due
date therefor;

     (b) Representation and Warranties. Any representation or warranty made or deemed to
be made (i) by the Borrower or any of its Restricted Subsidiaries or any other Guarantor (or any of
their respective officers) in this Agreement or in any other Loan Document or (ii) by the Borrower
or any of its Restricted Subsidiaries (or any of their respective officers) in connection with this
Agreement or any other Loan Document shall prove to have been incorrect in any material respect
(except that such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text thereof) when made or
deemed to be made;

     (c) Covenant Breaches. The Borrower or any of its Restricted Subsidiaries or any
other Guarantor shall (i) fail to perform or observe any term or covenant set forth in Section
2.05(b), Section 5.03 (with respect to the existence of the Borrower or any Restricted Subsidiary),
or Article VI of this Agreement or (ii) fail to perform or observe any other term or covenant set
forth in this Agreement or in any other Loan Document that is not covered by clause (i) above or
any other provision of this Section 7.01 and such failure shall remain unremedied for a period of
thirty Business Days after the occurrence of such failure (such grace period to be applicable only
in the event such Default can be remedied by corrective action of the Borrower or any of its
Restricted Subsidiaries);

     (d) Cross-Defaults. (i) The Borrower and or any of its Restricted Subsidiaries shall
fail to pay any principal of or premium or interest on its Debt that is outstanding in a principal
amount of at least $2,500,000 individually or when aggregated with all such Debt of the Borrower or
any of its Restricted Subsidiaries so in default (but excluding Debt evidenced by the Notes) when
the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to Debt (including, without
limitation, any event of default or termination event under any Hedge Contract) that is outstanding
in a principal amount (or termination payment amount or similar amount) of at least $2,500,000
individually or when aggregated with all such Debt of the Borrower or such Restricted Subsidiary so
in default, and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to accelerate, or to permit
the acceleration of, the maturity of such Debt; or (iii) any such Debt in a principal amount of at
least $2,500,000 individually or when aggregated with all such Debt of the Borrower or such
Restricted Subsidiary shall be declared to be due and payable, or required to be prepaid (other
than by a regularly scheduled required prepayment), prior to the stated maturity thereof;

     (e) Insolvency. (i) The Borrower or any of its Restricted Subsidiaries or any other
Guarantor shall generally not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the benefit of
creditors; (ii) any proceeding shall be instituted by or against the Borrower or any of its
Restricted Subsidiaries seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment,

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protection, relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee or other similar official for it or for any substantial part
of its Property and, in the case of any such proceeding instituted against the Borrower or any such
Restricted Subsidiary either such proceeding shall remain undismissed or unstayed for a period of
60 days or any of the actions sought in such proceeding shall occur; or (iii) the Borrower or any
of its Restricted Subsidiaries, shall take any corporate action to authorize any of the actions set
forth above in this paragraph (e);

     (f) Judgments. Any judgment or order for the payment of money in excess of $2,500,000
shall be rendered against the Borrower or any of its Restricted Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;

     (g) Termination Events. Any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to the Borrower by the
Administrative Agent, (i) such Termination Event shall not have been corrected and (ii) the
Termination Event could reasonably be expected to result in a Material Adverse Change;

     (h) Plan Withdrawals. The Borrower or any member of the Controlled Group as employer
under a Multiemployer Plan shall have made a complete or partial withdrawal from such Multiemployer
Plan and the plan sponsor of such Multiemployer Plan shall have notified such withdrawing employer
that such employer has incurred a withdrawal liability in an annual amount that could reasonably be
expected to result in a Material Adverse Change;

     (i) Change in Control. A Change in Control shall have occurred;

     (j) Loan Documents. Any provision of any Loan Document shall for any reason cease to
be valid and binding on the Borrower or any of its Restricted Subsidiaries or any such Person shall
so state in writing;

     (k) Security Instruments. (i) The Administrative Agent shall fail to have an
Acceptable Security Interest in any portion of the Collateral in excess of $1,000,000.00 in the
aggregate at any one time or (ii) any Security Instrument shall at any time and for any reason
cease to create the Lien on the Property purported to be subject to such agreement in accordance
with the terms of such agreement, or cease to be in full force and effect, or shall be contested by
the Borrower or any of its Restricted Subsidiaries except as a result of the sale or other
Disposition of the applicable Collateral permitted under the Loan Documents;

     (l) Potential Failure of Title. The title of the Borrower or any of its Restricted
Subsidiaries to any of the Oil and Gas Properties subject to the Mortgages, or any material part
thereof, shall become the subject matter of litigation before any Governmental Authority or
arbitrator that could reasonably be expected to result in a Material Adverse Change with respect to
the Borrower’s and the Restricted Subsidiaries’ title to such Oil and Gas Properties, taken as a
whole; or

     (m) Brayton Pledge Agreement. (i) Any representation or warranty made or deemed to be
made Frio Pecan Farm, LP, Flatmax Energy, L.P. or Brayton Management GP, LLC in the Brayton Pledge
Agreement shall prove to have been incorrect in any material respect when made or deemed to be made
and such misrepresentation could reasonably be expected to result in a Material Adverse Change;
(ii) Frio Pecan Farm, LP, Flatmax Energy, L.P. or Brayton Management GP, LLC shall fail to perform
or observe any term or covenant set forth in the Brayton Pledge Agreement and such failure shall
remain

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unremedied for a period of thirty Business Days after the occurrence of such failure (such
grace period to be applicable only in the event such Default can be remedied by corrective action
of Frio Pecan Farm, LP, Flatmax Energy, L.P. or Brayton Management GP, LLC) and such failure could
reasonably be expected to result in a Material Adverse Change; (iii) the Brayton Pledge Agreement
shall at any time and for any reason cease to create the Lien on the Property purported to be
subject to such agreement in accordance with the terms of such agreement except as a result of the
sale or other Disposition of the applicable Collateral permitted under the Loan Documents and such
cessation could reasonably be expected to result in a Material Adverse Change; (iv) Frio Pecan
Farm, LP, Flatmax Energy, L.P., or Brayton Management GP, LLC shall contest the Brayton Pledge
Agreement or the Lien purported to be created thereby and such action could reasonably be expected
to result in a Material Adverse Change; or (v) the Borrower or any of its Restricted Subsidiaries
shall contest the Brayton Pledge Agreement or the Lien purported to be created thereby.

