Document:

Exhibit
10.6

    

    Lease
Agreement

    

    Party A:
Dalian Wanbao Industrial Co.,LTD (the “Lessor”)

    

    Party B:
Dalian Befut Wire & Cable Manufacturing Co., LTD (“Lessee”)

    

    Under the
principles of equal rights and mutual benefit, lessor and lessee enter into a
lease agreement whereby lessor leases to lessee a plant site that was originally
owned by Dalian Grain Drying Co., Ltd. The lease terms are as
follow:

    

    
      	
              I.

            	
              Lessor
      leases to lessee the plant site with properties that was originally owned
      by Dalian Baolihang Grain Drying Co., LTD for the purpose of lessee
      establishing a cable manufacturing plant. The said land with properties
      are located in Qipan Village with valid land use certificate. Details of
      the land and properties are as
follows:

            

    

    

    1.      An
office building of 170 square meters

    2.      A
boiler room of 450 square meters

    3.      An
employee dormitory of 300 square meters

    4.      Power
facilities with power load of 400KW

    5.      Water
supply facilities

    6.      A
guard post

    7.      A
land area of 15 thousand square meters (All hardened surface)

    8.      Surrounding
walls

    

    II.     The
lease is valid for 50 years starting from October 1, 2001 through October 1,
2051.

    

    III.    Lease
amount and payment method: Total lease amount is RMB 2.5 million

    

    Payment
method: A security deposit of RMB 100 thousand will be paid within five days of
the execution of the lease agreement;  another RBM 900 thousand will
be paid when approvals for design and construction are secured. The remaining
balance of RMB1.5 million will be paid evenly over three years starting from the
third year of the lease. Payments should be made by November 30 of each
year.

    

    IV.    Responsibilities
and Obligations of Each Party

     

    1. Lessor
bears the responsibility and cost for securing land use certificate and land
planning and construction permits.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    2. With
lessor’s assistance, lessee bears the responsibility and cost for securing
construction design and construction permit. Both lessor and lessee share the
responsibility but lessee bears the cost for obtaining certificate of
building.

    3. With
lessor’s active assistance, lessee bears the responsibility and cost for
securing permits needed for operations, such as business license , environmental
protection certificate and fire safety certificate.

    4. Lessor
bears the responsibility but lessee bears the cost for securing governmental
approvals in the event that lessee needs to increase electricity load. Lessee is
responsible for expenditures needed for increasing electricity load. Lessee also
pays electricity bills based on actual consumption.

    5. Lessee
has the right to use the existing water facilities for free, but bears the
responsibility for securing water index. In the event that lessee needs to use
underground water, lessor has the responsibility to provide water source or
water delivery, but lessee pays for water use.

    6. During
the lease term, lessee pays directly to governmental authorities for land use
fees and land use tax.  Lessor cannot charge extra such fees and
tax.

    7. During
the lease term, without lessor’s consent, lessee cannot transfer the land or use
it for collateral purpose. Lessee has the right to use the land for 50 years but
must consult first with lessor if it desires to transfer the land or use it for
collaterial purpose.

    Lessee
must register the newly established cable manufacturing plant with Ganjingzi
Trade and Industry Bureau and pays taxes to Tax authorities of Gezhenbao
District. If the local tax authorities provide tax breaks, lessor should
actively assist lessee to obtain them.

    

    V. In the
event that the State retakes the land, lessee is entitled to the State
compensation for properties and lessor is entitled to the State compensation for
land. Lessor is obligated to return to lessee the paid lease amount that covers
the remaining balance of the lease term. Lessor has the option, however, either
to pay back to lessee 50,000 RMB per year or locate for lessee a land of similar
size and under similar terms to the current lease.

    

    VI. Lessee should
give lessor the first right to refuse for construction contracts as long as
lessor can meet the requirements..

    

    VII. Lessee should
give priority employment opportunities to the residents of Qipan Village as long
as such residents meet lessee’s employment requirements.

    

    VIII. Lessee is free
of any debts that were owed by Dalian Baolihang Grain Drying Co.,Ltd. Lessor is
responsible for any debt claims that are related to Baolihang Grain Drying
Co.,Ltd.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    IX. Liability for
breach of contract

    

    1. The
lease agreement become legally valid once executed by both parties. Each party
is obligated to comply with the terms herein without breach of
contract..

    

    2. Lessee
will be charged a .3% late payment penalty if it fails to make timely payment.
In the event that lessee defaults on lease payment for consecutive six months,
the lease is considered to terminate the lease and lessor has the right to
retake the land and all properties on it and the lease becomes automatically
void..

    

    3. Lessor
must return to lessee the 100,000 RMB security deposit if lessor fails to secure
the planning and construction permit. Lessor shall not return to lessee any
security deposit if lessee fails to secure permits needed for
operations..

    

    X.    In
the case of disputes, both parties agree to try to resolve such disputes through
consultation. If consultation fails, both parties agree to submit such disputes
to the People’s court..

    

    XI.   Each
party holds one copy of the executed lease agreements, both copies are legally
binding..

    

    Party A
:Dalian Wanbao Industry Co., Ltd

    Legal
representative’s signature and Party A’s company seal affixed

    

    Party B:
Dalian Befut Wire & Cable Manufacturing Co., Ltd

    Legal
representative’s signature and Party A’s company seal affixed

    

    March 10,
2001

    
      
         

      

      
        3EXHIBIT
10.27

       

      EXECUTION
VERSION

    

     

    DEBTOR-IN-POSSESSION
CREDIT AGREEMENT

     

    DATED
AS OF

    OCTOBER
6, 2009

     

    AMONG

     

    AURORA
OIL & GAS CORPORATION,

    AS
BORROWER, A DEBTOR AND DEBTOR-IN-POSSESSION,

     

    HUDSON
PIPELINE & PROCESSING CO., LLC,

    AS
A GUARANTOR, A DEBTOR AND DEBTOR-IN-POSSESSION,

     

    BNP
PARIBAS,

    AS
ADMINISTRATIVE AGENT AND ISSUING BANK,

     

    AND

     

    THE
LENDERS PARTY HERETO

     

    SOLE
LEAD ARRANGER AND SOLE BOOKRUNNER

     

    BNP
PARIBAS

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                ARTICLE
      I

                              	 
	
                                Definitions
      and Accounting Matters

                              	 	 	2	 
	
                                Section
      1.01

                              	
                                Terms
      Defined Above

                              	 	 	2	 
	
                                Section
      1.02

                              	
                                Certain
      Defined Terms

                              	 	 	2	 
	
                                Section
      1.03

                              	
                                Types
      of Loans and Borrowings

                              	 	 	23	 
	
                                Section
      1.04

                              	
                                Terms
      Generally; Rules of Construction

                              	 	 	23	 
	 	 
	
                                ARTICLE
      II

                              	 
	
                                The
      Credits

                              	 	 	24	 
	
                                Section
      2.01

                              	
                                Commitments

                              	 	 	24	 
	
                                Section
      2.02

                              	
                                Loans
      and Borrowings

                              	 	 	24	 
	
                                Section
      2.03

                              	
                                Requests
      for Borrowings

                              	 	 	25	 
	
                                Section
      2.04

                              	
                                Interest
      Elections

                              	 	 	26	 
	
                                Section
      2.05

                              	
                                Funding
      of Borrowings

                              	 	 	27	 
	
                                Section
      2.06

                              	
                                Termination
      and Reduction of Aggregate Commitments

                              	 	 	27	 
	
                                Section
      2.07

                              	
                                Use
      of Proceeds

                              	 	 	28	 
	
                                Section
      2.08

                              	
                                Letters
      of Credit

                              	 	 	28	 
	 	 	 	 	 
	
                                ARTICLE
      III

                              	 	 	 	 
	
                                Payments
      of Principal and Interest; Prepayments; Fees

                              	 	 	32	 
	
                                Section
      3.01

                              	
                                Repayment
      of Loans

                              	 	 	32	 
	
                                Section
      3.02

                              	
                                Interest

                              	 	 	33	 
	
                                Section
      3.03

                              	
                                Alternate
      Rate of Interest

                              	 	 	33	 
	
                                Section
      3.04

                              	
                                Prepayments

                              	 	 	34	 
	
                                Section
      3.05

                              	
                                Fees

                              	 	 	35	 
	 	 
	
                                ARTICLE
      IV

                              	 
	
                                Payments;
      Pro Rata Treatment; Sharing of Payments

                              	 	 	36	 
	
                                Section
      4.01

                              	
                                Payments
      Generally; Pro Rata Treatment; Sharing of Payments.

                              	 	 	36	 
	
                                Section
      4.02

                              	
                                Presumption
      of Payment by the Borrower

                              	 	 	37	 
	
                                Section
      4.03

                              	
                                Certain
      Deductions by the Administrative Agent

                              	 	 	38	 
	
                                Section
      4.04

                              	
                                Disposition
      of Proceeds

                              	 	 	38	 
	 	 
	
                                ARTICLE
      V

                              	 
	
                                Increased
      Costs; Break Funding Payments; Taxes

                              	 	 	38	 
	
                                Section
      5.01

                              	
                                Increased
      Costs.

                              	 	 	38	 
	
                                Section
      5.02

                              	
                                Break
      Funding Payments

                              	 	 	39	 
	
                                Section
      5.03

                              	
                                Taxes

                              	 	 	40	 
	
                                Section
      5.04

                              	
                                Mitigation
      Obligations

                              	 	 	40	 
	 	 
	
                                ARTICLE
      VI

                              	 
	
                                Conditions
      Precedent

                              	 	 	41	 
	
                                Section
      6.01

                              	
                                Effective
      Date

                              	 	 	41	 
	
                                Section
      6.02

                              	
                                Each
      Credit Event

                              	 	 	43	 

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                	
                        ARTICLE
      VII

                      	 
	
                        Representations
      and Warranties

                      	 	 	44	 
	
                        Section
      7.01

                      	
                        Organization;
      Powers

                      	 	 	44	 
	
                        Section
      7.02

                      	
                        Authority;
      Enforceability

                      	 	 	45	 
	
                        Section
      7.03

                      	
                        Approvals;
      No Conflicts

                      	 	 	45	 
	
                        Section
      7.04

                      	
                        Financial
      Condition; No Material Adverse Change

                      	 	 	45	 
	
                        Section
      7.05

                      	
                        Litigation

                      	 	 	46	 
	
                        Section
      7.06

                      	
                        Environmental
      Matters

                      	 	 	46	 
	
                        Section
      7.07

                      	
                        Compliance
      with the Laws; No Defaults

                      	 	 	47	 
	
                        Section
      7.08

                      	
                        Investment
      Company Act

                      	 	 	47	 
	
                        Section
      7.09

                      	
                        Taxes

                      	 	 	47	 
	
                        Section
      7.10

                      	
                        ERISA

                      	 	 	47	 
	
                        Section
      7.11

                      	
                        Disclosure;
      No Material Misstatements

                      	 	 	48	 
	
                        Section
      7.12

                      	
                        Insurance

                      	 	 	49	 
	
                        Section
      7.13

                      	
                        [Reserved]

                      	 	 	49	 
	
                        Section
      7.14

                      	
                        Subsidiaries

                      	 	 	49	 
	
                        Section
      7.15

                      	
                        Location
      of Business and Offices

                      	 	 	49	 
	
                        Section
      7.16

                      	
                        Properties;
      Titles, Etc.

                      	 	 	49	 
	
                        Section
      7.17

                      	
                        Maintenance
      of Properties

                      	 	 	50	 
	
                        Section
      7.18

                      	
                        Gas
      Imbalances, Prepayments

                      	 	 	50	 
	
                        Section
      7.19

                      	
                        Marketing
      of Production

                      	 	 	51	 
	
                        Section
      7.20

                      	
                        Swap
      Agreements

                      	 	 	51	 
	
                        Section
      7.21

                      	
                        Use
      of Loans and Letters of Credit

                      	 	 	51	 
	
                        Section
      7.22

                      	
                        Investments

                      	 	 	51	 
	
                        Section
      7.23

                      	
                        Collateral
      Documents; Nature of Obligations

                      	 	 	51	 
	
                        Section
      7.24

                      	
                        Broker’s
      Fees

                      	 	 	52	 
	
                        Section
      7.25

                      	
                        Representations
      and Warranties from Other Loan Documents

                      	 	 	52	 
	
                        Section
      7.26

                      	
                        Agreed
      Budget

                      	 	 	52	 
	
                        Section
      7.27

                      	
                        Financing
      Orders

                      	 	 	52	 
	 	 
	
                        ARTICLE
      VIII

                      	 
	
                        Affirmative
      Covenants

                      	 	 	52	 
	
                        Section
      8.01

                      	
                        Monthly
      Operating Reports; Other Information

                      	 	 	52	 
	
                        Section
      8.02

                      	
                        Notices
      of Material Events

                      	 	 	55	 
	
                        Section
      8.03

                      	
                        Existence;
      Conduct of Business

                      	 	 	56	 
	
                        Section
      8.04

                      	
                        Payment
      of Obligations

                      	 	 	56	 
	
                        Section
      8.05

                      	
                        Performance
      of Obligations under Loan Documents

                      	 	 	56	 
	
                        Section
      8.06

                      	
                        Operation
      and Maintenance of Properties

                      	 	 	56	 
	
                        Section
      8.07

                      	
                        Insurance

                      	 	 	57	 
	
                        Section
      8.08

                      	
                        Books
      and Records; Inspection Rights

                      	 	 	57	 
	
                        Section
      8.09

                      	
                        Compliance
      with Laws

                      	 	 	57	 
	
                        Section
      8.10

                      	
                        Environmental
      Matters

                      	 	 	58	 
	
                        Section
      8.11

                      	
                        Agreement
      to Deliver Security Instruments

                      	 	 	58	 
	
                        Section
      8.12

                      	
                        Further
      Assurances

                      	 	 	59	 
	
                        Section
      8.13

                      	
                        Deposit
      Accounts

                      	 	 	59	 
	
                        Section
      8.14

                      	
                        Title
      Information

                      	 	 	59	 
	
                        Section
      8.15

                      	
                        Additional
      Guarantors

                      	 	 	59	 
	
                        Section
      8.16

                      	
                        ERISA
      Compliance

                      	 	 	60	 
	
                        Section
      8.17

                      	
                        Marketing
      Activities

                      	 	 	60	 
	
                        Section
      8.18

                      	
                        Compliance
      with Financing Orders

                      	 	 	60	 

              

            

          

        

      

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    	
                            Section
      8.19

                          	
                            Retention
      of Financial Advisor; Executives

                          	 	 	61	 
	
                            Section
      8.20

                          	
                            Bankruptcy
      Cases Related Matters and Deadlines

                          	 	 	61	 
	 	 
	
                            ARTICLE
      IX

                          	 
	
                            Negative
      Covenants

                          	 	 	61	 
	
                            Section
      9.01

                          	
                            [Reserved]

                          	 	 	61	 
	
                            Section
      9.02

                          	
                            Debt

                          	 	 	61	 
	
                            Section
      9.03

                          	
                            Liens

                          	 	 	62	 
	
                            Section
      9.04

                          	
                            Dividends
      and Distributions

                          	 	 	62	 
	
                            Section
      9.05

                          	
                            Investments,
      Loans and Advances

                          	 	 	62	 
	
                            Section
      9.06

                          	
                            Nature
      of Business; International Operations

                          	 	 	63	 
	
                            Section
      9.07

                          	
                            Limitation
      on Leases

                          	 	 	64	 
	
                            Section
      9.08

                          	
                            Proceeds
      of Notes

                          	 	 	64	 
	
                            Section
      9.09

                          	
                            ERISA
      Compliance

                          	 	 	64	 
	
                            Section
      9.10

                          	
                            Disposition
      or Discount of Receivables

                          	 	 	65	 
	
                            Section
      9.11

                          	
                            Mergers,
      Etc

                          	 	 	65	 
	
                            Section
      9.12

                          	
                            Disposition
      of Properties

                          	 	 	65	 
	
                            Section
      9.13

                          	
                            Environmental
      Matters

                          	 	 	66	 
	
                            Section
      9.14

                          	
                            Transactions
      with Affiliates

                          	 	 	66	 
	
                            Section
      9.15

                          	
                            Subsidiaries

                          	 	 	66	 
	
                            Section
      9.16

                          	
                            Negative
      Pledge Agreements; Dividend Restrictions

                          	 	 	66	 
	
                            Section
      9.17

                          	
                            Prohibited
      Contracts

                          	 	 	66	 
	
                            Section
      9.18

                          	
                            Swap
      Agreements

                          	 	 	67	 
	
                            Section
      9.19

                          	
                            Transactions
      Affecting Collateral or Indebtedness

                          	 	 	67	 
	
                            Section
      9.20

                          	
                            Capital
      Expenditures

                          	 	 	67	 
	
                            Section
      9.21

                          	
                            Amendment
      and Prepayment of Other Debt

                          	 	 	67	 
	
                            Section
      9.22

                          	
                            Organization
      Documents; Fiscal Year

                          	 	 	67	 
	
                            Section
      9.23

                          	
                            Sale
      and Leaseback Transactions

                          	 	 	67	 
	
                            Section
      9.24

                          	
                            Deposit
      Accounts

                          	 	 	67	 
	
                            Section
      9.25

                          	
                            Compliance
      with Agreed Budget

                          	 	 	67	 
	
                            Section
      9.26

                          	
                            Chapter
      11 Claims

                          	 	 	68	 
	
                            Section
      9.27

                          	
                            Revision
      of Orders; Applications to Bankruptcy Court

                          	 	 	68	 
	 	 
	
                            ARTICLE
      X

                          	 
	
                            Events
      of Default; Remedies

                          	 	 	68	 
	
                            Section
      10.01

                          	
                            Events
      of Default

                          	 	 	68	 
	
                            Section
      10.02

                          	
                            Remedies

                          	 	 	72	 
	
                            Section
      10.03

                          	
                            Application
      of Funds

                          	 	 	73	 
	
                            Section
      10.04

                          	
                            Certain
      Bankruptcy Matters

                          	 	 	74	 
	 	 
	
                            ARTICLE
      XI

                          	 
	
                            The
      Agents

                          	 	 	75	 
	
                            Section
      11.01

                          	
                            Appointment;
      Powers

                          	 	 	75	 
	
                            Section
      11.02

                          	
                            Duties
      and Obligations of Administrative Agent

                          	 	 	76	 
	
                            Section
      11.03

                          	
                            Action
      by Administrative Agent

                          	 	 	76	 
	
                            Section
      11.04

                          	
                            Reliance
      by Administrative Agent

                          	 	 	77	 
	
                            Section
      11.05

                          	
                            Subagents

                          	 	 	77	 
	
                            Section
      11.06

                          	
                            Resignation
      or Removal of Administrative Agent

                          	 	 	77	 
	
                            Section
      11.07

                          	
                            Agents
      as Lenders

                          	 	 	78	 
	
                            Section
      11.08

                          	
                            No
      Reliance

                          	 	 	78	 
	
                            Section
      11.09

                          	
                            Administrative
      Agent May File Proofs of Claim

                          	 	 	79	 

                  

                

              

            

          

        

      

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            Section
      11.10

                          	
                            Authority
      of Administrative Agent to Release Collateral and Liens

                          	 	 	79	 
	
                            Section
      11.11

                          	
                            The
      Arranger and other Agents

                          	 	 	79	 
	 	 
	
                            ARTICLE
      XII

                          	 
	
                            Releases

                          	 	 	80	 
	
                            Section
      12.01

                          	
                            Release

                          	 	 	80	 
	
                            Section
      12.02

                          	
                            Covenant
      Not to Sue

                          	 	 	81	 
	
                            Section
      12.03

                          	
                            No
      Admission

                          	 	 	82	 
	 	 
	
                            ARTICLE
      XIII

                          	 
	
                            Miscellaneous

                          	 	 	82	 
	
                            Section
      13.01

                          	
                            Notices

                          	 	 	82	 
	
                            Section
      13.02

                          	
                            Waivers;
      Amendments

                          	 	 	83	 
	
                            Section
      13.03

                          	
                            Expenses,
      Indemnity; Damage Waiver

                          	 	 	84	 
	
                            Section
      13.04

                          	
                            Successors
      and Assigns

                          	 	 	86	 
	
                            Section
      13.05

                          	
                            Survival;
      Revival; Reinstatement

                          	 	 	89	 
	
                            Section
      13.06

                          	
                            Counterparts;
      Integration; Effectiveness

                          	 	 	89	 
	
                            Section
      13.07

                          	
                            Severability

                          	 	 	90	 
	
                            Section
      13.08

                          	
                            Right
      of Setoff

                          	 	 	90	 
	
                            Section
      13.09

                          	
                            GOVERNING
      LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

                          	 	 	90	 
	
                            Section
      13.10

                          	
                            Headings

                          	 	 	91	 
	
                            Section
      13.11

                          	
                            Confidentiality

                          	 	 	92	 
	
                            Section
      13.12

                          	
                            Interest
      Rate Limitation

                          	 	 	92	 
	
                            Section
      13.13

                          	
                            EXCULPATION
      PROVISIONS

                          	 	 	93	 
	
                            Section
      13.14

                          	
                            [Reserved]

                          	 	 	93	 
	
                            Section
      13.15

                          	
                            No
      Third Party Beneficiaries

                          	 	 	94	 
	
                            Section
      13.16

                          	
                            USA
      Patriot Act Notice

                          	 	 	94	 
	
                            Section
      13.17

                          	
                            No
      Advisory or Fiduciary Responsibility

                          	 	 	94	 
	
                            Section
      13.18

                          	
                            Time
      is of the Essence

                          	 	 	95	 
	
                            Section
      13.19

                          	
                            No
      Personal Liability of Directors, Officers, Employees and
      Stockholders

                          	 	 	95	 

                  

                

              

            

          

        

      

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    ANNEXES,
EXHIBITS AND SCHEDULES

     

    
      
        
          
            
              	
                      Annex
      I

                    	
                      List
      of Commitments

                    
	 	 
	
                      Exhibit
      A

                    	
                      Form
      of Note

                    
	
                      Exhibit
      B

                    	
                      Form
      of Borrowing Request

                    
	
                      Exhibit
      C

                    	
                      Form
      of Interest Election Request

                    
	
                      Exhibit
      D

                    	
                      Form
      of Compliance Certificate

                    
	
                      Exhibit
      E-1

                    	
                      Security
      Instruments

                    
	
                      Exhibit
      E-2

                    	
                      Form
      of Debtor-In-Possession Guaranty and Collateral
  Agreement

                    
	
                      Exhibit
      F

                    	
                      Form
      of Assignment and Assumption

                    
	
                      Exhibit
      G

                    	
                      Interim
      Order

                    
	
                      Exhibit
      H

                    	
                      Agreed
      Budget

                    
	 	 
	
                      Schedule
      7.05

                    	
                      Litigation

                    
	
                      Schedule
      7.06

                    	
                      Environmental
      Matters

                    
	
                      Schedule
      7.14

                    	
                      Subsidiaries
      and Partnerships

                    
	
                      Schedule
      7.18

                    	
                      Gas
      Imbalances

                    
	
                      Schedule
      7.19

                    	
                      Marketing
      Contracts

                    
	
                      Schedule
      7.20

                    	
                      Existing
      Swap Agreements

                    
	
                      Schedule
      8.13

                    	
                      Existing
      Accounts

                    
	
                      Schedule
      9.02

                    	
                      Debt

                    
	
                      Schedule
      9.03

                    	
                      Liens

                    
	
                      Schedule
      9.05

                    	
                      Investments

                    
	
                      Schedule
      9.17

                    	
                      Exceptions
      to Prohibited
Contracts

                    

            

          

        

      

    

    
      
         

      

      
        v

        
          

        

      

      
         

      

    

    THIS DEBTOR-IN-POSSESSION CREDIT
AGREEMENT dated as of October 6, 2009, is among: Aurora Oil & Gas
Corporation, debtor and debtor-in-possession, a corporation duly formed and
existing under the laws of the State of Utah (the “Borrower”); Hudson
Pipeline & Processing Co., LLC, debtor and debtor-in-possession, a limited
liability company duly formed and existing under the laws of the State of
Michigan (“HPPC” or, a “Guarantor”); each of
the lenders from time to time party hereto, (collectively, the “Lenders” and
individually, a “Lender”); and BNP
Paribas, as administrative agent for the Lenders (in such capacity, together
with its successors in such capacity, the “Administrative
Agent”) and Issuing Bank.

     

    RECITALS

     

    WHEREAS,
on July 12, 2009 (the “Petition Date”), the
Borrower and HPPC each filed a voluntary petition with the Bankruptcy Court
thereby initiating cases under Chapter 11 of the Bankruptcy Code (collectively,
the “Bankruptcy
Cases” and, individually, a “Bankruptcy
Case”).

     

    WHEREAS,
each of the Borrower and HPPC has continued in the possession of its assets and
in the management of its business as a debtor-in-possession pursuant to Sections
1107 and 1108 of the Bankruptcy Code.

     

    WHEREAS,
the Borrower has requested that the Lenders make available to the Borrower a
working capital revolving facility in an amount not to exceed $3,000,000.00,
which extensions of credit the Borrower will use for the purposes described
herein.

     

    WHEREAS,
to provide security for the repayment of the loans made available pursuant
hereto and payment of the other obligations of the Borrower and the other Loan
Parties under the Loan Documents, the Borrower and the other Loan Parties have
agreed to provide the Administrative Agent and the Lenders with the
following:

     

    (a)           a
perfected first priority Lien, pursuant to Section 364(c)(2) of the Bankruptcy
Code, on all Property of the Borrower and the other Loan Parties which was
unencumbered by any Lien as of the Petition Date (other than Avoidance Actions
and any proceeds or property recovered in respect of such Avoidance
Actions);

     

    (b)           a
perfected Lien, pursuant to Section 364(c)(3) of the Bankruptcy Code, upon all
Property of the Borrower and the other Loan Parties subject to existing valid,
perfected, enforceable and unavoidable Liens on such Property (other than
Property subject to Liens securing obligations owed to the Pre-Petition Secured
Parties);

     

    (c)           a
perfected first priority, senior priming Lien, pursuant to Section 364(d)(1) of
the Bankruptcy Code, upon all property of the Borrower and the other Loan
Parties that on the Petition Date is subject to a Lien securing any obligations
owed to the Pre-Petition Secured Parties; and

     

    (d)           with
respect to the obligations of the Borrower and the other Loan Parties hereunder
and under the other Loan Documents, an allowed administrative expense claim in
each Bankruptcy Case pursuant to Section 364(c)(1) of the Bankruptcy Code having
priority over all administrative expenses (subject to the Carve-Out) of the kind
specified in or arising under any sections of the Bankruptcy Code (including,
without limitation, Sections 105, 326, 328, 330, 331, 503(b), 507(a), 507(b),
546(c) or 726 thereof), but excluding the proceeds or property recovered in
respect of Avoidance Actions;

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    WHEREAS,
the Lenders have agreed to make available to the Borrower a working capital
revolving loan facility upon the terms and conditions set forth in this
Agreement.

     

    NOW
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree as follows:

     

    AGREEMENT

     

    ARTICLE
I

    Definitions
and Accounting Matters

     

    Section
1.01  Terms
Defined Above.  As used in this Agreement, each term defined
above has the meaning indicated above.

     

    Section
1.02  Certain Defined
Terms.  As used in this Agreement, the following terms have the
meanings specified below:

     

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

     

    “Adjusted LIBO Rate”
means, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.

     

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

     

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

     

    “Agents” means,
collectively, the Administrative Agent and any syndication agent, documentation
agent or similar agent that hereafter becomes a party hereto and “Agent” shall
mean either the Administrative Agent or such other agent, as the context
requires.

     

    “Aggregate
Commitments” shall mean all of the Commitments of all of the
Lenders.  The Aggregate Commitments on the Effective Date are
$3,000,000.00.

     

    “Agreed Budget” means
the budget approved by the Administrative Agent and the Majority Lenders and
defined in Section 7.26, as such budget may be updated from time to time in
accordance with the provisions of Section 8.01(d)(i).  The initial
Agreed Budget is attached as Exhibit H.

     

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

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Alternate Base Rate”
means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1 % and (c) 3.00%.  Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.

     

    "Applicable Margin"
means, for any day, with respect to (a) any Eurodollar Loan, the rate per annum
equal to 8.00%, and (b) any ABR Loan, the rate per annum equal to
8.75%.

     

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

     

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

     

    “Arranger” means BNP
Paribas, in its capacities as the sole lead arranger and sole bookrunner
hereunder.

     

    “Assignee” has the
meaning assigned to such term in Section 13.04(b)(i).

     

    “Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an Assignee (with the consent of any party whose consent is required by
Section 13.04(b)), and accepted by the Administrative Agent, substantially
in the form of Exhibit F or any other form approved by the Administrative
Agent.

     

    “Audited Financial
Statements” means the audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries for the fiscal year ended December
31, 2008, and the related consolidated statements of income or operations,
partners’ capital and cash flows for such fiscal year of the Borrower, including
the notes thereto, referred to in Section 7.04(a).

     

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

     

    “Avoidance Actions”
means causes of action arising under the Bankruptcy Code, including all of the
Borrower’s and Guarantor’s rights in and claims and causes of action under
Sections 541, 542, 544, 545, 547, 548, 549, 550, 551, 552(b) and 553 of the
Bankruptcy Code.

     

    “Bankruptcy Case” or
“Bankruptcy
Cases” have the meaning assigned to each such term in the
Recitals.

     

    “Bankruptcy Code”
means the Bankruptcy Code in Title 11 of the United States Code, as amended,
modified, succeeded or replaced from time to time.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Bankruptcy Court”
means the United States Bankruptcy Court for the Western District of
Michigan.

     

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

     

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

     

    “Borrowing Request”
means a request by the Borrower for a Borrowing in accordance with Section 2.03,
substantially in the form of Exhibit B.

     

    “Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
New York City or Houston, Texas are authorized or required by law to remain
closed; and if such day relates to a Borrowing or continuation of, a payment or
prepayment of principal of or interest on, or a conversion of or into, or the
Interest Period for, a Eurodollar Loan or a notice by the Borrower with respect
to any such Borrowing or continuation, payment, prepayment, conversion or
Interest Period, any day which is also a day on which dealings in dollar
deposits are carried out in the London interbank market.

     

    “Capital Expenditures”
means, for any Person for any period, the sum of, without duplication, (a) all
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to Property, plant or equipment on a consolidated balance sheet of
such Person or have a useful life of more than one (1) year plus (b) the
aggregate principal amount of all Debt (including obligations under Capital
Leases) assumed or incurred in connection with any such expenditures. For
purposes of this definition, the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the seller of
such equipment for the equipment being traded in at such time or the amount of
such proceeds, as the case may be.

