Document:

Second Lien Term Loan Agreement

 Exhibit 10.19 
  
 Execution Version 
  
 SECOND LIEN TERM LOAN AGREEMENT 
  
 DATED AS OF 
 JULY 7, 2005 
  
 AMONG 
  
 ROSETTA RESOURCES INC., 
 AS BORROWER, 
  
 BNP PARIBAS, 
 AS ADMINISTRATIVE AGENT,

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

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	ARTICLE I
	DEFINITIONS AND ACCOUNTING MATTERS
	Section 1.01	  	Terms Defined Above	  	1
	Section 1.02	  	Certain Defined Terms	  	1
	Section 1.03	  	Types of Loans and Borrowings	  	21
	Section 1.04	  	Terms Generally; Rules of Construction	  	21
	Section 1.05	  	Accounting Terms and Determinations; GAAP	  	22
	
	ARTICLE II
	THE LOANS
			
	Section 2.01	  	Term Loans	  	22
	Section 2.02	  	Loans	  	22
	Section 2.03	  	Requests for the Loans	  	23
	Section 2.04	  	Interest Elections	  	23
	Section 2.05	  	Funding the Loans	  	25
	Section 2.06	  	Termination	  	25
	Section 2.07	  	Total Reserve Value	  	25
	Section 2.08	  	Subordination of Loans	  	26
	
	ARTICLE III
	PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
			
	Section 3.01	  	Interest	  	26
	Section 3.02	  	Alternate Rate of Interest	  	27
	Section 3.03	  	Prepayments	  	27
	Section 3.04	  	Fees	  	28
	
	ARTICLE IV
	PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS
			
	Section 4.01	  	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	  	28
	Section 4.02	  	Presumption of Payment by the Borrower	  	29
	Section 4.03	  	Certain Deductions by the Administrative Agent	  	30
	Section 4.04	  	Disposition of Proceeds	  	30
	
	ARTICLE V
	INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
			
	Section 5.01	  	Increased Costs	  	30
	Section 5.02	  	Break Funding Payments	  	31
	Section 5.03	  	Taxes	  	32
	Section 5.04	  	Mitigation Obligations; Replacement of Lenders	  	33
	Section 5.05	  	Illegality	  	33

  

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	ARTICLE VI
	CONDITIONS PRECEDENT
			
	Section 6.01	  	Effective Date	  	34
	Section 6.02	  	Each Credit Event	  	37
	
	ARTICLE VII
	REPRESENTATIONS AND WARRANTIES
			
	Section 7.01	  	Organization; Powers	  	38
	Section 7.02	  	Authority; Enforceability	  	38
	Section 7.03	  	Approvals; No Conflicts	  	38
	Section 7.04	  	Financial Condition; No Material Adverse Change	  	39
	Section 7.05	  	Litigation	  	39
	Section 7.06	  	Environmental Matters	  	40
	Section 7.07	  	Compliance with the Laws and Agreements; No Defaults	  	41
	Section 7.08	  	Investment Company Act	  	41
	Section 7.09	  	Public Utility Holding Company Act	  	41
	Section 7.10	  	Taxes	  	41
	Section 7.11	  	ERISA	  	42
	Section 7.12	  	Disclosure; No Material Misstatements	  	42
	Section 7.13	  	Insurance	  	43
	Section 7.14	  	Restriction on Liens	  	43
	Section 7.15	  	Subsidiaries	  	43
	Section 7.16	  	Location of Business and Offices	  	44
	Section 7.17	  	Properties; Titles, Etc	  	44
	Section 7.18	  	Maintenance of Properties	  	45
	Section 7.19	  	Gas Imbalances, Prepayments	  	45
	Section 7.20	  	Marketing of Production	  	45
	Section 7.21	  	Swap Agreements	  	46
	Section 7.22	  	Use of Loans	  	46
	Section 7.23	  	Solvency	  	46
	Section 7.24	  	Acquisition Documents; Separation Documents	  	46
	
	ARTICLE VIII
	AFFIRMATIVE COVENANTS
			
	Section 8.01	  	Financial Statements; Ratings Change; Other Information	  	47
	Section 8.02	  	Notices of Material Events	  	50
	Section 8.03	  	Existence; Conduct of Business	  	51
	Section 8.04	  	Payment of Obligations	  	51
	Section 8.05	  	Performance of Obligations under Loan Documents	  	51
	Section 8.06	  	Operation and Maintenance of Properties	  	51
	Section 8.07	  	Insurance	  	52
	Section 8.08	  	Books and Records; Inspection Rights	  	52
	Section 8.09	  	Compliance with Laws	  	53
	Section 8.10	  	Environmental Matters	  	53
	Section 8.11	  	Further Assurances	  	54
	Section 8.12	  	Reserve Reports	  	54
	Section 8.13	  	Title Information	  	55
	Section 8.14	  	Additional Collateral; Additional Guarantors	  	56
	Section 8.15	  	ERISA Compliance	  	57

  

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	Section 8.16	  	Unrestricted Subsidiaries	  	57
	Section 8.17	  	Marketing Activities	  	58
	Section 8.18	  	Swap Agreements	  	58
	Section 8.19	  	Control Agreement	  	58
	
	ARTICLE IX
	NEGATIVE COVENANTS
			
	Section 9.01	  	Financial Covenants	  	59
	Section 9.02	  	Debt	  	59
	Section 9.03	  	Liens	  	60
	Section 9.04	  	Dividends, Distributions and Redemptions	  	60
	Section 9.05	  	Investments, Loans and Advances	  	60
	Section 9.06	  	Designation and Conversion of Restricted and Unrestricted Subsidiaries; Debt of Unrestricted Subsidiaries.	  	62
	Section 9.07	  	Nature of Business; International Operations	  	63
	Section 9.08	  	Limitation on Leases	  	63
	Section 9.09	  	Proceeds of Notes	  	63
	Section 9.10	  	ERISA Compliance	  	63
	Section 9.11	  	Sale or Discount of Receivables	  	65
	Section 9.12	  	Mergers, Etc	  	65
	Section 9.13	  	Sale of Properties	  	65
	Section 9.14	  	Environmental Matters	  	66
	Section 9.15	  	Transactions with Affiliates	  	66
	Section 9.16	  	Subsidiaries	  	66
	Section 9.17	  	Negative Pledge Agreements	  	66
	Section 9.18	  	Gas Imbalances, Take-or-Pay or Other Prepayments	  	67
	Section 9.19	  	Swap Agreements	  	67
	Section 9.20	  	Acquisition and Separation Documents	  	68
	Section 9.21	  	Gas Sales Contracts	  	68
	Section 9.22	  	Anti-Layering	  	69
	
