Document:

exv10w1

 

Exhibit 10.1

 

[U.S. CREDIT AGREEMENT]

[EXECUTION]

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of February 9, 2007

among

QUICKSILVER RESOURCES INC.,

as Borrower,

THE LENDERS PARTY HERETO,

BNP PARIBAS and

BANK OF AMERICA, N.A.,

as Co-Global Syndication Agents,

FORTIS CAPITAL CORP.,

THE BANK OF NOVA SCOTIA and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Co-Global Documentation Agents,

and

JPMORGAN CHASE BANK, N.A.,

as Global Administrative Agent

 

J.P. MORGAN SECURITIES INC.

and

BANC OF AMERICA SECURITIES LLC,

as Co-Lead Arrangers and Joint Bookrunners

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	 
	 	ARTICLE I	 	 	 	 
	 
	 	DEFINITIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.1
	 	Defined Terms	 	 	2	 
	Section 1.2
	 	Classification of Loans and Borrowings	 	 	37	 
	Section 1.3
	 	Terms Generally	 	 	37	 
	Section 1.4
	 	Accounting Terms; GAAP	 	 	38	 
	Section 1.5
	 	Designation of Material Subsidiaries	 	 	38	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE II	 	 	 	 
	 
	 	THE CREDITS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.1
	 	Global Commitments and Revolving Commitments	 	 	38	 
	Section 2.2
	 	Loans and Borrowings	 	 	41	 
	Section 2.3
	 	Requests for Revolving Borrowings	 	 	42	 
	Section 2.4
	 	Swingline Loans	 	 	42	 
	Section 2.5
	 	Letters of Credit	 	 	45	 
	Section 2.6
	 	Funding of Borrowings	 	 	50	 
	Section 2.7
	 	Interest Elections	 	 	50	 
	Section 2.8
	 	Global Borrowing Base	 	 	52	 
	Section 2.9
	 	Termination and Reduction of Global
Commitments and Commitments; Extension of Maturity Date	 	 	57	 
	Section 2.10
	 	Repayment of Loans; Evidence of Indebtedness	 	 	60	 
	Section 2.11
	 	Prepayment of Loans	 	 	60	 
	Section 2.12
	 	Fees	 	 	63	 
	Section 2.13
	 	Interest	 	 	64	 
	Section 2.14
	 	Alternate Rate of Interest	 	 	65	 
	Section 2.15
	 	Illegality	 	 	66	 
	Section 2.16
	 	Increased Costs	 	 	67	 
	Section 2.17
	 	Break Funding Payments	 	 	68	 
	Section 2.18
	 	Taxes	 	 	69	 
	Section 2.19
	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	 	 	71	 
	Section 2.20
	 	Mitigation Obligations; Replacement of Lenders	 	 	73	 
	Section 2.21
	 	Currency Conversion and Currency Indemnity	 	 	74	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE III	 	 	 	 
	 
	 	REPRESENTATIONS AND WARRANTIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.1
	 	Existence and Power	 	 	75	 
	Section 3.2
	 	Loan Party and Governmental Authorization; Contravention	 	 	75	 
	Section 3.3
	 	Binding Effect	 	 	76	 
	Section 3.4
	 	Financial Information	 	 	76	 
	Section 3.5
	 	Litigation	 	 	77	 
	Section 3.6
	 	ERISA	 	 	77	 
	Section 3.7
	 	Taxes and Filing of Tax Returns	 	 	78	 
	Section 3.8
	 	Ownership of Properties Generally	 	 	78	 
	Section 3.9
	 	Mineral Interests	 	 	78	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	Section 3.10
	 	Licenses, Permits, Etc	 	 	79	 
	Section 3.11
	 	Compliance with Law	 	 	79	 
	Section 3.12
	 	Full Disclosure	 	 	79	 
	Section 3.13
	 	Organizational Structure; Nature of Business	 	 	80	 
	Section 3.14
	 	Environmental Matters	 	 	80	 
	Section 3.15
	 	Fiscal Year	 	 	81	 
	Section 3.16
	 	No Default	 	 	81	 
	Section 3.17
	 	Government Regulation	 	 	81	 
	Section 3.18
	 	Insider	 	 	81	 
	Section 3.19
	 	Gas Balancing Agreements and Advance Payment Contracts	 	 	81	 
	Section 3.20
	 	Existing Subordinate Debt and Falcon Seaboard Settlement Agreement	 	 	81	 
	Section 3.21
	 	Use of Proceeds and Letters of Credit	 	 	81	 
	Section 3.22
	 	Location of Business and Offices	 	 	82	 
	Section 3.23
	 	Subsidiaries	 	 	82	 
	Section 3.24
	 	Material Agreements	 	 	82	 
	Section 3.25
	 	Priority; Security Matters	 	 	82	 
	Section 3.26
	 	Hedging Agreements	 	 	83	 
	Section 3.27
	 	Insurance	 	 	83	 
	Section 3.28
	 	Status as Senior Indebtedness	 	 	83	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE IV	 	 	 	 
	 
	 	CONDITIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.1
	 	Initial Loan	 	 	83	 
	Section 4.2
	 	Each Credit Event	 	 	89	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE V	 	 	 	 
	 
	 	AFFIRMATIVE COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.1
	 	Information	 	 	90	 
	Section 5.2
	 	Business of Borrower and Subsidiaries	 	 	93	 
	Section 5.3
	 	Maintenance of Existence; Oil and Gas Properties	 	 	93	 
	Section 5.4
	 	Title Data; Title to Oil and Gas Properties	 	 	94	 
	Section 5.5
	 	Right of Inspection	 	 	94	 
	Section 5.6
	 	Maintenance of Insurance	 	 	95	 
	Section 5.7
	 	Payment of Taxes and Claims	 	 	95	 
	Section 5.8
	 	Compliance with Laws and Documents	 	 	96	 
	Section 5.9
	 	Operation of Properties and Equipment	 	 	96	 
	Section 5.10
	 	Environmental Law Compliance	 	 	96	 
	Section 5.11
	 	ERISA Reporting Requirements	 	 	97	 
	Section 5.12
	 	Environmental Review	 	 	97	 
	Section 5.13
	 	Casualty and Condemnation	 	 	97	 
	Section 5.14
	 	Performance of Obligations	 	 	98	 
	Section 5.15
	 	Additional Subsidiaries	 	 	98	 
	Section 5.16
	 	Information Regarding Collateral	 	 	99	 
	Section 5.17
	 	Further Assurances	 	 	99	 
	Section 5.18
	 	Pledges of Equity Interests in non-Loan Parties	 	 	101	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	 
	 	ARTICLE VI	 	 	 	 
	 
	 	FINANCIAL COVENANTS	 	 	 	 
	 
	Section 6.1
	 	Current Ratio	 	 	101	 
	Section 6.2
	 	EBITDAX Ratio	 	 	101	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VII	 	 	 	 
	 
	 	NEGATIVE COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.1
	 	Incurrence of Debt	 	 	102	 
	Section 7.2
	 	Restricted Payments	 	 	103	 
	Section 7.3
	 	Negative Pledge	 	 	105	 
	Section 7.4
	 	Consolidations and Mergers	 	 	105	 
	Section 7.5
	 	Asset Dispositions.	 	 	105	 
	Section 7.6
	 	Amendments to Organizational Documents; Other Material Agreements	 	 	106	 
	Section 7.7
	 	Use of Proceeds	 	 	107	 
	Section 7.8
	 	Investments	 	 	107	 
	Section 7.9
	 	Transactions with Affiliates	 	 	108	 
	Section 7.10
	 	ERISA	 	 	108	 
	Section 7.11
	 	Hedge Transactions	 	 	108	 
	Section 7.12
	 	Fiscal Year	 	 	108	 
	Section 7.13
	 	Change in Business	 	 	109	 
	Section 7.14
	 	Existing Subordinate Debt,
Permitted Senior Notes Debt and Falcon Seaboard Settlement Agreement	 	 	109	 
	Section 7.15
	 	Governmental Rules	 	 	110	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VIII	 	 	 	 
	 
	 	EVENTS OF DEFAULT	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.1
	 	Listing of Events of Default	 	 	110	 
	Section 8.2
	 	Action if Bankruptcy	 	 	112	 
	Section 8.3
	 	Action if Other Event of Default	 	 	112	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE IX	 	 	 	 
	 
	 	AGENTS	 	 	 	 
	 
	 
	 	ARTICLE X	 	 	 	 
	 
	 	MISCELLANEOUS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.1
	 	Notices	 	 	115	 
	Section 10.2
	 	Waivers; Amendments	 	 	117	 
	Section 10.3
	 	Expenses; Indemnity; Damage Waiver	 	 	118	 
	Section 10.4
	 	Successors and Assigns	 	 	120	 
	Section 10.5
	 	Survival	 	 	123	 
	Section 10.6
	 	Counterparts; Effectiveness	 	 	123	 
	Section 10.7
	 	Severability	 	 	123	 
	Section 10.8
	 	Right of Setoff	 	 	124	 
	Section 10.9
	 	GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS	 	 	124	 
	Section 10.10
	 	WAIVER OF JURY TRIAL	 	 	125	 
	Section 10.11
	 	Headings	 	 	125	 
	Section 10.12
	 	Confidentiality	 	 	125	 
	Section 10.13
	 	Interest Rate Limitation	 	 	126	 
	Section 10.14
	 	USA PATRIOT Act Notice	 	 	128	 
	Section 10.15
	 	Collateral Matters; Hedging Agreements	 	 	128	 

iii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	Section 10.16
	 	Arrangers; Co-Global Documentation
Agents; Co-Global Syndication Agents; Other Agents	 	 	128	 
	Section 10.17
	 	Intercreditor Agreement; Security Documents; Designation	 	 	129	 
	Section 10.18
	 	Waiver of Consumer Credit Laws	 	 	129	 
	Section 10.19
	 	Status as Senior Indebtedness	 	 	129	 
	Section 10.20
	 	NO ORAL AGREEMENTS	 	 	129	 

iv

 

EXHIBITS AND SCHEDULES

	 	 	 
	EXHIBITS:	 	 
	Exhibit A

	 	Form of Note
	Exhibit B-1

	 	Form of Legal Opinion of General Counsel of Borrower
	Exhibit
B-2

	 	Form of Legal Opinion of Jones Day, Texas counsel to Borrower
	Exhibit
B-3

	 	Form of Legal Opinion of Loomis, Ewert, Parsley, Davis & Gotting, Michigan, local counsel
to Borrower
	Exhibit
B-4

	 	Form of Legal Opinion of Marian McGrath Pearcy, Indiana, local counsel to Borrower
	Exhibit
C

	 	Form of Certificate of Financial Officer
	Exhibit
D

	 	Form of Assignment and Acceptance
	Exhibit
E-1

	 	Form of Revolving Borrowing Request
	Exhibit
E-2

	 	Form of Interest Election Request (Revolving Borrowing)
	Exhibit
E-3

	 	Form of Swingline Borrowing Request
	Exhibit
E-4

	 	Form of Interest Election Request (Swingline Borrowing)
	Exhibit
F

	 	Form of Pledge Agreement and Irrevocable Proxy
	Exhibit
G

	 	Form of Guaranty
	Exhibit
H

	 	Form of Mortgage
	Exhibit
I

	 	Form of Security Agreement
	Exhibit
J

	 	Form of Additional Lender Certificate
	Exhibit
K

	 	[Reserved]
	Exhibit
L

	 	Material Subsidiaries; Other Subsidiaries
	Exhibit
M

	 	Form of Assignment of Production
	Exhibit
N

	 	Description of MLP Transactions

	 	 	 
	SCHEDULES:	 	 
	Schedule 2.1

	 	Global Commitments and Commitments
	Schedule 3.5

	 	Litigation
	Schedule 3.13

	 	Loan Party Information
	Schedule 3.14

	 	Environmental Disclosure
	Schedule 3.22

	 	Location of Offices
	Schedule 3.26

	 	Hedging Agreements
	Schedule 3.27

	 	Insurance
	Schedule 7.1

	 	Existing Indebtedness
	Schedule 7.3

	 	Existing Liens
	Schedule 7.8

	 	Investments

v

 

LIST OF DEFINED TERMS

	 	 	 	 	 
	 	 	Page No.	 
	ABR
	 	 	2	 
	Act
	 	 	128	 
	Additional Lender Certificate
	 	 	39	 
	Adjusted Eurodollar Rate
	 	 	2	 
	Administrative Questionnaire
	 	 	2	 
	Advance Payment
	 	 	2	 
	Advance Payment Contract
	 	 	2	 
	Affiliate
	 	 	3	 
	Agents
	 	 	3	 
	Agreed Currency
	 	 	74	 
	Agreement
	 	 	3	 
	Allocated Canadian Borrowing Base
	 	 	54	 
	Allocated U.S. Borrowing Base
	 	 	54	 
	Alternate Base Rate
	 	 	3	 
	Applicable Lending Office
	 	 	3	 
	Applicable Margin
	 	 	3	 
	Applicable Percentage
	 	 	4	 
	Approved Engineer
	 	 	4	 
	Approved Fund
	 	 	4	 
	Arrangers
	 	 	4	 
	Assignment and Acceptance
	 	 	4	 
	Assignment of Production
	 	 	4	 
	Authorized Officer
	 	 	5	 
	Availability Period
	 	 	5	 
	Board
	 	 	5	 
	BofA Fee Letter
	 	 	15	 
	Borrower
	 	 	1	 
	Borrower’s Global Effectiveness Notice
	 	 	5	 
	Borrowing
	 	 	5	 
	Borrowing Base Allocation Notice
	 	 	54	 
	Borrowing Base Properties
	 	 	5	 
	Borrowing Request
	 	 	5	 
	Business Day
	 	 	5	 
	C$
	 	 	6	 
	Canadian Administrative Agent
	 	 	6	 
	Canadian Borrower
	 	 	6	 
	Canadian Commitment
	 	 	6	 
	Canadian Credit Agreement
	 	 	6	 
	Canadian Dollars
	 	 	6	 
	Canadian Flex Portion
	 	 	6	 
	Canadian Lenders
	 	 	6	 
	Canadian Loan Documents
	 	 	6	 
	Canadian Obligations
	 	 	6	 
	Canadian Security Documents
	 	 	6	 

vi

 

	 	 	 	 	 
	 	 	Page No.	 
	Capital Lease Obligations
	 	 	6	 
	Casualty Event
	 	 	7	 
	CERCLA
	 	 	7	 
	Certificate of Mortgaged Properties
	 	 	88	 
	Change in Law
	 	 	7	 
	Change of Control
	 	 	7	 
	Chicago
	 	 	7	 
	Class
	 	 	7	 
	Closing Date
	 	 	7	 
	Code
	 	 	7	 
	Co-Global Documentation Agents
	 	 	7	 
	Co-Global Syndication Agents
	 	 	8	 
	Collateral
	 	 	8	 
	Combined Commitments
	 	 	8	 
	Combined Credit Agreements
	 	 	8	 
	Combined Credit Exposure
	 	 	8	 
	Combined Lenders
	 	 	8	 
	Combined Loan Documents
	 	 	8	 
	Combined Loans
	 	 	8	 
	Combined Obligations
	 	 	8	 
	Commitment
	 	 	8	 
	Commitment Fee
	 	 	63	 
	Consolidated Current Assets
	 	 	8	 
	Consolidated Current Liabilities
	 	 	9	 
	Consolidated EBITDAX
	 	 	9	 
	Consolidated Net Income
	 	 	10	 
	Consolidated Net Interest Expense
	 	 	10	 
	Consolidated Subsidiaries
	 	 	10	 
	Consolidated Subsidiary
	 	 	10	 
	Contractual Obligation
	 	 	10	 
	control
	 	 	3	 
	Control
	 	 	10	 
	Controlled
	 	 	10	 
	controlled by
	 	 	3	 
	Controlling
	 	 	10	 
	Credit Exposure
	 	 	10	 
	Darden Group
	 	 	10	 
	Debenture
	 	 	10	 
	Debt Issuance Reduction Amount
	 	 	11	 
	Default
	 	 	11	 
	Default Rate
	 	 	65	 
	Deficiency Notification Date
	 	 	56	 
	Designation
	 	 	11	 
	disposal
	 	 	12	 
	Distribution
	 	 	11	 
	Dollar
	 	 	37	 

vii

 

	 	 	 	 	 
	 	 	Page No.	 
	Environmental Complaint
	 	 	11	 
	Environmental Laws
	 	 	11	 
	Environmental Liability
	 	 	12	 
	Equity Interests
	 	 	12	 
	Equivalent Amount
	 	 	12	 
	ERISA
	 	 	12	 
	ERISA Affiliate
	 	 	12	 
	Eurodollar
	 	 	13	 
	Eurodollar Rate
	 	 	13	 
	Event of Default
	 	 	110	 
	Exchange Act
	 	 	13	 
	Excluded Taxes
	 	 	13	 
	Existing Convertible Debentures
	 	 	13	 
	Existing Convertible Note Indenture
	 	 	13	 
	Existing Credit Agreement
	 	 	1	 
	Existing Lenders
	 	 	1	 
	Existing Letter of Credit
	 	 	49	 
	Existing Loan Documents
	 	 	1	 
	Existing Loan Indebtedness
	 	 	1	 
	Existing Subordinate Debt
	 	 	14	 
	Existing Subordinate Note Documents
	 	 	14	 
	Existing Subordinate Note Indenture
	 	 	14	 
	Existing Subordinate Notes
	 	 	14	 
	Falcon Seaboard Settlement Agreement
	 	 	14	 
	Federal Funds Effective Rate
	 	 	15	 
	Fee Letter
	 	 	15	 
	Financial Officer
	 	 	15	 
	Financial Statements
	 	 	15	 
	Financing Transactions
	 	 	15	 
	Fiscal Quarter
	 	 	15	 
	Fiscal Year
	 	 	15	 
	Flex Lender
	 	 	15	 
	Flex Percentage
	 	 	15	 
	Flex Portion
	 	 	15	 
	Foreign Entity
	 	 	16	 
	Foreign Lender
	 	 	16	 
	Foreign Subsidiary
	 	 	16	 
	GAAP
	 	 	16	 
	Gas Balancing Agreement
	 	 	16	 
	Global Administrative Agent
	 	 	16	 
	Global Borrowing Base
	 	 	16	 
	Global Borrowing Base Deficiency
	 	 	16	 
	Global Borrowing Base Designation Notice
	 	 	53	 
	Global Borrowing Base Utilization
	 	 	16	 
	Global Commitment
	 	 	16	 
	Global Commitment Increase
	 	 	39	 

viii

 

	 	 	 	 	 
	 	 	Page No.	 
	Global Effective Date
	 	 	17	 
	Governmental Approval
	 	 	17	 
	Governmental Authority
	 	 	17	 
	Governmental Rule
	 	 	17	 
	Guarantee
	 	 	17	 
	Guaranteed
	 	 	17	 
	Guaranties
	 	 	17	 
	Guarantor
	 	 	17	 
	Guaranty
	 	 	17	 
	Hazardous Discharge
	 	 	18	 
	Hazardous Material
	 	 	18	 
	Hedge Transaction
	 	 	18	 
	Hedge Transactions
	 	 	18	 
	Hedging Agreements
	 	 	18	 
	Hedging Obligations
	 	 	18	 
	Highest Lawful Rate
	 	 	127	 
	Holdings
	 	 	18	 
	Hydrocarbons
	 	 	18	 
	Immaterial Title Deficiencies
	 	 	79	 
	Indebtedness
	 	 	18	 
	Indemnified Taxes
	 	 	19	 
	Indemnitee
	 	 	119	 
	Initial Reserve Report
	 	 	19	 
	Intercreditor Agreement
	 	 	19	 
	Interest Election Request
	 	 	19	 
	Interest Payment Date
	 	 	20	 
	Interest Period
	 	 	20	 
	Investment
	 	 	20	 
	IPO
	 	 	20	 
	Issuing Bank
	 	 	20	 
	JPM Fee Letter
	 	 	15	 
	JPMorgan
	 	 	21	 
	Judgment Currency
	 	 	74	 
	LC Disbursement
	 	 	21	 
	LC Exposure
	 	 	21	 
	Lender Affiliate
	 	 	21	 
	Lender Parties
	 	 	21	 
	Lenders
	 	 	21	 
	Letter of Credit
	 	 	21	 
	Lien
	 	 	21	 
	Loan Documents
	 	 	21	 
	Loan Parties
	 	 	22	 
	Loans
	 	 	22	 
	Long Term Debt
	 	 	22	 
	Majority Lenders
	 	 	22	 
	Margin Stock
	 	 	22	 

ix

 

	 	 	 	 	 
	 	 	Page No.	 
	Material Adverse Effect
	 	 	22	 
	Material Agreement
	 	 	22	 
	Material Gas Imbalance
	 	 	22	 
	Material Subsidiary
	 	 	22	 
	Maturity Date
	 	 	23	 
	Mercury Exploration
	 	 	23	 
	Mercury Production
	 	 	23	 
	Mineral Interests
	 	 	23	 
	Minimum Threshold Amount
	 	 	54	 
	MLP
	 	 	23	 
	MLP Subsidiaries
	 	 	23	 
	MLP Transactions
	 	 	23	 
	Monthly Date
	 	 	23	 
	Moody’s
	 	 	23	 
	Mortgage
	 	 	23	 
	Mortgaged Property
	 	 	24	 
	Net Cash Proceeds
	 	 	24	 
	Non-Consenting Lender
	 	 	24,74	 
	Non-Recourse Debt
	 	 	24	 
	Note
	 	 	25	 
	Obligations
	 	 	25	 
	oil
	 	 	12	 
	Oil and Gas Hedge Transaction
	 	 	25	 
	Oil and Gas Properties
	 	 	25	 
	OPA
	 	 	26	 
	Organic Documents
	 	 	26	 
	Other Currency
	 	 	74	 
	Other Taxes
	 	 	26	 
	parent
	 	 	35	 
	Participant
	 	 	122	 
	PBGC
	 	 	26	 
	Permitted Encumbrances
	 	 	26	 
	Permitted Investments
	 	 	28	 
	Permitted Senior Notes Debt
	 	 	30	 
	Permitted Senior Notes Documents
	 	 	31	 
	Person
	 	 	31	 
	Pipeline Partners
	 	 	31	 
	Plan
	 	 	31	 
	Pledge Agreement
	 	 	31	 
	Pledge Agreements
	 	 	31	 
	Pledging Subsidiary
	 	 	31	 
	PPSA
	 	 	31	 
	Prime Rate
	 	 	31	 
	Pro Rata Lender
	 	 	32	 
	Processing Partners
	 	 	31	 
	Production Payments
	 	 	32	 

x

 

	 	 	 	 	 
	 	 	Page No.	 
	Property
	 	 	32	 
	Property Description
	 	 	78	 
	Proved Mineral Interests
	 	 	32	 
	Proved Producing Mineral Interests
	 	 	32	 
	QELP
	 	 	32	 
	QR Canada
	 	 	32	 
	QRC Class C Shares
	 	 	32	 
	rate of exchange
	 	 	74	 
	RCRA
	 	 	12	 
	Recognized Value
	 	 	32	 
	Redetermination Date
	 	 	32	 
	Register
	 	 	122	 
	Regulation U
	 	 	32	 
	Related Parties
	 	 	33	 
	release
	 	 	12	 
	Required Lenders
	 	 	33	 
	Required Reserve Value
	 	 	33	 
	Reserve Report
	 	 	33	 
	Restricted Payment
	 	 	33	 
	Revolving Loan
	 	 	33	 
	S&P
	 	 	33	 
	Scheduled Redetermination
	 	 	34	 
	SEC
	 	 	34	 
	Security Agreement
	 	 	34	 
	Security Agreements
	 	 	34	 
	Security Documents
	 	 	34	 
	SFAS 133
	 	 	34	 
	SFAS 143
	 	 	34	 
	SFAS 144
	 	 	34	 
	Solvent
	 	 	34	 
	Specified Rate
	 	 	35	 
	Statutory Reserve Rate
	 	 	35	 
	Subsidiary
	 	 	35	 
	Supermajority Lenders
	 	 	35	 
	Sweep Accounts
	 	 	35	 
	Swingline Exposure
	 	 	36	 
	Swingline Lender
	 	 	36	 
	Swingline Loan
	 	 	36	 
	Taxes
	 	 	36	 
	Toronto
	 	 	36	 
	Type
	 	 	36	 
	U.S.
	 	 	36	 
	U.S. Borrowing Base
	 	 	36	 
	U.S. Borrowing Base Deficiency
	 	 	36	 
	U.S. Borrowing Base Properties
	 	 	37	 
	U.S. Dollars
	 	 	37	 

xi

 

	 	 	 	 	 
	 	 	Page No.	 
	U.S. Flex Portion
	 	 	37	 
	U.S. Only Lender
	 	 	37	 
	U.S. Required Lenders
	 	 	37	 
	U.S. Required Reserve Value
	 	 	37	 
	U.S. Supermajority Lenders
	 	 	37	 
	U.S.$
	 	 	37	 
	UCC
	 	 	36	 
	UCC Searches
	 	 	36	 
	under common control with
	 	 	3	 
	United States
	 	 	36	 
	Unutilized Commitment
	 	 	36	 
	Upfront Fee
	 	 	64	 
	Wholly-Owned Subsidiary
	 	 	37	 

xii

 

AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 9, 2007, is among QUICKSILVER
RESOURCES INC., a Delaware corporation (the “Borrower”), the LENDERS party hereto, BNP
PARIBAS and BANK OF AMERICA, N.A., as Co-Global Syndication Agents, FORTIS CAPITAL CORP., THE BANK
OF NOVA SCOTIA and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Co-Global Documentation Agents, and
JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, NA), as Global Administrative Agent.

     WHEREAS, the Borrower, the Global Administrative Agent and the financial institutions named
and defined therein as Lenders (the “Existing Lenders”) and Agents are parties to that
certain Credit Agreement dated as of July 28, 2004 (as amended or supplemented prior to the date
hereof, the “Existing Credit Agreement”), pursuant to which the Existing Lenders provided
certain loans and extensions of credit to the Borrower (all Indebtedness (as hereinafter defined)
arising pursuant to the Existing Credit Agreement is herein called the “Existing Loan
Indebtedness”); and

     WHEREAS, the parties hereto desire to amend and restate the Existing Credit Agreement in the
form of this Agreement and to appoint JPMorgan Chase Bank, N.A. as Global Administrative Agent
hereunder, and the Borrower desires to obtain Borrowings (as herein defined) to renew and restate
the Existing Loan Indebtedness and for other purposes permitted hereunder; and

     WHEREAS, after giving effect to the amendment and restatement of the Existing Credit Agreement
pursuant to the terms hereof, the Commitment of each Lender hereunder will be as set forth on
Schedule 2.1;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
and subject to the satisfaction (or waiver in accordance with  Section 10.2) of each
condition precedent contained in  Section 4.1 hereof, the satisfaction of which shall be
evidenced by the notification delivered by the Global Administrative Agent to the Borrower, the
Canadian Borrower, the Canadian Administrative Agent and the Combined Lenders of the Global
Effective Date, the parties hereto agree that the Existing Credit Agreement is hereby amended,
renewed, extended and restated in its entirety on (and subject to) the terms and conditions set
forth herein. It is the intention of the parties hereto that this Agreement supersedes and
replaces the Existing Credit Agreement in its entirety; provided, that, (a) such amendment
and restatement shall operate to renew, amend, modify and extend certain of the rights and
obligations of the Borrower under the Existing Credit Agreement and as provided herein, but shall
not act as a novation thereof, and (b) the Liens (as hereinafter defined) securing the Obligations
under and as defined in the Existing Credit Agreement and the liabilities and obligations of the
Borrower and its Subsidiaries under the Existing Credit Agreement and the Loan Documents (as
therein defined and referred to herein as the “Existing Loan Documents”) shall not be
extinguished but shall be carried forward and shall secure such obligations and liabilities as
amended, renewed, extended and restated hereby.
The parties hereto ratify and confirm each of the Existing Loan Documents entered into prior
to the Closing Date (but

1

 

excluding the Existing Credit Agreement) and agree that such Existing Loan
Documents continue to be legal, valid, binding and enforceable in accordance with their terms
(except to the extent amended, restated and superseded in their entirety in connection with the
transactions contemplated hereby), however, for all matters arising prior to the Global Effective
Date (including the accrual and payment of interest and fees, and matters relating to
indemnification and compliance with financial covenants), the terms of the Existing Credit
Agreement (as unmodified by this Agreement) shall control and are hereby ratified and confirmed.
The Borrower represents and warrants that, as of the Closing Date and the Global Effective Date,
there are no claims or offsets against, or defenses or counterclaims to, the obligations of the
Loan Parties (as defined in the Existing Credit Agreement) under the Existing Credit Agreement or
any of the other Existing Loan Documents.

     The parties hereto further agree as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

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

     “Additional Lender Certificate” is defined in Section 2.1(b).

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

     “Administrative Questionnaire” means an Administrative Questionnaire to be delivered
by the Lenders to the Global Administrative Agent, in a form supplied by the Global Administrative
Agent.

     “Advance Payment” is defined in the definition of “Advance Payment Contract” in this
 Section 1.1.

     “Advance Payment Contract” means any contract whereby any Loan Party either (a)
receives or becomes entitled to receive (either directly or indirectly) any payment (each, an
“Advance Payment”) to be applied toward payment of the purchase price of Hydrocarbons
produced or to be produced from any Borrowing Base Properties and which Advance Payment is, or is
to be, paid in advance of actual delivery of such production to or for the account of the purchaser
regardless of such production, or (b) grants an option or right of refusal to the purchaser to take
delivery of such production in lieu of payment, and, in either of the foregoing instances, the
Advance Payment is, or is to be, applied as payment in full for such production when sold and
delivered or is, or is to be, applied
as payment for a portion only of the purchase price thereof or of a percentage or share of
such production; provided, that (x) inclusion of

2

 

standard “take or pay” or prepayment
provisions in any gas sales or purchase contract or any other similar contract shall not, in and of
itself, constitute such contract as an Advance Payment Contract for the purposes hereof and (y) for
purposes hereof, the term “Advance Payment Contract” shall not include any Gas Balancing Agreement.

     “Affiliate” of any Person means any Person directly or indirectly controlled by,
controlling or under common control with such first Person. For purposes of this definition, any
Person which owns directly or indirectly 10% or more of the securities having ordinary voting power
for the election of directors or other governing body of a corporation or 10% or more of the
partnership or other ownership interests of any other Person (other than as a limited partner of
such other Person) will be deemed to “control” (including, with its correlative meanings,
“controlled by” and “under common control with”) such corporation or other Person.

     “Agents” means each of the Global Administrative Agent, the Co-Global Syndication
Agents and the Co-Global Documentation Agents.

     “Agreed Currency” is defined in Section 2.21(a).

     “Agreement” means this Amended and Restated Credit Agreement, as it may be amended,
supplemented, restated or otherwise modified and in effect from time to time.

     “Allocated Canadian Borrowing Base” is defined in Section 2.8(d)(ii).

     “Allocated U.S. Borrowing Base” is defined in Section 2.8(d)(i).

     “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day, and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively. If for any reason the
Global Administrative Agent shall have determined (which determination shall be conclusive and
binding, absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for
any reason, including, without limitation, the inability or failure of the Global Administrative
Agent to obtain sufficient bids or publications in accordance with the terms hereof, the Alternate
Base Rate shall be the Prime Rate until the circumstances giving rise to such inability no longer
exist.

     “Applicable Lending Office” means, for each Lender and for each Type of Loan, such
office of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify in writing to the Global Administrative Agent and the Borrower as the office by which its
Loans of such Type are to be made and/or issued and maintained.

     “Applicable Margin” means, for any day and with respect to any Eurodollar Loans, any
ABR Loans, any Specified Rate Swingline Loans or any Commitment Fees payable hereunder, as the case
may be, the applicable percentage rate per annum set forth below under the caption “Eurodollar
Loans”, “ABR Loans”, “Specified Rate Swingline Loans” or “Commitment Fees”, as the case may be,
based on the Global Borrowing Base Utilization on such date.

3

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Specified Rate	 	 
	 	 	 	 	 	 	Swingline	 	Commitment
	Global Borrowing	 	Eurodollar Loans	 	ABR Loans (in	 	Loans (in basis	 	Fees (in basis
	Base Utilization:	 	(in basis points)	 	basis points)	 	points)	 	points)
	Less than 50%
	 	100.0	 	0.0	 	100.0	 	25.0
	50% or greater and
less than 75%
	 	125.0	 	0.0	 	125.0	 	30.0
	75% or greater and
less than 90%
	 	150.0	 	0.0	 	150.0	 	35.0
	90% or greater
	 	175.0	 	0.0	 	175.0	 	37.5

For purposes of the foregoing, any change in the Applicable Margin will occur automatically without
prior notice upon any change in the Global Borrowing Base Utilization. Each change in the
Applicable Margin shall apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such change.

     “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Commitments most recently
set forth in the Register, giving effect to any assignments made in accordance with Section 10.4
or any increases or decreases in Commitments made in accordance with this Agreement.

     “Approved Engineer” means Schlumberger Data and Consulting Services, LaRoche Petroleum
Consultants Limited, or any other reputable firm of independent petroleum engineers or independent
petroleum consultants expert in the matters required to be performed in connection with the
preparation and delivery or auditing of a Reserve Report as shall be selected by the Borrower which
is reasonably satisfactory to the Global Administrative Agent.

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

     “Arrangers” means J.P. Morgan Securities Inc. and Banc of America Securities LLC, in
their capacity as co-lead arrangers and joint bookrunners.

     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 10.4),
and accepted by the Global Administrative Agent, in substantially the
form of Exhibit D or any other form approved by the Global Administrative Agent.

     “Assignment of Production” means an Assignment of Production delivered pursuant to the
Loan Documents in substantially the form of Exhibit M (or in such other
form as the Global Administrative Agent may approve), executed and delivered by the Borrower or any
Loan Party (other than Foreign Subsidiaries), as the case may be, as

4

 

amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms of this Agreement and
the other Loan Documents.

     “Authorized Officer” means, as to any Person, its Chief Executive Officer, its
President, its Chief Financial Officer, its Vice President-Treasurer, its Assistant Treasurer, its
Vice President-General Counsel, its Vice President-Controller or any other officer specified as
such to the Global Administrative Agent in writing by any of the aforementioned officers of such
Person or by resolution from the board of directors or similar governing body of such Person.

     “Availability Period” means the period from and including the Global Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of all of the Global
Commitments and Commitments.

     “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

     “Borrower” has the meaning given to such term in the preamble.

     “Borrower’s Global Effectiveness Notice” means a notice and certificate of the
Borrower properly executed by an Authorized Officer of the Borrower addressed to the Combined
Lenders and delivered to the Global Administrative Agent whereby the Borrower certifies its
satisfaction (except to the extent previously waived in accordance with the Combined Loan
Documents) of all the conditions precedent to the effectiveness under Section 4.1 of each Combined
Credit Agreement to be satisfied solely by the Borrower or any Loan Party or any “Loan Party” as
defined in the Canadian Credit Agreement.

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

     “Borrowing Base Allocation Notice” is defined in Section 2.8(d)(iii).

     “Borrowing Base Properties” means those Oil and Gas Properties owned by the Borrower
or any of its Subsidiaries, or in which the Borrower or
any of its Subsidiaries has an economic interest, that are evaluated for purposes of the then
current Global Borrowing Base.

     “Borrowing Request” means a written or telephonic request by an Authorized Officer of
the Borrower for (a) a Revolving Borrowing in accordance with Section 2.3, which if written shall
be in substantially the form of Exhibit E-1, or (b) a Swingline Borrowing in accordance
with  Section 2.4, which if written shall be substantially in the form of Exhibit
E-3, or, in either case, any other form approved by the Global Administrative Agent.

     “Business Day” means any day that is not a Saturday, Sunday or a United States federal
holiday or any other day on which the Chicago office of the Global Administrative Agent is closed;
provided that, when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits in
the London interbank market.

5

 

     “Canadian Administrative Agent” means JPMorgan Chase Bank, N.A., Toronto Branch
(successor by merger to Bank One, NA, Canada Branch), in its capacity as Canadian administrative
agent for the lenders party to the Canadian Credit Agreement, and any successor thereto.

     “Canadian Borrower” means QR Canada, as borrower under the Canadian Credit Agreement.

     “Canadian Commitment” means, with respect to each Canadian Lender, the “Commitment” of
such Canadian Lender (as defined in the Canadian Credit Agreement). The initial aggregate
principal amount of the Canadian Commitments of the Canadian Lenders is U.S.$423,529,411.78.

     “Canadian Credit Agreement” means that certain Amended and Restated Credit Agreement
of even date herewith among the Canadian Borrower, the Canadian Lenders, the Global Administrative
Agent, the Canadian Administrative Agent and the other agents party thereto, as it may be amended,
supplemented, restated or otherwise modified and in effect from time to time.

     “Canadian Dollars” or “C$” refers to lawful money of Canada.

     “Canadian Flex Portion” means that unallocated portion of the Canadian Commitments
remaining after making the allocations described in  Section 2.1(c)(ii) and (iii).

     “Canadian Lenders” means the financial institutions from time to time party to the
Canadian Credit Agreement and their respective successors and permitted assigns.

     “Canadian Loan Documents” means the Canadian Credit Agreement and the Canadian
Security Documents, together with all exhibits, schedules and attachments thereto, and all other
agreements, documents, certificates, financing statements
and instruments from time to time executed and delivered pursuant to or in connection with any
of the foregoing.

     “Canadian Obligations” means, at any time, the Equivalent Amount in U.S. Dollars of
the sum of (a) the aggregate “Credit Exposure” (as defined in the Canadian Credit Agreement) of the
Canadian Lenders under the Canadian Loan Documents plus (b) all accrued and unpaid interest
and fees owing to the Canadian Lenders under the Canadian Loan Documents plus (c) all
Hedging Obligations in connection with all Hedging Agreements between the Canadian Borrower or any
of its Subsidiaries and any Canadian Lender or any Affiliate of a Canadian Lender plus (d)
all other obligations (monetary or otherwise) of the Canadian Borrower to any Canadian Lender or
the “Agents” (as defined in the Canadian Credit Agreement) under the Canadian Credit Agreement,
whether or not contingent, arising under or in connection with any of the Canadian Loan Documents.

     “Canadian Security Documents” means the “Security Documents” as defined under the
Canadian Credit Agreement.

     “Capital Lease Obligations” means, for any Person, all obligations of such Person to
pay rent or other amounts under a lease of (or other agreement conveying the right to use)

6

 

Property
to the extent such obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of
such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

     “Casualty Event” means any loss, casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of, any Collateral.

     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. § 9601, et. seq., as amended from time to time.

     “Certificate of Mortgaged Properties” is defined in  Section 4.1(s).

     “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement, or (c)
compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.16(b), by any
Applicable Lending Office of such Lender or any Issuing Bank or by such Lender’s or any Issuing
Bank’s holding company, if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of this Agreement.

     “Change of Control” means the occurrence, after the date hereof, of any of the
following events: (a) any Person or “group” (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended), other than the Darden Group, shall have acquired
ownership, directly or indirectly, beneficially or of record, of Equity Interests representing more
than 35% of the aggregate ordinary voting power represented
by the issued and outstanding Equity Interests of the Borrower or (b) the occupation of a
majority of the seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by the board of directors or the stockholders of the
Borrower nor (ii) appointed by directors a majority of whom was so nominated, or (c) except as
permitted by Section 7.4 and Section 7.5(a), the Borrower shall cease to own, directly or
indirectly, 100% of the issued and outstanding Equity Interests of each Material Subsidiary.

     “Chicago” means Chicago, Illinois.

     “Class,” when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

     “Closing Date” means the date of this Agreement.

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

     “Co-Global Documentation Agents” means Fortis Capital Corp., The Bank of Nova Scotia
and Deutsche Bank Trust Company Americas, in their capacity as co-global documentation agents for
the Lenders hereunder, and their respective successors.

7

 

     “Co-Global Syndication Agents” means BNP Paribas and Bank of America, N.A., in their
capacity as co-global syndication agents for the Lenders hereunder, and their respective
successors.

     “Collateral” means any and all “Collateral” and “Mortgaged Property”, as defined in
the Security Documents and the Canadian Security Documents.

     “Combined Commitments” means the aggregate of (a) the Commitments of the Lenders
hereunder and (b) the Canadian Commitments. The initial aggregate principal amount of the Combined
Commitments is U.S.$1,200,000,000.

     “Combined Credit Agreements” means this Agreement and the Canadian Credit Agreement.

     “Combined Credit Exposure” means, at the time of determination, the sum of (a) the
aggregate Credit Exposure of the Lenders hereunder, and (b) the Equivalent Amount in U.S. Dollars
of the aggregate “Credit Exposure” (as defined in the Canadian Credit Agreement) of the Canadian
Lenders.

     “Combined Lenders” means the Lenders hereunder and the Canadian Lenders.

     “Combined Loan Documents” means the Loan Documents and the Canadian Loan Documents.

     “Combined Loans” means the loans made by the Combined Lenders to the Borrower and the
Canadian Borrower pursuant to the Combined Loan Documents.

     “Combined Obligations” means the aggregate of the Obligations and the Canadian
Obligations (without duplication of any Hedging Obligations).

     “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder,
and the commitment of the Swingline Lender to make Swingline Loans, expressed as an amount
representing the maximum aggregate amount of such Lender’s Credit Exposure hereunder, as such
commitment may be (a) adjusted from time to time pursuant to Section 2.1(c), (b) reduced or
increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.4,
and (c) terminated pursuant to Section 8.2 or Section 8.3; provided, however,
that the Commitment of any Lender shall at no time be greater than its Global Commitment. The
initial amount of each Lender’s Commitment is set forth on Schedule 2.1, or in the
Register following any Assignment and Acceptance to which such Lender is a party. The initial
aggregate principal amount of the Commitments of the Lenders is U.S.$776,470,588.22.

     “Commitment Fee” is defined in Section 2.12(a).

     “Consolidated Current Assets” means, for any Person at any time, the current assets of
such Person and its Consolidated Subsidiaries determined in accordance with GAAP at such time,
plus, in the case of Borrower, the Unutilized Commitment at such time, but excluding, for
any Person at any time, (a) any current asset of such Person for any Hedging Agreement

8

 

resulting
from the requirements of SFAS 133 at such time, and (b) current SFAS 143 assets. Notwithstanding
anything to the contrary contained herein, including the definition of “Consolidated Subsidiaries,”
upon closing of the IPO and thereafter, all calculations of Consolidated Current Assets shall be
calculated, determined and adjusted to exclude, for any applicable period or date of determination,
in each case, occurring on and after the closing of the IPO and thereafter, the current assets of
the MLP Subsidiaries determined in accordance with GAAP for such period or date of determination;
provided, however, that, notwithstanding the foregoing, at no time, whether before,
on or after the closing of the IPO, shall any assets received by Holdings, or any of its direct or
indirect parent companies, from any of the MLP Subsidiaries be excluded from the calculation of
Consolidated Current Assets.

     “Consolidated Current Liabilities” means, for any Person at any time, the current
liabilities of such Person and its Consolidated Subsidiaries determined in accordance with GAAP at
such time, but excluding (a) any current liability for any Hedging Agreement resulting from the
requirements of SFAS 133 at such time, and (b) current SFAS 143 liabilities, and in the case of
Borrower, excluding current maturities of Long Term Debt of Borrower and its Consolidated
Subsidiaries outstanding at such time. Notwithstanding anything to the contrary contained herein,
including the definition of “Consolidated Subsidiaries,” upon closing of the IPO and thereafter,
all calculations of Consolidated Current Liabilities shall be calculated, determined and adjusted
to exclude, for any applicable period or
date of determination, in each case, occurring on and after the closing of the IPO, the
current liabilities of the MLP Subsidiaries determined in accordance with GAAP for such period or
date of determination.

     “Consolidated EBITDAX” means, for any Person for any period, the Consolidated Net
Income of such Person for such period, plus each of the following determined for such Person and
its Consolidated Subsidiaries on a consolidated basis for such period: (a) any provision for (or
less any benefit from) income, sales or franchise Taxes included in determining Consolidated Net
Income; (b) Consolidated Net Interest Expense deducted in determining Consolidated Net Income; (c)
depreciation, depletion and amortization expense deducted in determining Consolidated Net Income;
(d) any unusual or non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income for such period,
non-cash losses on sales of assets outside of the ordinary course of business); (e) other non-cash
charges deducted in determining Consolidated Net Income to the extent not already included in
clauses (b), (c) and (d) of this definition; and (f) costs and expenses
associated with seismic, geological and geophysical services performed in connection with, and
attributable to, oil and gas exploration, to the extent deducted in determining Consolidated Net
Income. Notwithstanding anything to the contrary contained herein, including the definition of
“Consolidated Subsidiaries,” upon closing of the IPO and thereafter, all calculations of
Consolidated EBITDAX shall be calculated, determined and adjusted to exclude, for any applicable
period or date of determination, in each case, occurring on and after the closing of the IPO, any
income, loss, results of operations, deduction, charge or other adjustments, in each case
determined in accordance with GAAP, with respect to the MLP Subsidiaries for such period or date of
determination; provided, however, that, notwithstanding the foregoing, at no time,
whether before, on or after the closing of the IPO, shall any income or gains of Holdings, or any
of its direct or indirect parent companies, attributable to assets received by Holdings, or any of
its direct or indirect parent companies, from any of the MLP Subsidiaries be excluded from the
calculation of Consolidated EBITDAX.

9

 

     “Consolidated Net Income” means, for any Person as of any period, the net income (or
loss) of such Person and its Consolidated Subsidiaries for such period determined in accordance
with GAAP, but excluding: (a) the income of any other Person (other than its Consolidated
Subsidiaries) in which such Person or any of its Subsidiaries has an ownership interest, unless
received by such Person or its Consolidated Subsidiaries in a cash distribution; (b) any after-tax
gains attributable to asset dispositions; (c) any non-cash gains, losses or charges on any Hedging
Agreement resulting from the requirements of SFAS 133 for that period; (d) any non-cash gains,
losses or charges resulting from the requirements of SFAS 143 or SFAS 144 for that period; and (e)
to the extent not included in clauses (a), (b), (c) and (d) above,
any after-tax (i) extraordinary gains (net of extraordinary losses) or (ii) non-cash nonrecurring
gains.

     “Consolidated Net Interest Expense” means, for any Person for any period, the
remainder of the following for such Person and its Consolidated Subsidiaries for such period: (a)
interest expense determined in accordance with GAAP, minus (b) interest income determined in
accordance with GAAP. Notwithstanding anything to the contrary contained herein, including the
definition of “Consolidated Subsidiaries,” upon the closing of the IPO and thereafter, all
calculations of Consolidated Net
Interest Expense shall be calculated, determined and adjusted to exclude for any applicable
period or date of determination, in each case, occurring on and after the closing of the IPO, the
interest expense and interest income, in each case determined in accordance with GAAP, of the MLP
Subsidiaries for such period or date of determination.

     “Consolidated Subsidiaries” means each Subsidiary of a Person (whether now existing or
hereafter created or acquired) the financial statements of which shall be (or should have been)
consolidated with the financial statements of such Person in accordance with GAAP. Unless
otherwise indicated, each reference to the term “Consolidated Subsidiary” means a
Subsidiary consolidated with the Borrower.

     “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, contract, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound.

     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise, but not solely by being an officer or director of
that Person. “Controlling” and “Controlled” have meanings correlative thereto.

     “Credit Exposure” means, with respect to any Lender at any time, without duplication,
the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure
and Swingline Exposure at such time.

     “Darden Group” means, collectively, Mercury Exploration, Mercury Production, QELP, The
Discovery Fund, Pennsylvania Avenue Limited Partnership, Pennsylvania Management Company, the
estate of Frank Darden, Lucy Darden, Anne Darden Self, Glenn Darden and Thomas Darden, and their
respective successors, assigns, designees, heirs, beneficiaries, trusts, estates and controlled
affiliates.

     “Debenture” shall have the meaning set forth in the Canadian Credit Agreement.

10

 

     “Debt Issuance Reduction Amount” means, in connection with the issuance of any
Permitted Senior Notes Debt and any reduction of the Global Borrowing Base and U.S. Borrowing Base
in connection therewith in accordance with  Section 2.8(h), an amount equal to U.S. $0.30
per U.S. Dollar on the gross aggregate principal amount of such Permitted Senior Notes Debt issued
and incurred by the Borrower. For avoidance of doubt, and as an example only, subject to the
provisions of  Section 2.8(h), in the event the Borrower incurs Permitted Senior Notes Debt
in accordance with this Agreement in an amount equal to U.S. $300,000,000, the “Debt Issuance
Reduction Amount” will be equal to U.S. $90,000,000.

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

     “Deficiency Notification Date” is defined in Section 2.8(f).

     “Designation” means the designation of a Lender as a Flex Lender, a Pro Rata Lender,
or a U.S. Only Lender; provided that no Lender may have more than one Designation at any
time.

     “Discretionary Borrowing Base Reallocation” is defined in Section 2.8(d)(iv).

     “Distribution” by any Person, means (a) with respect to any stock issued by such
Person or any partnership, joint venture, limited liability company, membership or other Equity
Interest of such Person, the retirement, redemption, purchase, or other acquisition for value of
any such stock or partnership, joint venture, limited liability company, membership or other Equity
Interest, (b) the declaration or payment of any dividend or other distribution on or with respect
to any stock, partnership, joint venture, limited liability company, membership or other Equity
Interest of any Person, and (c) any other payment by such Person with respect to such stock,
partnership, joint venture, limited liability company, membership or other Equity Interest of such
Person; provided, however, that, notwithstanding anything to the contrary contained
herein or in any other Combined Loan Document, the term “Distribution” shall be deemed not
to include any cash payment or distribution by the Borrower to any holder of Indebtedness of the
Borrower that is convertible into capital stock of the Borrower that is made (or agreed to be made)
in satisfaction, in whole or in part, of (i) such Indebtedness or (ii) the Borrower’s obligations
to issue capital stock upon any such holder’s conversion of such Indebtedness to capital stock of
the Borrower, in either case, whether paid or distributed by the Borrower upon any such Holder’s
request to convert any such Indebtedness to capital stock of the Borrower or otherwise.

     “Environmental Complaint” means any complaint, summons, citation, notice, directive,
order, claim, litigation, investigation, proceeding, judgment, letter or other communication from
any federal, state or municipal authority or any other party against any Loan Party involving (a) a
Hazardous Discharge from, onto or about any real property owned, leased or operated at any time by
any Loan Party, or (b) a Hazardous Discharge caused, in whole or in part, by any Loan Party or by
any Person acting on behalf of or at the instruction of any Loan Party, or (c) any violation of any
Environmental Law by any Loan Party.

     “Environmental Laws” means any and all applicable Governmental Rules pertaining to
health (with respect to exposure to Hazardous Materials) or the environment in effect in any and
all jurisdictions in which the Borrower or any Subsidiary is conducting or at any time has

11

 

conducted business, or where any Property of the Borrower or any Subsidiary is located, including,
without limitation, OPA, the Clean Air Act, as amended, CERCLA, the Federal Water Pollution Control
Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource
Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, the Environmental
Protection and Enhancement Act, R.S.A. 2000, c. E-12, as amended, the Canadian Environmental
Protection Act, 1999. S.C. 1999. c. 33, as amended, and other environmental conservation or
protection laws. The term “oil” shall have the meaning specified in
OPA, the term “release” (or “threatened release”) shall have the meaning specified in
CERCLA, and the term “disposal” (or “disposed”) shall have the meaning specified in RCRA;
provided, however, that (i) in the event either OPA, CERCLA or RCRA is amended so
as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent
to the effective date of such amendment and (ii) to the extent the laws of the state, province or
territory in which any Property of the Borrower or any Subsidiary is located establish a meaning
for “oil”, “release”, or “disposal” which is broader than that specified in either OPA, CERCLA or
RCRA, such broader meaning shall apply.

     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any of its Subsidiaries resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment, or (e) any contract or agreement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

     “Equity Interests” means, with respect to any Person, shares of the capital stock,
partnership interests, membership interests in a limited liability company, beneficial interests in
a trust or other equity interests in such Person or any warrants, options or other rights to
acquire any of the foregoing.

     “Equivalent Amount” means, as at any date, the amount of Canadian Dollars into which
an amount of U.S. Dollars may be converted, or the amount of U.S. Dollars into which an amount of
Canadian Dollars may be converted, in either case at the rate of exchange for U.S. Dollars and
Canadian Dollars as published in The Wall Street Journal for such day or, if there is no such rate
of exchange so published for such day, at The Bank of Canada mid-point noon spot rate of exchange
for such date in Toronto at approximately 12:00 noon, Toronto time on such date.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import, together with the rules, regulations and interpretations
thereunder, in each case as in effect from time to time.

     “ERISA Affiliate” means all members of a controlled group of corporations and all
members of a controlled group of trades or businesses (whether or not incorporated) under

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common control which, together with the Borrower, are treated as a single employer under Section 414 (b)
or 414 (c) of the Code or Section 4001(b)(1) of ERISA.

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

     “Eurodollar Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the applicable British Bankers’ Association LIBOR rate for deposits in U.S. Dollars as
reported by any generally recognized financial information service as
of 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period,
and having a maturity equal to such Interest Period, provided that, if no such British
Bankers’ Association LIBOR rate is available to the Global Administrative Agent, the applicable
Eurodollar Rate for the relevant Interest Period shall instead be the rate determined by the Global
Administrative Agent to be the rate at which JPMorgan or one of its Affiliate banks offers to place
deposits in U.S. Dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, in the
approximate amount of JPMorgan’s relevant Eurodollar loan and having a maturity equal to such
Interest Period.

     “Event of Default” has the meaning assigned to such term in Section 8.1.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.

     “Excluded Taxes” means, with respect to any Agent, any Lender, any Issuing Bank or any
other recipient of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such recipient is or was
organized or in which its principal office is or was located or, in the case of any Lender, in
which its Applicable Lending Office is or was 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
recipient is or was located and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.20(b)), any withholding tax that is imposed
on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new Applicable Lending Office) or is attributable to such Foreign
Lender’s failure to comply with Section 2.18(e), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new Applicable Lending Office
(or assignment), to receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.18(a).

     “Existing Convertible Debentures” means, collectively, each of Borrower’s 1.875%
Convertible Subordinated Debentures due 2024, as amended, restated, renewed, extended,
supplemented, increased, replaced or otherwise modified from time to time to the extent permitted
hereunder and under the Existing Convertible Note Indenture.

     “Existing Convertible Note Indenture” means that certain Indenture dated as of
November 1, 2004, between the Borrower and JPMorgan, as the same may be modified,

13

 

amended, renewed,
supplemented, extended, restated, increased or replaced from time to time to the extent permitted
hereunder and under the Existing Convertible Note Indenture.

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

     “Existing Lenders” has the meaning given to such term in the recitals.

     “Existing Letter of Credit” is defined in  Section 2.5(j).

     “Existing Loan Documents ” has the meaning given to such term in the recitals.

     “Existing Loan Indebtedness” has the meaning given to such term in the
recitals.

     “Existing Subordinate Debt” means all unsecured Indebtedness of the Borrower and its
Subsidiaries outstanding from time to time under the Existing Subordinate Note Documents (including
Guarantees thereof by Subsidiaries), including all renewals, refinancings, replacements, and
extensions thereof to the extent permitted hereunder and made in accordance with the terms of the
Combined Loan Documents (including  Section 7.14).

     “Existing Subordinate Note Documents” means the Existing Subordinate Notes, the
Existing Subordinate Note Indenture, the Existing Convertible Debentures, the Existing Convertible
Note Indenture, and all promissory notes, guarantees and other documents, instruments and
agreements executed and delivered pursuant to the Existing Subordinate Note Indenture or the
Existing Convertible Note Indenture evidencing, guaranteeing or otherwise pertaining to the
Existing Subordinate Debt.

     “Existing Subordinate Note Indenture” means that certain Indenture dated as of
December 22, 2005, between the Borrower and JPMorgan, as Trustee, as supplemented by that certain
(a) First Supplemental Indenture, dated as of March 16, 2006, among the Borrower, the subsidiary
guarantors party thereto and JPMorgan, as Trustee, (b) Second Supplemental Indenture, dated as of
July 31, 2006, among the Borrower, the subsidiary guarantors party thereto and JPMorgan, as
Trustee, and (c) Third Supplemental Indenture, dated as of September 26, 2006, among the Borrower,
the subsidiary guarantors party thereto and JPMorgan, as Trustee, and as the same may be modified,
amended, renewed, supplemented, restated, increased or replaced from time to time to the extent
permitted hereunder and under the Existing Subordinate Note Indenture.

     “Existing
Subordinate Notes” means, collectively, each of
Borrower’s
71/2% Senior
Subordinated Notes due 2016, as amended, restated, renewed, extended, supplemented, increased,
replaced or otherwise modified from time to time to the extent permitted hereunder and under the
Existing Subordinate Note Indenture.

     “Falcon Seaboard Settlement Agreement” means that certain settlement agreement dated
as of September 30, 1994, pursuant to which Borrower (as successor in interest to Mercury
Exploration) is obligated to deliver certain gas volumes at a fixed price, as more particularly
described therein.

14

 

     “Federal Funds Effective Rate” means, for any day, an interest rate per annum equal to
the weighted average (rounded upwards, if necessary, to the next 1/100th of 1%) of the
rates on overnight Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published for such day (or if such day is not a Business
Day, for the immediately 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 (rounded upwards, if
necessary, to the next 1/100th of 1%) of the quotations at approximately 10:00 a.m.
(Chicago time) on such day on such transactions received
by the Global Administrative Agent from three Federal funds brokers of recognized standing
selected by the Global Administrative Agent in its sole reasonable discretion.

     “Fee Letter” means, collectively, that certain (a) Fee Letter (the “JPM Fee
Letter”) dated as of January 19, 2007, by and among the Borrower, JPMorgan Chase Bank, N.A.,
JPMorgan Chase Bank, N.A., Toronto Branch, and J.P. Morgan Securities Inc., and (b) Fee Letter (the
“BofA Fee Letter”) dated as of January 24, 2007, by and among the Borrower, Bank of
America, N.A., Bank of America, N.A. (by its Canada branch) and Banc of America Securities LLC, as
each such letter may be amended, supplemented, restated or otherwise modified from time to time in
accordance with the Loan Documents.

     “Financial Officer” of any Person means its Chief Financial Officer; provided,
that if no Person serves in such capacity, “Financial Officer” shall mean the highest
ranking executive officer of such Person with responsibility for accounting, financial reporting,
cash management and similar functions.

     “Financial Statements” means the financial statement or statements of the Borrower and
its Consolidated Subsidiaries described or referred to in Section 3.4.

     “Financing Transactions” means the execution, delivery and performance by each Loan
Party of the Loan Documents to which it is to be a party, the borrowing of the Loans, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.

     “Fiscal Quarter” means the three (3) month periods ending on March 31, June 30,
September 30 and December 31 of each Fiscal Year.

     “Fiscal Year” means a twelve (12) month period ending December 31.

     “Flex Lender” means any Lender identified as a “Flex Lender” on Schedule 2.1,
as such Schedule 2.1 is replaced or amended from time to time pursuant to the terms
hereof.

     “Flex Percentage” means, with respect to each Flex Lender (and its Affiliate, if any,
that is a Canadian Lender), a percentage determined by dividing the Global Commitment associated
with such Flex Lender (and such Affiliate, if any) by the aggregate Global Commitments associated
with all Flex Lenders (and their Affiliates, if any, that are Canadian Lenders).

     “Flex Portion” means that unallocated portion of the Combined Commitments remaining
after making the allocations described in Section 2.1(c)(ii) and (iii).

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     “Foreign Entity” means any Person (other than a natural person and a Foreign
Subsidiary) that is organized under the laws of a jurisdiction other than the United States of
America or any State thereof or the District of Columbia.

     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than the United States of America or any State thereof or the District of Columbia.

     “Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the District of
Columbia.

     “GAAP” means generally accepted accounting principles in the United States of America
as in effect from time to time.

     “Gas Balancing Agreement” means any agreement or arrangement whereby any Loan Party,
or any other party having an interest in any Hydrocarbons to be produced from Mineral Interests in
which any Loan Party owns an interest, has a right to take more than its proportionate share of
production therefrom.

     “Global Administrative Agent” means JPMorgan Chase Bank, N.A. (successor by merger to
Bank One, NA), in its capacity as global administrative agent for the Combined Lenders, and its
successors.

     “Global Borrowing Base” means the “Global Borrowing Base” as determined from time to
time pursuant to Section 2.8.

     “Global Borrowing Base Deficiency” means, at the time of determination, the amount by
which (a) the Combined Credit Exposure exceeds (b) the then current Global Borrowing Base.

     “Global Borrowing Base Designation Notice” is defined in Section 2.8(b).

     “Global Borrowing Base Utilization” means, at the time of determination, an amount
(expressed as a percentage) equal to the quotient of (a) the Combined Credit Exposure divided by
(b) the Global Borrowing Base.

     “Global Commitment” means, with respect to each Lender (and its Affiliate, if any,
that is a Canadian Lender), the amount set forth on Schedule 2.1 as the “Global
Commitment” for such Lender (and such Affiliate, if any) or in the Register following any
Assignment and Acceptance to which such Lender (and such Affiliate, if any) is a party, as such
Global Commitment may be (a) reduced from time to time pursuant to Section 2.9, (b) increased from
time to time pursuant to Section 2.1(b), (c) reallocated from time to time pursuant to Section
2.1(c), (d) reduced or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.4, and (e) terminated pursuant to Section 8.2 or 8.3. The initial
aggregate principal amount of the Global Commitments of the Lenders (and their respective
Affiliates who are Canadian Lenders) is U.S.$1,200,000,000.

     “Global Commitment Increase” is defined in Section 2.1(b).

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     “Global Effective Date” means the date on which the conditions specified in Section
4.1 of each Combined Credit Agreement are satisfied (or waived in accordance with Section 10.2 of
each Combined Credit Agreement).

     “Governmental Approval” means (a) any authorization, consent, approval, license,
ruling, permit, tariff, rate, certification, waiver, exemption, filing, variance, claim, order,
judgment or decree of, or with, (b) any required notice to, (c) any declaration of or with, or (d)
any registration by or with, any Governmental Authority.

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

     “Governmental Rule” means any statute, law, regulation, ordinance, rule, judgment,
order, decree, permit, concession, grant, franchise, license, agreement, directive or other
governmental restriction or binding form of decision of or determination by, or binding
interpretation or administration of any of the foregoing by, any Governmental Authority, whether
now or hereafter in effect.

     “Guarantee” by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement conditions, by “comfort letter” or
other similar undertaking of support or otherwise) or (b) entered into for the purpose of assuring
in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part), provided,
that the term “Guarantee” shall not include (x) endorsements of instruments for collection
or deposit in the ordinary course of business or (y) indemnities given in connection with asset
sales or otherwise provided in the ordinary course of business. The terms “Guarantee” and
“Guaranteed” used as a verb shall have a correlative meaning.

     “Guarantor”
means each Material Subsidiary listed on Exhibit L (except QR Canada) under the heading “Material Subsidiaries” and each Subsidiary that is
required to execute a Guaranty pursuant to Section 5.15.

     “Guaranty” means a Guaranty made pursuant to Section 4.1(a) or Section 5.15 by a
Guarantor in favor of the Global Administrative Agent, substantially
in the form of Exhibit G, as amended, supplemented, restated or otherwise modified from time to
time in accordance with the terms of this Agreement and the other Loan Documents. The term
“Guaranties” shall include each and every Guaranty executed and delivered by a Guarantor
hereunder.

17

 

     “Hazardous Discharge” means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping of any
Hazardous Material from or onto any real property owned, leased or operated at any time by any Loan
Party or any real property owned, leased or operated by any other Person.

     “Hazardous Material” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law, and any petroleum,
petroleum products or petroleum distillates and associated oil or natural gas exploration,
production and development wastes that are not exempted or excluded from being defined as
“hazardous substances”, “hazardous materials”, “hazardous wastes” and “toxic substances” under such
Environmental Laws.

     “Hedge Transaction” means any financial derivative transaction, including any
commodity, interest rate, currency or other derivative, swap, option, collar, futures contract or
other contract pursuant to which a Person hedges risks related to commodity prices, interest rates,
currency exchange rates, securities prices or financial market conditions. “Hedge
Transactions” expressly includes Oil and Gas Hedge Transactions.

     “Hedging Agreements” means, collectively, any agreement, instrument, arrangement or
schedule or supplement thereto evidencing any Hedge Transaction.

     “Hedging Obligations” means, with respect to any Person, all liabilities (including
but not limited to obligations and liabilities of such Person arising in connection with or as a
result of early or premature termination of a Hedging Agreement or Hedge Transaction, whether or
not occurring as a result of a default thereunder) of such Person under a Hedging Agreement or
Hedge Transaction.

     “Highest Lawful Rate” is defined in Section 10.13.

     “Holdings”
is defined in Exhibit N.

     “Hydrocarbons” means, collectively, oil, gas, casinghead gas, drip gasolines, natural
gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be
produced in conjunction therewith, and all products, by-products and all other substances refined,
separated, settled or derived therefrom or the processing thereof, and all other minerals and
substances, including, but not limited to, liquified petroleum gas, natural gas, kerosene, sulphur,
lignite, coal, uranium, thorium, iron, geothermal steam, water, carbon dioxide, helium, and any and
all other minerals, ores, or substances of value, and the products and proceeds therefrom,
including, without limitation, all gas resulting from the in-situ combustion of coal or lignite.

     “Immaterial Title Deficiencies” has the meaning assigned to such term in Section 3.9.

     “Indebtedness” means, for any Person, (without duplication): (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) all other indebtedness (including Capital Lease

18

 

Obligations, other than oil and gas leases entered into in the ordinary course of business) of such
Person on which interest charges are customarily paid or accrued, (d) all Guarantees by such
Person, (e) the unfunded or unreimbursed portion of all letters of credit, banker’s acceptances,
surety or other bonds or instruments issued for the account of such Person, (f) any amount owed by
such Person representing the deferred purchase price of property or services (other than accounts
payable incurred in the ordinary course of business and which have not been outstanding for more
than ninety (90) days past the applicable due date, or if outstanding beyond such date, such
account payable is being contested in good faith and such Person has established appropriate
reserves, if any, as required in conformity with GAAP), (g) all obligations of such Person secured
by a Lien on any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person, (h) all obligations under
operating leases (i) which require such Person or its Affiliate to make payments over the term of
such lease, including payments at termination, based on the purchase price or appraisal value of
the Property subject to such lease plus a marginal interest rate, and (ii) that are used primarily
as a financing vehicle for such Property, (i) obligations to deliver goods or services, including,
without limitation, Hydrocarbons and the forward sale of Hydrocarbons, in consideration of Advance
Payments, (j) the undischarged balance of any Production Payment created by such Person or for the
creation of which such Person directly or indirectly received payment, to the extent such
Production Payment would be reflected as indebtedness on a consolidated balance sheet of such
Person, (k) net liabilities of such Person under all Hedging Obligations determined in accordance
with GAAP, and (l) all liability of such Person as a general partner of a partnership for
obligations of such partnership of the nature described in clauses (a) through (k)
preceding.

     “Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.

     “Indemnitee” is defined in Section 10.3(b).

     “Initial Reserve Report” means (a) that certain reserve report which was prepared by
Schlumberger Data and Consulting Services, evaluating the Oil and Gas Properties of the Borrower
and its Subsidiaries as of December 31, 2006, located in the United States and (b) that certain
reserve report which was prepared by LaRoche Petroleum Consultants Limited, evaluating the Oil and
Gas Properties of the Borrower and its Subsidiaries as of December 31, 2006, located in Canada,
true and correct copies of which have been delivered to the Global Administrative Agent.

     “Intercreditor Agreement” means that certain Amended and Restated Intercreditor
Agreement dated as of even date herewith by and among the Global Administrative Agent on behalf of
the “Combined Lenders”, the “Combined Issuing Banks”, the “Accepting Lenders”, the “Lender Hedge
Counterparties” and the other “Agents” as defined therein, and the Canadian Administrative Agent on
behalf of the “Canadian Lenders”, the “Canadian Issuing Banks”, the “Accepting Lenders”, the
“Canadian Lender Hedge Counterparties” and the other “Canadian Agents” as defined therein, as
amended, supplemented,
restated or otherwise modified from time to time in accordance with the Combined Loan
Documents.

     “Interest Election Request” means a written or telephonic request by an Authorized
Officer of the Borrower to (a) convert or continue a Revolving Borrowing in accordance with

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Section 2.7, which if written shall be in substantially the form of Exhibit E-2 or any
other form approved by the Global Administrative Agent, or (b) convert a Swingline Borrowing in
accordance with  Section 2.4, which if written shall be in substantially the form of
Exhibit E-4 or any other form approved by the Global
Administrative Agent.

     “Interest Payment Date” means (a) with respect to any ABR Revolving Loan, the last day
of each March, June, September and December, (b) with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of
a Eurodollar Borrowing with an Interest Period of more than three (3) months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three (3) months’
duration after the first day of such Interest Period, and (c) with respect to any Swingline Loan,
the day that such Swingline Loan is required to be repaid pursuant to  Section 2.10(a)(ii);
provided that, if a Swingline Loan is converted to a Revolving Loan in accordance with
 Section 2.4 on a day which is not an Interest Payment Date with respect to Revolving Loans
as provided in clauses (a) or (b) of this definition, then the Interest Payment
Date for such converted Swingline Loan shall, as of the effective date of such conversion to a
Revolving Loan and thereafter, be the Interest Payment Date for such Revolving Loan.

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

     “Investment” means, with respect to any Person, any loan, advance, extension of credit
or capital contribution to, investment in or purchase of the stock or other securities of, or
interests in, any other Person.

     “IPO”
is defined in Exhibit N.

     “Issuing Bank” means (i) the Global Administrative Agent and (ii) any other Lender
agreed to among the Borrower and the Global Administrative Agent to issue Letters of Credit. An
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.

20

 

     “JPMorgan” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.

     “Judgment Currency” is defined in Section 2.21(b).

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

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

     “Lender Affiliate” means, with respect to any Lender, (a) an Affiliate of such Lender
or (b) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in
making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit
in the ordinary course of its business and is administered or managed by a Lender or an Affiliate
of such Lender and with respect to any Lender that is a fund which invests in bank loans and
similar extensions of credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

     “Lender Parties” means the Agents, the Lenders, the Issuing Banks and each Affiliate
of a then current Lender that is party to a Hedge Agreement with the Borrower (or with any Loan
Party that is organized in the United States, any state thereof or the District of Columbia, and
each of their respective successors, transferees and assigns).

     “Lenders” means the Persons listed on Schedule 2.1 and any other Person that
shall have become a party to this Agreement pursuant to an Additional Lender Certificate or an
Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to
an Assignment and Acceptance. Unless the context otherwise requires, the term “Lenders”
shall include the Swingline Lender.

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

     “Lien” means (a) any lien, charge or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment,
bailment or margin account for security purposes, (b) Production Payments and the like which
constitute Indebtedness, payable out of Oil and Gas Properties or (c) reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions, leases
and other title exceptions and encumbrances affecting title to Property. For the purposes of
this Agreement, Borrower and its Subsidiaries shall be deemed to own subject to a Lien any asset
which is acquired or held subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such asset.

     “Loan Documents” means (a) this Agreement, the Notes, the Security Documents, the Fee
Letter, the Intercreditor Agreement, the Hedging Agreements between the Borrower or any

21

 

of its U.S.
Subsidiaries and any Lender or any Affiliate of a then current Lender, any Borrowing Request, any
Interest Election Request, any Additional Lender Certificate, and any Assignment and Acceptance,
and (b) each other agreement, document or instrument delivered by the Borrower or any other Person
in connection with this Agreement, as such may be amended from time to time.

     “Loan Parties” means the Borrower, the Guarantors, the Canadian Borrower, and any
Material Subsidiary of the Borrower and any Material Subsidiary (as defined in the Canadian Credit
Agreement) of the Canadian Borrower that executes a Combined Loan Document, for so long as such
Combined Loan Document is in effect.

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

     “Long Term Debt” means Indebtedness which matures more than one year from the date it
is incurred, or which can be extended at the option of the obligor(s) to a date more than one year
from the date it is incurred.

     “Majority Lenders” means the Combined Lenders holding Combined Commitments (or
Combined Credit Exposure, as applicable) in the aggregate greater than 50% of the aggregate
Combined Commitments under the Combined Loan Documents, or, if the Combined Commitments have been
terminated, the aggregate Combined Credit Exposure under the Combined Loan Documents.

     “Margin Stock” means “margin stock” within the meaning of Regulation U.

     “Material Adverse Effect” means a material and adverse effect on (a) the financial
condition, business operations, properties or assets of the Borrower and its Subsidiaries, taken as
a whole, (b) (i) the validity and enforceability of this Agreement, the Notes, the Security
Documents or any other material Combined Loan Documents, or (ii) the perfection or priority of any
material Lien purported to be created thereby, or (c) the right or ability of the Loan Parties to
fully, completely and timely pay and perform their obligations under the Combined Loan Documents.

     “Material Agreement” means any material written or oral agreement or contract to which
a Person is a party, by which such Person is bound, or to which any material assets of such Person
are subject, which is not cancelable by such Person upon notice of thirty (30) days or less without
liability for further payment other than nominal penalty.

     “Material Gas Imbalance” means, with respect to all Gas Balancing Agreements to which
any Loan Party is a party or by which any Borrowing Base Property is bound, a net negative gas
imbalance in the aggregate for all Loan Parties in excess of one half bcf of gas (on an mcf
equivalent basis) in the aggregate.

     “Material
Subsidiary” means (a) any Subsidiary of the
Borrower listed on Exhibit L under the heading “Material Subsidiaries,” and (b) any Subsidiary
of the Borrower that (i) is designated by the Borrower in writing to the Global Administrative

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Agent as a Material Subsidiary, (ii) owns Mortgaged Properties or (iii) is a direct or indirect
parent of any Material Subsidiary.

     “Maturity Date” means February 9, 2012, as such date may be extended pursuant to
 Section 2.9(e).

     “Mercury Exploration” means Mercury Exploration Company, a Texas corporation.

     “Mercury Production” means Mercury Production Company, a Texas corporation.

     “Mineral Interests” means all rights, estates, titles, and interests in and to oil and
gas leases and any oil and gas interests, royalty and overriding royalty interests, production
payments, net profits interests, oil and gas fee interests, and other rights therein, including,
without limitation, any reversionary or carried interests relating to the foregoing, together with
rights, titles, and interests created by or arising under the terms of any unitization,
communization, and pooling agreements or arrangements, and all properties, rights and interests
covered thereby, whether arising by contract, by order, or by operation of Governmental Rules,
which now or hereafter include all or any part of the foregoing.

     “Minimum Threshold Amount” is defined in Section 2.8(d)(iii).

     “MLP”
is defined in Exhibit N.

     “MLP Subsidiaries” means, collectively, on and after the closing of the IPO, (a) the
MLP, (b) the General Partner, Operating LLC and Operating GP LLC (as each term is defined in
Exhibit N), (c) Pipeline Partners and Processing Partners, and (d)
any additional Wholly-Owned Subsidiary of Holdings or the MLP, and any indirect Subsidiary of the
Borrower, in each case formed on or after the Closing Date to effect the MLP Transactions.

     “MLP
Transactions” means the transactions described on Exhibit N attached hereto or in a replacement exhibit that is delivered to and approved by the
Majority Lenders in their sole discretion.

     “Monthly Date” means the fifteenth day of each calendar month.

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

     “Mortgage” means the Mortgage, Deed of Trust, Assignment of Production, Security
Agreement, Financing Statement and Fixture Filing delivered pursuant to the Loan Documents in
substantially the form of Exhibit H (or in such other form as the Global
Administrative Agent may approve), executed and delivered by the Borrower or any Loan Party (other
than Foreign Subsidiaries), as the case may be, as amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms of this Agreement and the other Loan
Documents. The term “Mortgage” shall include (a) each mortgage supplement or amendment
after execution and delivery of such mortgage supplement or amendment, (b) each and every Mortgage
executed and delivered by each of the Borrower and its Subsidiaries hereunder, and (c) each and
every “Mortgage” (as defined in the Existing Credit

23

 

Agreement) executed and delivered by each of
the Borrower and its Subsidiaries under the Existing Credit Agreement, as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms of the Existing
Credit Agreement and the terms of this Agreement and the other Loan Documents, other than any such
Mortgage that has previously been released in writing by the Global Administrative Agent or by the
“Global Administrative Agent” (as defined in the Existing Credit Agreement).

     “Mortgaged Property” means any Oil and Gas Property with respect to which a Lien is
granted pursuant to a Mortgage.