     

    “Capital Leases”
means, in respect of any Person, all leases which shall have been, or should
have been, in accordance with GAAP, recorded as capital leases on the balance
sheet of the Person liable (whether contingent or otherwise) for the payment of
rent thereunder.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Carve-Out” means sums
having priority ahead of the Liens securing the Indebtedness and the
Super-Priority Claims for (a) in the event of the occurrence and during the
continuance of an Event of Default, the payment (as the same may be due and
become payable) of (i) professional fees and disbursements allowed by order
of the Bankruptcy Court that are incurred by the Loan Parties or the Creditors’
Committee, (ii) any disbursement (other than attorneys’ or other professional
fees) of any member of the Creditors’ Committee allowed by order of the
Bankruptcy Court, in each case under clauses (a)(i) and (ii) hereof, only to the
extent all such fees or disbursements are incurred after such Event of Default
in an aggregate amount not in excess of $150,000 with (A) $100,000 of such
amount available first to cover the Loan Parties’ professionals and (B) $50,000
of such amount available first to cover the Creditors’ Committee and its
members, and (iii) professional fees and disbursements allowed by order of the
Bankruptcy Court that are incurred by the Loan Parties or the Creditors’
Committee which are accrued and unpaid as of such Event of Default in an
aggregate amount not in excess of $500,000 with (A) $400,000 of such amount
available first to cover the Loan Parties’ professionals and (B) $100,000 of
such amount available first to cover the Creditors’ Committee and its members,
and (b) the payment of unpaid fees of the United States Trustee, pursuant to 28
U.S.C. §1930; provided, however, that no
portion of the Carve-Out shall be utilized for the payment of professional fees
and disbursements incurred for the purpose of (w) objecting to or contesting in
any manner, or in raising any defenses to, the amount, validity, extent,
perfection, priority or enforceability of the indebtedness or other obligations
of the Loan Parties owing to (1) any of the Lenders and/or the Administrative
Agent under this Agreement and the other Loan Documents and (2) any of the
Pre-Petition Secured Parties under any of the applicable Pre-Petition Loan
Documents, or any Liens with respect thereto, or any other rights or interests
of the Lenders, the Administrative Agent and/or the Pre-Petition Secured
Parties, or in investigating or asserting any Claims or causes of action,
including any actions under Chapter 5 of the Bankruptcy Code against the
Administrative Agent, any of the Lenders and/or any of the Pre-Petition Secured
Parties; (x) preventing, hindering, or delaying the Administrative Agent’s or
the Lenders’ enforcement or realization upon any of the Collateral to the extent
permitted hereunder or under the applicable Loan Documents; (y) selling any
Collateral, except as permitted under this Agreement and the Financing Orders;
or (z) modifying the Administrative Agent’s and any Lender’s rights under
this Agreement and the other Loan Documents; provided, further, that
notwithstanding anything to the contrary herein, (y) no more than a total
aggregate amount of $35,000 of the Carve-Out may be used by the Creditors’
Committee to investigate the matters described in the foregoing clause (w) of
the immediately preceding proviso as such apply solely to the Pre-Petition
Secured Parties and the Pre-Petition Loan Documents, and (z) so long as no Event
of Default shall have occurred and be continuing, the Loan Parties shall be
permitted to pay reasonable compensation and reimbursement of expenses allowed
by order of the Bankruptcy Court under 11 U.S.C. §328, §330 and §331, as such
compensation and expenses may be due and payable and be in accordance with the
Agreed Budget, and such compensation and expenses shall not reduce the
Carve-Out.  This Carve-Out is not in addition to the “carve-out” set
forth in the Cash Collateral Order.

     

    “Cash Collateral
Order” means the Agreed Final Order (I) Authorizing the Debtors’ Use of
Cash Collateral Pursuant to 11 U.S.C. §§ 361 and 363(c); And (II) Granting
Replacement Liens, Adequate Protection and Administrative Expense Priority to
Certain Pre-Petition Lenders, entered on the docket of the Bankruptcy Court on
August 11, 2009.

     

    “Cash Management
Order” means the Final Order (I) Authorizing Continued Use of Existing
Bank Accounts, Cash Management System, and Checks and Business Forms and
(II) Granting Temporary Waiver of Bond Requirement, entered on the docket
of the Bankruptcy Court on August 12, 2009.

     

    “Casualty Event” means
any loss, casualty or other insured damage to, or any nationalization, taking
under power of eminent domain or by condemnation or similar proceeding of, any
Property of the Borrower or any of its Subsidiaries having a fair market value
in excess of $100,000.

     

    “Change in Control”
means the occurrence of any of the following events: (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules
of the SEC thereunder as in effect on the date hereof), of Equity Interests
representing more than 25% of the aggregate ordinary voting power represented by
the issued and outstanding Equity Interests of the Borrower, or (b) occupation
of a majority of the seats (other than vacant seats) on the board of directors
of the Borrower by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) appointed by directors so
nominated.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Change in Law” means
(a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 5.01(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this
Agreement.

     

    "Claims" shall mean
any and all claims, third-party claims, causes of action, actions, cross
actions, damages, losses, liabilities, costs, fees, attorneys’ fees, consultant
fees, expert fees, expenses, debts, dues, sums of money, accounts, reckonings,
contracts, controversies, arbitrations, mediations, agreements, promises,
demands, judgments and executions of any and every character, kind and nature
whatsoever, whether known or unknown, fixed or contingent, direct or indirect,
express or implied, latent or patent, accrued or not accrued, liquidated or
unliquidated, matured or unmatured, foreseen or unforeseen, or suspected or
unsuspected, in contract or in tort or otherwise, and regardless of the legal,
contractual or equitable basis thereof, including but not limited to any such
claims, third-party claims, causes of action, actions, cross actions, damages,
losses, liabilities, costs, fees, attorneys’ fees, consultant fees, expert fees,
expenses, debts, dues, sums of money, accounts, reckonings contracts,
controversies, arbitrations, mediations, agreements, promises, demands,
judgments and executions based upon breach of contract, breach of express
warranty, breach of implied warranty, negligence, usury, misrepresentation,
negligent misrepresentation, conspiracy, unconscionability, declaratory relief,
duress, economic duress, defamation, control, interference with contractual or
business relationships, conflicts of interest, misuse of insider information,
concealment, disclosure, secrecy, wrongful setoff, violations of statutes and
regulations of governmental entities, instrumentalities and agencies,
racketeering activities, securities or antitrust laws violations, tying
arrangements, deceptive trade practices, breach or abuse of any alleged
fiduciary duty, breach or abuse of any alleged duty of care or loyalty, breach
of any alleged special relationship, course of conduct or dealing, alleged
obligation of fair dealing, alleged obligation of good faith, alleged obligation
of good faith and fair dealing, failure to provide notice of, or request consent
to, any matter or action whether or not in connection with or related to an
agreement, or any doctrine of piercing the corporate veil, alter ego, mere
instrumentality or agency.

     

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

     

    “Collateral” means a
collective reference to all real and personal Property required to be pledged to
the Administrative Agent to secure all or part of the Indebtedness pursuant to
the Security Instruments, the Interim Order or the Final Order.

     

    “Commitment” means,
with respect to each Lender, the commitment of such Lender to make Loans and
obligation to acquire participations in Letters of Credit hereunder from time to
time during the Availability Period in accordance with the terms of this
Agreement, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth as its “Commitment” opposite such Lender’s name on
Annex I or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such commitment may be (a) modified
from time to time pursuant to Section 2.06 and (b) modified from time to time
pursuant to assignments by or to such Lender pursuant to Section 13.04(b); provided, each
Lender’s obligation to acquire participations in Letters of Credit shall not
exceed such Lender’s Pro Rata Share of the LC Commitment.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    “Confirmed Plan of
Reorganization” means a plan of reorganization of the Loan Parties under
the Bankruptcy Cases which has been confirmed by the Bankruptcy Court and which
(a) provides for the payment in full in cash of all Indebtedness on the
Plan Effective Date or (b) is otherwise satisfactory to the Administrative Agent
and the Majority Lenders.

     

    “Consolidated
Subsidiaries” means each Subsidiary of the Borrower (whether now existing
or hereafter created or acquired) the financial statements of which shall be (or
should have been) consolidated with the financial statements of the Borrower in
accordance with GAAP.

     

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

     

    “Creditors’ Committee”
means the official committee of unsecured creditors appointed by the United
States trustee on or about July 21, 2009 in the Bankruptcy Cases.

     

    “Debt” means, for any
Person, the sum of the following (without duplication): (a) all obligations of
such Person for borrowed money or evidenced by bonds, bankers’ acceptances,
debentures, notes or other similar instruments; (b) all obligations of such
Person (whether contingent or otherwise) in respect of letters of credit, surety
or other bonds and similar instruments; (c) all accounts payable and all accrued
expenses, liabilities or other obligations of such Person to pay the deferred
purchase price of Property or services; (d) all obligations under Capital
Leases; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in
the other clauses of this definition) of others secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be
secured by) a Lien on any Property of such Person, whether or not such Debt is
assumed by such Person; (g) all Debt (as defined in the other clauses of this
definition) of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the Debt (howsoever such assurance
shall be made) to the extent of the lesser of the amount of such Debt and the
maximum stated amount of such guarantee or assurance against loss; (h) all
obligations or undertakings of such Person to maintain or cause to be maintained
the financial position or covenants of others or to purchase the Debt or
Property of others; (i) obligations to deliver commodities, goods or services,
including, without limitation, Hydrocarbons, in consideration of one or more
advance payments, other than gas balancing arrangements in the ordinary course
of business; (j) obligations to pay for goods or services even if such goods or
services are not actually received or utilized by such Person; (k) any Debt of a
partnership for which such Person is liable either by agreement, by operation of
law or by a Governmental Requirement but only to the extent of such liability;
(l) Disqualified Capital Stock; and (m) the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment.  The Debt of any
Person shall include all obligations of such Person of the character described
above to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is not included as a liability of such
Person under GAAP.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    “Debtor Releasing
Parties” means, expressly subject to Section 12.01(e), collectively, the
Borrower, HPPC, and each of their respective estates under the Bankruptcy Cases
created pursuant to Section 541 of the Bankruptcy Code, and any Person seeking
to exercise the rights of any such estate, including, any successor to the
Borrower or HPPC, as the case may be, or any representative of any such estate
appointed or selected pursuant to Section 1123(b) of the Bankruptcy Code or
otherwise (including, any Chapter 11 or Chapter 7 trustee appointed in either of
the Bankruptcy Cases), on their own behalf and derivatively on behalf of the
Equity Interest holders and creditors of Borrower and HPPC.

     

    “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.

     

    “Disposition” or
“Dispose” means
the sale, transfer, license, lease or other disposition (including any sale and
leaseback transaction) of any property by any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated
therewith.

     

    “Disqualified Capital
Stock” means any Equity Interest that, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
upon the happening of any event, matures or is mandatorily redeemable for any
consideration other than other Equity Interests (which would not constitute
Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise,
or is convertible or exchangeable for Debt or redeemable for any consideration
other than other Equity Interests (which would not constitute Disqualified
Capital Stock) at the option of the holder thereof, in whole or in part, on or
prior to the date that is one (1) year after the earlier of (a) the Maturity
Date and (b) the date on which there are no Loans, LC Exposure or other
obligations hereunder outstanding and all of the Commitments are
terminated.

     

    “dollars” or “$” refers to lawful
money of the United States of America.

     

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

     

    “Effective Date” means
the date on which the conditions specified in Section 6.01 are satisfied (or
waived in accordance with Section 13.02).  For purposes hereof,
Effective Date shall mean October [___], 2009.

     

    “Environmental Laws”
means any and all Governmental Requirements pertaining in any way to health,
safety, the environment or the preservation or reclamation of natural resources,
in effect in any and all jurisdictions in which the Borrower or any Subsidiary
is conducting or at any time has conducted business, or where any Property of
the Borrower or any Subsidiary is located, including without limitation, the Oil
Pollution Act of 1990 (“OPA”), as amended,
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 (“CERCLA”), as amended,
the Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 (“RCRA”),
as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act, as amended, and
other environmental conservation or protection Governmental
Requirements.  The term “oil” shall have the meaning specified in OPA,
the terms “hazardous
substance” and “release” (or “threatened release”)
have the meanings specified in CERCLA, the terms “solid waste” and
“disposal” (or
“disposed”)
have the meanings specified in RCRA and the term “oil and gas waste”
shall mean those waste that are excluded from the definition of “hazardous  waste”
pursuant to 40 C.F.R. Section 261.4(b)(5) (“Section
261.4(b)(5)”); provided, however, that (a) in
the event either OPA, CERCLA, RCRA or Section 261.4(b)(5) is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment and (b) to the extent
the laws of the state or other jurisdiction in which any Property of the
Borrower or any Subsidiary is located establish a meaning for “oil,” “hazardous substance,”
“release,”
“solid waste,”
“disposal” or
“oil and
gas  waste” which is broader than that specified in either OPA,
CERCLA, RCRA or Section 261.4(b)(5), such broader meaning shall
apply.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

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

     

    “Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such Equity
Interest.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute.

     

    “ERISA Affiliate”
means each trade or business (whether or not incorporated) which together with
the Borrower or a Subsidiary would be deemed to be a “single employer” within
the meaning of Section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o)
of Section 414 of the Code.

     

    “ERISA Event” means
(a) a “Reportable Event” described in Section 4043 of ERISA and the regulations
issued thereunder, (b) the withdrawal of the Borrower, a Subsidiary or any ERISA
Affiliate from a Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice
of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability
pursuant to Section 4202 of ERISA or (f) any other event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan.

     

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

     

    “Event of Default” has
the meaning assigned to such term in Section 10.01.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    “Excepted Liens”
means: (a) Liens for Taxes, assessments or other governmental charges or levies
which are not delinquent or which are being contested in good faith by
appropriate action and for which the associated liabilities have been
appropriately recorded in the applicable Person’s books in accordance with GAAP;
(b) Liens in connection with workers’ compensation, unemployment insurance or
other social security, old age pension or public liability obligations which are
not delinquent or which are being contested in good faith by appropriate action
and for which the associated liabilities have been appropriately recorded in the
applicable Person’s books in accordance with GAAP; (c) statutory landlords’
liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’,
suppliers’, workers’, materialmen’s, construction or other like Liens arising by
operation of law in the ordinary course of business or incident to the
exploration, development, operation and maintenance of Oil and Gas Properties
each of which is in respect of obligations that are not delinquent or which are
being contested in good faith by appropriate action and for which the associated
liabilities have been appropriately recorded in the applicable Person’s books in
accordance with GAAP; (d) contractual Liens which arise in the ordinary course
of business under operating agreements, joint venture agreements, oil and gas
partnership agreements, oil and gas leases, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of oil and natural
gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements,
processing agreements, net profits agreements, development agreements, gas
balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and
customary in the oil and gas business and are for Claims which are not
delinquent or which are being contested in good faith by appropriate action and
for which the associated liabilities have been appropriately recorded in the
applicable Person’s books in accordance with GAAP, provided that any such Lien
referred to in this clause does not materially impair the use of the Property
covered by such Lien for the purposes for which such Property is held by the
Borrower or any Subsidiary or materially impair the value of such Property
subject thereto; (e) Liens arising solely by virtue of any statutory or common
law provision relating to banker’s liens, rights of set-off or similar rights
and remedies and burdening only deposit accounts or other funds maintained with
a creditor depository institution, provided that no such deposit account is a
dedicated cash collateral account or is subject to restrictions against access
by the depositor in excess of those set forth by regulations promulgated by the
Board and no such deposit account is intended by Borrower or any of its
Subsidiaries to provide collateral to the depository institution; (f) easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any Property of the Borrower or any Subsidiary for the purpose
of roads, pipelines, transmission lines, transportation lines, distribution
lines for the removal of gas, oil, coal or other minerals or timber, and other
like purposes, or for the joint or common use of real estate, rights of way,
facilities and equipment, that do not secure any monetary obligations and which
in the aggregate do not materially impair the use of such Property for the
purposes of which such Property is held by the Borrower or any Subsidiary or
materially impair the value of such Property subject thereto; (g) Liens on cash
or securities pledged to secure performance of tenders, surety and appeal bonds,
government contracts, performance and return of money bonds, bids, trade
contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business and (h)
judgment and attachment Liens not giving rise to an Event of Default, provided
that any appropriate legal proceedings which may have been duly initiated for
the review of such judgment shall not have been finally terminated or the period
within which such proceeding may be initiated shall not have expired and no
action to enforce such Lien has been commenced; provided, further, that Liens
described in clauses (a) through (e) shall remain “Excepted Liens” only for so
long as no action to enforce such Lien has been commenced and no intention to
subordinate the first priority Lien granted in favor of the Administrative Agent
and the Lenders is to be hereby implied or expressed by the permitted existence
of such Excepted Liens.

     

    “Excluded Disposition”
means, with respect to the Borrower or any of its Subsidiaries, any Disposition
consisting of (a) the sale, transfer or other disposition of Hydrocarbons in the
ordinary course of such Person’s business; (b) farmouts in the ordinary course
of such Person’s business of undeveloped acreage or undrilled depths and
assignments in connection with such farmouts; (c) the sale or transfer of
equipment that is no longer necessary for the business of such Person or is
replaced by equipment of at least comparable value and use; or (d) the granting
of easements, rights-of-way, servitudes, permits, reservations, exceptions,
covenants and other restrictions as to the use of real property, and other
similar encumbrances incurred in the ordinary course of business which, in the
case of this clause (d), in the aggregate, are not substantial in amount and
which do not in any case materially detract from the value of the Property
subject thereto or materially interfere with the ordinary conduct of such
Person’s business.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the Issuing Bank or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower or any Guarantor hereunder or under any other Loan Document, (a)
income or franchise Taxes imposed on (or measured by) its net income by the
United States of America or such other jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits Taxes imposed by the United States of America or any similar Tax
imposed by any other jurisdiction in which the Borrower or any Guarantor is
located and (c) in the case of a Foreign Lender, any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 5.03(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts with respect to such withholding tax pursuant to
Section 5.03(a) or Section 5.03(c).

     

    “Existing Accounts”
has the meaning assigned to such term in Section 8.13.

     

    “Existing Swap
Agreements” means those Swap Agreements of the Loan Parties in existence
as of the Effective Date and set forth on Schedule 7.20 hereto.

     

    “Extraordinary
Receipt” means any collections or other payments or transfers received by
a Loan Party not in the ordinary course of business, including, without
limitation, (a) proceeds of insurance (including proceeds of any key man life
insurance policies), judgments, proceeds of judgments or other consideration of
any kind in connection with any cause of action, (b) condemnation awards (and
payments in lieu thereof), (c) indemnity payments and (d) pension
reversions.

     

    “Federal Funds Effective
Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

     

    “Fee Letter” means the
letter agreement, dated October 6, 2009, among the Borrower, the Administrative
Agent and the Arranger.

     

    “Final Order” means
the order or judgment of the Bankruptcy Court as entered on the docket of the
Bankruptcy Court approving this Agreement and the other Loan Documents, in form
and substance satisfactory to the Administrative Agent, which order or judgment
is in effect and not stayed, and as to which the time to appeal, petition for
certiorari, or move for re-argument or re-hearing has expired and as to which no
appeal, petition for certiorari, or other proceeding for re-argument or
re-hearing shall then be pending, or, if pending, no stay pending appeal shall
have been granted.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    “Financial Officer”
means, for any Person, the chief financial officer, principal accounting
officer, treasurer or controller of such Person.  Unless otherwise
specified, all references herein to a Financial Officer means a Financial
Officer of the Borrower.

     

    “Financing Orders”
means, collectively, the Interim Order and the Final Order.

     

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

     

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

     

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

     

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

     

    “Governmental
Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
whether now or hereinafter in effect, including, without limitation,
Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority.

     

    “Guarantors”
means:

     

    (a)         HPPC,
debtor and debtor-in-possession, a limited liability company duly formed and
existing under the laws of the State of Michigan, that is a debtor in the
Bankruptcy Cases; and

     

    (b)         each
other Person that guarantees the Indebtedness pursuant to Section
8.15.

     

    “Guaranty Agreement”
means a Guaranty and Collateral Agreement executed by the Guarantors in
substantially the form of Exhibit E-2 unconditionally guarantying on a joint and
several basis, payment of the Indebtedness, as the same may be amended, modified
or supplemented from time to time.

     

    “Hazardous Material”
means any substance regulated or as to which liability might arise under any
applicable Environmental Law and including, without limitation: (a) any
chemical, compound, material, product, byproduct, substance or waste defined as
or included in the definition or meaning of “hazardous substance,” “hazardous
material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous
substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar
meaning or import found in any applicable Environmental Law; (b) petroleum
hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil
and gas waste, crude oil, and any components, fractions, or derivatives thereof;
and (c) radioactive materials, asbestos containing materials, polychlorinated
biphenyls, or radon.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    “Highest Lawful Rate”
means, with respect to each Lender, the maximum nonusurious interest rate, if
any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the Notes or on other Indebtedness under laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws
allow as of the date hereof.

     

    “Hydrocarbon
Interests” means all rights, titles, interests and estates now or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or
other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever
nature.

     

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

     

    “Indebtedness” means
any and all amounts owing or to be owing by the Borrower, any Subsidiary or any
Guarantor (whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter
arising): (a) to the Administrative Agent, the Issuing Bank or any Lender under
any Loan Document;  and (b) all renewals, extensions and/or
rearrangements of any of the above.

     

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

     

    “Interest Election
Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.04.

     

    “Interest Payment
Date” means (a) with respect to any ABR Loan, the last day of each
calendar month and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than one (1)
month duration, each day prior to the last day of such Interest Period that
occurs at intervals of one (1) month duration after the first day of such
Interest Period.

     

    “Interest Period”
means with respect to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one (1) or two (2) 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 shall extend beyond the Maturity
Date.  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.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    “Interim Order” means,
to the extent necessary, the order or judgment of the Bankruptcy Court as
entered on the docket of the Bankruptcy Court with respect to the Bankruptcy
Cases substantially in the form of Exhibit G hereto, approving, inter alia, this
Agreement and the other Loan Documents, and (a) authorizing the incurrence by
the Loan Parties of interim secured indebtedness in accordance with this
Agreement, and (b) approving the payment by the Loan Parties of the fees
contemplated by this Agreement and the Fee Letter.

     

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

     

    “Issuing Bank” means
BNP Paribas, in its capacity as the issuer of Letters of Credit hereunder, and
its successors in such capacity as provided in Section 2.08(i).  The
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate.

     

    “LC Commitment” at any
time means $700,000.

     

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

     

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

     

    “Lenders” means the
Persons listed on Annex I and any Person that shall have become a party hereto
pursuant to an Assignment and Assumption, other than any such Person that ceases
to be a party hereto pursuant to an Assignment and Assumption.

     

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

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    “Letter of Credit
Agreements” means all letter of credit applications and other agreements
(including any amendments, modifications or supplements thereto) submitted by
the Borrower, or entered into by the Borrower, with the Issuing Bank relating to
any Letter of Credit.

     

    “LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, the rate per
annum equal to the higher of (a) the rate appearing on Reuters Screen LIBOR01
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period and (b) 4.00%.  In the
event that such rate is not available at such time for any reason, then the
“LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
higher of (a) the rate per annum (rounded upwards, if necessary, to the next
1/16th of 1%) at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period and (b) 4.00% per annum.

     

    “Lien” means any
interest in Property securing an obligation owed to, or a claim by, a Person
other than the owner of the Property, whether such interest is based on the
common law, statute or contract, and whether such obligation or claim is fixed
or contingent, and including but not limited to (a) the lien or security
interest arising from a mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes or (b) production payments and the like payable out of Oil and
Gas Properties.

     

    The term
“Lien” shall
include easements, restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations.  For the purposes of this Agreement, the
Borrower and its Subsidiaries shall be deemed to be the owner of any Property
which they have acquired or hold subject to a conditional sale agreement, or
leases under a financing lease or other arrangement pursuant to which title to
the Property has been retained by or vested in some other Person in a
transaction intended to create a financing.

     

    “Loan Documents”
means, collectively, this Agreement, the Notes, the Letter of Credit Agreements,
the Letters of Credit and the Security Instruments.

     

    “Loan Parties” means
the Borrower and each Guarantor.

     

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

     

    “Majority Lenders”
means, at any time while no Loans or LC Exposure is outstanding, Lenders having
at least fifty-one percent (51%) of the Aggregate Commitments; and at any time
while any Loans or LC Exposure is outstanding, Lenders holding at least
fifty-one percent (51%) of the total aggregate Revolving Outstanding Amounts
(without regard to any sale by a Lender of a participation in any Loan under
Section 13.04(c)).

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    “Material Adverse
Effect” means a material adverse change in, or material adverse effect on
(a) the business, operations, Property, condition (financial or otherwise) or
prospects of the Borrower and the Subsidiaries taken as a whole, (b) the ability
of the Borrower, any Subsidiary or any Guarantor to perform any of its
obligations under any Loan Document, (c) the validity or enforceability of any
Loan Document, (d) the rights and remedies of or benefits available to the
Administrative Agent, any other Agent, the Issuing Bank or any Lender under any
Loan Document, (e) the Administrative Agent’s or the Lenders’ ability to realize
upon the Collateral, or (f) the Collateral (or the value thereof) or a material
impairment of the Administrative Agent’s or the Lenders’ Liens or the priority
thereof.

     

    “Material
Indebtedness” means Debt (other than the Loans and the Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $500,000.  For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of the Borrower or any
Subsidiary in respect of any Swap Agreement at any time shall be the Swap
Termination Value.

     

    “Maturity Date” means
the earliest to occur of (i) January 7, 2010, (ii) the date that is 30 calendar
days after the date hereof, solely to the extent that the Final Order has not
been entered by the Bankruptcy Court prior to the date that is 30 calendar days
after the date hereof, (iii) the date that the Aggregate Commitments terminate
and/or the Indebtedness is accelerated, in each case, by the Administrative
Agent or the Lenders upon the occurrence of an Event of Default and in
accordance with Section 10.02(a), and (iv) the Plan Effective Date, unless
terminated earlier in accordance with the terms of this Agreement.

     

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

     

    “Mortgaged Property”
means any Property owned by the Borrower or any Guarantor which is subject to
the Liens existing and to exist under the terms of the Security Instruments
(taken together with the Interim Order, if applicable, and the Final
Order).

     

    “Multiemployer Plan”
means a Plan which is a multiemployer plan as defined in Section 3(37) or
4001 (a)(3) of ERISA.

     

    “Net Cash Proceeds”
means in connection with any issuance or Disposition of assets, Equity
Interests, Debt securities, Casualty Events or the incurrence of loans, the cash
proceeds received from such Disposition, issuance or incurrence, net of Taxes,
attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith.

     

    “Notes” means the
promissory notes of the Borrower described in Section 2.02(d) and being
substantially in the form of Exhibit A, together with all amendments,
modifications, replacements, extensions and rearrangements thereof.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

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

     

    “Organizational
Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

     

    “Other Taxes” means
any and all present or future stamp or documentary Taxes or any other excise or
Property Taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement and any other Loan Document.

     

    “Participant” has the
meaning assigned to such term in Section 13.04(c)(i).

     

    “Patriot Act” has the
meaning assigned to such term in Section 13.16.

     

    “PBGC” means the
Pension Benefit Guaranty Corporation, or any successor thereto.

     

    “Permitted
Investments” means, at any time, Investments by the Loan Parties
permitted to exist at such time pursuant to the terms of Section
9.05.

     

    “Permitted Liens” has
the meaning assigned to such term in Section 9.03.

     

    
      
        
        

      

      
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    “Permitted Refinancing
Debt” means Debt (for purposes of this definition, “new Debt”) incurred
in exchange for, or proceeds of which are used to refinance, all of any other
Debt (the “Refinanced
Debt”); provided, that (a)
such new Debt is in an aggregate principal amount not in excess of the sum of
(i) the aggregate principal amount then outstanding of the Refinanced Debt (or,
if the Refinanced Debt is exchanged or acquired for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount) and (ii) an amount necessary to pay
any fees and expenses, including premiums, related to such exchange or
refinancing; (b) such new Debt has a stated maturity no earlier than the stated
maturity of the Refinanced Debt and an average life no shorter than the average
life of the Refinanced Debt; (c) such new Debt does not have a stated interest
rate in excess of the stated interest rate of the Refinanced Debt; (d) such new
Debt does not contain any covenants which are materially more onerous to the
Borrower and its Subsidiaries than those imposed by the Refinanced Debt and (e)
such new Debt (and any guarantees thereof) is subordinated in right of payment
to the Indebtedness (or, if applicable, the Guaranty Agreement) to at least the
same extent as the Refinanced Debt and is otherwise subordinated on terms
reasonably satisfactory to the Administrative Agent and the Majority
Lenders.

     

    “Permitted Variance”
means a Variance within a Proposed Budget or an Agreed Budget, as the case may
be, on any amount on a line-item basis that does not cause, individually or in
the aggregate with all other Variances on all other line-items, to exceed the
total aggregate amount of all line-items in the Proposed Budget or Agreed
Budget, as the case may be, for the applicable period by more than 10%, tested
weekly; provided, however, that any
unused amounts within a particular line-item for a particular week may be added
on a cumulative basis to the amount provided for in the same line-item for
succeeding weeks, so long as such succeeding weeks are not part of a Subsequent
Budget Period.

     

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

     

    “Petition Date” has
the meaning assigned to such term in the Recitals.

     

    “Plan” means any
employee pension benefit plan, as defined in Section 3(2) of ERISA, which (a) is
currently or hereafter sponsored, maintained or contributed to by the Borrower,
a Subsidiary or an ERISA Affiliate or (b) was at any time during the six (6)
calendar years preceding the date hereof, sponsored, maintained or contributed
to by the Borrower or a Subsidiary or an ERISA Affiliate.

     

    “Plan Effective Date”
means the date on which the Confirmed Plan of Reorganization becomes effective
as a result of confirmation by the Bankruptcy Court.

     

    “Pre-Petition First Lien
Administrative Agent” means BNP Paribas, or any successor thereto, in its
capacity as “Administrative Agent” under the Pre-Petition First Lien Credit
Agreement.

     

    “Pre-Petition First Lien
Credit Agreement” means the Amended and Restated Credit Agreement, dated
as of August 20, 2007, among the Borrower, the Pre-Petition First Lien Lenders,
and the Pre-Petition First Lien Administrative Agent, as amended, supplemented
or otherwise modified prior to the date hereof.

     

    “Pre-Petition First Lien
Lenders” means the “Lenders” under the Pre-Petition First Lien Credit
Agreement.

     

    “Pre-Petition Loan
Documents” means, collectively, all “Loan Documents” under and as defined
in (a) the Pre-Petition First Lien Credit Agreement and (b) the Pre-Petition
Second Lien Credit Agreement.

     

    
      
        
        

      

      
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    “Pre-Petition Second Lien
Administrative Agent” means D.E. Shaw Laminar Portfolios, L.L.C., as
successor to BNP Paribas, or any successor thereto, in its capacity as
“Administrative Agent” under the Pre-Petition Second Lien Credit
Agreement.

     

    “Pre-Petition Second Lien
Credit Agreement” means the Second Lien Term Loan Agreement, dated as of
August 20, 2007, among the Borrower, the Pre-Petition Second Lien Lenders, and
the Pre-Petition Second Lien Administrative Agent, as amended, supplemented or
otherwise modified prior to the date hereof.

     

    “Pre-Petition Second Lien
Lenders” means the “Lenders” under the Pre-Petition Second Lien Credit
Agreement.

     

    “Pre-Petition Secured
Indebtedness” means, collectively, all “Indebtedness” under and as
defined in (a) the Pre-Petition First Lien Credit Agreement and (b) the
Pre-Petition Second Lien Credit Agreement.

     

    “Pre-Petition Secured
Parties” means, collectively the Pre-Petition First Lien Administrative
Agent, each Pre-Petition First Lien Lender, the Pre-Petition Second Lien
Administrative Agent and each Pre-Petition Second Lien Lender.