	ARTICLE X
	EVENTS OF DEFAULT; REMEDIES
			
	Section 10.01	  	Events of Default	  	69
	Section 10.02	  	Remedies	  	71
	
	ARTICLE XI
	THE ADMINISTRATIVE AGENT
			
	Section 11.01	  	Appointment; Powers	  	72
	Section 11.02	  	Duties and Obligations of Administrative Agent	  	72
	Section 11.03	  	Action by Administrative Agent	  	73
	Section 11.04	  	Reliance by Administrative Agent	  	74
	Section 11.05	  	Subagents	  	74
	Section 11.06	  	Resignation or Removal of Administrative Agent	  	74
	Section 11.07	  	Administrative Agent as a Lender	  	75
	Section 11.08	  	No Reliance	  	75
	Section 11.09	  	Administrative Agent May File Proofs of Claim	  	75
	Section 11.10	  	Authority of Administrative Agent to Release Collateral and Liens	  	76
	Section 11.11	  	The Arranger	  	76

  

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	ARTICLE XII
	MISCELLANEOUS
			
	Section 12.01	  	Notices	  	76
	Section 12.02	  	Waivers; Amendments	  	77
	Section 12.03	  	Expenses, Indemnity; Damage Waiver.	  	78
	Section 12.04	  	Successors and Assigns	  	80
	Section 12.05	  	Survival; Revival; Reinstatement	  	83
	Section 12.06	  	Counterparts; Integration; Effectiveness	  	84
	Section 12.07	  	Severability	  	84
	Section 12.08	  	Right of Setoff	  	84
	Section 12.09	  	GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS	  	85
	Section 12.10	  	Headings	  	86
	Section 12.11	  	Confidentiality	  	86
	Section 12.12	  	Interest Rate Limitation	  	86
	Section 12.13	  	No Third Party Beneficiaries	  	87
	Section 12.14	  	USA Patriot Act Notice	  	87

  

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 ANNEXES, EXHIBITS AND SCHEDULES 
  

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

  

 v 

 THIS SECOND LIEN TERM LOAN AGREEMENT dated as of July 7, 2005, is among: Rosetta Resources
Inc., a corporation duly formed and existing under the laws of the State of Delaware (the “Borrower”); each of the Lenders from time to time party hereto; and BNP Paribas (in its individual capacity, “BNP Paribas”),
as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”). 
  
 R E C I T A L S 
  
 A. The Borrower has requested that the Lenders provide a $100,000,000 second lien term loan to the Borrower. 
  
 B. Each Lender has severally agreed to make its ratable portion of such loan
subject to the terms and conditions of this Agreement. 
  
 C. In
consideration of the mutual covenants and agreements herein contained and of the loans and commitments hereinafter referred to, the parties hereto agree as follows: 
  
 ARTICLE I 
 Definitions and Accounting Matters 
  
 Section
1.01 Terms Defined Above. As used in this Agreement, each term defined above has the meaning indicated above. 
  
 Section 1.02 Certain Defined Terms. As used in this Agreement, the following terms have the meanings specified below: 
  
 “ABR”, when used in reference to any Tranche, refers to
whether such Loan, or the Loans comprising such Tranche, are bearing interest at a rate determined by reference to the Alternate Base Rate. 
  
 “Acceptable Collateral” means: (a) letters of credit having terms satisfactory to the Administrative Agent issued by a bank or trust
company which is organized under the laws of the United States or any state thereof, has capital, surplus and undivided profits aggregating at least $100,000,000 (as of the date of such bank or trust company’s most recent financial reports) and
has a short term deposit rating of no lower than A2 or P2, as such rating is set forth from time to time, by S&P or Moody’s, (b) if the counterparty to a Gas Sales Contract is a “forward contract merchant” (as defined in the
United States Federal Bankruptcy Code) acting in such capacity, the posting of cash collateral to the Margin Account in accordance with Section 9.21, (c) cash prepayment for gas purchases and (d) such other forms of collateral as may be approved by
the Majority Lenders. 
  
 “Acquisition” means the
acquisition by the Borrower of all of the Equity Interests of certain Subsidiaries of Calpine pursuant to the terms and conditions of the Acquisition Documents. 
  

“Acquisition Documents” means (a) the Purchase and Sale Agreement, (b) the Transfer and Assumption Agreement, (c) the Transition
Services Agreement and (d) all bills of sale, assignments, agreements, instruments and documents executed and delivered in connection therewith, as amended. 

 “Acquisition Properties” means the Oil and Gas Properties and other properties acquired
directly or indirectly by the Borrower or any Guarantor pursuant to the Acquisition Documents. 
  
 “Adjusted LIBO Rate” means, with respect to any Eurodollar Tranche for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next  1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

  
 “Administrative Questionnaire” means
an Administrative Questionnaire in a form supplied by the Administrative Agent. 
  
 “Affected Portion” has the meaning assigned such term in Section 5.05. 
  
 “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person specified. 
  
 “Agreement” means this Second Lien Term Loan Agreement, as the same may from time to time be amended, modified, supplemented or restated. 
  
 “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus  1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

  
 “Applicable Margin” means (a) with
respect to each Eurodollar Tranche, a rate per annum equal to 5.0%; and (b) with respect to each ABR Tranche, a rate per annum equal to 4.0%. 
  
 “Approved Counterparty” means (a) any “Lender” as such term is defined under the Senior Revolving Credit Agreement or any
Affiliate of such Lender, (b) any other Person whose long term senior unsecured debt rating is A/A2 by S&P or Moody’s (or their equivalent) or higher or (c) any other Person from time to time approved by the Majority Lenders. 
  
 “Approved Fund” means any Person (other than a natural
person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender. 
  
 “Approved Petroleum Engineers” means Netherland, Sewell & Associates, Inc. and any other independent petroleum engineers reasonably acceptable to the Administrative Agent and the Borrower.

  

 2 

 “Approved Purchaser” means a Person whose long term senior unsecured debt rating from
S&P is at least “BBB+” or whose obligations are unconditionally guaranteed pursuant to a guaranty of payment by a Person (the “Approved Purchaser Guarantor”) whose long term senior unsecured debt rating from S&P is
at least “BBB+”, in either case at the time such Gas Sales Contract is entered into, provided that if such Person’s (or Approved Purchaser Guarantor’s, if applicable) long term senior unsecured debt rating from S&P
subsequently is downgraded to “BBB with negative outlook” or to “BBB-” or below, the Person will cease to be an Approved Purchaser until such time as such Person’s (or such Approved Purchaser Guarantor’s, if applicable)
long term senior unsecured debt rating is upgraded to “BBB with no negative outlook” or “BBB+” or above. 
  
 “Arranger” means BNP Paribas, in its capacity as the sole lead arranger and sole bookrunner hereunder. 
  
 “Assignment and Assumption” means an assignment and
assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 12.04(b)), and accepted by the Administrative Agent, in the form of Exhibit G or any other form approved by the Administrative
Agent. 
  
 “Board” means the Board of Governors
of the Federal Reserve System of the United States of America or any successor Governmental Authority. 
  
 “Borrowing Request” means the request by the Borrower for the Loans in accordance with Section 2.03. 
  