     “Net Cash Proceeds” means, with respect to any sale or other disposition (including a
Casualty Event), the cash proceeds (including cash equivalents and any cash payments received by
way of deferred payment of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such sale or other
disposition (including a Casualty Event) received by the Borrower or any of its Subsidiaries, net
of (a) all attorneys’ fees, accountants’ fees, investment banking fees and other customary
expenses, fees and commissions actually incurred by the Borrower or any of its Subsidiaries, (b)
Taxes paid as of the date of receipt of such Net Cash Proceeds as a result of such sale or
disposition by the Borrower or any of its Subsidiaries, (c) amounts required to be applied to the
repayment of any Indebtedness secured by a Lien expressly permitted hereunder on any Property that
is the subject of such sale or other disposition (other than any Lien pursuant to a Security
Document), (d) cash payments made to satisfy obligations resulting from early termination of
Hedging Agreements, and (e) any portion of the purchase price from such sale or other disposition
held as a reserve or placed in escrow, whether as a reserve for adjustment of the purchase price,
for satisfaction of indemnities in respect of such sale or other disposition, or otherwise, to the
extent directly attributable to such sale or other disposition; provided, however,
that upon termination of such reserve or escrow, Net Cash Proceeds will be increased by the portion
of funds in such reserve or escrow that are released to the Borrower or any of its Subsidiaries.

     “Non-Consenting Lender” is defined in  Section 2.20(c).

     “Non-Recourse Debt” means Indebtedness of any Subsidiary which does not own Borrowing
Base Properties (a) secured solely by the assets acquired with the proceeds of such Indebtedness
and (b) with respect to which (i) no Loan Party shall have any liability to any Person for
repayment of all or any portion of such Indebtedness
beyond the assets so secured and (ii) the holders thereof (A) shall have recourse only to, and
shall the right to require the obligations of such Subsidiary to be performed, satisfied or paid
only out of, the assets so secured and (B) shall have no direct or indirect recourse (including by
way of indemnity or guaranty) to any Loan Party, whether for principal, interest, fees, expenses or
otherwise; provided, however, that any such Indebtedness shall not cease to be
“Non-Recourse Debt” solely as a result of the instrument governing such Indebtedness
containing terms pursuant to which such Indebtedness becomes recourse upon (i) fraud or
misrepresentation by the Person in connection with such Indebtedness, (ii) such Person failing to
pay taxes or other charges that result in the creation of Liens on any portion of the specific
property securing such Indebtedness or failing to maintain any insurance on such property required
under the instruments securing such Indebtedness, (iii) the conversion of any of the collateral for
such Indebtedness, (iv) such

24

 

Person failing to maintain any of the collateral for such Indebtedness
in the condition required under the instruments securing the Indebtedness, (v) any income generated
by the specific property securing such Indebtedness being applied in a manner not otherwise allowed
in the instruments securing such Indebtedness, (vi) the violation of any Environmental Law or
otherwise affecting the environmental condition of the specific property securing the Indebtedness
or (vii) the rights of the holder of such Indebtedness to the specific property becoming impaired,
suspended or reduced by any act, omission or misrepresentation of such Person; provided
further, however, that, upon the occurrence of any of the foregoing clauses
(i) through (vii) above, any such Indebtedness shall cease to be “Non-Recourse
Debt” and shall be deemed to be Indebtedness incurred by such Person at such time.

     “Note” means any promissory note delivered pursuant to  Section 2.10(e).

     “Obligations” means (without duplication), at any time, the sum of (a) the Credit
Exposure of the Lenders under the Loan Documents plus (b) all accrued and unpaid interest
and fees owing to the Lenders under the Loan Documents plus (c) all Hedging Obligations in
connection with all Hedging Agreements between the Borrower or any of its Subsidiaries and any
Lender or any Affiliate of a Lender plus (d) all other obligations (monetary or otherwise)
of the Borrower or any Subsidiary to any Lender or any Agent, whether or not contingent, arising
(whether now or hereafter) under or in connection with any of the Loan Documents.

     “Oil and Gas Hedge Transaction” means a Hedge Transaction pursuant to which any Person
hedges the price to be received by it for future production of Hydrocarbons.

     “Oil and Gas Properties” means the Mineral Interests; the Properties now or hereafter
pooled or unitized with the Mineral Interests; all presently existing or future unitization,
pooling agreements and declarations of pooled units and the units created thereby (including
without limitation all units created under orders, regulations and rules of any Governmental
Authority having jurisdiction) which may affect all or any portion of the Mineral Interests; all
operating agreements, joint venture agreements, contracts and other agreements which relate to any
of the Mineral Interests or the production, sale, purchase, exchange or processing of Hydrocarbons
from or attributable to such Mineral Interests; all Hydrocarbons in and under and which may be
produced and saved or attributable to the Mineral Interests, the lands covered thereby and all oil
in tanks and all rents, issues, profits, proceeds,
products, revenues and other incomes from or attributable to the Mineral Interests; all
tenements, profits á prendre, hereditaments, appurtenances and Properties in anywise appertaining,
belonging, affixed or incidental to the Mineral Interests, Properties, rights, titles, interests
and estates described or referred to above, including any and all Property, real or personal, now
owned or hereafter acquired and situated upon, used, held for use or useful in connection with the
operating, working or development of any of such Mineral Interests or Property (excluding drilling
rigs, automotive equipment or other personal Property which may be on such premises for the purpose
of drilling a well or for other similar temporary uses) and including any and all oil wells, gas
wells, water wells, injection wells or other wells, buildings, structures, fuel separators, liquid
extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus,
equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface
leases, rights-of-way,

25

 

easements and servitudes together with all additions, substitutions,
replacements, accessions and attachments to any and all of the foregoing.

     “OPA” means the Oil Pollution Act of 1990, as amended from time to time.

     “Organic Documents” means, relative to any Person, its articles of organization,
association, formation or incorporation (or comparable document), its by-laws, memorandum of
association or operating agreement and all partnership agreements, limited liability company or
operating agreements and similar arrangements applicable to ownership of its Equity Interests.

     “Other Currency” is defined in Section 2.21(a).

     “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made under any
Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any
Loan Document, other than Excluded Taxes and Indemnified Taxes.

     “Participant” is defined in Section 10.4(e).

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

     “Permitted Encumbrances” means, with respect to any asset:

     (a) Liens securing the Combined Obligations;

     (b) minor defects in title which do not secure the payment of money and otherwise have no
material adverse effect on the value or the operation of the subject property, and for the purposes
of this Agreement, a minor defect in title shall include, but not be limited to, easements,
rights-of-way, servitudes, permits, zoning restrictions, surface leases and other similar rights in
respect of surface operations, and easements for pipelines, streets, alleys, highways, telephone
lines, power lines, railways and other easements and rights-of-way, on, over or in respect of
any of the properties of any Loan Party and Immaterial Title Deficiencies;

     (c) inchoate statutory or operators’ Liens securing obligations for labor, services, materials
and supplies arising in the ordinary course of business which are not delinquent (except to the
extent permitted by Section 5.7);

     (d) mechanic’s, materialmen’s, warehouseman’s, journeyman’s, vendor’s, landlord’s and
carrier’s Liens and other similar Liens arising by operation of law in the ordinary course of
business which are not delinquent (except to the extent permitted by Section 5.7);

     (e) Liens for Taxes, assessments, fees and other charges of any Governmental Authority not yet
due or not yet delinquent, or, if delinquent, that are being contested in good faith in the normal
course of business by appropriate action, as permitted by Section 5.7;

     (f) lease burdens payable to third parties which are deducted in the calculation of discounted
present value in the Reserve Report including, without limitation, any royalty,

26

 

overriding royalty, net profits interest, production payment, carried interest or reversionary working interest in
existence as of the Closing Date or as a result of or in accordance with the Loan Party’s
acquisition of the property burdened thereby;

     (g) Liens securing Non-Recourse Debt permitted by Section 7.1;

     (h) Liens created by and arising out of the Falcon Seaboard Settlement Agreement;

     (i) pledges or deposits in connection with workers’ compensation, unemployment compensation
and/or other social security legislation, and deposits in the ordinary course of business securing
liabilities to insurance carriers under insurance or self-insurance arrangements;

     (j) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other similar obligations incurred in
the ordinary course of business;

     (k) judgment Liens in respect of judgments that do not constitute an Event of Default under
Section 8.1(i);

     (l) any Lien existing on any Property or asset prior to the acquisition thereof by the
Borrower or any Subsidiary or existing on any Property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as applicable, (ii) such Lien shall not apply to
any other Property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure
only those obligations which it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as applicable, and extensions, renewals and replacements of such obligations
that are not in excess of the outstanding principal amount of such obligations as of such
acquisition date or date such Person becomes a Subsidiary (provided, that such obligations and such
extensions, renewals, and replacements thereof so secured by such Lien, together with the
Indebtedness secured by Liens described in clause (o) below, shall at no time exceed
U.S.$20,000,000 in the aggregate);

     (m) any interest or title of a lessor under any lease entered into by the Borrower or any
Subsidiary in the ordinary course of business and in accordance with the Combined Loan Documents
and covering only the assets so leased;

     (n) Liens in existence on the date hereof listed on Schedule 7.3 securing
Indebtedness permitted by Section 7.1(e), provided that no such Lien is spread to cover
any additional property after the Closing Date and that the amount of the Indebtedness secured
thereby is not increased;

     (o) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any
of its Subsidiaries; provided that (i) such Liens secure Indebtedness permitted by Section
7.1(l) hereof, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition, construction or improvement, (iii) the Indebtedness secured thereby
does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital
assets, (iv) such Liens shall not apply to any other property or assets of Parent or

27

 

any of such
Subsidiaries, and (iv) the Indebtedness secured by such Liens, together with the obligations and
extensions, renewals and replacements of such obligations described in clause (l) above,
shall at no time exceed U.S.$20,000,000 in the aggregate;

     (p) Liens perfected by the filing of UCC financing statements, PPSA financing statements or
other applicable filings regarding any Permitted Encumbrance;

     (q) Liens arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit
accounts or other funds maintained with a creditor depository institution;

     (r) contractual Liens that arise in the ordinary course of business under operating
agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases,
farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and
natural gas, unitization and pooling declarations and agreements, area of mutual interest
agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits
agreements, development agreements, gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and customary in the oil
and gas business and are for claims which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained in accordance with
GAAP; provided, that any such Lien referred to in this clause (r) does not
materially impair (i) the use of the Property covered by such Lien for the purposes for which such
Property is held by any Loan Party, or (ii) the value of such Property subject thereto;

     (s) any Lien or encumbrance permitted by the Mortgages or the Debentures; or

     (t) Liens not otherwise included in this definition so long as neither (i) the aggregate
outstanding principal amount of the obligations of all of the Loan Parties secured thereby nor (ii)
the aggregate fair market value (determined as of the date such Lien is incurred) of the assets
subject thereto exceeds (as to the Borrower and all Subsidiaries) U.S.$40,000,000 at any one
time.

     “Permitted Investments” means:

     (a) readily marketable direct obligations of the United States of America (or investments in
mutual funds or similar funds which invest solely in such obligations);

     (b) fully insured time deposits and certificates of deposit with maturities of one year or
less of any commercial bank operating in the United States having capital and surplus in excess of
U.S.$100,000,000;

     (c) all Investments held by any Loan Party in the form of cash or cash equivalents;

     (d) all Investments by any Loan Party in Sweep Accounts;

     (e) commercial paper of a domestic issuer if at the time of purchase such paper is rated in
one of the two highest ratings categories of S&P or Moody’s;

28

 

     (f) money market mutual or similar funds having assets in excess of U.S.$100,000,000, at least
95% of the assets of which are comprised of assets specified in clauses (a) through
(e) above;

     (g) all Investments described in the Financial Statements or on Schedule 7.8 hereto;

     (h) all Investments by any Loan Party in a direct or indirect Material Subsidiary (other than
Foreign Subsidiaries) of Borrower, so long as such Material Subsidiary (other than Foreign
Subsidiaries) has provided a Guaranty, a Security Agreement and/or Mortgage in accordance with
Section 4.1, 5.15 and 5.17, and the Equity Interests of such Material Subsidiary owned by the
Borrower or a Subsidiary of the Borrower has been pledged to the Global Administrative Agent
pursuant to a Pledge Agreement in accordance with, and as and to the extent required by, Section
4.1, 5.15 and 5.17;

     (i) extensions of customer or trade credit in the ordinary course of business;

     (j) Guarantee obligations permitted by Section 7.1;

     (k) all Investments by any Loan Party in any one or more direct or indirect Subsidiaries of
the Borrower (other than a Material Subsidiary) (i) that own, lease, hold and/or are party to (A)
any Oil and Gas Properties, (B) any gas processing or gas gathering systems, (C) any farm-out,
farm-in, joint operating, joint venture or area of mutual interest agreements and/or (D) any
gathering systems, pipelines or other similar arrangements, in each case located within or related
to the geographic boundaries of the United States of America or Canada, or (ii) the purpose of
which is to act as a direct or indirect holding company for any Subsidiary that satisfies one or
more provisions of subclause (i) of this clause (k), so long as the Equity
Interests of any such Subsidiary owned by such Loan Party have been pledged to the Global
Administrative Agent pursuant to a Pledge Agreement in accordance with, and as and to the extent
required by,  Section 5.17 and  Section 5.18;

     (l) all Investments constituting Indebtedness permitted by Section 7.1;

     (m) all Investments permitted by the Canadian Loan Documents;

     (n) all Investments by the Borrower or any Subsidiary in Foreign Subsidiaries (i) existing as
of the Global Effective Date that are set forth under the heading “Investments in Foreign
Subsidiaries” in Schedule 7.8 and (ii) made after the Global Effective Date in an
aggregate amount not to exceed U.S.$30,000,000 at any one time outstanding;

     (o) all Investments arising from transactions by the Borrower or any Subsidiary with customers
or suppliers in the ordinary course of business, including endorsements of negotiable instruments,
debt obligations and other Investments received by the Borrower or any Subsidiary in connection
with the bankruptcy or reorganization of customers and in settlement of delinquent obligations of,
and other disputes with, customers;

     (p) any Investments by any Loan Party in any Persons; provided that, the aggregate
amount of all such Investments made pursuant to this clause (p) outstanding at any time
shall not exceed U.S.$50,000,000 (measured on a cost basis);

29

 

     (q) all Investments by any Loan Party in Persons in which such Loan Party owns an Equity
Interest (other than a Material Subsidiary or a direct or indirect Subsidiary of the Borrower) (i)
that own, lease, hold and/or are party to (A) any Oil and Gas Properties, (B) any gas processing or
gas gathering systems, (C) any farm-out, farm-in, joint operating, joint venture or area of mutual
interest agreements and/or (D) any gathering systems, pipelines or other similar arrangements, in
each case located within or related to the geographic boundaries of the United States of America or
Canada, or (ii) the purpose of which is to act as a direct or indirect holding company for any
Person that satisfies one or more provisions of subclause (i) of this clause (q),
so long as the Equity Interests of such Person owned by such Loan Party have been pledged to the
Global Administrative Agent pursuant to a Pledge Agreement in accordance with, and as and to the
extent required by,  Section 5.17 and  Section 5.18, provided, except to
the extent any such Investments constitute “Permitted Investments” under any other subsection of
this definition, (x) the Loan Parties do not make more than U.S.$40,000,000 in the aggregate of any
such Investments during any Fiscal Year and (y) the total amount of any such Investments at any one
time does not exceed U.S.$100,000,000 in the aggregate;

     (r) entry into operating agreements, working interests, royalty interests, mineral leases,
processing agreements, farm-out agreements, contracts for the sale, transportation or exchange of
oil, natural gas or CO2, unitization agreements, pooling arrangements, area of mutual
interest agreements, production sharing agreements or other similar or customary agreements,
transactions, properties, interests or arrangements, and Investments and expenditures in connection
therewith or pursuant thereto, in each case made in the ordinary course of the oil and gas
business; and

     (s) the initial Investments specifically described on Exhibit N made in connection with, or as part of or pursuant to, the formation of the MLP and to
effect the MLP Transactions.

For the avoidance of doubt, to the extent any Investment could be attributable to more than one
subsection of this definition of “Permitted Investments,” the Borrower or any other Loan
Party may categorize all or any portion of such Investment to any one or more subsections of this
definition as it elects and unless as otherwise expressly provided, in no event shall the same
portion of any Investment be deemed to utilize or be attributable to more than one subsection of
this definition.

     “Permitted Senior Notes Debt” means any unsecured Indebtedness (in addition to, and
not including, Existing Subordinate Debt) of the Borrower, and any Guarantees thereof by
Subsidiaries, incurred or assumed after the date of this Agreement and resulting from one or more
issuances of Borrower’s senior unsecured subordinate notes in an aggregate outstanding principal
balance at any time of not greater than $300,000,000, including all renewals, refinancings,
replacements, and extensions thereof to the extent permitted hereunder and made in accordance with
the terms of the Combined Loan Documents (including  Section 7.14), provided, that
all such Indebtedness (i) has a maturity date at least six (6) months after the Maturity Date, (ii)
except to the extent any such prepayments are made in accordance with subsection (y) to the proviso
in  Section 7.14, is not permitted to be prepaid (other than by the conversion of any such
Indebtedness into the capital stock of the Borrower) without the written consent of the Global
Administrative Agent and the Majority Lenders, (iii) has a coupon not in excess of nine percent

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(9%), (iv) contains covenants not materially more onerous to Borrower and its Subsidiaries than
those contained in the Combined Loan Documents and (v) contains other terms and conditions
(including amount, interest, amortization, covenants and events of default) as are satisfactory to
the Global Administrative Agent and the Majority Lenders.

     “Permitted Senior Notes Documents” means the indentures or other agreements under
which any Permitted Senior Notes Debt is issued or incurred and all other instruments, agreements
and other documents evidencing or governing such Permitted Senior Notes Debt or providing for any
Guarantee or other right in respect thereof.

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

     “Pipeline Partners” means Cowtown Pipeline Partners L.P., a Texas limited partnership.

     “Plan” means an employee benefit plan within the meaning of Section 3(3) of ERISA
under which any Loan Party or an ERISA Affiliate of a Loan Party has any current or future
obligation or liability or under which any present or former employee of any Loan Party or an ERISA
Affiliate of a Loan Party, or such present or former employee’s dependents or beneficiaries, has
any current or future right to benefits resulting from the present or former employee’s employment
relationship with any Loan Party or an ERISA Affiliate of a Loan Party.

     “Pledge Agreement” means a Pledge Agreement and Irrevocable Proxy, dated as of the
Global Effective Date or otherwise delivered pursuant to the
Loan Documents, substantially in the form of Exhibit F (or such other
form acceptable to the Global Administrative Agent), as amended, supplemented, restated or
otherwise modified from time to time in accordance with the Loan Documents. The term “Pledge
Agreements” shall include each and every Pledge Agreement executed and delivered pursuant to
the Loan Documents.

     “Pledging Subsidiary” means each existing and future Subsidiary (other than a Foreign
Subsidiary) of Borrower that executes and delivers a Pledge Agreement in accordance with the Loan
Documents pursuant to which such Subsidiary pledges to the Global Administrative Agent, for the
ratable benefit of the Lenders, all of the issued and outstanding Equity Interests of a Material
Subsidiary or other Person owned by such Subsidiary to secure the Obligations.

     “PPSA” means the Personal Property Security Act (Alberta) or such other similar
legislation in effect in any other province or jurisdiction of Canada, as the same may be amended
from time to time.

     “Prime Rate” means a rate of interest per annum equal to the prime rate of interest
announced from time to time by JPMorgan or its parent (which is not necessarily the lowest rate
charged to any customer), changing when and as said prime rate changes. For purposes of this
Agreement, any change in the Alternate Base Rate due to a change in the Prime Rate shall be
effective on the date such change in the Prime Rate is announced.

     “Processing Partners” means Cowtown Gas Processing Partners L.P., a Texas limited
partnership.

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     “Production Payments” means a production payment obligation (whether volumetric or
dollar denominated) of the Borrower or any of its Subsidiaries which are payable from a specified
share of proceeds received from production from specified Oil and Gas Properties, together with all
undertakings and obligations in connection therewith.

     “Property” means any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

     “Property Description” is defined in Section 3.9.

     “Pro Rata Lender” means any Lender identified as a “Pro Rata Lender” on Schedule
2.1, as such Schedule 2.1 is replaced or amended from time to time pursuant to the
terms hereof.

     “Proved Mineral Interests” means, collectively, all Mineral Interests which constitute
“proved reserves,” “proved developed producing reserves,” “proved developed nonproducing reserves,”
and “proved undeveloped reserves,” as such terms are defined from time to time by the Society of
Petroleum Engineers of the American Institute of Mining Engineers.

     “Proved Producing Mineral Interests” means all Mineral Interests which constitute
“proved developed producing reserves” as such term
is defined from time to time by the Society of Petroleum Engineers of the American Institute
of Mining Engineers.

     “QELP” means Quicksilver Energy, L.P., a Michigan limited partnership.

     “QR Canada” means Quicksilver Resources Canada Inc., an Alberta, Canada corporation,
successor by name change to MGV Energy Inc.

     “QRC Class C Shares” means, collectively, the Class C Common shares of QR Canada.

     “Recognized Value” means, with respect to Mineral Interests, the discounted present
value of the estimated net cash flow to be realized from the production of Hydrocarbons from such
Mineral Interests as determined by the Global Administrative Agent for purposes of determining the
portion of the Global Borrowing Base and U.S. Borrowing Base which it attributes to such Mineral
Interests in accordance with  Section 2.8 hereof.

     “Redetermination Date” means (a) with respect to any Scheduled Redetermination, each
May 1, commencing May 1, 2008, and (b) with respect to any redetermination of the Global Borrowing
Base or U.S. Borrowing Base pursuant to Section 2.8(e), the first day of the first month which is
not less than twenty (20) Business Days following the date of a request for a redetermination
pursuant to Section 2.8(e).

     “Register” has the meaning set forth in Section 10.4(c).

     “Regulation U” means any of Regulations T, U or X of the Board from time to time in
effect and shall include any successor or other regulations or official interpretations of the
Board or any successor Person relating to the extension of credit for the purpose of purchasing or

32

 

carrying Margin Stock and which is applicable to member banks of the Federal Reserve System or
any successor Person.

     “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

     “Required Lenders” means the Combined Lenders holding Combined Commitments (or
Combined Credit Exposure, as applicable) in the aggregate greater than or equal to 66-2/3% of the
aggregate Combined Commitments under the Combined Loan Documents, or, if the Combined Commitments
have been terminated, the aggregate Combined Credit Exposure under the Combined Loan Documents.

     “Required Reserve Value” means Proved Mineral Interests in respect of the Borrowing
Base Properties that in the aggregate have a Recognized Value of not less than eighty percent (80%)
of the Recognized Value of all Proved Mineral Interests in respect of the Borrowing Base Properties
held by Borrower and its Subsidiaries.

     “Reserve Report” means the Initial Reserve Report and any other Reserve Report(s)
delivered pursuant to Section 2.8 or 5.1(i), in form and substance reasonably
satisfactory to the Global Administrative Agent, prepared at the sole cost and expense of the
Borrower by an Approved Engineer (or, with respect to a Reserve Report delivered pursuant to
Section 2.8(e), at the Borrower’s option, the in-house engineer of the Borrower), for which
the Approved Engineer (or, as appropriate, the in-house engineer of the Borrower) shall certify, in
writing, that such Reserve Report was prepared in accordance with the normal and customary methods
and procedures used by such Approved Engineer (or, as appropriate, such in-house engineer) for
evaluating oil and gas reserves. Each Reserve Report shall evaluate the Proved Mineral Interests
attributable to the Oil and Gas Properties owned directly by the Borrower and/or its Subsidiaries
which the Borrower wishes to include in the Global Borrowing Base, as of the immediately preceding
December 31 or, with respect to a discretionary redetermination of the Global Borrowing Base and
the U.S. Borrowing Base requested by any Person (other than the Borrower) pursuant to Section
2.8(e), as of the date reasonably requested by such Person in its request for such
discretionary redetermination, or, in connection with a request by the Borrower, as otherwise
mutually agreed upon by the Borrower and the Global Administrative Agent, as applicable. Each
Reserve Report shall set forth volumes, projections of the future rate of production, Hydrocarbons
prices, escalation rates, discount rate assumptions, and net proceeds of production, present value
of the net proceeds of production, operating expenses and capital expenditures, in each case based
upon updated economic assumptions reasonably acceptable to the Global Administrative Agent.

     “Restricted Payment” means, with respect to any Person, any Distribution by such
Person.

     “Revolving Loan” means a Loan made pursuant to Section 2.3.

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

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     “Scheduled Redetermination” means any redetermination of the Global Borrowing Base and
the U.S. Borrowing Base pursuant to Section 2.8(b).

     “SEC” means the Securities and Exchange Commission in the United States and any
successor Governmental Authority.

     “Security Agreement” means a Security Agreement executed and delivered pursuant to the
Loan Documents, between the Global Administrative Agent and the Borrower or a Material Subsidiary
(other than a Foreign Subsidiary), substantially in the form of
Exhibit I (or such other form as acceptable to the Global Administrative Agent), as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms of this Agreement and
the other Loan Documents. The term “Security Agreements” shall include each and every
Security Agreement executed and delivered pursuant to the Loan Documents.

     “Security Documents” means the Pledge Agreements, the Guaranties, the Mortgages, the
Security Agreements, the Assignments of Production, and each other security agreement or other
instrument or document executed and delivered pursuant to Section 4.1, 5.15,
5.17 or pursuant to the Loan Documents to secure any of the Obligations.

     “SFAS 133” means the Statement of Financial Accounting Standard Number 133 entitled
“Accounting for Derivative Instruments and Hedging Activities” issued by the Financial Accounting
Standards Board in June of 1998, as amended and in effect from time to time.

     “SFAS 143” means the Statement of Financial Accounting Standard Number 143 entitled
“Accounting for Asset Retirement Obligations” issued by the Financial Accounting Standards Board in
June of 2001, as amended and in effect from time to time.

     “SFAS 144” means the Statement of Financial Accounting Standard Number 144 entitled
“Accounting for the Impairment or Disposal of Long-Lived Assets” issued by the Financial Accounting
Standards Board in August of 2001, as amended and in effect from time to time.

     “Solvent” means, with respect to any Person at any time, a condition under which (a)
the fair saleable value of such Person’s assets is, on the date of determination, greater than the
total amount of such Person’s liabilities (including contingent and unliquidated liabilities) at
such time, (b) such Person is able to pay all of its liabilities as such liabilities mature, (c)
such Person does not intend to, and such Person does not believe it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature, and (d) such Person is
not engaged in a business or transaction, and such Person is not about to engage in a business or
transaction for which such Person’s property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which such Person is
engaged. For purposes of this definition (i) the amount of a Person’s contingent or unliquidated
liabilities at any time shall be that amount which, in light of all the facts and circumstances
then existing, represents the amount which can reasonably be expected to become an actual or
matured liability, (ii) the “fair saleable value” of an asset shall be the amount which may be
realized within a reasonable time either through collection or sale of such asset at its regular
market value, and (iii) the “regular market value” of an asset shall be the amount which a capable
and

34

 

diligent business person could obtain for such asset from an interested buyer who is willing to
purchase such asset under ordinary selling conditions.

     “Specified Rate” means, with respect to any Swingline Borrowing for any day, a rate
per annum equal to the Money Market Loan Cost of Funds Rate most recently quoted by JPMorgan and
provided to the Borrower and in effect on such day. If for any reason the Global Administrative
Agent shall have determined (which determination shall be conclusive and binding, absent manifest
error) that it is unable to ascertain the Money Market Loan Cost of Funds Rate for any reason, the
Alternate Base Rate shall be the Specified Rate until the circumstances giving rise to such
inability no longer exist. “Specified Rate,” when used in reference to any Swingline Loan
or Swingline Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Specified Rate.

     “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
applicable maximum reserve percentages (including all basic, marginal, special, emergency and
supplemental reserves) expressed as a decimal established by the Board to which the Global
Administrative Agent is subject with respect to the Adjusted Eurodollar Rate, for eurocurrency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to Regulation D. Eurodollar Loans shall
be deemed to constitute eurocurrency fundings and to be subject to such reserve requirements
without the benefit of or credit for proration, exemptions or offsets that may be available from
time to time to any Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any
reserve percentage.

     “Subsidiary” means, with respect to any Person (the “parent”) at any date any
corporation, limited liability company, partnership (limited or general), association or other
entity the accounts of which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in accordance with
GAAP as of such date. Unless otherwise indicated herein, each reference to the term
“Subsidiary” means a Subsidiary of the Borrower.

     “Supermajority Lenders” means the Combined Lenders holding Combined Commitments (or
Combined Credit Exposure, as applicable) in the aggregate greater than or equal to 90% of the
aggregate Combined Commitments under the Combined Loan Documents, or, if the Combined Commitments
have been terminated, the aggregate Combined Credit Exposure under the Combined Loan Documents.

     “Sweep Accounts” means deposit accounts, the proceeds of which are transferred nightly
to an interest-bearing concentration account maintained by the Global Administrative Agent or
another Lender (provided that upon an Event of Default such Lender shall, at the request of the
Global Administrative Agent, enter into a control agreement with the Global Administrative Agent
and the appropriate Loan Party in form and substance reasonably satisfactory to the Global
Administrative Agent), and re-transferred each morning to the applicable Loan Party’s

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deposit accounts, all on terms and conditions reasonably satisfactory to the Global Administrative Agent.

     “Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall
be its Applicable Percentage of the total Swingline Exposure at such time.

     “Swingline Lender” means JPMorgan in its capacity as lender of Swingline Loans
hereunder.

     “Swingline Loan” means a Loan made pursuant to Section 2.4.

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

     “Toronto” means Toronto, Ontario, Canada.

     “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted Eurodollar Rate, the Alternate Base Rate or, with respect to Swingline Loans or Swingline
Borrowings only, the Specified Rate.

     “UCC” means the Uniform Commercial Code as in effect in any applicable state or
jurisdiction, as the same may be amended from time to time.

     “UCC Searches” means central and local current financing statement or equivalent
Canadian Lien searches from each state or province in which any Collateral or a Borrowing Base
Property is located, and such other jurisdictions as the Global Administrative Agent may reasonably
request, covering the Borrower and each Guarantor together with copies of all financing statements
listed in such searches.

     “United States” or “U.S.” means the United States of America, its fifty states
and the District of Columbia.

     “Unutilized Commitment” means, at the time of determination, the amount by which (a)
the lowest of (i) the aggregate amount of the Commitments of all Lenders at such time, (ii) the
amount of the U.S. Borrowing Base as then in effect at such time and (iii) the amount of the
Allocated U.S. Borrowing Base as then in effect at such time, exceeds (b) the amount of the
aggregate Credit Exposure of the Lenders at such time.

     “Upfront Fee” is defined in Section 2.12(c).

     “U.S. Borrowing Base” means the “U.S. Borrowing Base” as determined from time to time
pursuant to Section 2.8.

     “U.S. Borrowing Base Deficiency” means, at the time of determination, the amount by
which (a) the aggregate Credit Exposure of the Lenders exceeds (b) the lesser of (i) the then
current U.S. Borrowing Base and (ii) the then current Allocated U.S. Borrowing Base.

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     “U.S. Borrowing Base Properties” means those Borrowing Base Properties located in the
United States owned by the Borrower or any of its U.S. Subsidiaries.

     “U.S. Dollars” or “U.S.$” or “Dollar” refers to lawful money of the
United States of America.

     “U.S. Flex Portion” means that unallocated portion of the Commitments remaining after
making the allocations described in Section 2.1(c)(ii) and (iii).

     “U.S. Only Lender” means any Lender identified as a “U.S. Only Lender” on Schedule
2.1, as such Schedule 2.1 is replaced or amended from time to time pursuant to the
terms hereof.

     “U.S. Required Lenders” means, at the time of determination, the Lenders holding
Commitments (or Credit Exposure, as applicable) in the aggregate greater than or equal to 66-2/3%
of the aggregate Commitments under the Loan Documents, or, if the Commitments have been terminated,
the aggregate Credit Exposure under the Loan Documents.

     “U.S. Required Reserve Value” means Proved Mineral Interests in respect of the U.S.
Borrowing Base Properties that have a Recognized Value of not less than eighty percent (80%) of the
Recognized Value of all Proved Mineral Interests in respect of the U.S. Borrowing Base Properties
held by Borrower and its Subsidiaries.

     “U.S. Supermajority Lenders” means, at the time of determination, the Lenders holding
Commitments (or Credit Exposure, as applicable) in the aggregate greater than or equal to 90% of
the aggregate Commitments under the Loan Documents, or, if the Commitments have been terminated,
the aggregate Credit Exposure under the Loan Documents.

     “Wholly-Owned Subsidiary” means, as to any Person, any Subsidiary of which all of the
outstanding shares of Equity Interests (other than directors’ qualifying shares or, in the case of
the Canadian Borrower, non-voting shares and related exchangeable put rights held by present or
former officers, directors and shareholders of the Canadian Borrower) on a fully-diluted basis, are
owned (whether legally or beneficially by agreement) directly or indirectly by such Person or one
or more of its Wholly-Owned Subsidiaries or by such Person and one or more of its Wholly-Owned
Subsidiaries. Unless otherwise indicated, each reference to a “Wholly-Owned Subsidiary”
means a Wholly-Owned Subsidiary of the Borrower.

     SECTION 1.2 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans and Borrowings may be classified and referred to by Class (e.g., a “Revolving Loan”
or “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Loan” or “Eurodollar Borrowing”)
or by Class and Type (e.g., an “ABR Revolving Loan” or “ABR Revolving Borrowing”).

     SECTION 1.3 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word

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“shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, restated, increased, renewed, extended, supplemented or otherwise
modified (subject to any restrictions on such amendments, restatements, increases, renewals,
extensions, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, provided such successors and
assigns are permitted by the Loan Documents, (c) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement.

     SECTION 1.4 Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Global Administrative
Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of
any change occurring after the date of this Agreement in GAAP or in the application thereof on the
operation of such provision (or if the Global Administrative Agent notifies the Borrower that the
Majority Lenders request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.

     SECTION 1.5 Designation of Material Subsidiaries. The Borrower shall from time to
time, by notice in writing to the Global Administrative Agent, be entitled to designate that either
(a) a Subsidiary which is not a Material Subsidiary become a Material Subsidiary (in which event
the Borrower will comply (or cause compliance) with the provisions of Section 5.15 with
respect to such Subsidiary), or (b) a Material Subsidiary which has previously been designated in
writing by the Borrower as a Material Subsidiary (and is not otherwise a Material Subsidiary
pursuant to clauses (b)(ii) or (iii) of the definition thereof) cease to be a
Material Subsidiary; provided, that the Borrower shall not be entitled to designate that a
Material Subsidiary cease to be a Material Subsidiary if a Default, Event of Default, Global
Borrowing Base Deficiency or U.S. Borrowing Base Deficiency has occurred and is continuing or would
result from or exist immediately after such a designation.

ARTICLE II

THE CREDITS

     SECTION 2.1 Global Commitments and Revolving Commitments.

          (a) Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving
Loans in U.S. Dollars to the Borrower from time to time during the Availability Period in an
aggregate principal amount that will not result in (i) the Credit Exposure of any Lender exceeding
the lowest of (A) the Commitment of such Lender then in effect, (B) such Lender’s Applicable
Percentage of the U.S. Borrowing Base then in effect or (C) such Lender’s Applicable Percentage of
the Allocated U.S. Borrowing Base then in effect, or (ii) the aggregate

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amount of the Credit Exposure of all Lenders then in effect exceeding the lowest of (A) the aggregate Commitments of all
the Lenders, (B) the U.S. Borrowing Base then in effect or (C) the Allocated U.S. Borrowing Base
then in effect. Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

     (b) At any time and from time to time prior to the Maturity Date, the Borrower may increase
the aggregate amount of the Global Commitments of the Combined Lenders (each such increase, a
“Global Commitment Increase”) in an aggregate amount for all such increases of up to
U.S.$250,000,000 so long as (i) the Global Administrative Agent, the Canadian Administrative Agent,
and the Majority Lenders consent to such requested Global Commitment Increase, which consent shall
not be unreasonably withheld, conditioned or delayed; (ii) the aggregate Global Commitments
calculated after taking into effect the requested Global Commitment Increase does not exceed
U.S.$1,450,000,000; and (iii) each Combined Lender shall have been offered a pro rata share of such
requested Global Commitment Increase, but no Combined Lender shall have its Global Commitment
increased without such Combined Lender’s consent; provided, that, the Borrower shall have
the right to replace any Non-Consenting Lender pursuant to, and in accordance with, Section
2.20(c). Each Combined Lender shall have the option, but no Combined Lender shall have any
obligation, to increase its Global Commitment hereunder in connection with any Global Commitment
Increase. If the Borrower desires to effect a Global Commitment Increase, the Borrower and the
financial institution(s) that the Borrower proposes to become a Lender hereunder, and, if
applicable, the existing Lender(s) that the Borrower proposes to increase its existing Global
Commitment shall (subject at all times to the consent of each such financial institution or each
such existing Lender, as applicable) execute and deliver to the Global Administrative Agent a
certificate substantially in the form of Exhibit J hereto (an
“Additional Lender Certificate”). Upon receipt of such Additional Lender Certificate (A)
any such additional Lender shall be deemed to be a party in all respects to this Agreement and the
other Loan Documents as of the effective date set forth in such Additional Lender Certificate and
(B) upon the effective date set forth in such Additional Lender Certificate, any such Lender party
to the Additional Lender Certificate shall purchase a pro rata portion of the outstanding Revolving
Loans (and participation interests in the Letters of Credit and Swingline Loans) of each of the
current Lenders such that the Lenders (including any additional Lender, if applicable) shall hold
their Applicable Percentage of the outstanding Revolving Loans (and participation interests).

     (c) The Global Commitments shall from time to time be reallocated, and the Commitments shall
from time to time be adjusted, by the Global Administrative Agent in accordance with this
Section 2.1(c). Upon each delivery by the Borrower of a Borrowing Base Allocation Notice
in accordance with Section 2.8(d)(iii) or (iv), or upon an increase of the Global
Commitments pursuant to Section 2.1(b), or upon a reduction of the Global Commitments by
the Borrower pursuant to Section 2.9, the Global Administrative Agent will reallocate the
Global Commitments of the Combined Lenders between this Agreement and the Canadian Credit Agreement
in order to establish new Commitments under this Agreement and Canadian Commitments under the
Canadian Credit Agreement for the Combined Lenders pursuant to the following guidelines: (i) the
Global Commitments of all Combined Lenders will be reallocated in such a manner that the ratio of
the aggregate Commitments of all Lenders to the Combined Commitments equals the ratio of the then
proposed Allocated U.S. Borrowing Base (as so

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designated or determined in accordance with Section 2.8) to the then proposed Global Borrowing Base (as so designated or determined in
accordance with Section 2.8); (ii) the Global Commitments of U.S. Only Lenders shall be
allocated such that the Commitment of each U.S. Only Lender shall be equal to its Global
Commitment; (iii) the Global Commitments of the Pro Rata Lenders (and their respective Affiliates,
if any, that are Canadian Lenders) shall be reallocated such that (A) if a Pro Rata Lender is both
a Lender and a Canadian Lender, (1) the ratio of such Pro Rata Lender’s Commitment to its Global
Commitment is equal to the ratio of the then proposed Allocated U.S. Borrowing Base (as so
designated or determined in accordance with Section 2.8) to the then proposed Global
Borrowing Base (as so designated or determined in accordance with Section 2.8) and (2) the
ratio of such Pro Rata Lender’s Canadian Commitment to its Global Commitment is equal to the ratio
of the then proposed Allocated Canadian Borrowing Base (as so designated or determined in
accordance with Section 2.8) to the then proposed Global Borrowing Base (as so designated
or determined in accordance with Section 2.8) and (B) if a Pro Rata Lender is a Lender and
has an Affiliate that is a Canadian Lender, (1) the ratio of such Pro Rata Lender’s Commitment to
the Global Commitment associated with such Pro Rata Lender and such Affiliate is equal to the ratio
of the then proposed Allocated U.S. Borrowing Base (as so designated or determined in accordance
with Section 2.8) to the then proposed Global Borrowing Base (as so designated or
determined in accordance with Section 2.8) and (2) the ratio of such Affiliate’s Canadian
Commitment to the Global Commitment associated with such Pro Rata Lender and such Affiliate is
equal to the ratio of the then proposed Allocated Canadian Borrowing Base (as so designated or
determined in accordance with Section 2.8) to the then proposed Global Borrowing Base (as
so designated or determined in accordance with Section 2.8); (iv) after making the
reallocations in clauses (ii) and (iii) above, the Global Administrative Agent
shall determine the Flex Portion of the Combined Commitments, the U.S. Flex Portion of the Combined
Commitments and the Canadian Flex Portion of the Combined Commitments and shall allocate the Flex
Portion of the Combined Commitments, the U.S. Flex Portion of the Combined Commitments and the
Canadian Flex Portion of the Combined Commitments among the Flex Lenders such that (A) if a Flex
Lender is both a Lender and a Canadian Lender, such Flex Lender shall be allocated (1) its Flex
Percentage of the U.S. Flex Portion of the Combined Commitments and (2) its Flex Percentage of the
Canadian Flex Portion of the Combined Commitments, and (B) if a Flex Lender is a Lender and has an
Affiliate that is a Canadian Lender, (1) such Flex Lender shall be allocated its Flex Percentage of
the U.S. Flex Portion of the Combined Commitments and (2) its Affiliate shall be allocated such
Affiliate’s Flex Percentage of the Canadian Flex Portion of the Combined Commitments. The Global
Administrative Agent shall (x) in the case of a reallocation of the Global Commitments as a result
of the delivery of a Borrowing Base Designation Notice, notify the Borrower and the Combined
Lenders of the reallocated Global Commitments and adjusted Combined Commitments at the same time
that it notifies them, pursuant to Section 2.8(d)(iii) or (iv), of the Allocated
U.S. Borrowing Base and the Allocated Canadian Borrowing Base and (y) in the case of a reallocation
of the Global Commitments as a result of an increase or reduction of the Global Commitments, notify
the Borrower and the Combined Lenders of the reallocated Global Commitments and adjusted Combined
Commitments by the date on which such reduction is to become effective in accordance with the terms
of Section 2.1(b) or 2.9. Any U.S. Only Lender may become a Pro Rata Lender or a
Flex Lender, and any Pro Rata Lender may become a Flex Lender, in each case by giving the Global
Administrative Agent a written notice of its agreement to be designated as such, which notice shall
be effective as of the date of the next reallocation of

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the Global Commitments made pursuant to
this clause (c). No Combined Lender may have more than one Designation and no Flex Lender
may be designated as a Pro Rata Lender or a U.S. Only Lender and no Pro Rata Lender may be
designated as a U.S. Only Lender.

          (d) The parties hereto acknowledge that any increase in the Global Commitments pursuant to
Section 2.1(b) of the Canadian Credit Agreement or any reduction in the Global Commitments pursuant
to Section 2.8 of the Canadian Credit Agreement also constitutes an increase or reduction, as the
case may be, of the Global Commitments pursuant to Section 2.1(b) and 2.9 hereof
(which increase or reduction hereunder shall take place simultaneously with the increase or
reduction, as the case may be, under the Canadian Credit Agreement).

     SECTION 2.2 Loans and Borrowings.

          (a) Each Revolving Loan shall be made as part of a Revolving Borrowing consisting of Revolving
Loans made by the Lenders ratably in accordance with their respective Applicable Percentages. Any
Swingline Loan shall be made in accordance with the procedures set forth in Section 2.4.
The failure of any Lender to make any Revolving Loan required to be made by it shall not relieve
any other Lender of its obligations hereunder; provided that the Commitments of the Lenders
are several and no Lender shall be responsible for any other Lender’s failure to make Revolving
Loans as required.

          (b) Subject to Section 2.14 and 2.15, each Revolving Borrowing shall be
comprised entirely of ABR Revolving Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Swingline Borrowing shall be an ABR Loan or Specified Rate Loan as the
Borrower may request in accordance herewith. Each Lender at its option may make any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement.

          (c) Each Eurodollar Borrowing shall be in an aggregate amount that is an integral multiple of
U.S.$1,000,000 and not less than U.S.$3,000,000 (including any continuation or conversion of
existing Revolving Loans made in connection therewith). At the time that each ABR Revolving
Borrowing is made, such Revolving Borrowing shall be in an aggregate amount that is an integral
multiple of U.S.$500,000 and not less than U.S.$500,000 (including any continuation or conversion
of existing Revolving Loans made in connection therewith); provided that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire Unutilized Commitment, if less.
Each Swingline Borrowing shall be in an amount that is an integral multiple of U.S.$500,000 and
not less than U.S.$500,000. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of ten (10)
Eurodollar Borrowings outstanding.

          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Eurodollar Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.

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     SECTION 2.3 Requests for Revolving Borrowings. To request a Revolving Borrowing, an
Authorized Officer of the Borrower shall notify the Global Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than noon, Chicago time, three (3)
Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Revolving
Borrowing, not later than noon, Chicago time, on the Business Day of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Global Administrative Agent of a written Borrowing Request executed by
an Authorized Officer of the Borrower, substantially in the form of Exhibit E-1 or
otherwise in a form approved by the Global Administrative Agent. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with Section 2.2:

     (i) the aggregate amount of the requested Revolving Borrowing;

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

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

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

     (v) either (A) the wire transfer instructions for the account (together with the
account number of such account) of the Borrower maintained with a Lender to which funds are
to be disbursed or (B) if to be disbursed to an account other than an account maintained
with a Lender, the wire transfer instructions for such account (together with the account
number of such account), each in compliance with Section 2.6.

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving
Borrowing shall be an ABR Revolving Borrowing. If no Interest Period is specified with respect to
any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance
with this Section, the Global Administrative Agent shall advise each Lender of the details thereof
and of the amount of such Lender’s Revolving Loan to be made as part of the requested Revolving
Borrowing.

     SECTION 2.4 Swingline Loans.

     (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make
Swingline Loans in U.S. Dollars to the Borrower from time to time during the Availability Period in
an aggregate principal amount that will not result in (i) the aggregate Swingline Exposure
exceeding U.S.$50,000,000, (ii) the Credit Exposure of any
Lender exceeding the lowest of (A) the

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          Commitment of such Lender then in effect, (B) such Lender’s Applicable Percentage of the U.S.
Borrowing Base then in effect, or (C) such Lender’s Applicable Percentage of the Allocated U.S.
Borrowing Base then in effect, or (iii) the aggregate amount of the Credit Exposure of all Lenders
then in effect exceeding the lowest of (A) the aggregate Commitments of all Lenders then in effect,
(B) the U.S. Borrowing Base then in effect, or (C) the Allocated U.S. Borrowing Base then in
effect; provided that the Swingline Lender shall not be required to make a Swingline Loan
to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

          (b) To request a Swingline Loan, the Borrower shall notify the Global Administrative Agent of
such request by telephone, not later than 12:00 noon, Chicago time, on the Business Day of a
proposed Swingline Loan. Each telephonic request shall be confirmed promptly by hand delivery or
telecopy to the Global Administrative Agent of a written Borrowing Request executed by an
Authorized Officer of the Borrower, substantially in the form of Exhibit E-3 or otherwise
in a form approved by the Global Administrative Agent. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and amount of the requested
Swingline Loan, and whether such Loan shall be an ABR Swingline Loan or Specified Rate Swingline
Loan. The Global Administrative Agent will promptly advise the Swingline Lender of any such notice
received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the
Borrower by means of a credit to the general deposit account of the Borrower with the Swingline
Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement
as provided in Section 2.5(e), by remittance to the Issuing Bank, or pursuant to such other
directions received by the Swingline Lender from the Borrower in connection with its request for
such Swingline Loan) by 2:00 p.m., Chicago time, on the requested date of such Swingline Loan.

          (c) The Swingline Lender may by written notice given to the Global Administrative Agent not
later than 9:00 a.m., Chicago time, on any Business Day, require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.
Promptly upon receipt of such notice, the Global Administrative Agent will give notice thereof to
each Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan
or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Global Administrative Agent, for the account of the Swingline Lender,
such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges and
agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph
is absolute and unconditional and shall not be affected by any circumstance whatsoever, including
the occurrence and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds in the same manner as provided in Section 2.6 with respect to
Loans made by such Lender (and Section 2.6 shall apply, mutatis mutandis,
to the payment obligations of the Lenders), and the Global Administrative Agent shall promptly pay
to the Swingline Lender the amounts so received by it from the Lenders. The Global Administrative
Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the
Global Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline
Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan
after receipt by the Swingline Lender of the proceeds of a sale of participations

43

 

therein shall be promptly remitted to the Global Administrative Agent; any such amounts received by the Global
Administrative Agent shall be promptly remitted by the Global Administrative Agent to the Lenders
that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as
their interests may appear; provided that any such payment so remitted shall be repaid to
the Swingline Lender or to the Global Administrative Agent, as applicable, if and to the extent
such payment is required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any
default in the payment thereof.

          (d) The unpaid principal amount of each Swingline Loan shall be due and payable on the earlier
of (i) the Maturity Date, and (ii) the first date after such Swingline Loan is made that is the
15th or last day of a calendar month and is at least five (5) Business Days after such
Swingline Loan is made; provided that, on each date that a Revolving Borrowing (other than
a Revolving Borrowing resulting from the conversion or continuation of an existing Revolving
Borrowing) is made, the Borrower shall repay all Swingline Loans then outstanding; provided
further, that, except with respect to Swingline Loans payable on the Maturity Date, in the
event the Borrower has not paid the outstanding principal amount of any Swingline Loan on or prior
to 12:00 noon, Chicago time, on the date due, the Borrower shall be deemed to have requested an ABR
Revolving Loan (it being understood that if such Swingline Loan is being refinanced with an ABR
Revolving Borrowing, such ABR Revolving Borrowing may be obtained on the same Business Day as the
proposed Borrowing, notwithstanding the advance notice requirements of Section 2.3(b)) in
an amount equal to the outstanding principal amount of such Swingline Loan maturing on such date,
and such Swingline Loan shall be deemed converted to an ABR Revolving Loan on such date, and shall
continue as an ABR Revolving Loan until converted in accordance with Section 2.7.

          (e) Each Swingline Borrowing initially shall be of the Type specified in the applicable
Borrowing Request (or an ABR Swingline Borrowing if no Type is specified). Thereafter, the
Borrower may elect from time to time to convert such Swingline Borrowing to a different Class, all
as provided in this Section. This Section shall not apply to the continuation of Swingline
Borrowings, or to the conversion of Swingline Borrowings to a different Type, which Swingline
Borrowings may not be continued or so converted.

          (f) To make an election pursuant to clause (e) of this Section, an Authorized Officer
of the Borrower shall notify the Global Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.3 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be made on the
effective date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Global
Administrative Agent of a written Interest Election Request executed by an Authorized Officer of
the Borrower, substantially in the form of Exhibit E-4 or otherwise in a form approved by
the Global Administrative Agent. The Global Administrative Agent will promptly advise the
Swingline Lender of any such notice received from the Borrower.

          (g) Each telephonic and written Interest Election Request pursuant to this Section 2.4
shall specify the following information in compliance with this Section 2.4:

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     (i) the Swingline Borrowing to which such Interest Election Request applies;

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

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

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

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

          (h) Promptly following receipt of an Interest Election Request pursuant to this Section
2.4, the Global Administrative Agent shall advise each Lender of the details thereof and of
such Lender’s portion of each resulting Revolving Borrowing.

          (i) Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Global Administrative Agent, at the request of the Required Lenders, so notifies
the Borrower, then, so long as such Event of Default is continuing, no outstanding Swingline
Borrowing may be converted to a Eurodollar Borrowing.

     SECTION 2.5 Letters of Credit.

          (a) General. Subject to the terms and conditions set forth herein, an Authorized
Officer of the Borrower may request the issuance of Letters of Credit for its own account or the
account of any Subsidiary (other than a Foreign Subsidiary), in a form reasonably acceptable to the
Global Administrative Agent and the relevant Issuing Bank, at any time and from time to time during
the Availability Period. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with, an Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions; Issuance of
Letters of Credit. To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), an Authorized Officer of the Borrower shall, prior
to noon, Chicago time, at least three (3) Business Days prior to the proposed date of issuance or
modification, hand deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the relevant Issuing Bank) to an Issuing Bank and the Global
Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal
or extension (which shall be a Business Day), the date

45

 

on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name of the account party (which shall be the Borrower or a Subsidiary that is not a
Foreign Subsidiary), the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by an
Issuing Bank, an Authorized Officer of the Borrower also shall submit a letter of credit
application on such Issuing Bank’s standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment, renewal or extension
(i) the aggregate LC Exposure shall not exceed U.S.$50,000,000 and (ii) the total Credit Exposure
shall not exceed the lowest of (A) the aggregate Commitments of the Lenders then in effect, (B) the
U.S. Borrowing Base then in effect or (C) the Allocated U.S. Borrowing Base then in effect. On the
Business Day on which a Letter of Credit is requested to be issued, unless the Global
Administrative Agent or the relevant Issuing Bank determines that any applicable condition
precedent required pursuant to this Agreement has not been satisfied, the relevant Issuing Bank
shall issue such Letter of Credit for the account of the Borrower or the account of the applicable
Subsidiary, as the case may be, by the end of such Business Day.

          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the date one year after the date of the issuance of such Letter of Credit or, in the
case of any renewal or extension thereof of any Letter of Credit with an initial one-year tenor,
one year after such renewal or extension, provided such date is not beyond the Maturity Date
unless, with respect to such Letter of Credit that has an expiration date extending beyond the
Maturity Date, the Borrower shall, no later than five (5) days prior to the Maturity Date, deposit
in an account with the Global Administrative Agent (and in accordance with the procedure and
subject to the same terms as described in clause (i) below), in the name of the Global
Administrative Agent and for the benefit of the Lenders as security for the LC Exposure with
respect to such Letter of Credit, cash collateral in an amount equal to the LC Exposure with
respect to such Letter of Credit so remaining as of the Maturity Date.

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

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          (e) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Global
Administrative Agent an amount equal to such LC Disbursement not later than 1:00 p.m., Chicago
time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of
such LC Disbursement prior to 10:00 a.m., Chicago time, on such date, or, if such notice has not
been received by the Borrower prior to such time on such date, then not later than 1:00 p.m.,
Chicago time, on the Business Day immediately following the day that the Borrower receives such
notice; provided that the Borrower may, subject to the conditions to Borrowing set forth
herein, request in accordance with Section 2.3 or Section 2.4 that such payment be
financed with an ABR Revolving Borrowing or Swingline Borrowing (it being understood that if such
payment is to be financed with an ABR Revolving Borrowing, then the Borrower may request and obtain
such ABR Revolving Loan on the same Business Day as the proposed Borrowing, notwithstanding the
advance notice requirements of Section 2.3(b), so long as such request is made by 12:00
noon, Chicago time) in an equivalent amount and, to the extent so financed, the Borrower’s
obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing or Swingline Borrowing. If the Borrower fails to make such payment when due (or request
an ABR Revolving Borrowing or Swingline Borrowing therefor as provided herein), the Global
Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Global Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in
Section 2.6 with respect to Loans made by such Lender (and Section 2.6 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the Global
Administrative Agent shall promptly pay to such Issuing Bank the amounts so received by it from the
Lenders. Promptly following receipt by the Global Administrative Agent of any payment from the
Borrower pursuant to this paragraph (or promptly following the Global Administrative Agent’s
receipt from the Lenders of proceeds from a requested ABR Revolving Borrowing or Swingline
Borrowing), the Global Administrative Agent shall distribute such payment to such Issuing Bank or,
to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing
Bank, then to such Lenders and such Issuing Bank as their interests may appear. Any payment made
by a Lender pursuant to this paragraph to reimburse any Issuing Bank for any LC Disbursement (other
than the funding of ABR Revolving Loans or Swingline Loans as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement or the other Loan Documents, or any term or provision herein or
therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein proving to be untrue or inaccurate in
any respect, (iii) payment by an Issuing Bank under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any
other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might,
but for the provisions of this Section, constitute a legal or equitable

47

 

discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder. Neither the Agents, the Lenders or
any Issuing Bank nor any of their Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of such Issuing Bank;
provided that none of the foregoing shall be construed to excuse such Issuing Bank from
liability to the Borrower to the extent of any direct or actual damages (AS OPPOSED TO SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, CLAIMS IN RESPECT OF WHICH ARE HEREBY WAIVED BY THE
BORROWER TO THE EXTENT PERMITTED BY APPLICABLE LAW) suffered by the Borrower that are caused by
such Issuing Bank’s failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part of an Issuing Bank
(as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to
have exercised care (REGARDLESS OF WHETHER THE ISSUING BANK HAS BEEN NEGLIGENT) in each such
determination. In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, any Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.

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

          (h) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then, unless
the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement,
at the rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement within five (5) days after such reimbursement is
due pursuant to paragraph (e) of this Section, then Section 2.13(d) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of such Issuing Bank, except
that interest accrued on and after the date of payment by any Lender pursuant to paragraph
(e) of this Section to reimburse such Issuing Bank shall be for the account of such Lender to
the extent of such payment.

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     (i) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower receives written notice from the Global Administrative Agent or
the Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Global Administrative Agent, in the name of the
Global Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the
aggregate LC Exposure as of such date plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without demand or other
notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower
described in Section 8.1(g) or (h). The Borrower also shall deposit cash
collateral pursuant to this paragraph as and to the extent required by Section 2.11, and
any such cash collateral so deposited and held by the Global Administrative Agent hereunder shall
constitute part of the Global Borrowing Base for purposes of determining compliance with
Section 2.11. Each such deposit shall be held by the Global Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower under this Agreement.
The Global Administrative Agent shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Subject to the proviso at the end of this sentence, other
than any interest, if any, earned on the investment of such deposits, which investments shall be
made at the option and reasonable discretion of the Global Administrative Agent (provided that it
has received sufficient protection and indemnities as it reasonably requests in connection with its
investing such cash collateral) and at the Borrower’s risk and expense, such deposits shall not
bear interest; provided, that, the Borrower may direct the Global Administrative Agent to
invest amounts credited to such account, at the Borrower’s risk and expense, in Permitted
Investments described in clauses (a), (b), (e) and (f) of the
definition of “Permitted Investments.” Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the Global Administrative
Agent to reimburse the relevant Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the aggregate LC Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to the consent of Lenders holding LC
Exposure in the aggregate greater than 50% of the aggregate LC Exposure at such time), be applied
to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) and, if any, all interest and profits
thereon shall be returned to the Borrower within three (3) Business Days after all Events of
Default then in existence have been cured or waived. If the Borrower is required to provide an
amount of cash collateral hereunder pursuant to Section 2.11, such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower as and to the extent that, after giving
effect to such return, the Borrower would remain in compliance with Section 2.11 and no
Event of Default shall have occurred and be continuing.

     (j) Existing Letters of Credit. Each Letter of Credit (as defined in the Existing
Credit Agreement) issued for the Borrower’s own account, or the account of any Subsidiary (as
defined in the Existing Credit Agreement), under and pursuant to the terms of the Existing Credit
Agreement and that is outstanding as of the Closing Date (each an “Existing Letter of
Credit”), is hereby deemed to be a Letter of Credit issued and outstanding under this Agreement
as of the Closing Date, and the issuer thereof is hereby deemed to be an Issuing Bank hereunder.

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     SECTION 2.6 Funding of Borrowings.

          (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 1:00 p.m. (or 2:00 p.m., in the case of an ABR
Revolving Borrowing requested pursuant to and in accordance with Section 2.5(e)), Chicago
time, to the account of the Global Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided, that Swingline Loans shall be made as provided
in Section 2.4. The Global Administrative Agent will make such Loans available to the
Borrower by promptly wiring the amounts so received, in like funds, to an account of the Borrower
in accordance with the wiring instructions set forth in the relevant Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.5(e) shall be remitted by the Global Administrative Agent to the
applicable Issuing Bank.

          (b) Unless the Global Administrative Agent shall have received notice from a Lender prior to
the proposed date of any Borrowing that such Lender will not make available to the Global
Administrative Agent such Lender’s share of such Borrowing, the Global Administrative Agent may
assume that such Lender has made such share available on such date in accordance with paragraph
(a) of this Section and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Global Administrative Agent, then the applicable Lender and the Borrower
severally agree to pay to the Global Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the Global Administrative Agent,
at (i) in the case of such Lender, the greater of (A) the Federal Funds Effective Rate or (B) a
rate determined by the Global Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to Loans
made in such Borrowing (provided that any such demand made to the Borrower shall be made within
three (3) Business Days following disbursement by the Global Administrative Agent, or the Global
Administrative Agent shall be deemed to have waived the right to make such demand for immediate
reimbursement from the Borrower and such funded amount shall be, as with respect to the Borrower,
deemed to be a Loan hereunder). If such Lender pays such amount to the Global Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

     SECTION 2.7 Interest Elections.

          (a) Each Revolving Borrowing initially shall be of the Type specified in the applicable
Borrowing Request (or an ABR Revolving Borrowing if no Type is specified) and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request
(or one month if no Interest Period is specified). Thereafter, the Borrower may elect from time to
time to convert such Revolving Borrowing to a different Type or to continue such Revolving
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may, subject to the requirements of Section 2.2(c),
elect different options with respect to different portions of the affected Revolving Borrowing, in
which case each such portion shall be allocated ratably among the Lenders holding the Revolving
Loans comprising such Revolving Borrowing, and the

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Revolving Loans comprising each such portion
shall be considered a separate Revolving Borrowing. This Section shall not apply to Swingline
Borrowings, which may not be converted except to the extent provided in Section 2.4.

          (b) To make an election pursuant to this Section, an Authorized Officer of the Borrower shall
notify the Global Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.3 if the Borrower were requesting a Revolving
Borrowing of the Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Global Administrative Agent of a written
Interest Election Request executed by an Authorized Officer of the Borrower, substantially in the
form of Exhibit E-2 or otherwise in a form approved by the Global Administrative Agent.

          (c) Each telephonic and written Interest Election Request pursuant to this Section 2.7
shall specify the following information in compliance with Section 2.2:

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

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

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

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

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

          (d) Promptly following receipt of an Interest Election Request pursuant to this Section
2.7, the Global Administrative Agent shall advise each Lender of the details thereof and of
such Lender’s portion of each resulting Revolving Borrowing.

          (e) If the Borrower fails to deliver a timely Interest Election Request (or delivers an
Interest Election Request that is inconsistent with a telephonic election) with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Revolving Borrowing is repaid as provided herein, at the end of such Interest Period such Revolving
Borrowing shall be converted to an ABR Revolving Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the Global Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long as such Event of
Default is continuing, (i) no outstanding Revolving Borrowing may be

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converted to or continued as a
Eurodollar Borrowing and (ii) unless the Obligations have been accelerated pursuant to Section
8.3, each Eurodollar Borrowing shall be converted to an ABR Revolving Borrowing at the end of
the Interest Period applicable thereto.

     SECTION 2.8 Global Borrowing Base.

          (a) Initial Global Borrowing Base and U.S. Borrowing Base. During the period from the
date hereof to the date of the first redetermination of the Global Borrowing Base and the U.S.
Borrowing Base pursuant to the provisions of this Section, (i) the initial amount of the Global
Borrowing Base has been determined by the Global Administrative Agent and acknowledged by the
Borrower and the Canadian Borrower and agreed to by the Combined Lenders to be U.S.$850,000,000 and
(ii) the initial amount of the U.S. Borrowing Base has been determined by the Global Administrative
Agent and acknowledged by the Borrower and agreed to by the Combined Lenders to be
U.S.$650,000,000.

          (b) Annual Scheduled Determinations of the Global and U.S. Borrowing Bases. Promptly
after January 1st of each calendar year (commencing January 1, 2008), and in any event prior to
April 1st of each calendar year, commencing April 1, 2008, the Borrower shall furnish to the Global
Administrative Agent and the Combined Lenders a Reserve Report in form and substance reasonably
satisfactory to the Global Administrative Agent, which Reserve Report shall evaluate as of December
31st of the immediately preceding calendar year (i) the Proved Mineral Interests attributable to
the Oil and Gas Properties which the Borrower wishes to include in the Global Borrowing Base, and a
projection of the rate of production and net operating income with respect thereto, as of such
date, and (ii) the Proved Mineral Interests attributable to the Oil and Gas Properties of the
Borrower and its U.S. Subsidiaries which the Borrower wishes to include in the U.S. Borrowing Base,
and a projection of the rate of production and net operating income with respect thereto, as of
such date, in each case, together with additional data concerning pricing, hedging, operating costs
and quantities of production, and other information and engineering and geological data as the
Global Administrative Agent or any Combined Lender may reasonably request. Within 30 days after
receipt of such report and information, the Global Administrative Agent shall make an initial
determination of the Global Borrowing Base and the U.S. Borrowing Base, and shall promptly notify
the Combined Lenders and the Borrower in writing of the Global Administrative Agent’s initial
determination of the Global Borrowing Base and the U.S. Borrowing Base. The Global Administrative
Agent shall make such determination in accordance with its customary practices and standards for
oil and gas loans and in the exercise of its sole discretion. Within fifteen (15) days following
their receipt of the proposed amount for the redetermined Global Borrowing Base and U.S. Borrowing
Base, (A) the Supermajority Lenders (in the case of the Global Borrowing Base) or the U.S.
Supermajority Lenders (in the case of the U.S. Borrowing Base) (and with the agreement in either
case of the Borrower, such agreement in either case to be given in its sole discretion) if the
proposed amount is an increase or (B) the Required Lenders (in the case of the Global Borrowing
Base) or the U.S. Required Lenders (in the case of the U.S. Borrowing Base) if the proposed amount
is a decrease or maintenance, shall approve or reject the Global Administrative Agent’s initial
determination of the Global Borrowing Base and U.S. Borrowing Base by written notice to the Global
Administrative Agent; provided, however that failure by any Combined Lender to
reject in writing the Global Administrative Agent’s determination of the Global Borrowing Base and
U.S. Borrowing Base within said fifteen (15) day period shall be deemed an acceptance of such

52

 

determination by such Combined Lender. If the Supermajority Lenders (in the case of the Global
Borrowing Base) or the U.S. Supermajority Lenders (in the case of the U.S. Borrowing Base) (and, in
either case, with the agreement of the Borrower in the case of a proposed increase, such agreement
in either case to be given in its sole discretion) or the Required Lenders or U.S. Required
Lenders, as applicable, fail to approve any such determination of the Global Borrowing Base or U.S.
Borrowing Base made by the Global Administrative Agent hereunder, then the Global Administrative
Agent shall poll the Supermajority Lenders, U.S. Supermajority Lenders, Required Lenders or U.S.
Required Lenders, as appropriate, and the Global Borrowing Base and U.S. Borrowing Base, as
applicable, shall be set at the highest amount on which the Supermajority Lenders (in the case of
the Global Borrowing Base) or the U.S. Supermajority Lenders (in the case of the U.S. Borrowing
Base) (and, in either case, with the agreement of the Borrower, such agreement in either case to be
given in its sole discretion) if such number would result in an increase in the Global Borrowing
Base or U.S. Borrowing Base, or otherwise, the Required Lenders or U.S. Required Lenders, as
applicable, can agree, it being understood that a Combined Lender is deemed to have agreed to any
and all amounts that are lower than the amount actually determined by such Combined Lender to be
the appropriate value of the Global Borrowing Base and U.S. Borrowing Base. Upon approval or
deemed approval by the Supermajority Lenders or the U.S. Supermajority Lenders and the Borrower or
the Required Lenders or U.S. Required Lenders, as applicable, of the Global Borrowing Base and U.S.
Borrowing Base, the Global Administrative Agent upon notice thereof shall, by written notice to the
Borrower and the Combined Lenders, designate the new U.S. Borrowing Base available to the Borrower
and Global Borrowing Base available to the Borrower and the Canadian Borrower (each such notice in
this Section 2.8(b), a “Global Borrowing Base Designation Notice”). If the
Combined Commitments are in effect and/or any Combined Obligations are outstanding, then upon
receipt of such Global Borrowing Base Designation Notice, the Borrower shall designate the
Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing Base to the Global
Administrative Agent in accordance with Section 2.8(d). The Borrower shall be deemed to
have agreed to the Global Borrowing Base and U.S. Borrowing Base as set forth in such Global
Borrowing Base Designation Notice unless it informs the Global Administrative Agent in writing of
its objection thereto prior to the date it designates the Allocated U.S. Borrowing Base and
Allocated Canadian Borrowing Base pursuant to Section 2.8(d) following its receipt of such
Global Borrowing Base Designation Notice.

          (c) Maximum Credit. The Global Borrowing Base shall represent the maximum amount of
credit in the form of loans, letters of credit and bankers’ acceptances (subject to the aggregate
Combined Commitments and subject to the other provisions hereof or of the Canadian Credit
Agreement) that the Combined Lenders will extend to the Borrower or the Canadian Borrower pursuant
to the Combined Loan Documents at any one time prior to the Maturity Date. The U.S. Borrowing Base
shall represent the maximum amount of credit in the form of Loans and Letters of Credit (subject to
the aggregate Commitments and subject to the other provisions thereof) that the Lenders will extend
to the Borrower pursuant to the Loan Documents at any one time prior to the Maturity Date.

          (d) Allocation of the Global Borrowing Base. For so long as any of the Combined
Commitments are in effect and/or any Combined Obligations are outstanding, the Global Borrowing
Base shall be comprised of the Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing
Base, and allocations between the Allocated U.S. Borrowing

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Base and Allocated Canadian Borrowing
Base shall be made in accordance with this Section 2.8(d).

     (i) The “Allocated U.S. Borrowing Base” means, as of any date, the amount in
U.S. Dollars designated or determined as such from time to time (A) by the Borrower
pursuant to a Borrowing Base Allocation Notice delivered in accordance with Section
2.8(d)(iii) of this Agreement or (B) in accordance with the other provisions of this
Agreement. As of the date of this Agreement, the initial Allocated U.S. Borrowing Base
shall be U.S.$550,000,000.

     (ii) The “Allocated Canadian Borrowing Base” means, as of any date, the
Equivalent Amount in U.S. Dollars designated as such from time to time (A) by the Borrower
pursuant to a Borrowing Base Allocation Notice delivered in accordance with Section
2.8(d)(iii) of this Agreement or (B) in accordance with the other provisions of this
Agreement. On the date of this Agreement, the initial Allocated Canadian Borrowing Base
shall be U.S.$300,000,000.

     (iii) Within ten (10) Business Days of receipt of a Global Borrowing Base Designation
Notice, the Borrower shall specify the allocation of the Global Borrowing Base between the
Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing Base by providing a
written notice to the Global Administrative Agent of such allocation (each such notice
herein a “Borrowing Base Allocation Notice”); provided that (A) the sum of
the Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing Base shall at all
times be equal to the Global Borrowing Base then in effect and (B) at no time shall the
Allocated U.S. Borrowing Base be set at an amount less than U.S.$50,000,000 and at no time
shall the Allocated Canadian Borrowing Base be set at an amount less than U.S.$50,000,000
(such minimum amount in respect of the Allocated U.S. Borrowing Base then in effect, the
“Minimum Threshold Amount”). In the event that the Borrower fails to provide the
Global Administrative Agent with a Borrowing Base Allocation Notice required to be
delivered upon receipt of a Global Borrowing Base Designation Notice within the period
required by this Section 2.8(d)(iii), the Global Borrowing Base will be allocated
in the same proportion as existed prior to such redetermination. Promptly upon the
allocation of the Global Borrowing Base between the Allocated U.S. Borrowing Base and the
Allocated Canadian Borrowing Base in accordance with the procedures set forth above, the
Global Administrative Agent shall provide a written notice to the Combined Lenders and the
Borrower, which written notice shall set forth the Allocated U.S. Borrowing Base and the
Allocated Canadian Borrowing Base to be in effect. Any designation of the Allocated U.S.
Borrowing Base or the Allocated Canadian Borrowing Base effected pursuant to this
Section 2.8(d)(iii) in connection with a determination or redetermination of the
Global Borrowing Base or U.S. Borrowing Base, shall be effective as of the date of the
Global Borrowing Base Designation Notice.

     (iv) So long as no Default or Event of Default shall have occurred and be continuing,
from time to time but in no event more than (i) four (4) times per Fiscal Year and (ii)
once every thirty (30) days, upon at least five (5) Business Days prior written notice to
the Global Administrative Agent, the Borrower may reallocate the

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Global Borrowing Base between the Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing Base (a
“Discretionary Borrowing Base Reallocation”). Promptly upon the allocation of the
Global Borrowing Base between the Allocated U.S. Borrowing Base and the Allocated Canadian
Borrowing Base in accordance with the procedures set forth in this clause (iv), the
Global Administrative Agent shall provide a written notice to the Combined Lenders and the
Borrower, which written notice shall set forth the Allocated U.S. Borrowing Base and the
Allocated Canadian Borrowing Base to be in effect. Any designation of the Allocated U.S.
Borrowing Base or the Allocated Canadian Borrowing Base effected pursuant to this
Section 2.8(d)(iv) in connection with a Discretionary Borrowing Base Reallocation,
shall (A) be effective five (5) Business Days following the date the Global Administrative
Agent receives the Borrowing Base Allocation Notice or the date indicated for such
effectiveness in the Borrowing Base Allocation Notice, whichever is later and (B) be
subject to the Minimum Threshold Amount described in clause (iii) above.

          (e) Discretionary Redetermination of the Global Borrowing Base and U.S. Borrowing
Base. Each of (i) the Borrower or (ii) (A) the Global Administrative Agent or (B) the Required
Lenders, shall have the right to request in writing a redetermination of the Global Borrowing Base
and U.S. Borrowing Base, in its or their sole discretion at any time and from time to time,
provided, that clause (i) and clause (ii) may each be the basis of an
unscheduled redetermination not more often than one (1) time during any calendar year, regardless,
in the case of clause (ii), of which Person makes such request. If any Person shall
request a discretionary redetermination of the Global Borrowing Base and U.S. Borrowing Base
pursuant to the provisions of this Section 2.8(e), the Borrower shall, upon receipt of a
request therefor from the Global Administrative Agent, deliver to the Global Administrative Agent,
by the date reasonably requested by the Global Administrative Agent (or, in the event of an
unscheduled redetermination requested by the Borrower, by the date mutually agreed upon by the
Borrower and the Global Administrative Agent), a Reserve Report dated as of the date requested in
such notice and such updated engineering, production, operating and other data as the Global
Administrative Agent or any other Combined Lender may reasonably request; provided, that,
such Reserve Report may, in the discretion of the Borrower, be (1) a new Reserve Report, (2) the
Reserve Report delivered in connection with the immediately preceding redetermination (whether
scheduled or unscheduled) of the Global Borrowing Base and the U.S. Borrowing Base, and/or (3) an
update of such Reserve Report described in subclause (2); provided, further
that, in connection with any request for an unscheduled redetermination pursuant to clause
(ii) above, the Reserve Report shall cover such additional Oil and Gas Properties of the
Borrower and its Subsidiaries as the Required Lenders may reasonably request. The Supermajority
Lenders (in the case of the Global Borrowing Base) or the U.S. Supermajority Lenders (in the case
of the U.S. Borrowing Base) (and, in either case, with the agreement of the Borrower, such
agreement in either case to be given in its sole discretion) if such number would result in an
increase in the Global Borrowing Base or U.S. Borrowing Base or otherwise, the Required Lenders or
U.S. Required Lenders, as the case may be, shall approve and designate the new Global Borrowing
Base and U.S. Borrowing Base in accordance with the procedures and standards described in
Section 2.8(b) and the Borrower shall provide a Borrowing
Base Allocation Notice to the Global Administrative Agent in accordance with Section 2.8(d)(iii); provided that
in the event that the Borrower fails to provide such Borrowing Base Allocation

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Notice, the Global
Borrowing Base shall be allocated between the Allocated U.S. Borrowing Base and Allocated Canadian
Borrowing Base in accordance with Section 2.8(d)(iii).

          (f) General Provisions With Respect to the Global Borrowing Base. The determination
of the Global Borrowing Base and U.S. Borrowing Base shall be made by the Global Administrative
Agent and the Supermajority Lenders or U.S. Supermajority Lenders or Required Lenders or U.S.
Required Lenders, as applicable, taking into consideration the estimated value of the Oil and Gas
Properties owned by the Borrower and its Subsidiaries as reflected in the most recent Reserve
Report delivered hereunder and any other relevant information obtained by or delivered to the
Global Administrative Agent or any other Combined Lender, all in accordance with the other
provisions of this Section 2.8 in accordance with their customary practices for oil and gas
loans as in effect from time to time. It is understood by the parties hereto that, unless
otherwise approved by the Supermajority Lenders or U.S. Supermajority Lenders, as applicable,
pursuant to, and in accordance with, the other provisions of this Section 2.8, the Combined
Lenders shall have no commitment or obligation whatsoever to increase the Global Borrowing Base or
U.S. Borrowing Base, as applicable, to any amount in excess of U.S.$850,000,000 or U.S.
$650,000,000, respectively, and nothing herein contained shall be construed to be a commitment by
the Combined Lenders to so increase the Global Borrowing Base or U.S. Borrowing Base except to the
extent so approved. The Global Borrowing Base and U.S. Borrowing Base (i) may each be redetermined
pursuant to Section 2.8(b) (annual) and Section 2.8(e) (unscheduled), (ii) subject
to the rights of the Borrower and the applicable Subsidiaries contained in Section 2.8(g),
may be adjusted from time to time to give effect to the occurrence of Casualty Events under
Section 2.8(g), and (iii) may each be reduced by an amount not greater than the applicable
Debt Issuance Reduction Amount pursuant to Section 2.8(h) in connection with the issuance
of any Permitted Senior Notes Debt. In connection with any redetermination, adjustment or
reduction pursuant to any of the foregoing, if the Global Administrative Agent determines that
either a Global Borrowing Base Deficiency or a U.S. Borrowing Base Deficiency exists, the Global
Administrative Agent shall give written notice thereof to the Borrower and the date such notice is
received shall be the “Deficiency Notification Date”.