     (n) Subordinated Credit Agreement. An “Event of Default” under the Subordinated
Credit Agreement shall have occurred.

     (o) Subordination and Intercreditor Agreement. For so long as the Subordinated Debt
is outstanding, unless such Debt was paid in violation of the terms of this Agreement or the
Subordination and Intercreditor Agreement, the subordination provisions of the Subordination and
Intercreditor Agreement shall, for any reason cease to be valid and binding or otherwise cease to
be in full force and effect.

     Section 7.02 Optional Acceleration of Maturity. If any Event of Default (other than
an Event of Default pursuant to paragraph (e) of Section 7.01) shall have occurred and be
continuing, then, and in any such event,

     (a) the Administrative Agent (i) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the obligation of each Lender and the Issuing
Lender to make extensions of credit hereunder, including making Advances and issuing, increasing,
or extending Letters of Credit, to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare all principal, interest, fees, reimbursements, indemnifications, and all other
amounts payable under this Agreement, the Notes, and the other Loan Documents to be forthwith due
and payable, whereupon all such amounts shall become and be forthwith due and payable in full,
without notice of intent to demand, demand, presentment for payment, notice of nonpayment, protest,
notice of protest, grace, notice of dishonor, notice of intent to accelerate, notice of
acceleration, and all other notices, all of which are hereby expressly waived by the Borrower;

     (b) the Borrower shall, on demand of the Administrative Agent at the request or with the
consent of the Required Lenders, deposit with the Administrative Agent into the Cash Collateral
Account an amount of cash equal to the Letter of Credit Exposure as security for the Obligations;
and

     (c) the Administrative Agent shall at the request of, or may with the consent of, the Required
Lenders proceed to enforce its rights and remedies under the Security Instruments, the Guaranties,
and any other Loan Document for the ratable benefit of itself, the Issuing Lender and the Lenders
by appropriate proceedings.

     Section 7.03 Automatic Acceleration of Maturity. If any Event of Default pursuant to
paragraph (e) of Section 7.01 shall occur,

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     (a) (i) the obligation of each Lender and the Issuing Lender to make extensions of credit
hereunder, including making Advances and issuing, increasing, or extending Letters of Credit, shall
terminate, and (ii) all principal, interest, fees, reimbursements, indemnifications, and all other
amounts payable under this Agreement, the Notes, and the other Loan Documents shall become and be
forthwith due and payable in full, without notice of intent to demand, demand, presentment for
payment, notice of nonpayment, protest, notice of protest, grace, notice of dishonor, notice of
intent to accelerate, notice of acceleration, and all other notices, all of which are hereby
expressly waived by the Borrower;

     (b) the Borrower shall deposit with the Administrative Agent into the Cash Collateral Account
an amount of cash equal to the outstanding Letter of Credit Exposure as security for the
Obligations; and

     (c) the Administrative Agent shall at the request of, or may with the consent of, the Required
Lenders proceed to enforce its rights and remedies under the Security Instruments, the Guaranties,
and any other Loan Document for the ratable benefit of itself, the Issuing Lender and the Lenders
by appropriate proceedings.

     Section 7.04 Right of Set-off. Upon the occurrence and during the continuance of any
Event of Default, the Administrative Agent, the Issuing Lender, and each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by the Administrative Agent, the Issuing Lender,
or such Lender to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement, the Notes held by the
Administrative Agent, the Issuing Lender, or such Lender, and the other Loan Documents,
irrespective of whether or not the Administrative Agent, the Issuing Lender, or such Lender shall
have made any demand under this Agreement, such Notes, or such other Loan Documents, and although
such obligations may be unmatured. The Administrative Agent, the Issuing Lender, and each Lender
agrees to promptly notify the Borrower after any such set-off and application made by the
Administrative Agent, the Issuing Lender, or such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The rights of the
Administrative Agent, the Issuing Lender, and each Lender under this Section 7.04 are in addition
to any other rights and remedies (including, without limitation, other rights of set-off) which the
Administrative Agent, the Issuing Lender, or such Lender may have.

     Section 7.05 Non-exclusivity of Remedies. No remedy conferred upon the Administrative
Agent, the Issuing Lender, and the Lenders is intended to be exclusive of any other remedy, and
each remedy shall be cumulative of all other remedies existing by contract, at law, in equity, by
statute or otherwise.

     Section 7.06 Application of Proceeds. From and during the continuance of any Event of
Default, any monies or Property actually received by the Administrative Agent pursuant to this
Agreement or any other Loan Document, the exercise of any rights or remedies under any Security
Instrument, or any other agreement with the Borrower or any of its Restricted Subsidiaries that
secures any of the Obligations, shall be, subject to the Subordination and Intercreditor Agreement,
applied in the following order:

     (a) First, to the payment of all amounts, including without limitation costs and expenses
incurred in connection with the collection of such proceeds and the payment of any part of the
Obligations, due to the Administrative Agent under any of the expense reimbursement or indemnity
provisions of this Agreement or any other Loan Document, any Security Instrument, or other
collateral documents, and any applicable law;

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     (b) Second, ratably, according to the then unpaid amounts thereof, without preference or
priority of any kind among them, to the payment of the Obligations then due and payable, including
Obligations with respect to Letters of Credit, any Obligations of the Borrower or its Restricted
Subsidiaries owing to any Swap Counterparty under any Hedge Contract and any Banking Services
Obligations owing to any Lender or Affiliate of a Lender; and

     (c) Third, to the Subordinated Agent as required under the Subordination and Intercreditor
Agreement; and

     (d) Fourth, the remainder, if any, to the Borrower, its Restricted Subsidiaries, their
respective successors or assigns, or such other Person as may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.