     

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

     

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

     

    “Proposed Budget” has
the meaning assigned to such term in Section 8.01(d)(i).

     

    “Pro Rata Share”
means, with respect to each Lender at any time, a fraction (expressed as a
percentage, carried out to the ninth (9th) decimal place), the numerator or
which is the amount of the Commitment of such Lender at such time and the
denominator of which is the amount of the Aggregate Commitments at such time;
provided, that
if the Commitment of each Lender to make Loans and its obligation to acquire
participations in Letters of Credit have been terminated pursuant to Section
10.02, then the Pro Rata Share of each Lender shall be determined based on the
Pro Rata Share of such Lender immediately prior to such termination and after
giving effect to any subsequent assignments made pursuant to the terms
hereof.

     

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

     

    
      
        
        

      

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

     

    “Register” has the
meaning assigned to such term in Section 13.04(b)(iv).

     

    “Regulation D” means
Regulation D of the Board, as the same may be amended, supplemented or replaced
from time to time.

     

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

     

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

     

    “Released Matters” has
the meaning assigned to such term in Section 12.01(a).

     

    “Released Parties”
means, collectively, the Pre-Petition First Lien Administrative Agent, each
Pre-Petition First Lien Lender, BNP Paribas, in its capacity as issuing bank,
sole lead arranger and sole bookrunner under the Pre-Petition First Lien Credit
Agreement, the Pre-Petition Second Lien Administrative Agent, each Pre-Petition
Second Lien Lender, and BNP Paribas, in its capacity as sole lead arranger and
sole bookrunner under the Pre-Petition Second Lien Credit Agreement, in each
case, together with their respective current and former directors, officers,
employees, shareholders, members, principals, partners, trustees, managers,
heirs, executors, administrators, insurers, professionals, attorneys, agents,
Subsidiaries, Affiliates, predecessors, successors, assigns, in each case, in
their respective capacities as such, and any other Person claimed to be liable
derivatively through any Person referred to in the foregoing.

     

    “Remedial Work” has
the meaning assigned to such term in Section 8.10(a).

     

    “Reserve Report” means
the latest “Reserve Report” (as such term is defined in the Pre-Petition First
Lien Credit Agreement) delivered to the Pre-Petition First Lien Administrative
Agent pursuant to the Pre-Petition First Lien Credit Agreement, together with
any other information providing for any material update to the information
contained therein.

     

    “Responsible Officer”
means, as to any Person, the chief executive officer, the president, chief
restructuring officer, any Financial Officer or any vice president of such
Person.  Unless otherwise specified, all references to a Responsible
Officer herein shall mean a Responsible Officer of the Borrower.

     

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

     

    
      
        
        

      

      
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    “Revolving Outstanding
Amount” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans and its LC Exposure at such
time.

     

    “Sale and Leaseback
Transaction” means any arrangement pursuant to which any Loan Party,
directly or indirectly, becomes liable as lessee, guarantor or other surety with
respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (a) which such Loan Party has sold or transferred (or is to sell or
transfer) to a Person which is not a Loan Party or (b) which such Loan Party
intends to use for substantially the same purpose as any other Property which
has been sold or transferred (or is to be sold or transferred) by such Loan
Party to another Person which is not a Loan Party in connection with such
lease.

     

    “SEC” means the
Securities and Exchange Commission or any successor Governmental
Authority.

     

    “Secured Parties”
means, collectively, the Administrative Agent and each of the
Lenders.

     

    “Security Instruments”
means, collectively, the Guaranty Agreement and the other letters, agreements,
instruments or certificates described or referred to in Exhibit E-1, and any and
all other agreements, instruments, consents or certificates now or hereafter
executed and delivered by the Borrower or any other Person (other than Swap
Agreements with the Lenders or any Affiliate of a Lender or participation or
similar agreements between any Lender and any other lender or creditor with
respect to any Indebtedness pursuant to this Agreement) in connection with, or
as security for the payment or performance of the Indebtedness, the Notes, this
Agreement or reimbursement obligations under the Letters of Credit, as such
agreements may be amended, modified, supplemented or restated from time to
time.

     

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

     

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

     

    “Subsequent Budget
Period” has the meaning assigned to such term in Section
8.01(d)(i).

     

    “Subsidiary” means:
(a) any Person of which at least a majority of the outstanding Equity Interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors, manager or other governing body of such Person (irrespective
of whether or not at the time Equity Interests of any other class or classes of
such Person shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
the Borrower or one or more of its Subsidiaries or by the Borrower and one or
more of its Subsidiaries and (b) any partnership of which the Borrower or any of
its Subsidiaries is a general partner.  Unless otherwise indicated
herein, each reference to the term “Subsidiary” shall mean a Subsidiary of the
Borrower.

     

    
      
        
        

      

      
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    “Super-Priority Claim”
shall mean, in relation to the Loan Parties, a claim in the Bankruptcy Cases
which is an administrative expense claim authorized and established by the
Bankruptcy Court pursuant to Sections 364(c)(1) and 507(b) of the Bankruptcy
Code and having priority over any or all administrative expenses of the kind
specified in Sections 503(b), 507(b) and 546(c) of the Bankruptcy
Code.

     

    “Swap Agreement” means
any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement, whether exchange traded, “over-the-
counter” or otherwise, involving, or settled by reference to, one or more
interest rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided, that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or the Subsidiaries shall be a Swap Agreement.

     

    “Swap Termination
Value” means, in respect of any one or more Swap Agreements, after taking
into account the effect of any legally enforceable netting agreement relating to
such Swap Agreements, (a) for any date on or after the date such Swap Agreements
have been closed out and termination value(s) determined in accordance
therewith, such termination value(s) and (b) for any date prior to the date
referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Agreements, as determined by the counterparties to such
Swap Agreements.

     

    “Synthetic Leases”
means, in respect of any Person, all leases which shall have been, or should
have been, in accordance with GAAP, treated as operating leases on the financial
statements of the Person liable (whether contingently or otherwise) for the
payment of rent thereunder and which were properly treated as indebtedness for
borrowed money for purposes of U.S. federal income Taxes, if the lessee in
respect thereof is obligated to either purchase for an amount in excess of, or
pay upon early termination an amount in excess of, 80% of the residual value of
the Property subject to such operating lease upon expiration or early
termination of such lease.

     

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

     

    “Termination Date”
means the earliest of (a) the Maturity Date, and (b) the date of termination of
all of the Commitments.

     

    “Transactions” means,
with respect to (a) the Borrower, the execution, delivery and performance by the
Borrower of this Agreement and each other Loan Document to which it is a party,
the borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder, and the grant of Liens by the Borrower on Mortgaged
Properties and other Properties pursuant to the Security Instruments, the
Interim Order, if applicable, and the Final Order and (b) each Guarantor, the
execution, delivery and performance by such Guarantor of each Loan Document to
which it is a party, the guaranteeing of the Indebtedness and the other
obligations under the Guaranty Agreement by such Guarantor and such Guarantor’s
grant of the security interests and provision of Collateral under the Security
Instruments, and the grant of Liens by such Guarantor on Mortgaged Properties
and other Properties pursuant to the Security Instruments.

     

    
      
        
        

      

      
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    “Transferee” means any
Assignee or Participant.

     

    “Type”, when used in
reference to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by reference
to the Alternate Base Rate or the Adjusted LIBO Rate.

     

    “UCC” means the
Uniform Commercial Code (or any similar or equivalent legislation) as in effect
in any applicable jurisdiction.

     

    “Variance” means (a) a
new line item contained in a Proposed Budget that was not contained in the most
recent Agreed Budget, or (b) a difference in the amount contained in an Agreed
Budget or a Proposed Budget, as the case may be, on a per line-item basis,
compared to the respective line-item amount that was previously in
effect.

     

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

     

    Section
1.03   Types
of Loans and Borrowings.  For purposes of this Agreement, Loans
and Borrowings, respectively, may be classified and referred to by Type (e.g., a
“Eurodollar
Loan” or a “Eurodollar
Borrowing”).

     

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

     

    
      
        
        

      

      
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    ARTICLE
II

    The
Credits

     

    Section
2.01   Commitments.  Subject
to the terms and conditions set forth herein and in the Financing Orders, each
Lender agrees to make Loans to the Borrower from time to time during the
Availability Period in an aggregate principal amount that will not result in (a)
such Lender’s Revolving Outstanding Amount exceeding such Lender’s Commitment or
(b) the total aggregate Revolving Outstanding Amounts exceeding the Aggregate
Commitments.  Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, repay and re-borrow the
Loans.

     

    Section
2.02   Loans and
Borrowings.

     

    (a)           Borrowings; Several
Obligations.  Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Commitments.  The failure of any Lender to fund any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided, that the
Commitments are several and no Lender shall be responsible for any other
Lender’s failure to fund Loans as required.

     

    (b)           Types of
Loans.  Subject to Section 3.03, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith.  Each Lender at its option may fund any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to fund such Loan; provided, that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.

     

    (c)           Minimum Amounts; Limitation
on Number of Borrowings.  At the commencement of each Interest
Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 and not less than
$100,000.  At the time that each ABR Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of $100,000 and not
less than $100,000; provided, that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Aggregate Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section
2.08(e).  Borrowings of more than one Type may be outstanding at the
same time, provided that there shall not at any time be more than a total of six
(6) Eurodollar Borrowings outstanding.  Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request, or
to elect to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.

     

    (d)           Notes.  The
Loans made by each Lender shall be evidenced by a single promissory note of the
Borrower in substantially the form of Exhibit A, dated, in the case of (i) any
Lender party hereto as of the date of this Agreement, as of the date of this
Agreement, or (ii) any Lender that becomes a party hereto pursuant to an
Assignment and Assumption, as of the effective date of the Assignment and
Assumption, in each case, payable to the order of such Lender in a principal
amount equal to its Commitment as in effect on such date, and otherwise duly
completed.  In the event that any Lender’s Commitment increases or
decreases for any reason (whether pursuant to Section 2.06, Section 13.04(b) or
otherwise), the Borrower shall deliver or cause to be delivered on the effective
date of such increase or decrease, a new Note payable to the order of such
Lender in a principal amount equal to its Commitment after giving effect to such
increase or decrease, and otherwise duly completed. The date, amount, Type,
interest rate and, if applicable, Interest Period of each Loan made by each
Lender, and all payments made on account of the principal thereof, shall be
recorded by such Lender on its books for its Note, and, prior to any transfer,
may be endorsed by such Lender on a schedule attached to such Note or any
continuation thereof or on any separate record maintained by such Lender.
Failure to make any such notation or to attach a schedule shall not affect any
Lender’s or the Borrower’s rights or obligations in respect of such Loans or
affect the validity of such transfer by any Lender of its Note.

     

    
      
        
        

      

      
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    Section
2.03   Requests for
Borrowings.  To request a Borrowing, the Borrower shall notify
the Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., Houston, Texas time, three (3)
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 12:00 noon, Houston, Texas time, on the Business
Day of the proposed Borrowing; provided, that no
such notice shall be required for any deemed request of an ABR Borrowing to
finance the reimbursement of an LC Disbursement as provided in Section
2.08(e).  Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in substantially the form of
Exhibit B and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section
2.02:

     

    (i)     the
aggregate amount of the requested Borrowing;

     

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

     

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

     

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

     

    (v)    the
current total aggregate Revolving Outstanding Amounts (without regard to the
requested Borrowing) and the pro forma total aggregate
Revolving Outstanding Amounts (giving effect to the requested Borrowing);
and

     

    (vi)   the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section
2.05.

     

    If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one (1) month’s duration.  Each
Borrowing Request shall constitute a representation by the Borrower that the
amount of the requested Borrowing shall not cause the total aggregate Revolving
Outstanding Amounts to exceed the Aggregate Commitments.

     

    Promptly
following receipt of a Borrowing Request in accordance with this Section 2.03,
the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender’s Loan to be made as part of the requested
Borrowing.

     

    
      
        
        

      

      
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    Section
2.04   Interest
Elections.

     

    (a)           Conversion and
Continuance.  Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.04.  The Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.

     

    (b)           Interest Election
Requests.  To make an election pursuant to this Section 2.04,
the Borrower shall notify the Administrative Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election.  Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in substantially the form of Exhibit C and signed by the
Borrower.

     

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

     

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

     

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

     

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

     

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

     

    If any
such Interest Election Request requests a Eurodollar Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one (1) month’s duration.

     

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

     

    (e)           Effect of Failure to Deliver
Timely Interest Election Request and Events of Default on Interest
Election.  If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing.  Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing: (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
(and any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective) and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.

     

    
      
        
        

      

      
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    Section
2.05   Funding of
Borrowings.

     

    (a)           Funding by
Lenders.  Each Lender shall make each Loan to be made by it
hereunder on the proposed date that is within the Availability Period by wire
transfer of immediately available funds by 12:00 noon, Houston, Texas time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders.  The Administrative Agent will make
such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower and designated by the
Borrower in the applicable Borrowing Request; provided, that ABR
Loans made to finance the reimbursement of an LC Disbursement as provided in
Section 2.08(e) shall be remitted by the Administrative Agent to the Issuing
Bank.  Nothing herein shall be deemed to obligate any Lender to obtain
the funds for its Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
its Loan in any particular place or manner.

     

    (b)           Presumption of Funding by
the Lenders.  Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Administrative Agent such Lender’s
share of such Borrowing, the Administrative Agent may assume that such Lender
has made such share available on such date in accordance with Section 2.05(a)
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount.  In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans.  If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.  Nothing in this
Section 2.05(b) shall be deemed to relieve any Lender from liability for failure
to perform its obligations hereunder.

     

    Section
2.06   Termination and Reduction of
Aggregate Commitments.

     

    (a)           Scheduled Termination of
Aggregate Commitments.  Unless previously terminated, the
Aggregate Commitments shall terminate on the Maturity Date.

     

    (b)           Optional Termination and
Reduction of Aggregate Commitments.

     

    (i)     The
Borrower may at any time terminate, or from time to time reduce, the Aggregate
Commitments; provided, that (A)
each reduction of the Aggregate Commitments shall be in an amount that is an
integral multiple of $500,000 and not less than $500,000 and (B) the Borrower
shall not terminate or reduce the Aggregate Commitments if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 3.04(c),
the total aggregate Revolving Outstanding Amounts would exceed the Aggregate
Commitments.

     

    
      
        
        

      

      
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    (ii)    The
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Aggregate Commitments under Section 2.06(b)(i) 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 notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each notice delivered by the
Borrower pursuant to this Section 2.06(b)(ii) shall be
irrevocable.  Any termination or reduction of the Aggregate
Commitments shall be permanent and may not be reinstated.  Each
reduction of the Aggregate Commitments shall be made ratably among the
Lenders.

     

    Section
2.07   Use of
Proceeds.  The proceeds of the Loans and the Letters of Credit
shall be used to (a) pay certain fees and expenses relating to the Loan
Documents, (b) support the working capital and general corporate purposes of the
Borrower and its Subsidiaries, in each case, solely as permitted under the
Agreed Budget (and Permitted Variances related thereto), (c) make any other
payments permitted to be made in the Interim Order (if applicable), the Final
Order or any other order of the Bankruptcy Court to the extent not prohibited by
this Agreement, or (d) make any other payment otherwise consented to by the
Majority Lenders.  Neither the Borrower nor any Person acting on
behalf of the Borrower has taken or will take any action which might cause any
of the Loan Documents to violate Regulations T, U or X or any other regulation
of the Board or to violate Section 7 of the Securities Exchange Act of 1934 or
any rule or regulation thereunder, in each case as now in effect or as the same
may hereinafter be in effect.  Nothing herein shall in any way
prejudice or prevent the Administrative Agent or the Lenders from objecting, for
any reason, to any requests, motions, or applications made in the Bankruptcy
Court, including any application of final allowances of compensation for
services rendered or reimbursement of expenses incurred under Sections 105(a),
328, 330 or 331 of the Bankruptcy Code, by any party in
interest.  Notwithstanding the foregoing, the Borrower and its
Subsidiaries shall not use the proceeds of the Loans or the Letters of Credit
(i) for any purpose that is prohibited under the Bankruptcy Code or (ii) to
investigate, commence or prosecute or join in any action against the
Administrative Agent, the Issuing Bank or any Lender seeking (x) to avoid,
subordinate in a manner not provided in the Loan Documents, in the Interim Order
or in the Final Order or re-characterize the Indebtedness or any of the
Administrative Agent’s Liens, (y) any monetary, injunctive or other affirmative
relief against the Administrative Agent, the Issuing Bank or any Lender or their
Collateral in connection with the Loan Documents, or (z) to prevent or restrict
the exercise by the Administrative Agent, the Issuing Bank or any Lender of any
of their respective rights or remedies under the Loan Documents.

     

    Section
2.08   Letters of
Credit.

     

    (a)           General.  Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of dollar denominated Letters of Credit for its own account or for the
account of any of its Subsidiaries, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Availability Period.  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 Agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

     

    (b)           Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions.  To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit, as applicable), the Borrower shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (not less than five (5) Business Days in advance of the
requested date of issuance, amendment, renewal or extension) a
notice:

     

    
      
        
        

      

      
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    (i)     requesting
the issuance of a Letter of Credit or identifying the Letter of Credit to be
amended, renewed or extended;

     

    (ii)    specifying
the date of issuance, amendment, renewal or extension (which shall be a Business
Day);

     

    (iii)   specifying
the date on which such Letter of Credit is to expire (which shall comply with
Section 2.08(c));

     

    (iv)   specifying
the amount of such Letter of Credit;

     

    (v)    specifying
the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of Credit;
and

     

    (vi)   specifying
the current total aggregate Revolving Outstanding Amounts (without regard to the
requested Letter of Credit or the requested amendment, renewal or extension of
an outstanding Letter of Credit, as applicable) and the pro forma total
aggregate Revolving Outstanding Amounts (giving effect to the requested Letter
of Credit or the requested amendment, renewal or extension of an outstanding
Letter of Credit, as applicable).

     

    Each
notice shall constitute a representation by the Borrower that after giving
effect to the requested issuance, amendment, renewal or extension, as
applicable, (i) the LC Exposure shall not exceed the LC Commitment and (ii) the
total aggregate Revolving Outstanding Amounts shall not exceed the Aggregate
Commitments.

     

    If
requested by the Issuing Bank, the Borrower also shall submit a Letter of Credit
Agreement on the Issuing Bank’s standard form in connection with any request for
a Letter of Credit.

     

    (c)           Expiration
Date.  Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one (1) year after such renewal or extension) and (ii) the date that is
five (5) Business Days prior to the Maturity Date.

     

    (d)           Participations.  By
the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and
each Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount
available to be drawn under such Letter of Credit.  In consideration
and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender’s Pro Rata Share of each LC Disbursement made by
the Issuing Bank and not reimbursed by the Borrower on the date due as provided
in Section 2.08(e), or of any reimbursement payment required to be refunded to
the Borrower for any reason.  Each Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this Section 2.08(d) in
respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of an outstanding Letter of Credit, as applicable, or the occurrence
and continuance of a Default, or reduction or termination of the Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.

     

    
      
        
        

      

      
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    (e)           Reimbursement.  If
the Issuing Bank shall make any LC Disbursement in respect of a Letter of
Credit, the Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, Houston, Texas 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., Houston, Texas time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than
12:00 noon, Houston, Texas time, on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 10:00 a.m., Houston,
Texas time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided, that if
such LC Disbursement is not less than $100,000, the Borrower shall, subject to
the conditions to Borrowing set forth herein, be deemed to have requested, and
the Borrower does hereby request under such circumstances, that such payment be
financed with an ABR Borrowing in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be discharged and
replaced by the resulting ABR Borrowing.  If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender’s Pro Rata Share thereof.  Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Pro Rata Share of the payment then due from the Borrower, in the same
manner as provided in Section 2.05 with respect to Loans made by such Lender
(and Section 2.05 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the
Lenders.  Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this Section 2.08(e), the
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that Lenders have made payments pursuant to this Section 2.08(e) to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear.  Any payment made by a Lender pursuant to this
Section 2.08(e) to reimburse the Issuing Bank for any LC Disbursement (other
than the funding of ABR Loans as contemplated above) shall not constitute a Loan
and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

     

    
      
        
        

      

      
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    (f)           Obligations
Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.08(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
Credit Agreement or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or any Letter of Credit Agreement, or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.08(f),
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder.  Neither the
Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related
Parties shall have any liability or responsibility by reason of or in connection
with the issuance or transfer of any Letter of Credit or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of technical
terms or any consequence arising from causes beyond the control of the Issuing
Bank; provided,
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof.  The parties hereto expressly agree that, in
the absence of gross negligence or willful misconduct on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction), the Issuing
Bank shall be deemed to have exercised all requisite care in each such
determination.  In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

     

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

     

    (h)           Interim
Interest.  If the Issuing Bank shall make any LC Disbursement,
then, until the Borrower shall have reimbursed the Issuing Bank for such LC
Disbursement (either with its own funds or a Borrowing under Section 2.08(e)),
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to ABR Loans.  Interest accrued pursuant to this Section 2.08(h) shall
be for the account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Lender pursuant to Section 2.08(e) to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such
payment.

     

    (i)           Replacement of the Issuing
Bank.  The Issuing Bank may be replaced at any time by written
agreement among the Borrower, the Administrative Agent, the replaced Issuing
Bank and the successor Issuing Bank.  The Administrative Agent shall
notify the Lenders of any such replacement of the Issuing Bank.  At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 3.05(d).  From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require.  After the replacement of the Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of the Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

     

    
      
        
        

      

      
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    (j)           Cash
Collateralization.  If (i) any Event of Default shall occur and
be continuing and the Borrower receives notice from the Administrative Agent or
the Majority Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(j), or (ii) the Borrower is required to pay to the Administrative
Agent the excess attributable to an LC Exposure in connection with any
prepayment pursuant to Section 3.04(c), then the Borrower shall deposit, in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to, in the case of
an Event of Default, the LC Exposure, and in the case of a payment required by
Section 3.04(c), the amount of such excess as provided in Section 3.04(c), as of
such date plus any accrued and unpaid interest thereon.  The Borrower
hereby grants to the Administrative Agent, for the benefit of the Issuing Bank
and the Lenders, an exclusive first priority and continuing perfected security
interest (subject to the Carve-Out and the Cash Collateral Order) in and Lien on
such account and all cash, checks, drafts, certificates and instruments, if any,
from time to time deposited or held in such account, all deposits or wire
transfers made thereto, any and all investments purchased with funds deposited
in such account, all interest, dividends, cash, instruments, financial assets
and other Property from time to time received, receivable or otherwise payable
in respect of, or in exchange for, any or all of the foregoing, and all
proceeds, products, accessions, rents, profits, income and benefits therefrom,
and any substitutions and replacements therefor.  The Borrower’s
obligation to deposit amounts pursuant to this Section 2.08(j) shall be absolute
and unconditional, without regard to whether any beneficiary of any such Letter
of Credit has attempted to draw down all or a portion of such amount under the
terms of a Letter of Credit, and, to the fullest extent permitted by applicable
law, shall not be subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Borrower or any of its Subsidiaries may now
or hereafter have against any such beneficiary, the Issuing Bank, the
Administrative Agent, the Lenders or any other Person for any reason
whatsoever.  Such deposit shall be held as collateral securing the
payment and performance of the Loan Parties’ obligations under this Agreement
and the other Loan Documents.  The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account.  Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower’s risk and expense,
such deposits shall not bear interest.  Interest or profits, if any,
on such investments shall accumulate in such account.  Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated, be applied to satisfy other obligations of
the Borrower and the Guarantors under this Agreement or the other Loan
Documents.  If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, and
the Borrower is not otherwise required to pay to the Administrative Agent the
excess attributable to an LC Exposure in connection with any prepayment pursuant
to Section 3.04(c), then such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three (3) Business Days after all
Events of Default have been cured or waived.

     

    ARTICLE
III

    Payments
of Principal and Interest; Prepayments; Fees

     

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

     

    
      
        
        

      

      
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    Section
3.02   Interest.

     

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

     

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

     

    (c)           Post-Default
Rate.  Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing, or if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower or any Guarantor hereunder or
under any other Loan Document is not paid when due, whether at stated maturity,
upon acceleration or otherwise, then all Loans outstanding, in the case of an
Event of Default, and such overdue amount, in the case of a failure to pay
amounts when due, shall bear interest, after as well as before judgment, at a
rate per annum equal to two percent (2%) plus the rate applicable to ABR Loans
as provided in Section 3.02(a), but in no event to exceed the Highest Lawful
Rate.

     

    (d)           Interest Payment
Dates.  Accrued interest on the outstanding principal amount of
each Loan shall be payable in arrears on each Interest Payment Date for such
Loan and on the Maturity Date; provided, that (i)
interest accrued pursuant to Section 3.02(c) shall be payable on demand, (ii) in
the event of any repayment or prepayment of principal of any Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment, and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

     

    (e)           Interest Rate
Computations.  All interest hereunder shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last
day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error, and be binding upon the parties
hereto.

     

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

     

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

     

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

     

    
      
        
        

      

      
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    then the
Administrative Agent shall give notice thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

     

    Section
3.04   Prepayments.

     

    (a)           Optional
Prepayments.  The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section 3.04(b); provided, that each
prepayment is in an amount that is an integral multiple of $100,000 and not less
than $100,000, or if the total aggregate Revolving Outstanding Amounts are less
than $100,000, the total aggregate Revolving Outstanding Amounts.

     

    (b)           Notice and Terms of Optional
Prepayment.  The Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 12:00 noon, Houston,
Texas time, three (3) Business Days before the date of prepayment, or (ii) in
the case of prepayment of an ABR Borrowing, not later than 12:00 noon, Houston,
Texas time, one Business Day before the date of prepayment.  Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be
prepaid.  Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof.  Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02.  Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid
Borrowing.  Prepayments shall be accompanied by accrued interest to
the extent required by Section 3.02.

     

    (c)           Mandatory
Prepayments.

     

    (i)     If,
after giving effect to any termination or reduction of the Aggregate Commitments
pursuant to Section 2.06(b), the total aggregate Revolving Outstanding Amounts
exceed the Aggregate Commitments, then the Borrower shall (A) prepay the
Borrowings on the date of such termination or reduction in an aggregate
principal amount equal to such excess, and (B) if any excess remains after
prepaying all of the Borrowings as a result of an LC Exposure, pay to the
Administrative Agent on behalf of the Lenders an amount equal to such excess to
be held as cash collateral as provided in Section 2.08(j).

     

    (ii)    The
Borrower shall prepay the Loans and, if applicable, cash collateralize the LC
Exposure as provided in Section 2.08(j), in amounts equal to:

     

     (A)           except
as provided in the Financing Orders, 100% of the Net Cash Proceeds from any
Disposition, other than an Excluded Disposition, of any Property of the Borrower
or any of the Guarantors. Such prepayment shall be made no later than the third
(3rd)
Business Day after the receipt of such proceeds.

     

     (B)           100%
of the Net Cash Proceeds of any Debt incurrence of the Borrower or any of the
Guarantors or of the Disposition or issuance of any Equity Interests of the
Borrower, excluding Debt permitted by Section 9.02. Such prepayment shall be
made no later than the next Business Day after the receipt of such
proceeds.

     

    
      
        
        

      

      
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    (C)           100%
of the Net Cash Proceeds of any Extraordinary Receipt (including 100% of the Net
Cash Proceeds of any Casualty Event), received by the Borrower or any of the
Guarantors.  Such prepayment shall be made on the later of (x) the
date that is the third (3rd)
Business Day after the receipt of such proceeds and (y) the date that is the
third (3rd)
Business Day after notice has been given to counsel to the Creditors’
Committee.

     

    (iii)          Each
prepayment of Borrowings pursuant to this Section 3.04(c) shall be applied,
first, ratably to prepay any ABR Borrowings then outstanding, and, second, to
prepay any Eurodollar Borrowings then outstanding, and if more than one
Eurodollar Borrowing is then outstanding, to each such Eurodollar Borrowing in
order of priority beginning with the Eurodollar Borrowing with the least number
of days remaining in the Interest Period applicable thereto and ending with the
Eurodollar Borrowing with the most number of days remaining in the Interest
Period applicable thereto.  Any amounts remaining after application in
accordance with the foregoing shall be applied to the satisfaction of any
outstanding Indebtedness (which payment shall be made ratably based upon the
amount of such Indebtedness), and after all of the Indebtedness have been
indefeasibly paid in full, applied as required by order of the Bankruptcy Court
(including, without limitation, to the Pre-Petition First Lien Administrative
Agent and Pre-Petition Second Lien Administrative Agent under the Pre-Petition
Loan Documents for application to the Pre-Petition Secured Indebtedness
thereunder in accordance with the terms thereof).

     

    (iv)          Each
prepayment of Borrowings pursuant to this Section 3.04(c) shall be applied
ratably to the Loans included in the prepaid Borrowings.  Prepayments
pursuant to this Section 3.04(c) shall be accompanied by accrued interest to the
extent required by Section 3.02, together with any additional amounts
required pursuant to Section 5.02.  Any principal or interest prepaid
pursuant to this Section shall be in addition to, and not in lieu of, all
payments otherwise required to be paid under the Loan Documents at the time of
such prepayment.

     

    (d)           No Premium or
Penalty.  Prepayments permitted or required under this
Section 3.04 shall be without premium or penalty, except as required under
Section 5.02.

     

    (e)           Dispositions of
Property.  Nothing contained in this Section 3.04 shall permit
any Loan Party to Dispose of any Property of any Loan Party other than in
accordance with the terms of this Agreement.

     

    Section
3.05    Fees.

     

    (a)           Commitment
Fees.  The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a commitment fee, which shall accrue at the rate
per annum of 0.75% on the average daily amount of the unused amount of the
Commitment of such Lender during the period from and including the date of this
Agreement to but excluding the Termination Date.  Accrued commitment
fees shall be payable in arrears on the last day of each calendar month of each
year and on the Termination Date, commencing on the first such date to occur
after the date hereof.  All commitment fees shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case commitment fees shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).

     

    
      
         

      

      
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    (b)           Facility
Fee.  The Borrower agrees to pay on the Effective Date to the
Administrative Agent, for the account of each Lender, a facility fee equal to
2.50% of each such Lender’s Commitment.

     

    (c)           Administrative Agent
Fees.  The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times agreed upon
under the Fee Letter.

     

    (d)           Letter of Credit
Fees.  The Borrower agrees to pay (i) to the Administrative
Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the rate per annum of
1.50% on the average daily amount of such Lender’s LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the date of this Agreement to but excluding the later of the
date on which such Lender’s Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, (ii) to the Issuing Bank a fronting fee,
which shall accrue at the rate of 0.125% per annum on the average daily amount
of the LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the date of this
Agreement to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC Exposure; provided,
that in no event shall such fee be less than $500 during any fiscal quarter of
the Borrower, and (iii) to the Issuing Bank, for its own account, its standard
fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit, as applicable, or processing of drawings
thereunder.  Participation fees and fronting fees accrued through and
including the last day of each calendar month shall be payable on the third
(3rd) Business Day following such last day, commencing on the first such date to
occur after the date of this Agreement; provided that all such fees shall be
payable on the Termination Date and any such fees accruing after the Termination
Date shall be payable on demand.  Any other fees payable to the
Issuing Bank pursuant to this Section 3.05(d) shall be payable within ten (10)
days after demand.  All participation fees and fronting fees shall be
computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

     

    ARTICLE
IV

    Payments;
Pro Rata Treatment; Sharing of Payments

     

    Section
4.01    Payments Generally; Pro Rata
Treatment; Sharing of Payments.