          (g) Casualty Event. In the event that a Casualty Event has occurred with respect to
any Borrowing Base Property or U.S. Borrowing Base Property, to the extent that the Net Cash
Proceeds received by the Borrower or any of its Subsidiaries with respect to such Casualty Event
(together with all other Net Cash Proceeds received during such calendar year) exceeds 5% of the
Global Borrowing Base and have not been applied or budgeted to be applied by the Borrower or any
such Subsidiary to repair, restore or replace the Property affected by such Casualty Event within
180 days after the receipt thereof, which actions the Borrower or such Subsidiary shall hereby be
permitted to take, the Global Administrative Agent, at the request of the Required Lenders, shall
have the right to reduce the U.S. Borrowing Base (if the Casualty Event that has occurred related
to a U.S. Borrowing Base Property) and the Global Borrowing Base, in its reasonable discretion
based on its review of such Casualty Event, by the value of the Property so affected by such
Casualty Event as set forth in the most recent Reserve Report; provided that, if an Event
of Default has occurred and is continuing, (i) such repair, restoration or replacement may occur
only with the written consent of the Global Administrative Agent, (ii) the Global Administrative
Agent may, at the request of the Required Lenders, reduce the U.S. Borrowing Base and Global
Borrowing Base, as the case may be, in the manner set forth above

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without regard to the 180 day
period referenced above and (iii) such Net Cash Proceeds shall be applied in accordance with
Section 2.11 to the extent required thereby. The Global Administrative Agent shall provide
notice to the Borrower and the Combined Lenders of the reduction in the U.S. Borrowing Base (if the
Casualty Event that has occurred related to a U.S. Borrowing Base Property) and the Global
Borrowing Base, which reduction shall be effective as of the date of such notice.

          (h) Issuance of Other Indebtedness. In the event of the issuance of any Permitted
Senior Notes Debt permitted pursuant to Section 7.1(o), the Global Administrative Agent and
the Required Lenders shall have the option, on not more than one occasion in connection with each
such issuance, to reduce the Global Borrowing Base and the U.S. Borrowing Base by an amount agreed
to by the Required Lenders, which reduction amount shall not be greater than the applicable Debt
Issuance Reduction Amount calculated with respect to such Permitted Senior Notes Debt then most
recently issued; provided, that, (i) in the event the Required Lenders are unable to agree
upon any such reduction amount provided for in this Section 2.8(h) within thirty (30) days
of the issuance of any such Permitted Senior Notes Debt, the Global Borrowing Base and the U.S.
Borrowing Base shall each reduce by an amount equal to the applicable Debt Issuance Reduction
Amount calculated with respect to such Permitted Senior Notes Debt then most recently issued, and
(ii) notwithstanding the foregoing or anything to the contrary contained in any Combined Loan
Document, if and only to the extent the Borrower uses any of the proceeds of the issuance of any
Permitted Senior Notes Debt to contemporaneously refinance or replace any of the Existing
Subordinate Debt and/or any other Permitted Senior Notes Debt in accordance with the last sentence
of Section 7.14 hereof, then the provisions of this Section 2.8(h) shall not apply,
and the Global Borrowing Base and the U.S. Borrowing Base shall not be reduced pursuant to the
provisions of this Section 2.8(h) in each case only, to the extent such proceeds are so
used. In connection with any such reduction, the Global Administrative Agent shall promptly
provide written notice to the Borrower and the Combined Lenders of the reduction of the Global
Borrowing Base and the U.S. Borrowing Base. Upon the approval of the Required Lenders of such
reduction amount, or, alternatively, upon any reduction by an amount equal to the Debt Issuance
Reduction Amount, and the delivery of written notice thereof to the Borrower, the Global Borrowing
Base and U.S. Borrowing Base shall each be reduced as of the date such notice is delivered or such
later date as specified in such notice. Notwithstanding anything to the contrary in the Combined
Loan Documents, (A) the language of the proviso of Section 2.11(b)(i) of this Agreement
shall not apply to any Global Borrowing Base Deficiency or U.S. Borrowing Base Deficiency resulting
from the application of this Section 2.8(h) and (B) the application of this Section
2.8(h) shall never result in an increase in the Global Borrowing Base or the U.S. Borrowing
Base.

     SECTION 2.9 Termination and Reduction of Global Commitments and Commitments; Extension of
Maturity Date.

          (a) Unless previously terminated, the Global Commitments and the Commitments shall terminate
on the Maturity Date.

          (b) An Authorized Officer of the Borrower may at any time terminate, or from time to time
reduce, without premium or penalty, the Global Commitments; provided that (i) each
reduction of the Global Commitments shall be in an amount that is an integral multiple of

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U.S.$1,000,000 and not less than U.S.$3,000,000 and (ii) the Borrower shall not terminate or reduce
the Global Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.11 and after giving effect to a reallocation of the Global
Commitments and adjustment of the Commitments pursuant to Section 2.1(c), the aggregate
Credit Exposure of the Lenders would exceed the aggregate Commitments of the Lenders.

          (c) An Authorized Officer of the Borrower shall notify the Global Administrative Agent of any
election to terminate or reduce the Global Commitments under paragraph (b) of this Section
at least three (3) Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following receipt of any such
notice, the Global Administrative Agent shall advise the Combined Lenders of the contents thereof
and reallocate the Global Commitments and adjust the Commitments in accordance with Section
2.1(c). Each notice delivered by an Authorized Officer of the Borrower pursuant to this
Section shall be irrevocable; provided that a notice of termination of the Global
Commitments delivered by an Authorized Officer of the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Global Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Except as provided in the immediately
preceding sentence, any termination or reduction of the Global Commitments shall be permanent and
may not be reinstated except pursuant to, and in accordance with, Section 2.1(b). Each
reduction of the Global Commitments shall reduce the Global Commitments of the Combined Lenders on
a pro rata basis and result in adjustments to the Commitments of the Lenders in accordance with
Section 2.1(c).

          (d) The Borrower will not terminate, or permit to expire, all of the Global Commitments and
Commitments under this Agreement prior to (i) the expiration or termination of the Canadian
Commitments and (ii) the payment and performance in full of all Canadian Obligations.

          (e) The Borrower may, by notice to the Global Administrative Agent (which shall promptly
deliver a copy to each of the Lenders) given not less than 90 days and not more than 120 days,
prior to the Maturity Date at any time in effect, and, subject to the proviso below, on not more
than two occasions, request that the Lenders extend the Maturity Date for an additional period of
not more than one year as specified in such notice; provided, that, the Borrower may, in
lieu of the foregoing and not in addition thereto, by notice to the Global Administrative Agent in
accordance with the foregoing provisions of this clause (e), on not more than one occasion,
request that the Lenders extend the Maturity Date for an additional period of not more than two
years as specified in such notice. Each Lender shall, by notice to the Borrower and the Global
Administrative Agent given not later than fifteen (15) days following receipt of the Borrower’s
request, advise the Borrower and the Global Administrative Agent whether or not it agrees to such
extension. The Global Administrative Agent shall promptly notify the Borrower and the Lenders of
the Lenders’ responses. Any Lender that has not so advised the Borrower and the Global
Administrative Agent by such day shall be deemed to have declined to agree to such extension. If
the Borrower shall have requested, and if each Lender shall have agreed to, an extension of the
Maturity Date, then the Maturity Date shall be extended for the additional period specified in the
Borrower’s request in accordance with the terms above, and the Global Administrative Agent shall
promptly notify the Borrower and the Lenders of the

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extension of the Maturity Date, whereupon the
Maturity Date shall be extended, effective as of the Maturity Date in effect immediately prior to
such extension, without the necessity for any further action; provided that, the Borrower
shall (i) execute and deliver, or cause to be executed and delivered, any and all documents which
may be reasonably required by the Global Administrative Agent in connection with such extension to
evidence such extension and new Maturity Date, and (ii) pay to the Global Administrative Agent, for
the account of each Lender, an extension fee in such amount as shall be agreed upon by the Borrower
and the Global Administrative Agent based on the then prevailing market rate for similar extensions
of comparable credit facilities. THE DECISION TO AGREE OR WITHHOLD AGREEMENT TO ANY EXTENSION OF
THE MATURITY DATE HEREUNDER SHALL BE AT THE SOLE DISCRETION OF EACH LENDER. Notwithstanding the
foregoing provisions of this paragraph, (A) the Maturity Date may not be extended to a date later
than February 9, 2014 pursuant to this clause (e), (B) the effectiveness of any such
extension shall be subject to (1) the absence of any Default, Event of Default, Global Borrowing
Base Deficiency or U.S. Borrowing Base Deficiency as of the date of such extension and request
therefor, (2) the absence of any material and adverse effect on the ability of any Loan Party to
fully, completely and timely pay its obligations under this Agreement as of the date of such
extension and request therefor, (3) the accuracy, in all material respects, of the representations
and warranties of each Loan Party set forth in the Loan Documents to which it is a party as of the
date of such extension and request therefor (or, if stated to have been made expressly as of an
earlier date, the accuracy, in all material respects, as of such date), and (4) a corresponding
extension of the “Maturity Date” (as defined in the Canadian Credit Agreement) in accordance with
the terms of Section 2.8(e) of the Canadian Credit Agreement, (C) the Borrower shall have the
right, pursuant to, and subject to the terms of, Section 2.20(c), to replace any
Non-Consenting Lender that has declined to agree to any requested extension of the Maturity Date
with a Lender or other financial institution that will agree to such extension of the Maturity
Date, (D) the Borrower shall have the right, at any time prior to the Maturity Date then in effect,
to withdraw its request for an extension under this clause (e) by notice to the Global
Administrative Agent (which shall promptly deliver a notice to each Lender), in which case the
Maturity Date will not be so extended, and (E) the Borrower shall have the right, at any time prior
to the Maturity Date then in effect, to withdraw its request for an extension of the Maturity Date
for an additional period of two (2) years and, in lieu thereof, request an extension of the
Maturity Date for an additional period of one year, by providing notice to the Global
Administrative Agent (which shall promptly deliver a notice to each Lender), in which case (1) the
Maturity Date will be extended for one year in the event the Lenders have previously agreed to a
two year extension pursuant to the Borrower’s request and in accordance with this Section
2.9(e), or (2) in the event any Lender has not previously agreed to a two year extension
pursuant to the Borrower’s request and in accordance with this Section 2.9(e), any such
Lender shall, by notice to the Borrower and the Global Administrative Agent given not later than
fifteen (15) days following receipt of the Borrower’s request pursuant to this clause (E),
advise the Borrower and the Global Administrative Agent whether or not it agrees to such one year
extension (and the Global Administrative Agent shall promptly notify the Borrower and the Lenders
of the Lenders’ responses), and any Lender that has not so advised the Borrower and the Global
Administrative Agent by such day shall be deemed to have declined to agree to such one year
extension; provided that, and notwithstanding anything to the contrary contained herein,
the Borrower shall not have the right provided in this clause (E) in the event that its
original request for an extension of two years was not approved by the Lenders pursuant

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 to the terms of this Section 2.9(e) and the Borrower’s alternative request pursuant to this
clause (E) is made (or would be made) by notice to the Global Administrative Agent given
less than 45 days prior to the Maturity Date.

     SECTION 2.10 Repayment of Loans; Evidence of Indebtedness.

          (a) The Borrower hereby unconditionally promises to pay (i) to the Global Administrative Agent
for the account of each Lender the then unpaid principal amount of each Revolving Loan of such
Lender on the Maturity Date, and (ii) to the Swingline Lender the then unpaid principal amount of
each Swingline Loan on the dates provided in, and in accordance with, Section 2.4(d).

          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the Obligations of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.

          (c) The Global Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Global
Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

          (d) The entries made in the accounts maintained pursuant to paragraphs (b) or
(c) of this Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the Global
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

          (e) Any Lender may request that Loans made by it be evidenced by one or more promissory notes.
In such event, the Borrower shall prepare, execute and deliver to such Lender promissory notes
payable to the order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns and in substantially the form of Exhibit A).
Thereafter, the Loans evidenced by such promissory notes and interest thereon shall at all times
(including after assignment pursuant to Section 10.4) be represented by one or more
promissory notes in such form payable to the order of the payee named therein (or, if any such
promissory note is a registered note, to such payee and its registered assigns).

     SECTION 2.11 Prepayment of Loans.

          (a) The Borrower shall have the right at any time and from time to time to prepay any
Borrowing in whole or in part, without premium or penalty except as expressly provided in this
Agreement, subject to the requirements of Section 2.11(d).

          (b) Subject to clause (c) below, the Borrower shall be required to prepay the Loans
hereunder and “Loans” under the Canadian Credit Agreement in accordance with the

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following, to the extent the Canadian Borrower does not otherwise make such prepayment in accordance with the
Canadian Credit Agreement:

     (i) Upon the occurrence of a Global Borrowing Base Deficiency resulting from a
redetermination or reduction of the Global Borrowing Base (other than pursuant to
Section 2.8(h)), the Borrower will prepay, or cause to be prepaid, Loans and
“Loans” under the Canadian Credit Agreement in an aggregate principal amount equal to such
deficiency, together, in each case, with unpaid interest accrued thereon to the date of
such prepayment and, if after prepaying all of such Loans and “Loans” under the Canadian
Credit Agreement, a Global Borrowing Base Deficiency remains as a result of an LC Exposure,
pay to the Global Administrative Agent an amount equal to such remaining Global Borrowing
Base Deficiency to be held as cash collateral as provided in Section 2.5(i);
provided however, that if the Global Borrowing Base Deficiency is the
result of a Scheduled Redetermination or a redetermination of the Global Borrowing Base
pursuant to Section 2.8(e)(ii) or as a result of any other event directly brought
about by the actions of any of the Global Administrative Agent, the Combined Lenders, the
Supermajority Lenders, the U.S. Supermajority Lenders, the Majority Lenders, the Required
Lenders or the U.S. Required Lenders (other than an acceleration of the Obligations,
reduction, reallocation, adjustment or termination of the Global Commitments or the “Global
Commitments” (as defined in the Canadian Credit Agreement) or the Commitments or Canadian
Commitments or an exercise of rights under Article VIII or Article VIII of the
Canadian Credit Agreement or any other enforcement of rights or remedies under the Combined
Loan Documents), then the Borrower shall, at its option, either (1) make (or cause to be
made) a single prepayment of principal and/or deposit of cash collateral in an amount equal
to such deficiency within thirty (30) days following the Deficiency Notification Date with
respect to such deficiency, (2) make (or cause to be made) six consecutive mandatory
prepayments of principal each of which shall be in an amount equal to one-sixth
(1/6th) of the amount of such Global Borrowing Base Deficiency commencing on the
first Monthly Date (provided such date is at least thirty (30) days following the
Deficiency Notification Date, otherwise commencing on the immediately following Monthly
Date) following the Deficiency Notification Date and continuing on each Monthly Date
thereafter, (3) within ninety (90) days following the Deficiency Notification Date with
respect to such deficiency, submit (and pledge as Collateral) additional Oil and Gas
Properties owned by the Borrower or any of its Subsidiaries for consideration in connection
with the determination of the Global Borrowing Base which the Global Administrative Agent
and the Lenders deem sufficient in their sole discretion to eliminate such Global Borrowing
Base Deficiency, or (4) within ninety (90) days following the Deficiency Notification Date
with respect to such deficiency, eliminate such Global Borrowing Base Deficiency through a
combination of prepayments and submission of additional Oil and Gas Properties as set forth
in clauses (1) and (3) above.

     (ii) Upon the occurrence of a U.S. Borrowing Base Deficiency resulting from a
redetermination or reduction of the Global Borrowing Base, the Borrower will take the
action described under clause (i) above.

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     (iii) Upon the occurrence of a U.S. Borrowing Base Deficiency resulting from a
reallocation of the Global Borrowing Base pursuant to Section 2.8(d), the Borrower
will prepay Loans in an aggregate principal amount equal to such deficiency, together with
interest on the principal amount paid accrued to the date of such prepayment, and if a U.S.
Borrowing Base Deficiency remains after prepaying all of the Loans as a result of an LC
Exposure, pay to the Global Administrative Agent an amount equal to such remaining U.S.
Borrowing Base Deficiency to be held as cash collateral as provided in Section
2.5(i); it being understood that the Borrower shall be obligated to make such
prepayment and/or deposit of cash collateral on the effective date of such reallocation.

     (iv) Notwithstanding anything in this Section 2.11(b) to the contrary, in the
event that a U.S. Borrowing Base Deficiency exists at a time when no Global Borrowing Base
Deficiency exists, then, to the extent that such action would cure (in whole or in part)
such U.S. Borrowing Base Deficiency, the Borrower may reallocate the Global Borrowing Base
between the Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing Base by
providing the Global Administrative Agent with its election to do so (which election will
designate the relevant reallocations) on the Business Day on which such U.S. Borrowing Base
Deficiency occurs; provided, however, that no reallocation shall be
permitted to the extent such reallocation would cause the aggregate “Credit Exposure” of
the Canadian Lenders under the Canadian Credit Agreement to be greater than the lower of
(1) the aggregate “Commitments” thereunder and (2) the Allocated Canadian Borrowing Base.

     (v) Upon the occurrence of a U.S. Borrowing Base Deficiency resulting from a Casualty
Event pursuant to Section 2.8(g) (subject to the Borrower’s and the applicable
Subsidiaries’ rights contained in Section 2.8(g)), the Borrower will utilize the
Net Cash Proceeds of such Casualty Event to take the action described under clause
(i) above (except that prepayments shall first be made in respect of Loans made
pursuant to this Agreement); provided that if a prepayment or deposit is required
under this clause (v), then the Borrower shall be obligated to make (or cause to be
made) such prepayment and/or deposit of cash collateral within sixty (60) days following
the Deficiency Notification Date with respect to such deficiency.

     (vi) Upon the occurrence of a Global Borrowing Base Deficiency or any U.S. Borrowing
Base Deficiency resulting from the issuance of any Permitted Senior Notes Debt pursuant to
Section 2.8(h), the Borrower will make (or cause to be made) a single prepayment of
principal and/or deposit of cash collateral in an amount equal to such deficiency within
thirty (30) days following the Deficiency Notification Date with respect to such
deficiency.

     (vii) Upon the occurrence of a Global Borrowing Base Deficiency or any U.S. Borrowing
Base Deficiency not resulting from a reason described in clauses (i), (ii),
(iii), (v) or (vi) above, the Borrower will prepay within sixty
(60) days the Loans and “Loans” under the Canadian Credit Agreement in an aggregate
principal amount equal to such Global Borrowing Base Deficiency or U.S. Borrowing Base
Deficiency together, in each case, with unpaid interest thereon accrued to the date of such
prepayment and, if

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after prepaying all such Loans and “Loans” under the Canadian Credit
Agreement, a Global Borrowing Base Deficiency remains as a result of an LC Exposure, pay to
the Global Administrative Agent an amount equal to such remaining Global Borrowing Base
Deficiency to be held as cash collateral as provided in Section 2.5(i).

          (c) Notwithstanding any other provision of this Section 2.11, if at any time the
Credit Exposure of any Lender exceeds its Commitment (including, without limitation, as a result of
a reallocation of its Global Commitment and adjustment of its Commitment pursuant to Section
2.1(c)), the Borrower will forthwith prepay the Loans of such Lender in an aggregate principal
amount equal to such excess, together with interest on the principal amount paid accrued to the
date of such prepayment, and if any excess remains after prepaying all of such Loans as a result of
an LC Exposure of such Lender, pay to the Global Administrative Agent an amount equal to such
remaining excess to be held as cash collateral for such Lender as provided in Section
2.5(i). The Borrower shall make prepayments pursuant to this clause (c) prior to
making prepayments pursuant to clause (b) above.

          (d) The Borrower shall notify the Global Administrative Agent (and, in the case of prepayment
of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than noon, Chicago
time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an
ABR Revolving Borrowing, not later than noon, Chicago time, one (1) Business Day before the date of
prepayment, and (iii) in the case of prepayment of a Swingline Borrowing, not later than noon,
Chicago time, on the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid
(which amount shall, in the case of clause (a) above, be in a minimum principal amount of
U.S.$1,000,000 and in U.S.$1,000,000 increments in excess thereof, provided that Swingline Loans
may be prepaid in any amount); provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Global Commitments as contemplated by
Section 2.9, then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.9. Promptly following receipt of any such notice
relating to a prepayment of a Revolving Borrowing, the Global Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that would be permitted in the case of an advance of a Borrowing of the same Type as provided in
Section 2.2. Each prepayment of a Borrowing shall be applied ratably to the Loans included
in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.13 and by any other amounts then due under this Agreement (including
all amounts due under Section 2.17).

     SECTION 2.12 Fees.

          (a) The Borrower agrees to pay to the Global Administrative Agent for the account of each
Lender a commitment fee (the “Commitment Fee”), which shall accrue at the Applicable Margin
on the daily amount equal to the Applicable Percentage of such Lender of the Unutilized Commitment
during the period from and including the Global Effective Date to but excluding the date on which
the Global Commitments and Commitments terminate. Accrued Commitment Fees shall be payable in
arrears on the last day of March, June, September and

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December of each year and on the date on
which the Global Commitments and Commitments terminate, commencing on the first such date to occur
after the date of this Agreement; provided that any Commitment Fees accruing after the date
on which the Global Commitments and Commitments terminate shall be payable on demand. All
Commitment Fees shall be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last day).

          (b) The Borrower agrees to pay (i) to the Global Administrative Agent for the account of each
Lender a participation fee with respect to its participation in each Letter of Credit, at a per
annum rate equal to the Applicable Margin as interest on Eurodollar Loans on such Lender’s
Applicable Percentage of the stated face amount of each such outstanding Letter of Credit during
the period from and including the date such Letter of Credit is issued (or, in the case of the
Existing Letters of Credit, the Global Effective Date) to but excluding the date such Letter of
Credit expires, and (ii) to the relevant Issuing Bank a fronting fee equal to the greater of (A)
U.S.$500 and (B) the rate of 0.125% per annum on the stated face amount of each outstanding Letter
of Credit during the period from and including the date such Letter of Credit is issued (or, in the
case of the Existing Letters of Credit, the Global Effective Date) to but excluding the date such
Letter of Credit expires, as well as any such Issuing Bank’s standard and customary fees with
respect to the administration, issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees shall be payable upon the
issuance and on each renewal of each Letter of Credit. Any other fees payable to any such Issuing
Bank pursuant to this paragraph shall be payable within ten (10) Business Days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of 360 days.

          (c) The Borrower agrees to pay to (i) the Global Administrative Agent, for its own account and
for the account of each Lender, as applicable, fees, including, without limitation, an upfront fee
(the “Upfront Fee”), and, if and when applicable, an extension fee (as provided in
Section 2.9(e)), in the amounts and at the times separately agreed upon in writing between
the Borrower and the Global Administrative Agent, including, without limitation, the amounts agreed
upon in the JPM Fee Letter, and (ii) Banc of America Securities LLC, or its Affiliate, fees in the
amounts agreed upon in the BofA Fee Letter.

          (d) Unless otherwise set forth herein, all fees payable hereunder shall be paid on the dates
due, in immediately available funds, to the Global Administrative Agent (or the relevant Issuing
Bank, in the case of fees payable to it) for distribution, in the case of Commitment Fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances absent manifest error (e.g., as a result of a clerical mistake).

     SECTION 2.13 Interest.

          (a) Subject to Section 10.13, the Loans comprising each ABR Revolving Borrowing shall
bear interest at the Alternate Base Rate plus the Applicable Margin for ABR Loans.

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          (b) Subject to Section 10.13, the Loans comprising each Eurodollar Borrowing shall
bear interest at the Adjusted Eurodollar Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin for Eurodollar Loans.

          (c) Subject to Section 10.13, the Swingline Loans shall bear interest at (i) the
Alternate Base Rate plus the Applicable Margin for ABR Loans or (ii) the Specified Rate plus the
Applicable Margin for Specified Rate Swingline Loans, as elected by the Borrower pursuant to
Section 2.4(b).

          (d) Notwithstanding the foregoing, but subject to Section 10.13, if any principal of
or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall
until paid or waived in writing bear interest, after as well as before judgment, at a rate per
annum (the “Default Rate”) equal to (i) in the case of overdue principal of any Loan, the
lesser of (A) the rate otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section plus 2% or (B) the Highest Lawful Rate or (ii) in the case of any other amount, the
lesser of (A) the rate applicable to ABR Revolving Loans as provided in paragraph (a) of
this Section plus 2% or (B) the Highest Lawful Rate.

          (e) Subject to Section 10.13, accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and upon termination of the Global Commitments
and Commitments; provided that (i) interest accrued pursuant to paragraph (d) of
this Section shall be payable on demand of the Global Administrative Agent or the Required Lenders,
(ii) in the event of any repayment or prepayment of any Loan (whether due to acceleration or
otherwise), accrued interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan
prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

          (f) Subject to Section 10.13, all interest hereunder shall be computed on the basis of
a year of 360 days, except that interest computed by reference to the Alternate Base Rate, shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but excluding the last day).
Promptly after the determination of any interest rate provided for herein or any change therein,
the Global Administrative Agent shall notify the Lenders to which such interest is payable and the
Borrower thereof. Each determination by the Global Administrative Agent of an interest rate or fee
hereunder shall, except in cases of manifest error, be final, conclusive and binding on the
parties.

     SECTION 2.14 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:

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

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

          (c) the Global Administrative Agent determines in good faith (which determination shall be
conclusive) that by reason of circumstances affecting the interbank dollar market generally,
deposits in U.S. Dollars in the London interbank dollar market are not being offered for the
applicable Interest Period and in an amount equal to the amount of the Eurodollar Loan requested by
the Borrower,

then the Global Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Global Administrative
Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, which notice the Global Administrative Agent shall give promptly after becoming aware
thereof, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing for the affected Interest Period shall be
ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing
shall be made as a Eurodollar Loan having the shortest Interest Period which is not unavailable
under clauses (a) through (c) of this Section, and if no Interest Period is
available, as an ABR Revolving Borrowing.

     SECTION 2.15 Illegality.

          (a) Notwithstanding any other provision of this Agreement to the contrary, if (i) by reason of
the adoption of any applicable Governmental Rule or any change in any applicable Governmental Rule
or in the interpretation or administration thereof by any Governmental Authority or compliance by
any Lender with any request or directive (whether or not having the force of law) of any central
bank or other Governmental Authority or (ii) circumstances affecting the London interbank dollar
market or the position of a Lender therein shall at any time make it unlawful in the sole
discretion of a Lender exercised in good faith for such Lender or its Applicable Lending Office to
(A) honor its obligation to make Eurodollar Loans either generally or for a particular Interest
Period provided for hereunder, or (B) maintain Eurodollar Loans either generally or for a
particular Interest Period provided for hereunder, then such Lender shall promptly notify the
Borrower thereof in writing through the Global Administrative Agent (who will endeavor to, but not
be liable for failing to, provide the Borrower with the basis therefor in reasonable detail) and
such Lender’s obligation to make or maintain Eurodollar Loans having an affected Interest Period
hereunder shall be suspended until such time as such Lender may again make and maintain Eurodollar
Loans having an affected Interest Period (in which case the provisions of Section 2.15(b)
hereof shall be applicable). Before giving such notice pursuant to this Section 2.15, such
Lender will designate a different available Applicable Lending Office for the affected Eurodollar
Loans of such Lender or take such other action as the Borrower may request if such designation or
action will avoid the need to suspend such Lender’s obligation to make Eurodollar Loans hereunder
and will not, in the sole opinion of such Lender exercised in good faith, be disadvantageous to
such Lender (provided, that such Lender shall have no obligation so to designate an Applicable
Lending Office for Eurodollar Loans located in the United States of America).

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          (b) If the obligation of any Lender to make or maintain any Eurodollar Loans shall be
suspended pursuant to Section 2.15(a) hereof, all Loans having an affected Interest Period
which would otherwise be made by such Lender as Eurodollar Loans shall be made instead as ABR
Revolving Loans (and, if such Lender so requests by written notice to the Borrower with a copy to
the Global Administrative Agent, each Eurodollar Loan having an affected Interest Period of such
Lender then outstanding shall be automatically converted into an ABR Revolving Loan on the last day
of the Interest Period for such Eurodollar Loans unless earlier conversion is required by
applicable law) and, to the extent that Eurodollar Loans are so made as (or converted into) ABR
Revolving Loans, all payments of principal which would otherwise be applied to such Eurodollar
Loans shall be applied instead to such ABR Revolving Loans.

     SECTION 2.16 Increased Costs.

          (a) If any Change in Law shall:

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

     (ii) impose on any Lender or any Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender (except any such
reserve requirement reflected in the Adjusted Eurodollar Rate) 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 Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or
such Issuing Bank hereunder (whether of principal, interest or otherwise) with respect to any
Eurodollar Loan or any Letter of Credit, then the Borrower will pay, in accordance with Section
2.16(c), to such Lender or such Issuing Bank such additional amount or amounts as will
compensate such Lender or such Issuing Bank, as the case may be, for such additional costs incurred
or reduction suffered with respect to any such Eurodollar Loan or Letter of Credit.

          (b) If any Lender or any Issuing Bank determines in good faith that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate of return on such
Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s
holding company, if any, as a consequence of this Agreement or the Loans made by, or participations
in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to
a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s
holding company could have achieved but for such Change in Law (taking into consideration such
Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s
holding company with respect to capital adequacy), then the Borrower will pay, in accordance with
Section 2.16(c), to such Lender or such

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Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company for any such reduction suffered.

          (c) A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary
to compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding
company, as the case may be, as specified in paragraph (a) or (b) of this Section
shall be delivered to the Borrower and shall be conclusive absent manifest error. Except as
provided in Section 2.16(d), the Borrower shall pay such Lender or such Issuing Bank, as
the case may be, the amount shown as due on any such certificate within ten (10) Business Days
after receipt thereof.

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

     SECTION 2.17 Break Funding Payments. In the event of:

          (a) the payment (including prepayment) of any principal of any Eurodollar Loan other than on
the last day of an Interest Period applicable thereto (including as a result of an Event of
Default);

          (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto;

          (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be revoked under
Section 2.11 and is revoked in accordance therewith); or

          (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to Section 2.1(b) or
2.20;

then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted Eurodollar Rate that would have been applicable to such Loan,
for the period from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue
on such principal amount for such period at the interest rate which such

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Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period
from other banks in the London interbank market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower and the Global Administrative Agent and shall be conclusive absent
manifest error. Except as provided in the last sentence of this Section 2.17, the Borrower
shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days
after receipt thereof. Failure or delay on the part of any Lender or any Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such
Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be
required to compensate a Lender or an Issuing Bank pursuant to this Section for any such loss, cost
or expense described in this Section 2.17 incurred more than 180 days prior to the date
that such Lender or such Issuing Bank, as the case may be, notifies the Borrower of the
circumstance giving rise to such loss, cost or expense described in this Section 2.17 and
of such Lender’s or such Issuing Bank’s intention to claim compensation therefor.

     SECTION 2.18 Taxes.

          (a) 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 deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section), the Global Administrative Agent, each Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant Governmental Authority in accordance with
applicable law; provided that if a Lender has breached or is in breach of its obligations
under Section 2.18(e), then the Borrower shall have no obligations under clause (i)
of this Section 2.18(a) with respect to payments made or to be made to such Lender where
Indemnified Taxes and/or Other Taxes arise in respect of such payments as a consequence of such
Lender’s status as a Foreign Lender.

          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.

          (c) THE BORROWER SHALL INDEMNIFY THE GLOBAL ADMINISTRATIVE AGENT, EACH LENDER AND EACH ISSUING
BANK, WITHIN TEN (10) BUSINESS DAYS AFTER WRITTEN DEMAND THEREFOR, FOR THE FULL AMOUNT OF ANY
INDEMNIFIED TAXES OR OTHER TAXES PAID BY THE GLOBAL ADMINISTRATIVE AGENT, SUCH LENDER OR SUCH
ISSUING BANK, AS THE CASE MAY BE, ON OR WITH RESPECT TO ANY PAYMENT BY OR ON ACCOUNT OF ANY
OBLIGATION OF THE BORROWER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT (INCLUDING INDEMNIFIED TAXES
OR OTHER TAXES IMPOSED OR

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ASSERTED ON OR ATTRIBUTABLE TO AMOUNTS PAYABLE UNDER THIS SECTION) AND
ANY PENALTIES, INTEREST AND REASONABLE EXPENSES ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER
OR NOT SUCH INDEMNIFIED TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY IMPOSED OR ASSERTED BY THE
RELEVANT GOVERNMENTAL AUTHORITY; PROVIDED THAT IF SUCH PAYMENTS OR LIABILITIES ARISE FROM
THE LENDER HAVING BREACHED OR BEING IN BREACH OF ITS OBLIGATIONS UNDER SECTION 2.18(e),
THEN THE BORROWER SHALL HAVE NO OBLIGATIONS UNDER THIS SECTION 2.18(c) WITH RESPECT TO SUCH
PAYMENTS OR LIABILITIES. A CERTIFICATE AS TO THE AMOUNT OF SUCH PAYMENT OR LIABILITY DELIVERED TO
THE BORROWER BY A LENDER OR AN ISSUING BANK, OR BY THE GLOBAL ADMINISTRATIVE AGENT ON ITS OWN
BEHALF OR ON BEHALF OF A LENDER OR AN ISSUING BANK, SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.

          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, if available, the Borrower shall deliver to the Global
Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Global Administrative Agent.

          (e) Each Lender that is not organized under the laws of the United States of America or a
state thereof agrees that such Lender will deliver to the Borrower and the Global Administrative
Agent two (2) duly completed copies of United States Internal Revenue Service Form W-8 BEN or W-8
ECI or successor forms (or if such forms are no longer required, a representation by such Lender)
certifying in either case that such Lender is entitled to receive payments from the Loan Parties
under the Loan Documents without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form W-8 BEN or W-8 ECI further undertakes to deliver to
the Borrower and the Global Administrative Agent two (2) additional copies of such form (or a
successor form) on or before such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form so delivered by it and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by the Borrower or the Global
Administrative Agent, in each case, certifying that such Lender is entitled to receive payments
from the Borrower under the Loan Documents without deduction or withholding of any United States
federal income taxes, unless (i) an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and (ii) such Lender advises the
Borrower and the Global Administrative Agent that it is not capable of receiving such payments
without any deduction or withholding of United States federal income tax.

          (f) If the Borrower at any time pays an amount under Section 2.18(a), (b) or
(c) to any Lender, the Global Administrative Agent or any Issuing Bank, and such payee
receives a refund of or credit for any part of any Indemnified Taxes or Other Taxes which such
payee determines in its reasonable judgment is made with respect to such amount paid by the
Borrower, such Lender, the Global Administrative Agent or any Issuing Bank, as the case may be,
shall pay to the Borrower the amount of such refund or credit promptly, and in any event within 60
days, following the receipt of such refund or credit by such payee.

          (g) If the Borrower pays any amount pursuant to Section 2.18(a) or (c) with
respect to any payment to a Lender or, with the prior written consent of such Lender, provides

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any security therefor pursuant to applicable law, and the Borrower at its expense wishes to contest the
eligibility of the relevant Taxes and furnishes to such Lender an opinion of tax counsel
satisfactory to such Lender, acting reasonably, to the effect that there exists a reasonable basis
for contesting such Taxes, the Borrower may contest such Taxes, provided that:

     (i) the Borrower has otherwise complied with this Section 2.18(g);

     (ii) the Borrower has delivered to such Lender such additional security or assurances
as such Lender may require, acting reasonably, in order to be satisfied that such Lender
will not incur any liability by reason of any contestation, including legal fees,
disbursements, interest and penalties; and

     (iii) the conduct of such proceedings (including the settlement or compromise of same)
will remain within the sole discretion of such Lender and will forthwith be abandoned if
such Lender so requires, acting reasonably, having regard to its overall tax and related
interests.

     SECTION 2.19 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

          (a) The Borrower shall make each payment required to be made by it hereunder or under any
other Loan Document (whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.16, Section 2.17 or Section 2.18, or
otherwise) prior to the time expressly required hereunder or under such other Loan Document for
such payment (or, if no such time is expressly required, prior to 2:00 p.m., Chicago time), on the
date when due, in immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the Global Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Global Administrative Agent c/o JPMorgan
Chase Bank, N.A., 10 South Dearborn, 7th Floor, Mail Code: IL1-0010, Chicago, Illinois
60603, Attention: Leonida G. Mischke, except payments to be made directly to an Issuing Bank or the
Swingline Lender as expressly provided herein and payments pursuant to Section 2.16,
2.17, 2.18(c) and 10.3 shall be made directly to the Persons entitled
thereto and payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Global Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following receipt thereof.
Except as set forth in clause (a) of the definition of “Interest Period”, if any payment
under any Loan Document shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension. All payments under
each Loan Document shall be made in U.S. Dollars.

          (b) If at any time insufficient funds are received by and available to the Global
Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest
and fees then due hereunder, such funds shall be applied, subject to Section 10.15 and
10.17, (i) first, towards payment of interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal and unreimbursed LC

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Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal
and unreimbursed LC Disbursements then due to such parties.

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

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

          (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.5(d) or (e), 2.6(b), 2.19(d) or 10.3(c) then the
Global Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Global 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.

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     SECTION 2.20 Mitigation Obligations; Replacement of Lenders.

          (a) If any Lender requests compensation under Section 2.16, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.18, then such Lender shall use reasonable efforts to
designate a different Applicable Lending Office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if,
in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.16 or 2.18, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such designation or assignment.

          (b) If (i) any Lender asserts that events have occurred suspending its obligation to make or
maintain Eurodollar Loans under Section 2.15 when substantially all other Lenders have not
also done so, (ii) any Lender requests compensation under Section 2.16, (iii) the Borrower
is required to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.18, or (iv) any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense, upon notice to such
Lender and the Global Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section 10.4),
all its interests, rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such assignment);
provided that (A) if the assignee is not a Lender or a Lender Affiliate, the Borrower shall
have received the prior written consent of the Global Administrative Agent and the Issuing Banks,
which consent of such Agent and Issuing Banks shall not unreasonably be withheld, conditioned or
delayed, (B) such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of
all other amounts), (C) the assignee and assignor shall have entered into an Assignment and
Acceptance, and (D) in the case of any such assignment resulting from a claim for compensation
under Section 2.16 or payments required to be made pursuant to Section 2.18, such
assignment will result in a reduction in such compensation or payments.

          (c) In addition to the foregoing provisions of Section 2.20(b), the Borrower shall be
permitted to replace any Lender who becomes a Non-Consenting Lender (as defined below) with a
replacement financial institution (which may be an existing Lender) pursuant to an assignment and
delegation, without recourse (in accordance with and subject to the restrictions contained in
Section 10.4), of all of such Non-Consenting Lender’s interests, rights and obligations
under this Agreement to such replacement financial institution that shall assume such obligations;
provided, that (i) if the proposed assignee is not a Lender or a Lender Affiliate, the Borrower
shall have received the prior written consent of the Global Administrative Agent and the Issuing
Banks, which consent of such Global Administrative Agent and Issuing Banks shall not unreasonably
be withheld, conditioned or delayed, (ii) such Non-Consenting Lender shall have received payment of
an amount equal to the outstanding principal of its Loans and

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participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts), (iii) the assignee and assignor shall
have entered into an Assignment and Acceptance, and (iv) the assignee shall consent, at the time of
such assignment, to each matter in respect of which such Non-Consenting Lender refused to consent.
In the event that, at any time, (A) the Borrower or the Global Administrative Agent has requested
the Lenders to (1) increase the Global Commitments in accordance with Section 2.1(b), (2)
increase, reaffirm or decrease the Global Borrowing Base in accordance with Section 2.8, or
(3) extend the Maturity Date in accordance with Section 2.9(e), (B) the increase,
reaffirmation, decrease or extension in question requires the agreement of all Lenders,
Supermajority Lenders, Required Lenders or Majority Lenders, as the case may be, in accordance with
the terms of Section 2.1(b), Section 2.8or Section 2.9(e), as applicable,
and (C) certain Lenders, but not Majority Lenders (in the case of Section 2.1(b)), the
Supermajority Lenders (in the case of Section 2.9(e)), the Required Lenders (in the case of
a requested increase in the Global Borrowing Base) or Majority Lenders (in the case of a requested
reaffirmation or decrease of the Global Borrowing Base) have agreed to such increase,
reaffirmation, decrease or extension, then any Lender, at such time, who does not agree to such
increase, reaffirmation, decrease or extension, as applicable, shall be deemed a
“Non-Consenting Lender.”

     SECTION 2.21 Currency Conversion and Currency Indemnity.

          (a) Payments in Agreed Currency. The Borrower shall make payment relative to any
Obligation in the currency (the “Agreed Currency”) in which the Obligation was effected.
If any payment is received on account of any Obligation in any currency (the “Other
Currency”) other than the Agreed Currency (whether voluntarily or pursuant to an order or
judgment or the enforcement thereof or the realization of any Collateral or the liquidation of the
Borrower or otherwise howsoever), such payment shall constitute a discharge of the liability of the
Borrower hereunder and under the other Loan Documents in respect of such obligation only to the
extent of the amount of the Agreed Currency which the relevant Lender, Issuing Bank or Agent, as
the case may be, is able to purchase with the amount of the Other Currency received by it on the
Business Day next following such receipt in accordance with its normal procedures and after
deducting any costs and expenses of exchange.

          (b) Conversion of Agreed Currency into Judgment Currency. If, for the purpose of
obtaining or enforcing judgment in any court in any jurisdiction, it becomes necessary to convert
into a particular currency (the “Judgment Currency”) any amount due in the Agreed Currency,
then the conversion shall be made on the basis of the rate of exchange prevailing on the next
Business Day following the date such judgment is given and in any event the Borrower shall be
obligated to pay the Agents, Issuing Banks and the Lenders any deficiency in accordance with
Section 2.21(c). For the foregoing purposes “rate of exchange” means the rate at
which the relevant Lender, Issuing Bank or Agent, as applicable, in accordance with its normal
banking procedures is able on the relevant date to purchase the Agreed Currency with the Judgment
Currency after deducting costs and expenses of exchange.

          (c) Circumstances Giving Rise to Indemnity. To the fullest extent permitted by applicable
law, if (i) any Lender, any Issuing Bank or any Agent receives any

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payment or payments on account of the liability of the Borrower hereunder pursuant to any
judgment or order in any Other Currency, and (ii) the amount of the Agreed Currency which the
relevant Lender, Issuing Bank or Agent, as applicable, is able to purchase on the Business Day next
following such receipt with the proceeds of such payment or payments in accordance with its normal
procedures and after deducting any costs and expenses of exchange is less than the amount of the
Agreed Currency due in respect of such liability immediately prior to such judgment or order, then
the Borrower on demand shall, and the Borrower hereby agrees to, indemnify the Lenders, the Issuing
Banks and the Agents from and against any loss, cost or expense arising out of or in connection
with such deficiency.

          (d) Indemnity Separate Obligation. To the fullest extent permitted by applicable law,
the agreement of indemnity provided for in Section 2.21(c) shall constitute an obligation
separate and independent from all other obligations contained in this Agreement, shall give rise to
a separate and independent cause of action, shall apply irrespective of any indulgence granted by
the Lenders, the Issuing Banks or Agents or any of them from time to time, and shall continue in
full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an
amount due hereunder or under any judgment or order.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     In order to induce the Global Administrative Agent, the other Agents, any Issuing Bank and the
Lenders to enter into this Agreement and to make Loans and issue or participate in Letters of
Credit hereunder, the Borrower represents and warrants to the Global Administrative Agent, the
other Agents, any Issuing Bank and the Lenders that each of the following statements is true and
correct:

     SECTION 3.1 Existence and Power. Each Loan Party (a) is a corporation, partnership or
limited liability company duly incorporated or organized (as applicable), validly existing and, if
applicable for such Loan Party in the jurisdiction in issue, in good standing under the laws of its
jurisdiction of incorporation or organization, (b) has all requisite corporate, partnership or
limited liability company power (as applicable) required to carry on its businesses as now
conducted, and (c) is duly qualified to transact business as a foreign corporation, partnership or
limited liability company in each jurisdiction where a failure to be so qualified would reasonably
be expected to have a Material Adverse Effect.

     SECTION 3.2 Loan Party and Governmental Authorization; Contravention. The execution,
delivery and performance of this Agreement and the other Loan Documents by each Loan Party (to the
extent each Loan Party is a party to this Agreement and such Loan Documents) (a) are within such
Loan Party’s corporate, partnership or limited liability company powers, (b) when executed will be
duly authorized by all necessary corporate, partnership or limited liability company action, (c)
require no action by or in respect of, or filing with, any Governmental Authority (other than (i)
actions or filings pursuant to the Exchange Act, (ii) actions or filings necessary to
create or perfect the Liens required hereby or by any other Combined Loan Document, (iii)
actions or filings that have been taken or made and are in full force and effect, and (iv) actions
or filings which, if not taken or made, would not reasonably be expected to have a Material Adverse
Effect) and (d) do not (i) contravene, or constitute a default

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under, any provision of (A) applicable Governmental Rule (including, without limitation, Regulation U), except any
contravention or default that would not reasonably be expected to have a Material Adverse Effect,
(B) the articles or certificate of incorporation, bylaws, regulations, partnership agreement or
comparable charter documents of any Loan Party, or (C) any agreement, judgment, injunction, order,
decree or other instrument binding upon any Loan Party, including, without limitation, any Existing
Subordinate Note Document or, as applicable, if and when any Permitted Senior Notes Debt is issued
and while such Permitted Senior Notes Debt remains outstanding, any Permitted Senior Notes
Document, except any contravention or default that would not reasonably be expected to have a
Material Adverse Effect and, with respect to the Existing Convertible Debentures and Existing
Convertible Note Indenture, assuming that any repurchase of the Existing Convertible Debentures
pursuant to Section 3.06 of the Existing Convertible Note Indenture is made (1) at a time at which
immediately before and after giving effect to such repurchase no Default, Event of Default, Global
Borrowing Base Deficiency or U.S. Borrowing Base Deficiency has occurred and is continuing or
results therefrom, (2) with the proceeds from the sale of shares of common stock of the Borrower,
or (3) in compliance with the last sentence of Section 7.14, or (ii) result in the creation
or imposition of any Lien on any Borrowing Base Property or Collateral other than the Liens
securing the Combined Obligations.

     SECTION 3.3 Binding Effect. This Agreement constitutes, and each other Loan Document
when executed and delivered will constitute, valid and binding obligations of each Loan Party which
is a party thereto, enforceable against each such Loan Party which executes the same in accordance
with its terms except as the enforceability thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, or similar Governmental Rules affecting creditors’ rights generally,
and (b) equitable principles of general applicability (whether enforcement is sought by proceedings
at law or in equity).

     SECTION 3.4 Financial Information.

          (a) The most recent annual audited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries and the related consolidated statements of operations and cash flows for
the Fiscal Year then ended, copies of which have been delivered to each Lender, fairly present in
all material respects, in conformity with GAAP, the consolidated financial position of the Borrower
and its Consolidated Subsidiaries as of the end of such Fiscal Year and its consolidated results of
operations and cash flows for such Fiscal Year.

          (b) The most recent quarterly unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries delivered to the Lenders, and the related unaudited consolidated
statements of operations and cash flows for the portion of the Borrower’s Fiscal Year then ended,
fairly present in all material respects, in conformity
with GAAP applied on a basis consistent with the financial statements referred to in
Section 3.4(a), the consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and its consolidated results of operations and cash flows for such
portion of the Borrower’s Fiscal Year (except that such balance sheet and other financial
statements do not contain all footnote disclosures required in accordance with GAAP and are subject
to normal year-end audit adjustments).

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          (c) Except as disclosed in writing to the Lenders prior to the execution and delivery of this
Agreement, since December 31, 2005, no event or circumstance which would reasonably be expected to
have a Material Adverse Effect has occurred.

          (d) After giving effect to the transactions contemplated by this Agreement, the Borrower and
each of its Subsidiaries, on a consolidated basis, are Solvent.

     SECTION 3.5 Litigation. Except for matters disclosed on Schedule 3.5 attached
hereto or in a replacement schedule that is delivered to the Global Administrative Agent and is
approved by the Majority Lenders in their sole discretion, there is no action, suit or proceeding
not fully covered by insurance (except for normal deductibles and provided that the applicable
insurance company has acknowledged such coverage and a copy thereof is provided to the Global
Administrative Agent) pending against, or to the knowledge of any Loan Party, threatened against or
affecting any Loan Party before any Governmental Authority in which there is a reasonable
possibility of an adverse decision which would reasonably be expected to have a Material Adverse
Effect.

     SECTION 3.6 ERISA. No Loan Party nor any ERISA Affiliate of any Loan Party maintains
or has ever maintained or been obligated to contribute to any Plan covered by Title IV of ERISA or
subject to the funding requirements of Section 412 of the Code or Section 302 of ERISA. Except in
such instances where an action, omission or failure would not reasonably be expected to have a
Material Adverse Effect, (a) each Plan maintained by any Loan Party or any ERISA Affiliate of any
Loan Party is in compliance with all applicable Governmental Rules, (b) all returns, reports and
notices required to be filed with any regulatory agency with respect to any Plan have been filed
timely, and (c) no Loan Party nor any ERISA Affiliate of any Loan Party has failed to make any
contribution or pay any amount due or owing as required by the terms of any Plan. There are not
pending or, to the Borrower’s knowledge, threatened claims, lawsuits, investigations or actions
(other than routine claims for benefits in the ordinary course) asserted or instituted against, and
no Loan Party nor any ERISA Affiliate of any Loan Party has knowledge of any threatened litigation
or claims (other than claims for benefits in the ordinary course) against, the assets of any Plan
or its related trust or against any fiduciary of a Plan with respect to the operation of such Plan
that are likely to result in liability of any Loan Party resulting in an event or circumstance
which would reasonably be expected to have a Material Adverse Effect. Except in such instances
where an action, omission or failure would not reasonably be expected to have a Material Adverse
Effect, each Plan that is intended to be “qualified” within the meaning of Section 401(a) of the
Code is, and has been during the period from its adoption to date, so qualified, both as to form
and operation, and all necessary governmental approvals, including a favorable determination as to the qualification under the Code of such Plan and
each amendment thereto, have been or will be timely obtained. No Loan Party nor any ERISA
Affiliate of any Loan Party has engaged in any non-exempt prohibited transactions, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, in connection with any Plan which
would result in liability of any Loan Party resulting in an event or circumstance that would
reasonably be expected to have a Material Adverse Effect. No Loan Party nor any ERISA Affiliate of
any Loan Party maintains or contributes to any Plan that provides a post-employment health benefit,
other than a benefit required under Section 601 of ERISA, or maintains or contributes to a Plan
that provides health benefits that is not fully funded except where the failure to fully fund such
Plan would not reasonably be expected to have a

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Material Adverse Effect. No Loan Party nor any ERISA Affiliate of any Loan Party maintains, has established or has ever participated in a multiple
employer welfare benefit arrangement within the meaning of Section 3(40)(A) of ERISA.

     SECTION 3.7 Taxes and Filing of Tax Returns. Except as otherwise permitted by
Section 5.7, (a) each Loan Party has filed all tax returns required to have been filed and
has paid all Taxes shown to be due and payable on such returns, including interest and penalties,
and all other Taxes which are payable by such party, to the extent the same have become due and
payable, (b) no Loan Party knows of any proposed material Tax assessment against it, and all Tax
liabilities of each Loan Party are adequately provided for, and (c) no income tax liability of any
Loan Party has been asserted by the Internal Revenue Service or other Governmental Authority for
Taxes in excess of those already paid.

     SECTION 3.8 Ownership of Properties Generally. Each Loan Party has good and
defensible fee simple or leasehold title (subject to Immaterial Title Deficiencies and Permitted
Encumbrances) to all Borrowing Base Properties and Collateral purported to be owned by it,
including, without limitation, all Borrowing Base Properties and Collateral reflected in the
balance sheets referred to in Section 3.4(a), and none of such Borrowing Base Properties
and Collateral is subject to any Lien other than Permitted Encumbrances.

     SECTION 3.9 Mineral Interests. The real property described in the attachment to the
Certificate of Mortgaged Properties (the “Property Description”) is an accurate and
complete description of all Mortgaged Properties owned by the Borrower and its U.S. Subsidiaries
which are real property located in the United States on and as of the Closing Date, and such
Mortgaged Properties (a) constitute at least the U.S. Required Reserve Value and (b) together with
the Mortgaged Properties described in the attachment to the Certificate of Mortgaged Properties (as
defined in the Canadian Credit Agreement) delivered pursuant to Section 4.1(m) of the Canadian
Credit Agreement, constitute at least the Required Reserve Value. Subject only to Immaterial Title
Deficiencies and Permitted Encumbrances, the Borrower and each of its Subsidiaries executing a
Mortgage (as applicable) have good and defensible title to all Borrowing Base Properties described
in the most recent Reserve Report delivered pursuant hereto, free and clear of all Liens except for
Permitted Encumbrances. Subject only to Immaterial Title Deficiencies and Permitted Encumbrances,
(i) all Borrowing Base Properties described in the most recent Reserve Report delivered pursuant hereto are valid,
subsisting, and in full force and effect, and (ii) all material rentals, royalties, and other
amounts due and payable in respect thereof have been duly paid when due, except as provided in
Section 5.3(b)(i) with respect to delay rentals. Without regard to any consent or
non-consent provisions of any joint operating agreement covering any of the Borrower’s or such
Subsidiary’s (as applicable) Proved Mineral Interests, subject to Immaterial Title Deficiencies and
Permitted Encumbrances, the Borrower’s percentage share and/or the percentage share of each
Subsidiary executing a Mortgage (as applicable) of (A) the costs for each Proved Mineral Interest
described in the most recent Reserve Report delivered pursuant hereto is not greater than 105% of
the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be,
and described therein by the respective designations “working interests,” “WI,” “gross working
interest,” “GWI,” or similar terms; provided that the Borrower or any applicable Subsidiary
of the Borrower shall have the right to bear costs disproportionate to the Borrower’s or such
Subsidiary’s working interest with respect to any Mineral Interest for a period of time in order to

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earn an interest in such Mineral Interest from a third party as evidenced by a written agreement,
and (B) production from, allocated to, or attributed to each such Proved Mineral Interest is not
less than the decimal fraction set forth in such Reserve Report, before and after payout, as the
case may be, and described therein by the designations “net revenue interest,” “NRI,” or similar
terms. As used herein, the term “Immaterial Title Deficiencies” means minor defects or
deficiencies in title which do not diminish more than two percent (2%) the aggregate value of the
Borrowing Base Properties. Each well drilled in respect of each Proved Producing Mineral Interest
described in the most recent Reserve Report delivered pursuant hereto (1) is capable of, and is
presently, producing Hydrocarbons in commercially profitable quantities (except to the extent
shut-in in accordance with the applicable lease for such Proved Producing Mineral Interest), and
after giving effect to the transactions contemplated by this Agreement, the Borrower and each of
its Subsidiaries executing a Mortgage (as applicable) will be entitled to receive payments on a
current basis for its share of production, with no funds in respect of any thereof held in
suspense, other than any such funds held in suspense pending delivery of appropriate division
orders, and (2) has been drilled, bottomed, completed, and operated in compliance in all material
respects with all applicable Governmental Rules and no such well which is currently producing
Hydrocarbons is subject to any penalty in production by reason of such well having produced in
excess of its allowable production.

     SECTION 3.10 Licenses, Permits, Etc. Each Loan Party possesses such valid franchises,
certificates of convenience and necessity, operating rights, licenses, permits, consents,
authorizations, exemptions and orders of Governmental Authorities as are necessary to carry on its
business as now conducted and as proposed to be conducted, except to the extent a failure to obtain
any such item would not reasonably be expected to have a Material Adverse Effect.

     SECTION 3.11 Compliance with Law. The business and operations of the Loan Parties
have been and are being conducted in accordance with all applicable Governmental Rules other than
violations of Governmental Rules which would not (either individually or collectively) reasonably be expected to have a Material Adverse
Effect.

     SECTION 3.12 Full Disclosure. All information heretofore furnished by each Loan Party
to the Global Administrative Agent or any Lender for purposes of or in connection with this
Agreement, any Loan Document or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by or on behalf of any Loan Party to the Global Administrative
Agent or any Lender will be, true, complete and accurate in every material respect;
provided, that any projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions believed by
management of the applicable Loan Party to be reasonable at the time made, it being recognized by
the Agents and Lenders that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period covered by such financial information may
differ from the projected results as set forth therein by a material amount. The Loan Parties have
disclosed or have caused to be disclosed to Lenders in writing any and all facts (other than facts
of general public knowledge, including those facts contained in the Borrower’s filings with the
SEC) which would reasonably be expected to have a Material Adverse Effect.

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     SECTION 3.13 Organizational Structure; Nature of Business. The Loan Parties are
engaged only in the business of acquiring, exploring, developing and operating Mineral Interests
and the production, marketing, processing and transporting of Hydrocarbons therefrom and businesses
reasonably related or complementary thereto. Schedule 3.13 hereto, as of the date hereof
or, as applicable, as of an earlier date as provided in Schedule 3.13, accurately reflects
(a) the jurisdiction of incorporation or organization of each Loan Party, (b) each jurisdiction in
which each Loan Party is qualified to transact business as a foreign corporation, foreign
partnership or foreign limited liability company, (c) the organizational identification number (if
applicable) of each Loan Party in its jurisdiction of organization, and (d) the authorized, issued
and outstanding Equity Interests of each Loan Party.

     SECTION 3.14 Environmental Matters. Except for matters disclosed on Schedule
3.14 hereto or in a replacement schedule that is delivered to the Global Administrative Agent
and is approved by the Majority Lenders in their sole discretion, no operation conducted by any
Loan Party and no real or personal property now or previously owned or leased by any Loan Party
(including, without limitation, Mineral Interests) and no operations conducted thereon, and to any
Loan Party’s knowledge, no operations of any applicable prior owner, lessee or operator of any such
properties, is or has been in violation of any Environmental Law other than violations which
neither individually nor in the aggregate would reasonably be expected to have a Material Adverse
Effect. Except for matters disclosed on Schedule 3.14 hereto or in a replacement schedule
that is delivered to the Global Administrative Agent and is approved by the Majority Lenders in
their sole discretion, no Loan Party, nor any such property nor operation is the subject of any
existing, pending or, to any Loan Party’s knowledge, threatened Environmental Complaint which
would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
All notices, permits, licenses, and similar authorizations, required to be obtained or filed in connection with the ownership
of each tract of real property or operations of any Loan Party thereon and each item of personal
property owned, leased or operated by any Loan Party, including, without limitation, notices,
licenses, permits and authorizations required in connection with any past or present treatment,
storage, disposal, or release of Hazardous Materials into the environment, have been duly obtained
or filed except to the extent the failure to obtain or file such notices, licenses, permits and
authorizations would not reasonably be expected to have a Material Adverse Effect. All Hazardous
Materials generated at each tract of real property or by each item of personal property owned,
leased or operated by any Loan Party have been transported, treated, and disposed of only by
carriers or facilities maintaining valid permits under RCRA and all other applicable Environmental
Laws for the conduct of such activities except in such cases where the failure to obtain such
permits would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except for matters disclosed on Schedule 3.14 hereto or in a replacement
schedule that is delivered to the Global Administrative Agent and is approved by the Majority
Lenders in their sole discretion, there have been no Hazardous Discharges which were not in
compliance with Environmental Laws other than Hazardous Discharges which would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. Except for matters
disclosed on Schedule 3.14 hereto or in a replacement schedule that is delivered to the
Global Administrative Agent and is approved by the Majority Lenders in their sole discretion, no
Loan Party nor any Subsidiary of any Loan Party has any contingent liability in connection with any
Hazardous Discharge which would reasonably be expected to have a Material Adverse Effect.

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     SECTION 3.15 Fiscal Year. The Borrower’s Fiscal Year is January 1 through December 31.

     SECTION 3.16 No Default. Neither a Default nor an Event of Default has occurred which
is continuing, or will exist after giving effect to the transactions contemplated by this Agreement
or the other Loan Documents. Neither the Borrower nor any Subsidiary is in default under, nor has
any event or circumstance occurred which, but for the expiration of any applicable grace period or
the giving of notice, or both, would constitute a default under, any Material Agreement to which
the Borrower or any Subsidiary is a party or by which the Borrower or any Subsidiary is bound which
default would reasonably be expected to have a Material Adverse Effect.

     SECTION 3.17 Government Regulation. No Loan Party is subject to regulation under the
Federal Power Act, the Interstate Commerce Act, the Investment Company Act of 1940 (as any of the
preceding acts have been amended), or any other Governmental Rule which regulates the incurring by
such Loan Party of Indebtedness, including, but not limited to Governmental Rules relating to
common contract carriers or the sale of electricity, gas, steam, water or other public utility
services.

     SECTION 3.18 Insider. No Loan Party is, and no Person having “control” (as that term
is defined in 12 U.S.C. Section 375(b) or regulations promulgated thereunder) of any Loan Party is,
an “executive officer,” “director” or “shareholder” of any Lender or any bank holding company of which any Lender is a Subsidiary or of any
Subsidiary of such bank holding company.

     SECTION 3.19 Gas Balancing Agreements and Advance Payment Contracts. On the Closing
Date and the Global Effective Date, (a) there is no Material Gas Imbalance, and (b) the aggregate
amount of all Advance Payments received by any Loan Party under Advance Payment Contracts which
have not been satisfied by delivery of production does not exceed U.S.$250,000.

     SECTION 3.20 Existing Subordinate Debt and Falcon Seaboard Settlement Agreement.

          (a) As of the Closing Date, the outstanding principal amount of the Existing Subordinate Debt
is not more than U.S.$500,000,000, which is comprised of $350,000,000 of outstanding principal
under the Existing Subordinate Notes, and not more than $150,000,000 of outstanding principal under
the Existing Convertible Debentures.

          (b) The book value of the Borrower’s obligations under the Falcon Seaboard Settlement
Agreement as of December 31, 2006 is U.S.$399,428.09.

     SECTION 3.21 Use of Proceeds and Letters of Credit. The proceeds of the Loans are or
will be used solely (a) to renew and restate the Existing Loan Indebtedness, (b) if the Borrower
elects and to the extent permitted by Section 7.14, to pay the Borrower’s obligations under
the Falcon Seaboard Settlement Agreement, (c) to reimburse each Issuing Bank for LC Disbursements
in accordance with Section 2.5(e), or (d) to finance the acquisition, exploration,
development and operation of Mineral Interests and related Property and for any other business

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activities described in Section 3.13, and for the Borrower’s and its Subsidiaries’ working
capital and general corporate purposes in the ordinary course of business. No part of the proceeds
of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation
of any of the regulations of the Board, including Regulation U. Letters of Credit will be issued
only to support business operations described in Section 3.13 and/or general corporate
purposes in the ordinary course of business of the Borrower or any of its Subsidiaries.

     SECTION 3.22 Location of Business and Offices. Each Loan Party’s principal place of
business and chief executive offices are located at the addresses specified on Schedule
3.22 or at such other address as specified in writing to the Global Administrative Agent, which
address is at a location permitted by the terms of the Combined Loan Documents.

     SECTION 3.23 Subsidiaries. Except as set forth on Schedule 3.13, Schedule
7.8 or Exhibit L or disclosed in writing to the Global Administrative
Agent in accordance with Section 5.15, the Borrower has no Subsidiaries.

     SECTION 3.24 Material Agreements. Except for the Combined Loan Documents, the
subsidiary guaranties executed in connection therewith, the Existing Subordinate Note Documents,
the subsidiary guaranties executed in connection therewith, the Falcon Seaboard Settlement Agreement, and the Hedging Agreements, neither the
Borrower nor any of its Subsidiaries are parties to any Material Agreements in effect, or to be in
effect, as of the Closing Date providing for, evidencing or securing any material Indebtedness of
the Borrower or any of its Subsidiaries.

     SECTION 3.25 Priority; Security Matters. The Combined Obligations are and shall be at
all times secured by valid, perfected first and prior Liens (subject only to Permitted
Encumbrances) in favor of the Global Administrative Agent, covering and encumbering (a) (i) in the
case of the Canadian Obligations only, the Required Reserve Value and (ii) in the case of the
Obligations, the U.S. Required Reserve Value, (b) all of the issued and outstanding Equity
Interests (other than the QRC Class C Shares) owned by the Borrower of each existing and future
Material Subsidiary (except that, if such Material Subsidiary is a Foreign Subsidiary, the Equity
Interests of such Material Subsidiary to be pledged shall be limited to 65% of the total combined
voting power of all classes of voting Equity Interests (other than the QRC Class C Shares) of such
Material Subsidiary and 100% of all non-voting Equity Interests (other than the QRC Class C Shares)
of such Material Subsidiary), (c) all of the issued and outstanding Equity Interests owned by each
Pledging Subsidiary of the Borrower of each existing and future Material Subsidiary thereof (except
that, if such Material Subsidiary is a Foreign Subsidiary, the Equity Interests of such Material
Subsidiary to be pledged shall be limited to 65% of the total combined voting power of all classes
of voting Equity Interests of such Material Subsidiary and 100% of all non-voting Equity Interests
of such Material Subsidiary) and (d) all other Collateral located in the United States owned by the
Borrower or any Material Subsidiary, pursuant to the Pledge Agreements, Security Agreements, and
Mortgages delivered pursuant to Section 4.1(e), (f) and (g), or otherwise
delivered pursuant to this Agreement or the other Loan Documents, to the extent perfection has or
will occur, by the recording of the Mortgage, the filing of a UCC financing statement, the filing
of a financing statement under the applicable Personal Property Security Act of the applicable
Canadian province, or by possession.

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     SECTION 3.26 Hedging Agreements. Schedule 3.26 sets forth, as of December 31,
2006, a true and complete list of all Hedging Agreements (including commodity price swap
agreements) and all forward agreements or contracts of sale which provide for prepayment for
deferred shipment or delivery of oil, gas or other commodities) of the Borrower and each
Subsidiary, the material terms thereof (including the type, term, effective date, termination date
and notional amounts or volumes), the net mark to market value thereof, all credit support
agreements relating thereto (including any margin required or supplied), and the counter party to
each such agreement. As of the Closing Date, all Hedging Agreements executed by the Borrower or
any of its Subsidiaries are either (a) unsecured, (b) executed with a Lender as the counterparty,
(c) assigned to a Lender as the counterparty, or (d) secured only by a Letter of Credit issued for
the benefit of the counterparty.

     SECTION 3.27 Insurance. Schedule 3.27 attached hereto contains an accurate
and complete description, as of the Closing Date, of all material policies of fire, liability,
workmen’s compensation and other forms of insurance owned or held by the Borrower and each
Subsidiary. As of the Closing Date, all such policies will be in full
force and effect, all premiums with respect thereto covering all periods up to and including
the Closing Date and through the respective dates set forth in Schedule 3.27 will have been
paid, and no notice of cancellation or termination will have been received with respect to any such
policy. Such policies, and/or such replacement or additional policies required to be obtained
pursuant to the terms of this Agreement as may be in full force and effect as of any date
subsequent to the Closing Date, are sufficient for compliance in all material respects with all
requirements of law and of all agreements to which the Borrower or any Subsidiary is a party; are
valid, outstanding and enforceable policies; provide adequate aggregate coverage in at least such
amounts and against at least such risks (but including in any event public liability) as are
usually insured against in the same general area by companies engaged in the same or a similar
business for the assets and operations of the Borrower and each Subsidiary. All such policies, or
the replacement and additional policies required to be obtained pursuant to the terms of this
Agreement, are in full force and effect and all premiums with respect thereto have been paid, and
no notice of cancellation or termination will have been received with respect to any such policies.

     SECTION 3.28 Status as Senior Indebtedness. The Loans and other Obligations hereunder
are “Bank Indebtedness,” “Senior Indebtedness” and “Designated Senior Indebtedness” under both the
Existing Subordinate Note Indenture and the Existing Convertible Note Indenture, and this Agreement
is a “Senior Secured Credit Agreement” under the Existing Subordinate Note Indenture and one of the
“Combined Credit Agreements” under the Existing Convertible Note Indenture.

ARTICLE IV

CONDITIONS

     SECTION 4.1 Initial Loan. The amendment and restatement of the Existing Credit
Agreement on the terms set forth herein, and the obligations of the Lenders to make Loans or
participate in any Letters of Credit or for any Issuing Bank to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 10.2):

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          (a) Certain Loan Documents. The Global Administrative Agent (or its counsel) shall
have received from each party thereto either a counterpart of each of the following documents duly
executed on behalf of such party or written evidence satisfactory to the Global Administrative
Agent (which may include telecopy or electronic transmission acceptable to the Global
Administrative Agent of a signed signature page of such document) that each such party has duly
executed for delivery to the Global Administrative Agent a counterpart of each of the following
documents which documents must be acceptable to the Global Administrative Agent in its sole and
absolute discretion: this Agreement, the Intercreditor Agreement, the Fee Letter, the Notes (to the
extent requested by any Lender), a Guaranty from each Guarantor, the Pledge Agreements required by
Section 4.1(e), the Security Agreements required by Section 4.1(f), and the
Mortgages required by Section 4.1(g), and all related financing statements and other
filings, and the other Loan Documents.

          (b) Canadian Loan Documents. The Global Administrative Agent shall have received
copies of the executed Canadian Loan Documents.

          (c) Opinions of Counsel. The Global Administrative Agent shall have received
opinions, dated the Global Effective Date, addressed to the Global Administrative Agent, the
Canadian Administrative Agent and all Lenders, from (i) General Counsel of the Borrower, in
substantially the form attached hereto as Exhibit B 1, (ii) Jones Day, counsel to the
Borrower, in substantially the form attached hereto as Exhibit B-2, (iii) Loomis, Ewert,
Parsley, Davis & Gotting, special Michigan counsel to the Borrower, in substantially the form
attached hereto as Exhibit B-3, and (iv) Marian McGrath Pearcy, special Indiana counsel to
the Borrower, in substantially the form attached hereto as Exhibit B-4.

          (d) Organizational Documents. The Global Administrative Agent shall have received a
certificate of an Authorized Officer of each Loan Party dated as of the Global Effective Date,
certifying:

            (i) that attached to each such certificate is (A) a true and complete copy of the
Organic Documents of such Loan Party, as the case may be, as in effect on the date of such
certificate, (B) a true and complete copy of a certificate from the applicable Governmental
Authority of the jurisdiction of such Loan Party’s organization to the effect that such
entity is validly existing in such jurisdiction, and (C) a true and complete copy of a
certificate from the appropriate Governmental Authority of each jurisdiction (without
duplication) to the effect that such Loan Party is duly qualified to transact business in
such jurisdiction as a foreign entity, if the failure to be so qualified would reasonably
be expected to have a Material Adverse Effect;

            (ii) that attached to such certificate is a true and complete copy of resolutions duly
adopted by the board of directors, management committee, members or general partner of such
Loan Party, as applicable, authorizing the execution, delivery and performance of such of
the Combined Loan Documents to which such Loan Party is or is intended to be a party;

            (iii) that attached thereto is (A) a true and complete copy of a certificate from the
applicable Governmental Authority of the jurisdiction of such Loan Party’s

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organization as to the existence and, except as to any Texas limited partnerships that are Loan Parties,
the good standing of and, except as to the Canadian Borrower and any Texas limited
partnerships that are Loan Parties, payment of franchise taxes by such Loan Party, dated as
of a recent date; and (B) a true and complete copy of a certificate from the appropriate
Governmental Authority of each jurisdiction (without duplication) to the effect that such
Loan Party is in good standing in such jurisdiction as a foreign entity, if the failure to
be so qualified would reasonably be expected to have a Material Adverse Effect; and

            (iv) as to the incumbency and specimen signature of each Authorized Officer of such
Loan Party executing such of the Combined Loan Documents to which such Loan Party is or is
intended to be a party.

          (e) Pledge Agreements. The Global Administrative Agent shall have received
counterparts of a Pledge Agreement, dated as of the Global Effective Date, duly executed and
delivered by each of the Borrower and each Material Subsidiary (that is not a Foreign Subsidiary)
that holds Equity Interests in any Material Subsidiary of the Borrower, together with the
following:

            (i) to the extent the stock, membership interests or partnership interests thereof are
certificated, stock, membership or partnership certificates representing 100% of the
outstanding shares of capital stock, membership interest or partnership interest (other
than the QRC Class C Shares) of all Material Subsidiaries (except that stock, membership or
partnership certificates representing shares of common stock, membership interest or
partnership interest of a Foreign Subsidiary shall be limited to 65% of the total combined
voting power of all classes of voting Equity Interests (other than the QRC Class C Shares)
of such Material Subsidiary and 100% of all non-voting Equity Interests (other than the QRC
Class C Shares) of such Material Subsidiary) listed in
Exhibit L hereto under the heading “Material Subsidiaries,” and stock powers and instruments of
transfer, endorsed in blank, with respect to such certificates; and

            (ii) all documents and instruments, including Uniform Commercial Code Financing
Statements (Form UCC-1), required by law or reasonably requested by the Global
Administrative Agent to be filed, registered or recorded to create or perfect the Liens
intended to be created under such Pledge Agreement.

          (f) Security Agreements. The Global Administrative Agent shall have received
counterparts of each Security Agreement, dated as of the Global Effective Date, duly executed and
delivered by the Borrower and Terra Energy Ltd., together with the following:

            (i) Uniform Commercial Code Financing Statements (Form UCC-1) and such evidence of
filing or arrangements for filing as may be acceptable to the Global Administrative Agent,
in appropriate form for filing, naming the Borrower and each such Subsidiary as debtor and
the Global Administrative Agent as the secured party, or other similar instruments or
documents, to be filed under the Uniform Commercial Code of all jurisdictions as may be
necessary or, in the opinion of the Global Administrative Agent,

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desirable to perfect the security interest of the Global Administrative Agent pursuant to such Security Agreement; and

            (ii) Uniform Commercial Code Form UCC-3 termination statements, if any, necessary to
release all Liens (except for Permitted Encumbrances) and other rights of any Person in any Collateral described in the
Security Agreement previously granted by any Person, and together with such other Uniform
Commercial Code Form UCC-3 termination statements as the Global Administrative Agent may
reasonably request.

          (g) Mortgages. The Global Administrative Agent shall have received executed
counterparts of the Mortgages (or amendments to the existing Mortgages previously delivered under
the Existing Credit Agreement which shall be amended contemporaneously herewith), dated as of the
Global Effective Date, duly executed and delivered by each of the relevant Loan Parties and
encumbering the U.S. Required Reserve Value, together with:

            (i) evidence of the completion (or satisfactory arrangements for the completion) of
all recordings and filings of the Mortgages (including, without limitation, amendments to
existing Mortgages) as may be necessary or, in the reasonable opinion of the Global
Administrative Agent, desirable, effectively to create a valid, perfected first priority
Lien (except for, with respect to priority, Permitted Encumbrances) against the U.S.
Required Reserve Value of the Loan Parties, as and to the extent such Mortgages are
required by Section 5.17(c); and

            (ii) such other approvals, customary opinions, releases or documents as the Global
Administrative Agent may reasonably request.

          (h) UCC and Lien Searches. The Global Administrative Agent shall have received (i)
the UCC Searches, all dated reasonably close to the Closing Date, requested by the Global
Administrative Agent and in form and substance satisfactory to the Global Administrative Agent,
(ii) evidence reasonably satisfactory to the Global Administrative Agent that the Liens indicated
by the financing statements (or similar documents) in such UCC Searches are Permitted Encumbrances
or have been released (or assigned to either the Global Administrative Agent or Canadian
Administrative Agent), and (iii) title due diligence in form and substance acceptable to the Global
Administrative Agent and other evidence of ownership regarding the ownership by the Borrower and
its Subsidiaries of the Borrowing Base Properties.

          (i) Priority; Security Interest. The Collateral and Borrowing Base Properties shall
be free and clear of all Liens, except Permitted Encumbrances. All filings, notices, recordings
and other action necessary to perfect the Liens in the Collateral shall have been made, given or
accomplished or arrangements for the completion thereof satisfactory to the Global Administrative
Agent and its counsel shall have been made and all filing fees and other expenses related to such
actions either have been paid in full or arrangements have been made for their payment in full
which are satisfactory to the Global Administrative Agent.