ARTICLE VIII

THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER

     Section 8.01 Authorization and Action. Each Lender that is an Existing Lender is
deemed to have appointed Wells Fargo Bank, N.A., as the administrative agent and the issuing lender
under the Existing Credit Agreement; provided, however, Wells Fargo Bank, N.A. does not assume and
shall not be obligated to pay, perform or discharge any claim, debt, obligation, expense or
liability of Union Bank, N.A., if any, of any kind, whether known or unknown, absolute or
contingent, under the Loan Documents (as defined in the Existing Credit Agreement) or otherwise,
arising out of any act or omission occurring on or before the date hereof under the Loan Documents
(as defined in the Existing Credit Agreement). The Borrower, the Existing Lenders, Wells Fargo
Bank, N.A. and Union Bank, N.A. agree that Section 8.06 of the Existing Credit Agreement shall
apply to Union Bank, N.A.’s resignation pursuant to the Assignment; provided that, such parties
hereby waive the 30 days prior written notice required thereunder as to such resignation. Each
Lender hereby appoints and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the Administrative
Agent by the terms hereof and of the other Loan Documents, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by this Agreement or
any other Loan Document (including, without limitation, enforcement or collection of the Notes),
the Administrative Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such instructions shall
be binding upon all Lenders and all holders of Notes; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the Administrative Agent
to personal liability or that is contrary to this Agreement, any other Loan Document, or applicable
law.

     Section 8.02 Administrative Agent’s Reliance, Etc. Neither the Administrative Agent
nor any of its directors, officers, agents, or employees shall be liable for any action taken or
omitted to be taken (INCLUDING THE ADMINISTRATIVE AGENT’S OWN NEGLIGENCE) by it or them under or in
connection with this Agreement or the other Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (a) may treat the payee of any Note as the holder thereof until the
Administrative Agent receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to the Administrative Agent; (b) may consult with legal counsel
(including counsel for the Borrower), independent public accountants, and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants, or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any statements,
warranties, or representations made in or in connection with

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this Agreement or the other Loan Documents; (d) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or conditions of this
Agreement or any other Loan Document on the part of the Borrower or its Subsidiaries or to inspect
the Property (including the books and records) of the Borrower or its Subsidiaries; (e) shall not
be responsible to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency, or value of this Agreement or any other Loan Document; and (f) shall
incur no liability under or in respect of this Agreement or any other Loan Document by acting upon
any notice, consent, certificate, or other instrument or writing (which may be by telecopier)
believed by it to be genuine and signed or sent by the proper party or parties.

     Section 8.03 The Administrative Agent and Its Affiliates. With respect to its
Commitment, the Advances made by it, and the Notes issued to it, the Administrative Agent shall
have the same rights and powers under this Agreement as any other Lender and may exercise the same
as though it were not the Administrative Agent. The term “Lender” or “Lenders” shall, unless
otherwise expressly indicated, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with, the Borrower or any of its
Subsidiaries, and any Person who may do business with or own securities of the Borrower or any such
Subsidiary, all as if the Administrative Agent were not an agent hereunder and without any duty to
account therefor to the Lenders.

     Section 8.04 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other Lender and based on
the Interim Financial Statements and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it shall, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action under this
Agreement.

     Section 8.05 Indemnification. THE LENDERS SEVERALLY AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT AND THE ISSUING LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS (TO THE EXTENT NOT REIMBURSED BY THE BORROWER),
ACCORDING TO THEIR RESPECTIVE PRO RATA SHARES FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER IN ANY WAY RELATING TO OR ARISING OUT OF
THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT OR THE ISSUING LENDER
UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (INCLUDING THE ADMINISTRATIVE AGENT’S AND THE
ISSUING LENDER’S OWN NEGLIGENCE), AND INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL CLAIMS AND ANY
LIABILITIES ARISING UNDER ENVIRONMENTAL LAW, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR
ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES, OR DISBURSEMENTS RESULTING FROM THE ADMINISTRATIVE AGENT’S OR THE ISSUING
LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT JURISDICTION
BY FINAL AND NONAPPEALABLE JUDGMENT. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO
REIMBURSE THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER PROMPTLY UPON DEMAND FOR ITS RATABLE
SHARE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY THE ADMINISTRATIVE AGENT
IN CONNECTION WITH THE PREPARATION,

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EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, TO THE EXTENT THAT THE
ADMINISTRATIVE AGENT OR THE ISSUING LENDER IS NOT REIMBURSED FOR SUCH BY THE BORROWER.
Notwithstanding the foregoing, the preceding provisions of this Section 8.05 shall apply only to
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that were incurred by or asserted against the Administrative Agent or the Issuing
Bank in their respective capacities as such, or against any Affiliate thereof, or any of such
Person’s or Affiliate’s respective directors, officers, employees, or agents, acting for the
Administrative Agent or Issuing Bank in connection with such capacity. To the extent that the
indemnity obligations provided in this Section 8.05 are for the benefit of the Administrative Agent
as the named secured party under the Liens granted under the Security Instruments, each Lender
hereby agrees that if such Lender ceases to be a Lender hereunder but Obligations owing to such
Lender or an Affiliate of such Lender continue to be secured by such Liens, then such Lender shall
continue to be bound by the provisions of this Section 8.05 until such time as such Obligations
have been satisfied or terminated in full and subject to the terms of the last sentence of Section
9.09. In such event, in determining the pro rata shares under this Section 8.05, the Lenders shall
include the aggregate amount (giving effect to any netting agreements) that would be owing to such
Swap Counterparty if such Hedge Contracts were terminated at the time of determination.