 “Business Day” means any day that is not a Saturday, Sunday
or other day on which commercial banks in New York City or Houston, Texas are authorized or required by law to remain closed; and if such day relates to a Tranche 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 Tranche or a notice by the Borrower with respect to any such Tranche or continuation, payment, prepayment, conversion or Interest Period, any day which is also a day on which dealings
in dollar deposits are carried out in the London interbank market. 
  
 “Calpine” means Calpine Corporation, a Delaware corporation. 
  
 “Calpine Gas Contracts” means all Gas Sales Contracts between the Borrower or any of its Subsidiaries and Calpine or any of its Subsidiaries. 
  
 “Capital Leases” means, in respect of any Person, all leases
which shall have been, or should have been, in accordance with GAAP, recorded as capital leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent thereunder. 
  
 “Casualty Event” means any loss, casualty or other insured
damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of the Borrower or any of its Restricted Subsidiaries having a fair market value in excess of $1,000,000. 

 

 3 

 “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) of Equity Interests representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated. 
  
 “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule
or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 5.01(b)), by any lending office of such Lender or by such
Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. 
  
 “Code” means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute. 
  
 “Commitment” means, with respect to each Lender, the commitment of such Lender to make its Loan on the Effective Date hereunder and “Commitments” means the aggregate amount of the Commitments of all Lenders. The
amount of each Lender’s Commitment is set forth on Annex I. 
  
 “Consolidated Net Income” means with respect to the Borrower and the Consolidated Restricted Subsidiaries, for any period, the aggregate of the net income (or loss) of the Borrower and the Consolidated Restricted
Subsidiaries after allowances for taxes for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein) the following: (a) the net
income of any Person in which the Borrower or any Consolidated Restricted Subsidiary has an interest (which interest does not cause the net income of such other Person to be consolidated with the net income of the Borrower and the Consolidated
Restricted Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions actually paid in cash during such period by such other Person to the Borrower or to a Consolidated Restricted Subsidiary, as the case
may be; (b) the net income (but not loss) during such period of any Consolidated Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by that Consolidated Restricted
Subsidiary is not at the time permitted by operation of the terms of its charter or any agreement, instrument or Governmental Requirement applicable to such Consolidated Restricted Subsidiary or is otherwise restricted or prohibited, in each case
determined in accordance with GAAP; (c) any extraordinary non-cash gains or losses during such period, (d) non-cash gains or losses under FAS 133 resulting from the net change in Borrower’s mark-to-market portfolio of commodity price risk
management activities during that period and (e) any gains or losses attributable to writeups or writedowns of assets, including ceiling test writedowns; and provided further that for purposes of calculating the financial ratio in Section 9.01(a),
if the Borrower or any Consolidated Restricted Subsidiary shall acquire or dispose of any material Property or a Subsidiary shall be 
  

 4 

 redesignated as either an Unrestricted Subsidiary or a Restricted Subsidiary, in any case, during the period of four
fiscal quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements are available and up to and including the date of the consummation of such acquisition, disposition or
redesignation, then Consolidated Net Income shall be calculated after giving pro forma effect to such acquisition (including the revenues of the Properties acquired), merger, disposition or redesignation, as if such acquisition, merger,
disposition or redesignation had occurred on the first day of such period. 
  
 “Consolidated Restricted Subsidiaries” means any Restricted Subsidiaries that are Consolidated Subsidiaries. 
  
 “Consolidated Subsidiaries” means each Subsidiary of the Borrower (whether now existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated with the financial statements of the Borrower in accordance with GAAP. 
  
 “Consolidated Unrestricted Subsidiaries” means any Unrestricted Subsidiaries that are Consolidated Subsidiaries. 
  
 “Control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings
correlative thereto. 
  
 “Control Agreement”
means the Account Control Agreement by and among the Borrower, the Administrative Agent and the depository bank named therein, granting the Administrative Agent “control” over the Margin Account, to be executed pursuant to Section 8.19.

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

 5 

 to purchase the Debt or Property of others to insure a creditor against a loss; (i) obligations to deliver commodities,
goods or services, including, without limitation, Hydrocarbons, in consideration of one or more advance payments made more than one month in advance of the month in which the commodities, goods or services are to be delivered, other than gas
balancing arrangements in the ordinary course of business; (j) obligations to pay for goods or services even if such goods or services are not actually received or utilized by such Person; (k) any Debt of a partnership for which such Person is
liable either by agreement, by operation of law or by a Governmental Requirement but only to the extent of such liability; (l) Disqualified Capital Stock; and (m) the undischarged balance of any production payment created by such Person or for the
creation of which such Person directly or indirectly received payment. The Debt of any Person shall include all obligations of such Person of the character described above to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is not included as a liability of such Person under GAAP. 
  
 “Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless
cured or waived, become an Event of Default. 
  
 “Disqualified Capital Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event, matures or is
mandatorily redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is convertible or exchangeable for Debt or redeemable for
any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is one year after the earlier of (a) the Maturity Date
and (b) the date on which there are no Loans or other obligations hereunder outstanding. 
  
 “dollars” or “$” refers to lawful money of the United States of America. 
  
 “Domestic Subsidiary” means any Restricted Subsidiary that is organized under the laws of the United States of America or any state
thereof or the District of Columbia. 
  
 “EBITDAX” means, for any period, the sum of Consolidated Net Income for such period plus the following expenses or charges to the extent deducted from Consolidated Net Income in such period: interest, letter of credit fees,
income and franchise taxes, depreciation, depletion, amortization and other similar noncash charges and exploration expenses, minus all noncash income added to Consolidated Net Income. 
  
 “Effective Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived
in accordance with Section 12.02). 
  
 “Environmental
Laws” means any and all Governmental Requirements pertaining in any way to health, safety the environment or the preservation or reclamation of natural resources, in effect in any and all jurisdictions in which the Borrower or any
Restricted Subsidiary is conducting or at any time has conducted business, or where any Property of the Borrower or any Restricted Subsidiary is located, including without limitation, the Oil Pollution Act of 1990 (“OPA”), as
amended, the Clean Air Act, as amended, the Comprehensive Environmental, 
  

 6 

 Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act,
as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection Governmental Requirements. The term “oil” shall
have the meaning specified in OPA, the terms “hazardous substance” and “release” (or “threatened release”) have the meanings specified in CERCLA, the terms “solid waste” and
“disposal” (or “disposed”) have the meanings specified in RCRA and the term “oil and gas waste” shall have the meaning specified in Section 91.1011 of the Texas Natural Resources Code
(“Section 91.1011”); provided, however, that (a) in the event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment and (b) to the extent the laws of the state or other jurisdiction in which any Property of the Borrower or any Restricted Subsidiary is located establish a meaning for “oil,” “hazardous
substance,” “release,” “solid waste,” “disposal” or “oil and gas waste” which is broader than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such broader
meaning shall apply. 
  