          (j) Approvals and Consents. The Borrower and its Subsidiaries shall have obtained,
and the Global Administrative Agent shall have received, copies of all material Governmental
Approvals (if any) and third party consents and approvals (if any) necessary or

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advisable in connection with the Financing Transactions and the continuing
operation and maintenance of the Borrowing Base Properties, and all applicable waiting periods
and appeal periods shall have expired, in each case without the imposition of any materially
burdensome conditions. There shall be no actual government or judicial action restraining,
preventing or imposing materially burdensome conditions on the Financing Transactions.

          (k) Insurance. The Global Administrative Agent and the Lenders shall have received
certificates, dated as of such date reasonably close to the Closing Date as acceptable to the
Global Administrative Agent, from the Borrower’s insurance broker setting forth the insurance
maintained by the Borrower, stating that such insurance is in full force and effect and that all
premiums due have been paid.

          (l) Initial Reserve Report. The Global Administrative Agent and the Lenders shall
have received and shall be satisfied with the contents, results and scope of the Initial Reserve
Report.

          (m) Existing Credit Agreement. The Global Administrative Agent shall have received
evidence satisfactory to it that all Liens associated with the Existing Credit Agreement have been
amended and restated by the Security Documents, contemporaneously with the making of the initial
Loan hereunder, and that arrangements satisfactory to the Global Administrative Agent have been
made for recording and filing such Liens.

          (n) Existing Subordinate Note Documents. The Global Administrative Agent and the
Lenders (i) shall have received (A) copies of the Existing Subordinate Note Indenture and the
Existing Convertible Note Indenture, including any and all supplements, amendments or modifications
thereto executed on or prior to the Closing Date, which documents and supplements, amendments or
modifications thereto shall be certified by the Borrower as true, complete and correct, and (B) any
other requested documents and information regarding the Existing Subordinate Debt, and (ii) shall
be satisfied that the Existing Subordinate Note Documents (A) reflect that this Agreement is a
“Senior Secured Credit Agreement” under the Existing Subordinate Note Indenture and one of the
“Combined Credit Agreements” under the Existing Convertible Note Indenture, and the Loans and other
Obligations hereunder are “Bank Indebtedness,” “Senior Indebtedness” and “Designated Senior
Indebtedness” under both the Existing Subordinate Note Indenture and the Existing Convertible Note
Indenture, and (B) permit the incurrence of the Combined Obligations, and are otherwise in form and
substance satisfactory to the Global Administrative Agent and the Lenders in their reasonable
discretion.

          (o) Financial Statements. The Global Administrative Agent shall have received (i) the
financial statements described in Section 3.4 hereof and (ii) copies of all financial
statements (including pro forma financial statements), reports, notices and proxy statements sent
by the Borrower to its respective stockholders and all filings submitted to the SEC in connection
with the Financing Transactions after September 30, 2006.

          (p) Satisfactory Environmental Due Diligence and Other Due Diligence. The Borrower
has adopted and implemented policies and guidelines as the Borrower has determined are reasonably
appropriate to assure compliance in all material respects with applicable Environmental Laws and to
identify and evaluate events or conditions which would

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result in any material Environmental Liability. On the basis of these procedures and guidelines, the Global Administrative Agent shall
have received a certificate, signed by an Authorized Officer of the Borrower stating that after
such review the Borrower has reasonably concluded that no Environmental Liabilities exist or
violations of Environmental Laws have occurred, which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect. The Global Administrative Agent shall
have received and reviewed, with results satisfactory to the Global Administrative Agent and its
counsel, information regarding tax, insurance, pension liabilities (actual or contingent), Material
Agreements, and material hedging and contingent liabilities of the Borrower and its Material
Subsidiaries.

          (q) Borrower’s Global Effectiveness Notice. The Global Administrative Agent shall
have received the Borrower’s Global Effectiveness Notice.

          (r) No Material Adverse Effect; Litigation. The Global Administrative Agent shall
have received a certificate, signed by an Authorized Officer of the Borrower, stating that (i) no
event or condition has occurred since December 31, 2005, which would reasonably be expected to have
a Material Adverse Effect and (ii) except as set forth on Schedule 3.5, no litigation,
arbitration, governmental proceeding, claim for Taxes, dispute or administrative or other
proceeding shall be pending or, to the knowledge of the Borrower, threatened against the Borrower
or any of its Subsidiaries which would reasonably be expected to have a Material Adverse Effect.

          (s) Certificate of Mortgaged Properties. The Global Administrative Agent shall have
received a certificate (the “Certificate of Mortgaged Properties”), signed by an Authorized
Officer of the Borrower, stating that the real property attached thereto is an accurate and
complete description of all Mortgaged Properties owned by the Borrower and its U.S. Subsidiaries
which are real property located in the United States on and as of the Closing Date.

          (t) Other Documents. The Global Administrative Agent shall have received such other
customary legal opinions, instruments and documents as any of the Global Administrative Agent, the
Lenders or their counsel may have reasonably requested.

          (u) Satisfactory Legal Form. All documents executed or submitted pursuant hereto by
and on behalf of the Borrower or any other Loan Party shall be in form and substance reasonably
satisfactory to the Global Administrative Agent and its counsel. The Global Administrative Agent
and its counsel shall have received all information, approvals, documents or instruments as the
Global Administrative Agent or its counsel may reasonably request.

          (v) Fees and Expenses. The Global Administrative Agent, the Canadian Administrative
Agent, the Arrangers, the other Agents and the Lenders shall have received all fees, including the
Upfront Fee, and other amounts due and payable pursuant to this Agreement or any other Combined
Loan Document on or prior to the date hereof, including, to the extent invoiced at least two (2)
Business Days prior to the Global Effective Date, reimbursement or payment of all reasonable
out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required
to be reimbursed or paid by any Loan Party hereunder or under any other Combined Loan Document.

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The Global Administrative Agent shall notify the Borrower, the Canadian Borrower, the Canadian
Administrative Agent and the Combined Lenders of the Global Effective Date, and such notice shall
be conclusive and binding. Upon satisfaction (or waiver pursuant to Section 10.2) of each
of the foregoing conditions and notification by the Global Administrative Agent to the Borrower,
the Canadian Borrower, the Canadian Administrative Agent and the Combined Lenders of the Global
Effective Date, the Existing Credit Agreement shall automatically and completely be amended and
restated on the terms set forth herein, and until such time, the Existing Credit Agreement shall
remain in full force and effect in accordance with its terms. Notwithstanding the foregoing, the
obligations of the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit
hereunder shall not become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 10.2) at or prior to 3:00 p.m., Chicago time, on February 9,
2007 (and, in the event such conditions are not so satisfied or waived, the Global Commitments and
Commitments shall terminate at such time).

     SECTION 4.2 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Banks to issue, amend, renew or extend any Letter of
Credit, is subject to receipt of the request therefor in accordance herewith and to the
satisfaction of the following conditions:

          (a) Representations and Warranties. At the time of and immediately after giving
effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit,
as applicable, the representations and warranties of each Loan Party set forth in the Combined Loan
Documents to which it is a party shall be true and correct on and as of such date after giving
effect to such funding and to the intended use thereof as if made on and as of such date (or, if
stated to have been made expressly as of an earlier date, were true and correct in all material
respects as of such date), except to the extent previously waived in writing by the Combined
Lenders, the Supermajority Lenders, the Majority Lenders, the Required Lenders, the Lenders, the
U.S. Supermajority Lenders, the U.S. Required Lenders or the Canadian Lenders, as applicable.

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

          (c) No Material Adverse Effect. At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, no event
or events shall have occurred which individually or in the aggregate would reasonably be expected
to have a Material Adverse Effect.

          (d) Borrowing Request. The Global Administrative Agent shall have received a
Borrowing Request for any Borrowing. Each Borrowing and each issuance, amendment, renewal or
extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b) and
(c) of this Section.

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ARTICLE V

AFFIRMATIVE COVENANTS

     The Borrower agrees with the Global Administrative Agent, the other Agents, any Issuing Bank
and each Lender that, until the Global Commitments and Commitments have expired or been terminated
and all Obligations shall have been paid and performed in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower will
perform the obligations set forth in this Article.

     SECTION 5.1 Information. The Borrower shall deliver, or shall cause to be delivered,
to the Global Administrative Agent (and to otherwise make available for each Lender):

          (a) As soon as available and in any event in accordance with then applicable law but not later
than one-hundred twenty (120) days after the end of each Fiscal Year, a consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of income, stockholders’ equity, and statements of cash flow for such
Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal
Year, all reported by such Loan Party in accordance with GAAP and audited by a firm of independent
public accountants of nationally recognized standing and reasonably acceptable to the Global
Administrative Agent.

          (b) As soon as available and in any event in accordance with then applicable law but not later
than sixty (60) days after the end of each of the first three (3) Fiscal Quarters of each Fiscal
Year, consolidated balance sheets of the Borrower and its Consolidated Subsidiaries as of the end
of such Fiscal Quarter, the related consolidated statement of income for such Fiscal Quarter and
for the portion of such Loan Party’s Fiscal Year ended at the end of such Fiscal Quarter and the
related consolidated statement of cash flows for the portion of such Fiscal Year ended at the end
of such Fiscal Quarter, each prepared in accordance with GAAP (except that such balance sheets and
other financial statements may not contain all footnote disclosures required in accordance with
GAAP and may be subject to normal year-end audit adjustments) setting forth in each case in
comparative form the figures for the corresponding quarter and the corresponding portion of such
Loan Party’s previous Fiscal Year.

          (c) Simultaneously with the delivery of each set of financial statements referred to in
Section 5.1(a) and (b), a certificate of a Financial Officer of the Borrower in the
form of Exhibit C attached hereto, (i) setting forth in reasonable detail
the calculations required to establish whether the Borrower was in compliance with the requirements
of Article VI on the date of such financial statements, (ii) stating whether there exists
on the date of such certificate any Default and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or proposes to take with respect
thereto, (iii) stating whether or not such financial statements fairly reflect in all material
respects the results of operations and financial condition of the Borrower and each other Loan
Party as of the date of the delivery of such financial statements and for the period covered
thereby, and (iv) setting forth a summary of the Hedge Transactions to which each Loan Party is a
party on such date (which summary will include the type of information as set forth in Schedule
3.26).

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          (d) Promptly upon the mailing thereof to the stockholders of any Loan Party generally, copies
of (except to the extent any of the foregoing are publicly available on the SEC’s LivEdgar website
and the Borrower has provided notice to the Global Administrative Agent thereof) all financial
statements, reports and proxy statements so mailed.

          (e) Promptly upon the filing thereof, copies of all annual reports on Form 10-K (and any
amendments thereto), quarterly reports on Form 10-Q (and any amendments thereto), current reports
on Form 8-K (and any amendments thereto) and final registration statements (and any post-effective
amendments thereto) which any Loan Party shall have filed with the SEC (except to the extent any of
the foregoing are publicly available on the SEC’s LivEdgar website and the Borrower has provided
notice to the Global Administrative Agent thereof); provided, that the Borrower must
deliver, or cause to be delivered, any annual reports which any Loan Party shall have filed with
the SEC, within ninety (90) days after the end of each Fiscal Year of such Loan Party, and any
quarterly reports which any Loan Party shall have filed with the SEC, within forty-five (45) days
after the end of each of the first three (3) Fiscal Quarters of each Fiscal Year of such Loan
Party.

          (f) Promptly following an Authorized Officer of any Loan Party becoming aware of the receipt
of same, any notice or other information received by any Loan Party indicating (i) any potential,
actual or alleged non-compliance with or violation of the requirements of any Environmental Law
which could result in liability to any Loan Party for fines, clean up or any other remediation
obligations or any other liability in excess of U.S.$5,000,000 (to the extent not paid or fully
covered by insurance as to which the relevant insurance company has acknowledged coverage in
writing thereof and a copy of such acknowledgment has been provided to the Global Administrative
Agent) in the aggregate; (ii) any Hazardous Discharge imposes on any Loan Party a duty to report to
a Governmental Authority or to pay cleanup costs or to take remedial action under any Environmental
Law which could result in liability to any Loan Party for fines, clean up and other remediation
obligations or any other liability in excess of U.S.$5,000,000 (to the extent not paid or fully
covered by insurance as to which the relevant insurance company has acknowledged coverage in
writing thereof and a copy of such acknowledgment has been provided to the Global Administrative Agent) in the
aggregate; or (iii) the existence of any Lien arising under any Environmental Law securing any
obligation to pay fines, clean up or other remediation costs or any other liability in excess of
U.S.$5,000,000 in the aggregate. Without limiting the foregoing, each Loan Party shall provide to
the Lenders promptly upon receipt of same by any Loan Party copies of all environmental
consultants’ or engineers’ reports received by any Loan Party which would render the
representations and warranties (or any of them) contained in Section 3.14 untrue or
inaccurate in any respect.

          (g) In the event any notification is provided to any Lender or the Global Administrative Agent
pursuant to Section 5.1(f) hereof or the Global Administrative Agent or any Lender
otherwise learns of any event or condition under which any such notice would be required, then,
upon written request of Required Lenders, within sixty (60) days following such request, a report
by an environmental consulting firm reasonably acceptable to the Global Administrative Agent and
Required Lenders, stating that a review of such event, condition or circumstance has been
undertaken (the scope of which shall be reasonably acceptable to the Global Administrative Agent and Required Lenders)
and detailing the findings, conclusions and

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recommendations of such consultant; the Borrower shall bear all expenses and costs associated with such review and updates
thereof.

          (h) Promptly, but in no event later than five (5) Business Days (if such Default continues to
exist as of such fifth Business Day), following any Authorized Officer of any Loan Party becoming
aware of the occurrence of any Default, a certificate of an Authorized Officer of the Borrower
setting forth the details thereof and the action which the Borrower is taking or proposes to take
with respect thereto.

          (i) No later than April 1 of each year, commencing April 1, 2008, a Reserve Report with
respect to the Proved Mineral Interests attributable to the Oil and Gas Properties owned by the
Borrower and each of its Subsidiaries for the period of twelve (12) months ending the preceding
December 31, which Reserve Reports shall be prepared on an accrual basis; with the delivery of each
Reserve Report, the Borrower shall provide to the Global Administrative Agent, a certificate from
an Authorized Officer of the Borrower (i) certifying that, to such officer’s knowledge: (A) the
information contained in the Reserve Report and any other information delivered in connection
therewith is true and correct in all material respects, (B)subject to Immaterial Title Deficiencies
and Permitted Encumbrances, the Borrower owns good and defensible title to the Oil and Gas
Properties evaluated in such Reserve Report and such Properties are free of all Liens except for
Permitted Encumbrances and (C) the Reserve Report attached as an exhibit to such certificate is
true, correct and complete, and (ii) setting forth (A) whether as of such date there is a Material
Gas Imbalance, and, if so, setting forth the aggregate amount of net negative gas imbalances to the
Loan Parties under all material Gas Balancing Agreements to which any Loan Party is a party or by
which any Borrowing Base Properties owned by the Borrower is bound, and (B) the aggregate amount of
all Advance Payments received by the Loan Parties under all material Advance Payment Contracts to
which any Loan Party is a party or by which any Borrowing Base Properties are bound which have not been satisfied in all material respects by
delivery of production, if any.

          (j) Promptly, but in no event later than five (5) Business Days (if such event or circumstance
continues to exist as of such fifth Business Day) following an Authorized Officer of any Loan Party
becoming aware of same, notice to the Global Administrative Agent of any event or circumstance that
would reasonably be expected to have a Material Adverse Effect.

          (k) Promptly following an Authorized Officer of any Loan Party becoming aware of same, notice
to the Global Administrative Agent of: (i) all legal or arbitral proceedings, and all proceedings
before any Governmental Authority affecting the Borrower or any Subsidiary, except proceedings
which, if adversely determined, would not reasonably be expected to have a Material Adverse Effect
and (ii) the occurrence of any development that would reasonably be expected to have a Material
Adverse Effect with respect to any action, suit or proceeding previously disclosed to the Global
Administrative Agent or the Lenders pursuant to this Agreement if such action, suit or proceeding
would reasonably be expected to have a Material Adverse Effect. The Borrower will, and will cause
each of its Subsidiaries to, promptly notify the Global Administrative Agent and each of the
Lenders of any claim, judgment or Lien (other than Permitted Encumbrances) affecting any Borrowing
Base Property or Collateral if the value of such claim, judgment or Lien when aggregated with all
other existing claims, judgment

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or Liens (other than Permitted Encumbrances) affecting such Property shall exceed U.S.$10,000,000.

          (l) Promptly following the Borrower’s annual renewal of its insurance policies each May 1
after the Global Effective Date, a certificate of insurance coverage from the insurer in form and
substance reasonably satisfactory to the Global Administrative Agent evidencing the insurance
coverage required to be maintained pursuant to Section 5.6 and, if requested, will furnish
the Global Administrative Agent copies of the applicable insurance policies referenced therein.

          (m) Promptly, but in no event later than five (5) Business Days following the issuance or
incurrence of any Permitted Senior Notes Debt, or any extension, renewal, refinancing or
replacement of any Existing Subordinate Debt or Permitted Senior Notes Debt, notice to the Global
Administrative Agent of such issuance, incurrence, extension, renewal, refinancing or replacement,
together with true, correct and complete copies of each Permitted Senior Notes Document, or any
such extension, renewal, refinancing or replacement of any Existing Subordinate Debt or Permitted
Senior Notes Debt, requested by the Global Administrative Agent.

          (n) Promptly following the execution and delivery by (i) any MLP Subsidiary of the loan or
credit agreement evidencing the revolving credit facility described in the second paragraph of
Exhibit N, or (ii) any Loan Party of any contribution agreement,
omnibus agreement or other material document, instrument or agreement in connection with the MLP
Transactions, a true, correct and complete copy of such loan or credit agreement, contribution agreement, omnibus
agreement or other material document, instrument or agreement.

          (o) From time to time such additional information regarding the financial position or business
of any Loan Party or Person which has any of its Equity Interests pledged pursuant to a Pledge
Agreement as the Global Administrative Agent, at the request of any Lender, may reasonably request.

     Notwithstanding the foregoing in this Section 5.1, reports and other information
required to be delivered pursuant to Section 5.1(a), 5.1(b), 5.1(d) and
5.1(e) shall be deemed to have been delivered on the date on which the Borrower posts such
reports on its Intralinks website, the SEC’s website or at such other website as notified to the
Global Administrative Agent.

     SECTION 5.2 Business of Borrower and Subsidiaries. The sole business of the Borrower
shall be the acquisition, exploration, development and operation of Mineral Interests and the
production, marketing, processing and transportation of Hydrocarbons therefrom and businesses
reasonably related or complementary thereto; and the sole business of each Subsidiary shall be
substantially similar and/or related thereto, or shall otherwise be to act as a holding company for
any such Subsidiary.

     SECTION 5.3 Maintenance of Existence; Oil and Gas Properties.

          (a) The Borrower shall, and shall cause each other Loan Party to, at all times (i) maintain
its corporate, partnership or limited liability company existence in its state of

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incorporation or organization, and (ii) maintain its good standing (if and when applicable in the jurisdiction in
issue) and qualification to transact business in all jurisdictions where the failure to maintain
good standing or qualification to transact business would reasonably be expected to have a Material
Adverse Effect; provided that the foregoing shall not prohibit any action permitted under
Section 7.4.

          (b) The Borrower will and will cause each Subsidiary to, in all material respects, promptly:
(i) pay and discharge, or make commercially reasonable efforts to cause to be paid and discharged,
when due all delay rentals, royalties and expenses accruing under the leases or other agreements
affecting or pertaining to its Oil and Gas Properties, provided that, in the case of delay
rentals, the Borrower and/or the applicable Subsidiary shall only be required to pay and discharge,
or make commercially reasonable efforts to pay and discharge, delay rentals as and to the extent
the Borrower or such Subsidiary determines in good faith that payment and discharge thereof is in
the Borrower’s or such Subsidiary’s, as applicable, best interest, (ii) perform, or make reasonable
and customary efforts to cause to be performed, the obligations of the Borrower or any such
Subsidiary required by each and all of the assignments, deeds, leases, subleases, contracts and
agreements affecting its interests in its material Oil and Gas Properties and other material
Properties, and (iii) do all other things necessary to keep unimpaired, except for Permitted
Encumbrances, its rights with respect to its material Oil and Gas Properties and other material
Properties and prevent any forfeiture thereof or a default thereunder, except to the extent a
portion of such Properties is no longer capable of producing Hydrocarbons in economically reasonable amounts, except for
dispositions permitted by this Agreement or any other Combined Loan Document and except when the
failure to do so would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

     SECTION 5.4 Title Data; Title to Oil and Gas Properties. The Borrower shall, upon the
request of the Required Lenders, cause to be delivered to the Global Administrative Agent such
title due diligence regarding title to the Borrowing Base Properties owned by the Borrower and each
of its Subsidiaries and the perfection and priority of Global Administrative Agent’s Liens therein,
as and to the extent such Borrowing Base Properties are required to be mortgaged pursuant hereto,
as are reasonably appropriate to determine the status thereof. The Borrower shall, and shall cause
each Subsidiary to, in all material respects maintain good and defensible title (except for
Immaterial Title Deficiencies and Permitted Encumbrances) to (a) the Mortgaged Properties and (b)
its and their other material Oil and Gas Properties, and to do all things reasonably necessary to
cure any material title defects which are not Permitted Encumbrances of which an Authorized Officer
of the Borrower or any Subsidiary has knowledge or has been provided written notice.

     SECTION 5.5 Right of Inspection. The Borrower will permit, and will cause each other
Loan Party to permit, any officer, employee or agent of the Global Administrative Agent or of any
Lender to visit and inspect any of the assets of any Loan Party, examine each Loan Party’s books of
record and accounts, take copies and extracts thereof and therefrom, and discuss the affairs,
finances and accounts of each Loan Party with such Loan Party’s officers, accountants and auditors,
all upon prior written notice to the Borrower at such reasonable times during the Borrower’s or
such Loan Party’s normal business hours (and in a manner so as, to the extent practicable, not to
interfere with the normal business operations of the Borrower or such Loan Party) and as often as
the Global Administrative Agent or any Lender may reasonably

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request, and upon and during the continuance of an Event of Default all at the expense of the Borrower. Notwithstanding the
foregoing, as long as no Event of Default has occurred and is continuing, the Borrower will not be
required to bear the expense of more than one (1) inspection during any calendar year;
provided that if an Event of Default has occurred and is continuing, the Global
Administrative Agent shall be entitled to conduct more frequent inspections at the expense of the
Borrower.

     SECTION 5.6 Maintenance of Insurance. The Borrower will, and will cause each other
Loan Party to, at all times maintain or cause to be maintained insurance covering such risks as are
customarily carried, or self-insured (in the case of health and dental insurance), by businesses
similarly situated, including, without limitation, the following: (a) workmen’s compensation
insurance; (b) employer’s liability insurance; (c) comprehensive general public liability and
property damage insurance; (d) insurance against losses customarily insured against as a result of
damage by fire, lightning, hail, tornado, explosion and other similar risk; and (e) comprehensive
automobile liability insurance. All loss payable clauses or provisions in all policies of
insurance maintained by the Borrower with respect to all or any portion of the Borrowing Base
Properties or any Collateral pursuant to this Section 5.6 shall be endorsed in favor of and
made payable to the Global Administrative Agent for the ratable benefit of the Lenders, as their interests
may appear. In addition, the Global Administrative Agent on behalf of the Combined Lenders shall
be named (i) as additional insured on all of the Loan Parties’ liability insurance policies
maintained by the Borrower with respect to all or any portion of the Borrowing Base Properties or
any Collateral, and (ii) as loss payee on all of the Loan Parties’ casualty and property insurance
policies covering all or any portion of the Borrowing Base Properties or any Collateral. Upon the
occurrence and during the continuance of an Event of Default, the Global Administrative Agent (A)
shall have the right, for the ratable benefit of the Lenders, to collect, and the Borrower hereby
assigns to the Global Administrative Agent for the ratable benefit of the Lenders, any and all
monies that may become payable under any such policies of insurance by reason of damage, loss or
destruction of any Collateral for the Obligations or any part thereof, and (B) may, at its
election, either apply for the ratable benefit of the Lenders all or any part of the sums so
collected toward payment of the Obligations, whether or not such Obligations are then due and
payable, in such manner as the Global Administrative Agent may elect, or release same to the
applicable Loan Party.

     SECTION 5.7 Payment of Taxes and Claims. The Borrower will, and will cause each other
Loan Party to, pay (a) all Taxes imposed upon it or any of its assets or with respect to any of its
franchises, business, income or profits before any material penalty or interest accrues thereon and
(b) all material claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or might become a Lien
(other than a Permitted Encumbrance) on any of its assets; provided however, that
no payment of such Taxes or claims shall be required to the extent that (i) (A) the amount,
applicability or validity thereof is currently being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted and no material part of the property or
assets of any Loan Party is subject to any pending levy or execution and (B) the Loan Parties, as
and to the extent required in accordance with GAAP, shall have set aside on their books reserves
(segregated to the extent required by GAAP) deemed by them to be adequate with respect thereto, or
(ii) the failure to make payment pending such contest would not reasonably be

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expected to have a Material Adverse Effect or result in the seizure or levy of any material Property of any Loan
Party.

     SECTION 5.8 Compliance with Laws and Documents. The Borrower will, and will cause
each other Loan Party to, comply with all Governmental Rules, their respective certificates (or
articles) of incorporation, bylaws, regulations and similar organizational documents and all
Material Agreements to which any Loan Party is a party, if a violation, alone or when combined with
all other such violations, would reasonably be expected to have a Material Adverse Effect.

     SECTION 5.9 Operation of Properties and Equipment.

          (a) The Borrower will, and will cause each of its Subsidiaries to, maintain, develop and
operate (or use its commercially reasonable efforts to cause the operator to maintain and operate
to the extent the Borrower is not the operator) its Oil and Gas Properties in a good and
workmanlike manner as and to the extent the Borrower or any of its Subsidiaries, as applicable, elect in their commercially reasonable discretion to
maintain, develop and operate any such Oil and Gas Property, except to the extent the failure to do
so would not reasonably be expected to have a Material Adverse Effect.

          (b) Subject to Section 7.5 and to exceptions as in the aggregate would not reasonably
be expected to have a Material Adverse Effect, the Borrower will, and will cause each of its
Subsidiaries to, at all times maintain, preserve and keep all operating equipment used with respect
to its Mineral Interests in proper repair, working order and condition (subject to ordinary wear
and tear), and make all necessary or appropriate repairs, renewals, replacements, additions and
improvements thereto so that, in the Borrower’s commercially reasonable judgment, the efficiency of
such operating equipment shall at all times be properly preserved and maintained; provided,
that no item of operating equipment need be so repaired, renewed, replaced, added to or improved,
if the Borrower shall in good faith determine that such action is not necessary or desirable for
the continued efficient and profitable operation of the business of such Loan Party.

     SECTION 5.10 Environmental Law Compliance. The Borrower will, and will cause each
other Loan Party to, comply in all respects with all Environmental Laws, including, without
limitation, (a) all licensing, permitting, notification and similar requirements of Environmental
Laws, and (b) all provisions of all Environmental Laws regarding storage, discharge, release,
transportation, treatment and disposal of Hazardous Materials, if a violation, alone or when
combined with all other such violations, would reasonably be expected to have a Material Adverse
Effect. The Borrower will, and will cause each other Loan Party to, promptly pay and discharge
when due all legal debts, claims, liabilities and obligations with respect to any clean-up or
remediation measures necessary to comply with Environmental Laws; provided that such
payment or discharge shall not be required to the extent that (i) (A) the amount, applicability or
validity thereof is currently being contested in good faith by appropriate proceedings promptly
initiated and diligently conducted and no material part of the property or assets of any Loan Party
is subject to any pending levy or execution and (B) the Loan Parties, as and to the extent required
in accordance with GAAP, shall have set aside on their books reserves (segregated to the extent
required by GAAP) deemed by them to be adequate with respect

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thereto, or (ii) the failure to make such payment or discharge would not reasonably be expected to have a Material Adverse Effect.

     SECTION 5.11 ERISA Reporting Requirements. The Borrower shall furnish, or cause to be
furnished, to the Global Administrative Agent:

          (a) promptly and in any event (i) within thirty (30) days after an Authorized Officer of the
Borrower or any ERISA Affiliate receives notice from any regulatory agency of the commencement of
an audit, investigation or similar proceeding with respect to a Plan, and (ii) within ten (10) days
after the Borrower or any ERISA Affiliate contacts the Internal Revenue Service for the purpose of
participation in a closing agreement or any voluntary resolution program with respect to a Plan, in
each case, if the result of any such audit, investigation or similar proceeding or any such closing
agreement or voluntary resolution would reasonably be expected to have a Material Adverse Effect, a
written notice describing such event and describing what action is being taken or is proposed to be taken with respect thereto, together with a copy of
any notice of event that is given to the PBGC;

          (b) promptly and in any event within thirty (30) days after the receipt by the Borrower of a
written request therefor by a Lender, copies of any annual and other report (including Schedule B
thereto) with respect to a Plan filed by the Borrower or any ERISA Affiliate with the United States
Department of Labor, the Internal Revenue Service or the PBGC;

          (c) notification within thirty (30) days of the effective date thereof of any material
increases in the benefits, or material change in the funding method, of any existing Plan which is
not a multiemployer plan (as defined in Section 4001(a)(3) of ERISA), or the establishment of any
material new Plans, or the commencement of material contributions to any Plan to which the Borrower
or any ERISA Affiliate was not previously contributing; and

          (d) promptly after receipt of written notice of commencement thereof, notice of all (i) claims
(other than routine claims for benefits) made by participants or beneficiaries with respect to any
Plan and (ii) actions, suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Borrower
or any ERISA Affiliate with respect to any Plan, except those which, in the aggregate, if adversely
determined could not reasonably be expected to have a Material Adverse Effect.

     SECTION 5.12 Environmental Review. In connection with any acquisition by any Loan
Party of Mineral Interests, other than an acquisition of additional interests in Mineral Interests
in which a Loan Party previously held an interest, to the extent a Loan Party obtains or is
provided the same, the Borrower shall, promptly following such Loan Party’s obtaining or being
provided with the same, deliver to the Global Administrative Agent all environmental reports and
results of environmental reviews (including Phase I environmental reports) of such Mineral
Interests.

     SECTION 5.13 Casualty and Condemnation. The Borrower (a) will furnish to the Global
Administrative Agent promptly, and in any event within fifteen (15) Business Days, after an
Authorized Officer of the Borrower becoming aware of the occurrence, written notice of any

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Casualty Event to any Collateral or the commencement of any action or proceeding for the taking of any
material portion of the Collateral or any part thereof or interest therein under power of eminent
domain or by condemnation or similar proceeding, to the extent the fair market value of such
Collateral so affected, when aggregated with the fair market value of all other Collateral so
affected by a Casualty Event occurring in the same calendar year, exceeds 5% of the Global
Borrowing Base, and (b) subject to the right of the Borrower and/or the applicable Subsidiaries to
first apply (or budget to apply) such Net Cash Proceeds as provided in Section 2.8(g) to
the repair, restoration or replacement of the Property affected by a Casualty Event, will ensure
that the Net Cash Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with the applicable
provisions of the Combined Loan Documents.

     SECTION 5.14 Performance of Obligations. The Borrower will and will cause each Loan
Party to do and perform every act and discharge all of the Obligations as and to the extent
required to be performed or discharged by the Borrower or such Loan Party at the time or times and
in the manner specified in the applicable Loan Documents.

     SECTION 5.15 Additional Subsidiaries. If any additional Subsidiary of the Borrower is
created or acquired after the Global Effective Date, the Borrower will notify the Global
Administrative Agent and the Lenders thereof. On or before the date of the designation by the
Borrower of any direct or indirect wholly owned Material Subsidiary, the Borrower shall cause such
Material Subsidiary (unless such Material Subsidiary is a Foreign Subsidiary) to execute and
deliver to the Global Administrative Agent a Guaranty. On or before the date of the designation by
the Borrower of a Subsidiary as a Material Subsidiary, the Borrower or relevant Subsidiary (which
shall not be a Foreign Subsidiary), as applicable, will pledge all Equity Interests (other than the
QRC Class C Shares) in such newly designated Material Subsidiary owned by the Borrower or such
Subsidiary (except that, if such new Material Subsidiary is a Foreign Subsidiary, the Equity
Interests of such Material Subsidiary to be pledged pursuant to such Pledge Agreement shall be
limited to 65% of the total combined voting power of all classes of voting Equity Interests (other
than the QRC Class C Shares) of such Material Subsidiary and 100% of all non-voting Equity
Interests (other than the QRC Class C Shares) of such Material Subsidiary owned by the Borrower or
such Subsidiary) and shall execute and deliver to the Global Administrative Agent a Pledge
Agreement together with (a) all certificates (or other evidence acceptable to the Global
Administrative Agent) evidencing the issued and outstanding Equity Interests (other than the QRC
Class C Shares) owned by the Borrower or such Subsidiary (subject to the 65% and 100% limitations
above with respect to Foreign Subsidiaries) of any such new Material Subsidiary of every class
owned by the Borrower or such Subsidiary (as applicable) which shall be duly endorsed or
accompanied by stock powers executed in blank (as applicable), and (b) such UCC-1 financing
statements as the Global Administrative Agent shall deem reasonably necessary or appropriate to
grant, evidence and perfect the Liens required hereunder in the issued and outstanding Equity
Interests (other than the QRC Class C Shares) of each such new Material Subsidiary. On or before
the designation by the Borrower of any additional Material Subsidiary after the Global Effective
Date, the Borrower will cause such Material Subsidiary (unless such Material Subsidiary is a
Foreign Subsidiary) to execute a Mortgage, to the extent required by Section 5.17, and
Security Agreement and promptly take such actions to create and perfect Liens on such Material
Subsidiary’s assets, as and to the extent

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such assets are required to be mortgaged or pledged pursuant to Section 5.17, to secure the Obligations as the Global Administrative Agent
shall reasonably request.

     SECTION 5.16 Information Regarding Collateral. The Borrower will furnish to the
Global Administrative Agent promptly, and in any event within thirty (30) days upon an Authorized
Officer of the Borrower becoming aware of the following changes, written notice of any change (a)
in any Subsidiary’s corporate name, (b) in the location of any Subsidiary’s chief executive office
or its principal place of business, (c) in any Subsidiary’s identity or corporate structure, (d) in
any Loan Party’s organizational number issued to it in its jurisdiction of organization, and (e) in
the location of the Collateral to any jurisdiction in which any registration of, or in respect of, the Security
Documents may not be effective to protect the Lien created thereunder, including, without
limitation, information regarding the time of such relocation, the items being relocated and the
intended new locality of such items.

     SECTION 5.17 Further Assurances.

          (a) The Borrower will, and will cause each Loan Party to, at the Borrower’s expense, cure
promptly any defects in the execution and delivery of this Agreement and any other Loan Document to
which any of them is a party. The Borrower, at its expense, will and will cause each Subsidiary
to, promptly execute and deliver to the Global Administrative Agent all such other documents,
agreements and instruments reasonably requested by the Global Administrative Agent to comply with
or accomplish the covenants and agreements of the Borrower or any Subsidiary, as the case may be,
in this Agreement and any other Loan Document, or to file any notices or obtain any consents, all
as may be reasonably necessary or appropriate in connection therewith.

          (b) The Borrower agrees that it will, and will cause each Loan Party to, at the Borrower’s
expense, execute any and all further documents, financing statements, agreements and instruments
and take all such further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents) that may be required under any
applicable law or which the Global Administrative Agent may reasonably request, to effect the
transactions contemplated by the Security Documents, or to grant, preserve, protect or perfect the
Liens created or intended to be created thereby or the validity or priority (subject only, with
respect to priority, to Permitted Encumbrances) of any such Liens, all at the expense of the Loan
Parties.

          (c) The Borrower shall at all times cause the Canadian Obligations to be secured by first and
prior Liens (subject only, with respect to priority, to Permitted Encumbrances) covering and
encumbering the Required Reserve Value, and shall at all times cause the Obligations to be secured
by first and prior Liens (subject only, with respect to priority, to Permitted Encumbrances)
covering and encumbering the U.S. Required Reserve Value. On or before each Redetermination Date
after the Closing Date and at such other times as the Global Administrative Agent or Required
Lenders shall request, the Borrower and its Subsidiaries shall execute and deliver to
Administrative Agent, for the ratable benefit of each Lender, Mortgages in form and substance
reasonably acceptable to the Global Administrative Agent and duly executed by the Borrower and any
such Subsidiary (as applicable) together with such other assignments, conveyances, amendments,
agreements and other writings, including, without limitation, UCC-1

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financing statements as Administrative Agent shall deem reasonably necessary or appropriate to grant, evidence and perfect
the Liens granted pursuant to the Security Documents with respect to Borrowing Base Properties
acquired by the Borrower and its Subsidiaries subsequent to the last date on which the Borrower or
any such Subsidiary was required to execute and deliver Mortgages pursuant to Section
4.1(g), Section 5.15 or this Section 5.17, or which, for any other reason are
not the subject of valid, enforceable, perfected first priority Liens (subject only to Permitted
Encumbrances) in favor of the Global Administrative Agent for the ratable benefit of Lenders covering the Required Reserve
Value and the U.S. Required Reserve Value. Notwithstanding anything herein to the contrary, it is
the intention of the parties hereto that the Borrower and its Subsidiaries will not be required to
deliver security or collateral for the Obligations other than (i) as delivered on or before the
Closing Date pursuant to Article IV, (ii) as required pursuant to Section 5.15 or
this Section 5.17, and (iii) as otherwise agreed upon in writing between the Lender Parties
and the Borrower and/or the applicable Subsidiary after the Closing Date, provided that the
Borrower and the Material Subsidiaries shall in no event be required to pledge, or grant any
security interests in any of the following that may now or hereafter be owned or leased by the
Borrower or any Material Subsidiary, or to which the Borrower or any Material Subsidiary is a
party: (A) any vehicles, (B) any equipment the ownership to which is evidenced by certificate(s)
of title or (C) any Hedging Agreements or computer or software licenses that are non-assignable by
their terms without the consent of the other party or parties thereto or the licensor (or
sublicensor) thereof, as applicable.

          (d) At any time the Borrower or any of its Subsidiaries is required to execute and deliver
Mortgages to the Global Administrative Agent pursuant to Section 5.15 or this Section
5.17, the Borrower shall also deliver to the Global Administrative Agent such customary
opinions of counsel (including, if so requested, title opinions, and in each case addressed to the
Global Administrative Agent) and other evidence of title as the Global Administrative Agent shall
deem reasonably necessary or appropriate to verify (i) the Borrower’s or such Subsidiary’s title to
the Required Reserve Value of the Proved Mineral Interests which are subject to such Mortgages, and
(ii) the validity, perfection of the Liens and priority (subject only, with respect to priority, to
Permitted Encumbrances) of the Liens created by such Mortgages and such other matters regarding
such Mortgages and the Loan Documents as the Global Administrative Agent shall reasonably request.

          (e) The Borrower agrees to provide to the Global Administrative Agent, from time to time upon
reasonable request of the Global Administrative Agent, information that is in the possession of the
Borrower or its Subsidiaries or otherwise reasonably obtainable by any of them, reasonably
satisfactory to the Global Administrative Agent as to the perfection and priority (subject only,
with respect to priority, to Permitted Encumbrances) of the Liens created or intended to be created
by the Security Documents. The Security Documents shall remain in effect at all times unless
otherwise released pursuant to the terms of this Agreement or any other Combined Loan Document.

          (f) In connection with the foregoing, the Borrower hereby authorizes the Global Administrative
Agent and the Lenders to file one or more financing statements or continuation statements, and
amendments thereto, in such jurisdictions as are necessary or as the Global Administrative Agent,
in its reasonable discretion, deems advisable to perfect, prepare, protect and maintain the Liens,
and the priority thereof, created pursuant to the Security

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Documents relative to all or any part of the Collateral without the signature of the Borrower or any other Loan Party where permitted by law
and describing the collateral using words such as “all personal property” or “all assets” or other
words of similar import. A carbon, photographic or other reproduction of the
Security Documents or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law. The Global Administrative
Agent will promptly send the Borrower any financing or continuation statements it files without the
signature of the Borrower or any other Loan Party and the Global Administrative Agent will promptly
send the Borrower the filing or recordation information with respect thereto.

     SECTION 5.18 Pledges of Equity Interests in non-Loan Parties. Prior to any Investment
being considered a Permitted Investment pursuant to subsections (k) and (q) of the
definition of “Permitted Investment”, the Borrower or relevant Subsidiary (which shall not be a
Foreign Subsidiary), as applicable, will pledge all Equity Interests in the Person into which the
Investment was or will be made which are owned by the Borrower or such Subsidiary (except that, if
such Person is a Foreign Entity, the Equity Interests of such Person to be pledged pursuant to such
Pledge Agreement shall be limited to 65% of the total combined voting power of all classes of
voting Equity Interests of such Person and 100% of all non-voting Equity Interests of such Person
owned by the Borrower or such Subsidiary) and shall execute and deliver to the Global
Administrative Agent a Pledge Agreement together with (a) all certificates (or other evidence
acceptable to the Global Administrative Agent) evidencing the issued and outstanding Equity
Interests owned by the Borrower or such Subsidiary (subject to the 65% and 100% limitations
described above with respect to a Foreign Entity) of any such Person of every class owned by the
Borrower or such Subsidiary (as applicable) which shall be duly endorsed or accompanied by stock
powers executed in blank (as applicable), and (b) such UCC-1 financing statements as the Global
Administrative Agent shall deem reasonably necessary or appropriate to grant, evidence and perfect
the Liens required hereunder in the issued and outstanding Equity Interests of each such Person.

ARTICLE VI

FINANCIAL COVENANTS

     The Borrower agrees with the Global Administrative Agent, the other Agents, any Issuing Bank,
and each Lender that, until the Commitments have expired or been terminated and Obligations shall
have been paid and performed in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower will perform the obligations set
forth in this Article.

     SECTION 6.1 Current Ratio. As of the end of any Fiscal Quarter, commencing with the
Fiscal Quarter ending March 31, 2007, the Borrower will not permit its ratio of Consolidated
Current Assets to Consolidated Current Liabilities to be less than 1.00 to 1.00.

     SECTION 6.2 EBITDAX Ratio. As of the end of any Fiscal Quarter, commencing with the
Fiscal Quarter ending March 31, 2007, the Borrower will not permit its ratio of Consolidated
EBITDAX (for the four (4) previous Fiscal Quarters ending on such date) to Consolidated Net
Interest Expense (for the four (4) previous Fiscal Quarters ending on such date) to be less than
2.50 to 1.00.

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ARTICLE VII

NEGATIVE COVENANTS

     The Borrower agrees with the Global Administrative Agent, the other Agents, any Issuing Bank,
and each Lender that, until the Global Commitments and Commitments have expired or been terminated
and all Obligations shall have been paid and performed in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower will
perform the obligations set forth in this Article.

     SECTION 7.1 Incurrence of Debt. The Borrower will not, nor will the Borrower permit
any other Loan Party to, incur, become or remain liable for any Indebtedness, other than:

          (a) the Combined Obligations;

          (b) the guarantee by the Borrower or any Material Subsidiary of any Contractual Obligation of
any Material Subsidiary so long as such guarantee only guarantees not more than the percentage of
such Contractual Obligation that equals the percentage of common equity owned directly or
indirectly by the Borrower or any Material Subsidiary, as applicable, in such Material Subsidiary
at the time such guaranty is executed;

          (c) Indebtedness evidenced by and/or arising out of the Falcon Seaboard Settlement Agreement;

          (d) Indebtedness of any Material Subsidiary (other than a Foreign Subsidiary) to the Borrower
or any other Material Subsidiary (other than a Foreign Subsidiary);

          (e) Indebtedness outstanding on the date hereof listed on Schedule 7.1 and any
refinancings, renewals or extensions thereof (without increasing, or shortening the maturity of,
the principal amount thereof);

          (f) Indebtedness of a Person which becomes a Subsidiary after the date hereof,
provided that (i) such Indebtedness existed at the time such Person became a Subsidiary and
was not created in anticipation thereof and (ii) immediately after giving effect to the acquisition
of such Person by the Borrower or a Subsidiary, no Default or Event of Default shall have occurred
and be continuing; provided, further, that all Indebtedness incurred under this
clause (f), together with all Indebtedness incurred pursuant to clause (l) below,
does not exceed U.S.$20,000,000 in the aggregate;

          (g) endorsements of negotiable instruments for collection in the ordinary course of business;

          (h) Indebtedness consisting of performance bonds or surety or appeal bonds provided by the
Borrower or any Subsidiary in the ordinary course of business;

          (i) Non-Recourse Debt in an aggregate amount outstanding at any time not to exceed
U.S.$5,000,000;

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          (j) Hedging Obligations existing or arising under Oil and Gas Hedge Transactions to the extent
such Oil and Gas Hedge Transactions are not prohibited by Section 7.11 of this Agreement or
the Canadian Credit Agreement;

          (k) Indebtedness constituting Permitted Investments;

          (l) Indebtedness incurred to finance the acquisition, construction or improvement of fixed or
capital assets (including, without limitation, Capital Lease Obligations) secured by Liens
permitted by clause (o) of the definition of “Permitted Encumbrances” contained herein;
provided that all Indebtedness incurred under this clause (l), together with all
Indebtedness incurred pursuant to clause (f) above, does not exceed U.S.$20,000,000 in the
aggregate;

          (m) Indebtedness in an aggregate amount outstanding at any time not to exceed U.S.$40,000,000;

          (n) the Existing Subordinate Debt; provided, however, that the aggregate
principal amount of such Existing Subordinate Debt does not exceed U.S.$500,000,000;

          (o) the Permitted Senior Notes Debt; provided, however, that the aggregate
principal amount of such Permitted Senior Notes Debt does not exceed U.S.$300,000,000;

          (p) Indebtedness associated with worker’s compensation claims, unemployment insurance laws or
similar legislation incurred in the ordinary course of business; and

          (q) Taxes, assessments or other governmental charges which are not yet due or are being
contested in good faith in accordance with Section 5.7;

provided, that, the Borrower may not incur any new Indebtedness (other than (i) the
renewal, extension, refinancing or replacement of the Existing Subordinate Debt or any Permitted
Senior Notes Debt and (ii) Guarantees by any Subsidiaries thereof to the extent the same is
incurred in accordance with Section 7.14) described in clauses (f), (i),
(j), and (o) above at any time that a Default, Event of Default, Global Borrowing
Base Deficiency or U.S. Borrowing Base Deficiency has occurred and is continuing.

For the avoidance of doubt, to the extent any Indebtedness could be attributable to more than one
subsection of this Section 7.1, the Borrower or any other Loan Party may categorize all or
any portion of such Indebtedness to any one or more subsections of this Section 7.1 as it
elects and unless as otherwise expressly provided, in no event shall the same portion of any
Indebtedness be deemed to utilize or be attributable to more than one subsection of this
Section 7.1.

     SECTION 7.2 Restricted Payments. The Borrower will not, nor will the Borrower permit
any other Loan Party to, directly or indirectly, declare or pay, or incur any liability to declare
or pay, any Restricted Payment; provided, that:

          (a) any direct or indirect Subsidiary of the Borrower that has provided a Guaranty, and all of
the Equity Interests of which Subsidiary directly or indirectly owned by the

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Borrower (or 65% of the total combined voting power of all classes of voting Equity Interests of such Subsidiary and
100% of the all non-voting Equity Interests of such Subsidiary, in the case of a Foreign
Subsidiary) has been pledged to the Global Administrative Agent pursuant to a Pledge Agreement, may
make Restricted Payments to the Borrower;

          (b) any direct or indirect Subsidiary of the Borrower that has provided a Guaranty may make
Restricted Payments to any Pledging Subsidiary of the Borrower owning Equity Interests therein, so
long as all of the Equity Interests in the indirect Subsidiary (or 65% of the total combined voting
power of all classes of voting Equity Interests of such Subsidiary and 100% of the all non-voting
Equity Interests of such Subsidiary, in the case of a Foreign Subsidiary) of the Borrower owned by
such Pledging Subsidiary of the Borrower has been pledged to the Global Administrative Agent
pursuant to a Pledge Agreement, all of the Equity Interests in the Pledging Subsidiary (or 65% of
the total combined voting power of all classes of voting Equity Interests of such Subsidiary and
100% of the all non-voting Equity Interests of such Subsidiary, in the case of a Foreign
Subsidiary) of the Borrower owned by the Borrower has been pledged to the Global Administrative
Agent pursuant to a Pledge Agreement, and, if such Pledging Subsidiary has not provided a Guaranty,
such Pledging Subsidiary of the Borrower makes a Restricted Payment to the Borrower in an equal
amount and on the same Business Day of receipt thereof;

          (c) any Person in which the Borrower directly or indirectly owns Equity Interests may make
Distributions to the Borrower and/or other Persons owning Equity Interests in such Person, so long
as any such Distribution is in each case made to the Borrower and/or such other Persons ratably in
accordance with its Equity Interests of the same class or series therein;

          (d) in the event no Default, Event of Default, Global Borrowing Base Deficiency, or U.S.
Borrowing Base Deficiency has occurred which is continuing, the Borrower may repurchase, during the
term of this Agreement, a portion of its common stock, par value U.S.$.01 per share, for an
aggregate and cumulative purchase price of not more than U.S.$20,000,000 in the aggregate;

          (e) the Borrower may declare and pay dividends with respect to its Equity Interests payable
solely in additional shares of its Equity Interests;

          (f) the Borrower may purchase or otherwise acquire Equity Interests in any Subsidiary using
additional shares of its Equity Interests;

          (g) the Borrower or any Subsidiary may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or employees of the Borrower or any
Subsidiary; and

          (h) the Borrower may redeem the share purchase rights issued pursuant to that certain Rights
Agreement, dated as of March 11, 2003, between the Borrower and Mellon Investor Services LLC, as
Rights Agent, in accordance with the terms of such Rights Agreement.

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Nothing in this Section 7.2 or any other provision of this Agreement or any Combined Loan
Document shall preclude the Borrower’s delivery of gas pursuant to the terms of the Falcon Seaboard
Settlement Agreement.

     SECTION 7.3 Negative Pledge. The Borrower will not, nor will the Borrower permit any
other Loan Party to, create, assume or suffer to exist any Lien on any of their respective assets,
other than Permitted Encumbrances. Subject to Sections 9-406 through 9-409 of the Uniform
Commercial Code as amended and in effect from time to time, the Borrower will not, nor will the
Borrower permit any other Loan Party to, create, assume or suffer to exist or enter into or become
bound by any agreement (other than this Agreement and the other Combined Loan Documents or pursuant
to agreements creating purchase money security interests or governing Capital Lease Obligations, in
each case to the extent the same are permitted pursuant to the Combined Loan Documents) that
prohibits or otherwise restricts the right of the Borrower or any other Loan Party to create,
assume or suffer to exist any Lien on any of their respective assets in favor of the Global
Administrative Agent for the ratable benefit of Lenders.

     SECTION 7.4 Consolidations and Mergers. The Borrower will not, nor will the Borrower
permit any other Loan Party to, consolidate or merge with or into any other Person;
provided, that, so long as no Default or Event of Default has occurred and is continuing or
will result therefrom, (a) the Borrower may merge or consolidate with another Person so long as the
Borrower is the surviving corporation, and (b) any Wholly-Owned Subsidiary of the Borrower may
merge or consolidate with any other Person so long as a Wholly Owned Subsidiary of the Borrower, or
the Borrower, is the surviving Person.

     SECTION 7.5 Asset Dispositions.

          (a) The Borrower will not, nor will the Borrower permit any other Loan Party to, sell, lease,
transfer, abandon or otherwise dispose of any Borrowing Base Property or Collateral, other than (i)
to the Borrower or any Material Subsidiary, (ii) farmouts of undeveloped acreage and assignments in
connection with such farmouts or the abandonment, farm-out, exchange, lease or sublease of Oil and
Gas Properties not containing Proved Mineral Interests capable of being produced in material
economic quantities and which are not included in the most recently delivered Reserve Report, (iii)
the sale in the ordinary course of business of Hydrocarbons produced from the Borrower’s and any
other Loan Party’s Mineral Interests (and not pursuant to Advance Payment Contracts), (iv) any
Subsidiary may sell, transfer, lease or otherwise dispose of all or any portion of its assets to the Borrower or any other Loan Party, (v) the sale or
disposition (including a Casualty Event), in accordance with the Combined Loan Documents, of assets
the Net Cash Proceeds of which are reinvested (whether through reparation, restoration or
replacement of the assets in issue), within 180 days after such sale or disposition, in assets
useful in the business of the Borrower or any Subsidiary or otherwise applied to the prepayment of
the Combined Loans in accordance with the Combined Loan Documents, (vi) the sale or disposition of
assets obtained as a result of mergers, consolidations or other transactions permitted under this
Agreement that are unnecessary or unrelated to the business of the Borrower and its Subsidiaries,
(vii) the sale, transfer or issuance of any Subsidiary’s Equity Interests to the Borrower or any
Loan Party, (viii) Permitted Investments that are not Mineral Interests, (ix) as permitted by
Section 7.4, (x) the sale or disposition of

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machinery, equipment or other assets which are obsolete, worn out or otherwise not necessary or useful in the operation of the Borrower’s business
or that are replaced by machinery, equipment or other assets of comparable value and use, (xi) the
initial sale, contribution or disposition of assets (including, without limitation, all of the
Equity Interests of Processing Partners and Pipeline Partners)
specifically described on Exhibit N made as part of, in connection with, or pursuant to, the formation
of the MLP and to effect the MLP Transactions, notwithstanding anything to the contrary contained
in any Combined Loan Document, and/or (xii) any Subsidiary (other than a Material Subsidiary or
Subsidiary that owns Mortgaged Properties) may liquidate, dissolve or cease operations if the
Borrower determines in good faith that such liquidation or cessation is in the best interests of
the Borrower and is not materially disadvantageous to the Lenders; provided, that, so long
as no Default or Event of Default has occurred which is continuing, the Borrower and each other
Loan Party shall be permitted to sell or dispose of Mineral Interests during any period between
Scheduled Redeterminations with an aggregate Recognized Value (measured at the time of such sale or
disposition) not in excess of five percent (5%) of the Global Borrowing Base in effect during such
period; provided, however, and without limiting the foregoing, the Borrower will
not, nor will the Borrower permit any other Loan Party to, (A) sell any Hydrocarbons under Advance
Payment Contracts, except to the extent disclosed on Schedule 7.1 and except to the extent
such sales of Hydrocarbons would not cause the representation in Section 3.19(b) to no
longer be true and correct, (B) sell or securitize any of their accounts receivable (other than (1)
those accounts receivable deemed by the Borrower to be doubtful or uncollectible, (2) discounts of
accounts receivable granted to settle collection of accounts receivable or (3) the sale of
defaulted accounts arising in the ordinary course of business in connection with the compromise or
collection thereof and not in connection with any financing transaction), (C) sell any production
payment or other term royalty, other than pursuant to the Falcon Seaboard Settlement Agreement, or
(D) sell assets (other than equipment) and then lease them back (or commit to lease them back)
within 180 days after such sale.

          (b) In the event of any disposition of assets permitted under this Section 7.5
(including the transfer and disposition of the Equity Interests of Processing Partners and Pipeline
Partners pursuant to the MLP Transactions), the Global Administrative Agent is authorized on behalf
of the Lenders to release and shall promptly release (or, in connection with the transfer and
disposition of the Equity Interests of Processing Partners and Pipeline Partners pursuant to the MLP Transactions, release Liens
covering such Equity Interests contemporaneously with the consummation of such MLP Transactions)
any Liens in favor of the Global Administrative Agent for the benefit of the Lenders covering such
assets upon (i) the prior or contemporaneous release of any other Liens covering the assets, and
(ii) the written request from an Authorized Officer of the Borrower which specifically identifies
the subject assets and certifies that such disposition complies with the terms of this Section
7.5 (including the release of any other Liens covering the assets).

     SECTION 7.6 Amendments to Organizational Documents; Other Material Agreements. The
Borrower will not, nor will the Borrower permit any other Loan Party to, enter into or permit any
modification or amendment of, or waive any material right or obligations of any Person under, (a)
its Organic Documents (other than amendments, modifications and waivers which would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect), (b)
the Existing Subordinate Note Documents, and (c) the Permitted

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Senior Notes Documents; provided, that the Borrower may enter into or obtain amendments, modifications or waivers
to or under the Existing Subordinate Note Documents or the Permitted Senior Notes Documents which
do not provide for or have any of the following effects: (i) cause (A) the outstanding principal
balance of the Existing Subordinate Debt to exceed U.S.$500,000,000 at any time and (B) the
outstanding principal balance of the Permitted Senior Notes Debt to exceed U.S.$300,000,000 at any
time (in each case, as reduced by any prepayments or redemptions to the extent permitted by
Section 7.14 hereof or any other principal payments hereafter made with the express written
consent of the Majority Lenders); (ii) increase the amount of any scheduled payment of principal or
interest on the Existing Subordinate Debt or Permitted Senior Notes Debt; (iii) hasten or
accelerate the date upon which any installment of principal or interest of any Existing Subordinate
Debt or any Permitted Senior Notes Debt is due or otherwise accelerate the amortization schedule
with respect to such Existing Subordinate Debt or Permitted Senior Notes Debt; (iv) increase the
rate of interest payable in cash accruing on the Existing Subordinate Debt or Permitted Senior
Notes Debt (other than any increase to the “Default Rate” in the circumstances provided for in the
Existing Subordinate Note Documents or the Permitted Senior Notes Documents), or impose any
additional premium or penalty in connection with the prepayment or late payment of the Existing
Subordinate Debt or Permitted Senior Notes Debt; (v) subject to the last proviso of this
Section 7.6, provide for the payment of additional fees or for any increase in existing
fees in connection with the Existing Subordinate Debt or Permitted Senior Notes Debt; or (vi) amend
or modify any covenant, obligation or default of the Borrower contained in the Existing Subordinate
Note Documents or Permitted Senior Notes Documents (including, without limitation, financial
ratios) in a manner which makes such covenants, obligations or defaults materially more restrictive
or onerous than those contained in, in the case of the applicable Existing Subordinate Note
Documents, the Existing Subordinate Note Documents as in effect on the Global Effective Date or in
the Combined Credit Agreements as then in effect, or, in the case of the Permitted Senior Notes
Documents, materially more restrictive or onerous than those contained in the Permitted Senior
Notes Documents when they are entered into by the Borrower or applicable Subsidiary thereof, or in
the Combined Credit Agreements as then in effect; provided, however, that,
notwithstanding the foregoing or anything else to the contrary contained in any Combined Loan
Document, any agent, any trustee and any holder of Existing Subordinate Debt or Permitted Senior
Notes Debt shall be entitled to receive fees for amendments (to the extent such amendments are
permitted hereby), providing consents, waiving defaults or granting forbearances (but solely to the
extent such fees are customary, do not exceed market rates and are permitted by the Existing
Subordinate Note Documents or the Permitted Senior Notes Documents or otherwise approved by the
Global Administrative Agent), and to the reimbursement of any reasonable out-of-pocket expenses
(including fees and expenses of attorneys, appraisers, consultants and advisors) relating thereto
in accordance with the terms of the Existing Subordinate Note Documents or the Permitted Senior
Notes Documents, respectively.

     SECTION 7.7 Use of Proceeds. The proceeds of the Loans and Letters of Credit will not
be used for any purpose other than in the manner described in Section 3.21.

     SECTION 7.8 Investments. The Borrower will not, nor will the Borrower permit any
other Loan Party to, directly or indirectly, make or have outstanding any Investment, other than
Permitted Investments.

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     SECTION 7.9 Transactions with Affiliates. The Borrower will not, nor will the
Borrower permit any other Loan Party (other than the Canadian Borrower or, as applicable, any
Subsidiary of the Canadian Borrower) to, engage in any transaction with any Affiliate (other than
Borrower or any Loan Party (other than the Canadian Borrower or any Subsidiary of the Canadian
Borrower)), except for (a) Permitted Investments, (b) the MLP Transactions and such other
transactions as are otherwise permitted under this Agreement or any other Combined Loan Document,
or (c) such transactions which are on material terms and conditions materially as favorable to such
party as could be obtained in a comparable arm’s length transaction with a Person that is not an
Affiliate. The Borrower will not, nor will the Borrower permit any other Loan Party (other than
the Canadian Borrower or, as applicable, any Subsidiary of the Canadian Borrower) to, engage in any
transaction with the Canadian Borrower or any Subsidiary of the Canadian Borrower, except for
Permitted Investments or unless such transaction is on material terms and conditions materially as
favorable to such party as could be obtained in a comparable arm’s length transaction with a Person
that is not an Affiliate of the Borrower or such Subsidiary.

     SECTION 7.10 ERISA. Except in such instances where an action, omission or failure
would not reasonably be expected to have a Material Adverse Effect, the Borrower will not, nor will
the Borrower permit any other Loan Party to, (a) take any action or fail to take any action which
would result in a violation of ERISA, the Code or other Governmental Rules applicable to the Plans
maintained or contributed to by it or any ERISA Affiliate, or (b) modify the term of, or the
funding obligations or contribution requirements under any existing Plan, establish a new Plan, or
become obligated or incur any liability under a Plan that is not maintained or contributed to by
the Borrower or any ERISA Affiliate as of the Closing Date.

     SECTION 7.11 Hedge Transactions. The Borrower will not, nor will the Borrower permit
any other Loan Party to, enter into Oil and Gas Hedge Transactions which would cause the volume of
Hydrocarbons with respect to which a settlement payment is calculated under such Oil and Gas Hedge
Transactions to exceed (a) the lesser of (i) eighty-five percent (85%) of the aggregate of the
Borrower’s and its Subsidiaries’ anticipated production from Proved Mineral Interests, or (ii) one
hundred percent (100%) of the aggregate of the Borrower’s and its Subsidiaries’ anticipated
production from Proved Producing Mineral Interests plus (b) an amount not to exceed one
hundred percent (100%) of associated royalty owners’ oil, gas and/or natural gas liquids produced
from the same wells, and which oil, gas and/or natural gas liquids the Borrower has the authority
to market and sell, during the period from the immediately preceding settlement date (or the
commencement of such Hedge Transaction if there is no prior settlement date) to such settlement
date; provided that the Borrower will not, nor will the Borrower permit any other Loan
Party to, enter into any Oil and Gas Hedge Transaction (i) except in the ordinary course of
business (and not for speculative purposes) and (ii) with a counterparty with a rating of its
senior, unsecured, long-term indebtedness for borrowed money that is not guaranteed by any other
Person or subject to any other credit enhancement of lower than “BBB-” or “Baa3” by S&P and
Moody’s, respectively.

     SECTION 7.12 Fiscal Year. The Borrower will not, and the Borrower will not permit any
other Loan Party to, change its Fiscal Year.

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     SECTION 7.13 Change in Business. The Borrower will not, nor will the Borrower permit
any other Loan Party to, engage in any business other than the businesses described in Section
3.13 hereof.

     SECTION 7.14 Existing Subordinate Debt, Permitted Senior Notes Debt and Falcon Seaboard
Settlement Agreement. In addition to the other restrictions contained in this Article
VII, the Borrower will not, nor will the Borrower permit any other Loan Party to, directly or
indirectly, (a) make any payment of principal or any other item of any Existing Subordinate Debt or
Permitted Senior Notes Debt (other than accrued interest thereon and reasonable fees and expenses
incurred in accordance with the terms thereof and Restricted Payments made with respect to any
Existing Subordinate Debt or Permitted Senior Notes Debt in accordance with Section 7.2 to
repurchase fractional shares of the Borrower’s Equity Interests that arise or result from the
conversion of any such Existing Subordinate Debt or Permitted Senior Notes Debt) or payment in
respect of the purchase, repurchase, redemption or defeasance of principal or such other item of
Existing Subordinate Debt or Permitted Senior Notes Debt (other than accrued interest thereon and
reasonable fees and expenses incurred in accordance with the terms thereof and Restricted Payments
made with respect to any Existing Subordinate Debt or Permitted Senior Notes Debt in accordance
with Section 7.2 to repurchase fractional shares of the Borrower’s Equity Interests that
arise or result from the conversion of any such Existing Subordinate Debt or Permitted Senior Notes
Debt) at any time prior to the earlier of (i) the termination of all Commitments and Canadian
Commitments, the payment and performance in full of the Combined Obligations, the termination or
expiration of all Letters of Credit and the “Letters of Credit” (as defined in the Canadian Credit
Agreement), and the termination or payment of all “Bankers’
Acceptances” (as defined in the Canadian Credit Agreement) and (ii) the scheduled maturity of
such Existing Subordinate Debt or Permitted Senior Notes Debt, as applicable; (b) make any
prepayment of interest prior to the time that such interest is due except as expressly permitted by
the terms hereof and by the terms of the documentation evidencing or governing such Existing
Subordinate Debt or Permitted Senior Notes Debt, as applicable; (c) permit (x) the outstanding
principal balance of all Existing Subordinate Debt to exceed U.S.$500,000,000 at any time and (y)
the outstanding principal balance of all Permitted Senior Notes Debt to exceed U.S.$300,000,000 at
any time; or (d) make any delivery on or with respect to the Falcon Seaboard Settlement Agreement,
except as expressly permitted by the terms of the Falcon Seaboard Settlement Agreement;
provided, however, that the Borrower and/or any Subsidiaries may (x) deliver gas
volumes at any time and from time to time prior to the stated delivery date thereof by Borrower or
any Affiliate of Borrower, or settle in cash at any time and from time to time the Borrower’s
obligations, under the Falcon Seaboard Settlement Agreement, and (y) prepay or pay at any time and
from time to time all or a portion of the principal of, and interest on, the Existing Subordinate
Debt or the Permitted Senior Notes Debt prior to the scheduled maturity thereof, and may pay the
Existing Subordinate Debt or the Permitted Senior Notes Debt on or after the maturity date
therefor, in each instance (i) so long as, and only so long as, both immediately before and after
giving effect thereto, no Default, Event of Default, Global Borrowing Base Deficiency or U.S.
Borrowing Base Deficiency has occurred and is continuing or results therefrom, or (ii) if and to
the extent such prepayment or payment is made with shares of common stock of the Borrower and/or
the proceeds from the sale or issuance of the common stock of the Borrower. Notwithstanding
anything to the contrary contained in any Combined Loan Document, the Borrower shall be permitted
to (A) extend, renew, refinance or replace the Existing Subordinate Debt and/or the Permitted
Senior Notes Debt at any time so long as the

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final maturity date of any such extension, renewal, refinancing or replacement is no earlier than six (6) months after the Maturity Date and/or (B)
repay any of the Existing Subordinate Debt and/or the Permitted Senior Notes Debt using proceeds of
the issuance of common stock of the Borrower.

     SECTION 7.15 Governmental Rules. Neither the Borrower nor any Person acting on behalf
of the Borrower has taken or will take any action which might cause any of the Loan Documents to
violate Regulation U or any other regulation of the Board or to violate Section 7 of the Exchange
Act or any rule or regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.

ARTICLE VIII

EVENTS OF DEFAULT

     SECTION 8.1 Listing of Events of Default. Each of the following events or occurrences
described in this Section 8.1 shall constitute an “Event of Default”:

          (a) the Borrower shall fail to pay when due any principal on any Loan;

          (b) the Borrower shall fail to pay when due accrued interest on any Loan, or any reimbursement
obligation made under any Letter of Credit or any fees or any other amount payable hereunder, and such failure shall continue for a period of five (5)
days following the due date thereof;

          (c) the Borrower shall fail to observe or perform any covenant or agreement contained in
Article VI or Article VII of this Agreement;

          (d) any Loan Party shall fail to observe or perform any covenant or agreement contained in
this Agreement or any other Loan Document (other than those referenced in Section 8.1(a),
(b) and (c)) and such failure continues for a period of thirty (30) days after the
earlier of (i) the date any Authorized Officer of any Loan Party acquires knowledge of such
failure, or (ii) written notice of such failure has been given to any Loan Party by Global
Administrative Agent or any Lender;

          (e) any representation, warranty, certification or statement made or deemed to have been made
by any Loan Party in any certificate, financial statement or other document delivered pursuant to
this Agreement or any other Combined Loan Document shall prove to have been incorrect in any
material respect when made;

          (f) any Loan Party shall fail to make one or more payments when due on any Indebtedness of
such Person (including, without limitation, any payment due under a Hedging Agreement, but
excluding any payment due under any Combined Loan Document) in a principal amount equal to or
greater than U.S.$15,000,000 individually or $30,000,000 in the aggregate beyond any applicable
grace period provided with respect thereto which shall continue uncured or unwaived, or any other
event or condition shall occur and be continuing which event or condition (i) results in the
acceleration of the maturity of any such Indebtedness, or (ii) entitles the holder of such
Indebtedness to accelerate the maturity thereof;

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          (g) any Loan Party shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar Governmental Rule now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay its debts as they
become due or shall admit in writing its inability to pay its debts as they become due or shall
admit to any of the circumstances, facts or events in clause (g) or (h) of this
Section 8.1, or shall take any corporate, partnership or limited liability company action
to authorize any of the foregoing;

          (h) an involuntary case or other proceeding shall be commenced against any Loan Party seeking
liquidation, reorganization, dissolution, winding up, or other similar relief (including
re-composition or readjustment) with respect to it or its debts under any bankruptcy, insolvency or
other similar Governmental Rule now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain undismissed, undischarged, unbonded or unstayed for a
period of sixty (60) consecutive days; or an order for relief shall be entered against any Loan
Party under the Federal Bankruptcy Code as now or hereafter in effect;

          (i) one (1) or more final judgments or orders (not paid or fully covered by insurance as to
which the relevant insurance company has acknowledged coverage and a copy of such acknowledgement
has been delivered to the Global Administrative Agent) for the payment of money aggregating in
excess of U.S.$15,000,000 shall be rendered against any Loan Party and such judgment or order shall
continue unsatisfied or unstayed for sixty (60) days;

          (j) any event occurs with respect to any Plan or Plans pursuant to which (i) any Loan Party
and/or any ERISA Affiliate incur a liability due and owing at the time of such event, without
existing funding therefor, for benefit payments under such Plan or Plans in excess of
U.S.$15,000,000; or (ii) any Loan Party, any ERISA Affiliate, or any other “party-in-interest” or
“disqualified person,” as such terms are defined in section 3(14) of ERISA and section 4975(e)(2)
of the Code, shall engage in transactions which in the aggregate would reasonably result in a
direct or indirect liability to any Loan Party or any ERISA Affiliate in excess of U.S.$15,000,000
under section 409 or 502 of ERISA or section 4975 of the Code;

          (k) this Agreement or any other Combined Loan Document shall cease to be in full force and
effect or shall be declared null and void or the validity or enforceability thereof shall be
contested or challenged by any Loan Party, or any Loan Party shall deny that it has any further
liability or obligation under any of the Combined Loan Documents to which it is a party, or any
Lien created by the Combined Loan Documents shall for any reason (other than the release thereof in
accordance with the Combined Loan Documents) cease to be a valid, first priority, perfected Lien
(subject to, with respect to priority, Permitted Encumbrances) upon any of the Collateral purported
to be covered thereby;

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          (l) any circumstance or event shall occur that has had since December 31, 2005, or that would
reasonably be expected to have a Material Adverse Effect with respect to the Borrower and its
Subsidiaries, taken as a whole;

          (m) a Change of Control shall occur;

          (n) a “Default” or “Event of Default” (each as defined in each material Existing Subordinate
Note Document, including, without limitation, the Existing Subordinate Note Indenture and the
Existing Convertible Note Indenture, and each material Permitted Senior Notes Document) shall occur
and be continuing;

          (o) any “Default” or “Event of Default” as defined in the Canadian Loan Documents shall occur;
provided that if such “Default” or “Event of Default” is cured or waived under the Canadian
Loan Documents, then such “Default” or “Event of Default” shall no longer constitute a Default or
an Event of Default, respectively, under this Agreement; or

          (p) any Guarantor fails to make payment under the Guaranty executed by such Guarantor in
accordance with the terms thereof; or any Guaranty is for any reason (other than satisfaction in
full of all Combined Obligations and the termination of the Commitments and the Canadian
Commitments) partially or wholly revoked or invalidated, or otherwise ceases to be in full force
and effect in any material respect, or any Guarantor or any other Loan Party contests in any manner
the validity or enforceability thereof or denies that such Guarantor has any further liability or
obligation thereunder.

     SECTION 8.2 Action if Bankruptcy. If any of the Events of Default specified in
Section 8.1(g) or (h) shall occur, then without any notice to any Loan Party or any
other act by the Global Administrative Agent or Lenders, the Global Commitments and Commitments (if
not theretofore terminated) shall automatically terminate and the outstanding principal amount of
all outstanding Loans and all other Obligations hereunder shall automatically be and become
immediately due and payable, without demand, protest or presentment or notice of any kind, all of
which are hereby expressly waived by the Borrower and its Subsidiaries. Without limiting the
foregoing, the Agents and the Lenders shall be entitled to exercise any and all other remedies
available to them under the Loan Documents and applicable law.

     SECTION 8.3 Action if Other Event of Default. If any of the Events of Default (other
than any Event of Default specified in Section 8.1(g) or (h)) shall occur for any
reason, whether voluntary or involuntary, and be continuing, the Required Lenders may, by notice to
the Borrower, declare (a) the Global Commitments and Commitments (if not theretofore terminated) to
be terminated and/or (b) all of the outstanding principal amount of the Loans and all other
Obligations hereunder to be due and payable, whereupon the Global Commitments and Commitments shall
terminate and the full unpaid amount of such Loans and other obligations shall be and become
immediately due and payable, without demand, protest or presentment or notice of any kind, all of
which are hereby waived by the Borrower and its Subsidiaries. Without limiting the foregoing, the
Agents and the Lenders shall be entitled to exercise any and all other remedies available to them
under the Loan Documents and applicable law.

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ARTICLE IX

AGENTS

     Each of the Lenders, the Issuing Banks and the other Agents hereby irrevocably appoints
JPMorgan Chase Bank, N.A., as the Global Administrative Agent, BNP Paribas and Bank of America,
N.A., as Co-Global Syndication Agents, and Fortis Capital Corp., The Bank of Nova Scotia and
Deutsche Bank Trust Company Americas, as Co-Global Documentation Agents, and authorizes each such
Agent to take such actions on its behalf and to exercise such powers as are delegated to such Agent
by the terms of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto.

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

     The Agents shall not have any duties or obligations except those expressly set forth in the
Loan Documents. Without limiting the generality of the foregoing, (a) the Agents shall not be
subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and
is continuing, (b) each Agent shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan
Documents that such Agent is required to exercise following its receipt of written instructions
from the Required Lenders (or such other number or percentage of the Combined Lenders as shall be
necessary under the circumstances as provided in Section 10.2), and (c) except as expressly
set forth in the Loan Documents, the Agents shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as such Agent or any of its
Related Parties in any capacity. Each Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other number or
percentage of the Combined Lenders as shall be necessary under the circumstances as provided in
Section 10.2) or in the absence of its own gross negligence or willful misconduct;
PROVIDED, HOWEVER, THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH OF THE
AGENTS BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS
OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL.
Each Agent shall be deemed not to have knowledge of any Default unless and until written notice
thereof is given to such Agent by the Borrower or a Lender, and such Agent shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any certificate, report or
other document delivered thereunder or in connection therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth in any Loan Document,
(iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to such Agent.

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     The Global Administrative Agent and the other Agents shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have been signed or sent
by the proper Person. The Global Administrative Agent and the other Agents also may rely upon any
statement made to it orally or by telephone and believed by it to be made by the proper Person, and
shall not incur any liability for relying thereon. The Global Administrative Agent and the other
Agents may consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or experts.

     Any Agent may perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by such Agent. Any Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers through their respective Related Parties.
The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of such Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided for herein as well
as activities as an Agent.

     Subject to the appointment and acceptance of a successor Global Administrative Agent as
provided in this paragraph, the Global Administrative Agent may resign at any time by notifying the
Combined Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, with the consent of the Borrower (unless an Event of Default has occurred and is
continuing), to appoint a successor. If no successor shall have been so appointed by the Required
Lenders, with such consent of the Borrower (unless an Event of Default has occurred and is
continuing), and shall have accepted such appointment within 30 days after the retiring Global
Administrative Agent gives notice of its resignation, then the retiring Global Administrative Agent
may, with the consent of the Borrower (unless an Event of Default has occurred and is continuing),
on behalf of the Combined Lenders and the Issuing Banks, appoint a successor Global Administrative
Agent which shall be a commercial bank organized under the laws of the United States of America
having combined capital and surplus of at least U.S.$100,000,000, or an Affiliate of any such bank.
Upon the acceptance of its appointment as Global Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Global Administrative Agent, and the retiring Global Administrative Agent
shall be discharged from its duties and obligations hereunder (other than its obligations under
Section 10.12). The fees payable by the Borrower to a successor Global Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Global Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 10.3 shall continue in effect for the benefit of
such retiring Global Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was acting as Global
Administrative Agent.