     Section 8.06 Successor Administrative Agent and Issuing Lender. The Administrative
Agent or the Issuing Lender may resign at any time by giving not less than 30 days prior written
notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause
by the Required Lenders upon receipt of written notice from the Required Lenders to such effect.
Upon receipt of notice of any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Administrative Agent or Issuing Lender with, if any Event of Default
has not occurred and is not continuing, the consent of the Borrower, which consent shall not be
unreasonably withheld. If no successor Administrative Agent or Issuing Lender shall have been so
appointed by the Required Lenders with the consent of the Borrower, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent’s or Issuing Lender’s giving of
notice of resignation or the Required Lenders’ removal of the retiring Administrative Agent or
Issuing Lender, then the retiring Administrative Agent or Issuing Lender may, on behalf of the
Lenders and the Borrower, appoint a successor Administrative Agent or Issuing Lender, which shall
be, in the case of a successor agent, a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and surplus of at least
$500,000,000 and, in the case of the Issuing Lender, a Lender; provided that, if the Administrative
Agent or Issuing Lender shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become effective in accordance
with such notice and (1) the retiring Administrative Agent or Issuing Lender shall be discharged
from its duties and obligations hereunder and under the other Loan Documents (except that (A) in
the case of any collateral security held by the Administrative Agent on behalf of the Lenders or
the Issuing Lender under any of the Loan Documents, the retiring Administrative Agent shall
continue to hold such collateral security until such time as a successor Administrative Agent is
appointed and (B) the retiring Issuing Lender shall remain the Issuing Lender with respect to any
Letters of Credit outstanding on the effective date of its resignation or removal and the
provisions affecting the Issuing Lender with respect to such Letters of Credit shall inure to the
benefit of the retiring Issuing Lender until the termination of all such Letters of Credit) and (2)
all payments, communications and determinations provided to be made by, to or through the retiring
Administrative Agent shall instead be made by or to each Lender and the Issuing Lender directly,
until such time as the Required Lenders appoint a successor Administrative Agent or Issuing Lender,
as applicable, as provided for above in this paragraph. Upon the acceptance of any appointment as
Administrative Agent or Issuing Lender by a successor Administrative Agent or Issuing Lender, such
successor Administrative Agent or Issuing Lender shall thereupon succeed

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to and become vested with all the rights, powers, privileges, and duties of the retiring
Administrative Agent or Issuing Lender, and the retiring Administrative Agent or Issuing Lender
shall be discharged from its duties and obligations under this Agreement and the other Loan
Documents, except that the retiring Issuing Lender shall remain the Issuing Lender with respect to
any Letters of Credit outstanding on the effective date of its resignation or removal and the
provisions affecting the Issuing Lender with respect to such Letters of Credit shall inure to the
benefit of the retiring Issuing Lender until the termination of all such Letters of Credit. After
any retiring Administrative Agent’s or Issuing Lender’s resignation or removal hereunder as
Administrative Agent or Issuing Lender, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent or
Issuing Lender under this Agreement and the other Loan Documents.

     Section 8.07 Additional Agents. None of the agents (other than the Administrative
Agent) or arrangers referred to on the cover of this Agreement shall have any duties, obligations
or liabilities in their respective capacities as agents or arrangers.

     Section 8.08 Collateral Matters.

     (a) Administrative Agent is authorized on behalf of the Secured Parties, without the necessity
of any notice to or further consent from the Secured Parties, from time to time, to take any
actions with respect to any Collateral or Security Instruments which may be necessary to perfect
and maintain Acceptable Security Interests in and Liens upon the Collateral granted pursuant to the
Security Instruments. Administrative Agent is further authorized on behalf of the Secured Parties,
without the necessity of any notice to or further consent from the Secured Parties, from time to
time, to take any action (other than enforcement actions requiring the consent of, or request by,
the Required Lenders as set forth in Section 7.02 or Section 7.03 above) in exigent circumstances
as may be reasonably necessary to preserve any rights or privileges of the Secured Parties under
the Loan Documents or applicable law. By accepting the benefit of the Liens granted pursuant to
the Security Instruments, each Secured Party not party hereto hereby agrees to the terms of this
paragraph (a).

     (b) Each Secured Party irrevocably authorizes Administrative Agent to release any Lien granted
to or held by the Administrative Agent upon any Collateral: (i) upon termination of the
Commitments, termination or expiration of all Letters of Credit (other than Letters of Credit as to
which other arrangements satisfactory to the Administrative Agent and the Issuing Lender have been
made), termination of all Hedge Contracts with Swap Counterparties that are secured by the Liens on
the Collateral (other than Hedge Contracts with any Swap Counterparty with respect to which other
arrangements satisfactory to the Swap Counterparty and the Borrower have been made;
provided that, unless a Swap Counterparty notifies the Administrative Agent in writing at
least 2 Business Days prior to the expected termination of the Commitments that such arrangements
have not been made, then solely for purposes of this clause (b), it shall be deemed that such
satisfactory arrangements have been made), and payment in full of all Obligations (other than
Obligations arising under Hedge Contracts with any Swap Counterparty with respect to which other
arrangements satisfactory to the Swap Counterparty and the Borrower have been made;
provided that, unless a Swap Counterparty notifies the Administrative Agent in writing at
least 2 Business Days prior to the expected termination of the Commitments that such arrangements
have not been made, then solely for purposes of this clause (b), it shall be deemed that such
satisfactory arrangements have been made); (ii) constituting Property sold or to be sold or
otherwise disposed of as part of or in connection with any Disposition permitted under this
Agreement or the other Loan Documents; (iii) constituting Property in which the Borrower or any
Restricted Subsidiary owned no interest at the time the Lien was granted or at any time thereafter;
(iv) constituting Property leased to the Borrower or any Restricted Subsidiary under a lease which
has expired or has been terminated in a transaction permitted under this Agreement or is about to
expire and which has not been, and is not intended by the Borrower or such Restricted Subsidiary to
be, renewed or extended; or (v) if approved,

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authorized or ratified in writing by the applicable Required Lenders or all the Lenders, as
the case may be, as required by Section 9.01. Upon the request of the Administrative Agent at any
time, the Secured Parties will confirm in writing the Administrative Agent’s authority to release
particular types or items of Collateral pursuant to this Section 8.08. By accepting the benefit of
the Liens granted pursuant to the Security Instruments, each Secured Party not party hereto hereby
agrees to the terms of this paragraph (b).