 “Equity Interests” means
shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder
thereof to purchase or acquire any such Equity Interest. 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute. 
  
 “ERISA Affiliate” means each trade or business (whether or not incorporated) which together with the Borrower or a Subsidiary would be
deemed to be a “single employer” within the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code. 
  
 “ERISA Event” means (a) a “Reportable Event” described in section 4043 of ERISA and the regulations issued thereunder, (b) the
withdrawal of the Borrower, a Subsidiary or any ERISA Affiliate from a Plan during a plan year in which it was a “substantial employer” as defined in section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or
the treatment of a Plan amendment as a termination under section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability pursuant to Section 4202 of ERISA or (f) any other
event or condition which might constitute grounds under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan. 
  

“Eurodollar”, when used in reference to any Tranche, refers to whether such Tranche is bearing interest at a rate determined by
reference to the Adjusted LIBO Rate. 
  
 “Event of
Default” has the meaning assigned such term in Section 10.01. 
  

 7 

 “Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental charges
or levies which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens in connection with workers’ compensation, unemployment
insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with
GAAP; (c) statutory landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens arising by
operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties each of which is in respect of obligations that are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d) contractual Liens which arise in the ordinary course of business under real property leases, operating agreements, joint venture
agreements, oil and gas partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt
water or other disposal agreements, seismic or other geophysical permits or agreements, and other agreements which are usual and customary in the oil and gas business and are for claims which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP, provided that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes
for which such Property is held by the Borrower or any Restricted Subsidiary or materially impair the value of such Property subject thereto; (e) Liens relating to banker’s liens, rights of set-off or similar rights and remedies and burdening
only deposit accounts or other funds maintained with a creditor depository institution, provided that no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set
forth by regulations promulgated by the Board and no such deposit account is intended by Borrower or any of its Restricted Subsidiaries to provide collateral to the depository institution; (f) easements, restrictions, servitudes, permits,
conditions, covenants, exceptions or reservations in any Property of the Borrower or any Restricted Subsidiary that do not secure any Debt and which in the aggregate do not materially impair the use of such Property for the purposes of which such
Property is held by the Borrower or any Restricted Subsidiary or materially impair the value of such Property subject thereto; (g) Liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds, government contracts,
performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of business; (h) Liens arising under Uniform Commercial Code
financing filings regarding operating leases which are not Synthetic Leases entered into by Borrower and Restricted Subsidiaries in the ordinary course of business covering only the Property under such lease and (i) judgment and attachment Liens not
giving rise to an Event of Default, provided that any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated
shall not have expired and no action to divest title to such Lien has been commenced; 
  

 8 

 provided, further that Liens described in clauses (a) through (e) shall remain “Excepted Liens” only for so
long as no action to divest title to such Lien has been commenced and no intention to subordinate the priority of the Lien granted in favor of the Administrative Agent and the Lenders is to be hereby implied or expressed by the permitted existence
of such Excepted Liens. 
  
 “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any Guarantor hereunder or under any other Loan Document, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of America or such other jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower or any Guarantor is located and (c) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Borrower under Section 5.04(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 5.03(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts with respect to such withholding tax pursuant to Section 5.03 or Section 5.03(c). 
  
 “FAS 133” means Statement of Financial Accounting Standard 133 (and any statements replacing, modifying or superceding such statement)
adopted by the Financial Accounting Standards Board. 
  
 “Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next  1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next  1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

  
 “Financial Officer” means, for
any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person. Unless otherwise specified, all references herein to a Financial Officer means a Financial Officer of the Borrower. 
  
 “Financial Statements” means the financial statement or
statements of the Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a). 
  
 “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America,
each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. 
  
 “Foreign Subsidiary” means any Restricted Subsidiary that is not a Domestic Subsidiary. 
  

 9 

 “GAAP” means generally accepted accounting principles in the United States of America as
in effect from time to time subject to the terms and conditions set forth in Section 1.05. 
  
 “Gas Sales Contract” means any contract for the purchase and sale of gas. 
  
 “Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government over the Borrower, any Restricted Subsidiary, any of their Properties, the Administrative Agent or any Lender. 
  
 “Governmental Requirement” means any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or requirement, whether now or hereinafter in effect, including, without limitation, Environmental Laws, energy regulations and occupational, safety and health standards or
controls, of any Governmental Authority. 
  
 “Guarantors” means, collectively: 
  

	 	•	 	Rosetta Resources California, LLC; 

  

	 	•	 	Rosetta Resources Offshore, LLC; 

  

	 	•	 	Rosetta Resources Rockies, LLC; 

  

	 	•	 	Rosetta Resources Texas GP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP; 

  

	 	•	 	Calpine Natural Gas Holdings, LLC; 

  

	 	•	 	Calpine Natural Gas GP, LLC; 

  

	 	•	 	Calpine Natural Gas L.P.; and 

  

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

  

“Guaranty Agreement” means an agreement executed by the Guarantors in substantially the form of Exhibit F-2 unconditionally
guarantying on a joint and several basis, payment of the Indebtedness, as the same may be amended, modified or supplemented from time to time. 
  
 “Highest Lawful Rate” means, with respect to each Lender, the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Notes or on other Indebtedness under laws applicable to such Lender 
  

 10 

 which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than applicable laws allow as of the date hereof. 
  
 “Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas
and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever
nature. Unless otherwise indicated herein, each reference to the term “Hydrocarbon Interests” shall mean Hydrocarbon Interests of the Borrower and the Restricted Subsidiaries. 
  
 “Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom. Unless otherwise indicated herein, each reference to the term “Hydrocarbons” shall mean Hydrocarbons of the Borrower and the Restricted
Subsidiaries. 
  
 “Indebtedness” means any and
all amounts owing or to be owing by the Borrower, any Restricted Subsidiary or any Guarantor whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising to the
Administrative Agent or any Lender under any Loan Document and all renewals, extensions and/or rearrangements of any of the above. 
  
 “Indemnified Taxes” means Taxes other than Excluded Taxes. 
  
 “Initial Reserve Report” means the report of Netherland, Sewell & Associates, Inc. dated as of January
26, 2005, with respect to certain Oil and Gas Properties of Calpine and its Subsidiaries as of December 31, 2004, as rolled forward to April 30, 2005 by the report of Netherland, Sewell & Associates, Inc. dated as of June 5, 2005. 
  
 “Intercreditor Agreement” means in respect of the Second
Lien Term Loan Agreement, the terms of subordination as attached as Annex II to the Second Lien Term Loan Agreement, as the same may from time to time be amended, modified, supplemented or restated. 
  
 “Interest Election Request” means a request by the Borrower
to convert or continue a Tranche in accordance with Section 2.04. 
  