     

    (a)           Payments by the
Borrower.  The Borrower shall make each payment required to be
made by it hereunder (whether of principal, interest, fees or reimbursement of
LC Disbursements, or of amounts payable under Section 5.01, Section 5.02,
Section 5.03 or otherwise) prior to 12:00 noon, Houston, Texas time, on the date
when due, in immediately available funds, without defense, deduction,
recoupment, set-off or counterclaim.  Fees, once paid, shall be fully
earned and shall not be refundable under any circumstances.  Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such
payments shall be made to the Administrative Agent at its offices specified in
Section 13.01, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Section 5.01,
Section 5.02, Section 5.03 and Section 13.03 shall be made directly to the
Persons entitled thereto.  The Administrative Agent shall distribute
any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof.  If any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension.  All payments hereunder shall be made in
dollars.

     

    
      
         

      

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

     

    (c)           Sharing of Payments by
Lenders.  If any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or participations in LC Disbursements
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in LC Disbursements of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans and participations
in LC Disbursements; provided, that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this Section 4.01(c) shall not be construed to apply to
any payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any Assignee or Participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this Section 4.01(c) shall apply).  The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such
participation.

     

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

     

    
      
         

      

      
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    Section
4.03   Certain Deductions by the
Administrative Agent.  If any Lender shall fail to make any
payment required to be made by it pursuant to Section 2.05(b), Section 2.08(d),
Section 2.08(e) or Section 4.02, then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.

     

    Section
4.04   Disposition of
Proceeds.  The Security Instruments, together with the Interim
Order, if applicable, and the Final Order, contain an assignment by the Borrower
and/or the Guarantors unto and in favor of the Administrative Agent for the
benefit of the Lenders of all of the Borrower’s or each Guarantor’s interest in
and to production and all proceeds attributable thereto which may be produced
from or allocated to the Mortgaged Property.  The Security
Instruments, together with the Interim Order, if applicable, and the Final
Order, further provide in general for the application of such proceeds to the
satisfaction of the Indebtedness and other obligations described therein and
secured thereby.  Notwithstanding the assignment contained in such
Security Instruments, together with the Interim Order, if applicable, and the
Final Order, until the occurrence of an Event of Default, (a) the Administrative
Agent and the Lenders agree that they will neither notify the purchaser or
purchasers of such production nor take any other action to cause such proceeds
to be remitted to the Administrative Agent or the Lenders, but the Lenders will
instead permit such proceeds to be paid to the Borrower and its Subsidiaries and
(b) the Lenders hereby authorize the Administrative Agent to take such actions
as may be necessary to cause such proceeds to be paid to the Borrower and/or
such Subsidiaries.

     

    ARTICLE
V

    Increased
Costs; Break Funding Payments; Taxes

     

    Section
5.01    Increased
Costs.

     

    (a)           Eurodollar Changes in
Law.  If any Change in Law shall:

     

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

     

    (ii)           
impose on any Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender;

     

    and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan) or to reduce the amount of any sum received or receivable by
such Lender (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction
suffered.

     

    
      
        
        

      

      
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    (b)           Capital
Requirements.  If any Lender or the 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 the Issuing
Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the
Issuing Bank’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.

     

    (c)           Certificates.  A
certificate of a Lender or the Issuing Bank setting forth in good faith the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in Section 5.01(a) or (b)
shall be delivered to the Borrower and shall be conclusive absent manifest
error.  The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within ten (10)
days after receipt thereof.

     

    (d)           Effect of Failure or Delay
in Requesting Compensation.  Failure or delay on the part of
any Lender or the Issuing Bank to demand compensation pursuant to this Section
5.01 shall not constitute a waiver of such Lender’s or the Issuing Bank’s right
to demand such compensation; provided, that the
Borrower shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section 5.01 for any increased costs or reductions incurred
more than 365 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided, further, that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 365-day period referred to above shall be extended to include the
period of retroactive effect thereof.

     

    Section
5.02   Break Funding
Payments.  In the event of (a) the payment of any principal of
any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of
any Eurodollar Loan into an ABR Loan other than on the last day of the Interest
Period applicable thereto or (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto, then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event.  In
the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market.

     

    A
certificate of any Lender setting forth in good faith any amount or amounts that
such Lender is entitled to receive pursuant to this Section 5.02 shall be
delivered to the Borrower and shall be conclusive absent manifest
error.  The Borrower shall pay such Lender the amount shown as due on
any such certificate within ten (10) days after receipt thereof.

     

    
      
        
        

      

      
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    Section
5.03    Taxes.

     

    (a)           Payments Free of
Taxes.  Any and all payments by or on account of any obligation
of the Borrower or any Guarantor under any Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes; provided, that if the
Borrower or any Guarantor shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.03(a)), the
Administrative Agent, Lender or the Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower or such Guarantor shall make such deductions and (iii)
the Borrower or such Guarantor shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

     

    (b)           Payment of Other Taxes by
the Borrower.  The Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

     

    (c)           Indemnification by the
Borrower.  The Borrower shall indemnify the Administrative
Agent, each Lender and the Issuing Bank, within ten (10) days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent, such Lender or the Issuing Bank, as the case
may be, on or with respect to any payment by or on account of any obligation of
the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 5.03) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate of the Administrative Agent, a Lender or the Issuing Bank as to the
amount of such payment or liability under this Section 5.03 shall be delivered
in good faith to the Borrower and shall be conclusive absent manifest
error.

     

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

     

    (e)           Foreign
Lenders.  Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.

     

    Section
5.04   Mitigation
Obligations.  If any Lender requests compensation under Section
5.01, or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
5.03, then such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 5.01 or
Section 5.03, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

     

    
      
         

      

      
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    ARTICLE
VI

    Conditions
Precedent

     

    Section
6.01    Effective
Date.  The obligations of the Lenders to make Loans and of the
Issuing Bank to issue, renew or extend Letters of Credit hereunder, in each
case, shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section
13.02):

     

    (a)           (i)
The Administrative Agent, the Arranger and the Lenders shall have received all
commitment, facility and agency fees and all other fees and amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all expenses required to be reimbursed or paid by
the Borrower hereunder (including, without limitation, the fees and expenses of
(A) Munsch Hardt Kopf & Harr, P.C., counsel to the Administrative Agent);
(B) in-house and outside-retained counsel to each Lender; and (C) FTI
Consulting, Inc., as financial advisor to counsel for the Administrative
Agent).

     

    (ii)           To
the extent invoiced and subject to the notice requirements in the Cash
Collateral Order, the Pre-Petition First Lien Administrative Agent, each
Pre-Petition First Lien Lender and the Pre-Petition Second Lien Administrative
Agent, as the case may be, shall have received reimbursement or payment by the
Borrower of all fees and expenses due on or prior to the Effective Date in
connection with the Bankruptcy Cases, including, all fees and expenses of their
respective in-house and outside-retained counsels.

     

    (b)           The
Administrative Agent shall have received a certificate of the Secretary or an
Assistant Secretary of the Borrower and each Guarantor setting forth (i)
resolutions of its board of directors with respect to the authorization of the
Borrower or such Guarantor to execute and deliver the Loan Documents to which it
is a party and to enter into the transactions contemplated in those documents,
(ii) the officers of the Borrower or such Guarantor (y) who are authorized to
sign the Loan Documents to which the Borrower or such Guarantor is a party and
(z) who will, until replaced by another officer or officers duly authorized for
that purpose, act as its representative for the purposes of signing documents
and giving notices and other communications in connection with this Agreement
and the transactions contemplated hereby, (iii) specimen signatures of such
authorized officers, and (iv) the Organizational Documents of the Borrower and
such Guarantors, certified as being true and complete.  The
Administrative Agent and the Lenders may conclusively rely on such certificate
until the Administrative Agent receives notice in writing from the Borrower to
the contrary.

     

    (c)           The
Administrative Agent shall have received certificates of the appropriate State
agencies with respect to the existence, qualification and good standing of the
Borrower and each Guarantor.

     

    (d)           The
Administrative Agent shall have received a compliance certificate which shall be
substantially in the form of Exhibit D, duly and properly executed by a
Responsible Officer and dated as of the date of Effective Date.

     

    
      
         

      

      
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    (e)           The
Administrative Agent shall have received from each party hereto counterparts (in
such number as may be requested by the Administrative Agent) of this Agreement
signed on behalf of such party.

     

    (f)           
The Administrative Agent shall have received duly executed Notes payable to the
order of each Lender in a principal amount equal to its Commitment dated as of
the date hereof.

     

    (g)           The
Administrative Agent shall have received from each party thereto duly executed
counterparts (in such number as may be requested by the Administrative Agent) of
the Security Instruments, including the Guaranty Agreement and the other
Security Instruments described on Exhibit E-1.

     

    (h)          
[Reserved]

     

    (i)           
The Administrative Agent shall have received a certificate of insurance coverage
of the Borrower evidencing that the Loan Parties are carrying insurance in
accordance with Section 7.12.

     

    (j)           
The Administrative Agent shall have received additional updated title
information as the Administrative Agent may reasonably require setting forth the
status of title of the Oil and Gas Properties previously specified by the
Administrative Agent.

     

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

     

    (l)           
[Reserved]

     

    (m)          [Reserved]

     

    (n)           Other
than the Bankruptcy Cases, there shall exist no claim, action, suit, litigation,
proceeding or investigation pending in any court or before any arbitrator or
Governmental Authority that relates to the Indebtedness.

     

    (o)           The
Administrative Agent shall have received (i) the Reserve Report, together with
any updates related thereto and a certification from a Responsible Officer, in
form and substance acceptable to the Administrative Agent, certifying that the
assumptions contained in any such updates are based upon factors the Borrower
believes are reasonable as of the date hereof and (ii) a list, as of the
Effective Date, of all Persons purchasing Hydrocarbons from any Loan
Party.

     

    (p)           The
Administrative Agent shall have received the written acknowledgment and consent,
in form and substance satisfactory to the Administrative Agent, of the
Pre-Petition Second Lien Administrative Agent to the parties entering into this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby.

     

    (q)           The
Borrower and the Administrative Agent shall have agreed upon the initial Agreed
Budget (it being understood that the budget delivered to FTI Consulting, Inc. on
October 1, 2009 is acceptable to the Administrative Agent).

     

    (r)           
[Reserved]

     

    
      
         

      

      
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    (s)           The
Final Order, or to the extent applicable, the Interim Order, shall have been
entered by the Bankruptcy Court in accordance with Bankruptcy Rule 4001 and is
in form and substance satisfactory to the Administrative Agent and such order
shall be in full force and effect and shall not have been (i) stayed, vacated,
revised or rescinded or (ii) without the prior written consent of the
Administrative Agent, in its sole discretion, amended or modified.

     

    (t)           All
other legal matters required by the terms of this Agreement, and to the extent
applicable, the Interim Order to be satisfied on or before the Effective Date
shall have been so satisfied in a manner reasonably satisfactory to the
Administrative Agent.

     

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

     

    The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.

     

    Section
6.02   Each Credit
Event.  The obligation of each Lender to make a Loan on the
occasion of any Borrowing (including the initial funding), and of the Issuing
Bank to issue, amend, renew or extend any Letter of Credit, in each case, is
subject to the satisfaction of each of the following conditions:

     

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

     

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

     

    (c)           The
representations and warranties of the Borrower and the Guarantors set forth in
this Agreement and in the other Loan Documents shall be true and correct on and
as of the date of such Borrowing or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, such
representations and warranties shall continue to be true and correct as of such
specified earlier date.

     

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

     

    
      
         

      

      
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    (e)           The
receipt by the Administrative Agent of a Borrowing Request in accordance with
Section 2.03 or a request for the issuance, amendment, renewal or extension of a
Letter of Credit in accordance with Section 2.08(b), as applicable.

     

    (f)           
The purpose of each Borrowing, or the issuance, amendment, renewal or extension
of such Letter of Credit, as applicable, shall be consistent with, and for a
purpose permitted under, the Agreed Budget (and Permitted Variances related
thereto) in accordance with Section 9.25.

     

    (g)           No
injunction, writ, restraining order, or other order of any nature (whether
temporary, preliminary or permanent) restricting or prohibiting, directly or
indirectly, the extending of such credit shall have been issued and remain in
force by any Governmental Authority (including, without limitation, the
Bankruptcy Court) against the Borrower, any Guarantor, any Lender or any of
their Affiliates, and such extension of credit shall not violate any requirement
of applicable laws.

     

    (h)           The
Lenders shall have received, in form and substance reasonably satisfactory to
the Lenders, all certificates, orders, authorizations, consents, affidavits,
schedules, instruments, security agreements, financing statements, mortgages and
other documents which are provided for hereunder or under the Interim Order (if
applicable) or the Final Order.

     

    (i)           
The Borrower shall have paid all fees and expenses then due and payable as
provided for herein or in any of the other Loan Documents.

     

    (j)           
To the extent necessary, the Interim Order or, following the entry of the Final
Order, the Final Order shall be in full force and effect, and shall not have
been vacated, reversed or rescinded, and an appeal of such order shall not have
been timely filed and a stay of such order pending appeal shall not be presently
effective, and without the prior written consent of the Administrative Agent,
such order shall not have been amended or modified.

     

    (k)           Other
than the Bankruptcy Cases, there shall exist no claim, action, suit, litigation,
proceeding or investigation pending in any court or before any arbitrator or
Governmental Authority that relates to the Indebtedness.

     

    Each
request for a Borrowing and each request for the issuance, amendment, renewal or
extension of any Letter of Credit, as applicable, shall be deemed to constitute
a representation and warranty by the Borrower on the date thereof as to the
matters specified in Section 6.02(a) through (d), (g), and (i) through
(k).

     

    ARTICLE
VII

    Representations
and Warranties

     

    The
Borrower hereby represents and warrants to the Lenders that:

     

    Section
7.01   Organization;
Powers.  Each Loan Party is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, has
all requisite power and authority, and has all material governmental licenses,
authorizations, consents and approvals necessary, to own its assets and to carry
on its business as now conducted, and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where failure to have such power, authority, licenses, authorizations,
consents, approvals and qualifications could not reasonably be expected to have
a Material Adverse Effect.

     

    
      
         

      

      
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    Section
7.02   Authority;
Enforceability.  Subject to the entry of the Interim Order or
Final Order, as applicable, the Transactions are within each Loan Party’s
corporate powers and have been duly authorized by all necessary corporate and,
if required, stockholder action (including, without limitation, any action
required to be taken by any class of directors of such Loan Party or any other
Person, whether interested or disinterested, in order to ensure the due
authorization of the Transactions).  Each Loan Document to which each
Loan Party is a party has been duly executed and delivered by such Loan Party
and, upon entry of the Interim Order (if applicable) and the Final Order,
constitutes a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

     

    Section
7.03   Approvals; No
Conflicts.  Subject to the entry and effectiveness of the
Interim Order or the Final Order, as applicable, the Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority or any other third Person (including
shareholders or any class of directors, whether interested or disinterested, of
any Loan Party or any other Person), nor is any such consent, approval,
registration, filing or other action necessary for the validity or
enforceability of any Loan Document or the consummation of the transactions
contemplated thereby, except (i) for the approval of the Bankruptcy Court in the
Interim Order or the Final Order, as applicable, and (ii) such as have been
obtained or made and are in full force and effect other than the recording and
filing of the Security Instruments as required by this Agreement, (b) will not
violate any applicable law or regulation or the Organizational Documents of any
Loan Party or any Subsidiary or any order of any Governmental Authority, (c)
will not violate or result in a default under any indenture, agreement or other
instrument binding upon any Loan Party or any Subsidiary or its Properties, or
give rise to a right thereunder to require any payment to be made by such Loan
Party or such Subsidiary and (d) will not result in the creation or imposition
of any Lien on any Property of any Loan Party or any Subsidiary (other than the
Liens created by the Loan Documents, the Interim Order (if applicable) and the
Final Order).

     

    Section
7.04    Financial Condition; No
Material Adverse Change.

     

    (a)           The
Audited Financial Statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Borrower and
its Consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP.

     

    (b)           (i)
Since the Petition Date, there has been no event, development or circumstance,
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect, except (A) the continuation of Bankruptcy
Cases and (B) the continuation of the circumstances giving rise to the filing
thereof or as a result thereof, and (ii) the business of the Borrower and its
Subsidiaries has been conducted only in the ordinary course consistent with past
business practices.

     

    
      
        
        

      

      
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    Section
7.05    Litigation.

    (a)           Except
as set forth on Schedule 7.05, there are no actions, suits, investigations or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Loan Parties, threatened against or
affecting the Loan Parties or any Subsidiary (i) not fully covered by insurance
(except for normal deductibles) as to which there is a reasonable possibility of
an adverse determination that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, or (ii) that involve any Loan Document or the Transactions.

     

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

     

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

     

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

     

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

     

    (c)           there
are no Claims, demands, suits, orders, inquiries, or proceedings concerning any
violation of, or any liability (including as a potentially responsible party)
under, any applicable Environmental Laws that is pending or threatened against
the Borrower or its Subsidiaries or any of their respective Properties or as a
result of any operations at the Properties;

     

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

     

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

     

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

     

    
      
         

      

      
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    (g)           there
has been no exposure of any Person or property to any Hazardous Materials as a
result of or in connection with the operations and businesses of any of the
Borrower’s or its Subsidiaries’ Properties that would reasonably be expected to
form the basis for a claim for damages or compensation and there are no
conditions or circumstances that would reasonably be expected to result in the
receipt of notice regarding such exposure; and

     

    (h)           the
Borrower and its Subsidiaries have provided to Lenders complete and correct
copies of all environmental site assessment reports, investigations, studies,
analyses, and correspondence on environmental matters (including matters
relating to any alleged non-compliance with or liability under Environmental
Laws) that are in any of the Borrower’s or its Subsidiaries’ possession or
control and relating to their respective Properties or operations
thereon.

     

    Section
7.07    Compliance with the Laws; No
Defaults.

     

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

     

    (b)           No
Default has occurred and is continuing.

     

    Section
7.08   Investment Company
Act.  No Loan Party is an “investment company” or a company
“controlled” by an “investment company,” within the meaning of, or subject to
regulation under, the Investment Company Act of 1940, as amended.

     

    Section
7.09   Taxes.  Each
Loan Party has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) as excused by the Bankruptcy Code, (b) Taxes
that are being contested in good faith by appropriate proceedings and for which
each Loan Party, as applicable, has appropriately recorded in its books the
associated liabilities thereof in accordance with GAAP or (c) to the extent that
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect.  The charges, accruals and reserves on the books of
the Loan Parties in respect of Taxes and other governmental charges are, in the
reasonable opinion of the Borrower, adequate.  No Tax Lien has been
filed and, to the knowledge of the Loan Parties, no claim is being asserted with
respect to any such Tax or other such governmental charge.

     

    Section
7.10    ERISA.

     

    (a)           The
Loan Parties and each ERISA Affiliate have complied in all material respects
with ERISA and, where applicable, the Code regarding each Plan.

     

    (b)           Each
Plan is, and has been, maintained in substantial compliance with ERISA and,
where applicable, the Code.

     

    (c)           No
act, omission or transaction has occurred which could result in imposition on
any Loan Party or any ERISA Affiliate (whether directly or indirectly) of (i)
either a civil penalty assessed pursuant to subsections (c), (i) or (l) of
Section 502 of ERISA or a Tax imposed pursuant to Chapter 43 of Subtitle D of
the Code or (ii) breach of fiduciary duty liability damages under Section 409 of
ERISA.

     

    
      
         

      

      
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    (d)          No
Plan (other than a defined contribution plan) or any trust created under any
such Plan has been terminated since September 2, 1974.  No liability
to the PBGC (other than for the payment of current premiums which are not past
due) by any Loan Party or any ERISA Affiliate has been or is expected by any
Loan Party or any ERISA Affiliate to be incurred with respect to any
Plan.  No ERISA Event with respect to any Plan has
occurred.

     

    (e)           Full
payment when due has been made of all amounts which any Loan Party or any ERISA
Affiliate is required under the terms of each Plan or applicable law to have
paid as contributions to such Plan as of the date hereof, and no accumulated
funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, exists with respect to any Plan.

     

    (f)           The
actuarial present value of the benefit liabilities under each Plan which is
subject to Title IV of ERISA does not, as of the end of the most recently ended
fiscal year of each Loan Party, exceed the current value of the assets (computed
on a plan termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities.  The term “actuarial present
value of the benefit liabilities” shall have the meaning specified in Section
4041 of ERISA.

     

    (g)          Neither
any Loan Party nor any ERISA Affiliate sponsors, maintains, or contributes to an
employee welfare benefit plan, as defined in Section 3(1) of ERISA, including,
without limitation, any such plan maintained to provide benefits to former
employees of such entities, that may not be terminated by the Borrower, a
Subsidiary or any ERISA Affiliate in its sole discretion at any time without any
material liability.

     

    (h)          Neither
any Loan Party nor any ERISA Affiliate sponsors, maintains or contributes to, or
has at any time in the six-year period preceding the date hereof sponsored,
maintained or contributed to, any Multiemployer Plan.

     

    (i)           Neither
any Loan Party nor any ERISA Affiliate is required to provide security under
Section 401(a)(29) of the Code due to a Plan amendment that results in an
increase in current liability for the Plan.

     

    Section
7.11   Disclosure; No Material
Misstatements.  The Loan Parties have disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which they or any of their Subsidiaries are subject,
and all other matters known to them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse
Effect.  None of the other reports, financial statements, certificates
or other information furnished by or on behalf of the Loan Parties to the
Administrative Agent or any Lender or any of their Affiliates in connection with
the negotiation of this Agreement or any other Loan Document or delivered
hereunder or under any other Loan Document (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided, that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

     

    
      
         

      

      
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    Section
7.12   Insurance.  The
Loan Parties have, (a) all insurance policies sufficient for the compliance by
each of them with all material Governmental Requirements and all material
agreements and (b) insurance coverage in at least amounts and against such risk
(including, without limitation, public liability) that are usually insured
against by companies similarly situated and engaged in the same or a similar
business for the assets and operations of the Loan Parties.  The Loan
Parties hereby agree to deliver to the Administrative Agent, by no later than
the fifth (5th)
Business Day after the Effective Date (or such later date as previously agreed
to by the Administrative Agent), documentation in form and substance acceptable
to the Administrative Agent that evidences that the Administrative Agent and the
Lenders have been named as additional insureds in respect of such liability
insurance policies and the Administrative Agent has been named as loss payee
with respect to Property loss insurance.

     

    Section
7.13    [Reserved]

     

    Section
7.14   Subsidiaries.  Except
as set forth on Schedule 7.14 or as disclosed in writing to the Administrative
Agent (which shall promptly furnish a copy to the Lenders), which shall be a
supplement to Schedule 7.14, the Borrower has no Subsidiaries and the Borrower
has no Foreign Subsidiaries.  Each Subsidiary on such schedule is a
Wholly-Owned Subsidiary, unless otherwise noted therein.

     

    Section
7.15   Location of Business and
Offices.  The Borrower’s jurisdiction of organization is Utah;
the name of the Borrower as listed in the public records of its jurisdiction of
organization is Aurora Oil & Gas Corporation; and the organizational
identification number of the Borrower in its jurisdiction of organization is
608892-0142 (or, in each case, as set forth in a notice delivered to the
Administrative Agent pursuant to Section 8.01(n) in accordance with Section
13.01).  The Borrower’s principal place of business and chief
executive offices are located at the address specified in Section 13.01 (or as
set forth in a notice delivered pursuant to Section 8.01(n) and Section
13.01(c)).  Each Subsidiary’s jurisdiction of organization, name as
listed in the public records of its jurisdiction of organization, organizational
identification number in its jurisdiction of organization, and the location of
its principal place of business and chief executive office are stated on
Schedule 7.14 (or as set forth in a notice delivered pursuant to Section
8.01(n)).

     

    Section
7.16    Properties; Titles,
Etc.

     

    (a)           Each
of the Loan Parties has good and defensible title to all the material Oil and
Gas Properties evaluated in the Reserve Report and good title to all its
material personal Properties, in each case, free and clear of all Liens except
for Permitted Liens.  After giving full effect to the Excepted Liens,
the Loan Parties specified as the owner owns the net interests in production
attributable to the Hydrocarbon Interests as reflected in the Reserve Report,
and the ownership of such Properties shall not in any material respect obligate
such Loan Party to bear the costs and expenses relating to the maintenance,
development and operations of each such Property in an amount in excess of the
working interest of each Property set forth in the Reserve Report that is not
offset by a corresponding proportionate increase in the such Loan Party’s net
revenue interest in such Property.

     

    (b)          All
material leases and agreements necessary for the conduct of the business of the
Loan Parties are valid and subsisting, in full force and effect, and there
exists no default or event or circumstance which with the giving of notice or
the passage of time or both would give rise to a default under any such lease or
leases, which could reasonably be expected to have a Material Adverse Effect
(except to the extent such Material Adverse Effect results from the commencement
of the Bankruptcy Cases).

     

    
      
         

      

      
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    (c)           The
rights and Properties presently owned, leased or licensed by the Loan Parties,
including, without limitation, all easements and rights of way, include all
rights and Properties necessary to permit the Loan Parties to conduct their
business in all material respects in the same manner as their business have been
conducted prior to the date hereof.

     

    (d)           All
of the Properties of the Loan Parties which are reasonably necessary for the
operation of their businesses are in good working condition and are maintained
in accordance with prudent business standards.

     

    (e)           Each
Loan Party owns, or is licensed to use, all trademarks, tradenames, copyrights,
patents and other intellectual Property material to its business, and the use
thereof by such Loan Party does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.  The Loan Parties either own or have valid licenses or other
rights to use all databases, geological data, geophysical data, engineering
data, seismic data, maps, interpretations and other technical information used
in their businesses as presently conducted, subject to the limitations contained
in the agreements governing the use of the same, which limitations are customary
for companies engaged in the business of the exploration and production of
Hydrocarbons, with such exceptions as could not reasonably be expected to have a
Material Adverse Effect.

     

    Section
7.17   Maintenance of
Properties.  Except for such acts or failures to act as could
not be reasonably expected to have a Material Adverse Effect, the Oil and Gas
Properties (and Properties unitized therewith) of the Loan Parties have been
maintained, operated and developed in a good and workmanlike manner and in
conformity with all Governmental Requirements and in conformity with the
provisions of all leases, subleases or other contracts comprising a part of the
Hydrocarbon Interests and other contracts and agreements forming a part of the
Oil and Gas Properties of the Borrower and its
Subsidiaries.  Specifically in connection with the foregoing, except
for those as could not be reasonably expected to have a Material Adverse Effect,
(i) no Oil and Gas Property of any Loan Party is subject to having allowable
production reduced below the full and regular allowable (including the maximum
permissible tolerance) because of any overproduction (whether or not the same
was permissible at the time) and (ii) none of the wells comprising a part of the
Oil and Gas Properties (or Properties unitized therewith) of the Loan Parties is
deviated from the vertical more than the maximum permitted by Governmental
Requirements, and such wells are, in fact, bottomed under and are producing
from, and the well bores are wholly within, the Oil and Gas Properties (or in
the case of wells located on Properties unitized therewith, such unitized
Properties) of such Loan Party.  All pipelines, wells, gas processing
plants, platforms and other material improvements, fixtures and equipment owned
in whole or in part by any Loan Party that are necessary to conduct normal
operations are being maintained in a state adequate to conduct normal
operations, and with respect to such of the foregoing which are operated by the
Loan Parties, in a manner consistent with the Loan Parties’ past practices
(other than those the failure of which to maintain in accordance with this
Section 7.17 could not reasonably be expected to have a Material Adverse
Effect).

     

    Section
7.18   Gas Imbalances,
Prepayments.  Except as set forth on Schedule 7.18, as of the
date hereof, on a net basis there are no gas imbalances, take or pay or other
prepayments which would require any Loan Party to deliver Hydrocarbons produced
from the Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor exceeding $50,000 of gas (on an mcf equivalent
basis) in the aggregate.

     

    
      
         

      

      
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    Section
7.19   Marketing of
Production.  Except for contracts listed and in effect on the
date hereof on Schedule 7.19, and thereafter either disclosed in writing to the
Administrative Agent or included in the Reserve Report (with respect to all of
which contracts the Borrower represents that it or its Subsidiaries are
receiving a price for all production sold thereunder which is computed
substantially in accordance with the terms of the relevant contract and are not
having deliveries curtailed substantially below the subject Property’s delivery
capacity), no material agreements exist which are not cancelable on sixty (60)
days notice or less without penalty or detriment for the sale of production from
the Loan Parties’ Hydrocarbons (including, without limitation, calls on or other
rights to purchase, production, whether or not the same are currently being
exercised) that (a) pertain to the sale of production at a fixed price and (b)
have a maturity or expiry date of longer than six (6) months from the date
hereof.

     

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

     

    Section
7.21   Use of Loans and Letters of
Credit.  The proceeds of the Loans and the Letters of Credit
shall be used as provided in Section 2.07.  The Loan Parties are not
engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regulation
T, U or X of the Board).  No part of the proceeds of any Loan or
Letter of Credit will be used for any purpose which violates the provisions of
Regulations T, U or X of the Board.

     

    Section
7.22    Investments.  None
of the Loan Parties holds any Investments other than Permitted
Investments.

     

    Section
7.23   Collateral Documents; Nature
of Obligations.  The provisions of the Security Instruments,
taken together with the Interim Order (if applicable), and the Final Order, are
effective to create in favor of the Administrative Agent for the benefit of the
Secured Parties and any other secured parties identified therein, a legal, valid
and enforceable first priority Lien or security interest in all right, title and
interest of the Loan Parties in the Collateral and all proceeds
thereof.  Pursuant to the terms of the Interim Order (if applicable)
and Final Order, no filing or other action will be necessary to perfect or
protect such Liens and security interests.  Pursuant to and to the
extent provided in the Interim Order (if applicable) and the Final Order, the
Indebtedness of the Loan Parties will constitute allowed administrative expense
claims in the Bankruptcy Cases under Section 364(c) of the Bankruptcy Code,
having priority over all administrative expense claims and unsecured claims
against such Loan Parties now existing or hereafter arising, of any kind
whatsoever, including, without limitation, all administrative expense claims of
the kind specified in Sections 503(b) and 507(b) of the Bankruptcy Code and all
super-priority administrative expense claims granted to any other Person,
subject, as to priority, only to the Carve-Out.

     

    
      
         

      

      
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    Section
7.24   Broker’s
Fees.  Except for Beachwalk Capital LLC or as otherwise
previously disclosed in writing to the Administrative Agent, no Loan Party has
any obligation to any Person in respect of any finder’s, broker’s, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Loan Documents.

     

    Section
7.25   Representations and
Warranties from Other Loan Documents.  Each of the
representations and warranties made by any of the Loan Parties in any of the
other Loan Documents is true and correct in all material respects.

     

    Section
7.26   Agreed
Budget.  A true and complete copy of the initial thirteen
(13)-week detailed budget (such initial budget, as updated in accordance with
the provisions of Section 8.01(d)(i), the “Agreed Budget”),
which shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Majority Lenders, is attached as Exhibit H
hereto.

     

    Section
7.27    Financing
Orders.

     

    (a)           The
Loan Parties are in compliance in all material respects with the terms and
conditions of the Interim Order and the Final Order, as applicable.