     (c) Notwithstanding anything contained in any of the Loan Documents to the contrary, the
Borrower, the Administrative Agent, and each Secured Party hereby agree that no Secured Party shall
have any right individually to realize upon any of the Collateral or to enforce the Guaranty, it
being understood and agreed that all powers, rights and remedies hereunder and under the Security
Instruments may be exercised solely by Administrative Agent on behalf of the Secured Parties in
accordance with the terms hereof. By accepting the benefit of the Liens granted pursuant to the
Security Instruments, each Secured Party not party hereto hereby agrees to the terms of this
paragraph (c).

ARTICLE IX

MISCELLANEOUS

     Section 9.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement, the Notes, or any other Loan Document (other than the Fee Letters), nor consent to any
departure by the Borrower or any Restricted Subsidiary therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders and the Borrower, and then
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver, or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Section 3.01, (b) increase the Borrowing Base or the aggregate Commitments
of the Lenders, (c) reduce the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder or under any other Loan Document, (d) postpone any date fixed for any payment of
principal of, or interest on, the Notes, or any fees or other amounts payable hereunder or extend
the Maturity Date, or the Commitment Termination Date, (e) change the percentage of Lenders that
shall be required for the Lenders or any of them to take any action hereunder or under any other
Loan Document, (f) amend Section 2.11 in such a manner as to alter the pro rata sharing of payments
required therein or this Section 9.01, (g) amend the definition of “Required Lenders,” (h) release
any Restricted Subsidiary or Orion from its obligations under any Guaranty other than as a result
of a transaction permitted hereby, (i) permit the Borrower or any Restricted Subsidiary to enter
into any merger or consolidation with or into any other Person, except for mergers or
consolidations permitted pursuant to Section 6.04 or amend clause (a)(i) of Section 6.04, (j)
release any Collateral securing the Obligations, except for releases of Collateral as permitted
under Section 8.08(b), or (k) amend or waive any provision of, nor consent to any departure by any
party thereto from, the Subordination and Intercreditor Agreement to the extent such amendment,
waiver or consent would impair the priority or enforceability of the Liens securing the
Obligations; and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent or the Issuing Lender in addition to the Lenders
required above to take such action, affect the rights or duties of the Administrative Agent or the
Issuing Lender, as the case may be, under this Agreement or any other Loan Document. 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 Hedge Contracts or Banking Services Obligations.

     Section 9.02 Notices, Etc. All notices and other communications shall be in writing
(including, without limitation, telecopy) and mailed by certified mail, return receipt requested,
telecopied, hand delivered, or delivered by a nationally recognized overnight courier, at the
address for the appropriate party specified in Schedule I or at such other address as shall be
designated by such party in a written notice to the other parties. All such notices and
communications shall, when so mailed,

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telecopied, or hand delivered or delivered by a nationally recognized overnight courier, be
effective when received if mailed, when telecopy transmission is completed or when delivered by
such messenger or courier, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or VIII shall not be effective until received by the
Administrative Agent.

     Section 9.03 No Waiver; Remedies. No failure on the part of any Lender, the
Administrative Agent, or the Issuing Lender to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

     Section 9.04 Costs and Expenses. The Borrower agrees to pay on demand (a) all
reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the
preparation, execution, waiver, delivery, administration, modification, and amendment of this
Agreement, the Notes, the Guaranties, and the other Loan Documents including, without limitation,
the reasonable fees and reasonable out-of-pocket expenses of counsel for the Administrative Agent
with respect to advising the Administrative Agent as to its rights and responsibilities under this
Agreement, and (b) all out-of-pocket costs and expenses, if any, of the Administrative Agent, the
Issuing Lender, and each Lender (including, without limitation, counsel fees and expenses of the
Administrative Agent, the Issuing Lender, and each Lender) incurred in connection with the
enforcement its rights or incurred during the existence of a Default in connection with the
protection if its rights (in any event, whether through negotiations, legal proceedings, or
otherwise) (A) in connection with this Agreement, the Notes, the Guaranties and the other Loan
Documents, including its rights under this Section, following an Event of Default or (B) in
connection with the Advances made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of
such Advances or Letters of Credit.

     Section 9.05 Binding Effect. This Agreement shall become effective as provided in
Section 3.01 and thereafter shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent, the Issuing Lender, and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights or delegate its
duties under this Agreement or any interest in this Agreement without the prior written consent of
each Lender.

     Section 9.06 Lender Assignments and Participations.

     (a) Assignments. Any Lender may assign to one or more Eligible Assignee all or any
portion of its rights and obligations under this Agreement (including, without limitation, all or a
portion of its Commitments, the Advances owing to it, the Notes held by it, and the participation
interest in the Letter of Credit Obligations held by it); provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of such Lender’s rights and
obligations assigned under this Agreement and shall be an equal percentage with respect to both its
obligations owing in respect of the Commitments and the related Advances and Letters of Credit,
(ii) the amount of the Commitments and Advances of such Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall be, if to an entity other than a Lender, not less than $5,000,000 and shall be an
integral multiple of $1,000,000 in excess thereof, (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with the Notes subject to such assignment, and (iv) each
Eligible Assignee (other than the Eligible Assignee of the Administrative Agent) shall pay to the
Administrative Agent a $3,500 administrative fee. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least three Business Days after the execution

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thereof, (A) the assignee thereunder shall be a party hereto for all purposes and, to the
extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender hereunder and (B) such Lender
thereunder shall, to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of such Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).

     (b) Terms of Assignments. By executing and delivering an Assignment and Acceptance,
the Lender thereunder and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance,
such Lender makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties, or representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, or sufficiency of value of this
Agreement or any other instrument or document furnished pursuant hereto; (ii) such Lender makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
the Borrower or its Restricted Subsidiaries or the performance or observance by the Borrower or its
Restricted Subsidiaries of any of their obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the Financial Statements and Interim Financial Statements
referred to in Section 4.05 and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Administrative Agent, such Lender
or any other Lender and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be performed by it as a
Lender.