 “Interest Expense” means, for any period, the sum (determined without duplication) of (a) all cash dividends paid on the Borrower’s preferred Equity Interests and (b) the aggregate gross interest expense of the
Borrower and the Consolidated Restricted Subsidiaries for such period, including to the extent included in interest expense under GAAP: (i) amortization of debt discount, (ii) capitalized interest and (iii) the portion of any payments or accruals
under Capital Leases allocable to interest expense, plus the portion of any payments or accruals under Synthetic Leases allocable to interest expense whether or not the same constitutes interest expense under GAAP. 
  
 “Interest Payment Date” means (a) with respect to any ABR
Tranche, the last day of each March, June, September and December and (b) with respect to any Eurodollar Tranche, the last day of the Interest Period applicable to such Tranche and, in the case of a Eurodollar Tranche 
  

 11 

 with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months’ duration after the first day of such Interest Period. 
  
 “Interest Period” means with respect to any Eurodollar Tranche, the period commencing on the date of such Tranche and ending on the
numerically corresponding day in the calendar month that is one, two, three or six months (or, with the consent of each Lender, nine or twelve months) thereafter, as the Borrower may elect; provided, that (a) if any Interest Period would end on a
day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period pertaining to a Eurodollar Tranche that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Tranche initially shall be the date on which such Loans comprising such Tranche are made and thereafter shall
be the effective date of the most recent conversion or continuation of such Tranche. 
  
 “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) or (c) the entering into of any guarantee of, or other contingent obligation (including the deposit of any Equity Interests to be sold) with respect to, Debt of any other Person and
(without duplication) any amount committed to be advanced, lent or extended to such Person. 
  
 “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. 
  
 “LIBO
Rate” means, with respect to any Eurodollar Tranche for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such
rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Tranche for such Interest Period shall be the rate (rounded upwards, if necessary, to 
  

 12 

 the next  1/16 of 1%) at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. 
  
 “Lien” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to (a) the lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes or (b) production payments and the like payable out of Oil and Gas Properties. For the purposes of this Agreement, the Borrower and its
Restricted Subsidiaries shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person in a transaction intended to create a financing. 
  
 “Loan Documents” means this Agreement, the Notes, Security Instruments and the Intercreditor Agreement. 
  
 “Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement. 
  
 “Majority Lenders” means, at any time while no Loans are
outstanding, Lenders having at least sixty-six and two-thirds percent (66 2/3%) of the Commitments; and at any
time while any Loans are outstanding, Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of the
outstanding principal amount of the Loans (without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c)). 
  
 “Margin Account” has the meaning assigned to such term in Section 9.21. 
  
 “Marketing Agreement” means the Service Agreement between Calpine Producer Services, L.P. and the Borrower.

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

 13 

 “Maturity Date” means July 7, 2010. 
  
 “Moody’s” means Moody’s Investors Service, Inc.
and any successor thereto that is a nationally recognized rating agency. 
  
 “Mortgaged Property” means any Property owned by the Borrower or any Guarantor which is subject to the Liens existing and to exist under the terms of the Security Instruments. 
  
 “Multiemployer Plan” means a Plan which is a multiemployer
plan as defined in section 3(37) or 4001 (a)(3) of ERISA. 
  
 “Non-Recourse Debt” means any Debt of any Unrestricted Subsidiary, in each case in respect of which: (a) the holder or holders thereof (i) shall have recourse only to, and shall have the right to require the obligations of
such Unrestricted Subsidiary to be performed, satisfied, and paid only out of, the Property of such Unrestricted Subsidiary and/or one or more of its Subsidiaries (but only to the extent that such Subsidiaries are Unrestricted Subsidiaries) and/or
any other Person (other than Borrower and/or any Restricted Subsidiary) and (ii) shall have no direct or indirect recourse (including by way of guaranty, support or indemnity) to the Borrower or any Restricted Subsidiary or to any of the Property of
Borrower or any Restricted Subsidiary, whether for principal, interest, fees, expenses or otherwise; and (b) the terms and conditions relating to the non-recourse nature of such Debt are in form and substance reasonably acceptable to the
Administrative Agent. 
  
 “Notes” means the
promissory notes of the Borrower described in Section 2.02(d) and being substantially in the form of Exhibit A, together with all amendments, modifications, replacements, extensions and rearrangements thereof. 
  
 “Offering Memorandum” means that certain Offering Memorandum
dated June 30, 2005 from the Borrower related to the offering of 45,312,500 shares of its common stock. 
  
 “Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon
Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental
Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the
production, 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 
  

 14 

 personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures,
valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all
additions, substitutions, replacements, accessions and attachments to any and all of the foregoing. Unless otherwise indicated herein, each reference to the term “Oil and Gas Properties” shall mean Oil and Gas Properties of the Borrower
and the Restricted Subsidiaries. 
  
 “Other
Taxes” means any and all present or future stamp or documentary taxes or any other excise or Property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement and any other Loan Document. 
  
 “Participant” has the meaning set forth in Section 12.04(c)(i). 
  
 “PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto. 
  
 “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. 
  
 “Plan” means any employee pension benefit plan, as defined in section 3(2) of ERISA, which (a) is currently or hereafter sponsored, maintained or contributed to by the Borrower, a Subsidiary or an ERISA Affiliate or (b) was
at any time during the six calendar years preceding the date hereof, sponsored, maintained or contributed to by the Borrower or a Subsidiary or an ERISA Affiliate. 
  
 “Prime Rate” means the rate of interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. Such rate is set by the
Administrative Agent as a general reference rate of interest, taking into account such factors as the Administrative Agent may deem appropriate; it being understood that many of the Administrative Agent’s commercial or other loans are priced in
relation to such rate, that it is not necessarily the lowest or best rate actually charged to any customer and that the Administrative Agent may make various commercial or other loans at rates of interest having no relationship to such rate.

  
 “Private Placement” means the issuance and
sale of common stock of the Borrower pursuant to the Offering Memorandum. 
  
 “Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract
rights. 
  
 “Proved Reserves” means “Proved
Reserves” as defined in the Definitions for Oil and Gas Reserves (in this paragraph, the “Definitions”) promulgated by the Society of Petroleum 
  

 15 

 Engineers (or any generally recognized successor) as in effect at the time in question. “Proved Developed
Producing Reserves” means Proved Reserves which are categorized as both “Developed” and “Producing” in the Definitions, “Proved Developed Nonproducing Reserves” means Proved Reserves which are
categorized as both “Developed” and “Nonproducing” in the Definitions, and “Proved Undeveloped Reserves” means Proved Reserves which are categorized as “Undeveloped” in the Definitions.

  
 “Purchase and Sale Agreement” means the
Purchase and Sale Agreement among Calpine, Calpine Gas Holdings LLC, Calpine Fuels Corporation, and the Borrower, dated July 7, 2005. 
  
 “Purchaser” has the meaning assigned such term in Section 9.21. 
  