     Each Lender acknowledges that it has, independently and without reliance upon any Agent or any
other Lender and based on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the Intercreditor Agreement. Each
Lender also acknowledges that it will, independently and without

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reliance upon any Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any related agreement
or any document furnished hereunder or thereunder.

     Each of the Lenders, for itself and on behalf of any of its Affiliates, the Issuing Banks, and
the other Agents hereby irrevocably appoints the Global Administrative Agent to act as its agent
under the Intercreditor Agreement and authorizes the Global Administrative Agent to execute the
Intercreditor Agreement on its behalf and to take such actions on its behalf and to exercise such
powers as are delegated to the Global Administrative Agent by the terms hereof and thereof,
together with such actions and powers as are reasonably incidental thereto.

     Without limiting the provisions of Section 7.5(b), each of the Lenders, for itself and
on behalf of any of its Affiliates, and the Issuing Banks hereby authorize the Global
Administrative Agent to release any Collateral or Guaranties that are permitted to be sold or
released pursuant to the Loan Documents, and the Global Administrative Agent agrees to promptly
release any such items upon written request from the Borrower. Each Lender and each Issuing Bank
hereby authorizes the Global Administrative Agent to execute and deliver to the Borrower, at the
Borrower’s sole cost and expense, any and all releases of Liens, releases of Guaranties,
termination statements, or other documents reasonably requested by the Borrower in connection with
(i) any sale or disposition of Collateral, or (ii) any Subsidiary ceasing to be a Material
Subsidiary hereunder, or otherwise pursuant to any other transaction permitted by this Agreement or
the other Combined Loan Documents.

ARTICLE X

MISCELLANEOUS

     SECTION 10.1 Notices.

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

	 	(A)	 	if to the Borrower, to:
	 
	 	 	 	Quicksilver Resources Inc.

777 West Rosedale Street, Suite 300

Fort Worth, Texas 76104

Attention: MarLu Hiller

Telephone: (817) 665-4860

Telecopy: (817) 665-5016

Email: mhiller@qrinc.com

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	 	(B)	 	if to the Global Administrative Agent, to:
	 
	 	 	 	JPMorgan Chase Bank, N.A.

10 South Dearborn, 7th Floor

Mail Code: IL1-0010

Chicago, Illinois 60603

Attention: Leonida G. Mischke

Telephone: (312) 385-7055

Telecopy: (312) 385-7096

Email: leonida.g.mischke@jpmchase.com

          and, with respect to non-Borrowing related matters, with a copy to:

	 	 	 	JPMorgan Chase Bank, N.A.

1717 Main Street, 4th Floor

TX1-2448

Dallas, Texas 75201

Attention: J. Scott Fowler

Telephone: (214) 290-2162

Telecopy: (214) 290-2332

Email: scott.fowler@jpmorgan.com

          (C) if to any other Agent or Lender (including the Swingline Lender), to it at
its address (or telecopy number) provided to the Global Administrative Agent and the
Borrower or as set forth in its Administrative Questionnaire; and

          (D) if to any Canadian Lender, to it at its address (or telecopy number)
provided to the Canadian Administrative Agent and the Canadian Borrower or as set
forth in its “Administrative Questionnaire” as defined in the Canadian Credit
Agreement.

Upon receipt by the Global Administrative Agent thereof, the Global Administrative Agent shall
promptly provide the Borrower with a copy of each Lender’s Administrative Questionnaire.

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

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

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     SECTION 10.2 Waivers; Amendments.

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

          (b) Neither this Agreement nor any of the Combined Loan Documents nor any provision hereof or
thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrower and the Majority Lenders or by the
Borrower and the Global Administrative Agent with the consent of the Majority Lenders, or, in the
case of any other Combined Loan Document, pursuant to an agreement or agreements in writing entered
into by the relevant Loan Parties thereto and the Majority Lenders or by the relevant Loan Parties
thereto and the Global Administrative Agent with the consent of the Majority Lenders;
provided that no such agreement shall (i) increase the Global Commitment or Commitment of
any Lender without the written consent of such Lender (other than, in the case of a Commitment of a
Lender, pursuant to a reallocation in accordance with Section 2.1(c)), (ii) reduce, or
otherwise release the Borrower from its obligation to pay, the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without
the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment
of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the
Maturity Date, without the written consent of each Lender affected thereby, (iv) change Section
2.19(b) or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the provisions of this
Section 10.2, or Section 2.8 or Section 2.11, or the definition of
“Combined Lenders” or “Majority Lenders” or “Required Lenders” or “Supermajority Lenders” or “U.S.
Required Lenders” or “U.S. Supermajority Lenders” or any other provision of any Combined Loan
Document specifying the number or percentage of Lenders, Canadian Lenders, or Combined Lenders
required to determine or redetermine the Global Borrowing Base or required to waive, amend or
modify any rights of the Combined Lenders thereunder or make any determination or grant any consent
thereunder, without the written consent of each Combined Lender, (vi) release any Loan Party from
its Guaranty (except as expressly provided in such Guaranty), or limit its liability in respect of
such Guaranty, without the written consent of each Combined Lender, (vii) except as expressly
provided herein, in the Intercreditor Agreement or in the Security Documents (as defined herein and
in the Canadian Credit Agreement), release all or any part of the Collateral from the Liens of the
Security

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Documents (as defined herein and in the Canadian Credit Agreement), without the written
consent of each Combined Lender, or (viii) amend or modify Section 2.1(c) without the
written consent of each Combined Lender; provided further that no such agreement
shall amend, waive, modify or otherwise affect the rights or duties of any Agent (as defined herein
and in the Canadian Credit Agreement), any Issuing Bank (as defined herein and in the Canadian
Credit Agreement) or the Swingline Lender without the prior written consent of such Agent (as
defined herein and in the Canadian Credit Agreement), such Issuing Bank (as defined herein and in
the Canadian Credit Agreement) or such Swingline Lender, as the case may be; and provided
further that, without limiting the provisions of Section 7.5(b) or the last
paragraph of Article IX, the Global Administrative Agent shall have the right to execute
and deliver any release of any Guaranty or Lien (or other similar instrument) without the consent
of any Lender to the extent such release is required to permit the Borrower or a Subsidiary to
consummate a transaction permitted by this Agreement or the other Combined Loan Documents, or as
otherwise required as a result of any Subsidiary ceasing to be a Material Subsidiary.
Notwithstanding anything to the contrary contained in the Combined Loan Documents, the Borrower
and/or any of its Subsidiaries shall be permitted at any time to consummate, or cause to be
consummated, the MLP Transactions or any part thereof without any further consent or approval of
any of the Agents or Combined Lenders, provided such transactions are consummated in accordance and
material compliance with the description set forth in
Exhibit N.

     SECTION 10.3 Expenses; Indemnity; Damage Waiver.

          (a) The Borrower shall pay (i) all legal, printing, recording, syndication, travel,
advertising and other reasonable and substantiated out-of-pocket expenses incurred by the Global
Administrative Agent and the Arrangers, including the reasonable and substantiated fees, charges
and disbursements of one (1) outside U.S. counsel, one (1) outside Canadian counsel, and applicable
U.S. local counsel for the Global Administrative Agent, the Canadian Administrative Agent and the
Arrangers, in connection with the syndication of the credit facilities provided for herein, the
preparation, execution, delivery and administration of this Agreement, the Loan Documents and each
other document or instrument relevant to this Agreement or the Loan Documents and any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by an Issuing Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, (iii) the filing, recording, refiling or
rerecording of the Mortgages, the Pledge Agreements and any other Security Documents and/or any
Uniform Commercial Code financing statements relating thereto and all amendments, supplements and
modifications to, and all releases and terminations of, any thereof and any and all other documents
or instruments of further assurance required to be filed or recorded or refiled or rerecorded by
the terms hereof or of the Mortgages, the Pledge Agreements and any other Security Documents, and
(iv) all reasonable and substantiated out-of-pocket expenses incurred by the Agents, any Issuing
Bank or any Lender, including the fees, charges and disbursements of any counsel for the Agents,
any Issuing Bank or any Lender, reasonably incurred in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all
such reasonable and substantiated out-of-pocket expenses

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reasonably incurred during any workout, restructuring or negotiations in respect of such Loans
or Letters of Credit.

          (b) EXCEPT TO THE EXTENT REIMBURSEMENT OF EXPENSES IS LIMITED BY SECTION 10.3(a) TO
REIMBURSEMENT OF EXPENSES OF ONLY CERTAIN PARTIES, THE BORROWER SHALL INDEMNIFY THE AGENTS, EACH
ISSUING BANK, THE ARRANGERS AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS
(EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS
FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE
REASONABLE OUT-OF-POCKET FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE,
INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT
OF (i) THE EXECUTION OR DELIVERY OF ANY LOAN DOCUMENT OR ANY OTHER AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY, THE PERFORMANCE BY THE PARTIES TO THE LOAN DOCUMENTS OF THEIR RESPECTIVE
OBLIGATIONS THEREUNDER OR THE CONSUMMATION OF THE FINANCING TRANSACTIONS OR ANY OTHER TRANSACTIONS
CONTEMPLATED HEREBY, (ii) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM
(INCLUDING ANY REFUSAL BY AN ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF
THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF
SUCH LETTER OF CREDIT), (iii) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON
OR FROM ANY PROPERTY CURRENTLY OR FORMERLY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS
SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS
SUBSIDIARIES, OR (iv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING
RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH INDEMNITY AND
RELEASE SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES (A) ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY
FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF SUCH INDEMNITEE (IT BEING UNDERSTOOD THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH OF
THE INDEMNITEES BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE),
REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR
TECHNICAL), (B) RELATE TO CLAIMS BETWEEN OR AMONG ANY OF THE LENDERS, THE AGENTS, THE ARRANGERS OR
ANY OF THEIR AFFILIATES, SHAREHOLDERS, PARTNERS OR MEMBERS, OR (C) ARE IN RESPECT OF ANY PROPERTY
FOR ANY OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS OF ANY AGENT OR ANY LENDER DURING THE

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PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED POSSESSION OF
SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR
OTHERWISE).

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

          (d) To the extent permitted by applicable law, no party hereto shall assert, and each party
hereby waives, any claim against any other 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 or any agreement or instrument
contemplated hereby, the Financing Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.

          (e) All amounts due under this Section shall be payable not later than thirty (30) days after
written demand is received by Borrower therefor.

     SECTION 10.4 Successors and Assigns.

          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including any
Affiliate of an Issuing Bank that issues any Letter of Credit), except that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without the prior written
consent of the Global Administrative Agent, each Issuing Bank and each Combined Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby (including
any Affiliate of an Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Global Administrative Agent, the Issuing
Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this
Agreement.

          (b) Any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Global Commitment, Commitment
and the Loans at the time owing to it); provided that (i) except in the case of an
assignment to a Lender, a Lender Affiliate or an Approved Fund, each of the Borrower (unless an
Event of Default has occurred and is continuing) and the Global Administrative Agent (and, in the
case of an assignment of all or a portion of a Global Commitment or Commitment or any Lender’s
obligations in respect of its LC Exposure, the

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Issuing Banks) must give their prior written consent to such assignment (which consents shall
not be unreasonably withheld, conditioned or delayed), (ii) except in the case of an assignment to
a Lender, a Lender Affiliate or an Approved Fund, or an assignment of the entire remaining amount
of the assigning Lender’s Global Commitment, Commitment or Loans, the amount of the Global
Commitment, Commitment or Loans of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is delivered to the
Global Administrative Agent) shall be not less than U.S.$10,000,000 unless each of the Borrower
(unless an Event of Default has occurred and is continuing) and the Global Administrative Agent
otherwise consent, (iii) in the case of an assignment to a Lender, a Lender Affiliate, or an
Approved Fund of an amount less than the entire remaining amount of the assigning Lender’s Global
Commitment, Commitment or Loans, the amount of the Global Commitment, Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Global Administrative Agent) shall
be not less than U.S.$5,000,000, (iv) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under this Agreement,
except that this clause (iv) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in respect of its
Commitments or Loans in conformity with the Intercreditor Agreement, (v) the parties to each
assignment shall execute and deliver to the Global Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of U.S.$3,500 to the Global
Administrative Agent, (vi) the assignee, if it shall not be a Lender, shall deliver to the Global
Administrative Agent an Administrative Questionnaire, (vii) after giving effect to any assignment
under clause (ii), the assigning Lender shall have a Global Commitment of at least
U.S.$10,000,000 and after giving effect to any assignment under clause (iii), the assigning
Lender shall have a Global Commitment of at least U.S.$5,000,000, unless, in each case, each of the
Borrower and the Global Administrative Agent otherwise consents, and (viii) any assignee Lender
shall have the same Designation (which Designation may be changed in accordance with Section
2.1(c)) as the assigning Lender to the extent of the Global Commitment, Commitments and Loans
so assigned by such assigning Lender; and provided further that any consent of the
Borrower otherwise required under this paragraph shall not be required if an Event of Default under
Section 8.1 has occurred and is continuing. Subject to acceptance and recording thereof
pursuant to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party hereto and to the other
Loan Documents and, to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement and the other Loan Documents (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 2.16, 2.17, 2.18, 2.19, 2.21 and
10.3 and be subject to the terms of Section 10.12). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with this paragraph
shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section.

          (c) The Global Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices in Chicago a copy of each Assignment and

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Acceptance delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Global Commitment and Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent manifest error, and
the Borrower, the Global Administrative Agent, the Issuing Banks and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement and the other Loan Documents, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, any Issuing Bank and any
Lender, at any reasonable time and from time to time upon reasonable prior notice. In connection
with any changes to the Register, if necessary, the Global Administrative Agent will reflect the
revisions on Schedule 2.1 and forward a copy of such revised Schedule 2.1 to the
Borrower, each Issuing Bank and each Lender.

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

          (e) Any Lender may, without the consent of the Borrower, the Global Administrative Agent, any
Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Global Commitment, Commitment and the Loans owing to
it); provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and (iii) the Borrower, the Global Administrative Agent, the
Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the second proviso to Section 10.2(b)
that affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Section 2.16,
2.17 and 2.18 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.8 and
10.12 as though it were a Lender, provided such Participant agrees to be subject to
Section 2.19(c) as though it were a Lender.

          (f) A Participant shall not be entitled to receive any greater payment under Section
2.16, 2.17 or 2.18 than the applicable Lender would have been entitled to
receive with

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respect to the participation sold to such Participant. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.18 unless the
Borrower is notified of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 2.18(e) as though it were a Lender.

          (g) Any Lender may at any time pledge or assign a Lien 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, in the case of a Lender organized in a
jurisdiction outside of the United States, a comparable Person, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

     SECTION 10.5 Survival. All covenants, agreements, representations and warranties made
by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the execution and delivery of
the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and notwithstanding that any Agent,
any Issuing Bank, the Arrangers or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended hereunder, and shall
continue in full force and effect as long as the principal of or any accrued interest on any Loan
or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter
of Credit is outstanding and so long as the Global Commitments and Commitments have not expired or
terminated. The provisions of Section 2.16, 2.17, 2.18, 2.19,
2.21, 10.3 and 10.12 and Article IX shall survive and remain in
full force and effect regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit and the Global
Commitments and Commitments or the termination of this Agreement or any provision hereof.

     SECTION 10.6 Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
Except as provided in Section 4.1, this Agreement shall become effective when it shall have
been executed by the Global Administrative Agent and when the Global Administrative Agent shall
have received counterparts hereof which, when taken together, bear the signatures of each of the
other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy (or other electronic transmission acceptable to the
Global Administrative Agent) shall be effective as delivery of a manually executed counterpart of
this Agreement.

     SECTION 10.7 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

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     SECTION 10.8 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each of the Agents, the Issuing Banks, the Lenders and their Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional or final) at any
time held, and other obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of, the Borrower or any of its Subsidiaries (other than QR Canada or any other
Foreign Subsidiary) against any and all the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement and although such obligations may be unmatured;
provided, however, that any such set-off and application shall be subject to the
provisions of Section 2.19 and the Intercreditor Agreement. As security for such
obligations, the Borrower hereby grants to the Agents, each Issuing Bank and each Lender a
continuing security interest in any and all balances, credits, deposits, accounts or moneys of the
Borrower and its Subsidiaries then or thereafter maintained with any of the Agents, such Issuing
Bank and such Lenders. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may have.

     SECTION 10.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

          (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.

          (b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE JURISDICTION OF ANY COURT OF THE STATE OF TEXAS LOCATED IN TARRANT OR DALLAS
COUNTY, TEXAS AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF TEXAS, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF
ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE GLOBAL ADMINISTRATIVE
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. EACH OF THE PARTIES HERETO AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
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
AGREEMENT SHALL AFFECT ANY RIGHT THAT THE AGENTS OR ANY LENDER MAY OTHERWISE HAVE TO

124

 

BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

          (c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

          (d) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF TEXAS. NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.

     SECTION 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

     SECTION 10.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.

     SECTION 10.12 Confidentiality. In the event that a Loan Party provides to the Global
Administrative Agent, the Issuing Banks or the Lenders (including the Swingline Lender)
confidential information belonging to such Loan Party or any of its Subsidiaries (whether before or
after the date of this Agreement), then the Global Administrative Agent, the Issuing Banks and the
Lenders (including the Swingline Lender) shall thereafter use such information only in connection
with, or as contemplated by, this Agreement, the other Combined Loan Documents and the transactions
contemplated hereby and thereby and shall maintain such information in

125

 

confidence in accordance with the standards of care and diligence that each utilizes in
maintaining its own confidential information. This obligation of confidence shall not apply to
such portions of the information which (a) are in the public domain due to no breach hereof by the
Global Administrative Agent, any of the Issuing Banks or any of the Lenders (including the
Swingline Lender), (b) hereafter become part of the public domain without the Global Administrative
Agent, the Issuing Banks or the Lenders (including the Swingline Lender) breaching their obligation
of confidence to such Loan Party as required hereby or any other Combined Loan Document, (c) are
previously known by the Global Administrative Agent, the Issuing Banks or the Lenders (including
the Swingline Lender) from some source other than such Loan Party, (d) are hereafter developed by
the Global Administrative Agent, the Issuing Banks or the Lenders (including the Swingline Lender)
without using such Loan Party’s information, (e) are hereafter obtained by or available to the
Global Administrative Agent, the Issuing Banks or the Lenders (including the Swingline Lender) from
a third party who owes no obligation of confidence to such Loan Party with respect to such
information, (f) are disclosed with the Borrower’s or such Loan Party’s consent, (g) must be
disclosed either pursuant to any Governmental Rule or to Persons regulating the activities of the
Global Administrative Agent, the Issuing Banks or the Lenders (including the Swingline Lender), or
(h) as may be required by law or regulation or order of any Governmental Authority in any judicial,
arbitration or governmental proceeding. Further, the Global Administrative Agent, an Issuing Bank
or a Lender (including the Swingline Lender) may disclose any such information to any other Lender
(including the Swingline Lender), any independent petroleum engineers or consultants, any
independent certified public or chartered accountants, any legal counsel employed by such Person in
connection with this Agreement or any other Combined Loan Document, including without limitation,
the enforcement or exercise of all rights and remedies thereunder, or any assignee or participant
(including prospective assignees and participants) in the Loans; provided, however,
that the Global Administrative Agent, the Issuing Banks or the Lenders (including the Swingline
Lender) shall receive a confidentiality agreement from the Person to whom such information is
disclosed such that said Person shall have the same obligation to maintain the confidentiality of
such information as is imposed upon the Global Administrative Agent, the Issuing Banks or the
Lenders (including the Swingline Lender) hereunder.

     SECTION 10.13 Interest Rate Limitation. It is the intention of the parties hereto to
conform strictly to applicable interest, usury and criminal laws and, anything herein to the
contrary notwithstanding, the obligations of the Borrower and the Guarantors to a Lender, any
Issuing Bank or any Agent under this Agreement or any Combined Loan Document shall be subject to
the limitation that payments of interest shall not be required to the extent that receipt thereof
would be contrary to provisions of law applicable to such Lender, such Issuing Bank or Agent
limiting rates of interest which may be charged or collected by such Lender, such Issuing Bank or
Agent. Accordingly, if the transactions contemplated hereby or thereby would be illegal,
unenforceable, usurious or criminal under laws applicable to a Lender, any Issuing Bank or any
Agent (including the laws of any jurisdiction whose laws may be mandatorily applicable to such
Lender or Agent notwithstanding anything to the contrary in this Agreement or any other Combined
Loan Document) then, in that event, notwithstanding anything to the contrary in this Agreement or
any other Combined Loan Document, it is agreed as follows:

          (i) the provisions of this Section shall govern and control;

126

 

          (ii) the aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received under this Agreement or any
Combined Loan Document or otherwise in connection with this Agreement or any Combined Loan
Document by such Lender, such Issuing Bank or such Agent shall under no circumstances exceed
the maximum amount of interest allowed by applicable law (such maximum lawful interest rate,
if any, with respect to each Lender, each Issuing Bank and the Agents herein called the
“Highest Lawful Rate”), and any excess shall be cancelled automatically and if
theretofore paid shall be credited to the Borrower by such Lender, such Issuing Bank or such
Agent (or, if such consideration shall have been paid in full, such excess refunded to the
Borrower);

          (iii) all sums paid, or agreed to be paid, to such Lender, such Issuing Bank or such
Agent for the use, forbearance and detention of the indebtedness of the Borrower to such
Lender, such Issuing Bank or such Agent hereunder or under any Combined Loan Document shall,
to the extent permitted by laws applicable to such Lender, such Issuing Bank or such Agent,
as the case may be, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of interest is uniform
throughout the full term thereof;

          (iv) if at any time the interest provided pursuant to this Section or any other clause
of this Agreement or any other Combined Loan Document, together with any other fees or
compensation payable pursuant to this Agreement or any other Combined Loan Document and
deemed interest under laws applicable to such Lender, such Issuing Bank or such Agent,
exceeds that amount which would have accrued at the Highest Lawful Rate, then the amount of
interest and any such fees or compensation to accrue to such Lender, such Issuing Bank or
such Agent pursuant to this Agreement or such other Combined Loan Document shall be limited,
notwithstanding anything to the contrary in this Agreement or any other Combined Loan
Document, to that amount which would have accrued at the Highest Lawful Rate, but any
subsequent reductions, as applicable, shall not reduce the interest to accrue to such
Lender, such Issuing Bank or such Agent pursuant to this Agreement or such other Combined
Loan Document below the Highest Lawful Rate until the total amount of interest accrued
pursuant to this Agreement or such other Combined Loan Document, as the case may be, and
such fees or compensation deemed to be interest equals the amount of interest which would
have accrued to such Lender or Agent if a varying rate per annum equal to the interest
provided pursuant to any other relevant Section hereof (other than this Section) or thereof,
as applicable, had at all times been in effect, plus the amount of fees which would have
been received but for the effect of this Section; and

          (v) with the intent that the rate of interest herein shall at all times be lawful, and
if the receipt of any funds owing hereunder or under any other agreement related hereto
(including any of the other Combined Loan Documents) by such Lender, such Issuing Bank or
such Agent would cause such Lender to charge the Borrower a criminal rate of interest, the
Lenders, the Issuing Banks and the Agents agree that they will not require the payment or
receipt thereof or a portion thereof which would cause a criminal rate of interest to be
charged by such Lender, such Issuing Bank or such Agent, as applicable, and if received such
affected Lender, such Issuing Bank or Agent will

127

 

return such funds to the Borrower so that the rate of interest paid by the Borrower
shall not exceed a criminal rate of interest from the date this Agreement was entered into.

     For purposes of Chapter 303 of the Texas Finance Code, as amended, to the extent applicable,
the Borrower agrees that the Highest Lawful Rate shall be the “indicated (weekly) rate ceiling” as
defined in such Chapter, provided that such Lender, such Issuing Bank, or such Agent may
also rely, to the extent permitted by applicable laws, on alternative maximum rates of interest
under other laws applicable to such Lender, such Issuing Bank or such Agent, if greater.

     SECTION 10.14 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and each Agent (for itself and not on behalf of any Lender) hereby notifies
the Borrower and each other Loan Party that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is
required to obtain, verify and record information that identifies the Borrower and each other Loan
Party, which information includes the name and address of the Borrower and each other Loan Party
and other information that will allow such Lender or such Agent, as applicable, to identify the
Borrower and each other Loan Party in accordance with the Act.

     SECTION 10.15 Collateral Matters; Hedging Agreements. The benefit of the Security
Documents and of the provisions of this Agreement relating to the Collateral shall also extend to
and be available to those Lenders or their Affiliates that are counterparties to the Hedging
Agreements on a pro rata basis in respect of any Hedging Obligations of the Borrower or any of its
Subsidiaries that are in effect at such time as such Person (or its Affiliate) is a Lender, but
only while such Person or its Affiliate is a Lender; provided that it is the intention of
the parties hereto that repayment of the Hedging Obligations of the Borrower and its Subsidiaries
under any Hedging Agreement with a Combined Lender, or any Affiliate of a Combined Lender from
realization of any Collateral shall be subject to the terms of the Intercreditor Agreement and
Security Documents.

     SECTION 10.16 Arrangers; Co-Global Documentation Agents; Co-Global Syndication Agents;
Other Agents. None of the Persons identified on the facing page or the signature pages of this
Agreement as a “Co-Lead Arranger and Joint Bookrunner” or “Co-Global Documentation Agent” or
“Co-Global Syndication Agent” or any other Agent (other than the Global Administrative Agent) shall
have any right, power, obligation, liability, responsibility or duty under this Agreement or any
other Combined Loan Document other than, except in the case of the Arrangers, those applicable to
all Lenders as such. Without limiting the foregoing, none of the Arrangers, the Co-Global
Documentation Agents, the Co-Global Syndication Agents or any other Agent shall have or be deemed
to have any fiduciary relationship with any Lender, and none of the Global Administrative Agent,
the Arrangers, the Co-Global Documentation Agents, the Co-Global Syndication Agents or any other
Agent shall have or be deemed to have any fiduciary relationship with the Borrower or any of its
Subsidiaries. The Borrower and each Lender acknowledges that it has not relied, and will not rely,
on any of the Arrangers, the Co-Global Documentation Agents, the Co-Global Syndication Agents or
any other Agent in deciding to enter into this Agreement or in taking or not taking any action
hereunder or under the Combined Loan Documents.

128

 

     SECTION 10.17 Intercreditor Agreement; Security Documents; Designation. Each Lender
on behalf of itself and any Affiliate which is a counterparty to a Hedging Agreement acknowledges
and agrees that the Global Administrative Agent has entered into the Intercreditor Agreement and
the Security Documents on behalf of itself, the other Agents, Lenders and Affiliates thereof that
are parties to a Hedge Transaction, and each of them (by their signature hereto or acceptance of
the benefits of the Security Documents) hereby agree to be bound by the terms of the Intercreditor
Agreement and such Security Documents, acknowledge receipt of copies of the Intercreditor Agreement
and such Security Documents and consent to the rights, powers, remedies, indemnities and
exculpations given to the Global Administrative Agent thereunder. For so long as the Intercreditor
Agreement shall be in effect, the terms and conditions of this Agreement and the other Loan
Documents are subject to the terms of the Intercreditor Agreement. In the event of any
inconsistency between this Agreement or any other Loan Document and the terms of the Intercreditor
Agreement, the Intercreditor Agreement shall control. In the event of any inconsistency between
this Agreement and the terms of any other Loan Document (other than the Intercreditor Agreement),
this Agreement shall control. Each Lender by its signature hereto agrees to its Designation as set
forth on Schedule 2.1.

     SECTION 10.18 Waiver of Consumer Credit Laws. Pursuant to Chapter 346 of the Texas
Finance Code, as amended, Borrower agrees that such Chapter 346 shall not govern or in any manner
apply to the Loans.

     SECTION 10.19 Status as Senior Indebtedness. The Loans and other Obligations
hereunder are “Senior Indebtedness” and “Designated Senior Indebtedness” under both the Existing
Subordinate Note Indenture and the Existing Convertible Note Indenture.

     SECTION 10.20 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
THEREOF AND 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 WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

129

 

	 	 	 	 	 
	 	QUICKSILVER RESOURCES INC., as Borrower

 	 
	 	By:  	/s/ Philip W. Cook
 	 
	 	 	Philip W. Cook, 	 
	 	 	Senior Vice President – Chief Financial
Officer 	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Global
Administrative Agent and as a Lender

 	 
	 	By:  	/s/ J. Scott Fowler
 	 
	 	 	J. Scott Fowler, 	 
	 	 	Senior Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

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

 	 
	 	By:  	/s/ Ronald E. McKaig
 	 
	 	 	Ronald E. McKaig, 	 
	 	 	Senior Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	BNP PARIBAS, as a Co-Global Syndication Agent
and as a Lender

 	 
	 	By:  	/s/ Brian M. Malone
 	 
	 	 	Brian M. Malone, 	 
	 	 	Managing Director 	 
	 	 	 
	 	By:  	                                              /s/ Russell Otts
 	 
	 	 	Russell Otts, 	 
	 	 	Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	FORTIS CAPITAL CORP., as a Co-Global
Documentation Agent and as a Lender

 	 
	 	By:  	/s/ Michele Jones
 	 
	 	 	Michele Jones, 	 
	 	 	Senior Vice President 	 
	 	 	 
	 	By:  	                                              /s/ Darrell Holley
 	 
	 	 	Darrell Holley, 	 
	 	 	Managing Director 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

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

 	 
	 	By:  	/s/ Richard Hawthorne
 	 
	 	 	Richard Hawthorne, 	 
	 	 	Director 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as a
Co-Global Documentation Agent and as a Lender

 	 
	 	By:  	/s/ Saad Iqbal
 	 
	 	 	Saad Iqbal, 	 
	 	 	Vice President 	 
	 	 	 
	 	By:  	                                              /s/ Carin Keegan
 	 
	 	 	Carin Keegan, 	 
	 	 	Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	BMO CAPITAL MARKETS FINANCING, INC., as a Lender 

 	 
	 	By:  	/s/ Mary Lou Allen
 	 
	 	 	Mary Lou Allen, 	 
	 	 	Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	THE ROYAL BANK OF SCOTLAND plc, as a Lender 

 	 
	 	By:  	/s/ Robert E. Poirrier Jr.
 	 
	 	 	Robert E. Poirrier Jr. 	 
	 	 	Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	CALYON NEW YORK BRANCH, as a Lender 

 	 
	 	By:  	/s/ Dennis Petito
 	 
	 	 	Dennis Petito, 	 
	 	 	Managing Director 	 
	 	 	 
	 	By:  	/s/ Michael Willis
 	 
	 	 	Michael Willis, 	 
	 	 	Director 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	CITIBANK, N.A., as a Lender 

 	 
	 	By:  	/s/ John F. Miller
 	 
	 	 	John F. Miller, 	 
	 	 	Attorney-In-Fact 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	SOCIÉTÉ GÉNÉRALE, as a Lender 

 	 
	 	By:  	/s/ Stephen W. Warfel
 	 
	 	 	Stephen W. Warfel, 	 
	 	 	Director 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

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

 	 
	 	By:  	/s/ Alison Fuqua
 	 
	 	 	Alison Fuqua, 	 
	 	 	Investment Banking Officer 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

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

 	 
	 	By:  	/s/ Charles D. Kirkham
 	 
	 	 	Charles D. Kirkham, 	 
	 	 	Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	TORONTO DOMINION (TEXAS) LLC, as a Lender 

 	 
	 	By:  	/s/ Ian Murray
 	 
	 	 	Ian Murray, 	 
	 	 	Authorized Signatory 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	COMERICA BANK, as a Lender 

 	 
	 	By:  	/s/ Peter L. Sefzik
 	 
	 	 	Peter L. Sefzik, 	 
	 	 	Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as a Lender 

 	 
	 	By:  	/s/ Daria Mahoney
 	 
	 	 	Daria Mahoney, 	 
	 	 	Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	CIBC INC., as a Lender 

 	 
	 	By:  	/s/ Dominic J. Sorresso
 	 
	 	 	Dominic J. Sorresso, 	 
	 	 	Executive Director

CIBC World Markets Corp.

Authorized Signatory 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	COMPASS BANK, as a Lender 

 	 
	 	By:  	/s/ Murray Brasseux
 	 
	 	 	Murray Brasseux, 	 
	 	 	Executive Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a
Lender

 	 
	 	By:  	/s/ Vanessa Gomez
 	 
	 	 	Vanessa Gomez, 	 
	 	 	Vice President 	 
	 	 	 
	 	By:  	                                              /s/ Mikhail Faybusovich
 	 
	 	 	Mikhail Faybusovich, 	 
	 	 	Associate 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement] 

 

 

	 	 	 	 	 
	 	STERLING BANK, as a Lender 

 	 
	 	By:  	/s/ Melissa A. Bauman
 	 
	 	 	Melissa A. Bauman, 	 
	 	 	Senior Vice President 	 
	 

[Signature Page to U.S. Amended And Restated Credit Agreement]exv10w2

 

Exhibit 10.2

 

[CANADIAN CREDIT AGREEMENT]

[EXECUTION]

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of February 9, 2007

among

QUICKSILVER RESOURCES CANADA INC.,

as Borrower,

THE LENDERS PARTY HERETO,

BNP PARIBAS and

BANK OF AMERICA, N.A.,

as Co-Global Syndication Agents,

FORTIS CAPITAL CORP.,

THE BANK OF NOVA SCOTIA and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Co-Global Documentation Agents,

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,

as Canadian Administrative Agent,

and

JPMORGAN CHASE BANK, N.A.,

as Global Administrative Agent

 

J.P. MORGAN SECURITIES INC.

and

BANC OF AMERICA SECURITIES LLC,

as Co-Lead Arrangers and Joint Bookrunners

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page No.	 
	ARTICLE I

	DEFINITIONS

	Section 1.1 Defined Terms
	 	 	2	 
	Section 1.2 Classification of Loans and Borrowings
	 	 	28	 
	Section 1.3 Terms Generally
	 	 	28	 
	Section 1.4 Designation of Material Subsidiaries
	 	 	29	 
	Section 1.5 U.S. Credit Agreement Definitions
	 	 	29	 
	 
	 	 	 	 
	ARTICLE II

	THE CREDITS

	Section 2.1 Global Commitments and Commitments
	 	 	29	 
	Section 2.2 Loans and Borrowings
	 	 	32	 
	Section 2.3 Requests for Borrowings
	 	 	32	 
	Section 2.4 Letters of Credit
	 	 	33	 
	Section 2.5 Funding of Borrowings
	 	 	38	 
	Section 2.6 Interest Elections
	 	 	39	 
	Section 2.7 Global Borrowing Base
	 	 	40	 
	Section 2.8 Termination and Reduction of Global Commitments and
Commitments;
Extension of Maturity Date
	 	 	45	 
	Section 2.9 Repayment of Loans; Evidence of
Indebtedness
	 	 	47	 
	Section 2.10 Prepayment of Loans
	 	 	48	 
	Section 2.11 Fees
	 	 	51	 
	Section 2.12 Interest
	 	 	52	 
	Section 2.13 Alternate Rate of Interest
	 	 	53	 
	Section 2.14 Illegality
	 	 	54	 
	Section 2.15 Increased Costs
	 	 	54	 
	Section 2.16 Break Funding Payments
	 	 	56	 
	Section 2.17 Taxes
	 	 	57	 
	Section 2.18 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs
	 	 	58	 
	Section 2.19 Mitigation Obligations; Replacement of
Lenders
	 	 	60	 
	Section 2.20 Currency Conversion and Currency
Indemnity
	 	 	61	 
	Section 2.21 Bankers’ Acceptances
	 	 	62	 
	 
	 	 	 	 
	ARTICLE III

	REPRESENTATIONS AND WARRANTIES

	Section 3.1 Existence and Power
	 	 	67	 
	Section 3.2 Loan Party and Governmental Authorization;
Contravention
	 	 	67	 
	Section 3.3 Binding Effect
	 	 	68	 
	Section 3.4 Financial Information
	 	 	68	 
	Section 3.5 Ownership of Properties Generally
	 	 	68	 
	Section 3.6 Mineral Interests
	 	 	68	 
	Section 3.7 Licenses, Permits, Etc
	 	 	69	 
	Section 3.8 Compliance with Law
	 	 	69	 
	Section 3.9 Full Disclosure
	 	 	69	 

i  

 

	 	 	 	 	 
	 	 	Page No.	 
	Section 3.10 Organizational Structure; Nature of
Business
	 	 	70	 
	Section 3.11 Fiscal Year
	 	 	70	 
	Section 3.12 No Default
	 	 	70	 
	Section 3.13 Use of Proceeds and Letters of Credit
	 	 	70	 
	Section 3.14 Location of Business and Offices
	 	 	70	 
	Section 3.15 Subsidiaries
	 	 	71	 
	Section 3.16 Priority; Security Matters
	 	 	71	 
	Section 3.17 Status as Senior Indebtedness
	 	 	71	 
	Section 3.18 Pension Plans
	 	 	71	 
	Section 3.19 Representations and Warranties in U.S. Credit
Agreement
	 	 	71	 
	 
	 	 	 	 
	ARTICLE IV

	CONDITIONS

	Section 4.1 Initial Loan
	 	 	72	 
	Section 4.2 Each Credit Event
	 	 	75	 
	 
	 	 	 	 
	ARTICLE V

	AFFIRMATIVE COVENANTS

	Section 5.1 Information
	 	 	76	 
	Section 5.2 Business of Borrower and Subsidiaries
	 	 	77	 
	Section 5.3 Maintenance of Existence; Oil and Gas
Properties
	 	 	77	 
	Section 5.4 Title Data; Title to Oil and Gas
Properties
	 	 	77	 
	Section 5.5 Right of Inspection
	 	 	78	 
	Section 5.6 Compliance with Laws and Documents
	 	 	78	 
	Section 5.7 Operation of Properties and Equipment
	 	 	78	 
	Section 5.8 Performance of Obligations
	 	 	79	 
	Section 5.9 Additional Subsidiaries
	 	 	79	 
	Section 5.10 Further Assurances
	 	 	79	 
	Section 5.11 Pension Plans
	 	 	81	 
	Section 5.12 Pledges of Equity Interests in non-Loan
Parties
	 	 	81	 
	Section 5.13 Covenants in U.S. Credit Agreement
	 	 	82	 
	 
	 	 	 	 
	ARTICLE VI

	[RESERVED]

	 
	 	 	 	 
	ARTICLE VII

	NEGATIVE COVENANTS

	Section 7.1 Incurrence of Debt
	 	 	82	 
	Section 7.2 Negative Pledge
	 	 	84	 
	Section 7.3 Amendments to Organizational Documents
	 	 	84	 
	Section 7.4 Use of Proceeds
	 	 	84	 
	Section 7.5 Transactions with Affiliates
	 	 	84	 
	Section 7.6 Fiscal Year
	 	 	85	 
	Section 7.7 Change in Business
	 	 	85	 
	 
	 	 	 	 
	ARTICLE VIII

	EVENTS OF DEFAULT

	Section 8.1 Listing of Events of Default
	 	 	85	 
	Section 8.2 Action if Bankruptcy
	 	 	87	 

ii  

 

	 	 	 	 	 
	 	 	Page No.	 
	Section 8.3 Action if Other Event of Default
	 	 	87	 
	 
	 	 	 	 
	ARTICLE IX

	AGENTS

	 
	ARTICLE X

	MISCELLANEOUS

	Section 10.1 Notices
	 	 	90	 
	Section 10.2 Waivers; Amendments
	 	 	93	 
	Section 10.3 Expenses; Indemnity; Damage Waiver
	 	 	94	 
	Section 10.4 Successors and Assigns
	 	 	96	 
	Section 10.5 Survival
	 	 	99	 
	Section 10.6 Counterparts; Effectiveness
	 	 	100	 
	Section 10.7 Severability
	 	 	100	 
	Section 10.8 Right of Setoff
	 	 	100	 
	Section 10.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS
	 	 	100	 
	Section 10.10 WAIVER OF JURY TRIAL
	 	 	101	 
	Section 10.11 Headings
	 	 	102	 
	Section 10.12 Confidentiality
	 	 	102	 
	Section 10.13 Interest Rate Limitation
	 	 	103	 
	Section 10.14 [Reserved]
	 	 	104	 
	Section 10.15 Collateral Matters; Hedging Agreements
	 	 	104	 
	Section 10.16 Arrangers; Co-Global Documentation Agents;
Co-Global Syndication
Agents; Other Agents
	 	 	105	 
	Section 10.17 Intercreditor Agreement; Security Documents;
Designation
	 	 	105	 
	Section 10.18 [Reserved]
	 	 	105	 
	Section 10.19 Status as Senior Indebtedness
	 	 	105	 
	Section 10.20 NO ORAL AGREEMENTS
	 	 	105	 

iii  

 

EXHIBITS AND SCHEDULES

	 
	EXHIBITS:

	 
	Exhibit
A Form of Note

	Exhibit B-1 Form of Legal Opinion of General Counsel of Parent

	Exhibit B-2 Form of Legal Opinion of McCarthy Tétrault LLP, Canadian counsel to Borrower

	Exhibit B-3 Form of Legal Opinion of Jones Day, Texas counsel to Borrower

	Exhibit B-4 Form of Legal Opinion of Loomis, Ewert, Parsley, Davis & Gotting, Michigan local counsel to Borrower

	Exhibit B-5 Form of Legal Opinion of Marian McGrath Pearcy, Indiana local counsel to Borrower

	Exhibit
C [Reserved]

	Exhibit
D Form of Assignment and Acceptance

	Exhibit E-1 Form of Borrowing Request

	Exhibit E-2 Form of Interest Election Request

	Exhibit
F Form of Parent Pledge Agreement and Irrevocable Proxy

	Exhibit
G Form of Parent Guaranty

	Exhibit
H Form of Debenture

	Exhibit
I [Reserved]

	Exhibit J Form of Additional Lender Certificate

	Exhibit
K [Reserved]

	Exhibit
L Power of Attorney Terms - Bankers’ Acceptances

	Exhibit
M Form of Bankers’ Acceptance Request

	Exhibit
N Calculation of Net Proceeds of Bankers’ Acceptances

	 

	SCHEDULES:

	 
	Schedule 2.1  Global Commitments and Commitments

iv  

 

LIST OF DEFINED TERMS

	 	 	 	 	 
	 	 	Page No.	 
	Accepting Lender

	 	 	2	 
	Additional Lender Certificate

	 	 	30	 
	Administrative Questionnaire

	 	 	2	 
	Advance Payment

	 	 	2	 
	Affiliate

	 	 	2	 
	Agents

	 	 	2	 
	Agreed Currency

	 	 	61	 
	Agreement

	 	 	3	 
	Allocated Canadian Borrowing Base

	 	 	42	 
	Allocated U.S. Borrowing Base

	 	 	42	 
	Applicable Lending Office

	 	 	3	 
	Applicable Margin

	 	 	3	 
	Applicable Percentage

	 	 	3	 
	Approved Fund

	 	 	3	 
	Arrangers

	 	 	4	 
	Assignment and Acceptance

	 	 	4	 
	Authorized Officer

	 	 	4	 
	Availability Period

	 	 	4	 
	BA Acceptance Date

	 	 	4	 
	BA Exposure

	 	 	4	 
	BA Loan

	 	 	64	 
	BA Maturity Date

	 	 	4	 
	BA Net Proceeds

	 	 	4	 
	Bankers’ Acceptance Liability

	 	 	4	 
	Bankers’ Acceptance Rate

	 	 	5	 
	Bankers’ Acceptance Request

	 	 	5	 
	Bankers’ Acceptances

	 	 	5	 
	Bankruptcy and Insolvency Act (Canada)

	 	 	5	 
	Borrower

	 	 	1	 
	Borrowing

	 	 	5	 
	Borrowing Base Allocation Notice

	 	 	42	 
	Borrowing Base Properties

	 	 	5	 
	Borrowing Request

	 	 	5	 
	Business Day

	 	 	5	 
	C$

	 	 	6	 
	Calgary

	 	 	6	 
	Canada

	 	 	6	 
	Canadian Administrative Agent

	 	 	6	 
	Canadian Dollars

	 	 	6	 
	Canadian Flex Portion

	 	 	6	 
	Canadian Lien Searches

	 	 	6	 
	Canadian Prime

	 	 	6	 
	Canadian Prime Rate

	 	 	6	 
	Capital Lease Obligations

	 	 	6	 

v  

 

	 	 	 	 	 
	 	 	Page No.	 
	CDOR Rate

	 	 	6	 
	CERCLA

	 	 	7	 
	Certificate of Mortgaged Properties

	 	 	74	 
	Change in Law

	 	 	7	 
	Change of Control

	 	 	7	 
	Chicago

	 	 	7	 
	Closing Date

	 	 	7	 
	Co-Global Documentation Agents

	 	 	7	 
	Co-Global Syndication Agents

	 	 	7	 
	Collateral

	 	 	7	 
	Combined Commitments

	 	 	8	 
	Combined Credit Agreements

	 	 	8	 
	Combined Credit Exposure

	 	 	8	 
	Combined Lenders

	 	 	8	 
	Combined Loan Documents

	 	 	8	 
	Combined Loans

	 	 	8	 
	Combined Obligations

	 	 	8	 
	Commitment

	 	 	8	 
	Commitment Fee

	 	 	51	 
	Contractual Obligation

	 	 	8	 
	control

	 	 	2	 
	Control

	 	 	8	 
	Controlled

	 	 	8	 
	controlled by

	 	 	2	 
	Controlling

	 	 	8	 
	Credit Exposure

	 	 	8	 
	Criminal Code (Canada)

	 	 	9	 
	Currency

	 	 	9	 
	DBNA

	 	 	66	 
	Debenture

	 	 	9	 
	Debt Issuance Reduction Amount

	 	 	9	 
	Default

	 	 	9	 
	Default Rate

	 	 	52	 
	Deficiency Notification Date

	 	 	44	 
	Designation

	 	 	9	 
	Discretionary Borrowing Base Reallocation

	 	 	42	 
	disposal

	 	 	10	 
	Dollar

	 	 	27	 
	Environmental Laws

	 	 	9	 
	Environmental Liability

	 	 	10	 
	Equity Interests

	 	 	10	 
	Equivalent Amount

	 	 	10	 
	Eurodollar

	 	 	10	 
	Eurodollar Rate

	 	 	10	 
	Event of Default

	 	 	85	 
	Exchange Act

	 	 	11	 

vi  

 

	 	 	 	 	 
	 	 	Page No.	 
	Excluded Taxes

	 	 	11	 
	Existing Convertible Debentures

	 	 	11	 
	Existing Convertible Note Indenture

	 	 	11	 
	Existing Credit Agreement

	 	 	1	 
	Existing Lenders

	 	 	1	 
	Existing Letter of Credit

	 	 	38	 
	Existing Loan Documents

	 	 	1	 
	Existing Loan Indebtedness

	 	 	1	 
	Existing Subordinate Debt

	 	 	11	 
	Existing Subordinate Note Documents

	 	 	12	 
	Existing Subordinate Note Indenture

	 	 	12	 
	Existing Subordinate Notes

	 	 	12	 
	Falcon Seaboard Settlement Agreement

	 	 	12	 
	Fee Letter

	 	 	12	 
	Financing Transactions

	 	 	12	 
	Fiscal Year

	 	 	12	 
	Flex Lender

	 	 	12	 
	Flex Percentage

	 	 	12	 
	Flex Portion

	 	 	12	 
	Floor Rate

	 	 	6	 
	Foreign Lender

	 	 	12	 
	Foreign Subsidiary

	 	 	13	 
	GAAP

	 	 	13	 
	Global Administrative Agent

	 	 	13	 
	Global Borrowing Base

	 	 	13	 
	Global Borrowing Base Deficiency

	 	 	13	 
	Global Borrowing Base Designation Notice

	 	 	41	 
	Global Borrowing Base Utilization

	 	 	13	 
	Global Commitment

	 	 	13	 
	Global Commitment Increase

	 	 	29	 
	Global Effective Date

	 	 	13	 
	Governmental Approval

	 	 	13	 
	Governmental Authority

	 	 	14	 
	Governmental Rule

	 	 	14	 
	Guarantee

	 	 	14	 
	Guaranteed

	 	 	14	 
	Guaranties

	 	 	14	 
	Guarantor

	 	 	14	 
	Guaranty

	 	 	14	 
	Hazardous Material

	 	 	14	 
	Hedge Transaction

	 	 	15	 
	Hedge Transactions

	 	 	15	 
	Hedging Agreements

	 	 	15	 
	Hedging Obligations

	 	 	15	 
	Highest Lawful Rate

	 	 	103	 
	Hydrocarbons

	 	 	15	 

vii  

 

	 	 	 	 	 
	 	 	Page No.	 
	Immaterial Title Deficiencies

	 	 	69	 
	Income Tax Act (Canada)

	 	 	15	 
	Indebtedness

	 	 	15	 
	Indemnified Taxes

	 	 	16	 
	Indemnitee

	 	 	95	 
	Intercreditor Agreement

	 	 	16	 
	Interest Election Request

	 	 	16	 
	Interest Payment Date

	 	 	16	 
	Interest Period

	 	 	16	 
	Investment

	 	 	17	 
	Issuing Bank

	 	 	17	 
	Judgment Currency

	 	 	62	 
	LC Disbursement

	 	 	17	 
	LC Exposure

	 	 	17	 
	Lender Affiliate

	 	 	17	 
	Lender Parties

	 	 	17	 
	Lenders

	 	 	18	 
	Letter of Credit

	 	 	18	 
	Lien

	 	 	18	 
	Loan Documents

	 	 	18	 
	Loan Parties

	 	 	18	 
	Loans

	 	 	18	 
	Majority Lenders

	 	 	18	 
	Material Adverse Effect

	 	 	18	 
	Material Agreement

	 	 	19	 
	Material Subsidiary

	 	 	19	 
	Material Subsidiary Guaranty

	 	 	19	 
	Maturity Date

	 	 	19	 
	Mineral Interests

	 	 	19	 
	Minimum Threshold Amount

	 	 	42	 
	Monthly Date

	 	 	19	 
	Mortgage

	 	 	19	 
	Mortgaged Property

	 	 	19	 
	Net Cash Proceeds

	 	 	19	 
	Non-Consenting Lender

	 	 	19, 61	 
	Non-Recourse Debt

	 	 	19	 
	Non-Schedule I Lender

	 	 	19	 
	Note

	 	 	20	 
	Obligations

	 	 	20	 
	oil

	 	 	10	 
	Oil and Gas Hedge Transaction

	 	 	20	 
	Oil and Gas Properties

	 	 	20	 
	OPA

	 	 	20	 
	Organic Documents

	 	 	20	 
	Other Currency

	 	 	62	 
	Other Taxes

	 	 	20	 

viii  

 

	 	 	 	 	 
	 	 	Page No.	 
	parent

	 	 	26	 
	Parent

	 	 	20	 
	Parent Guaranty

	 	 	20	 
	Parent’s Global Effectiveness Notice

	 	 	20	 
	Participant

	 	 	98	 
	Pension Plan

	 	 	21	 
	Permitted Encumbrances

	 	 	21	 
	Permitted Investments

	 	 	23	 
	Permitted Senior Notes Debt

	 	 	23	 
	Permitted Senior Notes Documents

	 	 	23	 
	Person

	 	 	23	 
	Pledge Agreement

	 	 	24	 
	Pledge Agreements

	 	 	24	 
	Pledging Subsidiary

	 	 	24	 
	PPSA

	 	 	24	 
	Principal Amount

	 	 	24	 
	Principal Office

	 	 	24	 
	Pro Rata Lender

	 	 	24	 
	Production Payments

	 	 	24	 
	Property

	 	 	24	 
	Property Description

	 	 	68	 
	Proved Mineral Interests

	 	 	24	 
	Proved Producing Mineral Interests

	 	 	25	 
	QRC Class C Shares

	 	 	25	 
	rate of exchange

	 	 	62	 
	RCRA

	 	 	10	 
	Recognized Value

	 	 	25	 
	Redetermination Date

	 	 	25	 
	Register

	 	 	98	 
	Related Parties

	 	 	25	 
	release

	 	 	10	 
	Required Lenders

	 	 	25	 
	Required Reserve Value

	 	 	25	 
	Reserve Report

	 	 	25	 
	Schedule I Lender

	 	 	25	 
	Schedule I Reference Lenders

	 	 	25	 
	Scheduled Redetermination

	 	 	25	 
	Security Agreement

	 	 	25	 
	Security Documents

	 	 	25	 
	SFAS 133

	 	 	26	 
	Solvent

	 	 	26	 
	Stamping Fee

	 	 	26	 
	Subsidiary

	 	 	26	 
	Supermajority Lenders

	 	 	26	 
	Taxes

	 	 	26	 
	Toronto

	 	 	26	 

ix  

 

	 	 	 	 	 
	 	 	Page No.	 
	Type

	 	 	26	 
	U.S.

	 	 	27	 
	U.S. Commitment

	 	 	27	 
	U.S. Credit Agreement

	 	 	27	 
	U.S. Dollars

	 	 	27	 
	U.S. Flex Portion

	 	 	27	 
	U.S. Lenders

	 	 	27	 
	U.S. Loan Documents

	 	 	27	 
	U.S. Material Subsidiary

	 	 	27	 
	U.S. Material Subsidiary Guaranties

	 	 	27	 
	U.S. Material Subsidiary Guaranty

	 	 	27	 
	U.S. Obligations

	 	 	27	 
	U.S. Only Lender

	 	 	28	 
	U.S. Prime

	 	 	28	 
	U.S. Prime Rate

	 	 	28	 
	U.S. Required Lenders

	 	 	28	 
	U.S. Required Reserve Value

	 	 	28	 
	U.S. Security Documents

	 	 	28	 
	U.S. Supermajority Lenders

	 	 	28	 
	U.S.$

	 	 	27	 
	UCC

	 	 	27	 
	under common control with

	 	 	2	 
	United States

	 	 	27	 
	Unutilized Commitment

	 	 	27	 
	Upfront Fee

	 	 	51	 

x  

 

AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 9, 2007, is among QUICKSILVER
RESOURCES CANADA INC., an Alberta, Canada corporation, successor by name change to MGV Energy Inc.
(the “Borrower”), the LENDERS party hereto, BNP PARIBAS and BANK OF AMERICA, N.A., as
Co-Global Syndication Agents, FORTIS CAPITAL CORP., THE BANK OF NOVA SCOTIA and DEUTSCHE BANK TRUST
COMPANY AMERICAS, as Co-Global Documentation Agents, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH
(successor by merger to Bank One, NA, Canada Branch), as Canadian Administrative Agent, and
JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, NA), as Global Administrative Agent.

     WHEREAS, the Borrower, the Global Administrative Agent, the Canadian Administrative Agent and
the financial institutions named and defined therein as Lenders (the “Existing Lenders”)
and Agents are parties to that certain Credit Agreement dated as of July 28, 2004 (as amended or
supplemented prior to the date hereof, the “Existing Credit Agreement”), pursuant to which
the Existing Lenders provided certain loans and extensions of credit to the Borrower (all
Indebtedness (as hereinafter defined) arising pursuant to the Existing Credit Agreement is herein
called the “Existing Loan Indebtedness”); and

     WHEREAS, the parties hereto desire to amend and restate the Existing Credit Agreement in the
form of this Agreement and to appoint JPMorgan Chase Bank, N.A. as Global Administrative Agent
hereunder and JPMorgan Chase Bank, N.A., Toronto Branch as Canadian Administrative Agent hereunder,
and the Borrower desires to obtain Borrowings (as herein defined) to renew and restate the Existing
Loan Indebtedness and for other purposes permitted hereunder; and

     WHEREAS, after giving effect to the amendment and restatement of the Existing Credit Agreement
pursuant to the terms hereof, the Commitment of each Lender hereunder will be as set forth on
Schedule 2.1;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
and subject to the satisfaction (or waiver in accordance with Section 10.2) of each
condition precedent contained in Section 4.1 hereof, the satisfaction of which shall be
evidenced by the notification delivered by the Global Administrative Agent to the Borrower, Parent,
the Canadian Administrative Agent and the Combined Lenders of the Global Effective Date, the
parties hereto agree that the Existing Credit Agreement is hereby amended, renewed, extended and
restated in its entirety on (and subject to) the terms and conditions set forth herein. It is the
intention of the parties hereto that this Agreement supersedes and replaces the Existing Credit
Agreement in its entirety; provided, that, (a) such amendment and restatement shall operate
to renew, amend, modify and extend certain of the rights and obligations of the Borrower under the
Existing Credit Agreement and as provided herein, but shall not act as a novation thereof, and (b)
the Liens (as hereinafter defined) securing the Obligations under and as defined in the Existing
Credit Agreement and the liabilities and obligations of the Borrower and its Subsidiaries under the Existing Credit Agreement and the Loan Documents (as therein defined
and referred to herein as the “Existing Loan Documents”) shall not be extinguished but
shall be

 1 

 

carried forward and shall secure such obligations and liabilities as amended, renewed,
extended and restated hereby. The parties hereto ratify and confirm each of the Existing Loan
Documents entered into prior to the Closing Date (but excluding the Existing Credit Agreement) and
agree that such Existing Loan Documents continue to be legal, valid, binding and enforceable in
accordance with their terms (except to the extent amended, restated and superseded in their
entirety in connection with the transactions contemplated hereby), however, for all matters arising
prior to the Global Effective Date (including the accrual and payment of interest and fees, and
matters relating to indemnification and compliance with financial covenants), the terms of the
Existing Credit Agreement (as unmodified by this Agreement) shall control and are hereby ratified
and confirmed. The Borrower represents and warrants that, as of the Closing Date and the Global
Effective Date, there are no claims or offsets against, or defenses or counterclaims to, the
obligations of the Loan Parties (as defined in the Existing Credit Agreement) under the Existing
Credit Agreement or any of the other Existing Loan Documents.

     The parties hereto further agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

     “Accepting Lender” means any Lender which has accepted a Bankers’ Acceptance issued by
the Borrower under this Agreement.

     “Additional Lender Certificate” is defined in Section 2.1(b).

     “Administrative Questionnaire” means an Administrative Questionnaire to be delivered
by the Lenders to the Canadian Administrative Agent, in a form supplied by the Canadian
Administrative Agent.

     “Advance Payment” means any payment to be applied toward payment of the purchase price
of Hydrocarbons produced or to be produced from any Borrowing Base Properties and which payment is,
or is to be, paid in advance of actual delivery of such production to or for the account of the
purchaser regardless of such production.

     “Affiliate” of any Person means any Person directly or indirectly controlled by,
controlling or under common control with such first Person. For purposes of this definition, any
Person which owns directly or indirectly 10% or more of the securities having ordinary voting power
for the election of directors or other governing body of a corporation or 10% or more of the
partnership or other ownership interests of any other Person (other than as a limited partner of
such other Person) will be deemed to “control” (including, with its correlative meanings,
“controlled by” and “under common control with”) such corporation or other Person.

     “Agents” means each of the Global Administrative Agent, the Co-Global Syndication
Agents, the Co-Global Documentation Agents, and the Canadian Administrative Agent.

     “Agreed Currency” is defined in Section 2.20(a).

 2 

 

     “Agreement” means this Amended and Restated Credit Agreement, as it may be amended,
supplemented, restated or otherwise modified and in effect from time to time.

     “Allocated Canadian Borrowing Base” is defined in Section 2.7(d)(ii).

     “Allocated U.S. Borrowing Base” is defined in Section 2.7(d)(i).

     “Applicable Lending Office” means, for each Lender and for each Type of Loan, such
office of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify in writing to the Global Administrative Agent, the Canadian Administrative Agent and the
Borrower as the office by which its Loans of such Type are to be made and/or issued and maintained.

     “Applicable Margin” means, for any day and with respect to any Eurodollar Loans, any
Canadian Prime Loans, any U.S. Prime Loans, any Bankers’ Acceptances or any Commitment Fees payable
hereunder, as the case may be, the applicable percentage rate per annum set forth below under the
caption “Eurodollar Loans”, “U.S. Prime Loans”, “Canadian Prime Loans”, “Bankers’ Acceptances
Stamping Fee” or “Commitment Fees”, as the case may be, based on the Global Borrowing Base
Utilization on such date.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	U.S.	 	 	 	 	 	 
	 	 	 	 	 	 	Prime	 	Canadian	 	Bankers’	 	 
	Global	 	Eurodollar	 	Loans (in	 	Prime	 	Acceptances	 	Commitment
	Borrowing Base	 	Loans (in basis	 	basis	 	Loans (in	 	Stamping Fee	 	Fees (in basis
	Utilization:	 	points)	 	points)	 	basis points)	 	(in basis points)	 	points)
	Less than 50%
	 	 	100.0	 	 	 	0.0	 	 	 	0.0	 	 	 	100.0	 	 	 	25.0	 
	50% or greater and
less than 75%
	 	 	125.0	 	 	 	0.0	 	 	 	0.0	 	 	 	125.0	 	 	 	30.0	 
	75% or greater and
less than 90%
	 	 	150.0	 	 	 	0.0	 	 	 	0.0	 	 	 	150.0	 	 	 	35.0	 
	90% or greater
	 	 	175.0	 	 	 	0.0	 	 	 	0.0	 	 	 	175.0	 	 	 	37.5	 

For purposes of the foregoing, any change in the Applicable Margin will occur automatically
without prior notice upon any change in the Global Borrowing Base Utilization. Each change in the
Applicable Margin shall apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such change.

     “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined
based upon the Commitments most recently set forth in the Register, giving effect to any
assignments made in accordance with Section 10.4 or any increases or decreases in
Commitments made in accordance with this Agreement.

     “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the

 3 

 

ordinary course of its business and that is administered or managed by (a) a Lender, (b) a Lender
Affiliate or (c) a Person or an Affiliate of a Person that administers or manages a Lender.

     “Arrangers” means J.P. Morgan Securities Inc. and Banc of America Securities LLC, in
their capacity as co-lead arrangers and joint bookrunners.

     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section
10.4), and accepted by the Global Administrative Agent and the Canadian Administrative Agent,
in substantially the form of Exhibit D or any other form approved
by the Global Administrative Agent and the Canadian Administrative Agent.

     “Authorized Officer” means, with respect to the Borrower, its Vice President-Finance,
Vice President-Treasurer, Assistant Treasurer or any other officer specified as such to the
Canadian Administrative Agent in writing by any of the aforementioned officers of such Person or by
resolution from the board of directors or similar governing body of such Person, or, with respect
to the Parent, its Chief Executive Officer, its President, its Chief Financial Officer, its Vice
President-Treasurer, its Assistant Treasurer, its Vice President-General Counsel, its Vice
President-Controller or any other officer specified as such to the Global Administrative Agent in
writing by any of the aforementioned officers of the Parent or by resolution from the board of
directors or similar governing body of the Parent.

     “Availability Period” means the period from and including the Global Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of all of the Global
Commitments and Commitments.

     “BA Acceptance Date” means any date, which must be a Business Day, on which a Bankers’
Acceptance is or is to be issued.

     “BA Exposure” means, with respect to any Accepting Lender, the Principal Amount of
Bankers’ Acceptances and BA Loans to be paid by the Borrower to the Canadian Administrative Agent
at the Principal Office for which such Borrower has not reimbursed such Accepting Lender.

     “BA Loan” is defined in Section 2.21(g) hereof.

     “BA Maturity Date” means the date on which a Bankers’ Acceptance is payable.

     “BA Net Proceeds” means, in respect of any Bankers’ Acceptance required to be
purchased by a Lender pursuant hereto, an amount determined as of the applicable BA Acceptance Date
in accordance with the formula set forth in Exhibit N less the Stamping
Fees applicable to each Bankers’ Acceptance.

     “Bankers’ Acceptance Liability” means, with respect to any Bankers’ Acceptance, the
obligation of the Borrower to pay to the Canadian Administrative Agent at the Principal Office the
Principal Amount of any Bankers’ Acceptances for which such Borrower has not reimbursed the
Accepting Lender.

 4 

 

     “Bankers’ Acceptance Rate” means, on any day:

     (a) with respect to Bankers’ Acceptances issued by a Schedule I Lender, the CDOR Rate on such
day; and

     (b) with respect to Bankers’ Acceptances issued by a Non-Schedule I Lender, the CDOR Rate on
such day plus 0.10%.

     “Bankers’ Acceptance Request” means a Bankers’ Acceptance Request executed and
delivered by the Borrower, in substantially the form of Exhibit
M or any
other form approved by the Global Administrative Agent and the Canadian Administrative Agent, and
containing the information set forth in Exhibit M.

     “Bankers’ Acceptances” means bankers’ acceptances denominated in Canadian Dollars in
the form of either a depository bill, as defined in the Depository Bills and Notes Act (Canada), or
a blank non-interest bearing bill of exchange, as defined in the Bills of Exchange Act (Canada), in
either case issued by the Borrower and accepted by a Lender (and, if applicable, purchased by a
Lender) at the request of such Borrower, such depository bill or bill of exchange to be
substantially in the standard form of, or otherwise acceptable to, such Lender and issued for value
pursuant to this Agreement.

     “Bankruptcy and Insolvency Act (Canada)” means the Bankruptcy and Insolvency Act
(Canada), as amended from time to time and any similar statute of Canada or any province thereof.

     “Borrower” has the meaning given to such term in the preamble.

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

     “Borrowing Base Allocation Notice” is defined in Section 2.7(d)(iii).

     “Borrowing Base Properties” means those Oil and Gas Properties owned by the Parent or
any of its Subsidiaries, or in which the Parent or any of its Subsidiaries has an economic
interest, that are evaluated for purposes of the then current Global Borrowing Base.

     “Borrowing Request” means a written or telephonic request by an Authorized Officer of
the Borrower for a Borrowing in accordance with Section 2.3, which if written shall be in
substantially the form of Exhibit E-1 or any other form approved by the Canadian
Administrative Agent and the Global Administrative Agent.

     “Business Day” means any day that is not a Saturday, Sunday or a United States federal
holiday or any other day on which (i) the Chicago office of the Global Administrative Agent is
closed or (ii) the Toronto office of the Canadian Administrative Agent is closed or the Montreal,
Quebec, Canada office of any Lender is closed; provided that (a) when used in connection
with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks
are not open for dealings in Dollar deposits in the London interbank market, (b) when used in

 5 

 

connection with a Canadian Prime Loan, BA Loan or Banker’s Acceptance, the term “Business
Day” shall also exclude any day on which commercial banks in Calgary and Toronto are authorized
or required by law to remain closed, and (c) when used in connection with a U.S. Prime Loan, the
term “Business Day” shall also exclude any day on which commercial banks in Calgary,
Toronto and Chicago are authorized or required by law to remain closed.

     “Calgary” means Calgary, Alberta, Canada.

     “Canada” means the country of Canada, including all of its provinces and territories.

     “Canadian Administrative Agent” means JPMorgan Chase Bank, N.A., Toronto Branch
(successor by merger to Bank One, NA, Canada Branch), in its capacity as Canadian administrative
agent for the lenders party to this Agreement, and any successor thereto.

     “Canadian Dollars” or “C$” refers to lawful money of Canada.

     “Canadian Flex Portion” means that unallocated portion of the Commitments remaining
after making the allocations described in Section 2.1(c)(ii) and (iii).

     “Canadian Lien Searches” means central and local current searches (for certainty,
excluding real property searches) for Liens from each province in which any Borrowing Base Property
or any material Collateral owned by the Borrower or any Material Subsidiary of the Borrower is
located, and such other jurisdictions as the Global Administrative Agent may reasonably request,
covering each Loan Party.

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

     “Canadian Prime Rate” means the variable rate of interest quoted by the Canadian
Administrative Agent from time to time as the reference rate of interest which it employs to
determine the interest rate it will charge for demand loans in Canadian Dollars to its customers in Canada and which it designates as its prime rate,
provided that if such rate of interest is less than the then applicable rate quoted by the
Canadian Administrative Agent for its one month Bankers’ Acceptances plus 100 basis points per
annum (the “Floor Rate”), then the Canadian Prime Rate shall equal the Floor Rate.

     “Capital Lease Obligations” means, for any Person, all obligations of such Person to
pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property
to the extent such obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of
such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

     “Casualty Event” shall have the meaning set forth in the U.S. Credit Agreement.

     “CDOR Rate” means, for any day, as established by the Canadian Administrative Agent,
for Bankers’ Acceptances which have a term to maturity for which quotes are available as

 6 

 

hereinafter contemplated, the per annum rate of interest which is the rate determined as being the
arithmetic average of the rates per annum (calculated on the basis of a year of 365 days)
applicable to Canadian Dollar bankers’ acceptances having identical issue and comparable maturity
dates as the Bankers’ Acceptances proposed to be issued by the Borrower displayed and identified as
such on the display referred to as the “CDOR Page” (or any display substituted therefore) of
Reuters Monitor Money Rates Service for Schedule I Lenders at approximately 10:00 a.m. (Toronto
time) on such date, or if such date is not a Business Day, then on the immediately preceding
Business Day; provided, however, that if no such rate appears on the CDOR Page as
contemplated, then the CDOR Rate on any date shall be calculated as the arithmetic average of the
discount rate quoted by each Schedule I Reference Lender (determined by the Canadian Administrative
Agent as of 10:00 a.m., Toronto time, on such day) at which each Schedule I Reference Lender is
offering, at such time on such day, or, if such date is not a Business Day, then on the immediately
preceding Business Day, for the purchase of bankers’ acceptances in a comparable amount and with
comparable maturity dates to the Bankers’ Acceptances proposed to be issued by the Borrower on such
day.

     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. § 9601, et. seq., as amended from time to time.

     “Certificate of Mortgaged Properties” is defined in Section 4.1(m).

     “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any
Applicable Lending Office of such Lender or any Issuing Bank or by such Lender’s or any Issuing
Bank’s holding company, if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of this Agreement.

     “Change of Control” means, except as permitted by Section 7.4 or Section 7.5(a) of the
U.S. Credit Agreement, the Parent shall cease to own, directly or indirectly, 100% of the issued
and outstanding Equity Interests of the Borrower.

     “Chicago” means Chicago, Illinois.

     “Closing Date” means the date of this Agreement.

     “Co-Global Documentation Agents” means Fortis Capital Corp., The Bank of Nova Scotia
and Deutsche Bank Trust Company Americas, in their capacity as co-global documentation agents for
the Lenders hereunder, and their respective successors.

     “Co-Global Syndication Agents” means BNP Paribas and Bank of America, N.A., in their
capacity as co-global syndication agents for the Lenders hereunder, and their respective
successors.

     “Collateral” means any and all “Collateral” and “Mortgaged Property”, as defined in
the Security Documents and the U.S. Security Documents.

 7 

 

     “Combined Commitments” means the aggregate of (a) the Commitments of the Lenders
hereunder and (b) the U.S. Commitments. The initial aggregate principal amount of the Combined
Commitments is U.S.$1,200,000,000.

     “Combined Credit Agreements” means this Agreement and the U.S. Credit Agreement.

     “Combined Credit Exposure” means, at the time of determination, the sum of (a) the
Equivalent Amount in U.S. Dollars of the aggregate Credit Exposure of the Lenders hereunder, and
(b) the aggregate “Credit Exposure” (as defined in the U.S. Credit Agreement) of the U.S. Lenders.

     “Combined Lenders” means the Lenders hereunder and the U.S. Lenders.

     “Combined Loan Documents” means the Loan Documents and the U.S. Loan Documents.

     “Combined Loans” means the loans made by the Combined Lenders to the Borrower and the
Parent pursuant to the Combined Loan Documents.

     “Combined Obligations” means the aggregate of the Obligations and the U.S. Obligations
(without duplication of any Hedging Obligations).

     “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans, to acquire participations in Letters of Credit hereunder, and to accept Bankers’ Acceptances
or make BA Loans hereunder, expressed as an amount representing the maximum aggregate amount of
such Lender’s Credit Exposure hereunder, as such commitment may be (a) adjusted from time to time pursuant to Section
2.1(c), (b) reduced or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.4, and (c) terminated pursuant to Section 8.2 or
8.3; provided, however, that the Commitment of any Lender shall at no time
be greater than its Global Commitment. The initial amount of each Lender’s Commitment is set forth
on Schedule 2.1, or in the Register following any Assignment and Acceptance to which such
Lender is a party. The initial aggregate principal amount of the Commitments of the Lenders is
U.S.$423,529,411.78.

     “Commitment Fee” is defined in Section 2.11(a).

     “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, contract, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound.

     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise, but not solely by being an officer or director of
that Person. “Controlling” and “Controlled” have meanings correlative thereto.

     “Credit Exposure” means, with respect to any Lender at any time, without duplication,
the Equivalent Amount in U.S. Dollars of the sum of (a) the outstanding principal amount of such
Lender’s Loans, plus (b) its LC Exposure, plus (c) its BA Exposure at such time.

 8 

 

     “Criminal Code (Canada)” means the Criminal Code R.S.C. 1985, c. C-46, as amended from
time to time.

     “Currency” means, with respect to any Loan or Letter of Credit or Bankers’ Acceptance,
whether such Loan or Letter of Credit or Bankers’ Acceptance is denominated in Canadian Dollars or
U.S. Dollars.

     “DBNA” is defined in Section 2.21(j).

     “Debenture” means a demand debenture substantially in the form of
Exhibit H attached hereto (or in such other form as the Global Administrative Agent may
approve), executed and delivered by the Borrower and any Material Subsidiary pursuant to the Loan
Documents, as amended, supplemented, restated or otherwise modified from time to time in accordance
with the terms of this Agreement and the other Loan Documents. The term “Debenture” shall
include (a) each supplemental debenture or amendment after execution and delivery of such
supplemental debenture or amendment, (b) each and every Debenture executed and delivered by the
Borrower and each of the Material Subsidiaries hereunder, and (c) each and every “Debenture” (as
defined in the Existing Credit Agreement) executed and delivered by the Borrower and each of the
Material Subsidiaries under the Existing Credit Agreement, as amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms of the Existing Credit Agreement
and the terms of this Agreement and the other Loan Documents, other than any such Debenture that
has previously been released in writing by the Global Administrative Agent or by the “Global Administrative Agent” or the “Canadian Administrative Agent,” each as defined in
the Existing Credit Agreement.

     “Debt Issuance Reduction Amount” means, in connection with the issuance of any
Permitted Senior Notes Debt and any reduction of the Global Borrowing Base and U.S. Borrowing Base
in connection therewith in accordance with Section 2.7(h), an amount equal to U.S. $0.30
per U.S. Dollar on the gross aggregate principal amount of such Permitted Senior Notes Debt issued
and incurred by the Parent. For avoidance of doubt, and as an example only, subject to the
provisions of Section 2.7(h), in the event the Parent incurs Permitted Senior Notes Debt
in accordance with this Agreement in an amount equal to U.S. $300,000,000, the “Debt Issuance
Reduction Amount” will be equal to U.S. $90,000,000.

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

     “Deficiency Notification Date” is defined in Section 2.7(f).

     “Designation” means the designation of a Lender as a Flex Lender, a Pro Rata Lender,
or a U.S. Only Lender; provided that no Lender may have more than one Designation at any
time.

     “Discretionary Borrowing Base Reallocation” is defined in Section 2.7(d)(iv).

     “Environmental Laws” means any and all applicable Governmental Rules pertaining to
health (with respect to exposure to Hazardous Materials) or the environment in effect in any and
all jurisdictions in which the Borrower or any Subsidiary is conducting or at any time has
conducted business, or where any Property of the Borrower or any Subsidiary is located,

 9 

 

including, without limitation, OPA, the Clean Air Act, as amended, CERCLA, the Federal Water Pollution Control
Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource
Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, the Environmental
Protection and Enhancement Act, R.S.A. 2000, c. E-12, as amended, the Canadian Environmental
Protection Act, 1999. S.C. 1999. c. 33, as amended, and other environmental conservation or
protection laws. The term “oil” shall have the meaning specified in OPA, the term
“release” (or “threatened release”) shall have the meaning specified in CERCLA, and the
term “disposal” (or “disposed”) shall have the meaning specified in RCRA; provided,
however, that (i) in the event either OPA, CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment and (ii) to the extent the laws of the state, province or territory in which
any Property of the Borrower or any Subsidiary is located establish a meaning for “oil”, “release”,
or “disposal” which is broader than that specified in either OPA, CERCLA or RCRA, such broader
meaning shall apply.

     “Environmental Liability” shall have the meaning set forth in the U.S. Credit
Agreement.

     “Equity Interests” means, with respect to any Person, shares of the capital stock,
partnership interests, membership interests in a limited liability company, beneficial interests in
a trust or other equity interests in such Person or any warrants, options or other rights to
acquire any of the foregoing.

     “Equivalent Amount” means, as at any date, the amount of Canadian Dollars into which
an amount of U.S. Dollars may be converted, or the amount of U.S. Dollars into which an amount of
Canadian Dollars may be converted, in either case at the rate of exchange for U.S. Dollars and
Canadian Dollars as published in The Wall Street Journal for such day or, if there is no such rate
of exchange so published for such day, at The Bank of Canada mid point noon spot rate of exchange
for such date in Toronto at approximately 12:00 noon, Toronto time on such date.