     

    (b)           Each
of the Interim Order (to the extent necessary, with respect to the period prior
to the entry of the Final Order) or the Final Order (from after the date the
Final Order is entered) is in full force and effect and has not been vacated,
reversed or rescinded or, without the prior written consent of the
Administrative Agent, in its sole discretion, amended or modified and no appeal
of such order has been timely filed or, if timely filed, no stay pending such
appeal is currently effective.

     

    ARTICLE
VIII

    Affirmative
Covenants

     

    Until the
Aggregate Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Lenders
that:

     

    Section
8.01    Monthly Operating Reports;
Other Information.  The Borrower will furnish to the
Administrative Agent and each Lender:

     

    (a)           Monthly Operating
Reports.  As soon as available, but in any event not later than
thirty (30) days after the end of each calendar month of each fiscal year of the
Loan Parties, any and all monthly operating reports required to be submitted for
such applicable period to the office of the United States Trustee or filed for
such applicable period with the Bankruptcy Court pursuant to the Bankruptcy Code
or the Federal Rules of Bankruptcy Procedure.

     

    (b)           [Reserved.]

     

    (c)           Certificate of Financial
Officer — Compliance.  Concurrently with any delivery of
financial reports under Section 8.01(a), a certificate of a Financial Officer in
substantially the form of Exhibit D hereto which, among other things, (i)
certifies as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, and (ii) states whether any change in GAAP or in the
application thereof has occurred since the Petition Date and, if any such change
has occurred, specifying the effect of such change on the financial reports
accompanying such certificate.

     

    
      
         

      

      
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    (d)           Certain Additional
Reporting; Certificate of Financial Advisor and Financial
Officer.  In form and detail reasonably satisfactory to the
Administrative Agent:

     

    (i)           
By no later than (A) with respect to (y) the initial Agreed Budget, November 20,
2009, and (z) each subsequent Agreed Budget, the fifth (5th) Business Day prior
to the expiration of the period previously mutually agreed by the Administrative
Agent and the Borrower to be applicable to such Agreed Budget (a “Subsequent Budget
Period”), a certificate of the chief restructuring officer or duly
authorized representative of the financial advisor of the Borrower, setting
forth a thirteen (13)-week (or such other period mutually agreed by the
Administrative Agent and the Borrower) detailed budget for the Subsequent Budget
Period of the Loan Parties’ cash receipts and expenses (each, a “Proposed Budget”),
(B) the third (3rd)
Business Day of each week after the Effective Date, a comparison of actual
results and Variance analysis (1) for the preceding week of each of the amounts
in the line items set forth in the Agreed Budget, and (2) that is cumulative
from the Petition Date (or from the first day of the applicable Subsequent
Budget Period, as applicable) to such date of each of the line items set forth
in the Agreed Budget, in each case under clauses (A) and (B), with such
supporting detail as the Administrative Agent and its financial advisors may
request, and (C) at any time, the Borrower may furnish a Proposed Budget; provided, in each
case under clauses (A) and (C), that if any Proposed Budget has the effect of
creating a Variance other than a Permitted Variance when compared to the most
recent Agreed Budget, such Variance must, prior to becoming part of the Agreed
Budget, be approved in writing by the Administrative Agent and only upon the
actual receipt of such written approvals shall such Variance become, at such
time and going forward (until subsequently modified as provided herein), part of
the “Agreed Budget” hereunder; and

     

    (ii)           On
the third (3rd) Business Day of each week, a certificate of a Financial Officer,
setting forth (A) with respect to the prior week, an accounting of all monies
deposited in, withdrawn from, and the balances in, the Existing Accounts, and
(B) a report setting forth for each week during the then current fiscal year to
date, the estimated volume of production and sales attributable to production
for each such week from Oil and Gas Properties, and setting forth the lease
operating expenses attributable thereto and incurred for each such calendar
month; provided, that the
Borrower will promptly furnish to the Administrative Agent, when obtained, the
actual volume of production and sales results for each such week, including
actual related ad valorem, severance and production Taxes and lease operating
expenses attributable thereto and actually incurred for each such calendar
month.

     

    (e)           Certificate of Financial
Officer – Swap Agreements.  No later than the tenth (10th)
Business Day after the expiration of each fiscal quarter of the Loan Parties, a
certificate of a Financial Officer, in form and substance satisfactory to the
Administrative Agent, setting forth as of the last Business Day of such fiscal
quarter, a true and complete list of all Swap Agreements of the Borrower and
each Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net mark-to-market
value therefor, any new credit support agreements relating thereto not listed on
Schedule 7.20, any margin required or supplied under any credit support
document, and the counterparty to each such agreement.

     

    
      
         

      

      
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    (f)           Certificate of Insurer —
Insurance Coverage.  Not later than the tenth (10th)
Business Day after the expiration of each fiscal quarter of the Loan Parties, a
certificate of insurance coverage from each insurer with respect to the
insurance required by Section 8.07, in form and substance satisfactory to the
Administrative Agent, and, if requested by the Administrative Agent or any
Lender, all copies of the applicable policies.

     

    (g)           Other Accounting
Reports.  Promptly upon receipt thereof, a copy of each other
report or letter submitted to any Loan Party by independent accountants in
connection with any annual, interim or special audit made by them of the books
of such Loan Party, and a copy of any response by such Loan Party, or the Board
of Directors of such Loan Party, to such letter or report.

     

    (h)           SEC and Other Filings;
Reports to Shareholders.  Promptly after the same become
publicly available, copies of all periodic and other reports, proxy statements
and other materials filed by any Loan Party with the SEC, or with any national
securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be.

     

    (i)           Notices Under Material
Instruments.  Promptly after the furnishing thereof, copies of
any financial statement, report or notice furnished to or by any Person pursuant
to the terms of any preferred stock designation, indenture, loan or credit or
other similar agreement, other than this Agreement and not otherwise required to
be furnished to the Lenders pursuant to any other provision of this Section
8.01.

     

    (j)           Updated Reserve
Report.  Promptly after receiving or otherwise becoming
available, any and all updates to the Reserve Report, including any updates
prepared by, or received from, any Approved Petroleum Engineer or any other
independent petroleum engineer.

     

    (k)           Notice of Sales of Oil and
Gas Properties.  In the event any Loan Party intends to Dispose
of any Oil or Gas Properties or any Equity Interests in any Subsidiary in
accordance with Section 9.12, prior written notice of such Disposition, the
price thereof and the anticipated date of closing and any other details thereof
requested by the Administrative Agent or any Lender.

     

    (l)           Notice of Casualty
Events.  Prompt written notice, and in any event within three
(3) Business Days, of the occurrence of any Casualty Event or the commencement
of any action or proceeding that could reasonably be expected to result in a
Casualty Event.

     

    (m)          Issuance of Permitted
Refinancing Debt.  In the event the Borrower intends to
refinance any Debt with the proceeds of Permitted Refinancing Debt as
contemplated by Section 9.02(b), prior written notice of such intended offering
therefor, the amount thereof and the anticipated date of closing and will
furnish a copy of the preliminary offering memorandum (if any) and the final
offering memorandum (if any).

     

    (n)           Information Regarding
Borrower and Guarantors.  Prompt written notice (and in any
event within thirty (30) days prior thereto) of any change (i) any Loan Party’s
corporate name or in any trade name used to identify such Person in the conduct
of its business or in the ownership of its Properties, (ii) in the location of
any Loan Party’s chief executive office or principal place of business, (iii) in
any Loan Party’s identity or corporate structure or in the jurisdiction in which
such Person is incorporated or formed, (iv) in any Loan Party’s jurisdiction of
organization or such Person’s organizational identification number in such
jurisdiction of organization, and (v) in any Loan Party’s federal taxpayer
identification number.

     

    (o)           [Reserved]

     

    
      
         

      

      
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    (p)           Notices of Certain
Changes.  Promptly, but in any event within five (5) Business
Days after the execution thereof, copies of any amendment, modification or
supplement to any preferred stock designation or any Organizational Document of
any Loan Party.

     

    (q)           Bankruptcy Cases Filings,
Documents, Etc.

     

    (i)           Prior
to the filing thereof in the Bankruptcy Court, all material filings related to
the transactions contemplated by this Agreement and the other Loan Documents
and/or any Disposition;

     

    (ii)          Promptly,
all pleadings, motions, applications, financial information and other papers and
documents filed by any of the Loan Parties in the Bankruptcy Cases;
and

     

    (iii)         Promptly,
all written reports given by the Borrower or HPPC or their respective attorneys,
accountants, or advisors to the Creditors’ Committee in the Bankruptcy
Cases.

     

    (r)           Other Requested
Information.  Promptly following any request therefor, such
other information regarding (i) the operations, business affairs and financial
condition of any Loan Party (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required to be filed
under ERISA), or compliance with the terms of this Agreement or any other Loan
Document, or (ii) the acts, conduct, Property, liabilities, operations,
financial condition and transactions of any Loan Party, or concerning any matter
that may affect the administration of its estate, in each case, as the
Administrative Agent or any Lender may from time to time reasonably
request.

     

    Section
8.02   Notices of Material
Events.  The Borrower will furnish to the Administrative Agent
and each Lender prompt written notice of the following:

     

    (a)           the
occurrence of any Default;

     

    (b)           the
filing or commencement of, or the threat in writing of, any action, suit,
proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against or affecting any Loan Party thereof not
previously disclosed in writing to the Lenders or any material adverse
development in any action, suit, proceeding, investigation or arbitration
(whether or not previously disclosed to the Lenders) that, in either case, if
adversely determined, could reasonably be expected to result in liability in
excess of $150,000, not fully covered by insurance, subject to normal
deductibles;

     

    (c)           the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Loan Parties in an aggregate amount exceeding $100,000; and

     

    (d)           any
other development that results in, or could reasonably be expected to result in,
a Material Adverse Effect except (i) the continuation of the Bankruptcy Cases
and (ii) the continuation of the circumstances giving rise to the filing thereof
or as a result thereof.

     

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

    
      
         

      

      
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    Section
8.03   Existence; Conduct of
Business.  The Borrower will, and will cause each Subsidiary
to, do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business and maintain,
if necessary, its qualification to do business in each other jurisdiction in
which its Oil and Gas Properties is located or the ownership of its Properties
requires such qualification, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.

     

    Section
8.04   Payment of
Obligations.  To the extent permitted by the Bankruptcy Court
and provided for in the Agreed Budget, the Borrower will, and will cause each
Subsidiary to, pay its obligations, including Tax liabilities of the Loan
Parties before the same shall become delinquent or in default, which arise after
the Petition Date except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings diligently conducted, (b) the
Loan Parties has appropriately recorded in their respective books the associated
liabilities thereof in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect or result in the seizure or levy of any Property of any Loan
Party.

     

    Section
8.05   Performance of Obligations
under Loan Documents.  The Borrower will pay the Notes
according to the reading, tenor and effect thereof, and the Borrower will, and
will cause each Subsidiary to, do and perform every act and discharge all of the
obligations to be performed and discharged by them under the Loan Documents,
including, without limitation, this Agreement, at the time or times and in the
manner specified.

     

    Section
8.06   Operation and Maintenance of
Properties.  To the extent permitted by
the  Bankruptcy Court and provided for in the Agreed Budget, the
Borrower, at its own expense, will, and will cause each Subsidiary
to:

     

    (a)           operate
their Oil and Gas Properties and other material Properties or cause such Oil and
Gas Properties and other material Properties to be operated in a careful and
efficient manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance with
all Governmental Requirements, including, without limitation, applicable
proration requirements and Environmental Laws, and all applicable laws, rules
and regulations of every other Governmental Authority from time to time
constituted to regulate the development and operation of its Oil and Gas
Properties and the production and sale of Hydrocarbons and other minerals
therefrom, except, in each case, as excused by the Bankruptcy Code, and where
the failure to comply could not reasonably be expected to have a Material
Adverse Effect.

     

    (b)           keep
and maintain all Property material to the conduct of their business in good
working order and condition (ordinary wear and tear excepted) and preserve,
maintain and keep in good repair, working order and efficiency (ordinary wear
and tear excepted) all of its material Oil and Gas Properties and other material
Properties, including, without limitation, all equipment, machinery and
facilities.

     

    (c)           promptly
pay and discharge, or make reasonable and customary efforts to cause to be paid
and discharged, all delay rentals, royalties, expenses and indebtedness accruing
under the leases or other agreements affecting or pertaining to their Oil and
Gas Properties and will do all other things necessary to keep unimpaired their
rights with respect thereto and prevent any forfeiture thereof or default
thereunder.

    
      
         

      

      
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    (d)           promptly
perform or make reasonable and customary efforts to cause to be performed, in
accordance with industry standards, the obligations required by each and all of
the assignments, deeds, leases, sub-leases, contracts and agreements affecting
its interests in their Oil and Gas Properties and other material
Properties.

     

    (e)           operate
their Oil and Gas Properties and other material Properties or cause or make
reasonable and customary efforts to cause such Oil and Gas Properties and other
material Properties to be operated in accordance with the practices of the
industry and in material compliance with all applicable contracts and agreements
and in compliance in all material respects with all Governmental
Requirements.

     

    (f)           to
the extent the Borrower or one of its Subsidiaries is not the operator of any
Property, the Borrower or such Subsidiary shall use reasonable efforts,
consistent with past practices, to cause the operator to comply with this
Section 8.06.

     

    Section
8.07   Insurance.  The
Borrower will, and will cause each Subsidiary to, maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.  The
loss payable clauses or provisions in said insurance policy or policies insuring
any of the Collateral for the Loans shall be endorsed in favor of and made
payable to the Administrative Agent as its interests may appear and any such
liability policies shall name the Administrative Agent and the Lenders as
“additional insureds” and provide that the insurer will endeavor to give at
least thirty (30) days prior notice of any cancellation to the Administrative
Agent.

     

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

     

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

    
      
         

      

      
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    Section
8.10   Environmental
Matters.

     

    (a)           The
Borrower shall at its sole expense:  (i) comply, and shall cause its
Properties and operations and each Subsidiary and each Subsidiary’s Properties
and operations to comply, with all applicable Environmental Laws, the breach of
which could be reasonably expected to have a Material Adverse Effect; (ii) not
dispose of or otherwise release, and shall cause each Subsidiary not to dispose
of or otherwise release, any oil, oil and gas waste, Hazardous Material, or
solid waste on, under, about or from any of the Borrower’s or its Subsidiaries’
Properties or any other Property to the extent caused by the Borrower’s or any
of its Subsidiaries’ operations except in compliance with applicable
Environmental Laws, the disposal or release of which could reasonably be
expected to have a Material Adverse Effect; (iii) timely obtain or file, and
shall cause each Subsidiary to timely obtain or file, all notices, permits,
licenses, exemptions, approvals, registrations or other authorizations, if any,
required under applicable Environmental Laws to be obtained or filed in
connection with the operation or use of the Borrower’s or its Subsidiaries’
Properties, which failure to obtain or file could reasonably be expected to have
a Material Adverse Effect; (iv) promptly commence and diligently prosecute to
completion, and shall cause each Subsidiary to promptly commence and diligently
prosecute to completion, any assessment, evaluation, investigation, monitoring,
containment, cleanup, removal, repair, restoration, remediation or other
remedial obligations (collectively, the “Remedial Work”) in
the event any Remedial Work is required or reasonably necessary under applicable
Environmental Laws because of or in connection with the actual or suspected
past, present or future disposal or other release of any oil, oil and gas waste,
Hazardous Material, or solid waste on, under, about or from any of the
Borrower’s or its Subsidiaries’ Properties, which failure to commence and
diligently prosecute to completion could reasonably be expected to have a
Material Adverse Effect; and (v) establish and implement, and shall cause each
Subsidiary to establish and implement, such policies of environmental audit and
compliance as may be necessary to continuously determine and assure that the
Borrower’s and its Subsidiaries’ obligations under this Section 8.10(a) are
timely and fully satisfied, which failure to establish and implement could
reasonably be expected to have a Material Adverse Effect.

     

    (b)           The
Borrower will promptly, but in no event later than five (5) days of the
occurrence of a triggering event, notify the Administrative Agent and the
Lenders in writing of any threatened action, investigation or inquiry by any
Governmental Authority or any threatened demand or lawsuit by any landowner or
other third party against the Borrower or its Subsidiaries or their Properties
of which the Borrower has knowledge in connection with any Environmental Laws
(excluding routine testing and corrective action) if the Borrower reasonably
anticipates that such action will result in liability (whether individually or
in the aggregate) in excess of $500,000, not fully covered by insurance, subject
to normal deductibles.

     

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

     

    Section
8.11   Agreement to Deliver
Security Instruments.  To the extent requested by the
Administrative Agent, the Borrower at its sole expense will (i) cause (or use
its reasonable efforts to cause in cases where a third-party consent is
required) all of the Collateral (including, without limitation, all owned and
leased real and personal Property of each Loan Party) to be subject at all times
to first priority, perfected and, in the case of real Property (whether leased
or owned), title insured Liens in favor of the Administrative Agent to secure
the Indebtedness pursuant to the terms and conditions hereof, the Security
Instruments, the Interim Order (if applicable) and the Final Order, and (ii)
deliver such other documentation as the Administrative Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, mortgages, real estate title insurance
policies, surveys, environmental reports, landlord’s waivers, certified
resolutions and other organizational and authorizing documents of such Person,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of the Administrative Agent’s
Liens thereunder), all in form, content and scope reasonably satisfactory to the
Administrative Agent.

    
      
         

      

      
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    Section
8.12   Further
Assurances.

     

    (a)           The
Borrower at its sole expense will, and will cause each Subsidiary to, promptly
execute and deliver to the Administrative Agent all such other documents,
agreements and instruments reasonably requested by the Administrative Agent to
comply with, cure any defects or accomplish the conditions precedent, covenants
and agreements of any Loan Party, as the case may be, in the Loan Documents,
including the Notes, or to further evidence and more fully describe the
Collateral intended as security for the Indebtedness, or to correct any
omissions in this Agreement or the Security Instruments, or to state more fully
the obligations secured therein, or to perfect, protect or preserve any Liens
created pursuant to this Agreement or any of the Security Instruments or the
priority thereof, or to make any recordings, file any notices or obtain any
consents, all as may be reasonably necessary or appropriate, in the sole
discretion of the Administrative Agent, in connection therewith.

     

    (b)           The
Borrower hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Mortgaged Property without the signature of the Borrower or any
other Guarantor where permitted by law.  A carbon, photographic or
other reproduction of the Security Instruments or any financing statement
covering the Mortgaged Property or any part thereof shall be sufficient as a
financing statement where permitted by law.

     

    Section
8.13   Deposit
Accounts.

     

    (a)           The
Borrower shall, and shall cause each of the Guarantors to, maintain their
deposit, securities, commodity and bank accounts that are identified on Schedule
8.13 (the “Existing
Accounts”) in accordance with the cash management system as set forth in
the Cash Management Order.

     

    (b)           Except
as permitted by an order of the Bankruptcy Court, without the Administrative
Agent’s prior written consent, neither the Borrower, nor any of the Guarantors,
shall close any Existing Account or establish any new bank
accounts.

     

    Section
8.14   Title
Information.  On or before the delivery to the Administrative
Agent and the Lenders of the Reserve Report pursuant to Section 6.01(o)(i), the
Borrower will deliver additional updated title information reasonably required
by the Administrative Agent, in form and substance acceptable to the
Administrative Agent, covering the Oil and Gas Properties previously specified
by the Administrative Agent.

     

    Section
8.15   Additional
Guarantors.  The Borrower will promptly notify the
Administrative Agent at the time that any Person becomes a debtor in the
Bankruptcy Cases, and (a) promptly thereafter (and in any event within five
days), seek an order of the Bankruptcy Court authorizing such Person to become a
Guarantor hereunder and (b) immediately upon the entry of such order, (i) cause
such Person to become a Guarantor by executing and delivering to the
Administrative Agent a counterpart of the Guaranty Agreement or a “Assumption
Agreement” in the form attached as Annex I to the Guaranty Agreement, and (ii)
deliver to the Administrative Agent documents of the types referred to in
clauses (iii) and (iv) of Section 6.01(b) and, if requested by the
Administrative Agent, favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the Guaranty Agreement), all in form, content and scope
reasonably satisfactory to the Administrative Agent.

    
      
         

      

      
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    Section
8.16  ERISA
Compliance.  The Borrower will promptly furnish and will cause
the Subsidiaries and any ERISA Affiliate to promptly furnish to the
Administrative Agent (i) promptly after the filing thereof with the United
States Secretary of Labor, the Internal Revenue Service or the PBGC, copies of
each annual and other report with respect to each Plan or any trust created
thereunder, (ii) immediately upon becoming aware of the occurrence of any ERISA
Event or of any “prohibited transaction,” as described in Section 406 of ERISA
or in Section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by a Responsible Officer, the Subsidiary or
the ERISA Affiliate, as the case may be, specifying the nature thereof, what
action the Borrower, the Subsidiary or the ERISA Affiliate is taking or proposes
to take with respect thereto, and, when known, any action taken or proposed by
the Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto, and (iii) immediately upon receipt thereof, copies of any notice of the
PBGC’s intention to terminate or to have a trustee appointed to administer any
Plan.  With respect to each Plan (other than a Multiemployer Plan),
the Borrower will, and will cause each Subsidiary and ERISA Affiliate to, (i)
satisfy in full and in a timely manner, without incurring any late payment or
underpayment charge or penalty and without giving rise to any lien, all of the
contribution and funding requirements of Section 412 of the Code (determined
without regard to subsections (d), (e), (f) and (k) thereof) and of Section 302
of ERISA (determined without regard to Sections 303, 304 and 306 of ERISA), and
(ii) pay, or cause to be paid, to the PBGC in a timely manner, without incurring
any late payment or underpayment charge or penalty, all premiums required
pursuant to Sections 4006 and 4007 of ERISA.

     

    Section
8.17   Marketing
Activities.

     

    (a)           The
Borrower will not, and will not permit any Subsidiary to, engage in marketing
activities for any Hydrocarbons or enter into any contracts related thereto
other than (i) contracts for the sale of Hydrocarbons scheduled or reasonably
estimated to be produced from their proved Oil and Gas Properties during the
period of such contract, (ii) contracts for the sale of Hydrocarbons scheduled
or reasonably estimated to be produced from proved Oil and Gas Properties of
third parties during the period of such contract associated with the Oil and Gas
Properties of the Borrower and its Subsidiaries that the Borrower or one of its
Subsidiaries has the right to market pursuant to joint operating agreements,
unitization agreements or other similar contracts that are usual and customary
in the oil and gas business and (iii) other contracts for the purchase and/or
sale of Hydrocarbons of third parties (A) which have generally offsetting
provisions (i.e. corresponding pricing mechanics, delivery dates and points and
volumes) such that no “position” is taken and (B) for which appropriate credit
support has been taken to alleviate the material credit risks of the
counterparty thereto.

     

    (b)           The
Borrower will not, and will not permit any Subsidiary to, amend in any material
respect the written Hydrocarbon Marketing Policy delivered to the Lenders
without the prior written consent of the Administrative Agent and the Majority
Lenders.

     

    Section
8.18   Compliance with Financing
Orders.  The Borrower shall comply, and shall cause each of its
Subsidiaries to comply, with the Interim Order and the Final Order, as
applicable, and each of the other orders entered by the Bankruptcy
Court.

    
      
         

      

      
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    Section
8.19   Retention of Financial
Advisor; Executives.  The Borrower shall at the Borrower’s
expense, continue the retention and employment of Sanford R. Edlein as chief
restructuring officer and Huron Consulting Services LLC as financial advisor to
the Borrower (or another chief restructuring officer or financial advisor
acceptable to the Administrative Agent), such retention to be on terms and
conditions satisfactory to the Administrative Agent.

     

    Section
8.20   Bankruptcy Cases Related
Matters and Deadlines.  The Borrower shall cause (a) the
Confirmed Plan of Reorganization, together with the disclosure statements
related thereto, to be filed with the Bankruptcy Court on or prior to October 6,
2009, (b) a confirmation hearing with the Bankruptcy Court relating to the
Confirmed Plan of Reorganization to be held on or prior to November 30, 2009,
and (c) the Plan Effective Date to have occurred on or prior to December 15,
2009.

     

    ARTICLE
IX

    Negative
Covenants

     

    Until the
Aggregate Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents have been paid in full and all Letters of
Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Lenders
that:

     

    Section
9.01   [Reserved]

     

    Section
9.02   Debt.  The
Loan Parties will not, and will not permit any Subsidiary to, incur, create,
assume or suffer to exist any Debt, except:

     

    (a)           the
Notes or other Indebtedness arising under the Loan Documents or any guaranty of
or suretyship arrangement for the Notes or other Indebtedness arising under the
Loan Documents.

     

    (b)           Debt
of the Borrower and its Subsidiaries outstanding on the Petition Date and listed
on Schedule 9.02, and any Permitted Refinancing Debt in respect
thereof.

     

    (c)           Guarantees
of the Borrower or any Guarantor in respect of Debt otherwise permitted
hereunder of the Borrower or any other Guarantor.

     

    (d)           accounts
payable and accrued expenses, liabilities or other obligations to pay the
deferred purchase price of Property or services, from time to time incurred in
the ordinary course of business.

     

    (e)           Debt
associated with bonds or surety obligations required by Governmental
Requirements in connection with the operation of the Oil and Gas
Properties.

     

    (f)           intercompany
Debt by and among the Borrower and any Guarantor (or between Guarantors), solely
to the extent permitted by Section 9.05(k); provided, that such Debt is not
held, assigned, transferred, negotiated or pledged to any Person other than the
Borrower or one of the Guarantors; provided, further, that any such Debt owed by
either the Borrower or a Guarantor shall be subordinated to the Indebtedness on
terms set forth in the Guaranty Agreement.

     

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

    
      
         

      

      
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    Section
9.03   Liens.  Subject
to (x) the Financing Orders, (y) the Cash Collateral Order and (z) Section 9.26,
the Borrower will not, and will not permit any Subsidiary to, create, incur,
assume or permit to exist any Lien on any of its Properties (now owned or
hereafter acquired), except (the following exceptions, collectively, “Permitted
Liens”):

     

    (a)           Liens
securing the payment of any Indebtedness.

     

    (b)           Liens
existing on the Petition Date and listed on Schedule 9.03.

     

    (c)           Excepted
Liens.

     

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

     

    (e)           additional
Liens granted by the Bankruptcy Court to the Pre-Petition Secured Parties
pursuant (i) to the Financing Orders or (ii) otherwise.

     

    (f)           any
other Lien, but only to the extent, that (i) if created, incurred, assumed or
suffered by a Loan Party on or after the Petition Date, such Lien is (A) junior
to the Liens of the Administrative Agent and the Lenders hereunder and junior to
the adequate protection Liens granted to the Pre-Petition Secured Parties in
accordance with the Financing Orders and (B) approved by the Bankruptcy Court
with the prior written consent of the Administrative Agent and (ii) if created,
incurred, assumed or suffered by a Loan Party before the Petition Date, such
Liens (A) have the priority set forth in the Financing Orders and (B) are valid,
perfected, enforceable and unavoidable in accordance with applicable
law.

     

    Section
9.04   Dividends and
Distributions.  The Borrower will not, and will not permit any
of its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, return any capital to its stockholders or
make any distribution of its Property to its Equity Interest holders, except, to
the extent previously approved by the Administrative Agent in writing (other
than with respect to any dividend required to be made in order to comply with
the Borrower’s obligations under Section 3.04(c)), Subsidiaries may declare and
pay dividends to the Borrower ratably with respect to their Equity
Interests.

     

    Section
9.05   Investments, Loans and
Advances.  The Borrower will not, and will not permit any
Subsidiary to, make or permit to remain outstanding any Investments in or to any
Person, except that the foregoing restriction shall not apply to:

     

    (a)           Investments
existing as of the Petition Date and set forth in Schedule 9.05.

     

    (b)           accounts
receivable arising in the ordinary course of business.

     

    (c)           direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, in each case maturing
within one (1) year from the date of creation thereof.

     

    (d)           commercial
paper maturing within one (1) year from the date of creation thereof rated in
the highest grade by S&P or Moody’s.

    
      
         

      

      
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    (e)           deposits
maturing within one (1) year from the date of creation thereof with, including
certificates of deposit issued by, any Lender or any office located in the
United States of any other bank or trust company which is organized under the
laws of the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $100,000,000 (as of the date of such bank
or trust company’s most recent financial reports) and has a short term deposit
rating of no lower than A2 or P2, as such rating is set forth from time to time,
by S&P or Moody’s, respectively or, in the case of any Foreign Subsidiary, a
bank organized in a jurisdiction in which the Foreign Subsidiary conducts
operations having assets in excess of $500,000,000 (or its equivalent in another
currency).

     

    (f)           deposits
in money market funds investing exclusively in Investments described in Section
9.05(c), Section 9.05(d) or Section 9.05(e).

     

    (g)           subject
to the prior written consent of the Administrative Agent, Investments
(including, without limitation, capital contributions) in general or limited
partnerships or other types of entities (each a “venture”) entered
into by the Borrower or a Subsidiary with others in the ordinary course of
business; provided, that (i)
any such venture is engaged exclusively in oil and gas exploration, development,
production, processing and related activities, including transportation, (ii)
the interest in such venture is acquired in the ordinary course of business and
on fair and reasonable terms and (iii) such venture interests acquired and
capital contributions made (valued as of the date such interest was acquired or
the contribution made) do not exceed, in the aggregate at any time outstanding
an amount equal to $300,000.

     

    (h)           subject
to the prior written consent of the Administrative Agent, Investments in direct
ownership interests in additional Oil and Gas Properties and gas gathering
systems related thereto or related to farm-out, farm-in, joint operating, joint
venture or area of mutual interest agreements, gathering systems, pipelines or
other similar arrangements which are usual and customary in the oil and gas
exploration and production business located within the geographic boundaries of
the United States of America.

     

    (i)           Investments
in stock, obligations or securities received in settlement of debts arising from
Investments permitted under this Section 9.05 owing to the Borrower or any
Subsidiary as a result of a bankruptcy or other insolvency proceeding of the
obligor in respect of such debts or upon the enforcement of any Lien in favor of
the Borrower or any of its Subsidiaries; provided, that the
Borrower shall give the Administrative Agent prompt written notice in the event
that the aggregate amount of all Investments held at any one time under this
Section 9.05(i) exceeds $100,000.

     

    (j)           Investments
otherwise permitted pursuant to the terms of this Agreement and provided for and
disclosed in the Agreed Budget, provided that no such Investments shall be made
if immediately prior to making such Investment, or after giving effect thereto,
there shall exist an Event of Default which is continuing.

     

    (k)           subject
to the prior written consent of the Administrative Agent, Investments (i) made
by the Borrower in or to the Guarantors, and (ii) made by any Subsidiary in or
to the Borrower or any Guarantor.

     

    Section
9.06   Nature of Business;
International Operations.  The Borrower will not, and will not
permit any Subsidiary to, allow any material change to be made in the character
of its business as an independent oil and gas exploration and production
company.  From and after the date hereof, the Borrower and its
Domestic Subsidiaries will not acquire or make any other expenditure (whether
such expenditure is capital, operating or otherwise) in or related to, any Oil
and Gas Properties not located within the geographical boundaries of the United
States.  The Borrower shall not have any Foreign
Subsidiaries.