 “PV” means the net present value, discounted at 10% per annum, of the future net revenues expected to
accrue to the Borrower’s and its Restricted Subsidiaries’ collective interests in Proved Reserves expected to be produced from Oil and Gas Properties during the remaining expected economic lives of such reserves. Each calculation of such
expected future net revenues shall be made in accordance with the then existing standards of the Society of Petroleum Engineers, provided that in any event (a) appropriate deductions shall be made for severance and ad valorem taxes, and for
operating, gathering, transportation and marketing costs required for the production and sale of such reserves, (b) appropriate adjustments shall be made for hedging operations, provided that Swap Agreements with non-investment grade counterparties
shall not be taken into account to the extent that such Swap Agreements improve the position of or otherwise benefit the Borrower or any of its Restricted Subsidiaries, (c) the pricing assumptions used in determining PV for any particular reserves
shall be based upon the following price decks: (i) for natural gas, the lesser of (A) the quotation for deliveries of natural gas for each such year from the New York Mercantile Exchange for Henry Hub and (B) $5.50/MMBtu, provided that with respect
to quotations for calendar years after the fifth calendar year, the quotation for the fifth calendar year shall be applied and (ii) for crude oil, the lesser of (A) the quotation for deliveries of West Texas Intermediate crude oil for each such
calendar year from the New York Mercantile Exchange for Cushing, Oklahoma, provided that with respect to quotations for calendar years after the fifth calendar year, the quotation for the fifth calendar year shall be applied and (B) $35.00/Bbl, and
(d) the cash-flows derived from the pricing assumptions set forth in clauses (b) and (c) above shall be further adjusted to account for the historical basis differentials for each month during the preceding 12-month period calculated by comparing
realized crude oil and natural gas prices to Cushing, Oklahoma and Henry Hub NYMEX prices for each month during such period. 
  
 “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. 
  
 “Register” has the meaning assigned such term in Section 12.04(b)(iv). 
  
 “Regulation D” means Regulation D of the Board, as the same
may be amended, supplemented or replaced from time to time. 
  

 16 

 “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors (including attorneys, accountants and experts) of such Person and such Person’s Affiliates. 
  
 “Remedial Work” has the meaning assigned such term in Section 8.10(a). 
  
 “Reserve Report” means the Initial Reserve Report and each
other report setting forth, as of each January 1st or July 1st (or such other specified “as of” date contemplated by Section 2.07), the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the Restricted
Subsidiaries, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, consistent with SEC reporting requirements at the time and reflecting
(and conforming to the definition of) PV, provided that each such report hereafter delivered must (a) separately report on Proved Developed Producing Reserves, Proved Developed Nonproducing Reserves and Proved Undeveloped Reserves and separately
calculate the PV of each such category of Proved Reserves for the Borrower’s and the Restricted Subsidiaries’ interests, (b) take into account the Borrower’s actual experiences with leasehold operating expenses and other costs in
determining projected leasehold operating expenses and other costs, (c) identify and take into account any “over-produced” or “under-produced” status under gas balancing arrangements, and (d) contain information and analysis
comparable in scope to that contained in the Initial Reserve Report. 
  
 “Responsible Officer” means, as to any Person, the Chief Executive Officer, the President, any Financial Officer or any Executive Vice President or other Vice President of such Person. Unless otherwise specified, all
references to a Responsible Officer herein shall mean a Responsible Officer of the Borrower. 
  
 “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in the Borrower or any of its Subsidiaries, or any
payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or any
of its Subsidiaries or any option, warrant or other right to acquire any such Equity Interests in the Borrower. 
  
 “Restricted Subsidiary” means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary. 
  
 “SEC” means the Securities and Exchange Commission or any
successor Governmental Authority. 
  
 “Security
Instruments” means the Guaranty Agreement, the Control Agreement, mortgages, deeds of trust and other agreements, instruments or certificates described or referred to in Exhibit F-1, and any and all other agreements, instruments, consents
or certificates now or hereafter executed and delivered by the Borrower or any other Person (other than 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, as such agreements may be amended, modified, supplemented or restated from time to time. 
  

 17 

 “Seller” has the meaning assigned such term in Section 9.21. 
  
 “Senior Revolving Credit Agreement” means that certain
Senior Revolving Credit Agreement dated as of July 7, 2005 among the Borrower, as borrower, BNP Paribas, as administrative agent and the other agents and lenders from time to time parties thereto and any “Loan Documents” (as defined
therein) executed in connection therewith, in each case, as hereafter amended, supplemented, modified, restated, refinanced or replaced from time to time, subject to Section 9.02(g) and Section 9.03(e). 
  
 “Senior Revolving Credit Documents” means the Senior
Revolving Credit Agreement, the Senior Notes and any “Loan Documents” (as defined therein), in each case, together with all amendments, modifications and supplements thereto. 
  
 “Senior Revolving Credit Notes” means the Notes from time to time issued under the Senior Revolving Credit
Agreement. 
  
 “Separation” means the following
transactions: 
  
 (a) STEP I: Calpine causes the formation of new
indirect subsidiaries and enters into the Transfer and Assumption Agreement; 
  
 (b) STEP II: Calpine, the Borrower and the other parties thereto enter into the Purchase and Sale Agreement; 
  
 (c) STEP III: Calpine causes the domestic oil and gas assets subject of the Transfer and Assumption Agreement to be transferred to the newly formed
subsidiaries; 
  
 (d) STEP IV: The following fundings occur:

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

 18 

 “Separation Documents” means the following agreements as such documents exist on the
date hereof, in each case, together with all amendments, modifications and supplements thereto permitted by Section 9.20: 
  
 (a) Purchase and Sale Agreement; 
  
 (b) Transfer and Assumption Agreement; 
  
 (c) Transition Services Agreement; 
  
 (d) Marketing Agreement; and 
  
 (e) all other agreements, instruments and documents executed in connection with the Separation. 
  
 “September Reserve Report” has the meaning assigned to such
term in Section 2.07. 
  
 “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 Tranches shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. 
  
 “Subsidiary” means: (a) any Person of which at least a
majority of the outstanding Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors, manager or other governing body of such Person (irrespective of whether or not at the time Equity Interests
of any other class or classes of such Person shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by the Borrower or one or more of its Subsidiaries or by the
Borrower and one or more of its Subsidiaries and (b) any partnership of which the Borrower or any of its Subsidiaries is a general partner. Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a
Subsidiary of the Borrower. 
  
 “Swap Agreement”
means any agreement with respect to any swap, forward, future or derivative transaction, collar or option or similar agreement, whether exchange traded, “over-the-counter” or otherwise, involving, or settled by reference to, one or more
rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any 
  

 19 

 combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account
of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement; provided further, that no options to purchase tangible Property for cash (other than currency
options) shall be a Swap Agreement. 
  
 “Swap Termination
Value” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements have
been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Agreements,
as determined by the counterparties to such Swap Agreements. 
  
 “Synthetic Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, treated as operating leases on the financial statements of the Person liable (whether
contingently or otherwise) for the payment of rent thereunder and which were properly treated as indebtedness for borrowed money for purposes of U.S. federal income taxes, if the lessee in respect thereof is obligated to either purchase for an
amount in excess of, or pay upon early termination an amount in excess of, 80% of the residual value of the Property subject to such operating lease upon expiration or early termination of such lease. 
  