     (c) The Register. The Administrative Agent shall maintain at its address referred to
in Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the Commitments of, and
principal amount of the Advances owing to, each Lender from time to time (the “Register”). The
entries in the Register shall be conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Administrative Agent, the Issuing Lender, and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.

     (d) Procedures. Upon its receipt of an Assignment and Acceptance executed by a Lender
and an Eligible Assignee, together with the Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form
of the attached Exhibit A, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register, and (iii) give prompt notice thereof to the Borrower. Within
five Business Days after its receipt of such notice, the Borrower shall execute and deliver to the
Administrative Agent in exchange for the surrendered Notes (A) if such Eligible Assignee has
acquired a Commitment, a new Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and (B) if such Lender has
retained any Commitment, a new Note to the order of such Lender in an amount equal to the
Commitment retained by it hereunder.

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Such new Notes shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the attached Exhibit E.

     (e) Participations. Each Lender may sell participations to one or more banks or other
financial institutions (or any other entity if an Event of Default has occurred and is continuing)
in or to all or a portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it, its participation
interest in the Letter of Credit Obligations, and the Notes held by it); provided, however,
that (i) such Lender’s obligations under this Agreement (including, without limitation, its
Commitments to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of any such Notes for all purposes of this Agreement, (iv) the Borrower,
the Administrative Agent, the Issuing Lender, and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement, and (v) such Lender shall not require the participant’s consent to any matter under this
Agreement, except for any matter set forth in the first proviso of Section 9.01. The Borrower
hereby agrees that participants shall have the same rights under Sections 2.12, 2.13, 2.14(c), and
9.07 as a Lender to the extent of their respective participations.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve Bank or any central
bank having jurisdiction over such Lender; provided that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

     Section 9.07 Indemnification; Waiver.

     (a) INDEMNIFICATION. THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE
LENDERS, THE ISSUING LENDER, AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AND AGENTS (EACH, AN “INDEMNIFIED PARTY”) FROM, AND DISCHARGE, RELEASE, AND HOLD
EACH INDEMNIFIED PARTY HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, OR DAMAGES THAT
MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNIFIED PARTY IN ANY WAY RELATING TO
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED
BY ANY INDEMNIFIED PARTY UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (A) INCLUDING ANY SUCH
LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE INCURRED BY REASON OF SUCH INDEMNIFIED PARTY’S OWN
NEGLIGENCE OR STRICT LIABILITY, (B) INCLUDING WITHOUT LIMITATION ENVIRONMENTAL CLAIMS AND ANY
LIABILITIES ARISING UNDER ENVIRONMENTAL LAW, AND (C) INCLUDING WITHOUT LIMITATION ANY SUCH OTHER
LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSES RESULTING FROM ANY LITIGATION, LEGAL PROCEEDING
OR OTHER TYPE OF ACTION, REGARDLESS OF WHETHER ANY INDEMNIFIED PARTY IS PARTY TO SUCH LITIGATION,
LEGAL PROCEEDING OR OTHER ACTION, BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR
EXPENSES INCURRED BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE
INDEMNIFIED AS DETERMINED BY A COURT OF COMPETENT JURISDICTION BY A FINAL AND NONAPPEALABLE
JUDGMENT. In the case of an investigation, litigation or proceeding to which the indemnity in this
paragraph applies, such indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by the Borrower, any Subsidiary or Affiliate thereof, any equityholder or
creditor thereof, or an Indemnified Party. The Borrower hereby also agrees that no Indemnified
Party will have any liability (whether direct or indirect, in contract or tort, or otherwise) to
the Borrower, any

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Subsidiary or Affiliate thereof, or any equity holder or creditor thereof arising out of,
related to or in connection with any aspect of the transactions contemplated hereby, except to the
extent such liability is determined in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party’s own gross negligence or willful
misconduct. The Borrower shall not, nor shall it permit any of its Subsidiaries to, without the
prior written consent of each Indemnified Party affected thereby (which consent will not be
unreasonably withheld), settle any threatened or pending claim or action that would give rise to
the right of any Indemnified Party to claim indemnification hereunder unless such settlement (a)
includes a full and unconditional release of all liabilities arising out of such claim or action
against such Indemnified Party and (b) does not include any statement as to or an admission of
fault, culpability or failure to act by or on behalf of any Indemnified Party.

     (b) Waiver of Damages. No Indemnified Party will be liable to the Borrower, any
Subsidiary or Affiliate thereof, any equity holder or creditor thereof or any other Person for any
indirect, consequential or punitive damages that may be alleged as a result of this Agreement, any
other Loan Documents, or any element of the transactions contemplated hereby or thereby, including
the Transactions. To the fullest extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnified Party, 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, the transactions contemplated hereby or thereby,
any Advance or Letter of Credit or the use of the proceeds thereof. No Indemnified Party referred
to in subsection (a) above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby.

     Section 9.08 Confidentiality. The Administrative Agent, the Issuing Lender, and each
Lender (each a “Lending Party”) agree to keep confidential any information furnished or
made available to it by the Borrower pursuant to this Agreement and identified by the Borrower as
proprietary or confidential; provided that nothing herein shall prevent any Lending Party
from disclosing such information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending Party or Affiliate of
any Lending Party for purposes of administering, negotiating, considering, processing,
implementing, syndicating, assigning, or evaluating the credit facilities provided herein and the
transactions contemplated hereby, (b) to any other Person if directly incidental to the
administration of the credit facilities provided herein, (c) as required by any Legal Requirement,
(d) upon the order of any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority or in connection with any pledge or assignment pursuant to Section
9.06(f), (f) that is or becomes available to the public or that is or becomes available to any
Lending Party other than as a result of a disclosure by any other Lending Party prohibited by this
Agreement, (g) in connection with any litigation relating to this Agreement or any other Loan
Document to which such Lending Party or any of its Affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any right or remedy under this Agreement or any other
Loan Document, and (i) to any actual or proposed participant or assignee, in each case, subject to
provisions similar to those contained in this Section 9.08. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN, nothing in this Agreement shall (a) restrict any Lending Party from
providing information to any bank or other regulatory or governmental authorities, including the
Federal Reserve Board and its supervisory staff; (b) require or permit any Lending Party to
disclose to the Borrower or any Affiliate thereof that any information will be or was provided to
the Federal Reserve Board or any of its supervisory staff; or (c) require or permit any Lending
Party to inform the Borrower or any Affiliate thereof of a current or upcoming Federal Reserve
Board examination or any nonpublic Federal Reserve Board supervisory initiative or action.