    
      
         

      

      
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    Section
9.07   Limitation on
Leases.  The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or suffer to exist any obligation for the
payment of rent or hire of Property of any kind whatsoever (real or personal but
excluding Capital Leases and leases of Hydrocarbon Interests), under leases or
lease agreements which would cause the aggregate amount of all payments made by
the Borrower and the Subsidiaries pursuant to all such leases or lease
agreements, including, without limitation, any residual payments at the end of
any lease, to exceed $1,000,000 in any period of twelve (12) consecutive
calendar months during the life of such leases.

     

    Section
9.08   Proceeds of
Notes.  The Borrower will not permit the proceeds of the Notes
to be used for any purpose other than those permitted by Section
2.07.  Neither the Borrower nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any of the Loan
Documents to violate Regulations T, U or X or any other regulation of the Board
or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.  If requested by the Administrative Agent,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 or such other form referred to in Regulation U, Regulation T or Regulation X
of the Board, as the case may be.

     

    Section
9.09   ERISA
Compliance.  The Borrower will not, and will not permit any
Subsidiary to, at any time:

     

    (a)           engage
in, or permit any ERISA Affiliate to engage in, any transaction in connection
with which the Borrower, a Subsidiary or any ERISA Affiliate could be subjected
to either a civil penalty assessed pursuant to subsections (c), (i) or (l) of
Section 502 of ERISA or a Tax imposed by Chapter 43 of Subtitle D of the
Code.

     

    (b)           terminate,
or permit any ERISA Affiliate to terminate, any Plan in a manner, or take any
other action with respect to any Plan, which could result in any liability of
the Borrower, a Subsidiary or any ERISA Affiliate to the PBGC.

     

    (c)           fail
to make, or permit any ERISA Affiliate to fail to make, full payment when due of
all amounts which, under the provisions of any Plan, agreement relating thereto
or applicable law, the Borrower, a Subsidiary or any ERISA Affiliate is required
to pay as contributions thereto.

     

    (d)           permit
to exist, or allow any ERISA Affiliate to permit to exist, any accumulated
funding deficiency within the meaning of Section 302 of ERISA or Section 412 of
the Code, whether or not waived, with respect to any Plan.

     

    (e)           permit,
or allow any ERISA Affiliate to permit, the actuarial present value of the
benefit liabilities under any Plan maintained by the Borrower, a Subsidiary or
any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the
current value of the assets (computed on a plan termination basis in accordance
with Title IV of ERISA) of such Plan allocable to such benefit
liabilities.  The term “actuarial present value of the benefit
liabilities” shall have the meaning specified in Section 4041 of
ERISA.

    
      
         

      

      
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    (f)           contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate to
contribute to or assume an obligation to contribute to, any Multiemployer
Plan.

     

    (g)           acquire,
or permit any ERISA Affiliate to acquire, an interest in any Person that causes
such Person to become an ERISA Affiliate with respect to the Borrower or a
Subsidiary or with respect to any ERISA Affiliate of the Borrower or a
Subsidiary if such Person sponsors, maintains or contributes to, or at any time
in the six (6)-year period preceding such acquisition has sponsored, maintained,
or contributed to, (1) any Multiemployer Plan, or (2) any other Plan that is
subject to Title IV of ERISA under which the actuarial present value of the
benefit liabilities under such Plan exceeds the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities.

     

    (h)           incur,
or permit any ERISA Affiliate to incur, a liability to or on account of a Plan
under Sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA.

     

    (i)           contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate to
contribute to or assume an obligation to contribute to, any employee welfare
benefit plan, as defined in Section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to former employees of
such entities, that may not be terminated by such entities in their sole
discretion at any time without any material liability.

     

    (j)           amend,
or permit any ERISA Affiliate to amend, a Plan resulting in an increase in
current liability such that the Borrower, a Subsidiary or any ERISA Affiliate is
required to provide security to such Plan under Section 401(a)(29) of the
Code.

     

    Section
9.10   Disposition or Discount of
Receivables.  Without the prior written consent of the
Administrative Agent, the Borrower will not, and will not permit any Subsidiary
to, discount or Dispose of (with or without recourse) any of its notes
receivable or accounts receivable; provided, however, that the
Borrower and any Guarantor shall be permitted to undertake a dollar-for-dollar
set-off, at full value, of any such receivables owed by a Person to the Borrower
or any Guarantor, as the case may be, against any account payables owed by the
Borrower or any Guarantor, as the case may be, to such Person.

     

    Section
9.11   Mergers,
Etc.  The Borrower will not, and will not permit any Subsidiary
to, merge into or with or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
Property (whether now owned or hereafter acquired) to any other Person or
liquidate or dissolve.

     

    Section
9.12   Disposition of
Properties.  The Borrower will not, and will not permit any
Subsidiary to, make any Disposition or enter into any agreement to make any
Disposition, except (a) Excluded Dispositions and (b) the Disposition (including
Casualty Events) of any Oil and Gas Property or any interest therein or any
Subsidiary owning Oil and Gas Properties; provided, that, in
the case of clause (b), (i) 100% of the consideration received in respect of
such Disposition shall be cash, (ii) the consideration received in respect of
such Disposition shall be equal to or greater than the fair market value of the
Oil and Gas Property, interest therein or Subsidiary subject to such Disposition
(as reasonably determined by the board of directors of the Borrower and, if
requested by the Administrative Agent, the Borrower shall deliver a certificate
of a Responsible Officer of the Borrower certifying to that effect), (iii) such
Disposition is previously approved by the Administrative Agent in writing, and
(iv) if any such Disposition is of a Subsidiary owning Oil and Gas Properties,
such sale or other disposition shall include all the Equity Interests of such
Subsidiary.

    
      
         

      

      
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    Section
9.13   Environmental
Matters.  The Borrower will not, and will not permit any
Subsidiary to, cause or permit any of its Property to be in violation of, or do
anything or permit anything to be done which will subject any such Property to
any Remedial Work under any Environmental Laws, assuming disclosure to the
applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations could reasonably be expected to have a Material Adverse
Effect.

     

    Section
9.14   Transactions with
Affiliates.  The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction, including, without limitation, any
purchase or Disposition of Property or the rendering of any service, with any
Affiliate (other than the Guarantors and Wholly-Owned Subsidiaries of the
Borrower) unless such transactions are otherwise permitted under this Agreement
and are upon fair and reasonable terms no less favorable to it than it would
obtain in a comparable arm’s length transaction with a Person not an
Affiliate.

     

    Section
9.15   Subsidiaries.  The
Borrower will not, and will not permit any Subsidiary to, create or acquire any
additional Subsidiary unless the Borrower gives written notice to the
Administrative Agent of such creation or acquisition and complies with Section
8.15.  The Borrower shall not, and shall not permit any Subsidiary to,
Dispose of any Equity Interests in any Subsidiary except in compliance with
Section 9.12.  Neither the Borrower nor any Subsidiary shall have any
Foreign Subsidiaries.

     

    Section
9.16  Negative Pledge Agreements;
Dividend Restrictions.  The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or suffer to exist any contract,
agreement or understanding (other than this Agreement and the Security
Instruments) which in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien on any of its Property in favor of the
Administrative Agent and the Lenders or restricts any Subsidiary from paying
dividends or making distributions to the Borrower or any Guarantor, or which
requires the consent of or notice to other Persons in connection
therewith.

     

    Section
9.17   Prohibited
Contracts.  Other than those listed on Schedule 9.17, the
Borrower will not, and will not permit any Subsidiary to:

     

    (a)           allow
gas imbalances or enter into any “take-or-pay” contract or other contract or
arrangement with respect to the Oil and Gas Properties of the Borrower or any
Subsidiary that would require the Borrower or such Subsidiary (i) to deliver
Hydrocarbons at some future time without then receiving full payment therefor,
or (ii) for the purchase of goods or services which obligates it to pay for such
goods or service regardless of whether they are delivered or furnished to it,
other than contracts for services reasonably anticipated to be utilized in the
ordinary course of business; or

     

    (b)           amend
or permit any amendment to any contract or lease which releases, qualifies,
limits, makes contingent or otherwise detrimentally affects the rights and
benefits of the Administrative Agent or any Lender under, or acquired pursuant
to, any Security Instrument.

    
      
         

      

      
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    Section
9.18   Swap
Agreements.  Without the prior written consent of the
Administrative Agent, the Borrower will not, and will not permit any Subsidiary
to, become a party to or in any manner be liable on any Swap Agreement other
than the Existing Swap Agreements.

     

    Section
9.19   Transactions Affecting
Collateral or Indebtedness.  The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly enter into any transaction
or any agreement, instrument or other undertaking subsequent to the Petition
Date which could be reasonably expected to have a Material Adverse
Effect.

     

    Section
9.20   Capital
Expenditures.  The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly make Capital Expenditures unless provided
for in the Agreed Budget (and Permitted Variances related thereto).

     

    Section
9.21   Amendment and Prepayment of
Other Debt.  The Borrower will not, and will not permit any
Subsidiary to directly or indirectly do any of the following:

     

    (a)           Except
in connection with the Confirmed Plan of Reorganization confirmed by the
Bankruptcy Court in these Bankruptcy Cases or pursuant to an order of the
Bankruptcy Court relating to an action commenced in accordance with Paragraph 22
of the Cash Collateral Order, amend or modify any of the terms of any Debt of
any of the Loan Parties arising prior to the Petition Date, if such amendment or
modification would add or change any terms in a manner adverse to the Loan
Parties or the Lenders, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled or
increase the interest rate applicable thereto; or

     

    (b)           make
any payment of any Debt or any claim arising prior to the Petition Date except
as permitted pursuant to an order of the Bankruptcy Court and/or set forth in
the Agreed Budget or make any voluntary, optional or other non-scheduled payment
(the “buyout” price at the end of the term of any Capital Lease or Synthetic
Lease being treated hereunder as scheduled), prepayment, redemption, acquisition
for value, refund, refinance or exchange of any Debt of such Loan Party arising
after the Petition Date (including, without limitation, any interest, premium or
other amounts owing in respect thereof), in each case whether or not mandatory,
except (i) with respect to the Indebtedness, or (ii) for payments made pursuant
to the Interim Order (if applicable) or the Final Order and in each instance as
set forth in the Agreed Budget.

     

    Section
9.22   Organization Documents;
Fiscal Year.  Without the prior written consent of the
Administrative Agent, the Borrower will not, and will not permit any Subsidiary
to, directly or indirectly (a) amend, modify or change its Organization
Documents or (b) change its fiscal year.

     

    Section
9.23   Sale and Leaseback
Transactions.  The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly enter into any Sale and Leaseback
Transaction.

     

    Section
9.24   Deposit
Accounts.  The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly maintain at any time any Deposit Account
at any Bank (as both such terms are defined in Article 9 of the UCC) other than
as provided in Section 8.13.

     

    Section
9.25   Compliance with Agreed
Budget.  Except as otherwise provided herein or approved by the
Administrative Agent and the Majority Lenders, the Borrower will not, and will
not permit any Subsidiary to directly or indirectly (a) use any cash or the
proceeds of any Loans in a manner or for a purpose other than in accordance with
this Agreement, the Financing Orders and the most recent Agreed Budget (and
Permitted Variances related thereto), and (b) permit a disbursement on a line
item basis or revenues generated in the ordinary course of business, as the case
may be, causing any Variance other than Permitted Variances without the prior
written consent of the Administrative Agent and the Majority
Lenders.

    
      
         

      

      
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    Section
9.26   Chapter 11
Claims.  The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, incur, create, assume, suffer to exist or
permit any administrative expense, unsecured Claim, or other Super-Priority
Claim or Lien which is pari passu with or senior to the Claims or Liens, as the
case may be, of the Administrative Agent and the Lenders against the Loan
Parties hereunder or under the Financing Orders, or apply to the Bankruptcy
Court for authority so to do, except for the Carve-Out.

     

    Section
9.27   Revision of Orders;
Applications to Bankruptcy Court.  The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly (a) seek, consent to
or suffer to exist any modification, stay, vacation or amendment of the Interim
Order (if applicable) or the Final Order except for any modifications and
amendments agreed to in writing by the Administrative Agent and the Majority
Lenders, or (b) apply to the Bankruptcy Court for authority to take any action
prohibited by this Article IX (except to the extent such application and the
taking of such action is conditioned upon the receiving the written consent of
the Administrative Agent and the Majority Lenders).

     

    ARTICLE
X

    Events
of Default; Remedies

     

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

     

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

     

    (b)           the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in Section 10.01(a)) payable under any
Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three (3) Business
Days.

     

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

     

    (d)           the
Borrower or any Subsidiary shall fail to observe or perform any covenant,
condition or agreement contained in Section 8.01(i), Section 8.01(n), Section
8.02, Section 8.13(b), Section 8.16, Section 8.18, Section 8.20 or in Article
IX.

    
      
         

      

      
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    (e)           the
Borrower or any Subsidiary shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in Section 10.01(a), Section 10.01(b) or Section 10.01(d)) or any other Loan
Document, and such failure shall continue unremedied for a period of ten (10)
days after the earlier to occur of (A) notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any Lender)
or (B) a Responsible Officer of the Borrower or such Subsidiary otherwise
becoming aware of such Default.

     

    (f)           the
Borrower or any Subsidiary shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable, unless such failure to pay is
a result of the Bankruptcy Cases.

     

    (g)           unless
as a result of the Bankruptcy Cases, any event or condition occurs that results
in any Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the Redemption thereof or any offer to Redeem to be made in
respect thereof, prior to its scheduled maturity or require the Borrower or any
Subsidiary to make an offer in respect thereof.

     

    (h)           after
the Petition Date (i) one or more judgments for the payment of money in an
aggregate amount in excess of $500,000 (to the extent not covered by independent
third party insurance provided by insurers of the highest claims paying rating
or financial strength as to which the insurer does not dispute coverage and is
not subject to an insolvency proceeding) or (ii) any one or more non-monetary
judgments that have, or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, and in each case under clause
(i) and (ii) of this subparagraph, shall be rendered against the Borrower,
any Subsidiary or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the Borrower or any Subsidiary to enforce
any such judgment.

     

    (i)           any
provision of any Loan Document after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms
against the Borrower or a Guarantor party thereto or shall be repudiated by any
of them, or cease to create a valid and perfected Lien of the priority required
thereby on any of the Collateral purported to be covered thereby, except to the
extent permitted by the terms of this Agreement, or the Borrower or any
Subsidiary or any of their Affiliates shall so state in writing.

     

    (j)           an
ERISA Event shall have occurred that, in the opinion of the Majority Lenders,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding (i) $100,000 in any year or (ii)
$250,000 for all periods.

     

    (k)           [Reserved]

     

    (l)           (i)
the Bankruptcy Court fails to enter the Final Order (with such changes as the
Administrative Agent may agree to) by the later date of (A) the date that is
thirty (30) calendar days after the date hereof or (B) the date subsequent to
thirty (30) calendar days after the date hereof which the Administrative Agent
has previously agreed to in writing, or (ii) the Bankruptcy Court reverses,
vacates or stays the effectiveness of either the Interim Order (if applicable)
or the Final Order.

    
      
         

      

      
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    (m)           an
order with respect to either of the Bankruptcy Cases shall be entered by the
Bankruptcy Court (or any of the Loan Parties shall file an application or motion
for entry of an order) (i) appointing a trustee under Section 1104 of the
Bankruptcy Code without the prior written consent of the Administrative Agent,
(ii) appointing an examiner with enlarged powers (beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) relating to the operation of
the business under Section 1106(b) of the Bankruptcy Code without the prior
written consent of the Administrative Agent, or (iii) dismissing or converting
either of the Bankruptcy Cases to a case under Chapter 7 of the Bankruptcy
Code.

     

    (n)           except
to the extent set forth herein, any Loan Party (i) fails or neglects to comply
with any provision of the Interim Order or the Final Order, as applicable, or
any order of the Bankruptcy Court governing the Loan Parties’ use of cash
collateral, and such non-compliance continues unremedied for a period of three
(3) Business Days thereafter, or (ii) seeks to, or shall support (whether by way
of motion or other pleadings filed with the Bankruptcy Court or any other
writing executed by any Loan Party or by oral argument before the Bankruptcy
Court) any other Person’s motion to vacate or modify any of the Financing Orders
over the objection of the Majority Lenders.

     

    (o)           (i)
An order shall be entered by the Bankruptcy Court confirming a plan of
reorganization in the Bankruptcy Cases which does not (A) contain a provision
for termination of all of the Lenders’ Commitments and payment in full of all
Indebtedness on the date of effectiveness of such plan and in each case in a
manner satisfactory to the Administrative Agent and the Lenders on or before the
effective date of such plan and (B) provide for the continuation of the Liens
and priorities in favor of the Administrative Agent and the Secured Parties
until such effective date or (ii) any Loan Party (or by any party with the
support of any of the Loan Parties) shall have filed a plan of reorganization
that violates clause (i) of this subparagraph in the Bankruptcy Cases, and such
filing of such plan is made without the prior written consent of the
Administrative Agent.

     

    (p)           an
order with respect to either of the Bankruptcy Cases shall be entered by the
Bankruptcy Court, without the consent of the Administrative Agent, (i) to
revoke, reverse, stay, vacate or rescind any provision of any Financing Order,
(ii) to modify, supplement or amend any provision of the Interim Order (if
applicable) or the Final Order, (iii) to permit any administrative expense or
any Claim (now existing or hereafter arising, of any kind or nature whatsoever)
to have administrative priority as to any of the Loan Parties, equal or superior
to the priority of the Lenders’ Claim in respect of the Indebtedness, except for
allowed administrative expenses having priority over the Indebtedness only to
the extent set forth in the definition of Carve-Out, (iv) to grant or permit the
grant of a Lien on the Collateral (other than a Permitted Lien), (v) to dismiss
either of the Bankruptcy Cases which does not contain a provision for
termination of all of the Lenders’ Commitments and payment in full in cash of
all Indebtedness in a manner satisfactory to the Administrative Agent upon such
dismissal, or (vi) to amend, supplement, stay, vacate or otherwise modify
any of the Loan Documents or any order of the Bankruptcy Court governing the
Loan Parties’ use of cash collateral.

     

    (q)           the
Bankruptcy Court enters an order or orders granting relief from the automatic
stay applicable under Section 362 of the Bankruptcy Code for any reason to any
Person with respect to assets of any Loan Party where the aggregate value of the
Property subject to all such order or orders is greater than
$500,000.

    
      
         

      

      
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    (r)           any
provision of the Interim Order (if applicable), the Final Order, this Agreement
or any other Loan Document shall for any reason cease to be valid or binding or
enforceable against any of the Loan Parties, or any of the Loan Parties shall so
state in writing; or any of the Loan Parties shall commence or join in any legal
proceeding to contest in any manner that the Interim Order (if applicable), the
Final Order, this Agreement or any other Loan Document constitutes a valid and
enforceable agreement or any of the Loan Parties shall commence or join in any
legal proceeding to assert that it has no further obligation or liability under
the Interim Order (if applicable), the Final Order, this Agreement or any other
Loan Document.

     

    (s)           except
as otherwise set forth in Sections 12.01(e) and 12.01(f), any of the Loan
Parties shall seek to, or shall support (whether by way of motion or other
pleadings filed with the Bankruptcy Court or any other writing executed by any
Loan Party or by oral argument before the Bankruptcy Court) any other Person’s
motion to, (i) disallow in whole or in part any of the Indebtedness arising
under this Agreement or any other Loan Document, (ii) disallow in whole or in
part any of the Pre-Petition Secured Indebtedness owed by the Loan Parties under
any of the Pre-Petition Loan Documents, (iii) challenge the validity and
enforceability of any of the Pre-Petition Loan Documents, (iv) challenge the
validity and enforceability of the Liens or security interests granted or
confirmed herein or in the Interim Order (if applicable), or the Final Order in
favor of the Secured Parties or (v) challenge the validity and enforceability of
the Liens or security interests in favor of the Pre-Petition Secured Parties,
except as specifically permitted in the Cash Collateral Order.

     

    (t)           any
of the Loan Parties shall make any payment (as adequate protection or
otherwise), or application for authority to pay, on account of any Claim or Debt
arising prior to the Petition Date other than those payments in respect of
“adequate protection obligations” permitted pursuant to the terms of the
Financing Orders, the Cash Collateral Order and payments authorized by the
Bankruptcy Court in respect of (i) any such payments required and/or permitted
in the “First Day Orders” or the Cash Collateral Order reasonably satisfactory
to the Administrative Agent, or, subject to the Administrative Agent’s consent,
any such payments required and/or permitted by any other order of the Bankruptcy
Court, (ii) accrued payroll and related expenses as of the Petition Date or
(iii) any such payments as described in and provided for in the Agreed
Budget.

     

    (u)           (i)
an order shall have been entered by the Bankruptcy Court modifying the adequate
protection obligations granted in any Financing Order without the prior written
consent of the Administrative Agent, or (ii) an order shall have been entered by
the Bankruptcy Court avoiding or requiring disgorgement by the Administrative
Agent or any of the Lenders of any amounts received in respect of the
Indebtedness.

     

    (v)           if
any Loan Party is enjoined, restrained or in any way prevented by court order
(other than an order of the Bankruptcy Court approved by the Majority Lenders)
from continuing to conduct all or any material part of its business
affairs.

     

    (w)           absent
the written consent of all of the Lenders, entry by the Bankruptcy Court of an
order under Section 363 or 365 of the Bankruptcy Code or otherwise authorizing
or approving the sale or assignment of all or substantially all of any Loan
Party’s assets, or procedures in respect thereof that does not provide for the
termination of the Aggregate Commitments and for the indefeasible payment in
full in cash of the Indebtedness on or prior to the date of consummation
thereof, with such indefeasible payment in full being in accordance with the
Administrative Agent’s and Lenders’ rights under the Bankruptcy Code, the Loan
Documents, and the Interim Order (if applicable), the Financing Order, or any of
the Loan Parties shall seek, support, or fail to contest in good faith, the
entry of such an order in the Bankruptcy Cases.

    
      
         

      

      
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    (x)           a
Change in Control shall occur, other than a Change in Control that may occur as
a result of the cancellation and subsequent issuance of replacement Equity
Interests in the Borrower in accordance with the Confirmed Plan of
Reorganization.

     

    Section
10.02 Remedies.

     

    (a)           Notwithstanding
the provisions of Section 362 of the Bankruptcy Code, but subject to the
Financing Orders, in the case of an Event of Default, at any time thereafter
during the continuance of such Event of Default, the Administrative Agent may,
and at the written request of the Majority Lenders, shall, by notice to the
Borrower, take any or all of the following actions, at the same or different
times, without further order of, or application to, the Bankruptcy Court: (i)
terminate the Aggregate Commitments, and thereupon the Aggregate Commitments
shall terminate immediately, (ii) declare the Notes and the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower and the Guarantors accrued hereunder and under the
Notes and the other Loan Documents (including, without limitation, the
depositing of cash collateral to secure the LC Exposure as provided in Section
2.08(j)), shall become due and payable immediately, without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other notice
of any kind, all of which are hereby waived by the Borrower and each Guarantor,
(iii) set-off against any outstanding Indebtedness amounts held in the accounts
of any Loan Party maintained by or with the Administrative Agent, any Lender or
their respective Affiliates, (iv) take any other action or exercise, on behalf
of itself and the Lenders, any other right and remedy available to it and the
Lenders under the Loan Documents or otherwise available at law or in equity;
provided, that
with respect to items (iii) and (iv) above, the Administrative Agent shall
provide the Borrower (with a copy to counsel for the Creditors’ Committee) with
five (5) Business Days’ prior written notice; provided, further, that upon
receipt of the notice referred in the immediately preceding clause, the Loan
Parties may continue to make ordinary course disbursements from such accounts
referred to in (iv) above to the extent and at the times set forth in the Agreed
Budget, but may not withdraw or disburse any other amounts from such account (in
any hearing after the giving of the aforementioned notice, the only issue that
may be raised by any party in opposition thereto being whether, in fact, an
Event of Default has occurred and is continuing).

     

    (b)           Upon
the occurrence and during the continuance of an Event of Default, the automatic
stay arising pursuant to Bankruptcy Code Section 362 shall be vacated and
terminated in accordance with the Interim Order or the Final Order, as
applicable, so as to permit the Administrative Agent and the Lenders full
exercise of all of their rights and remedies based on the occurrence of an Event
of Default, including, without limitation, all of their rights and remedies with
respect to the Collateral. With respect to the Administrative Agent’s and
Lenders’ exercise of their rights and remedies, each of the Loan Parties agree
and warrant as follows:

     

    (i)           the
Loan Parties waive and, release, and shall be enjoined from attempting to
contest, delay, or otherwise dispute the exercise by the Administrative Agent
and the Lenders of their rights and remedies before the Bankruptcy Court or
otherwise; except only as expressly stated in subparagraph (ii) of this
paragraph; and

    
      
         

      

      
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    (ii)           when
the Administrative Agent or the Lenders seek to enforce their rights and
remedies based on an Event of Default, and if any Loan Party disputes that an
Event of Default has occurred, a Loan Party will be entitled to file an
emergency motion with the Bankruptcy Court disputing whether an Event of Default
has occurred.  Unless otherwise agreed in writing by the
Administrative Agent, any such motion shall be heard within five (5) Business
Days after it is filed, subject to the availability of the Bankruptcy
Court.  At the hearing on the emergency motion, the only issue that
will be heard by the Bankruptcy Court will be whether an Event of Default has
occurred and has not been cured, and, if an Event of Default has occurred and
has not been cured, the Administrative Agent and the Lenders will be entitled to
continue to exercise all of their rights and remedies without the necessity of
any further notice or order.  Furthermore, nothing herein shall be
construed to impose or re-impose any stay or injunction of any kind against the
Administrative Agent or the Lenders.

     

    (c)           If
an Event of Default has occurred and is continuing, the Administrative Agent
shall have for the benefit the Secured Parties, in addition to all other rights
of the Administrative Agent and the Lenders, the rights and remedies of a
secured party under the UCC.

     

    Section
10.03 Application
of Funds.  All proceeds realized from the liquidation or other
Disposition of Collateral or otherwise received after maturity of the Notes,
whether by acceleration of the Indebtedness as provided for in Section 10.02 or
otherwise, shall be applied by the Administrative Agent, subject in all cases to
the Carve-Out, in the following order:

     

    (a)           first, to payment or
reimbursement of that portion of the Indebtedness constituting fees, expenses,
indemnities and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article V) payable
to the Administrative Agent in its capacity as such;

     

    (b)           second, to payment or
reimbursement of that portion of the Indebtedness constituting fees, indemnities
and other amounts (other than principal, interest and fees, charges and
disbursements of counsel to the respective Lenders) payable to the Lenders
(including amounts payable under Article V), ratably among them in proportion to
the respective amounts described in this Section 10.03(b) payable to
them;

     

    (c)           third, to payment of that
portion of the Indebtedness constituting accrued and unpaid interest on the
Loans, ratably among the Lenders;

     

    (d)           fourth, to the payment of
that portion of the Indebtedness constituting principal outstanding on the Loans
and Indebtedness referred to in Clause (b) of the definition of “Indebtedness”
in Section 1.02 owing to a Lender or an Affiliate of a Lender, ratably among
them in proportion to the respective amounts described in this Section 10.03(d)
payable to them;

     

    (e)           fifth, to the payment of any
other Indebtedness, including, without limitation, to serve as cash collateral
to be held by the Administrative Agent to secure the LC Exposure, ratably in
proportion to the respective amounts described in this Section 10.03(e);
and

     

    (f)           sixth, the balance, if any,
after all of the Indebtedness have been indefeasibly paid in full, as required
by order of the Bankruptcy Court (including, without limitation, to the
Pre-Petition Secured Parties under the Pre-Petition Loan Documents for
application to the Pre-Petition Secured Indebtedness thereunder in accordance
with the terms thereof).

     

    The Loan
Parties shall remain liable for any deficiency.

    
      
         

      

      
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    Section
10.04 Certain
Bankruptcy Matters.

     

    (a)           Except
to the extent provided otherwise in the Interim Order or the Final Order, as
applicable, the Borrower hereby agrees that the Indebtedness shall (i)
constitute super-priority allowed administrative expense claims in the
Bankruptcy Cases having priority pursuant to Section 364(c)(1) of the Bankruptcy
Code over all administrative expense claims and unsecured claims against the
Borrower and HPPC now existing or hereafter arising, of any kind or nature
whatsoever, including, without limitation, all administrative expense claims of
the kind specified in Sections 503(b) and 507(b) of the Bankruptcy Code and all
super-priority administrative expense claims granted to any other Person,
subject, as to priority, only to the Carve-Out and excluding the Avoidance
Actions and any proceeds or property recovered in respect of Avoidance Actions,
the establishment of which super-priority shall have been approved and
authorized by the Bankruptcy Court and (ii) be secured pursuant to Sections
364(c)(2), (c)(3) and (d)(1) of the Bankruptcy Code and, to the extent provided
in any of the Financing Orders, shall not be subject to any Claims against the
Collateral pursuant to Section 506(c) of the Bankruptcy Code.

     

    (b)           The
Administrative Agent’s Liens and the administrative expense claim super-priority
granted pursuant to clause (a) above have been independently granted by the Loan
Documents, and may be independently granted by other Loan Documents heretofore
or hereafter entered into. The Administrative Agent’s Liens and the
administrative expense claim super-priority granted pursuant to clause (a)
above, this Agreement, the Interim Order (if applicable), the Final Order and
the other Loan Documents supplement each other, and the grants, priorities,
rights and remedies of the Lenders and the Administrative Agent hereunder and
thereunder are cumulative. In the event of a direct conflict between the Interim
Order (if applicable) or the Final Order, on the one hand, and any other Loan
Document, on the other hand, the Interim Order or the Final Order, as the case
may be, shall control.

     

    (c)           Notwithstanding
anything to the contrary contained herein or elsewhere:

     

    (i)           The
Administrative Agent’s Liens on Collateral of the Loan Parties shall be deemed
valid and perfected by entry of the Interim Order and the Final Order, as the
case may be, which entry of the Interim Order (to the extent necessary) shall
have occurred on or prior to the Effective Date.  The Administrative
Agent and the Lenders shall not be required to prepare, file, register or
publish any financing statements, mortgages, hypothecs, account control
agreements, notices of Lien or similar instruments in any jurisdiction or filing
or registration office, or to take possession of any Collateral or to take any
other action, other than to fund at least a portion of the Loans, in order to
validate, render enforceable or perfect the Liens on Collateral granted by or
pursuant to this Agreement, the Interim Order (if applicable), the Final Order
or any other Loan Document.  If the Administrative Agent or the
Majority Lenders shall, in its or their sole discretion, from time to time elect
to prepare, file, register or publish any such financing statements, mortgages,
hypothecs, account control agreements, notices of Lien or similar instruments,
take possession of any Collateral, or take any other action to validate, render
enforceable or perfect all or any portion of the Administrative Agent’s Liens on
Collateral, (A) all such documents and actions shall be deemed to have been
filed, registered, published or recorded or taken at the time and on the date
that, to the extent that (x) an Interim Order is entered, the date in which such
Interim Order is entered, and (y) no Interim Order is entered, the date in which
the Final Order is entered, and (B) shall not negate or impair the validity or
effectiveness of this Section 10.04(c)(i) or of the perfection of any other
Liens in favor of the Administrative Agent, for the benefit of the Lenders, on
the Collateral.