     “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are denominated in U.S. Dollars and is bearing
interest at a rate determined by reference to the Eurodollar Rate.

     “Eurodollar Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the applicable British Bankers’ Association LIBOR rate for deposits in U.S. Dollars as
reported by any generally recognized financial information service as of 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers’ Association LIBOR rate is
available to the Global Administrative Agent, the applicable Eurodollar Rate for the relevant
Interest Period shall instead be the rate determined by the Global Administrative Agent to be the
rate at which JPMorgan Chase Bank, N.A., or one of its Affiliate banks offers to place deposits in
U.S. Dollars with first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period, in the

 10 

 

approximate amount of the Canadian Administrative Agent’s relevant Eurodollar loan and having a maturity equal
to such Interest Period.

     “Event of Default” has the meaning assigned to such term in Section 8.1.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.

     “Excluded Taxes” means, with respect to any Agent, any Lender, any Issuing Bank or any
other recipient of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the federal,
or any provincial, government of Canada (but which, for greater certainty, shall not include any
tax assessed pursuant to Part XIII of the Income Tax Act (Canada)), or by the jurisdiction under
the laws of which such recipient is or was organized or in which its principal office is or was
located or, in the case of any Lender, in which its Applicable Lending Office is or was located,
and (b) any branch profits taxes imposed by the federal, or any provincial, government of Canada or any similar tax imposed by any other
jurisdiction in which the recipient is or was located.

     “Existing Convertible Debentures” means, collectively, each of Parent’s 1.875%
Convertible Subordinated Debentures due 2024, as amended, restated, renewed, extended,
supplemented, increased, replaced or otherwise modified from time to time to the extent permitted
under the Combined Credit Agreements and under the Existing Convertible Note Indenture.

     “Existing Convertible Note Indenture” means that certain Indenture dated as of
November 1, 2004, between the Parent and JPMorgan Chase Bank, N.A., as the same may be modified,
amended, renewed, supplemented, extended, restated, increased or replaced from time to time to the
extent permitted under the Combined Credit Agreements and under the Existing Convertible Note
Indenture.

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

     “Existing Lenders” has the meaning given to such term in the recitals.

     “Existing Letter of Credit” is defined in Section 2.4(j).

     “Existing Loan Documents” has the meaning given to such term in the recitals.

     “Existing Loan Indebtedness” has the meaning given to such term in the
recitals.

     “Existing Subordinate Debt” means all unsecured Indebtedness of the Parent and its
Subsidiaries outstanding from time to time under the Existing Subordinate Note Documents (including
Guarantees thereof by Subsidiaries), including all renewals, refinancings, replacements, and
extensions thereof to the extent permitted under the Combined Credit Agreements and made in
accordance with the terms of the Combined Loan Documents (including Section 7.14 of the U.S. Credit
Agreement).

 11 

 

     “Existing Subordinate Note Documents” means the Existing Subordinate Notes, the
Existing Subordinate Note Indenture, the Existing Convertible Debentures, the Existing Convertible
Note Indenture, and all promissory notes, guarantees and other documents, instruments and
agreements executed and delivered pursuant to the Existing Subordinate Note Indenture or the
Existing Convertible Note Indenture evidencing, guaranteeing or otherwise pertaining to the
Existing Subordinate Debt.

     “Existing Subordinate Note Indenture” means that certain Indenture dated as of
December 22, 2005, between the Parent and JPMorgan Chase Bank, N.A., as Trustee, as supplemented by
that certain (a) First Supplemental Indenture, dated as of March 16, 2006, among the Parent, the
subsidiary guarantors party thereto and JPMorgan Chase Bank, N.A., as Trustee, (b) Second
Supplemental Indenture, dated as of July 31, 2006, among the Parent, the subsidiary guarantors
party thereto and JPMorgan Chase Bank, N.A., as Trustee, and (c) Third Supplemental Indenture,
dated as of September 26, 2006, among the Parent, the subsidiary guarantors party thereto and
JPMorgan Chase Bank, N.A., as Trustee, and as the same may be modified, amended, renewed,
supplemented, restated, increased or replaced from time to time to the extent permitted under the Combined Credit Agreements and
under the Existing Subordinate Note Indenture.

     “Existing Subordinate Notes” means, collectively, each of Parent’s 7?% Senior
Subordinated Notes due 2016, as amended, restated, renewed, extended, supplemented, increased,
replaced or otherwise modified from time to time to the extent permitted under the Combined Credit
Agreements and under the Existing Subordinate Note Indenture.

     “Falcon Seaboard Settlement Agreement” shall have the meaning set forth in the U.S.
Credit Agreement.

     “Fee Letter” shall have the meaning set forth in the U.S. Credit Agreement.

     “Financing Transactions” means the execution, delivery and performance by each Loan
Party of the Loan Documents to which it is to be a party, the borrowing of the Loans, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.

     “Fiscal Year” means a twelve (12) month period ending December 31.

     “Flex Lender” means any Lender identified as a “Flex Lender” on Schedule 2.1,
as such Schedule 2.1 is replaced or amended from time to time pursuant to the terms
hereof.

     “Flex Percentage” means, with respect to each Flex Lender (and its Affiliate, if any,
that is a U.S. Lender), a percentage determined by dividing the Global Commitment associated with
such Flex Lender (and such Affiliate, if any) by the aggregate Global Commitments associated with
all Flex Lenders (and their Affiliates, if any, that are U.S. Lenders).

     “Flex Portion” means that unallocated portion of the Combined Commitments remaining
after making the allocations described in Section 2.1(c)(ii) and (iii).

     “Foreign Lender” means any Lender that is not either (a) a resident in Canada for
purposes of the Income Tax Act (Canada) or (b) an authorized foreign bank as defined in

 12 

 

subsection 248(1) of the Income Tax Act (Canada), that will receive all amounts paid or credited to such
Lender under this Agreement in respect of its “Canadian banking business” for the purposes of
paragraph 212(13.3)(a) of the Income Tax Act (Canada). For purposes of this definition, Canada and
each province thereof shall be deemed to constitute a single jurisdiction.

     “Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than Canada or any province or territory thereof.

     “GAAP” means generally accepted accounting principles in the United States of America
as in effect from time to time.

     “Global Administrative Agent” means JPMorgan Chase Bank, N.A. (successor by merger to
Bank One, NA), in its capacity as global administrative agent for the Combined Lenders, and its
successors.

     “Global Borrowing Base” means the “Global Borrowing Base” as determined from time to
time pursuant to Section 2.7.

     “Global Borrowing Base Deficiency” means, at the time of determination, the amount by
which (a) the Combined Credit Exposure exceeds (b) the then current Global Borrowing Base.

     “Global Borrowing Base Designation Notice” is defined in Section 2.7(b).

     “Global Borrowing Base Utilization” means, at the time of determination, an amount
(expressed as a percentage) equal to the quotient of (a) the Combined Credit Exposure divided by
(b) the Global Borrowing Base.

     “Global Commitment” means, with respect to each Lender (and its Affiliate, if any,
that is a U.S. Lender), the amount set forth on Schedule 2.1 as the “Global Commitment”
for such Lender (and such Affiliate, if any) or in the Register following any Assignment and
Acceptance to which such Lender (and such Affiliate, if any) is a party, as such Global Commitment
may be (a) reduced from time to time pursuant to Section 2.8, (b) increased from time to
time pursuant to Section 2.1(b), (c) reallocated from time to time pursuant to
Section 2.1(c), (d) reduced or increased from time to time pursuant to assignments by or
to such Lender pursuant to Section 10.4, and (e) terminated pursuant to Section
8.2 or 8.3. The initial aggregate principal amount of the Global Commitments of the
Lenders (and their respective Affiliates who are U.S. Lenders) is U.S.$1,200,000,000.

     “Global Commitment Increase” is defined in Section 2.1(b).

     “Global Effective Date” means the date on which the conditions specified in Section
4.1 of each Combined Credit Agreement are satisfied (or waived in accordance with Section 10.2 of
each Combined Credit Agreement).

     “Governmental Approval” means (a) any authorization, consent, approval, license,
ruling, permit, tariff, rate, certification, waiver, exemption, filing, variance, claim, order,

 13 

 

judgment or decree of, or with, (b) any required notice to, (c) any declaration of or with, or (d)
any registration by or with, any Governmental Authority.

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

     “Governmental Rule” means any statute, law, regulation, ordinance, rule, judgment,
order, decree, permit, concession, grant, franchise, license, agreement, directive or other
governmental restriction or binding form of decision of or determination by, or binding
interpretation or administration of any of the foregoing by, any Governmental Authority, whether
now or hereafter in effect.

     “Guarantee” by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement conditions, by “comfort letter” or
other similar undertaking of support or otherwise) or (b) entered into for the purpose of assuring
in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part), provided,
that the term “Guarantee” shall not include (x) endorsements of instruments for collection
or deposit in the ordinary course of business or (y) indemnities given in connection with asset
sales or otherwise provided in the ordinary course of business. The terms “Guarantee” and
“Guaranteed” used as a verb shall have a correlative meaning.

     “Guarantor” means collectively (i) the Parent, (ii) each Material Subsidiary and (iii)
each U.S. Material Subsidiary that now or hereafter executes and delivers a U.S. Material
Subsidiary Guaranty, including each Material Subsidiary and U.S. Material Subsidiary that is
required to execute a Guaranty pursuant to Section 5.9.

     “Guaranty” means collectively (i) the Parent Guaranty, (ii) each Material Subsidiary
Guaranty, and (iii) each U.S. Material Subsidiary Guaranty. The term “Guaranties” shall
include each and every Guaranty executed and delivered by the Parent, each Material Subsidiary and
each U.S. Material Subsidiary.

     “Hazardous Material” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law, and any petroleum,
petroleum products or petroleum distillates and associated oil or natural gas exploration,
production and development wastes that are not exempted or excluded from being

 14 

 

defined as “hazardous substances”, “hazardous materials”, “hazardous wastes” and “toxic substances” under such
Environmental Laws.

     “Hedge Transaction” means any financial derivative transaction, including any
commodity, interest rate, currency or other derivative, swap, option, collar, futures contract or
other contract pursuant to which a Person hedges risks related to commodity prices, interest rates,
currency exchange rates, securities prices or financial market conditions. “Hedge
Transactions” expressly includes Oil and Gas Hedge Transactions.

     “Hedging Agreements” means, collectively, any agreement, instrument, arrangement or
schedule or supplement thereto evidencing any Hedge Transaction.

     “Hedging Obligations” means, with respect to any Person, all liabilities (including
but not limited to obligations and liabilities of such Person arising in connection with or as a
result of early or premature termination of a Hedging Agreement or Hedge Transaction, whether or
not occurring as a result of a default thereunder) of such Person under a Hedging Agreement or
Hedge Transaction.

     “Highest Lawful Rate” is defined in Section 10.13(ii).

     “Hydrocarbons” means, collectively, oil, gas, casinghead gas, drip gasolines, natural
gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be
produced in conjunction therewith, and all products, by-products and all other substances refined,
separated, settled or derived therefrom or the processing thereof, and all other minerals and
substances, including, but not limited to, liquified petroleum gas, natural gas, kerosene, sulphur,
lignite, coal, uranium, thorium, iron, geothermal steam, water, carbon dioxide, helium, and any and
all other minerals, ores, or substances of value, and the products and proceeds therefrom,
including, without limitation, all gas resulting from the in-situ combustion of coal or lignite.

     “Immaterial Title Deficiencies” has the meaning assigned to such term in Section
3.6.

     “Income Tax Act (Canada)” means the Income Tax Act (Canada), as amended from time to
time.

     “Indebtedness” means, for any Person, (without duplication): (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) all other indebtedness (including Capital Lease
Obligations, other than oil and gas leases entered into in the ordinary course of business) of such
Person on which interest charges are customarily paid or accrued, (d) all Guarantees by such
Person, (e) the unfunded or unreimbursed portion of all letters of credit, banker’s acceptances,
surety or other bonds or instruments issued for the account of such Person, (f) any amount owed by
such Person representing the deferred purchase price of property or services (other than accounts
payable incurred in the ordinary course of business and which have not been outstanding for more
than ninety (90) days past the applicable due date, or if outstanding beyond such date, such
account payable is being contested in good faith and such Person has established appropriate
reserves, if any, as required in conformity with GAAP), (g) all obligations of such Person secured
by a Lien on any property or asset owned or held by that Person regardless of

 15 

 

whether the indebtedness secured thereby shall have been assumed by that Person, (h) all obligations under
operating leases (i) which require such Person or its Affiliate to make payments over the term of
such lease, including payments at termination, based on the purchase price or appraisal value of
the Property subject to such lease plus a marginal interest rate, and (ii) that are used primarily
as a financing vehicle for such Property, (i) obligations to deliver goods or services, including,
without limitation, Hydrocarbons and the forward sale of Hydrocarbons, in consideration of Advance
Payments, (j) the undischarged balance of any Production Payment created by such Person or for the creation of which such
Person directly or indirectly received payment, to the extent such Production Payment would be
reflected as indebtedness on a consolidated balance sheet of such Person, (k) net liabilities of
such Person under all Hedging Obligations determined in accordance with GAAP, and (l) all liability
of such Person as a general partner of a partnership for obligations of such partnership of the
nature described in clauses (a) through (k) preceding.

     “Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.

     “Indemnitee” is defined in Section 10.3(b).

     “Intercreditor Agreement” means that certain Amended and Restated Intercreditor
Agreement dated as of even date herewith by and among the Global Administrative Agent on behalf of
the “Combined Lenders”, the “Combined Issuing Banks”, the “Accepting Lenders”, the “Lender Hedge
Counterparties” and the other “Agents” as defined therein, and the Canadian Administrative Agent on
behalf of the “Canadian Lenders”, the “Canadian Issuing Banks”, the “Accepting Lenders”, the
“Canadian Lender Hedge Counterparties” and the other “Canadian Agents” as defined therein, as
amended, supplemented, restated or otherwise modified from time to time in accordance with the
Combined Loan Documents.

     “Interest Election Request” means a written or telephonic request by an Authorized
Officer of the Borrower to convert or continue a Borrowing in accordance with Section 2.6,
which if written shall be in substantially the form of Exhibit E-2 or any other form
approved by the Global Administrative Agent and the Canadian Administrative Agent.

     “Interest Payment Date” means (a) with respect to any Canadian Prime Loan or U.S.
Prime Loan, the last day of each March, June, September and December, (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three (3)
months’ duration, each day prior to the last day of such Interest Period that occurs at intervals
of three (3) months’ duration after the first day of such Interest Period, and (c) with respect to
any BA Loan, the maturity date of the Bankers’ Acceptances issued concurrently with the advance of
such BA Loan.

     “Interest Period” means (i) with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day, or, with
the consent of the Global Administrative Agent and the Canadian Administrative Agent, such other
day, in the calendar month that is one, two, three or six months or, if available to all Lenders,
nine or twelve months thereafter, as the Borrower may elect and (ii) with respect to any BA Loan,
each period commencing on the date such BA Loan is made or converted from another

 16 

 

Type of Loan or the last day of the next preceding Interest Period for such BA Loan and ending on the date which is
an integral multiple of 30 days thereafter and is not less than 30 days or more than 180 days
thereafter, as the Borrower may select as provided in Section 2.6; provided, that
(a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day, (b) any Interest
Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar month of such
Interest Period, (c) no Interest Period may end later than the last day of the Availability Period,
and (d) the Interest Period for a BA Loan shall end on the BA Maturity Date of the Bankers’
Acceptances issued concurrently therewith. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.

     “Investment” shall have the meaning set forth in the U.S. Credit Agreement.

     “Issuing Bank” means (i) the Canadian Administrative Agent and (ii) any other Lender
agreed to among the Borrower and the Global Administrative Agent to issue Letters of Credit. An
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.

     “Judgment Currency” is defined in Section 2.20(b).

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

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

     “Lender Affiliate” means, with respect to any Lender, (a) an Affiliate of such Lender
or (b) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in
making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit
in the ordinary course of its business and is administered or managed by a Lender or an Affiliate
of such Lender and with respect to any Lender that is a fund which invests in bank loans and
similar extensions of credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

     “Lender Parties” means the Agents, the Lenders, the Issuing Banks and each Affiliate
of a then current Lender that is party to a Hedge Agreement with the Borrower (or with any Loan

 17 

 

Party that is organized in Canada or any province or territory thereof, and each of their
respective successors, transferees and assigns).

     “Lenders” means the Persons listed on Schedule 2.1 under the heading
“Canadian Lenders” and any other Person that shall have become a party to this Agreement
pursuant to an Additional Lender Certificate or an Assignment and Acceptance, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.

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

     “Lien” means (a) any lien, charge or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment,
bailment or margin account for security purposes, (b) Production Payments and the like which
constitute Indebtedness, payable out of Oil and Gas Properties or (c) reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting title to Property. For the purposes of this Agreement,
Borrower and its Subsidiaries shall be deemed to own subject to a Lien any asset which is acquired
or held subject to the interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.

     “Loan Documents” means (a) this Agreement, the Notes, the Security Documents, the Fee
Letter, the Intercreditor Agreement, the Hedging Agreements between the Borrower or any of its
Subsidiaries and any Lender or any Affiliate of a then current Lender, any Borrowing Request, any
Interest Election Request, any Additional Lender Certificate, and any Assignment and Acceptance,
and (b) each other agreement, document or instrument delivered by the Borrower or any other Person
in connection with this Agreement, as such may be amended from time to time.

     “Loan Parties” means the Parent, the Borrower, the Guarantors and any Material
Subsidiary or any U.S. Material Subsidiary that executes a Combined Loan Document, for so long as
such Combined Loan Document is in effect.

     “Loans” means the loans (including, without limitation, the Canadian Prime Loans, the
Eurodollar Loans, the U.S. Prime Loans and the BA Loans) made by the Lenders to the Borrower
pursuant to this Agreement and the acceptance and purchase by the Lenders of Bankers’ Acceptances
pursuant hereto.

     “Majority Lenders” shall have the meaning set forth in the U.S. Credit Agreement.

     “Material Adverse Effect” means a material and adverse effect on (a) the financial
condition, business operations, properties or assets of the Borrower and its Subsidiaries, taken as
a whole, (b) (i) the validity and enforceability of this Agreement, the Notes, the Security
Documents or any other material Combined Loan Documents, or (ii) the perfection or priority of any
material Lien purported to be created thereby, or (c) the right or ability of the Loan Parties to
fully, completely and timely pay and perform their obligations under the Combined Loan Documents.

 18 

 

     “Material Agreement” means any material written or oral agreement or contract to which
a Person is a party, by which such Person is bound, or to which any material assets of such Person
are subject, which is not cancelable by such Person upon notice of thirty (30) days or less without
liability for further payment other than nominal penalty.

     “Material Subsidiary” means (a) any Subsidiary of the Borrower that is domiciled in
Canada and listed on Exhibit L to the U.S. Credit Agreement under the heading “Material
Subsidiaries,” and (b) any Subsidiary of the Borrower that (i) is designated by the Borrower in
writing to the Global Administrative Agent as a Material Subsidiary, (ii) owns Mortgaged Properties
or (iii) is a direct or indirect parent of any Material Subsidiary.

     “Material Subsidiary Guaranty” means, collectively, any Guaranty executed by any
Person that becomes a Material Subsidiary and executes a Material Subsidiary Guaranty pursuant to
Section 5.9 hereof, each in favor of the Global Administrative Agent and in form and
substance acceptable to the Global Administrative Agent, as amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms of this Agreement and the other
Loan Documents. The term “Material Subsidiary Guaranty” shall include each and every
Material Subsidiary Guaranty executed and delivered by a Material Subsidiary.

     “Maturity Date” means February 9, 2012, as such date may be extended pursuant to
Section 2.8(e).

     “Mineral Interests” means all rights, estates, titles, and interests in and to oil and
gas leases and any oil and gas interests, royalty and overriding royalty interests, production
payments, net profits interests, oil and gas fee interests, and other rights therein, including,
without limitation, any reversionary or carried interests relating to the foregoing, together with
rights, titles, and interests created by or arising under the terms of any unitization,
communization, and pooling agreements or arrangements, and all properties, rights and interests
covered thereby, whether arising by contract, by order, or by operation of Governmental Rules,
which now or hereafter include all or any part of the foregoing.

     “Minimum Threshold Amount” is defined in Section 2.7(d)(iii).

     “Monthly Date” means the fifteenth day of each calendar month.

     “Mortgage” shall have the meaning set forth in the U.S. Credit Agreement.

     “Mortgaged Property” means any Oil and Gas Property with respect to which a Lien is
granted pursuant to a Mortgage delivered pursuant to the U.S. Credit Agreement or a Debenture.

     “Net Cash Proceeds” shall have the meaning set forth in the U.S. Credit Agreement.

     “Non-Consenting Lender” is defined in Section 2.19(c).

     “Non-Recourse Debt” shall have the meaning set forth in the U.S. Credit Agreement.

     “Non-Schedule I Lender” means a Lender which is a Canadian chartered bank that is
listed on Schedule II or Schedule III to the Bank Act (Canada), as amended from time to time.

 19 

 

     “Note” means any promissory note delivered pursuant to Section 2.9(e).

     “Obligations” means (without duplication), at any time, the sum of (a) the Credit
Exposure of the Lenders under the Loan Documents plus (b) all accrued and unpaid interest
and fees owing to the Lenders under the Loan Documents plus (c) all Hedging Obligations in
connection with all Hedging Agreements between the Borrower or any of its Subsidiaries and any
Lender or any Affiliate of a Lender plus (d) all other obligations (monetary or otherwise)
of the Borrower or any Subsidiary to any Lender or any Agent, whether or not contingent, arising
(whether now or hereafter) under or in connection with any of the Loan Documents.

     “Oil and Gas Hedge Transaction” means a Hedge Transaction pursuant to which any Person
hedges the price to be received by it for future production of Hydrocarbons.

     “Oil and Gas Properties” shall have the meaning set forth in the U.S. Credit
Agreement.

     “OPA” shall have the meaning set forth in the U.S. Credit Agreement.

     “Organic Documents” means, relative to any Person, its articles of organization,
association, formation or incorporation (or comparable document), its by-laws, memorandum of
association or operating agreement and all partnership agreements, limited liability company or
operating agreements and similar arrangements applicable to ownership of its Equity Interests.

     “Other Currency” is defined in Section 2.20(a).

     “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made under any
Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any
Loan Document, other than Excluded Taxes and Indemnified Taxes.

     “Parent” means Quicksilver Resources Inc., a Delaware corporation.

     “Parent Guaranty” means a Guaranty dated as of the Global Effective Date, executed and
delivered by the Parent pursuant to Section 4.1(a) hereof in favor of the Global
Administrative Agent and substantially in the form of Exhibit G attached
hereto, as amended, supplemented, restated or otherwise modified from time to time in accordance
with the terms of this Agreement and the other Loan Documents.

     “Parent’s Global Effectiveness Notice” means a notice and certificate of the Parent
properly executed by an Authorized Officer of the Parent addressed to the Combined Lenders and delivered to the Global Administrative Agent
whereby the Parent certifies its satisfaction (except to the extent previously waived in accordance
with the Combined Loan Documents) of all the conditions precedent to the effectiveness under
Section 4.1 of each Combined Credit Agreement to be satisfied solely by the Parent or any Loan
Party or any “Loan Party” as defined in the U.S. Credit Agreement.

     “Participant” is defined in Section 10.4(e).

 20 

 

     “Pension Plan” means any retirement or pension benefit plan that is established by a
Person for the benefit of its employees, that requires such Person to make periodic payments or
contributions.

     “Permitted Encumbrances” means, with respect to any asset:

     (a) Liens securing the Combined Obligations;

     (b) minor defects in title which do not secure the payment of money and otherwise have no
material adverse effect on the value or the operation of the subject property, and for the purposes
of this Agreement, a minor defect in title shall include, but not be limited to, easements,
rights-of-way, servitudes, permits, zoning restrictions, surface leases and other similar rights in
respect of surface operations, and easements for pipelines, streets, alleys, highways, telephone
lines, power lines, railways and other easements and rights-of-way, on, over or in respect of any
of the properties of any Loan Party and Immaterial Title Deficiencies;

     (c) inchoate statutory or operators’ Liens securing obligations for labor, services, materials
and supplies arising in the ordinary course of business which are not delinquent (except to the
extent permitted by Section 5.7 of the U.S. Credit Agreement);

     (d) mechanic’s, materialmen’s, warehouseman’s, journeyman’s, vendor’s, landlord’s and
carrier’s Liens and other similar Liens arising by operation of law in the ordinary course of
business which are not delinquent (except to the extent permitted by Section 5.7 of the U.S. Credit
Agreement);

     (e) Liens for Taxes, assessments, fees and other charges of any Governmental Authority not yet
due or not yet delinquent, or, if delinquent, that are being contested in good faith in the normal
course of business by appropriate action, as permitted by Section 5.7 of the U.S. Credit Agreement;

     (f) lease burdens payable to third parties which are deducted in the calculation of discounted
present value in the Reserve Report including, without limitation, any royalty, overriding royalty,
net profits interest, production payment, carried interest or reversionary working interest in
existence as of the Closing Date or as a result of or in accordance with the Loan Party’s
acquisition of the property burdened thereby;

     (g) Liens securing Non-Recourse Debt permitted by Section 7.1;

     (h) Liens created by and arising out of the Falcon Seaboard Settlement Agreement;

     (i) pledges or deposits in connection with workers’ compensation, unemployment compensation
and/or other social security legislation, and deposits in the ordinary course of business securing
liabilities to insurance carriers under insurance or self-insurance arrangements;

     (j) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other similar obligations incurred in
the ordinary course of business;

 21 

 

     (k) judgment Liens in respect of judgments that do not constitute an Event of Default under
Section 8.1(i) of either Combined Credit Agreement;

     (l) any Lien existing on any Property or asset prior to the acquisition thereof by the Parent
or any Subsidiary of Parent or existing on any Property or asset of any Person that becomes a
Subsidiary of Parent after the date hereof prior to the time such Person becomes a Subsidiary of
Parent; provided that (i) such Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Subsidiary of Parent, as applicable, (ii) such Lien
shall not apply to any other Property or assets of the Parent or any Subsidiary of Parent and (iii)
such Lien shall secure only those obligations which it secures on the date of such acquisition or
the date such Person becomes a Subsidiary of Parent, as applicable, and extensions, renewals and
replacements of such obligations that are not in excess of the outstanding principal amount of such
obligations as of such acquisition date or date such Person becomes a Subsidiary of Parent
(provided, that such obligations and such extensions, renewals, and replacements thereof so
secured by such Lien, together with the Indebtedness secured by Liens described in clause
(o) below, shall at no time exceed U.S.$20,000,000 in the aggregate);

     (m) any interest or title of a lessor under any lease entered into by the Parent or any
Subsidiary of Parent in the ordinary course of business and in accordance with the Combined Loan
Documents and covering only the assets so leased;

     (n) Liens in existence on the date hereof listed on Schedule 7.3 to the U.S. Credit
Agreement securing Indebtedness permitted by Section 7.1(e), provided that no such Lien is
spread to cover any additional property after the Closing Date and that the amount of the
Indebtedness secured thereby is not increased;

     (o) Liens on fixed or capital assets acquired, constructed or improved by Parent or any of its
Subsidiaries; provided that (i) such Liens secure Indebtedness permitted by Section
7.1(l) hereof and of the U.S. Credit Agreement, (ii) such Liens and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition, construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets, (iv) such Liens shall not apply to any
other property or assets of Parent or any of such Subsidiaries, and (iv) the Indebtedness secured
by such Liens, together with the obligations and extensions, renewals and replacements of such
obligations described in clause (l) above, shall at no time exceed U.S.$20,000,000 in the
aggregate;

     (p) Liens perfected by the filing of UCC financing statements, PPSA financing statements or
other applicable filings regarding any Permitted Encumbrance;

     (q) Liens arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit
accounts or other funds maintained with a creditor depository institution;

     (r) contractual Liens that arise in the ordinary course of business under operating
agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases,
farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and

 22 

 

natural gas, unitization and pooling declarations and agreements, area of mutual interest
agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits
agreements, development agreements, gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and customary in the oil
and gas business and are for claims which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained in accordance with
GAAP; provided, that any such Lien referred to in this clause (r) does not
materially impair (i) the use of the Property covered by such Lien for the purposes for which such
Property is held by any Loan Party, or (ii) the value of such Property subject thereto;

     (s) any Lien or encumbrance permitted by the Debentures or the Mortgages; or

     (t) Liens not otherwise included in this definition so long as neither (i) the aggregate
outstanding principal amount of the obligations of all of the Loan Parties secured thereby nor (ii)
the aggregate fair market value (determined as of the date such Lien is incurred) of the assets
subject thereto exceeds (as to the Parent and all Subsidiaries of Parent) U.S.$40,000,000 at any
one time.

     “Permitted Investments” shall have the meaning set forth in the U.S. Credit Agreement.

     “Permitted Senior Notes Debt” means any unsecured Indebtedness (in addition to, and
not including, Existing Subordinate Debt) of the Parent, and any Guarantees thereof by
Subsidiaries, incurred or assumed after the date of this Agreement and resulting from one or more
issuances of Parent’s senior unsecured subordinate notes in an aggregate outstanding principal
balance at any time of not greater than $300,000,000, including all renewals, refinancings,
replacements, and extensions thereof to the extent permitted hereunder and made in accordance with
the terms of the Combined Loan Documents (including Section 7.14 of the U.S. Credit Agreement),
provided, that all such Indebtedness (i) has a maturity date at least six (6) months after
the Maturity Date, (ii) except to the extent any such prepayments are made in accordance with
subsection (y) to the proviso in Section 7.14 of the U.S. Credit Agreement, is not permitted to be
prepaid (other than by the conversion of any such Indebtedness into the capital stock of the
Parent) without the written consent of the Global Administrative Agent and the Majority Lenders,
(iii) has a coupon not in excess of nine percent (9%), (iv) contains covenants not materially more
onerous to Parent and its Subsidiaries than those contained in the Combined Loan Documents and (v)
contains other terms and conditions (including amount, interest, amortization, covenants and events
of default) as are satisfactory to the Global Administrative Agent and the Majority Lenders.

     “Permitted Senior Notes Documents” means the indentures or other agreements under
which any Permitted Senior Notes Debt is issued or incurred and all other instruments, agreements
and other documents evidencing or governing such Permitted Senior Notes Debt or providing for any
Guarantee or other right in respect thereof.

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

 23 

 

     “Pledge Agreement” means (i) a Pledge Agreement and Irrevocable Proxy, dated as
of the Global Effective Date delivered by the Parent, substantially in the form of Exhibit F and (ii) a Pledge Agreement and Irrevocable Proxy, dated as of the Global
Effective Date or otherwise delivered pursuant to the Loan Documents, substantially in a form
acceptable to the Global Administrative Agent, each as amended, supplemented, restated or otherwise
modified from time to time in accordance with the Loan Documents. The term “Pledge
Agreements” shall include each and every Pledge Agreement executed and delivered pursuant to
the Loan Documents.

     “Pledging Subsidiary” means each existing and future Subsidiary of Borrower that
executes and delivers a Pledge Agreement in accordance with the Loan Documents pursuant to which
such Subsidiary pledges to the Global Administrative Agent, for the ratable benefit of the Lenders,
all of the issued and outstanding Equity Interests of a Material Subsidiary or other Person owned
by such Subsidiary to secure the Obligations.

     “PPSA” means the Personal Property Security Act (Alberta) or such other similar
legislation in effect in any other province or jurisdiction of Canada, as the same may be amended
from time to time.

     “Principal Amount” means, for (i) a Bankers’ Acceptance, the face amount thereof, (ii)
a BA Loan, the principal amount thereof determined in accordance with Section 2.21(g)
hereof, and (iii) any other Loans, the outstanding principal amount thereof.

     “Principal Office” means the principal office of the Canadian Administrative Agent,
which on the date of this Agreement is located at BCE Place, 161 Bay Street, Suite 4240, Toronto,
Ontario, Canada, M5J 2S1.

     “Production Payments” means a production payment obligation (whether volumetric or
dollar denominated) of the Borrower or any of its Subsidiaries which are payable from a specified
share of proceeds received from production from specified Oil and Gas Properties, together with all
undertakings and obligations in connection therewith.

     “Property” means any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

     “Property Description” is defined in Section 3.6.

     “Pro Rata Lender” means any Lender identified as a “Pro Rata Lender” on Schedule
2.1, as such Schedule 2.1 is replaced or amended from time to time pursuant to the
terms hereof.

     “Proved Mineral Interests” means, collectively, all Mineral Interests which constitute
“proved reserves”, “proved developed producing reserves,” “proved developed nonproducing reserves”,
and “proved undeveloped reserves,” as such terms are defined from time to time by the Society of
Petroleum Engineers of the American Institute of Mining Engineers.

24

 

     “Proved Producing Mineral Interests” means all Mineral Interests which constitute
“proved developed producing reserves” as such term is defined from time to time by the Society of
Petroleum Engineers of the American Institute of Mining Engineers.

     “QRC Class C Shares” means, collectively, the Class C Common Shares of the Borrower.

     “Recognized Value” means, with respect to Mineral Interests, the discounted present
value of the estimated net cash flow to be realized from the production of Hydrocarbons from such
Mineral Interests as determined by the Global Administrative Agent for purposes of determining the
portion of the Global Borrowing Base which it attributes to such Mineral Interests in accordance
with Section 2.7 hereof.

     “Redetermination Date” shall have the meaning set forth in the U.S. Credit Agreement.

     “Register” has the meaning set forth in Section 10.4(c).

     “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

     “Required Lenders” means the Combined Lenders holding Combined Commitments (or
Combined Credit Exposure, as applicable) in the aggregate greater than or equal to 66-2/3% of the
aggregate Combined Commitments under the Combined Loan Documents, or, if the Combined Commitments
have been terminated, the aggregate Combined Credit Exposure under the Combined Loan Documents.

     “Required Reserve Value” means Proved Mineral Interests in respect of the Borrowing
Base Properties that in the aggregate have a Recognized Value of not less than eighty percent (80%)
of the Recognized Value of all Proved Mineral Interests in respect of the Borrowing Base Properties
held by Parent and its Subsidiaries.

     “Reserve Report” shall have the meaning set forth in the U.S. Credit Agreement.

     “Scheduled Redetermination” means any redetermination of the Global Borrowing Base
pursuant to Section 2.7(b).

     “Schedule I Lender” means a Lender which is a Canadian chartered bank listed on
Schedule I to the Bank Act (Canada), as amended from time to time.

     “Schedule I Reference Lenders” means The Bank of Nova Scotia, and any other Person
that becomes a Lender hereunder and which is a Canadian chartered bank that is listed on Schedule I
to the Bank Act (Canada), as amended from time to time.

     “Security Agreement” shall have the meaning set forth in the U.S. Credit Agreement.

     “Security Documents” means the Pledge Agreements, the Guaranties, the Debentures, the
Mortgages and Assignments of Production delivered pursuant to the U.S. Credit Agreement,

25

 

the
Security Agreements delivered pursuant to the U.S. Credit Agreement and each other security
agreement or other instrument or document executed and delivered pursuant to the Combined Loan
Documents to secure any of the Combined Obligations.

     “SFAS 133” shall have the meaning set forth in the U.S. Credit Agreement.

     “Solvent” means, with respect to any Person at any time, a condition under which (a)
the fair saleable value of such Person’s assets is, on the date of determination, greater than the
total amount of such Person’s liabilities (including contingent and unliquidated liabilities) at
such time; (b) such Person is able to pay all of its liabilities as such liabilities mature, (c)
such Person does not intend to, and such Person does not believe it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature, and (d) such Person is
not engaged in a business or transaction, and such Person is not about to engage in a business or
transaction for which such Person’s property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which such Person is
engaged. For purposes of this definition (i) the amount of a Person’s contingent or unliquidated
liabilities at any time shall be that amount which, in light of all the facts and circumstances
then existing, represents the amount which can reasonably be expected to become an actual or
matured liability, (ii) the “fair saleable value” of an asset shall be the amount which may be
realized within a reasonable time either through collection or sale of such asset at its regular
market value, and (iii) the “regular market value” of an asset shall be the amount which a capable
and diligent business person could obtain for such asset from an interested buyer who is willing to
purchase such asset under ordinary selling conditions.

     “Stamping Fee” means, in respect of any Bankers’ Acceptance or BA Loan, the applicable
fee described in the definition of “Applicable Margin “ payable by the Borrower pursuant to
Section 2.21(g).

     “Subsidiary” means, with respect to any Person (the “parent”) at any date any
corporation, limited liability company, partnership (limited or general), association or other
entity the accounts of which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in accordance with
GAAP as of such date. Unless otherwise indicated herein, each reference to the term
“Subsidiary” means a Subsidiary of the Borrower.

     “Supermajority Lenders” shall have the meaning set forth in the U.S. Credit Agreement.

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

     “Toronto” means Toronto, Ontario, Canada.

     “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Eurodollar Rate or the Canadian Prime Rate or the Bankers’ Acceptance Rate or the U.S. Prime Rate.

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     “UCC” shall have the meaning set forth in the U.S. Credit Agreement.

     “United States” or “U.S.” means the United States of America, its fifty states
and the District of Columbia.

     “Unutilized Commitment” means, at the time of determination, the amount by which (a)
the lower of (i) the aggregate amount of the Commitments of all Lenders at such time and (ii) the
amount of the Allocated Canadian Borrowing Base as then in effect at such time, exceeds (b) the
amount of the aggregate Credit Exposure of the Lenders at such time.

     “Upfront Fee” is defined in Section 2.11(c).

     “U.S. Commitment” means, with respect to each U.S. Lender, the “Commitment” of such
U.S. Lender (as defined in the U.S. Credit Agreement). The initial aggregate principal amount of
the U.S. Commitments of the U.S. Lenders is U.S.$776,470,588.22.

     “U.S. Credit Agreement” means that certain Amended and Restated Credit Agreement of
even date herewith among the Parent, the U.S. Lenders, the other agents party thereto, and the
Global Administrative Agent, as it may be amended, supplemented, restated or otherwise modified and
in effect from time to time.

     “U.S. Dollars” or “U.S.$” or “Dollar” refers to lawful money of the
United States of America.

     “U.S. Flex Portion” means that unallocated portion of the U.S. Commitments remaining
after making the allocations described in Section 2.1(c)(ii) and (iii).

     “U.S. Lenders” means the financial institutions from time to time party to the U.S.
Credit Agreement and their respective successors and permitted assigns.

     “U.S. Loan Documents” means the U.S. Credit Agreement and the U.S. Security Documents,
together with all exhibits, schedules and attachments thereto, and all other agreements, documents,
certificates, financing statements and instruments from time to time executed and delivered
pursuant to or in connection with any of the foregoing.

     “U.S. Material Subsidiary” shall have the meaning of the term “Material Subsidiary” as
defined in the U.S. Credit Agreement.

     “U.S. Material Subsidiary Guaranty” means a Guaranty made pursuant to Sections 4.1(a)
or 5.15 of the U.S. Credit Agreement by a U.S. Material Subsidiary in favor of the Global
Administrative Agent, as amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms of the Combined Loan Documents. The term “U.S. Material Subsidiary
Guaranties” shall include each and every U.S. Material Subsidiary Guaranty executed and
delivered hereunder.

     “U.S. Obligations” means, at any time, the sum of (a) the aggregate “Credit Exposure”
(as defined in the U.S. Credit Agreement) of the U.S. Lenders under the U.S. Loan Documents
plus (b) all accrued and unpaid interest and fees owing to the U.S. Lenders under the U.S.
Loan

27

 

Documents plus (c) all Hedging Obligations in connection with all Hedging Agreements
between the Parent or any of its Subsidiaries (other than the Borrower or any Subsidiary of the
Borrower) and any U.S. Lender or any Affiliate of a U.S. Lender plus (d) all other
obligations (monetary or otherwise) of the Parent to any U.S. Lender or the “Agents” (as defined in
the U.S. Credit Agreement) under the U.S. Credit Agreement, whether or not contingent, arising
under or in connection with any of the U.S. Loan Documents.

     “U.S. Only Lender” means any Lender identified as a “U.S. Only Lender” on Schedule
2.1, as such Schedule 2.1 is replaced or amended from time to time pursuant to the
terms hereof.

     “U.S. Prime”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined in
reference to the U.S. Prime Rate.

     “U.S. Prime Rate” means the variable rate of interest quoted by the Canadian
Administrative Agent from time to time as the reference rate of interest which it employs to
determine the interest rate it will charge for demand loans in U.S. Dollars to its customers in
Canada and which it designates as its prime rate.

     “U.S. Required Lenders” shall have the meaning set forth in the U.S. Credit Agreement.

     “U.S. Required Reserve Value” shall have the meaning set forth in the U.S. Credit
Agreement.

     “U.S. Security Documents” means the “Security Documents” as defined under the U.S.
Credit Agreement.

     “U.S. Supermajority Lenders” shall have the meaning set forth in the U.S. Credit
Agreement.

     Section 1.2 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans and Borrowings may be classified and referred to by Type (e.g., a “Eurodollar Loan”
or “Eurodollar Borrowing” or “BA Loan” or “BA Borrowing” or “U.S. Prime Loan” or “U.S. Prime
Borrowing” or “Canadian Prime Loan” or “Canadian Prime Borrowing”).

     Section 1.3 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, restated, increased, renewed, extended, supplemented or otherwise
modified (subject to any restrictions on such amendments, restatements, increases, renewals,
extensions, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, provided such successors and
assigns are permitted by the Loan

28

 

Documents, (c) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement.

     Section 1.4 Designation of Material Subsidiaries. The Borrower shall from time to
time, by notice in writing to the Global Administrative Agent, be entitled to designate that either
(a) a Subsidiary which is not a Material Subsidiary become a Material Subsidiary (in which event
the Borrower will comply (or cause compliance) with the provisions of Section 5.9 with
respect to such Subsidiary), or (b) a Material Subsidiary which has previously been designated in
writing by the Borrower as a Material Subsidiary (and is not otherwise a Material Subsidiary
pursuant to clauses (b)(ii) or (iii) of the definition thereof) cease to be a
Material Subsidiary; provided, that the Borrower shall not be entitled to designate that a
Material Subsidiary cease to be a Material Subsidiary if a Default, Event of Default, Global
Borrowing Base Deficiency or U.S. Borrowing Base Deficiency has occurred and is continuing or would
result from or exist immediately after such a designation.

     Section 1.5 U.S. Credit Agreement Definitions. Unless the context otherwise requires,
capitalized terms used herein and not otherwise defined shall have the meanings given to them in
the U.S. Credit Agreement.

ARTICLE II

THE CREDITS

     Section 2.1 Global Commitments and Commitments.

          (a) Subject to the terms and conditions set forth herein, each Lender agrees to make Loans
(including BA Loans made in accordance with Section 2.21) to the Borrower and each
Accepting Lender agrees to accept Bankers’ Acceptances presented to it by the Borrower pursuant to
Section 2.21, in each case from time to time during the Availability Period in an aggregate
principal amount that will not result in (i) the Credit Exposure of any Lender exceeding the lower
of (A) the Commitment of such Lender then in effect, or (B) such Lender’s Applicable Percentage of
the Allocated Canadian Borrowing Base then in effect, or (ii) the aggregate amount of the Credit
Exposure of all Lenders then in effect exceeding the lower of (A) the aggregate Commitments of all
the Lenders, or (B) the Allocated Canadian Borrowing
Base then in effect. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may repay (but not prepay) Bankers’ Acceptances and may borrow, prepay
and reborrow Loans.

          (b) At any time and from time to time prior to the Maturity Date, the Borrower may increase
the aggregate amount of the Global Commitments of the Combined Lenders (each such increase, a
“Global Commitment Increase”) in an aggregate amount for all such increases of up to
U.S.$250,000,000 so long as (i) the Global Administrative Agent, the Canadian Administrative Agent,
and the Majority Lenders consent to such requested Global Commitment Increase, which consent shall
not be unreasonably withheld, conditioned or delayed; (ii) the aggregate Global Commitments
calculated after taking into effect the requested Global Commitment Increase does not exceed
U.S.$1,450,000,000; and (iii) each Combined

29

 

Lender shall have been offered a pro rata share of such
requested Global Commitment Increase, but no Combined Lender shall have its Global Commitment
increased without such Combined Lender’s consent; provided, that, the Borrower shall have
the right to replace any Non-Consenting Lender pursuant to, and in accordance with, Section
2.19(c). Each Combined Lender shall have the option, but no Combined Lender shall have any
obligation, to increase its Global Commitment hereunder in connection with any Global Commitment
Increase. If the Borrower desires to effect a Global Commitment Increase, the Borrower and the
financial institution(s) that the Borrower proposes to become a Lender hereunder, and, if
applicable, the existing Lender(s) that the Borrower proposes to increase its existing Global
Commitment shall (subject at all times to the consent of each such financial institution or each
such existing Lender, as applicable) execute and deliver to the Global Administrative Agent and the
Canadian Administrative Agent a certificate substantially in the form
of Exhibit J hereto (an “Additional Lender Certificate”). Upon receipt of such
Additional Lender Certificate (A) any such additional Lender shall be deemed to be a party in all
respects to this Agreement and the other Loan Documents as of the effective date set forth in such
Additional Lender Certificate and (B) upon the effective date set forth in such Additional Lender
Certificate, any such Lender party to the Additional Lender Certificate shall purchase a pro rata
portion of the outstanding Loans (and participation interests in the Letters of Credit) of each of
the current Lenders such that the Lenders (including any additional Lender, if applicable) shall
hold their Applicable Percentage of the outstanding Loans (and participation interests).

          (c) The Global Commitments shall from time to time be reallocated, and the Commitments shall
from time to time be adjusted, by the Global Administrative Agent in accordance with this
Section 2.1(c). Upon each delivery by Parent of a Borrowing Base Allocation Notice in
accordance with Section 2.8(d)(iii) or (iv) of the U.S. Credit Agreement, or upon an increase of
the Global Commitments pursuant to Section 2.1(b), or upon a reduction of the Global
Commitments by the Borrower pursuant to Section 2.8, the Global Administrative Agent will
reallocate the Global Commitments of the Combined Lenders between this Agreement and the U.S.
Credit Agreement in order to establish new Commitments under this Agreement and U.S. Commitments
under the U.S. Credit Agreement for the Combined Lenders pursuant to the following guidelines: (i)
the Global Commitments of all Combined Lenders will be reallocated in such a manner that the ratio
of the aggregate Commitments of all Lenders to the Combined Commitments equals the ratio of the
then proposed Allocated Canadian Borrowing Base (as so designated or determined in accordance with
Section 2.8 of the U.S. Credit
Agreement) to the then proposed Global Borrowing Base (as

30

 

so designated or determined in
accordance with Section 2.8 of the U.S. Credit Agreement); (ii) the Global Commitments of U.S. Only
Lenders shall be allocated such that the U.S. Commitment of each U.S. Only Lender shall be equal to
its Global Commitment; (iii) the Global Commitments of the Pro Rata Lenders (and their respective
Affiliates, if any, that are U.S. Lenders) shall be reallocated such that (A) if a Pro Rata Lender
is both a Lender and a U.S. Lender, (1) the ratio of such Pro Rata Lender’s Commitment to its
Global Commitment is equal to the ratio of the then proposed Allocated Canadian Borrowing Base (as
so designated or determined in accordance with Section 2.8 of the U.S. Credit Agreement) to the
then proposed Global Borrowing Base (as so designated or determined in accordance with Section 2.8
of the U.S. Credit Agreement) and (2) the ratio of such Pro Rata Lender’s U.S. Commitment to its
Global Commitment is equal to the ratio of the then proposed Allocated U.S. Borrowing Base (as so
designated or determined in accordance with Section 2.8 of the U.S. Credit Agreement) to the then
proposed Global Borrowing Base (as so designated or determined in accordance with Section 2.8 of
the U.S. Credit Agreement) and (B) if a Pro Rata Lender is a Lender and has an Affiliate that is a
U.S. Lender, (1) the ratio of such Pro Rata Lender’s Commitment to the Global Commitment associated
with such Pro Rata Lender and such Affiliate is equal to the ratio of the then proposed Allocated
Canadian Borrowing Base (as so designated or determined in accordance with Section 2.8 of the U.S.
Credit Agreement) to the then proposed Global Borrowing Base (as so designated or determined in
accordance with Section 2.8 of the U.S. Credit Agreement) and (2) the ratio of such Affiliate’s
U.S. Commitment to the Global Commitment associated with such Pro Rata Lender and such Affiliate is
equal to the ratio of the then proposed Allocated U.S. Borrowing Base (as so designated or
determined in accordance with Section 2.8 of the U.S. Credit Agreement) to the then proposed Global
Borrowing Base (as so designated or determined in accordance with Section 2.8 of the U.S. Credit
Agreement); (iv) after making the reallocations in clauses (ii) and (iii) above,
the Global Administrative Agent shall determine the Flex Portion of the Combined Commitments, the
U.S. Flex Portion of the Combined Commitments and the Canadian Flex Portion of the Combined
Commitments and shall allocate the Flex Portion of the Combined Commitments, the U.S. Flex Portion
of the Combined Commitments and the Canadian Flex Portion of the Combined Commitments among the
Flex Lenders such that (A) if a Flex Lender is both a Lender and a U.S. Lender, such Flex Lender
shall be allocated (1) its Flex Percentage of the U.S. Flex Portion of the Combined Commitments and
(2) its Flex Percentage of the Canadian Flex Portion of the Combined Commitments, and (B) if a Flex
Lender is a Lender and has an Affiliate that is a U.S. Lender, (1) such Flex Lender shall be
allocated its Flex Percentage of the Canadian Flex Portion of the Combined Commitments and (2) its
Affiliate shall be allocated such Affiliate’s Flex Percentage of the U.S. Flex Portion of the
Combined Commitments. The Global Administrative Agent shall (x) in the case of a reallocation of
the Global Commitments as a result of the delivery of a Borrowing Base Designation Notice, notify
the Parent, the Borrower and the Combined Lenders of the reallocated Global Commitments and
adjusted Combined Commitments at the same time that it notifies them, pursuant to Section
2.8(d)(iii) or (iv) of the U.S. Credit Agreement, of the Allocated U.S. Borrowing Base and the
Allocated Canadian Borrowing Base and (y) in the case of a reallocation of the Global Commitments
as a result of an increase or reduction of the Global Commitments, notify the Borrower and the
Combined Lenders of the reallocated Global Commitments and adjusted Combined Commitments by the
date on which such increase or reduction is to become effective in accordance with the terms of
Section 2.1(b) or 2.8. Any U.S. Only Lender may become a Pro Rata Lender or a Flex
Lender,
and any Pro Rata Lender may become a Flex Lender, in each case by giving the Global
Administrative Agent a written notice of its agreement to be designated as such, which notice shall
be effective as of the date of the next reallocation of the Global Commitments made pursuant to
this clause (c). No Combined Lender may have more than one Designation and no Flex Lender
may be designated as a Pro Rata Lender or a U.S. Only Lender and no Pro Rata Lender may be
designated as a U.S. Only Lender.

          (d) The parties hereto acknowledge that any increase in the Global Commitments pursuant to
Section 2.1(b) of the U.S. Credit Agreement or any reduction in the Global Commitments pursuant to
Section 2.9 of the U.S. Credit Agreement also constitutes an increase or reduction, as the case may
be, of the Global Commitments pursuant to Section 2.1(b) and 2.8 hereof (which
increase or reduction hereunder shall take place simultaneously with the increase or reduction, as
the case may be, under the U.S. Credit Agreement).

31

 

     Section 2.2 Loans and Borrowings.

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

          (b) Subject to Section 2.13 and 2.14, each Borrowing shall be comprised
entirely of Canadian Prime Loans, Eurodollar Loans or U.S. Prime Loans as the Borrower may request
in accordance herewith or shall be comprised of Bankers’ Acceptances and BA Loans made in
accordance with Section 2.21. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement.

          (c) Each Eurodollar Borrowing, Bankers’ Acceptance or BA Loan shall be in an aggregate amount
that is an integral multiple of U.S.$1,000,000 and not less than U.S.$3,000,000 (including any
continuation or conversion of existing Loans made in connection therewith). At the time that each
Canadian Prime Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of C$500,000 and not less than C$500,000 (including any continuation or
conversion of existing Loans made in connection therewith); provided that a Canadian Prime
Borrowing may be in an aggregate amount that is equal to the Equivalent Amount in Canadian Dollars
of the entire Unutilized Commitment, if less. At the time that each U.S. Prime Borrowing is made,
such Borrowing shall be in an aggregate amount that is an integral multiple of U.S.$500,000 and not
less than U.S.$500,000, as applicable (including any continuation or conversion of existing Loans
made in connection therewith); provided that a U.S. Prime Borrowing may be in an aggregate
amount that is equal to the entire Unutilized Commitment, if less. Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any time be more
than a total of ten (10) Eurodollar Borrowings, BA Loan Borrowings or Bankers’ Acceptance
Borrowings outstanding.

          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Eurodollar Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.

     Section 2.3 Requests for Borrowings. To request a Borrowing, an Authorized Officer of
the Borrower shall notify the Global Administrative Agent and the Canadian Administrative Agent of
such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 1:00 p.m.,
Toronto time, three (3) Business Days before the date of the proposed Borrowing or (b) in the case
of a Canadian Prime Borrowing, or U.S. Prime Borrowing, by 10:00 a.m., Toronto time, on the
Business Day of the proposed Borrowing or by 1:00 p.m., Toronto time, at least one (1) Business Day
before the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Global
Administrative Agent and the Canadian Administrative Agent of a written Borrowing Request executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit E-1 or
otherwise in a form approved by the Global

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Administrative Agent and the Canadian Administrative
Agent. Each such telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.2:

          (i) the aggregate amount of the requested Borrowing (which amount will be in the
appropriate Currency as required pursuant to the last sentence of this Section 2.3);

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

          (iii) whether such Borrowing is to be a Canadian Prime Borrowing, a U.S. Prime
Borrowing or a Eurodollar Borrowing;

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

          (v) either (A) the wire transfer instructions for the account (together with the
account number of such account) of the Borrower maintained with a Lender to which funds are
to be disbursed or (B) if to be disbursed to an account other than an account maintained
with a Lender, the wire transfer instructions for such account (together with the account
number of such account), each in compliance with Section 2.5.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be a
Canadian Prime Borrowing. If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. Promptly following receipt of a Borrowing Request in accordance with this
Section, the Canadian Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender’s Loan (which shall be made in the appropriate Currency based on the
Currency of the Borrowings being requested) to be made as part of the requested Borrowing.
Notwithstanding anything herein to the contrary, Canadian Prime Loans and BA Loans may only be
denominated in Canadian Dollars and U.S. Prime Loans and Eurodollar Loans may only be denominated
in U.S. Dollars.

     Section 2.4 Letters of Credit.

          (a) General. Subject to the terms and conditions set forth herein, an Authorized
Officer of the Borrower may request the issuance of Letters of Credit for its own account or the
account of any Subsidiary (other than a Foreign Subsidiary), in a form reasonably acceptable to the
Global Administrative Agent, the Canadian Administrative Agent and the relevant Issuing Bank, at
any time and from time to time during the Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, an Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions; Issuance of
Letters of Credit. To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), an Authorized Officer of

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the Borrower shall, prior
to 1:00 p.m., Toronto time, at least three (3) Business Days prior to the proposed date of issuance
or modification, hand deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the relevant Issuing Bank) to an Issuing Bank, the Canadian
Administrative Agent and the Global Administrative Agent (reasonably in advance of the requested
date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the
date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name of the account party (which shall be the
Borrower or a Subsidiary that is not a Foreign Subsidiary), the name and address of the beneficiary
thereof and such other information (including, if applicable, the Currency of such Letter of Credit
which shall be Canadian Dollars or U.S. Dollars) as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by an Issuing Bank, an Authorized Officer of the
Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of
Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the aggregate LC Exposure shall not exceed
U.S.$50,000,000 and (ii) the total Credit Exposure shall not exceed the lower of (A) the aggregate
Commitments of the Lenders then in effect, or (B) the Allocated Canadian Borrowing Base then in
effect. On the Business Day on which a Letter of Credit is requested to be issued, unless the
Global Administrative Agent, the Canadian Administrative Agent or the relevant Issuing Bank
determines that any applicable condition precedent required pursuant to this Agreement has not been
satisfied, the relevant Issuing Bank shall issue such Letter of Credit for the account of the
Borrower or the account of the applicable Subsidiary, as the case may be, by the end of such
Business Day.

          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the date one year after the date of the issuance of such Letter of Credit or, in the
case of any renewal or extension thereof of any Letter of Credit with an initial one-year tenor,
one year after such renewal or extension, provided such date is not beyond the Maturity Date
unless, with respect to such Letter of Credit that has an expiration date extending beyond the
Maturity Date, the Borrower shall, no later than five (5) days prior to the Maturity Date,
deposit in an account with the Global Administrative Agent (and in accordance with the procedure
and subject to the same terms as described in clause (i) below), in the name of the Global
Administrative Agent and for the benefit of the Lenders as security for the LC Exposure with
respect to such Letter of Credit, cash collateral in an amount equal to the LC Exposure with
respect to such Letter of Credit so remaining as of the Maturity Date.

          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
relevant Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Lender, and each
Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to
such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter
of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Canadian Administrative Agent, for the account of such Issuing
Bank in the Currency in which such Letter of Credit is denominated,

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such Lender’s Applicable
Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on
the date due as provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit
is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including
any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Commitments or Global Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction whatsoever.

          (e) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement in the currency in which such
Letter of Credit is denominated by paying to the Canadian Administrative Agent an amount equal to
such LC Disbursement not later than 2:00 p.m., Toronto time, on the date that such LC Disbursement
is made, if the Borrower shall have received notice of such LC Disbursement prior to 11:00 a.m.,
Toronto time, on such date, or, if such notice has not been received by the Borrower prior to such
time on such date, then not later than 2:00 p.m., Toronto time, on the Business Day immediately
following the day that the Borrower receives such notice; provided that the Borrower may,
subject to the conditions to Borrowing set forth herein, request in accordance with Section
2.3 that such payment be financed with a Borrowing (it being understood that if such payment is
to be financed with a Canadian Prime Borrowing or a U.S. Prime Borrowing, then the Borrower may
request and obtain such Loan on the same Business Day as the proposed Borrowing, notwithstanding
the advance notice requirements of Section 2.3(b), so long as such request is made by 1:00
p.m., Toronto time) in an equivalent amount and, to the extent so financed, the Borrower’s
obligation to make such payment shall be discharged and replaced by the resulting Borrowing. If
the Borrower fails to make such payment when due (or request a Canadian Prime Borrowing or U.S.
Prime Borrowing therefor as provided herein), the Canadian Administrative Agent shall notify each
Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof
and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each
Lender shall pay to the Canadian Administrative Agent its Applicable Percentage of the payment then
due from the Borrower, in the same manner as provided in Section 2.5 with respect to Loans
made by such
Lender in the appropriate Currency (and Section 2.5 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Canadian Administrative Agent shall promptly pay
to such Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by
the Canadian Administrative Agent of any payment from the Borrower pursuant to this paragraph (or
promptly following the Canadian Administrative Agent’s receipt from the Lenders of proceeds from a
requested Borrowing), the Global Administrative Agent shall distribute such payment to such Issuing
Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such
Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear. Any
payment made by a Lender pursuant to this paragraph to reimburse any Issuing Bank for any LC
Disbursement (other than the funding of Canadian Prime Loans or U.S. Prime Loans as contemplated
above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.

          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and

35

 

irrevocable,
and shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement or the other Loan Documents, or any term or provision herein or
therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein proving to be untrue or inaccurate in
any respect, (iii) payment by an Issuing Bank under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any
other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might,
but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder. Neither the Agents, the Lenders or
any Issuing Bank nor any of their Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of such Issuing Bank;
provided that none of the foregoing shall be construed to excuse such Issuing Bank from
liability to the Borrower to the extent of any direct or actual damages (AS OPPOSED TO SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, CLAIMS IN RESPECT OF WHICH ARE HEREBY WAIVED BY THE
BORROWER TO THE EXTENT PERMITTED BY APPLICABLE LAW) suffered by the Borrower that are caused by
such Issuing Bank’s failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part of an Issuing Bank
(as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to
have exercised care (REGARDLESS OF WHETHER THE ISSUING BANK HAS BEEN NEGLIGENT) in each such
determination. In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, any Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of Credit.

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

          (h) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then, unless
the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and

36

 

including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement,
at the rate per annum then applicable to Canadian Prime Loans or U.S. Prime Loans, as applicable;
provided that, if the Borrower fails to reimburse such LC Disbursement within five (5) days
after such reimbursement is due pursuant to paragraph (e) of this Section, then Section
2.12(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of
such Issuing Bank, except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall be for the
account of such Lender to the extent of such payment.

          (i) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower receives written notice from the Global Administrative Agent,
the Canadian Administrative Agent or the Required Lenders demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the Canadian
Administrative Agent, in the name of the Canadian Administrative Agent and for the benefit of the
Lenders, an amount in cash (in the applicable Currency) equal to the aggregate LC Exposure as of
such date plus any accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in Section 8.1(g) or (h).
The Borrower also shall deposit cash collateral pursuant to this paragraph as and to the extent
required by Section 2.10, and any such cash collateral so deposited and held by the
Canadian Administrative Agent hereunder shall constitute part of the Global Borrowing Base for
purposes of determining compliance with Section 2.10. Each such deposit shall be held by
the Canadian Administrative Agent as collateral for the payment and performance of the obligations
of the Borrower under this Agreement. The Canadian Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such account. Subject to
the proviso at the end of this sentence, other than any interest, if any, earned on the investment
of such deposits, which investments shall be made at the option and reasonable discretion of the
Canadian Administrative Agent (provided that it has received sufficient protection and indemnities
as it reasonably requests in connection with its investing such cash collateral) and at the
Borrower’s risk and expense, such deposits shall not bear interest; provided, that, the
Borrower may direct the Canadian Administrative Agent to invest amounts credited to such
account, at the Borrower’s risk and expense, in Permitted Investments described in clauses
(a), (b), (e) and (f) of the definition of “Permitted Investments” contained in the U.S. Credit
Agreement. Interest or profits, if any, on such investments shall accumulate in such account.
Moneys in such account shall be applied by the Canadian Administrative Agent to reimburse the
relevant Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent
not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower
for the aggregate LC Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Lenders holding LC Exposure in the aggregate greater than 50% of the
aggregate LC Exposure at such time), be applied to satisfy other obligations of the Borrower under
this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) and, if any, all interest and profits thereon shall be returned to the Borrower within
three (3) Business Days after all Events of Default then in existence have been cured or waived. If
the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section
2.10, such amount (to the extent not applied as aforesaid) shall be returned to

37

 

the Borrower as
and to the extent that, after giving effect to such return, the Borrower would remain in compliance
with Section 2.10 and no Event of Default shall have occurred and be continuing.

          (j) Existing Letters of Credit. Each Letter of Credit (as defined in the Existing
Credit Agreement) issued for the Borrower’s own account, or the account of any Subsidiary (as
defined in the Existing Credit Agreement), under and pursuant to the terms of the Existing Credit
Agreement and that is outstanding as of the Closing Date (each an “Existing Letter of
Credit”), is hereby deemed to be a Letter of Credit issued and outstanding under this Agreement
as of the Closing Date, and the issuer thereof is hereby deemed to be an Issuing Bank hereunder.

     Section 2.5 Funding of Borrowings.

          (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 2:00 p.m. (or 3:00 p.m., in the case of a
Canadian Prime Borrowing or U.S. Prime Borrowing requested pursuant to Section 2.4(e)),
Toronto time, to the account of the Canadian Administrative Agent most recently designated by it
for such purpose by notice to the Lenders, which Loan shall be in the appropriate Currency (based
on the relevant Borrowing Request). The Canadian Administrative Agent will make such Loans
available to the Borrower by promptly wiring the amounts so received, in like funds, to an account
of the Borrower in Canada in accordance with the wiring instructions set forth in the relevant
Borrowing Request; provided that Canadian Prime Loans and/or U.S. Prime Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.4(e) shall be
remitted by the Canadian Administrative Agent to the applicable Issuing Bank.

          (b) Unless the Canadian Administrative Agent shall have received notice from a Lender prior to
the proposed date of any Borrowing that such Lender will not make available to the Canadian
Administrative Agent such Lender’s share of such Borrowing, the Canadian Administrative Agent may
assume that such Lender has made such share available on such date in accordance with paragraph
(a) of this Section and may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Borrowing available to the Canadian Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the Canadian Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but excluding the date of
payment to the Canadian Administrative Agent, at (i) in the case of such Lender, the greater of (A)
the costs incurred by the Canadian Administrative Agent for making such Lender’s share of such
Borrowing or (B) a rate determined by the Canadian Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to Loans made in such Borrowing (provided that any such demand made to the Borrower
shall be made within three (3) Business Days following disbursement by the Canadian Administrative
Agent, or the Canadian Administrative Agent shall be deemed to have waived the right to make such
demand for immediate reimbursement from the Borrower and such funded amount shall be, as with
respect to the Borrower, deemed to be a

38

 

Loan hereunder). If such Lender pays such amount to the
Canadian Administrative Agent, then such amount shall constitute such Lender’s Loan included in
such Borrowing.

          (c) Borrowings, conversion or continuations of Loans, and prepayments of Loans of different
Currencies at the same time hereunder shall be deemed to be separate Borrowings, continuations,
conversions and prepayments, respectively, one for each Currency.

     Section 2.6 Interest Elections.

          (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request (or a Canadian Prime Borrowing if no Type is specified) and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing Request (or one
month if no Interest Period is specified). Thereafter, the Borrower may elect from time to time to
convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The
Borrower may, subject to the requirements of Section 2.2(c), elect different options with
respect to different portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.

          (b) To make an election pursuant to this Section, an Authorized Officer of the Borrower shall
notify the Global Administrative Agent and the Canadian Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under Section 2.3 if the
Borrower were requesting a Borrowing of the Type resulting from such election to be made on the
effective date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Global
Administrative Agent and the Canadian Administrative Agent of a written Interest Election Request
executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit E-2
or otherwise in a form approved by the Global Administrative Agent and the Canadian Administrative
Agent.

          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.2:

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

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

          (iii) whether the resulting Borrowing is to be a Canadian Prime Borrowing or a U.S.
Prime Borrowing or a Eurodollar Borrowing; and

39

 

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

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

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

          (e) If the Borrower fails to deliver a timely Interest Election Request (or delivers an
Interest Election Request that is inconsistent with a telephonic election) with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be
converted to a U.S. Prime Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Global Administrative Agent or the Canadian
Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so
long as such Event of Default is continuing, (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless the Obligations have been accelerated pursuant
to Section 8.3, each Eurodollar Borrowing shall be converted to a U.S. Prime Borrowing at
the end of the Interest Period applicable thereto.

     Section 2.7 Global Borrowing Base.

          (a) Effectiveness. Notwithstanding anything to the contrary in this Agreement, for so
long as any of the Combined Commitments are in effect and/or any Combined Obligation is
outstanding, the Global Borrowing Base shall be determined in accordance with, and as provided in,
Section 2.8 of the U.S. Credit Agreement.

          (b) Annual Scheduled Determinations of the Global Borrowing Base. Promptly after
January 1st of each calendar year (commencing January 1, 2008), and in any
event prior to April 1st of each calendar year, commencing April 1, 2008, the Parent shall
furnish to the Global Administrative Agent and the Combined Lenders a Reserve Report in form and
substance reasonably satisfactory to the Global Administrative Agent, which Reserve Report shall
evaluate as of December 31st of the immediately preceding calendar year the Proved Mineral
Interests attributable to the Oil and Gas Properties which the Parent wishes to include in the
Global Borrowing Base, and a projection of the rate of production and net operating income with
respect thereto, as of such date, together with additional data concerning pricing, hedging,
operating costs and quantities of production, and other information and engineering and geological
data as the Global Administrative Agent or any Combined Lender may reasonably request. Within 30
days after receipt of such report and information, the Global Administrative Agent shall make an
initial determination of the Global Borrowing Base and shall promptly notify the Combined Lenders
and the Parent in writing of the Global Administrative Agent’s initial determination of the Global
Borrowing Base. The Global Administrative Agent shall make such determination in accordance with
its customary practices and standards for oil and gas

40

 

loans and in the exercise of its sole
discretion. Within fifteen (15) days following their receipt of the proposed amount for the
redetermined Global Borrowing Base, (i) the Supermajority Lenders (and with the agreement of the
Parent, such agreement to be given in its sole discretion) if the proposed amount is an increase or
(ii) the Required Lenders if the proposed amount is a decrease or maintenance, shall approve or
reject the Global Administrative Agent’s initial determination of the Global Borrowing Base by
written notice to the Global Administrative Agent; provided, however that failure
by any Combined Lender to reject in writing the Global Administrative Agent’s determination of the
Global Borrowing Base within said fifteen (15) day period shall be deemed an acceptance of such
determination by such Combined Lender. If the Supermajority Lenders (and with the agreement of the
Parent, such agreement to be given in its sole discretion) or the Required Lenders, as applicable,
fail to approve any such determination of the Global Borrowing Base made by the Global
Administrative Agent hereunder, then the Global Administrative Agent shall poll the Supermajority
Lenders or Required Lenders, as appropriate, and the Global Borrowing Base shall be set at the
highest amount on which the Supermajority Lenders (and with the agreement of the Parent, such
agreement to be given in its sole discretion) if such number would result in an increase in the
Global Borrowing Base, or otherwise, the Required Lenders can agree, it being understood that a
Combined Lender is deemed to have agreed to any and all amounts that are lower than the amount
actually determined by such Combined Lender to be the appropriate value of the Global Borrowing
Base. Upon approval or deemed approval by the Supermajority Lenders and the Parent or the Required
Lenders, as applicable, of the Global Borrowing Base, the Global Administrative Agent upon notice
thereof shall, by written notice to the Parent and the Combined Lenders, designate the new Global
Borrowing Base available to the Parent and the Borrower (each such notice in this Section
2.7(b), a “Global Borrowing Base Designation Notice”). If the Combined Commitments are
in effect and/or any Combined Obligations are outstanding, then upon receipt of such Global
Borrowing Base Designation Notice, the Parent shall designate the Allocated U.S. Borrowing Base and
the Allocated Canadian Borrowing Base to the Global Administrative Agent in accordance with
Section 2.7(d). The Parent shall be deemed to have agreed to the Global Borrowing Base as
set forth in such Global Borrowing Base Designation Notice unless it informs the Global
Administrative Agent in writing of its objection thereto prior to the date it designates the
Allocated U.S. Borrowing Base
and Allocated Canadian Borrowing Base pursuant to Section 2.7(d) following its receipt
of such Global Borrowing Base Designation Notice.

          (c) Maximum Credit. The Global Borrowing Base shall represent the maximum amount of
credit in the form of loans, letters of credit and bankers’ acceptances (subject to the aggregate
Combined Commitments and subject to the other provisions hereof or of the U.S. Credit Agreement)
that the Combined Lenders will extend to the Borrower or the Parent pursuant to the Combined Loan
Documents at any one time prior to the Maturity Date.

          (d) Allocation of the Global Borrowing Base. For so long as any of the Combined
Commitments are in effect and/or any Combined Obligations are outstanding, the Global Borrowing
Base shall be comprised of the Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing
Base, and allocations between the Allocated U.S. Borrowing Base and Allocated Canadian Borrowing
Base shall be made in accordance with this Section 2.7(d).

41

 

          (i) The “Allocated U.S. Borrowing Base” means, as of any date, the amount in
U.S. Dollars designated or determined as such from time to time (A) by the Parent pursuant
to a Borrowing Base Allocation Notice delivered in accordance with Section
2.7(d)(iii) of this Agreement or (B) in accordance with the other provisions of this
Agreement. As of the date of this Agreement, the initial Allocated U.S. Borrowing Base
shall be U.S.$550,000,000.

          (ii) The “Allocated Canadian Borrowing Base” means, as of any date, the
Equivalent Amount in U.S. Dollars designated as such from time to time (A) by the Parent
pursuant to a Borrowing Base Allocation Notice delivered in accordance with Section
2.7(d)(iii) of this Agreement or (B) in accordance with the other provisions of this
Agreement. On the date of this Agreement, the initial Allocated Canadian Borrowing Base
shall be U.S.$300,000,000.

          (iii) Within ten (10) Business Days of receipt of a Global Borrowing Base Designation
Notice, the Parent shall specify the allocation of the Global Borrowing Base between the
Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing Base by providing a
written notice to the Global Administrative Agent of such allocation (each such notice
herein a “Borrowing Base Allocation Notice”); provided that (A) the sum of
the Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing Base shall at all
times be equal to the Global Borrowing Base then in effect and (B) at no time shall the
Allocated U.S. Borrowing Base be set at an amount less than U.S.$50,000,000 and at no time
shall the Allocated Canadian Borrowing Base be set at an amount less than U.S.$50,000,000
(such minimum amount in respect of the Allocated U.S. Borrowing Base then in effect, the
“Minimum Threshold Amount”). In the event that the Parent fails to provide the
Global Administrative Agent with a Borrowing Base Allocation Notice required to be delivered
upon receipt of a Global Borrowing Base Designation Notice within the period required by
this Section 2.7(d)(iii), the Global Borrowing Base will be allocated in the same
proportion as existed prior to such redetermination. Promptly upon the allocation of the
Global Borrowing Base between the Allocated U.S.
Borrowing Base and the Allocated Canadian Borrowing Base in accordance with the
procedures set forth above, the Global Administrative Agent shall provide a written notice
to the Combined Lenders and the Parent, which written notice shall set forth the Allocated
U.S. Borrowing Base and the Allocated Canadian Borrowing Base to be in effect. Any
designation of the Allocated U.S. Borrowing Base or the Allocated Canadian Borrowing Base
effected pursuant to this Section 2.7(d)(iii) in connection with a determination or
redetermination of the Global Borrowing Base shall be effective as of the date of the Global
Borrowing Base Designation Notice.

          (iv) So long as no Default or Event of Default shall have occurred and be continuing,
from time to time but in no event more than (A) four (4) times per Fiscal Year and (B) once
every thirty (30) days, upon at least five (5) Business Days prior written notice to the
Global Administrative Agent, the Parent may reallocate the Global Borrowing Base between the
Allocated U.S. Borrowing Base and the Allocated Canadian Borrowing Base (a
“Discretionary Borrowing Base Reallocation”). Promptly upon the allocation of the
Global Borrowing Base between the Allocated U.S. Borrowing Base and the Allocated Canadian
Borrowing Base in accordance with the procedures set forth in

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this clause (iv), the
Global Administrative Agent shall provide a written notice to the Combined Lenders and the
Parent, which written notice shall set forth the Allocated U.S. Borrowing Base and the
Allocated Canadian Borrowing Base to be in effect. Any designation of the Allocated U.S.
Borrowing Base or the Allocated Canadian Borrowing Base effected pursuant to this
Section 2.7(d)(iv) in connection with a Discretionary Borrowing Base Reallocation,
shall (1) be effective five (5) Business Days following the date the Global Administrative
Agent receives the Borrowing Base Allocation Notice or the date indicated for such
effectiveness in the Borrowing Base Allocation Notice, whichever is later and (2) be subject
to the Minimum Threshold Amount described in clause (iii) above.

          (e) Discretionary Redetermination of the Global Borrowing Base. Each of (i) the
Parent or (ii) (A) the Global Administrative Agent or (B) the Required Lenders, shall have the
right to request in writing a redetermination of the Global Borrowing Base, in its or their sole
discretion at any time and from time to time, provided, that clause (i) and
clause (ii) may each be the basis of an unscheduled redetermination not more often than one
(1) time during any calendar year, regardless, in the case of clause (ii), of which Person
makes such request. If any Person shall request a discretionary redetermination of the Global
Borrowing Base pursuant to the provisions of this Section 2.7(e), the Parent shall, upon
receipt of a request therefor from the Global Administrative Agent, deliver to the Global
Administrative Agent, by the date reasonably requested by the Global Administrative Agent (or, in
the event of an unscheduled redetermination requested by the Parent, by the date mutually agreed
upon by the Parent and the Global Administrative Agent), a Reserve Report dated as of the date
requested in such notice and such updated engineering, production, operating and other data as the
Global Administrative Agent or any other Combined Lender may reasonably request; provided,
that, such Reserve Report may, in the discretion of the Parent, be (1) a new Reserve Report, (2)
the Reserve Report delivered in connection with the immediately preceding redetermination (whether
scheduled or unscheduled) of the Global Borrowing Base and the U.S. Borrowing Base, and/or (3) an
update of such Reserve Report described in subclause (2); provided, further that,
in connection with any request for an unscheduled redetermination pursuant to clause (ii)
above, the Reserve Report
shall cover additional Oil and Gas Properties of the Parent and its Subsidiaries as the
Required Lenders may reasonably request. The Supermajority Lenders (and with the agreement of the
Parent, such agreement to be given in its sole discretion) if such number would result in an
increase in the Global Borrowing Base or otherwise, the Required Lenders shall approve and
designate the new Global Borrowing Base in accordance with the procedures and standards described
in Section 2.7(b) and the Parent shall provide a Borrowing Base Allocation Notice to the
Global Administrative Agent in accordance with Section 2.7(d)(iii); provided that
in the event that the Parent fails to provide such Borrowing Base Allocation Notice, the Global
Borrowing Base shall be allocated between the Allocated U.S. Borrowing Base and Allocated Canadian
Borrowing Base in accordance with Section 2.7(d)(iii).