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     Section 9.09 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement.

     Section 9.10 Survival of Representations, Etc. All representations and warranties
contained in this Agreement or made in writing by or on behalf of the Borrower in connection
herewith shall survive the execution and delivery of this Agreement and the Loan Documents, the
making of the Advances and any investigation made by or on behalf of the Lenders, none of which
investigations shall diminish any Lender’s right to rely on such representations and warranties.
All obligations of the Borrower provided for in Sections 2.12, 2.13, 2.14(c), 9.04, and 9.07 and
all of the obligations of the Lenders in Section 8.05 shall survive any termination of this
Agreement and repayment in full of the Obligations.

     Section 9.11 Severability. In case one or more provisions of this Agreement or the
other Loan Documents shall be invalid, illegal or unenforceable in any respect under any applicable
law, the validity, legality, and enforceability of the remaining provisions contained herein or
therein shall not be affected or impaired thereby.

     Section 9.12 Business Loans. The Borrower warrants and represents that the Loans
evidenced by the Notes are and shall be for business, commercial, investment, or other similar
purposes and not primarily for personal, family, household, or agricultural use, as such terms are
used in Chapter One (“Chapter One”) of the Texas Credit Code. At all such times, if any, as
Chapter One shall establish a Maximum Rate, the Maximum Rate shall be the “indicated rate ceiling”
(as such term is defined in Chapter One) from time to time in effect.

     Section 9.13 Governing Law; Submission to Jurisdiction. This Agreement, the Notes,
and the other Loan Documents shall be governed by, and construed and enforced in accordance with,
the laws of the State of Texas. Without limiting the intent of the parties set forth above, (a)
Chapter 346 of the Texas Finance Code, as amended (relating to revolving loans and revolving
tri-party accounts), shall not apply to this Agreement, the Notes, or the transactions contemplated
hereby and (b) to the extent that any Lender may be subject to Texas law limiting the amount of
interest payable for its account, such Lender shall utilize the indicated (weekly) rate ceiling
from time to time in effect. Each Letter of Credit shall be governed by either the Uniform Customs
and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication
No. 600, or the International Standby Practices (ISP98), International Chamber of Commerce
Publication No. 590 (and any subsequent revisions thereof approved by a Congress of the
International Chamber of Commerce and adhered to by the Issuing Lender). The Borrower hereby
irrevocably submits to the jurisdiction of any Texas state or federal court sitting in Houston,
Texas in any action or proceeding arising out of or relating to this Agreement or the other Loan
Documents, and the Borrower hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court. The Borrower hereby unconditionally and
irrevocably waives, to the fullest extent it may effectively do so, any right it may have to the
defense of an inconvenient forum to the maintenance of such action or proceeding. The Borrower
hereby agrees that service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding may be made by mailing or delivering a copy of such
process to such Borrower at its address set forth in this Agreement. The Borrower agrees that a
final judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this
Section shall affect the rights of any Lender to serve legal process in any other manner permitted
by the law or affect the right of any Lender to bring any action or proceeding against the Borrower
or its Property in the courts of any other jurisdiction.

89

 

     Section 9.14 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS, THE ISSUING LENDER, AND
THE ADMINISTRATIVE AGENT HEREBY ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED BY AND HAVE CONSULTED
WITH COUNSEL OF THEIR CHOICE, AND HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.

     Section 9.15 Subordination and Intercreditor Agreement; Fortis Assignment. The
Administrative Agent is hereby authorized (a) on behalf of the Lenders for the Lenders and their
Affiliates that are Swap Counterparties or that may hold Banking Services Obligations to enter into
the Subordination and Intercreditor Agreement, and (b) on behalf of the Lenders for the Lenders, to
enter into the Fortis Assignment A copy of the Subordination and Intercreditor Agreement, and, if
entered into, the Fortis Assignment will be made available to each Secured Party on the date hereof
and thereafter upon request. Each Lender, each Swap Counterparty (by receiving the benefits
thereunder and of the Collateral) and each Affiliate of a Lender holding Banking Services
Obligations acknowledges and agrees to the terms of such Subordination and Intercreditor Agreement,
as the same may further be amended, restated, supplemented or otherwise modified pursuant to the
terms hereof, and agrees that the terms thereof shall be binding on such Secured Party and its
successors and assigns, as if it were a party thereto.

     Section 9.16 USA Patriot Act. Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies
the Borrower that pursuant to the requirements of the Patriot 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 or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Patriot Act.

     Section 9.17 PRIOR OR ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS,
AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND SUPERSEDE ALL
PRIOR UNDERSTANDINGS AND AGREEMENTS, WHETHER WRITTEN OR ORAL, RELATING TO THE TRANSACTIONS PROVIDED
FOR HEREIN AND THEREIN. ADDITIONALLY, THIS AGREEMENT AND THE LOAN DOCUMENTS MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

     THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

     IN EXECUTING THIS AGREEMENT, THE BORROWER HEREBY WARRANTS AND REPRESENTS IT IS NOT RELYING ON
ANY STATEMENT OR REPRESENTATION OTHER THAN THOSE IN THIS AGREEMENT AND IS RELYING UPON ITS OWN
JUDGMENT AND ADVICE OF ITS ATTORNEYS.

[Remainder of this page intentionally left blank. Signature page follows.]

90

 

     EXECUTED as of the date first above written.