    
      
         

      

      
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    (ii)           Except
as otherwise previously agreed to in writing by the Administrative Agent, the
Liens, lien priorities, super-priority administrative expense Claims and other
rights and remedies granted to the Administrative Agent and the Lenders pursuant
to this Agreement, the Interim Order (if applicable), the Final Order or the
other Loan Documents (specifically including, but not limited to, the existence,
perfection, enforceability and priority of the Liens provided for herein and
therein, and the administrative expense claim super-priority provided herein and
therein) shall not be modified, altered or impaired in any manner by any other
financing or extension of credit or incurrence of debt by the Borrower (pursuant
to Section 364 of the Bankruptcy Code or otherwise), or by dismissal or
conversion of the Bankruptcy Cases, or by any other act or omission
whatsoever.

     

    Without
limiting the generality of the foregoing, notwithstanding any such order,
financing, extension, incurrence, dismissal, conversion, act or
omission:

     

    (A)           except
for the Carve-Out and to the extent provided in any of the Financing Orders, no
costs or expenses of administration which have been or may be incurred in the
Bankruptcy Cases or any conversion of the same or in any other proceedings
related thereto, and no priority Claims, are or will be prior to or on a parity
with any Claim of any Lender or the Administrative Agent against the Borrower in
respect of any Indebtedness;

     

    (B)           other
than as provided in the Financing Orders or the Loan Documents, the
Administrative Agent’s Liens on the Collateral shall constitute valid,
enforceable and perfected first priority Liens, and shall be prior to all other
Liens, now existing or hereafter arising, in favor of any other creditor or
other Person; and

     

    (C)           the
Administrative Agent’s Liens on the Collateral shall continue to be valid,
enforceable and perfected without the need for the Administrative Agent or any
Lender to prepare, file, register or publish any financing statements,
mortgages, hypothecs, account control agreements, notices of Lien or similar
instruments or to otherwise perfect the Administrative Agent’s Liens under
applicable non-bankruptcy law.

     

    ARTICLE
XI

    The
Agents

     

    Section
11.01 Appointment;
Powers.  Each of the Lenders and the Issuing Bank hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto.

    
      
         

      

      
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    Section
11.02 Duties and
Obligations of Administrative Agent.  The Administrative Agent
shall not have any duties or obligations except those expressly set forth in the
Loan Documents.  Without limiting the generality of the foregoing, (a)
the Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing (the use
of the term “agent” herein and in the other Loan Documents with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law;
rather, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties), (b) the Administrative Agent shall have no duty to take
any discretionary action or exercise any discretionary powers, except as
provided in Section 11.03, and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the Person
serving as Administrative Agent or any of its Affiliates in any
capacity.  The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or under any other Loan Document or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, (v) the satisfaction of any condition set forth in Article VI or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent or as to those conditions precedent
expressly required to be to the Administrative Agent’s satisfaction, (vi) the
existence, value, perfection or priority of any collateral security or the
financial or other condition of the Borrower and its Subsidiaries or any other
obligor or guarantor, or (vii) any failure by the Borrower or any other Person
(other than itself) to perform any of its obligations hereunder or under any
other Loan Document or the performance or observance of any covenants,
agreements or other terms or conditions set forth herein or
therein.  For purposes of determining compliance with the conditions
specified in Article VI, each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
written notice from such Lender prior to the proposed closing date specifying
its objection thereto.

     

    Section
11.03 Action by
Administrative Agent.  The Administrative Agent shall have no
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby or by the
other Loan Documents that the Administrative Agent is required to exercise in
writing as directed by the Majority Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 13.02) and in all cases the Administrative Agent shall be fully
justified in failing or refusing to act hereunder or under any other Loan
Documents unless it shall (a) receive written instructions from the Majority
Lenders or the Lenders, as applicable, (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
13.02) specifying the action to be taken and (b) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such
action.  The instructions as aforesaid and any action taken or failure
to act pursuant thereto by the Administrative Agent shall be binding on all of
the Lenders.  If a Default has occurred and is continuing, then the
Administrative Agent shall take such action with respect to such Default as
shall be directed by the requisite Lenders in the written instructions (with
indemnities) described in this Section 11.03, provided that, unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interests of the Lenders.  In no event, however, shall the
Administrative Agent be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement, the Loan Documents or applicable law.  If a Default has
occurred and is continuing, no Agent other than the Administrative Agent shall
have any obligation to perform any act in respect thereof.  The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Majority Lenders or the Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 13.02), and otherwise the Administrative
Agent shall not be liable for any action taken or not taken by it hereunder or
under any other Loan Document or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith
INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or
willful misconduct.

    
      
         

      

      
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    Section
11.04   Reliance by Administrative
Agent.  The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper
Person.  The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon and each of the
Borrower, the Lenders and the Issuing Bank hereby waives the right to dispute
the Administrative Agent’s record of such statement, except in the case of gross
negligence or willful misconduct by the Administrative Agent.  The
Administrative Agent may consult with legal counsel, independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.  The Administrative Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof permitted hereunder shall
have been filed with the Administrative Agent.

     

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

     

    Section
11.06   Resignation or Removal of
Administrative Agent.  Subject to the appointment and
acceptance of a successor Administrative Agent as provided in this
Section 11.06, the Administrative Agent may resign at any time by notifying
the Lenders in writing, the Issuing Bank and the Borrower, and the
Administrative Agent may be removed at any time with or without cause upon
written notification by the Majority Lenders.  Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent.  If no such successor shall have been
so appointed by the Majority Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of
its resignation or after receiving notification of removal of the Administrative
Agent, then the retiring or to be removed Administrative Agent, as the case may
be, may, on behalf of the Lenders and the Issuing Bank, appoint a successor
Administrative Agent.  Upon the acceptance of its appointment as
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 or removed Administrative Agent, and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such
successor.  After the Administrative Agent’s resignation or removal
hereunder, the provisions of this Article XI and Section 13.03 shall continue in
effect for the benefit of such retiring or removed 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 Administrative
Agent.

    
      
         

      

      
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    Section
11.07 Agents as
Lenders.  Each Person serving as an Agent hereunder, if such
Person is also a Lender, 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 Person and its Affiliates, subject to applicable law, may
accept deposits from, lend money to and generally engage in any kind of business
with the Borrower or any Subsidiary or other Affiliate thereof as if it were not
an Agent hereunder.

     

    Section
11.08 No
Reliance.

     

    (a)           Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent, any other Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and each other Loan Document
to which it is a party.  Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent, any other
Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document, any related agreement or any document furnished hereunder or
thereunder.  The Agents shall not be required to keep themselves
informed as to the performance or observance by the Borrower or any of its
Subsidiaries of this Agreement, the Loan Documents or any other document
referred to or provided for herein or to inspect the Properties or books of the
Borrower or its Subsidiaries.  Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent or the Arranger shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower (or any
of its Affiliates) which may come into the possession of such Agent or any of
their respective Affiliates.  In this regard, each Lender acknowledges
that Munsch Hardt Kopf & Harr, P.C. is acting in this transaction as special
counsel to the Administrative Agent only, except to the extent otherwise
expressly stated in any legal opinion or any Loan Document.  Each
other party hereto will consult with its own legal counsel to the extent that it
deems necessary in connection with the Loan Documents and the matters
contemplated therein.

     

    (b)           The
Lenders acknowledge that the Administrative Agent and the Arranger are acting
solely in administrative capacities with respect to the structuring and
syndication of this facility and have no duties, responsibilities or liabilities
under this Agreement and the other Loan Documents other than their
administrative duties, responsibilities and liabilities specifically as set
forth in the Loan Documents and in their capacity as Lenders
hereunder.  In structuring, arranging or syndicating the Loans, each
Lender acknowledges that the Administrative Agent and/or Arranger may be or may
have been an Agent or Lender under the Notes, the Pre-Petition Secured
Indebtedness, other loans or other securities and waives any existing or future
conflicts of interest associated with the their role in such other debt
instruments.  If in its administration of the Loans or any other debt
instrument, the Administrative Agent determines (or is given written notice by
any Lender that a conflict exists and the Administrative Agent determines that
such a conflict actually exists), then it shall eliminate such conflict within
ninety (90) days or resign pursuant to Section 11.06 and shall have no liability
for action taken or not taken while such conflict existed.

    
      
         

      

      
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    Section
11.09 Administrative
Agent May File Proofs of Claim.

     

    The
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

     

    (a)           to
file and prove an administrative claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Indebtedness
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the Claims of the Lenders and the Administrative
Agent (including any Claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and in-house and outside-retained counsel and all other
amounts due the Lenders and the Administrative Agent under Sections 3.05 and
13.03) allowed in the Bankruptcy Cases or other applicable proceeding;
and

     

    (b)           to
collect and receive any monies or other Property payable or deliverable on any
such Claims and to distribute the same;

     

    and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 3.05 and 13.03.

     

    Section
11.10 Authority of
Administrative Agent to Release Collateral and Liens.  Each
Lender and the Issuing Bank hereby irrevocably authorizes the Administrative
Agent, at the Administrative Agent’s option and in its discretion, to release
any Lien on any Collateral granted to or held by the Administrative Agent under
any Loan Document (a) upon termination of the Aggregate Commitments and payment
in full of all of the Indebtedness (other than contingent indemnification
obligations), (b) that is sold or to be sold as part of or in connection with
any Disposition permitted hereunder or under any other Loan Document, (c) to the
extent that it involves a release of Liens on Collateral that is less than all
or substantially all of the Collateral, solely to the extent previously
consented or directed by the Majority Lenders, or (d) to the extent that it
involves a release of Liens on all or substantially all of the Collateral,
solely in accordance with, and subject to, Section 13.02.  Each Lender
and the Issuing Bank hereby authorizes the Administrative Agent to execute and
deliver to the Borrower, at the Borrower’s sole cost and expense, any and all
releases of Liens, termination statements, assignments or other documents
reasonably requested by the Borrower in connection with any Disposition of
Property to the extent such Disposition is permitted by the terms of Section
9.12 or is otherwise authorized by the terms of the Loan Documents.

     

    Section
11.11 The Arranger and
other Agents.  The Arranger and all other Agents, other than
the Administrative Agent, shall have no duties, responsibilities or liabilities
under this Agreement and the other Loan Documents other than (a) as specifically
set forth in the Loan Documents and (b) in their capacity as Lenders
hereunder.

    
      
         

      

      
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    ARTICLE
XII

    Releases

     

    Section
12.01 Release.

     

    (a)           On
the Effective Date, each of the Debtor Releasing Parties fully, knowingly,
unconditionally, completely and irrevocably releases, acquits, and forever
discharges each of the Released Parties, to the fullest extent permitted by
applicable state and federal law, from (or with respect to):

     

    (i)           any
and all acts and omissions of the Released Parties, whether certain or
indefinite, known or unknown, which have existed, or may have existed or do
exist, whether at law, in equity or otherwise, on or prior to the Effective
Date, and

     

    (ii)           any
and all Claims of the Debtor Releasing Parties, whether certain or indefinite,
known or unknown, which have existed, or may have existed or do exist, whether
at law, in equity or otherwise, on or prior to the Effective Date, against any
of the Released Parties,

     

    in each case under clauses
(i) and (ii) immediately above, in any manner whatsoever relating to,
created by, arising out of, concerning or in connection with (y) the
Pre-Petition First Lien Credit Agreement, the Pre-Petition Second Lien Credit
Agreement, and the other respective Pre-Petition Loan Documents, as the case may
be, and each of the transactions relating thereto including, without limitation,
the negotiations of any and all disputes thereunder and the negotiation,
execution and delivery of this Article XII, or (z) any breach, default,
violation, event of default, action or omission, whether actual or alleged, with
respect to any agreement (whether written or oral), document or instrument,
right or obligation referred to in clause (y) immediately above (including all
related Claims, collectively, the "Released
Matters").

     

    (b)           Each
of the Debtor Releasing Parties acknowledges that it understands that the
releases contained in this Section 12.01 are an essential and material
requirement of this Agreement and the Administrative Agent and the Lenders would
not have entered into this Agreement absent the releases contained
herein.  Each of the Debtor Releasing Parties represents and warrants
that (i) it has the requisite authority to release and forever discharge the
Released Matters, (ii) it has not nor purported to sell, convey, assign or
otherwise transfer any right, title or interest in any Released Matters (or any
portion thereof) to any other Person and it is the sole owner of the Released
Matters free and clear of any and all liens, encumbrances, rights of first
refusal, options, or buy/sell agreements, (iii) the foregoing releases
constitute a full, complete and final release of the Released Matters, (iv) no
other Person claims or has any right, title or interest in any of the Released
Matters, and (v) it has had the opportunity to consult with independent counsel
regarding the legal effects of the releases contained in this Section 12.01, and
that it is executing such release of its own free will and accord, for the
purposes and considerations set forth herein.  Each of the Debtor
Releasing Parties hereby acknowledges that the releases provided for in this
Article XII are binding and enforceable against it in accordance with its
terms.  Each of the Debtor Releasing Parties acknowledges that it may
hereafter discover facts different from or in addition to those which it now
knows or believes to be true with respect to the Released Matters, and each of
the Debtor Releasing Parties assumes the risk of such later discovered facts,
even if they would have altered such Debtor Releasing Party's desire to enter
into this Agreement.

    
      
         

      

      
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    (c)           Each
of the Debtor Releasing Parties agrees that the releases provided for herein are
to be construed as the broadest type of general releases as possible and shall
have the benefits of the doctrines of res judicata and collateral estoppel to
the fullest extent allowed by applicable law.  In addition, each of
the Debtor Releasing Parties respectively agrees that (i) this Agreement will
constitute a complete waiver of Claims regarding the Released Matters,
regardless of their nature or value and (ii) the releases provided for herein
shall remain in effect in all respects and shall not be subject to termination
or rescission, notwithstanding the existence or discovery of such different or
additional facts.

     

    (d)           Each
of the Debtor Releasing Parties further agrees that any provision in this
Agreement to the contrary notwithstanding, in the event any Debtor Releasing
Party asserts or brings any Claim against any of the Released Parties with
respect to the Released Matters, there shall be expressly excluded from such
Claim any and all allegations or Claims for punitive and/or exemplary damages,
damages attributable to lost profits or opportunity, damages attributable to
mental anguish, and damages attributable to pain and suffering, and each Debtor
Releasing Party does hereby irrevocably waives and releases all such damages
with respect to any and all Claims of any nature whatsoever which may arise at
any time against any of the Released Parties with respect to the Released
Matters.  This Section 12.01(d) is in addition to, and shall not in
any way limit, any other release, covenant not to sue, or waiver by any Debtor
Releasing Party in favor of any Released Party or any one of them contained in
this Agreement or in any other agreement, document, order or
instrument.

     

    (e)           Notwithstanding
anything to the contrary contained herein, solely for the period from July 21,
2009 through October 19, 2009, inclusive, the Creditors’ Committee shall not be
deemed to be part of the Debtor Releasing Parties and shall be permitted, in
accordance with the Cash Collateral Order, to pursue its rights and interests to
challenge the amount, validity, enforceability, priority or extent of the
Pre-Petition Secured Indebtedness or any of the Liens of the Pre-Petition
Secured Parties related thereto or otherwise assert any claims or causes of
action against the Pre-Petition Secured Parties on behalf of the estates of the
Borrower or HPPC.  After October 19, 2009, the Creditors’ Committee
shall automatically be deemed, without the consent, notice, order or
authorization of, to or from any Person, to be a Debtor Releasing Party and all
of its rights and interests described in this Section 12.01(e) shall
automatically be deemed, without the consent, notice, order or authorization of,
to or from any Person, to be part of the Released Matters.

     

    (f)           Notwithstanding
any other provision of this Agreement or any other agreement by and between any
of the Loan Parties and any of the Pre-Petition Secured Parties, the period of
time in which the Loan Parties may commence an action asserting that the
additional Prepetition Collateral (as such term is defined in the Cash
Collateral Order) constitutes avoidable transfers under Section 547 of the
Bankruptcy Code shall be extended to, and including, October 19,
2009.

     

    Section
12.02 Covenant Not to
Sue.  Each of the Debtor Releasing Parties agrees and covenants
that it shall not in the future assert, file, or prosecute any Claim that is
released by Section 12.01 against any of the Released Parties to recover any
damages or injunctive relief, whether on its own behalf or on behalf of a Person
not a signatory to this Agreement.  If a Debtor Releasing Party or its
successor breaches this covenant not to sue, the Released Parties sued by such
Debtor Releasing Party or its successor shall be entitled to recover from that
Debtor Releasing Party or its successor all attorneys' fees and costs incurred
by it as a result of such breach of this covenant not to sue.  A
violation or alleged violation of a term of the releases contained in Section
12.01 (e.g., a
subsequent dispute among any of the Debtor Releasing Parties and any Released
Party) shall not affect the validity and enforceability of the releases or the
covenant not to sue granted herein in favor of the Released
Parties.

    
      
         

      

      
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    Section
12.03 No
Admission.  Nothing in this Agreement or any negotiations in
connection herewith shall constitute or be deemed or claimed to be evidence of
an admission by any Released Party of any liability, violation of law, or
wrongdoing whatsoever, or the truth or untruth, or merit or lack of merit, of
any Claim or defense of any Person.  Neither this Article XII nor any
negotiations in connection herewith may be used in any proceeding against any
Released Party for any purpose whatsoever except in respect to effectuation and
enforcement of this Article XII.

     

    ARTICLE
XIII

    Miscellaneous

     

    Section
13.01 Notices.

     

    (a)           Except
in the case of notices and other communications expressly permitted to be given
by telephone (and subject to Section 13.01(b)), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:

     

    (i)    
       if to the Borrower, to it at 4110
Copper Ridge, Suite 110, Traverse City, MI 49684, Attention: Chief Financial
Officer;

     

    (ii)           if
to the Administrative Agent, to it at 787 Seventh Avenue, New York, New York
10019, Attention:  Amy Kirschner, Managing Director (Telecopy No.
(212) 841-2868), with a copy to BNP Paribas, 1200 Smith Street, Suite 3100,
Houston, Texas 77002, Attention: Betsy Jocher (Telecopy No. (713)
659-6915);

     

    (iii)          if
to the Issuing Bank, to it at 787 Seventh Avenue, New York, New York 10019,
Attention:  Amy Kirschner, Managing Director (Telecopy No. (212)
841-2868), with a copy to BNP Paribas, 1200 Smith Street, Suite 3100, Houston,
Texas 77002, Attention:  Betsy Jocher (Telecopy No. (713) 659-6915);
and

     

    (iv)          if
to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

     

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

     

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

     

    
      
         

      

      
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    Section
13.02 Waivers;
Amendments.

     

    (a)           No
failure on the part of the Administrative Agent, any other Agent, the Issuing
Bank or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege, or any abandonment or
discontinuance of steps to enforce such right, power or privilege, under any of
the Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under any of the Loan
Documents preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  The rights and remedies of the
Administrative Agent, any other Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise
have.  No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by Section 13.02(b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given.  Without limiting the generality of
the foregoing, the making of a Loan or issuance, amendment, renewal or extension
of a Letter of Credit, as applicable, shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any other Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.

     

    (b)           Neither
this Agreement nor any provision hereof nor any Security Instrument nor any
provision thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Majority
Lenders or by the Borrower and the Administrative Agent with the consent of the
Majority Lenders; provided, that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, or reduce any other Indebtedness hereunder or under any other
Loan Document, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment or prepayment of the principal
amount of any Loan or LC Disbursement, any interest thereon, or any fees payable
hereunder, or any other Indebtedness hereunder or under any other Loan Document,
or reduce the amount of, waive or excuse any such payment, or postpone or extend
the Availability Period or the Termination Date without the written consent of
each Lender affected thereby, (iv) change Section 4.01(b) or Section 4.01(c) in
a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) waive or amend Section 3.04(c),
Section 6.01, Section 8.15, Section 10.03 or Section 13.14 or change the
definition of the terms “Domestic Subsidiary”, “Foreign Subsidiary”, or
“Subsidiary”, without the written consent of each Lender, (vi) release any
Guarantor (except as set forth in the Guaranty Agreement), release Liens on all
or substantially all of the Collateral (other than as provided in Section
11.10), without the written consent of each Lender, or (vii) change any of the
provisions of this Section 13.02(b) or the definition of “Majority Lenders” or
any other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or under any other Loan
Documents or make any determination or grant any consent hereunder or any other
Loan Documents, without the written consent of each Lender; provided, further, that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any other Agent, or the Issuing Bank hereunder or under
any other Loan Document without the prior written consent of the Administrative
Agent, such other Agent, or the Issuing Bank, as the case may
be.  Notwithstanding the foregoing, any supplement to Schedule 7.14
(Subsidiaries) shall be effective simply by delivering to the Administrative
Agent a supplemental schedule clearly marked as such and, upon receipt, the
Administrative Agent will promptly deliver a copy thereof to the
Lenders.

    
      
         

      

      
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    Section
13.03 Expenses,
Indemnity; Damage Waiver.

     

    (a)           The
Borrower shall pay (i) all reasonable out-of-pocket fees and expenses incurred
by the Administrative Agent and its Affiliates, including, without limitation,
the reasonable fees, charges and disbursements of counsel for the Administrative
Agent, the reasonable travel, photocopy, mailing, courier, telephone and other
similar expenses, including all Intralinks expenses, and the
cost of environmental audits and surveys and appraisals, in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the Administrative Agent as
to the rights and duties of the Administrative Agent and the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any
amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable costs, expenses, Taxes,
assessments and other charges incurred by any Agent or any Lender in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out-of-pocket fees and expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit, as applicable, or any demand for payment
thereunder, (iv) all fees and expenses incurred by any Agent, the Issuing Bank
or any Lender, including the reasonable fees, charges and disbursements of any
in-house and outside-retained counsel for any Agent, the Issuing Bank or any
Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement or any other Loan Document, including its rights
under this Section 13.03, or in connection with the Loans made or Letters of
Credit issued, amended, renewed or extended hereunder, as applicable, including,
without limitation, all such expenses incurred during any workout, restructuring
or negotiations in respect of such Loans or Letters of Credit and (v) all
reasonable fees and expenses incurred by the Pre-Petition First Lien
Administrative Agent, the Pre-Petition Second Lien Administrative Agent, and
each Pre-Petition First Lien Lender, including the reasonable fees, charges and
disbursements of their respective in-house and outside-retained counsels, in
connection with the Bankruptcy Cases.  The Borrower’s obligation to
pay all of the payment obligations under this Section 13.03(a) includes, without
limitation, any such payment obligations that accrue after any conversion of the
Bankruptcy Cases to proceedings administered under Chapter 7 of the Bankruptcy
Code.

    
      
         

      

      
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    (b)           THE
BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER, THE ISSUING BANK AND EACH
LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON
BEING CALLED AN “INDEMNITEE”) AGAINST,
AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES, CHARGES AND
DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST
ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE
EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE
PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE OF THE
BORROWER OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT,
INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iii) ANY
INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF
THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY
INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv)
ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING,
WITHOUT LIMITATION, (A) ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR
PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH
SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, OR
(B) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING, THE
NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS
PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS,
(vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES BY THE
BORROWER AND ITS SUBSIDIARIES, (vii) ANY ASSERTION THAT THE LENDERS WERE NOT
ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS,
(viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY OR ANY
OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION,
STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF
DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS
SUBSTANCES ON ANY OF THEIR PROPERTIES, (ix) THE BREACH OR NON-COMPLIANCE BY THE
BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER
OR ANY SUBSIDIARY, (x) THE PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF
ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH,
THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL,
GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR
ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR
ANY SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS
MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF
ITS SUBSIDIARIES, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE
BORROWER OR ANY OF ITS SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH
OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL
OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED, THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNITEE.

    
      
         

      

      
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    (c)           To
the extent that the Borrower fails to pay any amount required to be paid by it
to any Agent, the Arranger or the Issuing Bank under Section 13.03(a) or (b),
each Lender severally agrees to pay to such Agent, the Arranger or the Issuing
Bank, as the case may be, such Lender’s pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided, that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Agent, the
Arranger or the Issuing Bank in its capacity as such.

     

    (d)           To
the extent permitted by applicable law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of
the proceeds thereof.

     

    (e)           All
amounts due under this Section 13.03 shall be payable promptly after written
demand therefor, but in no event later than ten (10) Business Days after receipt
of such written demand.

     

    Section
13.04 Successors and
Assigns.

     

    (a)           The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that (i) no Loan Party may assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of the Administrative
Agent and each Lender (and any attempted assignment or transfer by any Loan
Party without such consents shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section 13.04.  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in Section 13.04(c)) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

     

     

    (b)           (i)           Subject
to the conditions set forth in Section 13.04(b)(ii), any Lender may assign to
one or more assignees (each, an “Assignee”) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:

     

    (A)           the
Borrower, provided that no consent of the Borrower shall be required if such
assignment is to a Lender, an Affiliate of a Lender, an Approved Fund, a Person
that was either a Pre-Petition First Lien Lender or a Pre-Petition Second Lien
Lender or an Affiliate thereof as of the Effective Date, or, if an Event of
Default has occurred and is continuing, any other assignee; and

     

    
      
         

      

      
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    (B)           the
Administrative Agent, provided that no consent of the Administrative Agent shall
be required for an assignment to an Assignee that is a Lender or the Affiliate
of such assignor immediately prior to giving effect to such
assignment.

     

    (ii)           Assignments
shall be subject to the following additional conditions:

     

    (A)           except
in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans, the amount of the Commitment or Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless the Administrative Agent otherwise
consents;

     

    (B)           each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement with respect
to the Loans or the Commitment assigned;

     

    (C)           any
assignment of a Commitment must be approved by the Administrative Agent unless
the Person that is the proposed Assignee is itself a Lender or an Affiliate of a
Lender;

     

    (D)           the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500;

     

    (E)           the
Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire; and

     

    (F)           the
Assignee shall not be a natural person, the Borrower, or any of the Borrower’s
Affiliates or Subsidiaries.

     

    (iii)           Subject
to Section 13.04(b)(iv) and the acceptance and recording thereof, from and after
the effective date specified in each Assignment and Assumption, the Assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 5.01, Section 5.02, Section 5.03 and
Section 13.03).  Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this Section 13.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
13.04(c).

     

    (iv)           The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the 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, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the
Borrower, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.  In connection with any changes
to the Register, if necessary, the Administrative Agent will reflect the
revisions on Annex I and forward a copy of such revised Annex I to the Borrower,
the Issuing Bank and each Lender.

    
      
         

      

      
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    (v)           Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an Assignee, the Assignee’s completed Administrative
Questionnaire and, if required hereunder, applicable tax forms (unless the
Assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in Section 13.04(b), any written consent to such assignment
required by Section 13.04(b), and the satisfaction of the conditions set forth
in Section 13.04(b)(ii)(F), the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.  No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
Section 13.04(b).

     

    (c)           (i)           Any
Lender may, without the consent of the Borrower, the Administrative Agent or the
Issuing Bank, sell participations to one or more Lenders, Affiliates of Lenders,
Approved Funds or a Person that was either a Pre-Petition First Lien Lender or a
Pre-Petition Second Lien Lender as of the Effective Date (and, with the prior
consent of the Administrative Agent, any Person that satisfies the conditions
under Section 13.04(b)(ii)(F)) (each, a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it); provided, that (A)
such Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative Agent,
the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided, that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the proviso to Section 13.02(b) that affects such
Participant.  In addition such agreement must provide that the
Participant be bound by the provisions of Section 13.03.  Subject to
Section 13.04(c)(ii), the Borrower agrees that each Participant shall be
entitled to the benefits of Section 5.01, Section 5.02 and Section 5.03 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 13.04(b).  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 13.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 4.01(c)
as though it were a Lender.

     

    (ii)           A
Participant shall not be entitled to receive any greater payment under Section
5.01 or Section 5.03 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 5.03 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
5.03(e) as though it were a Lender.

    
      
         

      

      
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    (d)           Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Note) to secure
obligations of such Lender, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank or any other funding
source of such Lender, and this Section 13.04(d) shall not apply to any such
pledge or assignment of a security interest; provided, that no
such pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

     

    (e)           Notwithstanding
any other provisions of this Section 13.04, no transfer or assignment of the
interests or obligations of any Lender or any grant of participations therein
shall be permitted if such transfer, assignment or grant would require the
Borrower and the Guarantors to file a registration statement with the SEC or to
qualify the Loans under the “Blue Sky” laws of any state.

     

    Section
13.05 Survival;
Revival; Reinstatement.

     

    (a)           All
covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance, amendment, renewal or extension of any Letters of Credit, as
applicable, regardless of any investigation made by any such other party or on
its behalf and notwithstanding that the Administrative Agent, any other Agent,
the Issuing Bank or any Lender may have had notice or knowledge of any Default
or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Aggregate Commitments have not expired or
terminated.  The provisions of Section 5.01, Section 5.02, Section
5.03 and Section 13.03, Article XI and Article XII 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 Aggregate Commitments or the termination of
this Agreement, any other Loan Document or any provision hereof or
thereof.

     

    (b)           To
the extent that any payments on the Indebtedness or proceeds of any Collateral
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, debtor in possession, receiver or
other Person under any bankruptcy law, common law or equitable cause, then to
such extent, the Indebtedness so satisfied shall be revived and continue as if
such payment or proceeds had not been received and the Administrative Agent’s
and the Lenders’ Liens, security interests, rights, powers and remedies under
this Agreement and each Loan Document shall continue in full force and
effect.  In such event, each Loan Document shall be automatically
reinstated and the Borrower shall take such action as may be reasonably
requested by the Administrative Agent and the Lenders to effect such
reinstatement.

     

    Section
13.06 Counterparts;
Integration; Effectiveness.

     

    (a)           This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.

    
      
         

      

      
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    (b)           This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

     

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

     

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

     

    Section
13.08   Right of
Setoff.  If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations (of whatsoever kind, including,
without limitations obligations under Swap Agreements) at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower or any
Subsidiary against any of and all the obligations of the Borrower or any
Subsidiary owed to such Lender now or hereafter existing under this Agreement or
any other Loan Document, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations may be unmatured.  The rights of each Lender under
this Section 13.08 are in addition to other rights and remedies (including other
rights of setoff) which such Lender or its Affiliates may have.

     

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

     

    (a)           THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES
FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE
INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
LOCATED.  CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL
NOT APPLY TO THIS AGREEMENT OR THE NOTES.

    
      
         

      

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

     

    (c)           EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 13.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO
SECTION 13.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL
AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.

     

    (d)           EACH
PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii)
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR
AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 13.09.

     

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

    
      
         

      

      
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    Section
13.11 Confidentiality.

     

    (a)           Each
of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement
or any other Loan Document, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement to comply with the
provisions of this Section, to any actual or prospective Transferee or any
direct or indirect counterparty to any Swap Agreement (or any professional
advisor to such counterparty), (g) with the consent of the Borrower, (h) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section 13.11 or (ii) becomes available to the Administrative
Agent, the Issuing Bank or any Lender on a non-confidential basis from a source
other than the Borrower, or (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender’s investment portfolio
in connection with ratings issued with respect to such Lender.  For
the purposes of this Section 13.11, “Information” means
all information received from the Borrower or any Subsidiary relating to the
Borrower or any Subsidiary and their businesses, other than any such information
that is available to the Administrative Agent, the Issuing Bank or any Lender on
a non-confidential basis prior to disclosure by the Borrower or a Subsidiary;
provided, that,
in the case of information received from the Borrower or any Subsidiary after
the date hereof, such information is clearly identified at the time of delivery
as confidential.  Any Person required to maintain the confidentiality
of Information as provided in this Section 13.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

     

    (b)           Except
to the extent permitted by the Financing Orders, each Loan Party hereby agrees
to maintain the confidentiality of the Fee Letter, including, without
limitation, the contents thereof in communications with third parties and
otherwise and to take all reasonable actions to prevent the unauthorized use or
disclosure of and to protect the confidentiality of such confidential
information.