          (f) General Provisions With Respect to the Global Borrowing Base. The determination
of the Global Borrowing Base shall be made by the Global Administrative Agent and the Supermajority
Lenders or Required Lenders, as applicable, taking into consideration the estimated value of the
Oil and Gas Properties owned by the Parent and its Subsidiaries as reflected in the most recent
Reserve Report delivered hereunder and any other relevant information obtained by or delivered to
the Global Administrative Agent or any other Combined

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Lender, all in accordance with the other
provisions of this Section 2.7 in accordance with their customary practices for oil and gas
loans as in effect from time to time. It is understood by the parties hereto that, unless
otherwise approved by the Supermajority Lenders pursuant to, and in accordance with, the other
provisions of this Section 2.7, the Combined Lenders shall have no commitment or obligation
whatsoever to increase the Global Borrowing Base to any amount in excess of U.S.$850,000,000, and
nothing herein contained shall be construed to be a commitment by the Combined Lenders to so
increase the Global Borrowing Base except to the extent so approved. The Global Borrowing Base (i)
may be redetermined pursuant to Section 2.7(b) (annual) and Section 2.7(e)
(unscheduled), (ii) subject to the rights of the Parent and the applicable Subsidiaries contained
in Section 2.7(g), may be adjusted from time to time to give effect to the occurrence of
Casualty Events under Section 2.7(g), and (iii) may be reduced by an amount not greater
than the applicable Debt Issuance Reduction Amount pursuant to Section 2.7(h) in connection
with the issuance of any Permitted Senior Notes Debt. In connection with any redetermination,
adjustment or reduction pursuant to any of the foregoing, if the Global Administrative Agent
determines that a Global Borrowing Base Deficiency exists, the Global Administrative Agent shall
give written notice thereof to the Parent and the Borrower and the date such notice is received
shall be the “Deficiency Notification Date”.

          (g) Casualty Event. In the event that a Casualty Event has occurred with respect to
any Borrowing Base Property, to the extent that the Net Cash Proceeds received by the Parent or any
of its Subsidiaries with respect to such Casualty Event (together with all other Net Cash Proceeds
received during such calendar year) exceeds 5% of the Global Borrowing Base and have not been
applied or budgeted to be applied by the Parent or any such Subsidiary to repair, restore or
replace the Property affected by such Casualty Event within 180 days after the receipt thereof,
which actions the Parent or such Subsidiary shall hereby be permitted to take, the Global
Administrative Agent, at the request of the Required Lenders, shall have the right to reduce the
Global Borrowing Base, in its reasonable discretion based on its review of such Casualty Event, by
the value of the Property so affected by such Casualty Event as set forth in the most recent
Reserve Report; provided that, if an Event of Default has occurred and is
continuing, (i) such repair, restoration or replacement may occur only with the written
consent of the Global Administrative Agent, (ii) the Global Administrative Agent may, at the
request of the Required Lenders, reduce the Global Borrowing Base in the manner set forth above
without regard to the 180 day period referenced above and (iii) such Net Cash Proceeds shall be
applied in accordance with Section 2.10 to the extent required thereby. The Global
Administrative Agent shall provide notice to the Borrower, Parent and the Combined Lenders of the
reduction in the Global Borrowing Base, which reduction shall be effective as of the date of such
notice.

          (h) Issuance of Other Indebtedness. In the event of the issuance of any Permitted
Senior Notes Debt permitted pursuant to Section 7.1(o), the Global Administrative Agent and
the Required Lenders shall have the option, on not more than one occasion in connection with each
such issuance, to reduce the Global Borrowing Base by an amount agreed to by the Required Lenders,
which reduction amount shall not be greater than the applicable Debt Issuance Reduction Amount
calculated with respect to such Permitted Senior Notes Debt then most recently issued;
provided, that, (i) in the event the Required Lenders are unable to agree upon any such
reduction amount provided for in this Section 2.7(h) within thirty (30) days of the
issuance of any such

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Permitted Senior Notes Debt, the Global Borrowing Base shall reduce by an
amount equal to the applicable Debt Issuance Reduction Amount calculated with respect to such
Permitted Senior Notes Debt then most recently issued, and (ii) notwithstanding the foregoing or
anything to the contrary contained in any Combined Loan Document, if and only to the extent the
Parent uses any of the proceeds of the issuance of any Permitted Senior Notes Debt to
contemporaneously refinance or replace any of the Existing Subordinate Debt and/or any other
Permitted Senior Notes Debt in accordance with the last sentence of Section 7.14 of the U.S. Credit
Agreement, then the provisions of this Section 2.7(h) shall not apply, and the Global
Borrowing Base shall not be reduced pursuant to the provisions of this Section 2.7(h), in
each case only to the extent such proceeds are so used. In connection with any such reduction, the
Global Administrative Agent shall promptly provide written notice to the Parent, the Borrower and
the Combined Lenders of the reduction of the Global Borrowing Base. Upon the approval of the
Required Lenders of such reduction amount, or, alternatively, upon any reduction by an amount equal
to the Debt Issuance Reduction Amount, and the delivery of written notice thereof to the Parent and
the Borrower, the Global Borrowing Base shall be reduced as of the date such notice is delivered or
such later date as specified in such notice. Notwithstanding anything to the contrary in the
Combined Loan Documents, (A) the language of the proviso of Section 2.10(b)(i) of this
Agreement shall not apply to any Global Borrowing Base Deficiency resulting from the application of
this Section 2.7(h) and (B) the application of this Section 2.7(h) shall never
result in an increase in the Global Borrowing Base.

     Section 2.8 Termination and Reduction of Global Commitments and Commitments; Extension of
Maturity Date.

          (a) Unless previously terminated, the Global Commitments and the Commitments shall terminate
on the Maturity Date.

          (b) An Authorized Officer of the Parent may at any time terminate, or from time to time
reduce, without premium or penalty, the Global Commitments; provided that (i) each
reduction of the Global Commitments shall be in an amount that is an integral multiple of
U.S.$1,000,000 and not less than U.S.$3,000,000 and (ii) the Parent shall not terminate or
reduce the Global Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.10 and after giving effect to a reallocation of the
Global Commitments and adjustment of the Commitments pursuant to Section 2.1(c), the
aggregate Credit Exposure of the Lenders would exceed the aggregate Commitments of the Lenders.

          (c) An Authorized Officer of the Parent shall notify the Global Administrative Agent of any
election to terminate or reduce the Global Commitments under paragraph (b) of this Section
at least three (3) Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following receipt of any such
notice, the Global Administrative Agent shall advise the Combined Lenders of the contents thereof
and reallocate the Global Commitments and adjust the Commitments in accordance with Section
2.1(c). Each notice delivered by an Authorized Officer of the Parent pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Global Commitments
delivered by an Authorized Officer of the Parent may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be revoked by the Parent
(by notice to the Global Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Except as provided in the immediately preceding sentence, any
termination or reduction of the Global Commitments shall be permanent

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and may not be reinstated
except pursuant to, and in accordance with, Section 2.1(b). Each reduction of the Global
Commitments shall reduce the Global Commitments of the Combined Lenders on a pro rata basis and
result in adjustments to the Commitments of the Lenders in accordance with Section 2.1(c).

          (d) The Parent and the Borrower will not terminate, or permit to expire, all of the Global
Commitments and Commitments under this Agreement prior to (i) the expiration or termination of the
U.S. Commitments and (ii) the payment and performance in full of all U.S. Obligations.

          (e) The Borrower may, by notice to the Global Administrative Agent (which shall promptly
deliver a copy to each of the Lenders) given not less than 90 days and not more than 120 days,
prior to the Maturity Date at any time in effect, and, subject to the proviso below, on not more
than two occasions, request that the Lenders extend the Maturity Date for an additional period of
not more than one year as specified in such notice; provided, that, the Borrower may, in
lieu of the foregoing and not in addition thereto, by notice to the Global Administrative Agent in
accordance with the foregoing provisions of this clause (e), on not more than one occasion,
request that the Lenders extend the Maturity Date for an additional period of not more than two
years as specified in such notice. Each Lender shall, by notice to the Borrower and the Global
Administrative Agent given not later than fifteen (15) days following receipt of the Borrower’s
request, advise the Borrower and the Global Administrative Agent whether or not it agrees to such
extension. The Global Administrative Agent shall promptly notify the Borrower and the Lenders of
the Lenders’ responses. Any Lender that has not so advised the Borrower and the Global
Administrative Agent by such day shall be deemed to have declined to agree to such extension. If
the Borrower shall have requested, and if each Lender shall have agreed to, an extension of the
Maturity Date, then the Maturity Date shall be extended for the additional period specified in the
Borrower’s request in accordance with the terms above, and the Global Administrative Agent shall
promptly notify the Borrower and the Lenders of the extension of the Maturity Date, whereupon the
Maturity Date shall be extended, effective as of
the Maturity Date in effect immediately prior to such extension, without the necessity for any
further action; provided that, the Borrower shall (i) execute and deliver, or cause to be
executed and delivered, any and all documents which may be reasonably required by the Global
Administrative Agent in connection with such extension to evidence such extension and new Maturity
Date, and (ii) pay to the Global Administrative Agent, for the account of each Lender, an extension
fee in such amount as shall be agreed upon by the Borrower and the Global Administrative Agent
based on the then prevailing market rate for similar extensions of comparable credit facilities.
THE DECISION TO AGREE OR WITHHOLD AGREEMENT TO ANY EXTENSION OF THE MATURITY DATE HEREUNDER SHALL
BE AT THE SOLE DISCRETION OF EACH LENDER. Notwithstanding the foregoing provisions of this
paragraph, (A) the Maturity Date may not be extended to a date later than February 9, 2014 pursuant
to this clause (e), (B) the effectiveness of any such extension shall be subject to (1) the
absence of any Default, Event of Default or Global Borrowing Base Deficiency as of the date of such
extension and request therefor, (2) the absence of any material and adverse effect on the ability
of any Loan Party to fully, completely and timely pay its obligations under this Agreement as of
the date of such extension and request therefor, (3) the accuracy, in all material respects, of the
representations and warranties of each Loan Party set forth in the Loan Documents to which it is a
party as of the date of such extension and request therefor (or, if

46

 

stated to have been made
expressly as of an earlier date, the accuracy, in all material respects, as of such date), and (4)
a corresponding extension of the “Maturity Date” (as defined in the U.S. Credit Agreement) in
accordance with the terms of Section 2.9(e) of the U.S. Credit Agreement, (C) the Borrower shall
have the right, pursuant to, and subject to the terms of, Section 2.19(c), to replace any
Non-Consenting Lender that has declined to agree to any requested extension of the Maturity Date
with a Lender or other financial institution that will agree to such extension of the Maturity
Date, (D) the Borrower shall have the right, at any time prior to the Maturity Date then in effect,
to withdraw its request for an extension under this clause (e) by notice to the Global
Administrative Agent (which shall promptly deliver a notice to each Lender), in which case the
Maturity Date will not be so extended, and (E) the Borrower shall have the right, at any time prior
to the Maturity Date then in effect, to withdraw its request for an extension of the Maturity Date
for an additional period of two (2) years and, in lieu thereof, request an extension of the
Maturity Date for an additional period of one year, by providing notice to the Global
Administrative Agent (which shall promptly deliver a notice to each Lender), in which case (1) the
Maturity Date will be extended for one year in the event the Lenders have previously agreed to a
two year extension pursuant to the Borrower’s request and in accordance with this Section
2.8(e), or (2) in the event any Lender has not previously agreed to a two year extension
pursuant to the Borrower’s request and in accordance with this Section 2.8(e), any such
Lender shall, by notice to the Borrower and the Global Administrative Agent given not later than
fifteen (15) days following receipt of the Borrower’s request pursuant to this clause (E),
advise the Borrower and the Global Administrative Agent whether or not it agrees to such one year
extension (and the Global Administrative Agent shall promptly notify the Borrower and the Lenders
of the Lenders’ responses), and any Lender that has not so advised the Borrower and the Global
Administrative Agent by such day shall be deemed to have declined to agree to such one year
extension; provided that, and notwithstanding anything to the contrary contained herein,
the Borrower shall not have the right provided in this clause (E) in the event that its
original request for an extension of two years was not approved by the Lenders pursuant to the
terms of this Section 2.8(e) and the
Borrower’s alternative request pursuant to this clause (E) is made (or would be made)
by notice to the Global Administrative Agent given less than 45 days prior to the Maturity Date.

     Section 2.9 Repayment of Loans; Evidence of Indebtedness.

          (a) The Borrower hereby unconditionally promises to pay to the Canadian Administrative Agent
for the account of each Lender the then unpaid principal amount of each Loan of such Lender on the
Maturity Date.

          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the Obligations of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.

          (c) The Canadian Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by the Canadian
Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

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          (d) The entries made in the accounts maintained pursuant to paragraphs (b) or
(c) of this Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the Canadian
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

          (e) Any Lender may request that Loans made by it be evidenced by one or more promissory notes.
In such event, the Borrower shall prepare, execute and deliver to such Lender promissory notes
payable to the order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns and in substantially the form of Exhibit A).
Thereafter, the Loans evidenced by such promissory notes and interest thereon shall at all times
(including after assignment pursuant to Section 10.4) be represented by one or more
promissory notes in such form payable to the order of the payee named therein (or, if any such
promissory note is a registered note, to such payee and its registered assigns).

     Section 2.10 Prepayment of Loans.

          (a) The Borrower shall have the right at any time and from time to time to prepay any
Borrowing in whole or in part, without premium or penalty except as expressly provided in this
Agreement, subject to the requirements of Section 2.10(d). The Borrower shall not be
permitted to prepay any Bankers’ Acceptance or BA Loans at any time.

          (b) Subject to clause (c) below, the Borrower shall be required to prepay the Loans
hereunder and “Loans” under the U.S. Credit Agreement in accordance with the following, to the
extent the U.S. Borrower does not otherwise make such prepayment in accordance with the U.S. Credit
Agreement:

          (i) Upon the occurrence of a Global Borrowing Base Deficiency resulting from a
redetermination or reduction of the Global Borrowing Base (other than pursuant to
Section 2.7(h)), the Borrower will prepay, or cause to be prepaid, Loans in an
aggregate principal amount equal to such deficiency, together, in each case, with unpaid
interest accrued thereon to the date of such prepayment and, if after prepaying all of such
Loans (other than Bankers’ Acceptances), a Global Borrowing Base Deficiency remains as a
result of a BA Exposure, pay to the Canadian Administrative Agent an amount equal to such
remaining Global Borrowing Base Deficiency to be held as cash collateral as provided in
Section 2.21, and, if after prepaying all of the Combined Loans (other than Bankers’
Acceptances) and providing cash collateral for all Bankers’ Acceptances pursuant to this
Section, a Global Borrowing Base Deficiency remains as a result of an LC Exposure, pay to
the Canadian Administrative Agent an amount equal to such remaining Global Borrowing Base
Deficiency to be held as cash collateral as provided in Section 2.4(i);
provided however, that if the Global Borrowing Base Deficiency is the result
of a Scheduled Redetermination or a redetermination of the Global Borrowing Base pursuant to
Section 2.7(e)(ii) or as a result of any other event directly brought about by the
actions of any of the Global Administrative Agent, the Canadian Administrative Agent, the
Combined Lenders, the Supermajority Lenders or the Required Lenders (other than an
acceleration of the Obligations, reduction, reallocation, adjustment or termination of the
Global Commitments or the “Global Commitments” (as defined in the U.S. Credit

48

 

Agreement) or
the Commitments or U.S. Commitments or an exercise of rights under Article VIII or
Article VIII of the U.S. Credit Agreement or any other enforcement of rights or remedies
under the Combined Loan Documents), then the Borrower shall, at its option, either (A) make
(or cause to be made) a single prepayment of principal and/or deposit of cash collateral in
an amount equal to such deficiency within thirty (30) days following the Deficiency
Notification Date with respect to such deficiency, (B) make (or cause to be made) six
consecutive mandatory prepayments of principal each of which shall be in an amount equal to
one-sixth (1/6th) of the amount of such Global Borrowing Base Deficiency
commencing on the first Monthly Date (provided such date is at least thirty (30) days
following the Deficiency Notification Date, otherwise commencing on the immediately
following Monthly Date) following the Deficiency Notification Date and continuing on each
Monthly Date thereafter, (C) within ninety (90) days following the Deficiency Notification
Date with respect to such deficiency, submit (and pledge as Collateral) additional Oil and
Gas Properties owned by the Parent or any of its Subsidiaries for consideration in
connection with the determination of the Global Borrowing Base which the Global
Administrative Agent and the Required Lenders deem sufficient in their sole discretion to
eliminate such Global Borrowing Base Deficiency, or (D) within ninety (90) days following
the Deficiency Notification Date with respect to such deficiency, eliminate such Global
Borrowing Base Deficiency through a combination of prepayments and submission of additional
Oil and Gas Properties as set forth in clauses (A) and (C) above.

          (ii) [Reserved].

          (iii) [Reserved].

          (iv) [Reserved].

          (v) Upon the occurrence of a Global Borrowing Base Deficiency resulting from a Casualty
Event pursuant to Section 2.7(g) (subject to the Borrower’s and the applicable
Subsidiaries’ rights contained in Section 2.7(g)), the Borrower will utilize the Net
Cash Proceeds of such Casualty Event to take the action described under clause (i)
above (except that prepayments shall first be made in respect of Loans made pursuant to this
Agreement); provided that if a prepayment or deposit is required under this
clause (v), then the Borrower shall be obligated to make (or cause to be made) such
prepayment and/or deposit of cash collateral within sixty (60) days following the Deficiency
Notification Date with respect to such deficiency.

          (vi) Upon the occurrence of a Global Borrowing Base Deficiency resulting from the
issuance of any Permitted Senior Notes Debt pursuant to Section 2.7(h), the Borrower
will prepay, or cause to be prepaid, within thirty (30) days following the Deficiency
Notification Date with respect to such deficiency, Loans in an aggregate principal amount
equal to such deficiency, together, in each case, with unpaid interest accrued thereon to
the date of such prepayment and, if after prepaying all of such Loans (other than Bankers’
Acceptances), a Global Borrowing Base Deficiency remains as a result of a BA Exposure, pay
to the Canadian Administrative Agent an amount equal to such remaining Global Borrowing Base
Deficiency to be held as cash collateral as

49

 

provided in Section 2.21, and, if after
prepaying all of the Combined Loans (other than Bankers’ Acceptances) and providing cash
collateral for all Bankers’ Acceptances pursuant to this Section, a Global Borrowing Base
Deficiency remains as a result of an LC Exposure, pay to the Canadian Administrative Agent
an amount equal to such remaining Global Borrowing Base Deficiency to be held as cash
collateral as provided in Section 2.4(i).

          (vii) Upon the occurrence of a Global Borrowing Base Deficiency not resulting from a
reason described in clauses (i), (v) or (vi) above, the Borrower
will prepay within sixty (60) days the Loans (other than Bankers’ Acceptances) in an
aggregate principal amount equal to such Global Borrowing Base Deficiency together, in each
case, with unpaid interest thereon accrued to the date of such prepayment and, if after
prepaying all such Loans (other than Bankers’ Acceptances), a Global Borrowing Base
Deficiency remains as a result of an LC Exposure, pay to the Global Administrative Agent an
amount equal to such remaining Global Borrowing Base Deficiency to be held as cash
collateral as provided in Section 2.4(i).

          (c) Notwithstanding any other provision of this Section 2.10, if at any time the
Credit Exposure of any Lender exceeds its Commitment (including, without limitation, as a result of
a reallocation of its Global Commitment and adjustment of its Commitment pursuant to Section
2.1(c)), the Borrower will forthwith prepay the Loans (other than Bankers’ Acceptances) of such
Lender in an aggregate principal amount equal to such excess, together with interest on the
principal amount paid accrued to the date of such prepayment, and if any excess remains after
prepaying all of such Loans as a result of BA Exposure, pay to the Canadian Administrative Agent an
amount equal to such remaining excess to be held as cash collateral as provided in Section
2.21, and, if after prepaying all of the Combined Loans (other than Bankers’ Acceptances) and
providing cash collateral for all Bankers’ Acceptances pursuant to Section 2.21, any excess
remains as a result of an LC Exposure of such Lender, pay to the Canadian
Administrative Agent an amount equal to such remaining excess to be held as cash collateral
for such Lender as provided in Section 2.4(i). The Borrower shall make prepayments
pursuant to this clause (c) prior to making prepayments pursuant to clause (b)
above.

          (d) The Borrower shall notify the Global Administrative Agent and the Canadian Administrative
Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 1:00 p.m., Toronto time, three (3) Business
Days before the date of prepayment or (ii) in the case of prepayment of a Canadian Prime Borrowing
or U.S. Prime Borrowing, not later than 1:00 p.m., Toronto time, one (1) Business Day before the
date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date
and the principal amount of each Borrowing or portion thereof to be prepaid (which amount shall, in
the case of clause (a) above, be in a minimum principal amount of U.S.$1,000,000 and in
U.S.$1,000,000 increments in excess thereof); provided that, if a notice of prepayment is
given in connection with a conditional notice of termination of the Global Commitments as
contemplated by Section 2.8, then such notice of prepayment may be revoked if such notice
of termination is revoked in accordance with Section 2.8. Promptly following receipt of
any such notice relating to a prepayment of a Borrowing, the Canadian Administrative Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in
an amount that would be permitted in the case of an

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advance of a Borrowing of the same Type as
provided in Section 2.2. Each prepayment of a Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to
the extent required by Section 2.12 and by any other amounts then due under this Agreement
(including all amounts due under Section 2.16).

     Section 2.11 Fees.

          (a) The Borrower agrees to pay to the Global Administrative Agent for the account of each
Lender a commitment fee (the “Commitment Fee”), which shall accrue at the Applicable Margin
on the daily amount equal to the Applicable Percentage of such Lender of the Unutilized Commitment
during the period from and including the Global Effective Date to but excluding the date on which
the Global Commitments and Commitments terminate. Accrued Commitment Fees shall be payable in
arrears on the last day of March, June, September and December of each year and on the date on
which the Global Commitments and Commitments terminate, commencing on the first such date to occur
after the date of this Agreement; provided that any Commitment Fees accruing after the date
on which the Global Commitments and Commitments terminate shall be payable on demand. All
Commitment Fees shall be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last day).

          (b) The Borrower agrees to pay (i) to the Canadian Administrative Agent for the account of
each Lender a participation fee with respect to its participation in each Letter of Credit, at a
per annum rate equal to the Applicable Margin as interest on Eurodollar Loans on such Lender’s
Applicable Percentage of the stated face amount of each such outstanding Letter of Credit during
the period from and including the date such Letter of Credit is issued (or, in the case of the
Existing Letters of Credit, the Global Effective Date) to but excluding the date such Letter of
Credit expires, and (ii) to the relevant Issuing Bank a fronting fee equal to the greater of
(A) U.S.$500 and (B) the rate of 0.125% per annum on the Equivalent Amount in U.S. Dollars of
the stated face amount of each outstanding Letter of Credit during the period from and including
the date such Letter of Credit is issued (or, in the case of the Existing Letters of Credit, the
Global Effective Date) to but excluding the date such Letter of Credit expires, as well as any such
Issuing Bank’s standard and customary fees with respect to the administration, issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation
fees and fronting fees shall be payable upon the issuance and on each renewal of each Letter of
Credit. Any other fees payable to any such Issuing Bank pursuant to this paragraph shall be
payable within ten (10) Business Days after demand. All participation fees and fronting fees shall
be computed on the basis of a year of 360 days.

          (c) The Borrower agrees to pay to the Global Administrative Agent, for the account of each
Lender, as applicable, fees, including, without limitation, an upfront fee (the “Upfront
Fee”), and, if and when applicable, an extension fee (as provided in Section 2.8(e)),
in the amounts and at the times separately agreed upon in writing between the Borrower and the
Global Administrative Agent.

          (d) Unless otherwise set forth herein, all fees payable hereunder shall be paid on the dates
due, in immediately available funds in U.S. Dollars, to the Global Administrative

51

 

Agent or the
Canadian Administrative Agent (or the relevant Issuing Bank, in the case of fees payable to it), as
the case may be, for distribution, in the case of Commitment Fees and participation fees, to the
Lenders entitled thereto. Fees paid shall not be refundable under any circumstances absent
manifest error (e.g., as a result of a clerical mistake).

     Section 2.12 Interest.

          (a) Subject to Sections 2.12(f), (g) and (h) and Section
10.13, Loans comprising each Canadian Prime Borrowing shall bear interest at the Canadian Prime
Rate plus the Applicable Margin for Canadian Prime Loans, and Loans comprising each U.S. Prime
Borrowing shall bear interest at the U.S. Prime Rate plus the Applicable Margin for U.S. Prime Rate
Loans.

          (b) Subject to Sections 2.12(f), (g) and (h) and Section
10.13, the Loans comprising each Eurodollar Borrowing shall bear interest at the Eurodollar
Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin for Eurodollar
Loans.

          (c) Notwithstanding the foregoing, but subject to Sections 2.12(f), (g) and
(h) and Section 10.13, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall until paid or waived in writing bear
interest, after as well as before judgment, at a rate per annum (the “Default Rate”) equal
to (i) in the case of overdue principal of any Loan, the lesser of (A) the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section plus 2% or (B) the
Highest Lawful Rate or (ii) in the case of any other amount, the lesser of (A) the rate applicable
to Canadian Prime Loans as provided in paragraph (a) of this Section plus 2% or (B) the
Highest Lawful Rate.

          (d) Subject to Sections 2.12(f), (g) and (h) and Section
10.13, accrued interest on each Loan (other than a Loan consisting of the acceptance of a
Bankers’ Acceptance) shall be payable in arrears on each Interest Payment Date for such Loan and
upon termination of the Global Commitments and Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand of the
Canadian Administrative Agent or the Required Lenders, (ii) in the event of any repayment or
prepayment of any Loan (whether due to acceleration or otherwise), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of
such conversion.

          (e) Subject to Sections 2.12(f), (g) and (h) and Section
10.13, all interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Canadian Prime Rate or the U.S. Prime Rate and interest
associated with BA Loans shall be computed on the basis of a year of 365 days (or 366 days in a
leap year), and in each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). Promptly after the determination of any interest rate
provided for herein or any change therein, the Canadian Administrative Agent shall notify the
Lenders to which such interest is payable and the Borrower thereof. The applicable Canadian Prime
Rate, U.S. Base

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Rate or Eurodollar Rate shall be determined by the Canadian Administrative Agent,
and such determination shall be conclusive absent manifest error.

          (f) To the extent permitted by applicable law, any provision of the Interest Act (Canada) or
the Judgment Interest Act (Alberta) which restricts any rate of interest set forth herein shall be
inapplicable to this Agreement and is hereby waived by the Borrower.

          (g) The theory of deemed reinvestment shall not apply to the calculation of interest or
payment of fees or other amounts hereunder, notwithstanding anything contained in this Agreement,
acceptance or other evidence of indebtedness or in any other Loan Document now or hereafter taken
by any Agent or any Lender for the obligations of the Borrower under this Agreement, or any other
instrument referred to herein, and all interest and fees payable by the Borrower to the Lenders,
shall accrue from day to day, computed as described herein in accordance with the “nominal rate”
method of interest calculation.

          (h) Where, in this Agreement, a rate of interest or fees is to be calculated on the basis of a
360-day year, such rate is, for the purpose of the Interest Act (Canada), equivalent to the said
rate (i) multiplied by the actual number of days in the one year period beginning on the first day
of the period of calculation and (ii) divided by 360.

     Section 2.13 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:

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

          (b) the Global Administrative Agent is advised by the Required Lenders that the Eurodollar
Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans included in such Borrowing for such Interest Period; or

          (c) the Global Administrative Agent determines in good faith (which determination shall be
conclusive) that by reason of circumstances affecting the interbank dollar market generally,
deposits in U.S. Dollars in the London interbank dollar market are not being offered for the
applicable Interest Period and in an amount equal to the amount of the Eurodollar Loan requested by
the Borrower,

then the Global Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Global Administrative
Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, which notice the Global Administrative Agent shall give promptly after becoming aware
thereof, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing for the affected Interest Period shall be
ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing
shall be made as a Eurodollar Loan having the shortest Interest Period which is not unavailable
under clauses (a) through (c) of this Section, and if no Interest Period is
available, as a U.S. Prime Borrowing.

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     Section 2.14 Illegality.

          (a) Notwithstanding any other provision of this Agreement to the contrary, if (i) by reason of
the adoption of any applicable Governmental Rule or any change in any applicable Governmental Rule
or in the interpretation or administration thereof by any Governmental Authority or compliance by
any Lender with any request or directive (whether or not having the force of law) of any central
bank or other Governmental Authority or (ii) circumstances affecting the London interbank dollar
market or the position of a Lender therein shall at any time make it unlawful in the sole
discretion of a Lender exercised in good faith for such Lender or its Applicable Lending Office to
(A) honor its obligation to make Eurodollar Loans either generally or for a particular Interest
Period provided for hereunder, or (B) maintain Eurodollar Loans either generally or for a
particular Interest Period provided for hereunder, then such Lender shall promptly notify the
Borrower thereof in writing through the Global Administrative Agent (who will endeavor to, but not
be liable for failing to, provide the Borrower with the basis therefor in reasonable detail) and
such Lender’s obligation to make or maintain Eurodollar Loans having an affected Interest Period
hereunder shall be suspended until such time as such Lender may again make and maintain Eurodollar
Loans having an affected Interest Period (in which case the provisions of Section 2.14(b)
hereof shall be applicable). Before giving such notice pursuant to this Section 2.14, such
Lender will designate a different available Applicable Lending Office for the affected Eurodollar
Loans of such Lender or take such other action as the Borrower may request if such designation or
action will avoid the need to suspend such Lender’s obligation to make Eurodollar Loans hereunder
and will not, in the sole opinion of such Lender exercised in good faith, be disadvantageous to
such Lender (provided, that such Lender shall have no obligation so to designate an Applicable
Lending Office for Eurodollar Loans located in the United States of America).

          (b) If the obligation of any Lender to make or maintain any Eurodollar Loans shall be
suspended pursuant to Section 2.14(a) hereof, all Loans having an affected Interest Period
which would otherwise be made by such Lender as Eurodollar Loans shall be made instead as U.S.
Prime Loans (and, if such Lender so requests by written notice to the Borrower with a copy to the
Global Administrative Agent and the Canadian Administrative Agent, each Eurodollar Loan having an
affected Interest Period of such Lender then outstanding shall be automatically converted into a
U.S. Prime Loan on the last day of the Interest Period for such Eurodollar Loans unless earlier
conversion is required by applicable law) and, to the extent that Eurodollar Loans are so made as
(or converted into) U.S. Prime Loans, all payments of principal which would otherwise be applied to
such Eurodollar Loans shall be applied instead to such U.S. Prime Loans.

     Section 2.15 Increased Costs.

          (a) If any Change in Law shall:

          (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender or any Issuing Bank; or

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          (ii) impose on any Lender or any Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans 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 Loan or BA Loan or Bankers’ Acceptance (or of maintaining its obligation
to make any such Loan or BA Loan or Bankers’ Acceptance ) or to increase the cost to such Lender or
such Issuing Bank of participating in, issuing or maintaining any Letter of Credit or BA Loan or
Bankers’ Acceptance, or to reduce the amount of any sum received or receivable by such Lender or
such Issuing Bank hereunder (whether of principal, interest or otherwise) with respect to any
Eurodollar Loan or any Letter of Credit or any BA Loan or Bankers’ Acceptance, then the Borrower
will pay, in accordance with Section 2.15(c), to such Lender or such Issuing Bank such
additional amount or amounts as will compensate such Lender or such Issuing Bank, as the case may
be, for such additional costs incurred or reduction suffered with respect to any Eurodollar Loan or
any Letter of Credit or any BA Loan or Bankers’ Acceptance.

          (b) If any Lender or any Issuing Bank determines in good faith that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate of return on such
Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s
holding company, if any, as a consequence of this Agreement or the Loans made by, or participations
in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to
a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s
holding company could have achieved but for such Change in Law (taking into consideration such
Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s
holding company with respect to capital adequacy), then the Borrower will pay, in accordance with
Section 2.15(c), to such Lender or such Issuing Bank,
as the case may be, such additional amount or amounts as will compensate such Lender or such
Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction
suffered.

          (c) A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary
to compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding
company, as the case may be, as specified in paragraph (a) or (b) of this Section
shall be delivered to the Borrower and shall be conclusive absent manifest error. Except as
provided in Section 2.15(d), the Borrower shall pay such Lender or such Issuing Bank, as
the case may be, the amount shown as due on any such certificate within ten (10) Business Days
after receipt thereof.

          (d) Failure or delay on the part of any Lender or any Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Bank’s
right to demand such compensation; provided that the Borrower shall not be required to
compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or such Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased

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costs or
reductions is retroactive, then the 180-day period referred to above shall be extended to include
the period of retroactive effect thereof.

     Section 2.16 Break Funding Payments. In the event of:

          (a) the payment (including prepayment or cash collateralization, as applicable) of any
principal of any Eurodollar Loan or BA Loan or Bankers’ Acceptance other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of Default);

          (b) the conversion of any Eurodollar Loan or BA Loan or Bankers’ Acceptance other than on the
last day of the Interest Period applicable thereto;

          (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be revoked under
Section 2.10 and is revoked in accordance therewith); or

          (d) the assignment of any Eurodollar Loan or BA Loan or Bankers’ Acceptance other than on the
last day of the Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.1(b) or 2.19;

then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Eurodollar Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such Lender would bid
were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the London interbank market. A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower, the Global Administrative Agent and the Canadian Administrative Agent
and shall be conclusive absent manifest error. Except as provided in the last sentence of this
Section 2.16, the Borrower shall pay such Lender the amount shown as due on any such
certificate within ten (10) Business Days after receipt thereof. Failure or delay on the part of
any Lender or any Issuing Bank to demand compensation pursuant to this Section shall not constitute
a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any such loss, cost or expense described in this Section 2.16
incurred more than 180 days prior to the date that such Lender or such Issuing Bank, as the case
may be, notifies the Borrower of the circumstance giving rise to such loss, cost or expense
described in this Section 2.16 and of such Lender’s or such Issuing Bank’s intention to
claim compensation therefor.

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     Section 2.17 Taxes.

          (a) 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 deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section), the Global Administrative Agent, the Canadian
Administrative Agent, each Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law; provided that if a Lender has breached or is
in breach of its representations, warranties, covenants and obligations under Section
2.17(e), then the Borrower shall have no obligations under clause (i) of this
Section 2.17(a) with respect to payments made or to be made to such Lender where
Indemnified Taxes and/or Other Taxes arise in respect of such payments as a consequence of such
Lender’s status as a Foreign Lender.

          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.

          (c) THE BORROWER SHALL INDEMNIFY THE GLOBAL ADMINISTRATIVE AGENT, THE CANADIAN ADMINISTRATIVE
AGENT, EACH LENDER AND EACH ISSUING BANK, WITHIN TEN (10) BUSINESS DAYS AFTER WRITTEN DEMAND
THEREFOR, FOR THE FULL AMOUNT OF ANY INDEMNIFIED TAXES OR OTHER TAXES PAID BY THE GLOBAL
ADMINISTRATIVE AGENT, THE CANADIAN ADMINISTRATIVE AGENT, SUCH LENDER OR SUCH ISSUING BANK, AS THE
CASE MAY BE, ON OR WITH RESPECT TO ANY PAYMENT BY OR ON ACCOUNT OF ANY OBLIGATION OF THE BORROWER
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT (INCLUDING INDEMNIFIED TAXES OR OTHER TAXES IMPOSED
OR ASSERTED ON OR ATTRIBUTABLE TO AMOUNTS PAYABLE UNDER THIS SECTION) AND ANY PENALTIES,
INTEREST AND REASONABLE EXPENSES ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH
INDEMNIFIED TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY IMPOSED OR ASSERTED BY THE RELEVANT
GOVERNMENTAL AUTHORITY; PROVIDED THAT IF SUCH PAYMENTS OR LIABILITIES ARISE FROM THE LENDER
HAVING BREACHED OR BEING IN BREACH OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS AND OBLIGATIONS
UNDER SECTION 2.17(e), THEN THE BORROWER SHALL HAVE NO OBLIGATIONS UNDER THIS SECTION
2.17(c) WITH RESPECT TO SUCH PAYMENTS OR LIABILITIES. A CERTIFICATE AS TO THE AMOUNT OF SUCH
PAYMENT OR LIABILITY DELIVERED TO THE BORROWER BY A LENDER OR AN ISSUING BANK, OR BY EITHER THE
GLOBAL ADMINISTRATIVE AGENT OR THE CANADIAN ADMINISTRATIVE AGENT ON ITS OWN BEHALF OR ON BEHALF OF
A LENDER OR AN ISSUING BANK, SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.

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          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, if available, the Borrower shall deliver to the Global
Administrative Agent and the Canadian Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory to the Global
Administrative Agent and the Canadian Administrative Agent.

          (e) Each Lender represents, warrants and covenants that it is not, and shall not be at any
time during the term of this Agreement, a Foreign Lender.

          (f) If the Borrower at any time pays an amount under Section 2.17(a), (b) or
(c) to any Lender, the Global Administrative Agent, the Canadian Administrative Agent or
any Issuing Bank, and such payee receives a refund of or credit for any part of any Indemnified
Taxes or Other Taxes which such payee determines in its reasonable judgment is made with respect to
such amount paid by the Borrower, such Lender, the Global Administrative Agent, the Canadian
Administrative Agent or any Issuing Bank, as the case may be, shall pay to the Borrower the amount
of such refund or credit promptly, and in any event within 60 days, following the receipt of such
refund or credit by such payee.

          (g) If the Borrower pays any amount pursuant to Section 2.17(a) or (c) with
respect to any payment to a Lender or, with the prior written consent of such Lender, provides any
security therefor pursuant to applicable law, and the Borrower at its expense wishes to contest the
eligibility of the relevant Taxes and furnishes to such Lender an opinion of tax counsel
satisfactory to such Lender, acting reasonably, to the effect that there exists a reasonable basis
for contesting such Taxes, the Borrower may contest such Taxes, provided that:

          (i) the Borrower has otherwise complied with this Section 2.17(g);

          (ii) the Borrower has delivered to such Lender such additional security or assurances
as such Lender may require, acting reasonably, in order to be satisfied that
such Lender will not incur any liability by reason of any contestation, including legal
fees, disbursements, interest and penalties; and

          (iii) the conduct of such proceedings (including the settlement or compromise of same)
will remain within the sole discretion of such Lender and will forthwith be abandoned if
such Lender so requires, acting reasonably, having regard to its overall tax and related
interests.

     Section 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

          (a) The Borrower shall make each payment required to be made by it hereunder or under any
other Loan Document (whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to
the time expressly required hereunder or under such other Loan Document for such payment (or, if no
such time is expressly required, prior to 3:00 p.m., Toronto time), on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Canadian Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of

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calculating interest thereon. All
such payments shall be made to the Canadian Administrative Agent c/o JPMorgan Chase Bank, N.A.,
Toronto Branch, BCE Place, 161 Bay Street, Toronto, Ontario M5J 2S1, with a copy to JPMorgan Chase
Bank, N.A., 10 South Dearborn, 7th Floor, Mail Code: IL1-0010, Chicago, Illinois 60603,
Attention: Leonida G. Mischke, except payments to be made directly to an Issuing Bank as expressly
provided herein and payments pursuant to Section 2.15, 2.16, 2.17(c) and
10.3 shall be made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The Canadian Administrative Agent
shall distribute any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. Except as set forth in clause
(a) of the definition of “Interest Period”, if any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable
for the period of such extension. All payments under each Loan Document shall be made in the
appropriate Currency as required pursuant to the Loan Documents.

          (b) If at any time insufficient funds are received by and available to the Canadian
Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest
and fees then due hereunder, such funds shall be applied, subject to Section 10.15 and
10.17, (i) first, towards payment of interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal
and unreimbursed LC Disbursements then due to such parties.

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

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

          (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.4(d) or (e), 2.5(b), 2.18(d) or 10.3(c) then the
Canadian Administrative Agent may, in its discretion (notwithstanding any contrary provision
hereof), apply any amounts thereafter received by the Canadian Administrative Agent for the account
of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.

     Section 2.19 Mitigation Obligations; Replacement of Lenders.

          (a) If any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to
designate a different Applicable Lending Office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or Affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or
2.17, as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

          (b) If (i) any Lender asserts that events have occurred suspending its obligation to make or
maintain Eurodollar Loans under Section 2.14 when substantially all other Lenders have not
also done so, (ii) any Lender requests compensation under Section 2.15, (iii) the Borrower
is required to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, or (iv) any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense, upon notice to such
Lender, the Canadian Administrative Agent and the Global Administrative Agent, require such Lender
to assign and delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.4), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (A) if the assignee is not a Lender or

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a
Lender Affiliate, the Borrower shall have received the prior written consent of the Global
Administrative Agent and the Canadian Administrative Agent and the Issuing Banks, which consent of
such Agents and the Issuing Banks shall not unreasonably be withheld, conditioned or delayed, (B)
such Lender shall have received payment of an amount equal to the outstanding principal of its
Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts), (C) the assignee and
assignor shall have entered into an Assignment and Acceptance, and (D) in the case of any such
assignment resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments.

          (c) In addition to the foregoing provisions of Section 2.19(b), the Borrower shall be
permitted to replace any Lender who becomes a Non-Consenting Lender (as defined below) with a
replacement financial institution (which may be an existing Lender) pursuant to an assignment and
delegation, without recourse (in accordance with and subject to the restrictions contained in
Section 10.4), of all of such Non-Consenting Lender’s interests, rights and obligations
under this Agreement to such replacement financial institution that shall assume such obligations;
provided, that (i) if the proposed assignee is not a Lender or a Lender Affiliate, the
Borrower shall have received the prior written consent of the Global Administrative Agent and the
Issuing Banks, which consent of such Global Administrative Agent and Issuing Banks shall not
unreasonably be withheld, conditioned or delayed, (ii) such Non-Consenting Lender shall have
received payment of an amount equal to the outstanding principal of its Loans and participations in
LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts), (iii) the assignee and assignor shall
have entered into an Assignment and Acceptance, and (iv) the assignee shall consent, at the time of
such assignment, to each matter in respect of which such Non-Consenting
Lender refused to consent. In the event that, at any time, (A) the Borrower or the Global
Administrative Agent has requested the Lenders to (1) increase the Global Commitments in accordance
with Section 2.1(b), (2) increase, reaffirm or decrease the Global Borrowing Base in
accordance with Section 2.7, or (3) extend the Maturity Date in accordance with Section
2.8(e), (B) the increase, reaffirmation, decrease or extension in question requires the
agreement of all Lenders, Supermajority Lenders, Required Lenders or Majority Lenders, as the case
may be, in accordance with the terms of Section 2.1(b), Section 2.7 or Section
2.8(e), as applicable, and (C) certain Lenders, but not Majority Lenders (in the case of
Section 2.1(b)), the Supermajority Lenders (in the case of Section 2.8(e)), the
Required Lenders (in the case of a requested increase in the Global Borrowing Base) or Majority
Lenders (in the case of a requested reaffirmation or decrease of the Global Borrowing Base) have
agreed to such increase, reaffirmation, decrease or extension, then any Lender, at such time, who
does not agree to such increase, reaffirmation, decrease or extension, as applicable, shall be
deemed a “Non-Consenting Lender.”

     Section 2.20 Currency Conversion and Currency Indemnity.

          (a) Payments in Agreed Currency. The Borrower shall make payment relative to any
Obligation in the currency (the “Agreed Currency”) in which the Obligation was effected.
If any payment is received on account of any Obligation in any currency (the “Other

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Currency”) other than the Agreed Currency (whether voluntarily or pursuant to an order or
judgment or the enforcement thereof or the realization of any Collateral or the liquidation of the
Borrower or otherwise howsoever), such payment shall constitute a discharge of the liability of the
Borrower hereunder and under the other Loan Documents in respect of such obligation only to the
extent of the amount of the Agreed Currency which the relevant Lender, Issuing Bank or Agent, as
the case may be, is able to purchase with the amount of the Other Currency received by it on the
Business Day next following such receipt in accordance with its normal procedures and after
deducting any costs and expenses of exchange.

          (b) Conversion of Agreed Currency into Judgment Currency. If, for the purpose of
obtaining or enforcing judgment in any court in any jurisdiction, it becomes necessary to convert
into a particular currency (the “Judgment Currency”) any amount due in the Agreed Currency,
then the conversion shall be made on the basis of the rate of exchange prevailing on the next
Business Day following the date such judgment is given and in any event the Borrower shall be
obligated to pay the Agents, Issuing Banks and the Lenders any deficiency in accordance with
Section 2.20(c). For the foregoing purposes “rate of exchange” means the rate at
which the relevant Lender, Issuing Bank or Agent, as applicable, in accordance with its normal
banking procedures is able on the relevant date to purchase the Agreed Currency with the Judgment
Currency after deducting costs and expenses of exchange.

          (c) Circumstances Giving Rise to Indemnity. To the fullest extent permitted by
applicable law, if (i) any Lender, any Issuing Bank or any Agent receives any payment or payments
on account of the liability of the Borrower hereunder pursuant to any judgment or order in any
Other Currency, and (ii) the amount of the Agreed Currency which the relevant Lender, Issuing Bank
or Agent, as applicable, is able to purchase on the Business Day
next following such receipt with the proceeds of such payment or payments in accordance with
its normal procedures and after deducting any costs and expenses of exchange is less than the
amount of the Agreed Currency due in respect of such liability immediately prior to such judgment
or order, then the Borrower on demand shall, and the Borrower hereby agrees to, indemnify the
Lenders, the Issuing Banks and the Agents from and against any loss, cost or expense arising out of
or in connection with such deficiency.

          (d) Indemnity Separate Obligation. To the fullest extent permitted by applicable law,
the agreement of indemnity provided for in Section 2.20(c) shall constitute an obligation
separate and independent from all other obligations contained in this Agreement, shall give rise to
a separate and independent cause of action, shall apply irrespective of any indulgence granted by
the Lenders, the Issuing Banks or Agents or any of them from time to time, and shall continue in
full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an
amount due hereunder or under any judgment or order.

     Section 2.21 Bankers’ Acceptances. Subject to the terms and conditions of this
Agreement, the Commitments may be utilized, upon the request of the Borrower, in addition to the
Loans provided for by Section 2.2 and the issuance of Letters of Credit provided for by
Section 2.4, for the acceptance by the Lenders of Bankers’ Acceptances issued by the
Borrower, provided that in no event shall (i) the aggregate amount of all Bankers’
Acceptance Liabilities together with the Equivalent Amount in U.S. Dollars of the aggregate
Principal Amount of the Loans and the aggregate amount of all LC Exposure exceed the lesser of (A)
the aggregate

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amount of the Allocated Canadian Borrowing Base then in effect and (B) the aggregate
amount of the Commitments of the Lenders, and (ii) any Bankers’ Acceptances have maturities that
are not integral multiples of 30 days, nor fewer than 30 days nor more than 180 days, from the BA
Acceptance Date (and in no event shall any Bankers’ Acceptances mature on a date after the Maturity
Date). Whenever the Borrower is required to furnish a notice to the Canadian Administrative Agent
pursuant to the following additional provisions of this Section, it shall give a copy of such
notice to the Global Administrative Agent. The following additional provisions shall apply to
Bankers’ Acceptances:

          (a) In order to facilitate and expedite the issuance and acceptance of Bankers’ Acceptances
hereunder, the Borrower agrees to the terms and conditions of the Power of Attorney with respect to
the Bankers’ Acceptance attached hereto as Exhibit L.

          (b) When the Borrower wishes to make a Borrowing by way of Bankers’ Acceptances, the Borrower
shall submit to the Canadian Administrative Agent and the Global Administrative Agent a Bankers’
Acceptance Request by not later than 2:00 p.m., Toronto time, three (3) Business Days’ prior to the
BA Acceptance Date. Each Bankers’ Acceptance Request shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss or expense incurred by such
Lender as a result of any failure by the Borrower to fulfill or honor before the date specified as
the BA Acceptance Date, the applicable conditions set forth in Article IV, if, as a result
of such failure the requested Bankers’ Acceptance is not made on such date. Unless otherwise
agreed among the Canadian Administrative Agent, the Global Administrative Agent and the Lenders,
the aggregate amount of all Bankers’ Acceptances issued on any BA Acceptance Date hereunder shall
be accepted pro rata by all Lenders relative
to their respective Applicable Percentage, rounded, upwards or downwards, as the case may be,
to the nearest C$100,000. Upon receipt of a Bankers’ Acceptance Request, the Canadian
Administrative Agent shall advise each Lender of the contents thereof.

          (c) [Reserved].

          (d) On each day during the period commencing with the issuance by the Borrower of any Bankers’
Acceptance and until such Bankers’ Acceptance Liability shall have been paid by the Borrower, the
Commitment of each Accepting Lender that is able to extend credit by way of Bankers’ Acceptances
shall be deemed to be utilized for all purposes of this Agreement in an amount equal to the
Principal Amount of such Bankers’ Acceptance.

The Commitment of any Lender providing a BA Loan rather than Bankers’ Acceptances shall be deemed
utilized during this period in an amount equal to its Applicable Percentage of the total amount of
Bankers’ Acceptances and BA Loans in each Bankers’ Acceptance Request.

          (e) The Borrower agrees to pay on the BA Maturity Date for each Bankers’ Acceptance, to the
Canadian Administrative Agent for account of each Accepting Lender, an amount equal to the Bankers’
Acceptance Liability for such Bankers’ Acceptance.

The Borrower hereby waives presentment for payment of Bankers’ Acceptances by each Accepting Lender
and any defense to payment of amounts due to an Accepting Lender in respect

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of a Bankers’
Acceptance which might exist by reason of such Bankers’ Acceptance being held at maturity by the
Accepting Lender which accepted it and agree not to claim from such Lenders any days of grace for
the payment at maturity of Bankers’ Acceptances.

          (f) In the event the Borrower fails to notify the Canadian Administrative Agent in writing not
later than 2:00 p.m., Toronto time, on the Business Day prior to any BA Maturity Date that the
Borrower intends to pay with such Borrower’s own funds the Bankers’ Acceptance Liabilities due on
such BA Maturity Date or fails to make such payment, the Borrower shall be deemed, for all purposes
to have given the Canadian Administrative Agent notice of a borrowing of a Canadian Prime Loan
pursuant to Section 2.3 for an amount equal to the Principal Amount of such Bankers’
Acceptance; provided that:

          (i) the BA Maturity Date for such Bankers’ Acceptances shall be considered to be the
date of such borrowing;

          (ii) the proceeds of such Canadian Prime Loan shall be used to pay the amount of the
Bankers’ Acceptance Liability due on such BA Maturity Date;

          (iii) if after giving effect to such Canadian Prime Loan, a Global Borrowing Base
Deficiency would exist, the Global Administrative Agent shall so advise the Borrower and the
Borrower shall comply with the provisions of Section 2.10;

          (iv) each Lender which has made a maturing BA Loan (in accordance with Section
2.21(g) hereof) shall continue to extend credit to the Borrower by way of a Canadian
Prime Loan (without further advance of funds to the Borrower) in the Principal
Amount equal to its Applicable Percentage of the total amount of credit requested to be
extended by Bankers’ Acceptances when the BA Loan was made; and

          (v) the Canadian Administrative Agent shall promptly and in any event within three (3)
Business Days following the BA Maturity Date of such Bankers’ Acceptances, notify the
Borrower in writing of the making of such Canadian Prime Loan pursuant to this Section
2.21(f).

          (g) If, in the sole judgment of a Lender, such Lender is unable, as a result of applicable law
or customary market practice, to extend credit by way of Bankers’ Acceptance in accordance with
this Agreement, such Lender shall give written notice to such effect to the Canadian Administrative
Agent and the Borrower prior to noon, Toronto time, on the date of the requested credit extension
(which notice may, if so stated therein, remain in effect with respect to subsequent requests for
extension of credit by way of Bankers’ Acceptance until revoked by notice to the Global
Administrative Agent, the Canadian Administrative Agent and the Borrower) and shall make available
to the Canadian Administrative Agent, in accordance with Section 2.1 hereof prior to 3:00
p.m., Toronto time, on the date of such requested credit extension a Canadian Dollar loan (a
“BA Loan”) in the Principal Amount equal to such Lender’s Applicable Percentage of the
total amount of credit requested to be extended by way of Bankers’ Acceptances. The Stamping Fee
for that BA Loan shall be calculated on that Principal Amount. On the BA Acceptance Date, the
Borrower shall pay each Accepting Lender and each Lender providing a BA Loan a Stamping Fee with
respect to such Bankers’ Acceptance and each BA

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Loan and each Lender is hereby authorized to
deduct such Stamping Fee prior to remitting the BA Net Proceeds to the Canadian Administrative
Agent. For each Bankers’ Acceptance or BA Loan, the Stamping Fee payable by the Borrower shall be
the product obtained by multiplying: (i) the applicable Bankers’ Acceptance Stamping Fee specified
in the definition of Applicable Margin in effect from time to time by (ii) the Principal Amount of
that Bankers’ Acceptance or BA Loan; and prorating that product for the number of days in that term
from and including the BA Acceptance Date to but not including the BA Maturity Date of that
Bankers’ Acceptance or the Interest Period for the BA Loan, as the case may be, on the basis of a
year of 365 days. Such BA Loan shall have an Interest Period equal to the term of the
Bankers’ Acceptances for which it is a substitute and shall bear interest throughout such Interest
Period applicable to that BA Loan at a rate per annum equal to the Bankers’ Acceptance Rate for
such Bankers’ Acceptances. On the maturity date of the Bankers’ Acceptances issued concurrently
with the advance of the BA Loan, the Borrower shall pay to each Lender which made a BA Loan, in
satisfaction of the BA Loan and accrued interest thereon, an amount equal to the Principal Amount
of such BA Loan, failing which such Principal Amount shall be converted to a Canadian Prime Loan.
The amount of the proceeds of that BA Loan to be disbursed to the Borrower on the BA Acceptance
Date shall be the same amount as if that Lender had accepted and purchased its Lender’s Applicable
Percentage of the requested Bankers’ Acceptances at a discount from the Principal Amount of that
Bankers’ Acceptance calculated at a discount rate per annum equal to the Bankers’ Acceptance Rate
for the term of such Bankers’ Acceptances in the same manner that BA Net Proceeds are calculated;
provided that the Principal Amount of such BA Loan shall be the same amount as the face
amount of the Bankers’ Acceptance which such Lender would have accepted but for this Section
2.21(g).

          (h) [Reserved].

          (i) (i) If a Lender determines in good faith, which determination shall be final, conclusive
and binding upon the Borrower absent manifest error, and notifies the Borrower that, by reason of
circumstances affecting the money market:

          (ii) there is no market for Bankers’ Acceptances generally or of the requested
duration; or

          (iii) the demand for Bankers’ Acceptances is insufficient to allow the sale or trading
of the Bankers’ Acceptances created and purchased hereunder generally or in connection with
the requested duration;

then:

          (A) the right of the Borrower to request Bankers’ Acceptances or a BA Loan of
the affected duration from that Lender shall be suspended until such Lender
determines that the circumstances causing such suspension no longer exist and such
Lender so notifies each Borrower; and

          (B) any Bankers’ Acceptance Request for an affected duration which is
outstanding shall be canceled and the Bankers’ Acceptances or BA Loan requested
therein shall not be made and a Bankers’ Acceptance or BA Loan

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having the shortest
duration available (or if none) a Canadian Prime Loan shall be made in its place.

          (j) It is the intention of the Canadian Administrative Agent, the Lenders and the Borrower
that, except to the extent a Lender advises otherwise, pursuant to the Depository Bills and Notes
Act (“DBNA”), all Bankers’ Acceptances accepted by the Lenders under this Agreement shall
be issued in the form of a “depository bill” (as defined in the DBNA), deposited with the Canadian
Depository for Securities Ltd. and made payable to CDS & Co. In order to give effect to the
foregoing, the Canadian Administrative Agent shall, subject to the approval of the Borrower and the
Lenders, establish and notify the Borrower and the Lenders of any procedure, consistent with the
terms of this Agreement and the requirements of the DBNA, as is reasonably necessary to accomplish
such intention, including, without limitation:

          (i) any instrument held by the Canadian Administrative Agent or a Lender for the
purposes of Bankers’ Acceptances shall have marked prominently and legibly on its face and
within its text, at or before the time of issue, the words “This is a depository bill
subject to the Depository Bills and Notes Act (Canada)”;

          (ii) any reference to the authentication of the Bankers’ Acceptances will be removed;
and

          (iii) any reference to “bearer” will be removed and no Bankers’ Acceptance shall be
marked with any words prohibiting negotiation, transfer or assignment of it or of an
interest in it.

          (k) If any Event of Default shall occur and be continuing on the Business Day that the
Borrower receives written notice from the Global Administrative Agent, the Canadian
Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been
accelerated, Lenders with BA Exposure representing greater than 50% of the total BA Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in
an account with the Canadian Administrative Agent, in the name of the Canadian Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to the BA Exposure as of such date plus
any accrued and unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any Event of Default
described in Section 8.1(g). The Borrower shall also deposit cash collateral pursuant to
this paragraph as and to the extent required by Section 2.10, and any such cash collateral
so deposited and held by the Canadian Administrative Agent hereunder shall constitute part of the
Global Borrowing Base for purposes of determining compliance with Section 2.10. Each such
deposit shall be held by the Canadian Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement. The Canadian Administrative
Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over
such account. Other than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Canadian Administrative Agent and at the
Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any,
on such investments shall accumulate in such account. Moneys in such account shall be applied by
the Canadian Administrative Agent for the

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satisfaction of the obligations of the Borrower with
respect to the BA Exposure at such time or, if the maturity of the Loans has been accelerated (but
subject to the consent of Lenders with BA Exposure representing greater than 50% of the total BA
Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the
Borrower is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) and, if
any, all interest and profits thereon shall be returned to the Borrower within three (3) Business
Days after all Events of Default then in existence have been cured or waived. If the Borrower is
required to provide an amount of cash collateral hereunder pursuant to Section 2.10, such
amount (to the extent not applied as aforesaid) and, if any, all interest and profits thereon shall
be returned to the Borrower, within three (3) Business Days as required by Section 2.10, as
and to the extent that, after giving effect to such return, the Borrower would remain in compliance
with Section 2.10 and no Event of Default shall have occurred and be continuing.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     In order to induce the Global Administrative Agent, the Canadian Administrative Agent, the
other Agents, any Issuing Bank and the Lenders to enter into this Agreement and to make Loans
(including making BA Loans and accepting Bankers’ Acceptances) and issue or participate in any
Letters of Credit hereunder, the Borrower represents and warrants to the Global Administrative
Agent, the Canadian Administrative Agent, the other Agents, any Issuing Bank and the Lenders that
each of the following statements is true and correct:

     Section 3.1 Existence and Power. Each Loan Party (a) is a corporation, partnership or
limited liability company duly incorporated or organized (as applicable), validly existing and, if
applicable for such Loan Party in the jurisdiction in issue, in good standing under the laws of
its jurisdiction of incorporation or organization, (b) has all requisite corporate,
partnership or limited liability company power (as applicable) required to carry on its businesses
as now conducted, and (c) is duly qualified to transact business as a foreign corporation,
partnership or limited liability company in each jurisdiction where a failure to be so qualified
would reasonably be expected to have a Material Adverse Effect.

     Section 3.2 Loan Party and Governmental Authorization; Contravention. The execution,
delivery and performance of this Agreement and the other Loan Documents by each Loan Party (to the
extent each Loan Party is a party to this Agreement and such Loan Documents) (a) are within such
Loan Party’s corporate, partnership or limited liability company powers, (b) when executed will be
duly authorized by all necessary corporate, partnership or limited liability company action, (c)
require no action by or in respect of, or filing with, any Governmental Authority (other than (i)
actions or filings pursuant to the Exchange Act, (ii) actions or filings necessary to create or
perfect the Liens required hereby or by any other Combined Loan Document, (iii) actions or filings
that have been taken or made and are in full force and effect, and (iv) actions or filings which,
if not taken or made, would not reasonably be expected to have a Material Adverse Effect), and (d)
do not (i) contravene, or constitute a default under, any provision of (A) applicable Governmental
Rule, except any contravention or default that would not reasonably be expected to have a Material
Adverse Effect, (B) the articles or certificate of incorporation, bylaws, regulations, partnership
agreement or comparable charter

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documents of any Loan Party, or (C) any agreement, judgment,
injunction, order, decree or other instrument binding upon any Loan Party, including, without
limitation, any Existing Subordinate Note Document or, as applicable, if and when any Permitted
Senior Notes Debt is issued and while such Permitted Senior Notes Debt remains outstanding, any
Permitted Senior Notes Document, except any contravention or default that would not reasonably be
expected to have a Material Adverse Effect and, with respect to the Existing Convertible Debentures
and Existing Convertible Note Indenture, assuming that any repurchase of the Existing Convertible
Debentures pursuant to Section 3.06 of the Existing Convertible Note Indenture is made (1) at a
time at which immediately before and after giving effect to such repurchase no Default, Event of
Default, Global Borrowing Base Deficiency or U.S. Borrowing Base Deficiency has occurred and is
continuing or results therefrom, (2) with the proceeds from the sale of shares of common stock of
the U.S. Borrower, or (3) in compliance with the last sentence of Section 7.14 of the U.S. Credit
Agreement, or (ii) result in the creation or imposition of any Lien on any Borrowing Base Property
or Collateral other than the Liens securing the Combined Obligations.

     Section 3.3 Binding Effect. This Agreement constitutes, and each other Loan Document
when executed and delivered will constitute, valid and binding obligations of each Loan Party which
is a party thereto, enforceable against each such Loan Party which executes the same in accordance
with its terms except as the enforceability thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, or similar Governmental Rules affecting creditors’ rights generally,
and (b) equitable principles of general applicability (whether enforcement is sought by proceedings
at law or in equity).

     Section 3.4 Financial Information.

          (a) Except as disclosed in writing to the Lenders prior to the execution and delivery of this
Agreement, since December 31, 2005, no event or circumstance which would reasonably be expected to
have a Material Adverse Effect has occurred.

          (b) After giving effect to the transactions contemplated by this Agreement, the Parent and
each of its Subsidiaries, on a consolidated basis, are Solvent.

     Section 3.5 Ownership of Properties Generally. Each Loan Party has good and
defensible fee simple or leasehold title (subject to Immaterial Title Deficiencies and Permitted
Encumbrances) to all Borrowing Base Properties and Collateral purported to be owned by it,
including, without limitation, all Borrowing Base Properties and Collateral reflected in the
balance sheets referred to in Section 3.4(a) of the U.S. Credit Agreement, and none of such
Borrowing Base Properties and Collateral is subject to any Lien other than Permitted Encumbrances.

     Section 3.6 Mineral Interests. The real property described in the attachment to the
Certificate of Mortgaged Properties (the “Property Description”) is an accurate and
complete description of all Mortgaged Properties owned by the Borrower and its Subsidiaries which
are real property on and as of the Closing Date, and such Mortgaged Properties, together with the
Mortgaged Properties described in the attachment to the Certificate of Mortgaged Properties (as
defined in the U.S. Credit Agreement) delivered pursuant to Section 4.1(s) of the U.S. Credit
Agreement, constitute the Required Reserve Value. Subject only to Immaterial Title

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Deficiencies
(as herein defined) and Permitted Encumbrances, the Borrower and each of its Subsidiaries executing
a Security Document (as applicable) have good and defensible title to all Borrowing Base Properties
owned by the Borrower and its Subsidiaries, as applicable, free and clear of all Liens except for
Permitted Encumbrances. Without regard to any consent or non-consent provisions of any joint
operating agreement covering any of the Borrower’s or such Subsidiary’s (as applicable) Proved
Mineral Interests, subject to Immaterial Title Deficiencies and Permitted Encumbrances, the
Borrower’s percentage share and/or the percentage share of each Subsidiary executing a Security
Document (as applicable) of (a) the costs for each Proved Mineral Interest described in the most
recent Reserve Report delivered pursuant hereto is not greater than 105% of the decimal fraction
set forth in such Reserve Report, before and after payout, as the case may be, and described
therein by the respective designations “working interests,” “WI,” “gross working interest,” “GWI,”
or similar terms; provided, that the Borrower or any applicable Subsidiary of the Borrower
shall have the right to bear costs disproportionate to the Borrower’s or such Subsidiary’s working
interest with respect to any Mineral Interest for a period of time in order to earn an interest in
such Mineral Interest from a third party as evidenced by a written agreement, and (b) production
from, allocated to, or attributed to each such Proved Mineral Interest is not less than the decimal
fraction set forth in such Reserve Report, before and after payout, as the case may be, and
described therein by the designations “net revenue interest,” “NRI,” or similar terms. As used
herein, the term “Immaterial Title Deficiencies” means minor defects or deficiencies in
title which do not diminish more than two percent (2%) the aggregate value of the Borrowing Base
Properties. Each well drilled in respect of each Proved Producing Mineral Interest owned by the
Borrower and its Subsidiaries (i) is capable of, and is presently, producing Hydrocarbons in
commercially
profitable quantities (except to the extent shut-in in accordance with the applicable lease
for such Proved Producing Mineral Interest), and after giving effect to the transactions
contemplated by this Agreement, the Borrower and each of its Subsidiaries executing a Security
Document (as applicable) will be entitled to receive payments on a current basis for its share of
production, with no funds in respect of any thereof held in suspense, other than any such funds
held in suspense pending delivery of appropriate division orders, and (ii) has been drilled,
bottomed, completed, and operated in compliance in all material respects with all applicable
Governmental Rules and no such well which is currently producing Hydrocarbons is subject to any
penalty in production by reason of such well having produced in excess of its allowable production.

     Section 3.7 Licenses, Permits, Etc. Each Loan Party possesses such valid franchises,
certificates of convenience and necessity, operating rights, licenses, permits, consents,
authorizations, exemptions and orders of Governmental Authorities as are necessary to carry on its
business as now conducted and as proposed to be conducted, except to the extent a failure to obtain
any such item would not reasonably be expected to have a Material Adverse Effect.

     Section 3.8 Compliance with Law. The business and operations of the Loan Parties have
been and are being conducted in accordance with all applicable Governmental Rules other than
violations of Governmental Rules which would not (either individually or collectively) reasonably
be expected to have a Material Adverse Effect.

     Section 3.9 Full Disclosure. All information heretofore furnished by each Loan Party
to the Global Administrative Agent, the Canadian Administrative Agent or any Lender for purposes of
or in connection with this Agreement, any Loan Document or any transaction

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contemplated hereby or
thereby is, and all such information hereafter furnished by or on behalf of any Loan Party to the
Global Administrative Agent, the Canadian Administrative Agent or any Lender will be, true,
complete and accurate in every material respect; provided, that any projections and pro
forma financial information contained in the materials referenced above are based upon good faith
estimates and assumptions believed by management of the applicable Loan Party to be reasonable at
the time made, it being recognized by the Agents and Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual results during the period
covered by such financial information may differ from the projected results set forth therein by a
material amount. The Loan Parties have disclosed or have caused to be disclosed to Lenders in
writing any and all facts (other than facts of general public knowledge, including those facts
contained in the Parent’s filings with the SEC) which would reasonably be expected to have a
Material Adverse Effect.

     Section 3.10 Organizational Structure; Nature of Business. The Loan Parties are
engaged only in the business of acquiring, exploring, developing and operating Mineral Interests
and the production, marketing, processing and transporting of Hydrocarbons therefrom and businesses
reasonably related or complementary thereto.

     Section 3.11 Fiscal Year. The Borrower’s Fiscal Year is January 1 through December
31.

     Section 3.12 No Default. Neither a Default nor an Event of Default has occurred which
is continuing, or will exist after giving effect to the transactions contemplated by this
Agreement or the other Loan Documents. Neither the Borrower nor any Subsidiary is in default
under, nor has any event or circumstance occurred which, but for the expiration of any applicable
grace period or the giving of notice, or both, would constitute a default under, any Material
Agreement to which the Borrower or any Subsidiary is a party or by which the Borrower or any
Subsidiary is bound which default would reasonably be expected to have a Material Adverse Effect.

     Section 3.13 Use of Proceeds and Letters of Credit. The proceeds of the Loans are or
will be used solely (a) to renew and restate the Existing Loan Indebtedness, (b) to reimburse each
Issuing Bank for LC Disbursements in accordance with Section 2.4(e), or (c) to finance the
acquisition, exploration, development and operation of Mineral Interests and related Property and
for any other business activities described in Section 3.10, and for the Borrower’s and its
Subsidiaries’ working capital and general corporate purposes in the ordinary course of business.
Letters of Credit will be issued only to support business operations described in Section
3.10 and/or general corporate purposes in the ordinary course of business of the Borrower or
any of its Subsidiaries.

     Section 3.14 Location of Business and Offices. Each Loan Party’s principal place of
business and chief executive offices are located at the addresses specified on Schedule 3.22 to the
U.S. Credit Agreement or at such other address as specified in writing to the Global Administrative
Agent, which address is at a location permitted by the terms of the Combined Loan Documents.

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     Section 3.15 Subsidiaries. Except as set forth on Schedule 3.13 to the U.S. Credit
Agreement, Schedule 7.8 to the U.S. Credit Agreement or Exhibit L to the U.S. Credit Agreement or
disclosed in writing to the Global Administrative Agent in accordance with Section 5.9, the
Borrower has no Subsidiaries.

     Section 3.16 Priority; Security Matters. The Obligations are and shall be at all
times secured by valid, perfected first and prior Liens (subject only to Permitted Encumbrances) in
favor of the Global Administrative Agent, covering and encumbering (a) the Required Reserve Value,
(b) all of the issued and outstanding Equity Interests owned by the Borrower of each existing and
future Material Subsidiary, (c) all of the issued and outstanding Equity Interests owned by each
Pledging Subsidiary of the Borrower of each existing and future Material Subsidiary thereof and (d)
all other Collateral located in Canada owned by the Borrower or any Material Subsidiary, pursuant
to the Security Documents delivered pursuant to this Agreement or the other Loan Documents, to the
extent perfection has or will occur, by the filing of a financing statement under the PPSA under
the applicable laws of any applicable province, or by possession.

     Section 3.17 Status as Senior Indebtedness. The Loans and other Obligations hereunder
are “Bank Indebtedness,” “Senior Indebtedness” and “Designated Senior Indebtedness” under both the
Existing Subordinate Note Indenture and the Existing Convertible Note Indenture, and this Agreement
is a “Senior Secured Credit Agreement” under the Existing Subordinate Note Indenture and one of the
“Combined Credit Agreements” under the Existing Convertible Note Indenture.

     Section 3.18 Pension Plans. The Borrower and its Material Subsidiaries have in all
respects complied with the contractual provisions and applicable laws relating to each Pension Plan
to which the Borrower or such Material Subsidiary is a party or is otherwise bound, all amounts due
and owing under any such Pension Plan have been paid in full and no deficiency exists (whether or
not waived) under any such Pension Plan, in each case except to the extent such failure to comply,
such failure of payment in full or such deficiency would not reasonably be expected to have a
Material Adverse Effect.

     Section 3.19 Representations and Warranties in U.S. Credit Agreement. The Borrower
represents and warrants that each of the representations and warranties contained in the U.S.
Credit Agreement, including, without limitation, Article III of the U.S. Credit Agreement,
pertaining or otherwise applicable to the Borrower or its Subsidiaries, each in its capacity as a
direct or indirect Subsidiary of the Parent, is true, correct and complete in all respects (except
with respect to such representations and warranties which expressly relate to an earlier date, in
which case such representations and warranties are true, correct and complete as of such earlier
date) and except to the extent previously waived in writing by the Combined Lenders, the Required
Lenders, the Majority Lenders, the U.S. Lenders or the U.S. Required Lenders, as applicable.

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ARTICLE IV

CONDITIONS

     Section 4.1 Initial Loan. The amendment and restatement of the Existing Credit
Agreement on the terms set forth herein, and the obligations of the Lenders to make Loans
(including making BA Loans and accepting Bankers’ Acceptances) or participate in any Letters of
Credit or for any Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived in accordance with
Section 10.2):

          (a) Certain Loan Documents. The Global Administrative Agent (or its counsel) shall
have received from each party thereto either a counterpart of each of the following documents duly
executed on behalf of such party or written evidence satisfactory to the Global Administrative
Agent (which may include telecopy or electronic transmission acceptable to the Global
Administrative Agent of a signed signature page of such document) that each such party has duly
executed for delivery to the Global Administrative Agent a counterpart of each of the following
documents which documents must be acceptable to the Global Administrative Agent in its sole and
absolute discretion: this Agreement, the Intercreditor Agreement, the Fee Letter, the Notes (to the
extent requested by any Lender), a Guaranty from each Guarantor, the Pledge Agreements required by
Section 4.1(e), and the Debentures required by Section 4.1(f), and all related
financing statements and other filings, and the other Loan Documents.

          (b) U.S. Loan Documents. The Global Administrative Agent shall have received copies
of the executed U.S. Loan Documents and all other deliveries required by Section 4.1 of the U.S.
Credit Agreement.

          (c) Opinions of Counsel. The Global Administrative Agent shall have received
opinions, dated the Global Effective Date, addressed to the Global Administrative
Agent, the Canadian Administrative Agent and all Lenders, from (i) General Counsel of the
Parent, in substantially the form attached hereto as Exhibit B-1, (ii) McCarthy Tétrault
LLP, counsel to the Borrower, in substantially the form attached hereto as Exhibit B-2,
(iii) Jones Day, U.S. counsel to the Parent and its Subsidiaries, in substantially the form
attached hereto as Exhibit B-3, (iv) Loomis, Ewert, Parsley, Davis & Gotting, special
Michigan counsel to the Parent and its Subsidiaries, in substantially the form attached hereto as
Exhibit B-4, and (v) Marian McGrath Pearcy, special Indiana counsel to the Parent and its
Subsidiaries, in substantially the form attached hereto as Exhibit B-5.

          (d) Organizational Documents. The Global Administrative Agent shall have received a
certificate of an Authorized Officer of each Loan Party dated as of the Global Effective Date,
certifying:

          (i) that attached to each such certificate is (A) a true and complete copy of the
Organic Documents of such Loan Party, as the case may be, as in effect on the date of such
certificate, (B) a true and complete copy of a certificate from the applicable Governmental
Authority of the jurisdiction of such Loan Party’s organization to the effect that such
entity is validly existing in such jurisdiction, and (C) a true and complete copy of a
certificate from the appropriate Governmental Authority of each

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jurisdiction (without
duplication) to the effect that such Loan Party is duly qualified to transact business in
such jurisdiction as a foreign entity, if the failure to be so qualified would reasonably be
expected to have a Material Adverse Effect;

          (ii) that attached to such certificate is a true and complete copy of resolutions duly
adopted by the board of directors, management committee, members or general partner of such
Loan Party, as applicable, authorizing the execution, delivery and performance of such of
the Combined Loan Documents to which such Loan Party is or is intended to be a party;

          (iii) that attached thereto is (A) a true and complete copy of a certificate from the
applicable Governmental Authority of the jurisdiction of such Loan Party’s organization as
to the existence and, except as to any Texas or Alberta limited partnerships or trust formed
under the laws of Alberta that are Loan Parties, the good standing of such Loan Party, dated
as of a recent date; and (B) a true and complete copy of a certificate from the appropriate
Governmental Authority of each jurisdiction (without duplication) to the effect that such
Loan Party is in good standing in such jurisdiction as a foreign entity, if the failure to
be so qualified would reasonably be expected to have a Material Adverse Effect; and

          (iv) as to the incumbency and specimen signature of each Authorized Officer of such
Loan Party executing such of the Combined Loan Documents to which such Loan Party is or is
intended to be a party.

          (e) Pledge Agreement — Parent. The Global Administrative Agent shall have received
counterparts of a Pledge Agreement, dated as of the Global Effective Date, duly executed and
delivered by the Parent, together with the following:

          (i) stock certificates representing 100% of the outstanding shares of capital stock of
the Borrower (other than the QRC Class C Shares), and stock powers and instruments of
transfer, endorsed in blank, with respect to such certificates; and

          (ii) all documents and instruments, including Uniform Commercial Code Financing
Statements (Form UCC-1), required by law or reasonably requested by the Global
Administrative Agent to be filed, registered or recorded to create or perfect the Liens
intended to be created under such Pledge Agreement.