 “Taxes” means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority. 
  
 “Total Debt” means, at any date, all Debt of the Borrower and the Consolidated Restricted Subsidiaries on a consolidated basis, excluding non-cash obligations under FAS 133. 
  
 “Total Reserve Value” means at any time the PV attributable
to Proved Reserves as most recently determined and certified to the Lenders in accordance with 0, as the same may be adjusted from time to time pursuant to Section 8.13(c) or Section 9.13(e) and further adjusted, if necessary, to exclude a portion
of reserves other than Proved Developed Producing Reserves such that not less than 60% of Total Reserve Value is attributable to the PV of Proved Developed Producing Reserves. 
  
 “Transactions” means, with respect to (a) the Borrower, the execution, delivery and performance by the
Borrower of this Agreement and each other Loan Document, Acquisition Document and Separation Document to which it is a party, the Acquisition, the Separation, the borrowing of the Loan, the use of the proceeds thereof, and the Borrower’s grant
of the security interests and provision of collateral under the Security Instruments and (b) each Guarantor, the execution, delivery and performance by such Guarantor of each Loan Document, Acquisition Document and Separation Document to which it is
a party, the Acquisition, the Separation, the guaranteeing of the Indebtedness and the other obligations under the Guaranty Agreement by such Guarantor and such Guarantor’s grant of the security interests and provision of collateral under the
Security Instruments, and the grant of Liens by such Guarantor on Mortgaged Properties and other Properties pursuant to the Security Instruments. 
  

 20 

 “Transfer and Assumption Agreement” means the Transfer and Assumption Agreement dated
July 7, 2005 by and among Calpine, and the subsidiaries of Calpine Gas Holdings LLC identified therein. 
  
 “Transition Services Agreement” means the Transition Services Agreement dated July 7, 2005 by and among Calpine, Calpine Fuels
Corporation, the Borrower and Calpine Natural Gas, L.P. 
  
 “Type”, when used in reference to any Loan or Tranche, refers to whether the rate of interest on such Loan, or on the Loans comprising such Tranche is determined by reference to the Alternate Base Rate or the Adjusted LIBO
Rate. 
  
 “Unrestricted Subsidiary” means any
Subsidiary of the Borrower designated as such on Schedule 7.15 or which the Borrower has designated in writing to the Administrative Agent to be an Unrestricted Subsidiary pursuant to Section 9.06. 
  
 “Wholly-Owned Subsidiary” means any Restricted Subsidiary of
which all of the outstanding Equity Interests (other than any directors’ qualifying shares mandated by applicable law), on a fully-diluted basis, are owned by the Borrower or one or more of the Wholly-Owned Subsidiaries or by the Borrower and
one or more of the Wholly-Owned Subsidiaries. 
  
 Section 1.03
Types of Loans and Borrowings. For purposes of this Agreement, Loans and Tranches, respectively, may be classified and referred to by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Tranche”). 
  
 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. 
  

 21 

 Section 1.05 Accounting Terms and Determinations; GAAP. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the
Administrative Agent or the Lenders hereunder shall be prepared, in accordance with GAAP as in effect at such time; provided that upon the occurrence of any change in GAAP after the Effective Date, Borrower shall disclose to Administrative Agent on
the next date on which financial statements are required to be delivered to the Lenders pursuant to Section 8.01(a) any such change, and no such change shall modify or affect the manner in which compliance with the covenants contained herein is
computed such that all such computations shall be conducted utilizing financial information presented consistently with prior periods, unless the Borrower and the Majority Lenders shall otherwise agree in writing. 
  
 ARTICLE II 
 The Loans 
  
 Section 2.01 Term Loans. Subject to the terms and conditions set forth herein, each Lender agrees on the Effective Date to make a Loan in dollars to the Borrower in an aggregate principal amount equal to such Lender’s
Commitment. The Commitments are not revolving and amounts repaid or prepaid may not be re-borrowed under any circumstance. Any portion of the Commitments not utilized by the Borrower on or before 3:00 p.m. New York City time on the Effective Date
shall be permanently cancelled. 
  
 Section 2.02 Loans.

  
 (a) Several Obligations. Each Loan shall be made as
part of a Tranche consisting of Loans made on the Effective Date by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to fund its Loan 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 its Loan as required. 
  
 (b) Types of Tranches. Subject to Section 3.03, each Tranche shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its option (but subject to Section 5.04) may fund any Eurodollar Loans 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 Lender’s Loan in accordance with the terms of this Agreement. 
  
 (c) Minimum Amounts. At the commencement of each Interest Period for any Eurodollar Tranche, such Tranche shall be in an aggregate amount that is
an integral multiple of $1,000,000 and not less than $10,000,000. At the time that each ABR Tranche is made, such Tranche shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. Tranches 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 four Eurodollar Tranches outstanding. Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to elect
to convert or continue any Tranche if the Interest Period requested with respect thereto would end after the Maturity Date. 
  

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 (d) Notes. The Loan 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, or (ii) any Lender that becomes a party hereto pursuant to an Assignment and Assumption, as of the effective date
of the Assignment and Assumption, payable to the order of such Lender in a principal amount equal to such Lender’s funded Loan as in effect on such date, and otherwise duly completed. The date, amount, Type, interest rate and, if applicable,
Interest Period of each Tranche consisting of a portion of the 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 its Loan or affect the validity of such transfer by any Lender of its Note. 
  
 Section 2.03 Requests for the Loans Not later than 12:00 noon, New York City time, three Business Days before the Effective Date, the Borrower
shall request the Loans by notifying the Administrative Agent by telephone, fax (or electronic communication, if arrangements for doing so have been approved by the Administrative Agent), and shall confirm such request by delivering to the
Administrative Agent and the Lenders a written Borrowing Request in substantially the form of Exhibit B and signed by the Borrower. Such telephonic, electronic or written request shall specify the following information in compliance with Section
2.02: 
  
 (i) the aggregate amount of the requested Loans;

  
 (ii) the Effective Date, which shall be a Business Day;

  
 (iii) whether any portion of such Loans is to be an ABR
Tranche or a Eurodollar Tranche; 
  
 (iv) in the case of a
Eurodollar Tranche, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and 
  
 (v) 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 is specified, then
the entire portion of the Loans shall be an ABR Tranche. If no Interest Period is specified with respect to any requested Eurodollar Tranche, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

  
 Promptly following receipt of the 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. 
  
 Section 2.04 Interest Elections. 
  
 (a) Conversion and Continuance. Each Tranche initially shall be of the Type specified in the Borrowing Request and, in the case of a Eurodollar
Tranche, shall have an initial 
  

 23 

 Interest Period as specified in the Borrowing Request. Thereafter, the Borrower may elect to convert such Tranche to a
different Type or to continue such Tranche and, in the case of a Eurodollar Tranche, 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 Tranche, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Tranche, and the Loans comprising each such portion shall be considered a separate Tranche. 
  