	 	 	 	 	 
	 	BORROWER:

ALTA MESA HOLDINGS, LP
 	 
	 	By:  	Alta Mesa Holdings GP, LLC, 	 
	 	 	its general partner 	 
	 
	 	 	 
	 	By:  	/s/ Michael A. McCabe 
	 
	 	 	Michael A. McCabe 	 
	 	 	Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:

WELLS FARGO BANK, N.A.

as Administrative Agent and as Issuing Lender

 	 
	 	By:  	/s/ Richard A. Gould 	 
	 	 	Richard A. Gould 	 
	 	 	Managing Director 	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	LENDERS:

WELLS FARGO BANK, N.A.

 	 
	 	By:  	/s/ Shiloh Davila	 
	 	 	Shiloh Davila 	 
	 	 	Assistant Vice President  	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	UNION BANK, N.A.

 	 
	 	By:  	/s/ Paul E. Cornell	 
	 	 	Name: 	Paul E. Cornell	 
	 	 	Title:  	Senior Vice President	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	TORONTO DOMINION (NEW YORK) LLC

 	 
	 	By:  	/s/ Debbi L. Brito	 
	 	 	Name: 	Debbi L. Brito	 
	 	 	Title:  	Authorized Signatory	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	ING CAPITAL LLC

 	 
	 	By:  	/s/ Charles E. Hall	 
	 	 	Name: 	Charles E. Hall	 
	 	 	Title:  	Managing Director	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	CITIBANK, N.A.

 	 
	 	By:  	/s/ Thomas Benavides	 
	 	 	Name: 	Thomas Benavides	 
	 	 	Title:  	Senior Vice President	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	COMPASS BANK (as successor in interest to

Guaranty Bank)

 	 
	 	By:  	/s/ Kathleen J. Bowen	 
	 	 	Name: 	Kathleen J. Bowen	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	CAPITAL ONE, N.A.

 	 
	 	By:  	/s/ Nancy M. Mak	 
	 	 	Name: 	Nancy M. Mak	 
	 	 	Title:  	Vice President	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	BANK OF TEXAS, NA

 	 
	 	By:  	/s/ Martin W. Wilson	 
	 	 	Name: 	Martin W. Wilson	 
	 	 	Title:  	Senior Vice President	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	AMEGY BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Mark A. Serice	 
	 	 	Name: 	Mark A. Serice	 
	 	 	Title:  	Vice President	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

	 	 	 	 	 
	 	TEXAS CAPITAL BANK, N.A.

 	 
	 	By:  	/s/ W. David McCarver IV	 
	 	 	Name: 	W. David McCarver IV	 
	 	 	Title:  	Vice President	 
	 

Signature page to Sixth Amended and Restated Credit Agreement

(Alta Mesa Holdings, LP)

 

 

SCHEDULE I

NOTICE INFORMATION FOR BORROWER, ADMINISTRATIVE AGENT, AND LENDERS

	 	 	 

	Administrative Agent: 
	 	 
	 

	 	With a copy to:
	Wells Fargo Bank, N.A.

	 	Wells Fargo Bank, N.A.
	1525 W WT Harris Blvd.

	 	1000 Louisiana, 9th Floor
	Charlotte, NC 28262

	 	MAC T5002-090
	Attn: Syndication Agency Services

	 	Houston, Texas 77002
	Telephone: (704) 590 2706

	 	Attention: Richard Gould
	Facsimile: (704) 715 0017

	 	Facsimile: (713) 319-1925
	 
	Borrower:
	 	 
	 
	Alta Mesa Holdings, LP
	 	 
	15415 Katy Freeway, Suite 800
	 	 
	Houston, Texas 77094
	 	 
	Attention: Michael McCabe
	 	 
	Facsimile: 281-530-5278
	 	 
	 
	Lenders:
	 	 
	 
	 	 
	Each to its address (or telecopy number) set forth in its administrative questionnaire

..

Schedule I

 

SCHEDULE II

COMMITMENTS; INITIAL BORROWING BASE; PRO RATA SHARE

Each of the Commitments set forth herein is governed by the terms of the Credit Agreement, which
provides for, among other things, Borrowing Base limitations which may restrict the Borrower’s
ability to request (and the Lenders’ obligation to provide) Credit Extensions to a maximum amount
which is less than the Commitments set forth in this Schedule I. The initial Borrowing Base and
each Lender’s Pro Rata Share thereof set forth below are subject to, and governed by, the terms of
the Credit Agreement, including, but not limited to, any increases, decreases, terminations, and
assignments thereof.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PRO RATA SHARE OF	 	 	 	 
	 	 	 	 	 	 	THE INITIAL	 	 	 	 
	LENDERS	 	COMMITMENT AMOUNTS	 	 	BORROWING BASE	 	 	PERCENTAGE OF TOTAL	 
	Wells Fargo Bank, N.A.
	 	$	78,947,368	 	 	$	45,000,000	 	 	 	0.157894737	%
	Union Bank, N.A.
	 	$	78,947,368	 	 	$	45,000,000	 	 	 	0.157894737	%
	Toronto Dominion (New York) LLC
	 	$	59,649,123	 	 	$	34,000,000	 	 	 	0.119298246	%
	ING Capital LLC
	 	$	49,122,807	 	 	$	28,000,000	 	 	 	0.098245614	%
	Citibank, N.A.
	 	$	49,122,807	 	 	$	28,000,000	 	 	 	0.098245614	%
	Compass Bank
	 	$	43,859,649	 	 	$	25,000,000	 	 	 	0.087719298	%
	Capital One, N.A.
	 	$	43,859,649	 	 	$	25,000,000	 	 	 	0.087719298	%
	Bank of Texas, NA
	 	$	43,859,649	 	 	$	25,000,000	 	 	 	0.087719298	%
	Amegy Bank National Association
	 	$	26,315,790	 	 	$	15,000,000	 	 	 	0.052631579	%
	Texas Capital Bank, N.A.
	 	$	26,315,790	 	 	$	15,000,000	 	 	 	0.052631579	%
	TOTAL 
	 	$	500,000,000.00           	 	 	$	285,000,000.00	 	 	 	100	%

Schedule II

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