          (f) Debentures. The Global Administrative Agent shall have received executed
counterparts of the duly executed Debentures (or amendments to the existing Debentures previously
delivered under the Existing Credit Agreement which shall be amended contemporaneously herewith),
as applicable, which Debentures shall create a floating charge in favor of the Global
Administrative Agent for the benefit of the Lenders on substantially all of the Borrowing Base
Properties owned by the Borrower, and a Lien in and to all of the Borrower’s present and
after-acquired personal property, together with such other documents or instruments as the Global
Administrative Agent may reasonably request.

          (g) Canadian Lien Searches. The Global Administrative Agent shall have received (i)
the Canadian Lien Searches, all dated reasonably close to the Closing Date,

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requested by the Global
Administrative Agent and in form and substance satisfactory to the Global Administrative Agent,
(ii) evidence reasonably satisfactory to the Global Administrative Agent that the Liens indicated
by the financing statements (or similar documents) in such Canadian Lien Searches are Permitted
Encumbrances or have been released, and (iii) title due diligence in form and substance acceptable
to the Global Administrative Agent and other evidence of ownership regarding the ownership by the
Borrower and its Subsidiaries of the Borrowing Base Properties.

          (h) Priority; Security Interest. The Collateral and Borrowing Base Properties owned
by the Borrower and its Material Subsidiaries shall be free and clear of all Liens, except
Permitted Encumbrances. All filings, notices, recordings and other action necessary to perfect the
Liens in the Collateral shall have been made, given or accomplished or arrangements for the
completion thereof satisfactory to the Global Administrative Agent and its counsel shall have been
made and all filing fees and other expenses related to such actions either have been paid in full
or arrangements have been made for their payment in full which are satisfactory to the Global
Administrative Agent.

          (i) Approvals and Consents. The Borrower and its Subsidiaries shall have obtained,
and the Global Administrative Agent shall have received, copies of all material Governmental
Approvals (if any) and third party consents and approvals (if any) necessary or advisable in
connection with the Financing Transactions and the continuing operation and maintenance of the
Borrowing Base Properties owned by the Borrower and its Material Subsidiaries, and all applicable
waiting periods and appeal periods shall have expired, in each case without the imposition of any
materially burdensome conditions. There shall be no actual government or judicial action
restraining, preventing or imposing materially burdensome conditions on the Financing Transactions.

          (j) Existing Credit Agreement. The Global Administrative Agent shall have received
evidence satisfactory to it that all Liens associated with the Existing Credit Agreement have been
amended and restated by the Security Documents, contemporaneously with the making of the initial
Loan hereunder, and that arrangements satisfactory to the Global Administrative Agent have been
made for recording and filing such Liens.

          (k) Parent’s Global Effectiveness Notice. The Global Administrative Agent shall have
received the Parent’s Global Effectiveness Notice.

          (l) No Material Adverse Effect; Litigation. The Global Administrative Agent shall
have received a certificate, signed by an Authorized Officer of the Parent, stating that (i) no
event or condition has occurred since December 31, 2005, which would reasonably be expected to have
a Material Adverse Effect and (ii) except as set forth on Schedule 3.5 to the U.S. Credit
Agreement, no litigation, arbitration, governmental proceeding, claim for Taxes, dispute or
administrative or other proceeding shall be pending or, to the knowledge of the Parent, threatened
against the Parent or any of its Subsidiaries which would reasonably be expected to have a Material
Adverse Effect.

          (m) Certificate of Mortgaged Properties. The Global Administrative Agent shall have
received a certificate (the “Certificate of Mortgaged Properties”), signed by an

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Authorized
Officer of the Borrower, stating that the real property attached thereto is an accurate and
complete description of all Mortgaged Properties owned by the Borrower which are real property
located in Canada on and as of the Closing Date.

          (n) Other Documents. The Global Administrative Agent shall have received such other
customary legal opinions, instruments and documents as any of the Global Administrative Agent, the
Lenders or their counsel may have reasonably requested.

          (o) Satisfactory Legal Form. All documents executed or submitted pursuant hereto by
and on behalf of the Borrower, the Parent or any other Loan Party shall be in form and substance
reasonably satisfactory to the Global Administrative Agent and its counsel. The Global
Administrative Agent and its counsel shall have received all information, approvals, documents or
instruments as the Global Administrative Agent or its counsel may reasonably request.

          (p) Fees and Expenses. The Global Administrative Agent, the Canadian Administrative
Agent, the Arrangers, the other Agents and the Lenders shall have received all fees, including the
Upfront Fee, and other amounts due and payable pursuant to this Agreement or any other Combined
Loan Document on or prior to the date hereof, including, to the extent invoiced at least two (2)
Business Days prior to the Global Effective Date, reimbursement or payment of all reasonable
out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required
to be reimbursed or paid by any Loan Party hereunder or under any other Combined Loan Document.

The Global Administrative Agent shall notify the Parent, the Borrower, the Canadian Administrative
Agent and the Combined Lenders of the Global Effective Date, and such notice shall be conclusive
and binding. Upon satisfaction (or waiver pursuant to Section 10.2) of each
of the foregoing conditions and notification by the Global Administrative Agent to the Parent, the
Borrower, the Canadian Administrative Agent and the Combined Lenders of the Global Effective Date,
the Existing Credit Agreement shall automatically and completely be amended and restated on the
terms set forth herein, and until such time, the Existing Credit Agreement shall remain in full
force and effect in accordance with its terms. Notwithstanding the foregoing, the obligations of
the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 10.2) at or prior to 4:00 p.m., Toronto time, on February 9, 2007 (and, in the
event such conditions are not so satisfied or waived, the Global Commitments and Commitments shall
terminate at such time).

     Section 4.2 Each Credit Event. The obligation of each Lender to make a Loan
(including making BA Loans and accepting and purchasing Bankers’ Acceptances) on the occasion of
any Borrowing, and of the Issuing Banks to issue, amend, renew or extend any Letter of Credit, is
subject to receipt of the request therefor in accordance herewith and to the satisfaction of the
following conditions:

          (a) Representations and Warranties. At the time of and immediately after giving
effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit,
as applicable, the representations and warranties of each Loan Party set forth in the

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Combined Loan
Documents to which it is a party shall be true and correct on and as of such date after giving
effect to such funding and to the intended use thereof as if made on and as of such date (or, if
stated to have been made expressly as of an earlier date, were true and correct in all material
respects as of such date), except to the extent previously waived in writing by the Combined
Lenders, the Required Lenders, the Majority Lenders, the Lenders, the U.S. Lenders or the U.S.
Required Lenders, as applicable.

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

          (c) No Material Adverse Effect. At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, no event
or events shall have occurred which individually or in the aggregate would reasonably be expected
to have a Material Adverse Effect.

          (d) Borrowing Request. The Global Administrative Agent and the Canadian
Administrative Agent shall have received a Borrowing Request for any Borrowing. Each Borrowing and
each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute
a representation and warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (a), (b) and (c) of this Section.

ARTICLE V

AFFIRMATIVE COVENANTS

     The Borrower agrees with the Global Administrative Agent, the Canadian Administrative Agent,
the other Agents, any Issuing Bank and each Lender that, until the Global Commitments
and Commitments have expired or been terminated and all Obligations shall have been paid and
performed in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed and no Bankers’ Acceptances Liabilities are outstanding,
the Borrower will perform the obligations set forth in this Article.

     Section 5.1 Information. The Borrower shall deliver, or shall cause to be delivered,
to the Global Administrative Agent and the Canadian Administrative Agent (and to otherwise make
available for each Lender):

          (a) Promptly, but in no event later than five (5) Business Days (if such Default continues to
exist as of such fifth Business Day), following any Authorized Officer of any Loan Party becoming
aware of the occurrence of any Default, a certificate of an Authorized Officer of the Borrower
setting forth the details thereof and the action which the Borrower is taking or proposes to take
with respect thereto.

          (b) Promptly, but in no event later than five (5) Business Days (if such event or circumstance
continues to exist as of such fifth Business Day) following an Authorized Officer of any Loan Party
becoming aware of same, notice to the Global Administrative Agent of any event or circumstance that
would reasonably be expected to have a Material Adverse Effect.

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          (c) From time to time such additional information regarding the financial position or business
of any Loan Party or Person which has any of its Equity Interests pledged pursuant to a Pledge
Agreement as the Global Administrative Agent, at the request of any Lender, may reasonably request.

     Section 5.2 Business of Borrower and Subsidiaries. The sole business of the Borrower
shall be the acquisition, exploration, development and operation of Mineral Interests and the
production, marketing, processing and transportation of Hydrocarbons therefrom and businesses
reasonably related or complementary thereto; and the sole business of each Subsidiary shall be
substantially similar and/or related thereto, or shall otherwise be to act as a holding company for
any such Subsidiary.

     Section 5.3 Maintenance of Existence; Oil and Gas Properties. (a) The Borrower shall,
and shall cause each other Loan Party to, at all times (i) maintain its corporate, partnership or
limited liability company existence in its state of incorporation or organization, and (ii)
maintain its good standing (if and when applicable in the jurisdiction in issue) and qualification
to transact business in all jurisdictions where the failure to maintain good standing or
qualification to transact business would reasonably be expected to have a Material Adverse Effect;
provided that the foregoing shall not prohibit any action permitted under Section 7.4 of
the U.S. Credit Agreement.

          (b) The Borrower will and will cause each Subsidiary to, in all material respects, promptly:
(i) pay and discharge, or make commercially reasonable efforts to cause to be paid and discharged,
when due all delay rentals, royalties and expenses accruing under the leases or other agreements
affecting or pertaining to its Oil and Gas Properties, provided that, in the case of delay
rentals, the Borrower and/or the applicable Subsidiary shall only be required to pay and discharge,
or make commercially reasonable efforts to pay and discharge, delay rentals as
and to the extent the Borrower or such Subsidiary determines in good faith that payment and
discharge thereof is in the Borrower’s or such Subsidiary’s, as applicable, best interest, (ii)
perform, or make reasonable and customary efforts to cause to be performed, the obligations of the
Borrower or any such Subsidiary required by each and all of the assignments, deeds, leases,
sub-leases, contracts and agreements affecting its interests in its material Oil and Gas Properties
and other material Properties, and (iii) do all other things necessary to keep unimpaired, except
for Permitted Encumbrances, its rights with respect to its material Oil and Gas Properties and
other material Properties and prevent any forfeiture thereof or a default thereunder, except to the
extent a portion of such Properties is no longer capable of producing Hydrocarbons in economically
reasonable amounts, except for dispositions permitted by this Agreement or any other Combined Loan
Document and except when the failure to do so would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.

          Section 5.4 Title Data; Title to Oil and Gas Properties. The Borrower shall, upon the
request of the Required Lenders, cause to be delivered to the Global Administrative Agent such
title due diligence regarding title to the Borrowing Base Properties owned by the Borrower and each
of its Subsidiaries and the perfection and priority of Global Administrative Agent’s Liens therein,
as and to the extent such Borrowing Base Properties are required to be mortgaged pursuant hereto,
as are reasonably appropriate to determine the status thereof. The Borrower shall, and shall cause
each Subsidiary to, in all material respects maintain good and defensible

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title (except for
Immaterial Title Deficiencies and Permitted Encumbrances) to (a) the Mortgaged Properties and (b)
its and their other material Oil and Gas Properties, and to do all things reasonably necessary to
cure any material title defects which are not Permitted Encumbrances of which an Authorized Officer
of the Borrower or any Subsidiary has knowledge or has been provided written notice.

     Section 5.5 Right of Inspection. The Borrower will permit, and will cause each other
Loan Party to permit, any officer, employee or agent of the Global Administrative Agent or of any
Lender to visit and inspect any of the assets of any Loan Party, examine each Loan Party’s books of
record and accounts, take copies and extracts thereof and therefrom, and discuss the affairs,
finances and accounts of each Loan Party with such Loan Party’s officers, accountants and auditors,
all upon prior written notice to the Borrower at such reasonable times during the Borrower’s or
such Loan Party’s normal business hours (and in a manner so as, to the extent practicable, not to
interfere with the normal business operations of the Borrower or such Loan Party) and as often as
the Global Administrative Agent or any Lender may reasonably request, and upon and during the
continuance of an Event of Default all at the expense of the Borrower. Notwithstanding the
foregoing, as long as no Event of Default has occurred and is continuing, the Borrower will not be
required to bear the expense of more than one (1) inspection in the aggregate during any calendar
year pursuant to this Section and Section 5.5 of the U.S. Credit Agreement; provided that
if an Event of Default has occurred and is continuing, the Global Administrative Agent shall be
entitled to conduct more frequent inspections at the expense of the Borrower.

     Section 5.6 Compliance with Laws and Documents. The Borrower will, and will cause
each other Loan Party to, comply with all Governmental Rules, their respective certificates (or
articles) of incorporation, bylaws, regulations and similar organizational documents and all
Material Agreements to which any Loan Party is a party, if a violation, alone or when combined
with all other such violations, would reasonably be expected to have a Material Adverse Effect.

     Section 5.7 Operation of Properties and Equipment.

          (a) The Borrower will, and will cause each of its Subsidiaries to, maintain, develop and
operate (or use its commercially reasonable efforts to cause the operator to maintain and operate
to the extent the Borrower is not the operator) its Oil and Gas Properties in a good and
workmanlike manner as and to the extent the Borrower or any of its Subsidiaries, as applicable,
elect in their commercially reasonable discretion to maintain, develop and operate any such Oil and
Gas Property, except to the extent a failure to do so would not reasonably be expected to have a
Material Adverse Effect.

          (b) Subject to Section 7.5 of the U.S. Credit Agreement and to exceptions as in the
aggregate would not reasonably be expected to have a Material Adverse Effect, the Borrower will,
and will cause each of its Subsidiaries to, at all times maintain, preserve and keep all operating
equipment used with respect to its Mineral Interests in proper repair, working order and condition
(subject to ordinary wear and tear), and make all necessary or appropriate repairs, renewals,
replacements, additions and improvements thereto so that, in the Borrower’s commercially reasonable
judgment, the efficiency of such operating equipment shall at all times be properly preserved and
maintained; provided, that no item of operating equipment need be so

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repaired, renewed,
replaced, added to or improved, if the Borrower shall in good faith determine that such action is
not necessary or desirable for the continued efficient and profitable operation of the business of
such Loan Party.

     Section 5.8 Performance of Obligations. The Borrower will and will cause each Loan
Party to do and perform every act and discharge all of the Obligations as and to the extent
required to be performed or discharged by the Borrower or such Loan Party at the time or times and
in the manner specified in the applicable Loan Documents.

     Section 5.9 Additional Subsidiaries. If any additional Subsidiary of the Borrower is
created or acquired after the Global Effective Date, the Borrower will notify the Global
Administrative Agent and the Lenders thereof. On or before the date of the designation by the
Borrower or the Parent of any direct or indirect wholly owned Material Subsidiary, the Borrower
shall cause such Material Subsidiary, and any other Material Subsidiaries resulting from such
designation, to execute and deliver to the Global Administrative Agent a Guaranty. On or before
the date of the designation by the Borrower or the Parent of a Subsidiary as a Material Subsidiary,
the Borrower or relevant Subsidiary, as applicable, will pledge all Equity Interests in such newly
designated Material Subsidiary owned by the Borrower or such Subsidiary, and any other Material
Subsidiaries resulting from such designation, and shall execute and deliver to the Global
Administrative Agent a Pledge Agreement together with (a) all certificates (or other evidence
acceptable to the Global Administrative Agent) evidencing the issued and outstanding Equity
Interests owned by the Borrower or such Subsidiary of any such new Material Subsidiary of every
class owned by the Borrower or such Subsidiary (as applicable) which shall be duly endorsed or
accompanied by stock powers executed in blank (as applicable), and (b) such filings as the Global
Administrative Agent shall deem reasonably necessary or appropriate to grant, evidence and perfect
the Liens required hereunder in the issued and outstanding Equity Interests
of each such new Material Subsidiary. On or before the designation by the Borrower or the
Parent of any additional Material Subsidiary after the Global Effective Date, the Borrower will
cause such Material Subsidiary, and any other Material Subsidiaries resulting from such
designation, to execute appropriate Debentures, to the extent required by Section 5.10, and
promptly take such actions to create and perfect Liens on such Material Subsidiary’s assets, as and
to the extent such assets are required to be mortgaged or pledged pursuant to Section 5.10,
to secure the Obligations as the Global Administrative Agent shall reasonably request.

     Section 5.10 Further Assurances.

          (a) The Borrower will, and will cause each Loan Party to, at the Borrower’s expense, cure
promptly any defects in the execution and delivery of this Agreement and any other Loan Document to
which any of them is a party. The Borrower, at its expense, will and will cause each Subsidiary
to, promptly execute and deliver to the Global Administrative Agent or the Canadian Administrative
Agent all such other documents, agreements and instruments reasonably requested by the Global
Administrative Agent or the Canadian Administrative Agent to comply with or accomplish the
covenants and agreements of the Borrower or any Subsidiary, as the case may be, in this Agreement
and any other Loan Document, or to file any notices or obtain any consents, all as may be
reasonably necessary or appropriate in connection therewith.

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          (b) The Borrower agrees that it will, and will cause each Loan Party to, at the Borrower’s
expense, execute any and all further documents, financing statements, agreements and instruments
and take all such further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents) that may be required under any
applicable law or which the Global Administrative Agent or the Canadian Administrative Agent may
reasonably request, to effect the transactions contemplated by the Security Documents, or to grant,
preserve, protect or perfect the Liens created or intended to be created thereby or the validity or
priority (subject only, with respect to priority, to Permitted Encumbrances) of any such Liens, all
at the expense of the Loan Parties.

          (c) The Borrower shall at all times cause the Obligations to be secured by first and prior
Liens (subject only, with respect to priority, to Permitted Encumbrances) covering and encumbering
the Required Reserve Value. On or before each Redetermination Date after the Closing Date and at
such other times as the Global Administrative Agent or Required Lenders shall request, the Borrower
and its Subsidiaries shall execute and deliver to Administrative Agent, for the ratable benefit of
each Lender, Security Documents in form and substance reasonably acceptable to the Global
Administrative Agent and duly executed by the Borrower and any such Subsidiary (as applicable)
together with such other assignments, conveyances, amendments, agreements and other writings,
including, without limitation, appropriate financing statements and similar filings as the Global
Administrative Agent shall deem reasonably necessary or appropriate to grant, evidence and perfect
the Liens granted pursuant to the Security Documents with respect to Borrowing Base Properties
acquired by the Borrower and its Subsidiaries subsequent to the last date on which the Borrower or
any such Subsidiary was required to execute and deliver Debentures pursuant to Section 4.1,
Section 5.9 or this Section 5.10, or which, for any other reason are not the
subject of valid, enforceable, perfected first priority Liens (subject only to Permitted
Encumbrances) in favor of the Global Administrative Agent for the ratable benefit of Lenders
covering the Required Reserve Value. Notwithstanding
anything herein to the contrary, it is the intention of the parties hereto that the Borrower
and its Subsidiaries will not be required to deliver security or collateral for the Obligations
other than (i) as delivered on or before the Closing Date pursuant to Article IV, (ii) as
required pursuant to Section 5.9 or this Section 5.10 or the U.S. Loan Documents
and (iii) as otherwise agreed upon in writing between the Lender Parties and the Parent, the
Borrower and/or the applicable Subsidiary after the Closing Date, provided that the
Borrower and the Material Subsidiaries shall in no event be required to pledge, or grant any
security interests in any of the following that may now or hereafter be owned or leased by the
Borrower or any Material Subsidiary, or to which the Borrower or any Material Subsidiary is a
party: (A) any vehicles, (B) any equipment the ownership to which is evidenced by certificate(s) of
title or (C) any Hedging Agreements or computer or software licenses that are non-assignable by
their terms without the consent of the other party or parties thereto or the licensor (or
sublicensor) thereof, as applicable.

          (d) At any time the Borrower or any of its Subsidiaries is required to execute and deliver
Security Documents to the Global Administrative Agent pursuant to Section 5.9 or this
Section 5.10, the Borrower shall also deliver to the Global Administrative Agent such
customary opinions of counsel (including, if so requested, title opinions, and in each case
addressed to the Global Administrative Agent) and other evidence of title as the Global
Administrative Agent shall deem reasonably necessary or appropriate to verify (i) the Borrower’s or
such Subsidiary’s title to the Required Reserve Value of the Proved Mineral Interests which

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are
subject to such Debentures, and (ii) the validity, perfection of the Liens and priority (subject
only, with respect to priority, to Permitted Encumbrances) of the Liens created by such Debentures
and such other matters regarding such Debentures and the Loan Documents as the Global
Administrative Agent shall reasonably request.

          (e) The Borrower agrees to provide to the Global Administrative Agent, from time to time upon
reasonable request of the Global Administrative Agent, information that is in the possession of the
Borrower or its Subsidiaries or otherwise reasonably obtainable by any of them, reasonably
satisfactory to the Global Administrative Agent as to the perfection and priority (subject only,
with respect to priority, to Permitted Encumbrances) of the Liens created or intended to be created
by the Security Documents. The Security Documents shall remain in effect at all times unless
otherwise released pursuant to the terms of this Agreement or any other Combined Loan Document.

          (f) In connection with the foregoing, the Borrower hereby authorizes the Global Administrative
Agent and the Lenders to file one or more financing statements or similar filings or continuation
statements, and amendments thereto, in such jurisdictions as are necessary or as the Global
Administrative Agent, in its reasonable discretion, deems advisable to perfect, prepare, protect
and maintain the Liens, and the priority thereof, created pursuant to the Security Documents
relative to all or any part of the Collateral without the signature of the Borrower or any other
Loan Party where permitted by law and describing the collateral using words such as “all personal
property” or “all assets” or other words of similar import. A carbon, photographic or other
reproduction of the Security Documents or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by law. The Global
Administrative Agent will promptly send the Borrower any financing or continuation statements it
files without the signature of the Borrower or any other Loan Party and the Global
Administrative Agent will promptly send the Borrower the filing or recordation information
with respect thereto.

     Section 5.11 Pension Plans. The Borrower and its Material Subsidiaries shall in all
respects comply with the contractual provisions and applicable laws relating to each Pension Plan
to which the Borrower or such Material Subsidiary is a party or is otherwise bound and shall cause
all amounts due and owing under any such Pension Plan to be paid in full, in each case except to
the extent failure to comply or failure to cause to be paid would not reasonably be expected to
have a Material Adverse Effect.

     Section 5.12 Pledges of Equity Interests in non-Loan Parties. Prior to any Investment
being considered a Permitted Investment pursuant to subsections (k) and (q) of the definition of
“Permitted Investment” contained in the U.S. Credit Agreement, the Borrower or relevant Subsidiary,
as applicable, will pledge all Equity Interests in the Person into which the Investment was or will
be made which are owned by the Borrower or such Subsidiary and shall execute and deliver to the
Global Administrative Agent a Pledge Agreement together with (a) all certificates (or other
evidence acceptable to the Global Administrative Agent) evidencing the issued and outstanding
Equity Interests owned by the Borrower or such Subsidiary of any such Person of every class owned
by the Borrower or such Subsidiary (as applicable) which shall be duly endorsed or accompanied by
stock powers executed in blank (as applicable), and (b) such filings as the Global Administrative
Agent shall deem reasonably necessary or appropriate to

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grant, evidence and perfect the Liens
required hereunder in the issued and outstanding Equity Interests of each such Person.

     Section 5.13 Covenants in U.S. Credit Agreement. Until the payment in full in cash of
all Obligations and the termination or expiration of all Commitments and Letters of Credit and
Bankers’ Acceptances, the Borrower covenants and agrees that it will perform, comply with, observe
and fulfill, each of the covenants, agreements and obligations contained in the U.S. Credit
Agreement (or, if the U.S. Credit Agreement has been terminated, the covenants, agreements and
obligations in effect immediately prior to the termination of the U.S. Credit Agreement),
including, without limitation, Article V and Article VII of the U.S. Credit Agreement, pertaining
or otherwise applicable to such Borrower in its capacity as a Subsidiary of the Parent. The
Borrower hereby irrevocably and unconditionally agrees to be bound by such covenants, agreements
and obligations applicable to it in such capacity as if such Borrower were a party to the U.S.
Credit Agreement and such covenants, agreements and obligations applicable to it in such capacity
are hereby reaffirmed by the Borrower.

ARTICLE VI

[RESERVED]

ARTICLE VII

NEGATIVE COVENANTS

     The Borrower agrees with the Global Administrative Agent, the Canadian Administrative Agent,
the other Agents, any Issuing Bank and each Lender that, until the Global Commitments and
Commitments have expired or been terminated and all Obligations shall have been paid and performed
in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed and no Bankers’ Acceptances Liabilities are
outstanding, the Borrower will perform the obligations set forth in this Article.

     Section 7.1 Incurrence of Debt. The Borrower will not, nor will the Borrower permit
any other Loan Party to, incur, become or remain liable for any Indebtedness, other than:

          (a) the Combined Obligations;

          (b) the guarantee by the Borrower or any Material Subsidiary of any Contractual Obligation of
any Material Subsidiary so long as such guarantee only guarantees not more than the percentage of
such Contractual Obligation that equals the percentage of common equity owned directly or
indirectly by the Borrower or any Material Subsidiary, as applicable, in such Material Subsidiary
at the time such guaranty is executed;

          (c) Indebtedness of the Parent evidenced by and/or arising out of the Falcon Seaboard
Settlement Agreement;

          (d) Indebtedness of any Material Subsidiary to the Borrower or any other Material Subsidiary
or any Indebtedness permitted pursuant to Section 7.1(d) of the U.S. Credit Agreement;

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          (e) Indebtedness outstanding on the date hereof listed on Schedule 7.1 to the U.S. Credit
Agreement and any refinancings, renewals or extensions thereof (without increasing, or shortening
the maturity of, the principal amount thereof);

          (f) Indebtedness of a Person which becomes a Subsidiary of the Parent after the date hereof,
provided that (i) such Indebtedness existed at the time such Person became a Subsidiary and
was not created in anticipation thereof and (ii) immediately after giving effect to the acquisition
of such Person by the Parent or a Subsidiary of the Parent, no Default or Event of Default shall
have occurred and be continuing; provided, further, that all Indebtedness incurred
under this clause (f), together with all Indebtedness incurred pursuant to clause
(l) below, does not exceed U.S.$20,000,000 in the aggregate;

          (g) endorsements of negotiable instruments for collection in the ordinary course of business;

          (h) Indebtedness consisting of performance bonds or surety or appeal bonds provided by the
Parent or any Subsidiary of the Parent in the ordinary course of business;

          (i) Non-Recourse Debt in an aggregate amount outstanding at any time not to exceed
U.S.$5,000,000;

          (j) Hedging Obligations existing or arising under Oil and Gas Hedge Transactions to the extent
such Oil and Gas Hedge Transactions are not prohibited by Section 7.11 of the U.S. Credit
Agreement;

          (k) Indebtedness constituting “Permitted Investments” under the U.S. Credit Agreement,
provided that with respect to subsections (k) and (q) of the definition of “Permitted
Investments” under the U.S. Credit Agreement, references to “Section 5.17 and Section 5.18”
shall be deemed to be references to “Section 5.10 and Section 5.12” of this
Agreement;

          (l) Indebtedness incurred to finance the acquisition, construction or improvement of fixed or
capital assets (including, without limitation, Capital Lease Obligations) secured by Liens
permitted by subsection (o) of the definition of “Permitted Encumbrances” contained herein;
provided that all Indebtedness incurred under this clause (l), together with all
Indebtedness incurred pursuant to clause (f) above, does not exceed U.S.$20,000,000 in the
aggregate;

          (m) Indebtedness in an aggregate amount outstanding at any time not to exceed U.S.$40,000,000;

          (n) the Existing Subordinate Debt; provided, however, that the aggregate
principal amount of such Existing Subordinate Debt does not exceed U.S.$500,000,000;

          (o) the Permitted Senior Notes Debt; provided, however, that the aggregate
principal amount of such Permitted Senior Notes Debt does not exceed U.S.$300,000,000;

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          (p) Indebtedness associated with worker’s compensation claims, unemployment insurance laws or
similar legislation incurred in the ordinary course of business; and

          (q) Taxes, assessments or other governmental charges which are not yet due or are being
contested in good faith in accordance with Section 5.7 of the U.S. Credit Agreement;

provided, that, the Borrower may not incur any new Indebtedness (other than (i) the
renewal, extension, refinancing or replacement of the Existing Subordinate Debt or any Permitted
Senior Notes Debt and (ii) Guarantees by any Subsidiaries thereof to the extent the same is
incurred in accordance with Section 7.14 of the U.S. Credit Agreement) described in clauses
(f), (i), (j) and (o) above at any time that a Default, Event of
Default, Global Borrowing Base Deficiency or U.S. Borrowing Base Deficiency has occurred and is
continuing.

For the avoidance of doubt, to the extent any Indebtedness could be attributable to more than one
subsection of this Section 7.1, the Borrower or any other Loan Party may categorize all or
any portion of such Indebtedness to any one or more subsections of this Section 7.1 as it
elects and unless as otherwise expressly provided, in no event shall the same portion of any
Indebtedness be deemed to utilize or be attributable to more than one subsection of this
Section 7.1.

     Section 7.2 Negative Pledge. The Borrower will not, nor will the Borrower permit any
other Loan Party to, create, assume or suffer to exist any Lien on any of their respective assets,
other than Permitted Encumbrances. Subject to Sections 9-406 through 9-409 of the Uniform
Commercial Code as amended and in effect from time to time, the Borrower will not, nor will the
Borrower permit any other Loan Party to, create, assume or suffer to exist or enter into or become
bound by any agreement (other than this Agreement and the other Combined Loan Documents or pursuant
to agreements creating purchase money security interests or governing Capital Lease Obligations, in
each case to the extent the same are permitted pursuant
to the Combined Loan Documents) that prohibits or otherwise restricts the right of the
Borrower or any other Loan Party to create, assume or suffer to exist any Lien on any of their
respective assets in favor of the Global Administrative Agent for the ratable benefit of Lenders.

     Section 7.3 Amendments to Organizational Documents. The Borrower will not, nor will
the Borrower permit any other Loan Party to, enter into or permit any modification or amendment of,
or waive any material right or obligations of any Person under, its Organic Documents (other than
amendments, modifications and waivers which would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect).

     Section 7.4 Use of Proceeds. The proceeds of the Loans and Letters of Credit will not
be used for any purpose other than in the manner described in Section 3.13.

     Section 7.5 Transactions with Affiliates. The Borrower will not, nor will the
Borrower permit any of its Subsidiaries to, engage in any transaction with any Affiliate (other
than Borrower or any Subsidiary of Borrower), except for (a) Permitted Investments, (b) such
transactions which are on material terms and conditions materially as favorable to such party as
could be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate,

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or (c) such transactions as are otherwise permitted under this Agreement or any other Combined Loan
Document.

     Section 7.6 Fiscal Year. The Borrower will not, and the Borrower will not permit any
other Loan Party to, change its Fiscal Year.

     Section 7.7 Change in Business. The Borrower will not, nor will the Borrower permit
any other Loan Party to, engage in any business other than the businesses described in Section
3.10 hereof.

ARTICLE VIII

EVENTS OF DEFAULT

     Section 8.1 Listing of Events of Default. Each of the following events or occurrences
described in this Section 8.1 shall constitute an “Event of Default”:

          (a) the Borrower shall fail to pay when due any principal on any Loan (including BA Loans) or
shall fail to pay when due any reimbursement obligation in respect of any Bankers’ Acceptance;

          (b) the Borrower shall fail to pay when due accrued interest on any Loan (including BA Loans
and Bankers’ Acceptances), or any reimbursement obligation made under any Letter of Credit or any
fees or any other amount payable hereunder, and such failure shall continue for a period of five
(5) days following the due date thereof;

          (c) the Borrower shall fail to observe or perform any covenant or agreement contained in
Article VII or Section 5.13 (as it relates to Article VII of the U.S. Credit
Agreement) of this Agreement;

          (d) any Loan Party shall fail to observe or perform any covenant or agreement contained in
this Agreement or any other Loan Document (other than those referenced in Section 8.1(a),
(b) and (c)) and such failure continues for a period of thirty (30) days after the
earlier of (i) the date any Authorized Officer of any Loan Party acquires knowledge of such
failure, or (ii) written notice of such failure has been given to any Loan Party by Global
Administrative Agent or any Lender;

          (e) any representation, warranty, certification or statement made or deemed to have been made
by any Loan Party in any certificate, financial statement or other document delivered pursuant to
this Agreement or any other Combined Loan Document shall prove to have been incorrect in any
material respect when made;

          (f) any Loan Party shall fail to make one or more payments when due on any Indebtedness of
such Person (including, without limitation, any payment due under a Hedging Agreement, but
excluding any payment due under any Combined Loan Document) in a principal amount equal to or
greater than U.S.$15,000,000 individually or $30,000,000 in the aggregate beyond any applicable
grace period provided with respect thereto which shall continue uncured or unwaived, or any other
event or condition shall occur and be continuing which event or

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condition (i) results in the
acceleration of the maturity of any such Indebtedness, or (ii) entitles the holder of such
Indebtedness to accelerate the maturity thereof;

          (g) any Loan Party shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any bankruptcy,
insolvency, corporate or other similar Governmental Rule now or hereafter in effect, including,
without limitation, under the Bankruptcy and Insolvency Act (Canada), the Companies Creditors
Arrangement Act (Canada) or the Winding-up and Restructuring Act (Canada), or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due or shall admit in writing its inability to pay its debts as they
become due or shall admit to any of the circumstances, facts or events in clause (g) or
(h) of this Section 8.1, or shall take any corporate, partnership or limited
liability company action to authorize any of the foregoing;

          (h) an involuntary case or other proceeding shall be commenced against any Loan Party seeking
liquidation, reorganization, dissolution, winding up, or other similar relief (including
re-composition or readjustment) with respect to it or its debts under any bankruptcy, insolvency,
corporate or other similar Governmental Rule now or hereafter in effect, including, without
limitation, under the Bankruptcy and Insolvency Act (Canada), the Companies Creditors Arrangement
Act (Canada) or the Winding-up and Restructuring Act (Canada), or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain undismissed, undischarged,
unbonded or unstayed for a period of sixty (60) consecutive days; or an order for relief shall be
entered against any Loan Party under the Bankruptcy and Insolvency Act (Canada) or other similar
Governmental Rules as now or hereafter in effect;

          (i) one (1) or more final judgments or orders (not paid or fully covered by insurance as to
which the relevant insurance company has acknowledged coverage and a copy of such acknowledgement
has been delivered to the Global Administrative Agent) for the payment of money aggregating in
excess of U.S.$15,000,000 shall be rendered against any Loan Party and such judgment or order shall
continue unsatisfied or unstayed for sixty (60) days;

          (j) [reserved];

          (k) this Agreement or any other Combined Loan Document shall cease to be in full force and
effect or shall be declared null and void or the validity or enforceability thereof shall be
contested or challenged by any Loan Party, or any Loan Party shall deny that it has any further
liability or obligation under any of the Combined Loan Documents to which it is a party, or any
Lien created by the Combined Loan Documents shall for any reason (other than the release thereof in
accordance with the Combined Loan Documents) cease to be a valid, first priority, perfected Lien
(subject only, with respect to priority, to Permitted Encumbrances) upon any of the Collateral
purported to be covered thereby;

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          (l) any circumstance or event shall occur that has had since December 31, 2005, or that
would reasonably be expected to have a Material Adverse Effect with respect to the Borrower and its
Subsidiaries, taken as a whole;

          (m) a Change of Control shall occur;

          (n) a “Default” or “Event of Default” (each as defined in each material Existing Subordinate
Note Document, including, without limitation, the Existing Subordinate Note Indenture and the
Existing Convertible Note Indenture, and each material Permitted Senior Notes Document) shall occur
and be continuing;

          (o) any “Default” or “Event of Default” as defined in the U.S. Loan Documents shall occur;
provided that if such “Default” or “Event of Default” is cured or waived under the U.S.
Loan Documents, then such “Default” or “Event of Default” shall no longer constitute a Default or
an Event of Default, respectively, under this Agreement; or

          (p) any Guarantor fails to make payment under the Guaranty executed by such Guarantor in
accordance with the terms thereof; or any Guaranty is for any reason (other than satisfaction in
full of all Combined Obligations and the termination of the Commitments and the U.S. Commitments)
partially or wholly revoked or invalidated, or otherwise ceases to be in full force and effect in
any material respect, or any Guarantor or any other Loan Party contests in any manner the validity
or enforceability thereof or denies that such Guarantor has any further liability or obligation
thereunder.

     Section 8.2 Action if Bankruptcy. If any of the Events of Default specified in
Section 8.1(g) or (h) shall occur, then without any notice to any Loan Party or any
other act by the Global Administrative Agent or Lenders, the Global Commitments and Commitments (if
not theretofore terminated) shall automatically terminate and the outstanding principal amount of
all outstanding Loans and all other Obligations hereunder shall automatically be and become
immediately due and payable, without demand, protest or presentment or notice of any kind, all of
which are hereby expressly waived by the Borrower and its Subsidiaries. Without limiting the
foregoing, the Agents and the Lenders shall be entitled to exercise any and all other remedies
available to them under the Loan Documents and applicable law.

     Section 8.3 Action if Other Event of Default. If any of the Events of Default (other
than any Event of Default specified in Section 8.1(g) or (h)) shall occur for any
reason, whether voluntary or involuntary, and be continuing, the Required Lenders may, by notice to
the Parent and the Borrower, declare (a) the Global Commitments and Commitments (if not theretofore
terminated) to be terminated and/or (b) all of the outstanding principal amount of the Loans
(including BA Loans and Bankers’ Acceptances) and all other Obligations hereunder to be due and
payable, whereupon the Global Commitments and Commitments shall terminate and the full unpaid
amount of such Loans and other obligations shall be and become immediately due and payable, without
demand, protest or presentment or notice of any kind, all of which are hereby waived by the
Borrower and its Subsidiaries. Without limiting the foregoing, the Agents and the Lenders shall be
entitled to exercise any and all other remedies available to them under the Loan Documents and
applicable law.

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ARTICLE IX

AGENTS

     Each of the Lenders, the Issuing Banks and the other Agents hereby irrevocably appoints
JPMorgan Chase Bank, N.A., as the Global Administrative Agent, JPMorgan Chase Bank, N.A., Toronto
Branch, as the Canadian Administrative Agent, BNP Paribas and Bank of America, N.A., as Co-Global
Syndication Agents, and Fortis Capital Corp., The Bank of Nova Scotia and Deutsche Bank Trust
Company Americas, as Co-Global Documentation Agents, and authorizes each such Agent to take such
actions on its behalf and to exercise such powers as are delegated to such Agent by the terms of
the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

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

     The Agents shall not have any duties or obligations except those expressly set forth in the
Loan Documents. Without limiting the generality of the foregoing, (a) the Agents shall not be
subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and
is continuing, (b) each Agent shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan
Documents that such Agent is required to exercise following its receipt of written instructions
from the Required Lenders (or such other number or percentage of the Combined Lenders as shall be
necessary under the circumstances as provided in Section 10.2), and (c) except as expressly
set forth in the Loan Documents, the Agents shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Parent, the Borrower or any of
its Subsidiaries that is communicated to or obtained by the bank serving as such Agent or any of
its Related Parties in any capacity. Each Agent shall not be liable for any action taken or not
taken by it with the consent or at the request of the Required Lenders (or such other number or
percentage of the Combined Lenders as shall be necessary under the circumstances as provided in
Section 10.2) or in the absence of its own gross negligence or willful misconduct;
PROVIDED, HOWEVER, THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH OF THE
AGENTS BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS
OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL.
Each Agent shall be deemed not to have knowledge of any Default unless and until written notice
thereof is given to such Agent by the Borrower or a Lender, and such Agent shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any certificate, report or
other document delivered thereunder or in connection therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth in any Loan Document,
(iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set forth in
Article IV

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or elsewhere in any Loan Document, other than to confirm receipt of items expressly required
to be delivered to such Agent.

     The Global Administrative Agent, the Canadian Administrative Agent and the other Agents shall
be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Global Administrative Agent, the
Canadian Administrative Agent and the other Agents also may rely upon any statement made to it
orally or by telephone and believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Global Administrative Agent, the Canadian Administrative Agent
and the other Agents may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

     Any Agent may perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by such Agent. Any Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers through their respective Related Parties.
The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of such Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided for herein as well
as activities as an Agent.

     Subject to the appointment and acceptance of a successor Global Administrative Agent or
Canadian Administrative Agent as provided in this paragraph, the Global Administrative Agent or
Canadian Administrative Agent may resign at any time by notifying the Combined Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right, with the consent
of the Parent and the Borrower (unless an Event of Default has occurred and is continuing), to
appoint a successor. If no successor shall have been so appointed by the Required Lenders, with
such consent of the Parent and the Borrower (unless an Event of Default has occurred and is
continuing), and shall have accepted such appointment within 30 days after the retiring Global
Administrative Agent or the retiring Canadian Administrative Agent gives notice of its resignation,
then the retiring Global Administrative Agent or retiring Canadian Administrative Agent may, with
the consent of the Parent and the Borrower (unless an Event of Default has occurred and is
continuing) on behalf of the Combined Lenders and the Issuing Banks, appoint a successor Global
Administrative Agent or successor Canadian Administrative Agent, respectively, which shall be a
commercial bank organized under the laws of the United States of America or the laws of Canada,
respectively, having combined capital and surplus of at least U.S.$100,000,000, or an Affiliate of
any such bank. Upon the acceptance of its appointment as Global Administrative Agent or Canadian
Administrative Agent hereunder by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Global Administrative Agent or
retiring Canadian Administrative Agent, as the case may be, and the retiring Global Administrative
Agent or retiring Canadian Administrative Agent shall be discharged from its duties and obligations
hereunder (other than its obligations under Section 10.12). The fees payable by the
Borrower to a successor Global Administrative Agent or successor Canadian Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower
and

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such successor. After the Global Administrative Agent’s or Canadian Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 10.3 shall continue in
effect for the benefit of such retiring Global Administrative Agent or retiring Canadian
Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as Global Administrative Agent or
the Canadian Administrative Agent, respectively.

     Each Lender acknowledges that it has, independently and without reliance upon any Agent or any
other Lender and based on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the Intercreditor Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon any Agent or any
other Lender and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action under or based upon
this Agreement, any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

     Each of the Lenders, for itself and on behalf of any of its Affiliates, the Issuing Banks, and
the other Agents hereby irrevocably appoints the Global Administrative Agent and the Canadian
Administrative Agent to act as its agent under the Intercreditor Agreement and authorizes the
Global Administrative Agent and the Canadian Administrative Agent to execute the Intercreditor
Agreement on its behalf and to take such actions on its behalf and to exercise such powers as are
delegated to the Global Administrative Agent or the Canadian Administrative Agent by the terms
hereof and thereof, together with such actions and powers as are reasonably incidental thereto.

     Without limiting the provisions of Section 7.5(b) of the U.S. Credit Agreement, each of the
Lenders, for itself and on behalf of any of its Affiliates, and the Issuing Banks hereby authorize
the Global Administrative Agent to release any Collateral or Guaranties that are permitted to be
sold or released pursuant to the Loan Documents, and the Global Administrative Agent agrees to
promptly release any such items upon written request from the Borrower. Each Lender and each
Issuing Bank hereby authorizes the Global Administrative Agent to execute and deliver to the
Borrower, at the Borrower’s sole cost and expense, any and all releases of Liens, releases of
Guaranties, termination statements, or other documents reasonably requested by the Borrower in
connection with (i) any sale or disposition of Collateral, or (ii) any Subsidiary ceasing to be a
Material Subsidiary hereunder, or otherwise pursuant to any other transaction permitted by this
Agreement or the other Combined Loan Documents.

ARTICLE X

MISCELLANEOUS

     Section 10.1 Notices.

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

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	 	(i)	 	if to the Borrower, to:

Quicksilver Resources Canada Inc.

One Palliser Square, Suite 2000

125-9th Avenue, SE

Calgary, Alberta T2G OP8

Canada

Attention: Bob McGregor

Telephone: (403) 537-2467

Telecopy: (403) 537-3236

Email: bmcgregor@qrinc.ca

	 	 	 	with a copy to:

Quicksilver Resources Inc.

777 West Rosedale Street

Suite 300

Fort Worth, Texas 76104

Attention: MarLu Hiller

Telephone: (817) 665-4860

Telecopy: (817) 665-5016

Email: mhiller@qrinc.com

	 	(ii)	 	if to the Global Administrative Agent, to:

JPMorgan Chase Bank, N.A.

10 South Dearborn, 7th Floor

Mail Code: IL1-0010

Chicago, Illinois 60603

Attention: Leonida G. Mischke

Telephone: (312) 385-7055

Telecopy: (312) 385-7096

Email: leonida.g.mischke@jpmchase.com

	 	 	 	and, with respect to non-Borrowing related matters, with a copy to:

JPMorgan Chase Bank, N.A.

1717 Main Street, 4th Floor

TX1-2448

Dallas, Texas 75201

Attention: J. Scott Fowler

Telephone: (214) 290-2162

Telecopy: (214) 290-2332

Email: scott.fowler@jpmorgan.com

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	 	(iii)	 	if to the Canadian Administrative Agent, to:

JPMorgan Chase Bank, N.A., Toronto Branch

BCE Place

161 Bay Street, Suite 4240

Toronto, Ontario, M5J 2S1

Attention: Michael Tam

Telephone: (416) 365-5261

Telecopy: (416) 363-7574

Email: michael_n_tam@jpmorgan.com

	 	 	 	with a copy to:

JPMorgan Chase Bank, N.A.

10 South Dearborn, 7th Floor

Mail Code: IL1-0010

Chicago, Illinois 60603

Attention: Leonida G. Mischke

Telephone: (312) 385-7055

Telecopy: (312) 385-7096

Email: leonida.g.mischke@jpmchase.com

	 	 	 	and, with respect to non-Borrowing related matters, with a copy to:

JPMorgan Chase Bank, N.A.

1717 Main Street, 4th Floor

TX1-2448

Dallas, Texas 75201

Attention: J. Scott Fowler

Telephone: (214) 290-2162

Telecopy: (214) 290-2332

Email: scott.fowler@jpmorgan.com

	 	(iv)	 	if to any other Agent or Lender, to it at its address (or telecopy number)
provided to the Global Administrative Agent, the Canadian Administrative Agent and the
Borrower or as set forth in its Administrative Questionnaire; and
	 
	 	(v)	 	if to any U.S. Lender, to it at its address (or telecopy number) provided to
the Global Administrative Agent and the Parent or as set forth in its “Administrative
Questionnaire” as defined in the U.S. Credit Agreement.

Upon receipt by the Canadian Administrative Agent thereof, the Global Administrative Agent shall
promptly provide the Global Administrative Agent and the Borrower with a copy of each Lender’s
Administrative Questionnaire.

          (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the

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Global Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Global Administrative Agent and the
applicable Lender. The Global Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be limited to
particular notices or communications.

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

     Section 10.2 Waivers; Amendments.

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

          (b) Neither this Agreement nor any of the Combined Loan Documents nor any provision hereof or
thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrower and the Majority Lenders or by the
Borrower and the Global Administrative Agent and the Canadian Administrative Agent with the consent
of the Majority Lenders, or, in the case of any other Combined Loan Document, pursuant to an
agreement or agreements in writing entered into by the relevant Loan Parties thereto and the
Majority Lenders or by the relevant Loan Parties thereto and the Global Administrative Agent and
the Canadian Administrative Agent with the consent of the Majority Lenders; provided that
no such agreement shall (i) increase the Global Commitment or Commitment of any Lender without the
written consent of such Lender (other than, in the case of a Commitment of a Lender, pursuant to a
reallocation in accordance with Section 2.1(c)), (ii) reduce, or otherwise release the
Borrower from its obligation to pay, the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount
of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any

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such payment, or postpone the Maturity Date, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would alter
the pro rata sharing of payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section 10.2, or Section 2.7 or Section
2.10, or the definition of “Combined Lenders” or “Majority Lenders” or “Required Lenders” or
“Supermajority Lenders” or “U.S. Required Lenders” or “U.S. Supermajority Lenders” or any other
provision of any Combined Loan Document specifying the number or percentage of Lenders, U.S.
Lenders, or Combined Lenders required to determine or redetermine the Global Borrowing Base or
required to waive, amend or modify any rights of the Combined Lenders thereunder or make any
determination or grant any consent thereunder, without the written consent of each Combined Lender,
(vi) release any Loan Party from its Guaranty (except as expressly provided in such Guaranty), or
limit its liability in respect of such Guaranty, without the written consent of each Combined
Lender, (vii) except as expressly provided herein, in the Intercreditor Agreement or in the
Security Documents (as defined herein and in the U.S. Credit Agreement), release all or any part of
the Collateral from the Liens of the Security Documents (as defined herein and in the U.S. Credit
Agreement), without the written consent of each Combined Lender, or (viii) amend or modify
Section 2.1(c) without the written consent of each Combined Lender; provided
further that no such agreement shall amend, waive, modify or otherwise affect the rights or
duties of any Agent (as defined herein and in the U.S. Credit Agreement) or any Issuing Bank (as
defined herein and in the U.S. Credit Agreement) without the prior written consent of such Agent
(as defined herein and in the U.S. Credit Agreement) or such Issuing Bank (as defined herein and in
the U.S. Credit Agreement), as the case may be; and provided further that, without
limiting the provisions of Section 7.5(b) of the U.S. Credit Agreement or the last paragraph of
Article IX, the Global Administrative Agent shall have the right to execute and deliver any
release of Lien (or other similar instrument) without the consent of any Lender to the extent such
release is required to permit the Borrower or a Subsidiary to consummate a transaction permitted by
this Agreement or the other Combined Loan Documents, or as otherwise required as a result of any
Subsidiary ceasing to be a Material Subsidiary. Notwithstanding anything to the contrary contained
in the Combined Loan Documents, the Parent and/or any of its Subsidiaries shall be permitted at any
time to consummate, or cause to be consummated, the MLP Transactions (as defined in the U.S. Credit
Agreement) or any part thereof without any further consent or approval of any of the Agents or
Combined Lenders, provided such transactions are consummated in accordance and material compliance
with the description set forth in Exhibit N to the U.S. Credit Agreement.

     Section 10.3 Expenses; Indemnity; Damage Waiver.

          (a) The Borrower shall pay (i) all legal, printing, recording, syndication, travel,
advertising and other reasonable and substantiated out-of-pocket expenses incurred by the Global
Administrative Agent, the Canadian Administrative Agent and the Arrangers, including the reasonable
and substantiated fees, charges and disbursements of one (1) outside U.S. counsel, one (1) outside
Canadian counsel (on a solicitor and his own client full indemnity basis) and applicable local
counsel for the Global Administrative Agent, the Canadian Administrative Agent and the Arrangers,
in connection with the syndication of the credit facilities provided for herein, the preparation,
execution, delivery and administration of this Agreement, the Loan Documents and each other
document or instrument relevant to this Agreement or the Loan Documents and any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all

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reasonable out-of-pocket expenses incurred by an Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iii)
the filing, recording, refiling or rerecording of the Pledge Agreements and any other Security
Documents and/or any Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to, and all releases and terminations of, any thereof and
any and all other documents or instruments of further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or of the Pledge Agreements and any other Security
Documents, and (iv) all reasonable and substantiated out-of-pocket expenses incurred by the Agents,
any Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for
the Agents, any Issuing Bank or any Lender (on a solicitor and his own client full indemnity
basis), reasonably incurred in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or in connection with
the Loans made or Letters of Credit issued hereunder, including all such reasonable and
substantiated out-of-pocket expenses reasonably incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

          (b) EXCEPT TO THE EXTENT REIMBURSEMENT OF EXPENSES IS LIMITED BY SECTION 10.3(a) TO
REIMBURSEMENT OF EXPENSES OF ONLY CERTAIN PARTIES, THE BORROWER SHALL INDEMNIFY THE AGENTS, EACH
ISSUING BANK, THE ARRANGERS AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS
(EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS
FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE
REASONABLE OUT-OF-POCKET FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE (ON A
SOLICITOR AND HIS OWN CLIENT FULL INDEMNITY BASIS), INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE
ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF ANY LOAN
DOCUMENT OR ANY OTHER AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE PERFORMANCE BY THE PARTIES
TO THE LOAN DOCUMENTS OF THEIR RESPECTIVE OBLIGATIONS THEREUNDER OR THE CONSUMMATION OF THE
FINANCING TRANSACTIONS OR ANY OTHER TRANSACTIONS CONTEMPLATED HEREBY, (ii) ANY LOAN OR LETTER OF
CREDIT OR THE USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY AN ISSUING BANK TO HONOR A
DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH
DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (iii) ANY ACTUAL OR ALLEGED
PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY CURRENTLY OR FORMERLY OWNED OR
OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY
WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (iv) ANY ACTUAL OR PROSPECTIVE CLAIM,
LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO;
PROVIDED THAT SUCH INDEMNITY AND RELEASE SHALL NOT, AS TO ANY

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INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
RELATED EXPENSES (A) ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE
JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE (IT
BEING UNDERSTOOD THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH OF THE INDEMNITEES BE
INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER
SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL), (B)
RELATE TO CLAIMS BETWEEN OR AMONG ANY OF THE LENDERS, THE AGENTS, THE ARRANGERS OR ANY OF THEIR
AFFILIATES, SHAREHOLDERS, PARTNERS OR MEMBERS, OR (C) ARE IN RESPECT OF ANY PROPERTY FOR ANY
OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS OF ANY AGENT OR ANY LENDER DURING THE PERIOD AFTER
WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED POSSESSION OF SUCH PROPERTY
(WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE).

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

          (d) To the extent permitted by applicable law, no party hereto shall assert, and each party
hereby waives, any claim against any other 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 or any agreement or instrument
contemplated hereby, the Financing Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.

          (e) All amounts due under this Section shall be payable not later than thirty (30) days after
written demand is received by Borrower therefor.

     Section 10.4 Successors and Assigns.

          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including any
Affiliate of an Issuing Bank that issues any Letter of Credit), except that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without the prior written
consent of the Global Administrative Agent, each Issuing Bank and each Combined Lender (and any
attempted assignment or transfer by the Borrower without such

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consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of an Issuing Bank that issues any Letter of
Credit) and, to the extent expressly contemplated hereby, the Related Parties of each of the Global
Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

          (b) Any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Global Commitment, Commitment
and the Loans at the time owing to it) to any Person who is not a Foreign Lender; provided
that (i) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund,
each of the Borrower (unless an Event of Default has occurred and is continuing) and the Global
Administrative Agent and the Canadian Administrative Agent (and, in the case of an assignment of
all or a portion of a Global Commitment or Commitment or any Lender’s obligations in respect of its
LC Exposure, the Issuing Banks) must give their prior written consent to such assignment (which
consents shall not be unreasonably withheld, conditioned or delayed), (ii) except in the case of an
assignment to a Lender, a Lender Affiliate or an Approved Fund, or an assignment of the entire
remaining amount of the assigning Lender’s Global Commitment, Commitment or Loans, the amount of
the Global Commitment, Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Global Administrative Agent) shall be not less than U.S.$10,000,000 unless each of
the Borrower (unless an Event of Default has occurred and is continuing), the Global Administrative
Agent and the Canadian Administrative Agent otherwise consent, (iii) in the case of an assignment
to a Lender, a Lender Affiliate, or an Approved Fund of an amount less than the entire remaining
amount of the assigning Lender’s Global Commitment, Commitment or Loans, the amount of the Global
Commitment, Commitment or Loans of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is delivered to the
Global Administrative Agent) shall be not less than U.S.$5,000,000, (iv) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement, except that this clause (iv) shall not be construed to
prohibit the assignment of a proportionate part of all the assigning Lender’s rights and
obligations in respect of its Commitments or Loans in conformity with the Intercreditor Agreement,
(v) the parties to each assignment shall execute and deliver to the Global Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of U.S.$3,500 to the
Global Administrative Agent, (vi) the assignee, if it shall not be a Lender, shall deliver to the
Global Administrative Agent an Administrative Questionnaire, (vii) after giving effect to any
assignment under clause (ii), the assigning Lender shall have a Global Commitment of at
least U.S.$10,000,000 and after giving effect to any assignment under clause (iii), the
assigning Lender shall have a Global Commitment of at least U.S.$5,000,000, unless, in each case,
each of the Borrower and the Global Administrative Agent otherwise consents, and (viii) any
assignee Lender shall have the same Designation (which Designation may be changed in accordance
with Section 2.1(c)) as the assigning Lender to the extent of the Global Commitment,
Commitments and Loans so assigned by such assigning Lender; and provided further that any
consent of the Borrower otherwise required under this paragraph shall not be required if an Event
of Default under Section 8.1 has occurred and is continuing. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section, from and after the

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effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a
party hereto and to the other Loan Documents and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and
the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
and Acceptance, be released from its obligations under this Agreement and the other Loan Documents
(and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 2.15, Section 2.16, Section 2.17,
Section 2.18, Section 2.20 and Section 10.3 and be subject to the terms of
Section 10.12). Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.

          (c) The Global Administrative Agent and the Canadian Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices in Chicago and Toronto,
respectively, a copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Global Commitment and Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be conclusive
absent manifest error, and the Borrower, the Global Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement and the other Loan Documents, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, any Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice. In connection with any changes
to the Register, if necessary, the Global Administrative Agent will reflect the revisions on
Schedule 2.1 and forward a copy of such revised Schedule 2.1 to the Borrower, each
Issuing Bank and each Lender.

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

          (e) Any Lender may, without the consent of the Borrower, the Global Administrative Agent, the
Canadian Administrative Agent or any Issuing Bank, sell participations to one or more banks or
other entities which are entities in Canada for purposes of the Income Tax Act (Canada) (a
“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Global Commitment, Commitment and the Loans owing to
it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other

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parties hereto for the performance of such obligations, and (iii) the
Borrower, the Global Administrative Agent, the Canadian Administrative Agent, the Issuing Banks and
the other Lenders shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall retain the sole
right to enforce the Loan Documents and to approve any amendment, modification or waiver of any
provision of the Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the second proviso to Section 10.2(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Section 2.15, Section 2.16 and
Section 2.17 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.8 and Section
10.12 as though it were a Lender, provided such Participant agrees to be subject to Section
2.18(c) as though it were a Lender.

          (f) A Participant shall not be entitled to receive any greater payment under Section
2.15, Section 2.16 or Section 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant. A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section
2.17 unless the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.

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

     Section 10.5 Survival. All covenants, agreements, representations and warranties made
by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the execution and delivery of
the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and notwithstanding that any Agent,
any Issuing Bank, the Arrangers or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended hereunder, and shall
continue in full force and effect as long as the principal of or any accrued interest on any Loan
or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter
of Credit is outstanding and so long as the Global Commitments and Commitments have not expired or
terminated. The provisions of Section 2.15, Section 2.16, Section 2.17,
Section 2.18, Section 2.20, Section 10.3 and Section 10.12 and
Article IX shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Global Commitments and Commitments or the termination of this
Agreement or any provision hereof.

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     Section 10.6 Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
Except as provided in Section 4.1, this Agreement shall become effective when it shall have
been executed by the Global Administrative Agent and the Canadian Administrative Agent and when the
Global Administrative Agent and the Canadian Administrative Agent shall have received counterparts
hereof which, when taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy (or other electronic transmission acceptable to the Global Administrative
Agent) shall be effective as delivery of a manually executed counterpart of this Agreement.

     Section 10.7 Severability. Any provision of this Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

     Section 10.8 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each of the Agents, the Issuing Banks, the Lenders and their Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional or final) at any
time held, and other obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of, the Borrower or any of its Subsidiaries against any and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and although such
obligations may be unmatured; provided, however, that any such set-off and
application shall be subject to the provisions of Section 2.18 and the Intercreditor
Agreement. As security for such obligations, the Borrower hereby grants to the Agents, each
Issuing Bank and each Lender a continuing security interest in any and all balances, credits,
deposits, accounts or moneys of the Borrower and its Subsidiaries then or thereafter maintained
with any of the Agents, such Issuing Bank and such Lenders. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of setoff) which such
Lender may have.

     Section 10.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

          (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF
ALBERTA AND OF CANADA APPLICABLE THEREIN.

          (b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE JURISDICTION OF THE COURTS OF THE PROVINCE OF ALBERTA, AND ANY

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APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS OF THE PROVINCE OF
ALBERTA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE GLOBAL ADMINISTRATIVE AGENT’S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH OF THE
PARTIES HERETO AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, 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 AGREEMENT SHALL
AFFECT ANY RIGHT THAT THE AGENTS OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

          (c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

          (d) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE PROVINCE OF ALBERTA. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.

     Section 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE

101

 

FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

     Section 10.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.

     Section 10.12 Confidentiality. In the event that a Loan Party provides to the Global
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or the Lenders
confidential information belonging to such Loan Party or any of its Subsidiaries (whether before or
after the date of this Agreement), then the Global Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks and the Lenders shall thereafter use such information only
in connection with, or as contemplated by, this Agreement, the other Combined Loan Documents and
the transactions contemplated hereby and thereby and shall maintain such information in confidence
in accordance with the standards of care and diligence that each utilizes in maintaining its own
confidential information. This obligation of confidence shall not apply to such portions of the
information which (a) are in the public domain due to no breach hereof by the Global Administrative
Agent, the Canadian Administrative Agent, the Issuing Banks or any of the Lenders, (b) hereafter
become part of the public domain without the Global Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks or the Lenders breaching their obligation of confidence to
such Loan Party as required hereby or by any other Combined Loan Document, (c) are previously known
by the Global Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or the
Lenders from some source other than such Loan Party, (d) are hereafter developed by the Global
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or the Lenders without
using such Loan Party’s information, (e) are hereafter obtained by or available to the Global
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or the Lenders from a
third party who owes no obligation of confidence to such Loan Party with respect to such
information, (f) are disclosed with such Loan Party’s consent, (g) must be disclosed either
pursuant to any Governmental Rule or to Persons regulating the activities of the Global
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or the Lenders, or (h)
as may be required by law or regulation or order of any Governmental Authority in any judicial,
arbitration or governmental proceeding. Further, the Global Administrative Agent, the Canadian
Administrative Agent, an Issuing Bank or a Lender may disclose any such information to any other
Lender, any independent petroleum engineers or consultants, any independent certified public or
chartered accountants, any legal counsel employed by such Person in connection with this Agreement
or any other Combined Loan Document, including without limitation, the enforcement or exercise of
all rights and remedies thereunder, or any assignee or participant (including prospective assignees
and participants) in the Loans; provided, however, that the Global Administrative
Agent, the Canadian Administrative Agent, the Issuing Banks or the Lenders shall receive a
confidentiality agreement from the Person to whom such information is disclosed such that said
Person shall have the same obligation to maintain the confidentiality of such information as is
imposed upon the Global Administrative Agent, the Canadian Administrative Agent, the Issuing Banks
or the Lenders hereunder.

102

 

     Section 10.13 Interest Rate Limitation. It is the intention of the parties hereto to
conform strictly to applicable interest, usury and criminal laws and, anything herein to the
contrary notwithstanding, the obligations of the Borrower and the Guarantors to a Lender, any
Issuing Bank or any Agent under this Agreement or any Combined Loan Document shall be subject to
the limitation that payments of interest shall not be required to the extent that receipt thereof
would be contrary to provisions of law applicable to such Lender, such Issuing Bank or Agent
limiting rates of interest which may be charged or collected by such Lender, such Issuing Bank or
Agent. Accordingly, if the transactions contemplated hereby or thereby would be illegal,
unenforceable, usurious or criminal under laws applicable to a Lender, any Issuing Bank or any
Agent (including the laws of any jurisdiction whose laws may be mandatorily applicable to such
Lender or Agent notwithstanding anything to the contrary in this Agreement or any other Combined
Loan Document then, in that event, notwithstanding anything to the contrary in this Agreement or
any other Combined Loan Document, it is agreed as follows:

               (i) the provisions of this Section shall govern and control;

               (ii) the aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received under this Agreement or any
Combined Loan Document or otherwise in connection with this Agreement or any Combined Loan
Document by such Lender, such Issuing Bank or such Agent shall under no circumstances exceed
the maximum amount of interest allowed by applicable law (such maximum lawful interest rate,
if any, with respect to each Lender, each Issuing Bank and the Agents herein called the
“Highest Lawful Rate”), and any excess shall be cancelled automatically and if
theretofore paid shall be credited to the Borrower by such Lender, such Issuing Bank or such
Agent (or, if such consideration shall have been paid in full, such excess refunded to the
Borrower);

               (iii) all sums paid, or agreed to be paid, to such Lender, such Issuing Bank or such
Agent for the use, forbearance and detention of the indebtedness of the Borrower to such
Lender, such Issuing Bank or such Agent hereunder or under any Combined Loan Document shall,
to the extent permitted by laws applicable to such Lender, such Issuing Bank or such Agent,
as the case may be, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of interest is uniform
throughout the full term thereof;

               (iv) if at any time the interest provided pursuant to this Section or any other clause
of this Agreement or any other Combined Loan Document, together with any other fees or
compensation payable pursuant to this Agreement or any other Combined Loan Document and
deemed interest under laws applicable to such Lender, such Issuing Bank or such Agent,
exceeds that amount which would have accrued at the Highest Lawful Rate, then the amount of
interest and any such fees or compensation to accrue to such Lender, such Issuing Bank or
such Agent pursuant to this Agreement or such other Combined Loan Document shall be limited,
notwithstanding anything to the contrary in this Agreement or any other Combined Loan
Document, to that amount which would have accrued at the Highest Lawful Rate, but any
subsequent reductions, as applicable, shall not reduce the interest to accrue to such
Lender, such Issuing Bank or such Agent pursuant to this Agreement or such other Combined
Loan Document below the Highest

103

 

Lawful Rate until the total amount of interest accrued pursuant to this Agreement or
such other Combined Loan Document, as the case may be, and such fees or compensation deemed
to be interest equals the amount of interest which would have accrued to such Lender or
Agent if a varying rate per annum equal to the interest provided pursuant to any other
relevant Section hereof (other than this Section) or thereof, as applicable, had at all
times been in effect, plus the amount of fees which would have been received but for the
effect of this Section; and

               (v) with the intent that the rate of interest herein shall at all times be lawful, and
if the receipt of any funds owing hereunder or under any other agreement related hereto
(including any of the other Combined Loan Documents) by such Lender, such Issuing Bank or
such Agent would cause such Lender to charge the Borrower a criminal rate of interest, the
Lenders, the Issuing Banks and the Agents agree that they will not require the payment or
receipt thereof or a portion thereof which would cause a criminal rate of interest to be
charged by such Lender, such Issuing Bank or such Agent, as applicable, and if received such
affected Lender, such Issuing Bank or Agent will return such funds to the Borrower so that
the rate of interest paid by the Borrower shall not exceed a criminal rate of interest from
the date this Agreement was entered into.

     Notwithstanding any provision herein to the contrary, in no event will the aggregate
“interest” (as defined in section 347 of the Criminal Code (Canada)) payable under this Agreement
exceed the maximum effective annual rate of interest on the “credit advanced” (as defined in that
section) permitted under that section and, if any payment, collection or demand pursuant to this
Agreement in respect of “interest” (as defined in that section) is determined to be contrary to the
provisions of that section, such payment, collection or demand will be deemed to have been made by
mutual mistake of the Borrower, any Guarantor, the Lenders, the Issuing Bank and the Agent, as the
case may be, and the amount of such excess payment or collection will be refunded to the Borrower
or such Guarantor, as the case may be. For purposes of this Agreement, the effective annual rate
of interest will be determined in accordance with generally accepted actuarial practices and
principles over the term of the Loans on the basis of annual compounding of the lawfully permitted
rate of interest and, in the event of dispute, a certificate of a Fellow of the Canadian Institute
of Actuaries appointed by the Global Administrative Agent will be prima facie evidence, for the
purposes of such determination.

     Section 10.14 [Reserved].

     Section 10.15 Collateral Matters; Hedging Agreements. The benefit of the Security
Documents and of the provisions of this Agreement relating to the Collateral shall also extend to
and be available to those Lenders or their Affiliates that are counterparties to the Hedging
Agreements on a pro rata basis in respect of any Hedging Obligations of the Borrower or any of its
Subsidiaries that are in effect at such time as such Person (or its Affiliate) is a Lender, but
only while such Person or its Affiliate is a Lender; provided that it is the intention of
the parties hereto that repayment of the Hedging Obligations of the Borrower and its Subsidiaries
under any Hedging Agreement with a Combined Lender, or any Affiliate of a Combined Lender from
realization of any Collateral shall be subject to the terms of the Intercreditor Agreement and
Security Documents.

104

 

     Section 10.16 Arrangers; Co-Global Documentation Agents; Co-Global Syndication Agents;
Other Agents. None of the Persons identified on the facing page or the signature pages of this
Agreement as a “Co-Lead Arranger and Joint Bookrunner” or “Co-Global Documentation Agent” or
“Co-Global Syndication Agent” or any other Agent (other than the Global Administrative Agent) shall
have any right, power, obligation, liability, responsibility or duty under this Agreement or any
other Combined Loan Document other than, except in the case of the Arrangers, those applicable to
all Lenders as such. Without limiting the foregoing, none of the Arrangers, the Co-Global
Documentation Agents, the Co-Global Syndication Agents or any other Agent shall have or be deemed
to have any fiduciary relationship with any Lender, and none of the Global Administrative Agent,
the Canadian Administrative Agent, the Arrangers, the Co-Global Documentation Agents, the Co-Global
Syndication Agents or any other Agent shall have or be deemed to have any fiduciary relationship
with the Borrower or any of its Subsidiaries. The Borrower and each Lender acknowledges that it
has not relied, and will not rely, on any of the Arrangers, the Co-Global Documentation Agents, the
Co-Global Syndication Agents or any other Agent in deciding to enter into this Agreement or in
taking or not taking any action hereunder or under the Combined Loan Documents.

     Section 10.17 Intercreditor Agreement; Security Documents; Designation. Each Lender on
behalf of itself and any Affiliate which is a counterparty to a Hedging Agreement acknowledges and
agrees that the Global Administrative Agent has entered into the Intercreditor Agreement and the
Security Documents on behalf of itself, the other Agents, Lenders and Affiliates thereof that are
parties to a Hedge Transaction, and each of them (by their signature hereto or acceptance of the
benefits of the Security Documents) hereby agree to be bound by the terms of the Intercreditor
Agreement and such Security Documents, acknowledge receipt of copies of the Intercreditor Agreement
and such Security Documents and consent to the rights, powers, remedies, indemnities and
exculpations given to the Global Administrative Agent thereunder. For so long as the Intercreditor
Agreement shall be in effect, the terms and conditions of this Agreement and the other Loan
Documents are subject to the terms of the Intercreditor Agreement. In the event of any
inconsistency between this Agreement or any other Loan Document and the terms of the Intercreditor
Agreement, the Intercreditor Agreement shall control. In the event of any inconsistency between
this Agreement and the terms of any other Loan Document (other than the Intercreditor Agreement),
this Agreement shall control. Each Lender by its signature hereto agrees to its Designation as set
forth on Schedule 2.1.

     Section 10.18 [Reserved].

     Section 10.19 Status as Senior Indebtedness. The Loans and other Obligations hereunder
are “Senior Indebtedness” and “Designated Senior Indebtedness” under both the Existing Subordinate
Note Indenture and the Existing Convertible Note Indenture.

     Section 10.20 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
THEREOF AND 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.

105

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

106

 

	 	 	 	 	 
	 	QUICKSILVER RESOURCES CANADA INC. ,

as Borrower

 	 
	 	By:  	/s/ Philip W. Cook
 	 
	 	 	     Philip W. Cook, 	 
	 	 	     Vice President, Finance 	 
	 

[Signature
Page To Canadian Amended and Restated Credit Agreement]

107

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Global 

Administrative Agent

 	 
	 	By:  	/s/ J. Scott Fowler
 	 
	 	 	J. Scott Fowler, 	 
	 	 	Senior Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH, as
Canadian Administrative Agent and as a Lender

 	 
	 	By:  	/s/ Michael N. Tam
 	 
	 	 	Michael N. Tam, 	 
	 	 	Senior Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	BNP PARIBAS, as a Co-Global Syndication Agent

 	 
	 	By:  	/s/ Brian M. Malone
 	 
	 	 	Brian M. Malone, 	 
	 	 	Managing Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Russell Otts
 	 
	 	 	Russell Otts, 	 
	 	 	Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	BNP PARIBAS (CANADA), as a Lender

 	 
	 	By:  	/s/ Edward Pak
 	 
	 	 	Edward Pak, 	 
	 	 	Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ Krista McLeod
 	 
	 	 	Krista McLeod, 	 
	 	 	Assistant Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

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

 	 
	 	By:  	/s/ Ronald E. McKaig
 	 
	 	 	Ronald E. McKaig, 	 
	 	 	Senior Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A. (by its
Canada branch), as a Lender

 	 
	 	By:  	/s/ Medina Sales de Andrade
 	 
	 	 	Medina Sales de Andrade, 	 
	 	 	Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

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

 	 
	 	By:  	/s/ Andrew Kellock
 	 
	 	 	Andrew Kellock, 	 
	 	 	Associate Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Stacey Strike
 	 
	 	 	Stacey Strike, 	 
	 	 	Director 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as a Lender

 	 
	 	By:  	/s/ Andrew Kellock
 	 
	 	 	Andrew Kellock, 	 
	 	 	Associate Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Stacey Strike
 	 
	 	 	Stacey Strike, 	 
	 	 	Director 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	FORTIS CAPITAL CORP., as a Co-Global Documentation
Agent

 	 
	 	By:  	/s/ Darrell Holley
 	 
	 	 	Darrell Holley, 	 
	 	 	Managing Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Michele Jones
 	 
	 	 	Michele Jones, Senior Vice President 	 
	 	 	 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	FORTIS CAPITAL (CANADA) LTD., as a Lender

 	 
	 	By:  	/s/ Darrell Holley
 	 
	 	 	Darrell Holley, 	 
	 	 	Managing Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Doug Clark
 	 
	 	 	Doug Clark, 	 
	 	 	Senior Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Co-Global
Documentation Agent

 	 
	 	By:  	/s/ Evelyn Thierry
 	 
	 	 	Evelyn Thierry, 	 
	 	 	Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ Paul O’Leary
 	 
	 	 	Paul O’Leary, 	 
	 	 	Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	DEUTSCHE BANK AG CANADA BRANCH, as a Lender

 	 
	 	By:  	/s/ Robert Johnston
 	 
	 	 	Robert Johnston, 	 
	 	 	Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ Marcellus Leung
 	 
	 	 	Marcellus Leung, 	 
	 	 	Assistant Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	BANK OF MONTREAL, as a Lender

 	 
	 	By:  	/s/ Mary Lou Allen
 	 
	 	 	Mary Lou Allen, 	 
	 	 	Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	CITIBANK, N.A., CANADIAN BRANCH, as a Lender

 	 
	 	By:  	/s/ Niyousha Zarinpour
 	 
	 	 	Niyousha Zarinpour, 	 
	 	 	Authorized Signature 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	SOCIÉTÉ GÉNÉRALE (CANADA BRANCH), as a Lender

 	 
	 	By:  	/s/ Benoit Desmarais
 	 
	 	 	Benoit Desmarais, 	 
	 	 	Managing Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Paul Primavesi
 	 
	 	 	Paul Primavesi, 	 
	 	 	Vice-President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	UNION BANK OF CALIFORNIA, N.A., CANADA BRANCH, as a
Lender

 	 
	 	By:  	/s/ Phil Taylor
 	 
	 	 	Phil Taylor, 	 
	 	 	Senior Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	WELLS FARGO FINANCIAL CORPORATION CANADA, as a Lender

 	 
	 	By:  	/s/ Nick Scarfo
 	 
	 	 	Nick Scarfo, 	 
	 	 	Vice President 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	TORONTO DOMINION BANK, as a Lender

 	 
	 	By:  	/s/ Ian Murray
 	 
	 	 	Ian Murray, 	 
	 	 	Authorized Signatory 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	COMERICA BANK, CANADA BRANCH, as a Lender

 	 
	 	By:  	/s/ Omer Ahmed
 	 
	 	 	Omer Ahmed, 	 
	 	 	Portfolio Manager 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Kevin Jephcott
 	 
	 	 	Kevin Jephcott, 	 
	 	 	Principal Officer 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	CANADIAN IMPERIAL BANK OF COMMERCE, as a Lender

 	 
	 	By:  	/s/ Randy Geislinger
 	 
	 	 	Randy Geislinger, 	 
	 	 	Executive Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ David Swain
 	 
	 	 	David Swain, 	 
	 	 	Managing Director 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

 

 

	 	 	 	 	 
	 	CREDIT SUISSE, TORONTO BRANCH, as a Lender

 	 
	 	By:  	/s/ Alain Daoust
 	 
	 	 	Alain Daoust, 	 
	 	 	Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Bruce F. Wetherly
 	 
	 	 	Bruce F. Wetherly, 	 
	 	 	Director 	 
	 

[Signature Page To Canadian Amended and Restated Credit Agreement]

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