    
      
         

      

      
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    Section
13.12 Interest Rate
Limitation.  It is the intention of the parties hereto that
each Lender shall conform strictly to usury laws applicable to
it.  Accordingly, if the transactions contemplated hereby would be
usurious as to any Lender under laws applicable to it (including the laws of the
United States of America and the State of Texas or any other jurisdiction whose
laws may be mandatorily applicable to such Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything to
the contrary in any of the Loan Documents or any agreement entered into in
connection with or as security for the Notes, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under law applicable
to any Lender that is contracted for, taken, reserved, charged or received by
such Lender under any of the Loan Documents or agreements or otherwise in
connection with the Notes shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be canceled automatically
and if theretofore paid shall be credited by such Lender on the principal amount
of the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower); and (ii) in the event that the maturity of the Notes is
accelerated by reason of an election of the holder thereof resulting from any
Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal amount of
the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower).  All sums paid or agreed to be paid to any
Lender for the use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to such Lender, be amortized, prorated,
allocated and spread throughout the stated term of the Loans evidenced by the
Notes until payment in full so that the rate or amount of interest on account of
any Loans hereunder does not exceed the maximum amount allowed by such
applicable law.  If at any time and from time to time (x) the amount
of interest payable to any Lender on any date shall be computed at the Highest
Lawful Rate applicable to such Lender pursuant to this Section 13.12 and
(y) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Lender would be less than the amount of
interest payable to such Lender computed at the Highest Lawful Rate applicable
to such Lender, then the amount of interest payable to such Lender in respect of
such subsequent interest computation period shall continue to be computed at the
Highest Lawful Rate applicable to such Lender until the total amount of interest
payable to such Lender shall equal the total amount of interest which would have
been payable to such Lender if the total amount of interest had been computed
without giving effect to this Section 13.12.  To the extent that
Chapter 303 of the Texas Finance Code is relevant for the purpose of determining
the Highest Lawful Rate applicable to a Lender, such Lender elects to determine
the applicable rate ceiling under such Chapter by the weekly ceiling from time
to time in effect.  Chapter 346 of the Texas Finance Code does not
apply to the Borrower’s obligations hereunder.

     

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

    Section
13.14 [Reserved]

     

    
      
        
        

      

      
        93

        
          

        

      

      
        
        

      

    

     

    Section
13.15 No Third Party
Beneficiaries.  This Agreement, the other Loan Documents, and
the agreement of the Lenders to make Loans and the Issuing Bank to issue, amend,
renew or extend Letters of Credit hereunder are solely for the benefit of the
Borrower, and no other Person (including, without limitation, any Subsidiary of
the Borrower, any obligor, contractor, subcontractor, supplier or materialman)
shall have any rights, Claims, remedies or privileges hereunder or under any
other Loan Document against the Administrative Agent, any other Agent, the
Issuing Bank or any Lender for any reason whatsoever; provided, however,
notwithstanding the foregoing, the parties hereto acknowledge and agree that (a)
the Pre-Petition First Lien Administrative Agent, the Pre-Petition Second Lien
Administrative Agent and each Pre-Petition First Lien Lender are intended third
party beneficiaries with respect to Section 6.01(a)(ii) and Section 13.03(a)(iv)
and, as a result, such sections are also intended to be for the benefit of, and
may be enforced by, such Persons and (b) each of the Released Parties not party
to this Agreement are intended third party beneficiaries with respect to Article
XII and, as a result, such article is also intended to be for the benefit of,
and may be enforced by, such Persons.  There are no other third party
beneficiaries.

     

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

     

    Section
13.17 No Advisory or
Fiduciary Responsibility.  In connection with all aspects of
each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Borrower and each other Loan Party acknowledges and agrees, and acknowledges
its Affiliates’ understanding, that: (a) (i) the arranging and other services
regarding this Agreement provided by the Administrative Agent, the Issuing Bank
and the Arranger are arm’s-length commercial transactions between the Borrower,
each other Loan Party and their respective Affiliates, on the one hand, and the
Administrative Agent, the Issuing Bank and the Arranger, on the other hand, (ii)
each of the Borrower and the other Loan Parties has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate,
and (iii) the Borrower and each other Loan Party is capable of evaluating, and
understands and accepts, the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents; (b) (i) the Administrative
Agent, the Issuing Bank and the Arranger each is and has been acting solely as a
principal and, except as expressly agreed in writing by the relevant parties,
has not been, is not, and will not be acting as an advisor, agent or fiduciary
for the Borrower, any other Loan Party or any of their respective Affiliates, or
any other Person and (ii) neither the Administrative Agent, the Issuing Bank nor
the Arranger has any obligation to the Borrower, any other Loan Party or any of
their respective Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; and (c) the Administrative Agent, the Issuing Bank and the Arranger
and their respective Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Borrower, the other Loan
Parties and their respective Affiliates, and neither the Administrative Agent,
the Issuing Bank nor the Arranger has any obligation to disclose any of such
interests to the Borrower, any other Loan Party or any of their respective
Affiliates. To the fullest extent permitted by law, each of the Borrower and the
other Loan Parties hereby waives and releases any Claims that it may have
against the Administrative Agent, the Issuing Bank and the Arranger with respect
to any breach or alleged breach of agency or fiduciary duty in connection with
any aspect of any transaction contemplated hereby.

    
      
         

      

      
        94

        
          

        

      

      
         

      

    

     

    Section
13.18  Time
is of the Essence.  The parties agree that time is of the
essence with respect to all provisions of this Agreement and the other Loan
Documents.

     

    Section
13.19  No
Personal Liability of Directors, Officers, Employees and
Stockholders.  No director, officer, employee, consultant,
advisor, contractor, incorporator or stockholder of the Borrower or any
Guarantor shall have any personal liability for any representations and
warranties of the Borrower or any Guarantor under this Agreement, or the other
Loan Documents or for any claim based on, or in respect of, or by reason of such
representations and warranties or their creation.

     

    [SIGNATURES
BEGIN NEXT PAGE]

     

    
      
         

      

      
        95

        
          

        

      

      
         

      

    

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

     

    
      	
              BORROWER:

            	
              AURORA OIL & GAS
      CORPORATION,

              a
      Debtor and Debtor-in-Possession,

              as
      Borrower

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Sanford Edlein

            
	 
      	 
      	
              Name:  Sanford
      Edlein

            
	 
      	 
      	
              Title:  Chief
      Restructuring Officer

            

    

    

    
      	
              GUARANTOR:

            	
              HUDSON
      PIPELINE & PROCESSING CO.,

              LLC., a Debtor and
      Debtor-in-Possession,

              as
      a Guarantor

            
	 
      	 
      
	 
      	
              By:

            	
              Aurora Oil & Gas
      Corporation,

            
	 
      	 
      	
              a
      Debtor and Debtor-in-Possession,

            
	 
      	 
      	
              as
      its sole manager

            
	 
      	 
      	 
      
	 
      	 
      	
              By:

            	
              /s/ Sanford Edlein

            
	 
      	 
      	 
      	
              Name:  Sanford
      Edlein

            
	 
      	 
      	 
      	
              Title:  Chief
      Restructuring Officer

            

    

     

    Signature
Page – Amended and Restated Credit Agreement – 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              ADMINISTRATIVE
      AGENT, ISSUING BANK AND LENDER:

            	
              BNP
PARIBAS,

              as
      Administrative Agent, Issuing Bank and Lender

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Claudia DeSimio

            
	 
      	
              Name:

            	
              Claudia DeSimio

            
	 
      	
              Title:

            	
              Vice President

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Amy Kirschner

            
	 
      	
              Name:

            	
              Amy Kirschner

            
	 
      	
              Title:

            	
              Managing
Director

            

    

     

    Signature
Page – Amended and Restated Credit Agreement – 2

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	
                OTHER
      LENDERS:

              	
                COMERICA
      BANK,

                as
      Lender

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Robin Kain

              
	 
      	
                Name:

              	
                Robin Kain

              
	 
      	
                Title:

              	
                Vice President

              
	 
      	 
      	 
      
	 
      	
                KEYBANK NATIONAL
      ASSOCIATION,

              
	 
      	
                as
      Lender

              
	 	 
	 
      	
                By:

              	
                /s/ Scott D. Randle

              
	 
      	
                Name:

              	
                Scott D. Randle

              
	 
      	
                Title:

              	
                Vice
President

              

      

    

     

    Signature
Page – Amended and Restated Credit Agreement – 3

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
I

     

    LIST OF
COMMITMENTS

     

    
      
        
          
            
              	
                      Name of Lender

                    	 	
                      Commitments

                    	 
	
                      BNP
      Paribas

                    	 	$	1,250,000.00	 
	
                      Comerica
      Bank

                    	 	$	875,000.00	 
	
                      KeyBank
      National Association

                    	 	$	875,000.00	 
	
                      TOTAL

                    	 	$	3,000,000.00	 

            

          

        

      

    

     

    Annex I -
1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

    FORM
OF NOTE

     

    
      
        	
                $[___________]

              	
                [__________],
      20[__]

              

      

    

     

    FOR VALUE
RECEIVED, Aurora Oil & Gas Corporation, a Utah corporation (the “Borrower”) hereby
promises to pay to the order of [________________] (the “Lender”), at the
principal office of BNP Paribas (the “Administrative
Agent”), the principal sum of [__________] Dollars ($[_____________]) (or
such lesser amount as shall equal the aggregate unpaid principal amount of the
Loans made by the Lender to the Borrower under the Credit Agreement, as
hereinafter defined), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Credit Agreement, and to pay interest on the unpaid principal amount of
each such Loan, at such office, in like money and funds, for the period
commencing on the date of such Loan until such Loan shall be paid in full, at
the rates per annum and on the dates provided in the Credit
Agreement.

     

    The date,
amount, Type, interest rate, Interest Period and maturity of each Loan made by
the Lender to the Borrower, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of this Note, may be endorsed by the Lender on the schedules attached hereto or
any continuation thereof or on any separate record maintained by the
Lender.  Failure to make any such notation or to attach a schedule
shall not affect any Lender’s or the Borrower’s rights or obligations in respect
of such Loans or affect the validity of such transfer by any Lender of this
Note.

     

    This Note
is one of the Notes referred to in the Debtor-In-Possession Credit Agreement,
dated as of October 6, 2009 (as the same may be amended, supplemented or
restated from time to time, the “Credit Agreement”),
among the Borrower, Hudson Pipeline & Processing Co., LLC, the
Administrative Agent, BNP Paribas, as Issuing Bank, and the other agents and
lenders signatory thereto (including the Lender), and evidences Loans made by
the Lender thereunder.  Capitalized terms used in this Note have the
respective meanings assigned to them in the Credit Agreement.

     

    This Note
is issued pursuant to, and is subject to the terms and conditions set forth in,
the Credit Agreement and is entitled to the benefits provided for in the Credit
Agreement and the other Loan Documents.  The Credit Agreement provides
for the acceleration of the maturity of this Note upon the occurrence of certain
events, for prepayments of Loans upon the terms and conditions specified therein
and other provisions relevant to this Note.

     

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

     

    
      	 
      	
              AURORA
      OIL & GAS CORPORATION

            
	 
      	 
      
	 
      	
              By:

            	
                 

            
	 
      	
              Name:

            	
                 

            
	 
      	
              Title:

            	
                 

            

    

     

    Exhibit A
- 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B

    FORM
OF BORROWING REQUEST

     

    [____________],
20[_]

     

    Aurora
Oil & Gas Corporation, a Utah corporation (the “Borrower”), pursuant
to Section 2.03 of the Debtor-In-Possession Credit Agreement, dated as of
October 6, 2009 (together with all amendments, restatements, supplements or
other modifications thereto, the “Credit Agreement”),
among the Borrower, Hudson Pipeline & Processing Co., LLC, BNP Paribas, as
Administrative Agent and Issuing Bank, and the other agents and lenders (the
“Lenders”)
which are or become parties thereto (unless otherwise defined herein, each
capitalized term used herein is defined in the Credit Agreement), hereby
requests a Borrowing as follows:

     

    (i)           Aggregate
amount of the requested Borrowing is $[_________________];

     

    (ii)           Date
of such Borrowing is [___________], 20[_];

     

    (iii)           Requested
Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing];

     

    (iv)           In
the case of a Eurodollar Borrowing, the initial Interest Period applicable
thereto is [_________________];

     

    (v)           Total
aggregate Revolving Outstanding Amounts on the date hereof (i.e., outstanding
principal amount of Loans and total LC Exposure) is $[_____________];
and

     

    (vi)           Pro forma total aggregate
Revolving Outstanding Amounts (giving effect to the requested Borrowing) is
$[________________]; and

     

    (vii)           Location
and number of the Borrower’s account to which funds are to be disbursed, which
shall comply with the requirements of Section 2.05 of the Credit Agreement, is
as follows:

     

    [______________________]

    [______________________]

    [______________________]

    [______________________]

    [______________________]

     

    Exhibit B
- 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    
      	 
      	
              AURORA
      OIL & GAS CORPORATION

            
	 
      	 
      
	 
      	
              By:

            	
                 

            
	 
      	
              Name:

            	
                 

            
	 
      	
              Title:

            	
                 

            

    

    

    Exhibit B
- 2

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
C

    FORM
OF INTEREST ELECTION REQUEST

     

    [_______________],
20[_]

     

    Aurora
Oil & Gas Corporation, a Utah corporation (the “Borrower”), pursuant
to Section 2.04 of the Debtor-In-Possession Credit Agreement, dated as of
October 6, 2009 (together with all amendments, restatements, supplements or
other modifications thereto, the “Credit Agreement”),
among the Borrower, Hudson Pipeline & Processing Co., LLC, BNP Paribas, as
Administrative Agent and Issuing Bank, and the other agents and lenders (the
“Lenders”)
which are or become parties thereto (unless otherwise defined herein, each
capitalized term used herein is defined in the Credit Agreement), hereby makes
an Interest Election Request as follows:

     

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

     

    (ii)           The
effective date of the election made pursuant to this Interest Election Request
is [______________], 20[_];[and]

     

    (iii)           The
resulting Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing][;
and]

     

    [(iv) [If
the resulting Borrowing is a Eurodollar Borrowing] The Interest Period
applicable to the resulting Borrowing after giving effect to such election is
[______________]].

     

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

     

    
      	 
      	
              AURORA
      OIL & GAS CORPORATION

            
	 
      	 
      
	 
      	
              By:

            	
                

            
	 
      	
              Name:

            	
                

            
	 
      	
              Title:

            	
                

            

    

    

    Exhibit C
- 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
D

    FORM
OF

    COMPLIANCE
CERTIFICATE

     

    The
undersigned hereby certifies that he/she is the [____________] of Aurora Oil
& Gas Corporation, a Utah corporation (the “Borrower”), and that
as such he/she is authorized to execute this certificate on behalf of the
Borrower.  With reference to the Debtor-In-Possession Credit
Agreement, dated as of October 6, 2009 (together with all amendments,
restatements, supplements or other modifications thereto being the “Agreement”), among
the Borrower, Hudson Pipeline & Processing Co., LLC, BNP Paribas, as
Administrative Agent and Issuing Bank, and the other agents and lenders (the
“Lenders”)
which are or become a party thereto, and such Lenders, the undersigned
represents and warrants as follows (each capitalized term used herein having the
same meaning given to it in the Agreement unless otherwise
specified):

     

    (a)           The
representations and warranties of the Borrower contained in Article VII of the
Agreement and in the Loan Documents and otherwise made in writing by or on
behalf of the Borrower pursuant to the Agreement and the Loan Documents were
true and correct when made, and are repeated at and as of the time of delivery
hereof and are true and correct in all material respects at and as of the time
of delivery hereof, except to the extent such representations and warranties are
expressly limited to an earlier date or the Majority Lenders have expressly
consented in writing to the contrary.

     

    (b)           The
Borrower has performed and complied with all agreements and conditions contained
in the Agreement and in the Loan Documents required to be performed or complied
with by it prior to or at the time of delivery hereof [or specify default and
describe].

     

    (c)           Since
the Petition Date, no change has occurred, either in any case or in the
aggregate, in the condition, financial or otherwise, of the Borrower or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect,
except (i) the continuation of the Bankruptcy Cases and (ii) the continuation of
the circumstances giving rise to the filing thereof or as a result thereof [or
specify event].

     

    (d)           There
exists no Default or Event of Default [or specify Default and
describe].

     

    EXECUTED
AND DELIVERED this [_________] day of [_________________].

     

    
      	 
      	
              AURORA
      OIL & GAS CORPORATION

            
	 
      	 
      
	 
      	
              By:

            	
                

            
	 
      	
              Name:

            	
                

            
	 
      	
              Title:

            	
                

            

    

     

    Exhibit D
- 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
E-1

    SECURITY
INSTRUMENTS

     

    
      	
              1)

            	
              Debtor
      and Debtor-In-Possession Guaranty and Collateral Agreement dated as of
      October 6, 2009 by the Borrower and the Guarantors, in favor of the
      Administrative Agent and the
Lenders.

            

    

     

    
      	
              2)

            	
              Financing
      Statements which may be filed in respect of item 1
  by:

            

    

    
      	
               
      

            	
              (a)
      the Borrower

            

    

    
      	
               
      

            	
              (b)
      HPPC

            

    

     

    
      	
              3)

            	
              Any
      Stock Powers which may be delivered in respect of item 1 by
      HPPC.

            

    

     

    Exhibit
E-1 - 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
E-2

    FORM
OF DEBTOR-IN-POSSESSION GUARANTY AND COLLATERAL AGREEMENT

     

    [to be
attached]

     

    Exhibit
E-2 - 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
F

     

    FORM
OF ASSIGNMENT AND ASSUMPTION

     

    This
Assignment and Assumption (the “Assignment and
Assumption”) is dated as of the Effective Date set forth below and is
entered into by and between [Insert name of Assignor] (the
“Assignor”) and
[Insert name of
Assignee] (the “Assignee”).  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (as amended, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the
Assignee.  The Standard Terms and Conditions set forth in Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Assumption as if set forth herein in
full.

     

    For an
agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit and guarantees included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned
Interest”).  Such sale and assignment is without recourse to
the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

     

    
      	
              1.

            	
              Assignor:

            	
                 

            
	 
      	 
      	 
      
	
              2.

            	
              Assignee:

            	
                 

            
	 
      	 
      	
              [and
      is an Affiliate/Approved Fund of [identify
      Lender]]

            
	 
      	 
      	 
      
	
              3.

            	
              Borrower:

            	
              Aurora
      Oil & Gas Corporation

            
	 
      	 
      	 
      
	
              4.

            	
              Administrative
      Agent:

            	
              BNP
      Paribas, as the administrative agent under the Credit
      Agreement

            
	 
      	 
      	 
      
	
              5.

            	
              Credit
      Agreement:

            	
              The
      Debtor-In-Possession Credit Agreement dated as of October 6, 2009 among
      the Borrower, Hudson Pipeline & Processing Co., LLC, the Lenders
      parties thereto, BNP Paribas, as Administrative Agent and Issuing Bank,
      and the other agents parties thereto

            
	 
      	 
      	 
      
	
              6.

            	
              Assigned
      Interest:

            	 
      

    

     

    Exhibit F - 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              	
                      Commit Assigned

                    	 	
                      Aggregate Amount of

                      Loans for all

                      Lenders/Aggregate

                      Commitments

                    	 	 	
                      Amount of

                      Commitment/Loans

                      Assigned

                    	 	 	
                      Percentage Assigned

                      of Commitment/Loans

                    	 
	  
      	 	$	 	 	 	$	 	 	 	 	 	%
	  
      	 	$	 	 	 	$	 	 	 	 	 	%
	  
      	 	$	 	 	 	$	 	 	 	 	 	%

            

          

        

      

    

    

     

    Effective
Date:                                ,
20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE
DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

     

    The terms
set forth in this Assignment and Assumption are hereby agreed to:

     

    
      
        
          	 
      	
                  ASSIGNOR

                
	 
      	 
      
	 
      	
                  [NAME
      OF ASSIGNOR]

                
	 
      	 
      
	 
      	 
      
	 
      	
                  By:

                	
                     

                
	 
      	 
      	
                  Title:

                	
                     

                
	 
      	 
      
	 
      	 
      
	 
      	
                  ASSIGNEE

                
	 
      	 
      
	 
      	
                  [NAME
      OF ASSIGNEE]

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                     

                
	 
      	 
      	
                  Title:

                	
                     

                

        

      

    

     

    Exhibit F
- 2

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              [Consented
      to and Accepted:

            	 
      
	 
      	 
      
	
              BNP
      Paribas, as Administrative Agent

            	 
      
	 
      	 
      
	 
      	 
      
	
              By

            	
                

            	 
      
	 
      	
              Title:

            	
                

            	 
      
	 
      	 
      	 
      
	
              By

            	
                

            	 
      
	 
      	
              Title:

            	
                ]1

            	 
      
	 
      	 
      
	 
      	 
      
	
              [Consented
      to:

            	 
      
	 
      	 
      
	
              AURORA
      OIL & GAS CORPORATION

            	 
      
	 
      	 
      
	
              By:

            	
                

            	 
      
	
              Name:

            	
                

            	 
      
	
              Title:

            	
                ]2

            	 
      

    

     

    
      

    

    1 If
required pursuant to Section 12.04 of the Credit Agreement.

    2 If
required pursuant to Section 12.04 of the Credit Agreement.

     

    
      Exhibit F
- 3

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
1

     

    AURORA
OIL & GAS CORPORATION DEBTOR-IN-POSSESSION CREDIT AGREEMENT

     

    STANDARD
TERMS AND CONDITIONS FOR

    ASSIGNMENT
AND ASSUMPTION

     

    1.             Representations and
Warranties.

     

    1.1           Assignor.  The
Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of
any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
Collateral thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

     

    1.2.           Assignee.  The
Assignee (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any,
specified in the Credit Agreement that are required to be satisfied by it in
order to acquire the Assigned Interest and become a Lender, (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement
as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial reports
delivered pursuant to Section 8.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment
and Assumption is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by the Assignee;
and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

     

    2.           Payments.  From
and after the Effective Date, the Administrative Agent shall make all payments
in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date.

     

    
      Exhibit F
- 4

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.           General
Provisions.  This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page
of this Assignment and Assumption by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment and
Assumption.  This Assignment and Assumption shall be governed by, and
construed in accordance with, the law of the State of Texas.

     

    
      Exhibit F
- 5

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
G

     

    INTERIM
ORDER

     

    [To be
attached]

     

    Exhibit G
- 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
H

     

    AGREED
BUDGET

     

    [To be
attached]

     

    Exhibit H
- 1

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
7.05

     

    LITIGATION

     

    Frontier Energy
LLC v Aurora Energy, Ltd., Case No. 08-995-21-CH,
in the Circuit Court for Charlevoix County, Michigan.

     

    Frontier
Energy LLC (“Frontier”) is suing Aurora Energy, Ltd. (“Aurora Energy”) claiming
that Aurora Energy has materially breached the lease by failing to submit to an
audit, by failing to operate as reasonably prudent operator, and by failing to
pay all royalties due to Frontier under the lease.  Frontier is
requesting money damages, specific performance and an accounting.

    

    Further,
Frontier filed a Supplemental Complaint against Aurora Energy seeking to recover
the cost of the Martindale audit which is approximately
$138,095.  With the cost of the audit, Frontier is seeking more than
$1.1 million in damages.

    

    Schedule
7.05 - 1

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
7.06

     

    ENVIRONMENTAL
MATTERS

     

    In the
most recent correspondence with the State of Michigan, Aurora Oil & Gas
Corporation (the “Borrower”) received two letters dated August 19,
2009.  In these letters, the Michigan Department of Environmental
Quality provided the Borrower with Amended Violation Notices, which required the
Borrower to plug certain producing and shut-in natural gas wells, one (1) Salt
Water Disposal well, remove certain production lines and close a cuttings pit in
its Arrowhead, Tomahawk, Blue Chip, and Gaylord Fishing Club
projects.  Certain wells must be addressed by September 30, 2009 and
certain other wells must be addressed by January 1, 2010.  This
amounts to 34 total wells in Michigan with an estimated plugging and restoration
cost of approximately $380,000.  Warnings of Noncompliance have also
been received on nine (9) shut-in natural gas wells in the State of Indiana,
which require the Borrower to plug or temporarily abandon these
wells.  The Borrower is taking action within the required timeline to
temporarily abandon six (6) of the nine (9) wells by October [__], 2009 at a
projected cost of approximately $30,000.  Presently, plans for
corrective action on the remaining three (3) wells are pending further
requirements from the State of Indiana.

     

    Additionally,
the Borrower’s 25% minority ownership of the Vipont mining operation under Mine
Permit No. S/003/035 presents potential environmental exposure.  A
full environmental assessment has not been completed, but preliminary
assessments have suggested that certain environmental concerns may represent a
maximum liability in excess of $1 million.  In a 1995 report published
by Behre Dolbear, it was reported that “a Superfund investigation was underway
by the Utah Department of Environmental Quality (UDEQ) acting as a contractor to
U.S. Environmental Protection Agency (EPA).  That investigation was
complete in June 1995 and apparently resulted in a recommendation that the site
be scored for possible listing on the National Priorities List.  Such
scoring was apparently not carried out, as that recommendation remains on EPA’s
website.  Although it is possible if conditions at the site were
somehow to worsen or complaints received, the process could be resumed, it seems
unlikely after the passing of 12 years.”

     

    Schedule
7.06 - 1 

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
7.14

     

    SUBSIDIARIES
AND PARTNERSHIPS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Name of Subsidiary

                                  	 
      	
                                    Jurisdiction and entity

                                  	 
      	
                                    Entity number

                                  
	 
      	 
      	 
      	 
      	 
      
	
                                    Aurora
      Oil & Gas Corporation

                                  	 
      	
                                    Utah
      Corporation

                                  	 
      	
                                    608892-0142

                                  
	 
      	 
      	 
      	 
      	 
      
	
                                    Celebration
      Mining Company

                                  	 
      	
                                    Washington
      corporation

                                  	 
      	
                                    601525229

                                  
	 
      	 
      	 
      	 
      	 
      
	
                                    Aurora
      Operating, L.L.C. (Aurora Oil & Gas Corporation owns
    71%)

                                  	 
      	
                                    Michigan
      limited liability company

                                  	 
      	
                                    B71015

                                  
	 
      	 
      	 
      	 
      	 
      
	
                                    Hudson
      Pipeline & Processing Co., LLC (Aurora Oil & Gas Corporation owns
      93.6%)

                                  	 
      	
                                    Michigan
      limited liability company

                                  	 
      	
                                    B0008T

                                  
	 
      	 
      	 
      	 
      	 
      
	
                                    Indiana
      Royalty Trustory, L.L.C. (Aurora Oil & Gas Corporation owns
      51%)

                                  	
                                      

                                  	
                                    Michigan
      limited liability company

                                  	
                                      

                                  	
                                    B24031

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Schedule
7.14 - 1

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SCHEDULE
7.18

    

    GAS
IMBALANCES

     

    None

     

    Schedule
7.18 - 1

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
7.19

     

    MARKETING
CONTRACTS

     

    None.

     

    Schedule
7.19 - 1

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
7.20

     

    SWAP
AGREEMENTS

    

    None

    

    Schedule
7.20 - 1

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
8.13

     

    EXISTING
ACCOUNTS

     

    
      
        
          
            
              
                	
                        Bank

                      	 
      	
                        Account Name

                      	 
      	
                        Type of Account

                      
	 
      	 
      	 
      	 
      	 
      
	
                        Charles
      Schwab & Co.

                      	 
      	
                        Aurora
      Oil & Gas Corporation

                      	 
      	
                        Investment

                      
	
                        JPMorgan
      Chase & Co.

                      	 
      	
                        Aurora
      Oil & Gas Corporation

                      	 
      	
                        Operating/Concentration

                      
	
                        JPMorgan
      Chase & Co.

                      	 
      	
                        Aurora
      Oil & Gas Corporation

                      	 
      	
                        Disbursement

                      
	
                        Northwestern
      Bank

                      	 
      	
                        Aurora
      Oil & Gas Corporation

                      	 
      	
                        Operating/Concentration

                      
	
                        Northwestern
      Bank

                      	 
      	
                        Aurora
      Oil & Gas Corporation

                      	 
      	
                        Disbursement

                      
	
                        Northwestern
      Bank

                      	 
      	
                        Aurora
      Oil & Gas Corporation

                      	 
      	
                        General
      Checking

                      
	
                        Northwestern
      Bank

                      	 
      	
                        Aurora
      Oil & Gas Corporation

                      	 
      	
                        Money
      Market

                      
	
                        Northwestern
      Bank

                      	 
      	
                        Aurora
      Operating, LLC

                      	 
      	
                        Operating

                      
	
                        Northwestern
      Bank

                      	 
      	
                        Celebration
      Mining Company

                      	 
      	
                        Operating

                      
	
                        Charles
      Schwab & Co.

                      	 
      	
                        Hudson
      Pipeline & Processing Co., LLC

                      	 
      	
                        Investment

                      
	
                        JPMorgan
      Chase & Co.

                      	 
      	
                        Hudson
      Pipeline & Processing Co., LLC

                      	 
      	
                        Operating

                      
	
                        National
      City

                      	
                          

                      	
                        Indiana
      Royalty Trustory, LLC

                      	
                          

                      	
                        Operating

                      

              

            

          

        

      

    

     

    Schedule
8.13 - 1

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
9.02

     

    DEBT

    

    1.  Pre-Petition
First Lien Credit Agreement (as amended on June 12, 2008, and February 12,
2009).

    

    2.  Certain
indebtedness related to the Settlement Amount of Early Termination of all
outstanding transactions under the 1992 ISDA Master Agreement between BNP
Paribas and Aurora Oil & Gas Corporation, dated as of February 21,
2006.

    

    3.  Pre-Petition
Second Lien Credit Agreement (as amended on June 12, 2008).

    

    4.  Promissory
Note, dated September 19, 2005 (as amended on February 14, 2008 and May 26,
2009) by and between Aurora Oil & Gas Corporation, as borrower, and
Northwestern Bank, as lender.

    

    5.  Irrevocable
Letter of Credit, dated December 1, 2006, and renewed annually thereafter,
provided by Northwestern Bank in favor of the Utah Division of Oil, Gas and
Mining on behalf of Aurora Oil & Gas Corporation, related to the Vipont
mining operation under Mine Permit No. S/003/035 which is owned by Celebration
Mining Company, a subsidiary owned 100% by Aurora Oil & Gas
Corporation.

    

    Schedule
9.02 - 1

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
9.03

     

    LIENS

     

    None

     

    Schedule
9.03 - 1

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
9.05

     

    INVESTMENTS

     

    None

     

    Schedule
9.05 - 1

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    SCHEDULE
9.17

     

    EXCEPTIONS
TO PROHIBITED CONTRACTS

     

    None

     

    Schedule
9.17 - 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]