 (b) Interest Election Requests. To make an election pursuant to this
Section 2.04, the Borrower shall notify the Administrative Agent of such election by telephone, fax (or transmit by electronic communication, if arrangements for doing so have been approved by the Administrative Agent) (i) in the case of a
Eurodollar Tranche, not later than 12:00 noon, New York City time, three Business Days before the first day of the Interest Period related to such Tranche and (ii) in the case of an ABR Tranche, not later than 12:00 noon, New York City time, on the
same Business Day of the proposed conversion or continuation. Each such telephonic (or electronic communication) Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Interest Election Request in substantially the form of Exhibit C and signed by the Borrower. 
  
 (c) Information in Interest Election Requests. Each telephonic, electronic communication and written Interest Election Request shall specify the
following information in compliance with Section 2.02: 
  
 (i)
the Tranche 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 Tranche (in which case the information to be
specified pursuant to Section 2.04(c)(iii) and (iv) shall be specified for each resulting Tranche); 
  
 (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; 
  
 (iii) whether the resulting Tranche is to be an ABR Tranche or a Eurodollar
Tranche; and 
  
 (iv) if the resulting Tranche is a Eurodollar
Tranche, 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 Tranche but does not specify an Interest Period, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration. 
  
 (d) Notice to Lenders by the Administrative Agent. Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s
portion of each resulting Tranche. 
  
 (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 
  

 24 

 with respect to a Eurodollar Tranche prior to the end of the Interest Period applicable thereto, then, unless such
Tranche is repaid as provided herein, at the end of such Interest Period such Tranche shall be converted to an ABR Tranche. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing: (i) no outstanding
Tranche may be converted to or continued as a Eurodollar Tranche (and any Interest Election Request that requests the conversion of any Tranche to, or continuation of any Tranche as, a Eurodollar Tranche shall be ineffective) and (ii) unless repaid,
each Eurodollar Tranche shall be converted to an ABR Tranche at the end of the Interest Period applicable thereto. 
  
 Section 2.05 Funding the Loans. 
  
 (a) Funding by Lenders. Each Lender shall make its Loan on the Effective Date by wire transfer of immediately available funds by 1:00 p.m., New
York, New York time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York, New York and designated by the Borrower in the Borrowing Request. 
  
 (b) Presumption of Funding by the Lenders. Unless the Administrative Agent shall have received notice from a Lender
prior to the Effective Date that such Lender will not make available to the Administrative Agent such Lender’s Loan, the Administrative Agent may assume that such Lender has made its Loan 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 Loan 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 Tranches. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan. 
  
 Section 2.06 Termination. The Commitments shall terminate at 3.00 p.m., New York, New York time on the Effective
Date. 
  
 Section 2.07 Total Reserve Value. Subject to
interim adjustment under Section 6.01(r), Section 8.14 and Section 9.13, the initial Total Reserve Value shall be $1,050,000,000. The Borrower shall deliver to the Administrative Agent a certificate, in form reasonably satisfactory to the
Administrative Agent, no later than April 1st and October 1st of each year reflecting the Total Reserve Value as of the immediately preceding January 1 and July 1, commencing April 1, 2006; and, on or before October 30, 2005, the Borrower shall
deliver to the Administrative Agent a Reserve Report with an “as of” date of September 30, 2005 (the “September Reserve Report”) together with a certificate in form reasonably satisfactory to the Administrative Agent
reflecting the Total Reserve Value as of September 30, 2005. In addition, the Borrower may, by notifying the Administrative Agent thereof, and the Administrative Agent may, at the direction of the 
  

 25 

 Majority Lenders, by notifying the Borrower thereof, each elect to require the Total Reserve Value be determined one
additional time on a specified “as of” date between such regular determinations (which shall be the first day of a calendar month following the date of such notice), in which event the Borrower shall deliver to the Administrative Agent a
certificate, in form reasonably satisfactory to the Administrative Agent, no later than three months after such specified date reflecting the Total Reserve value as of such specified date. The Borrower shall calculate the Total Reserve Value based
upon the applicable definitions of this Agreement, and provide with each such certificate the Reserve Report and other information used by the Borrower in calculating the Total Reserve Value. 
  
 Upon receipt of such certificate, the Administrative Agent shall promptly review such
certificate and, within five (5) Business Days, confirm to the Borrower and the Lenders that (i) the calculations used to determine the Total Reserve Value were based upon the pricing and other requirements set forth in the definition of Total
Reserve Value and (ii) no mathematical or other errors or omissions have been made in such calculation. If facts under (i) or (ii) are ascertained to exist, the Administrative Agent and the Borrower shall cooperate to promptly calculate the proper
amount of the Total Reserve Value. Otherwise, upon confirmation of such amount as the Total Reserve Value, such amount will be the Total Reserve Value until next adjusted or redetermined in accordance with the terms of this Agreement. 
  
 Section 2.08 Subordination of Loans. The Loans, the Notes, this
Agreement and the other Loan Documents; the rights and remedies of the Lenders and the Administrative Agent hereunder and thereunder and the Liens created thereby are subject to the Terms of Subordination attached hereto as Annex II. 
  
 ARTICLE III 
 Payments of Principal and Interest; Prepayments; Fees 
  
 Section 3.01 Repayment of the Loans. On the Maturity Date, the Borrower shall repay the outstanding principal balance of the Loans in full.

  
 Section 3.02 Interest. 
  
 (a) ABR Tranches. The portion of the Loans comprising each ABR
Tranche shall bear interest at the Alternate Base Rate plus the Applicable Margin, but in no event to exceed the Highest Lawful Rate. 
  
 (b) Eurodollar Tranches. The portion of the Loans comprising each Eurodollar Tranche shall bear interest at the Adjusted LIBO Rate for the Interest
Period in effect for such Tranche plus the Applicable Margin, but in no event to exceed the Highest Lawful Rate. 
  
 (c) Post-Default Rate. Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the
Borrower or any Guarantor hereunder or under any other Loan Document is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum
equal to two percent (2%) plus the rate applicable to ABR Tranches as provided in Section 3.02(a), but in no event to exceed the Highest Lawful Rate. 
  

 26 

 (d) Interest Payment Dates. Accrued interest on the principal amount of each Loan comprising a
Tranche shall be payable in arrears on each Interest Payment Date for such Tranche; provided that (i) interest accrued pursuant to Section 3.02(c) shall be payable on demand, (ii) in the event of any prepayment of principal of any Loan, accrued
interest on the principal amount prepaid shall be payable on the date of such prepayment, and (iii) in the event of any conversion of any Eurodollar Tranche 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 Tranche: 
  
 (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 a portion of their Loans included in such Tranche for such Interest Period; 
  
 then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Tranche to, or continuation
of any Tranche as, a Eurodollar Tranche shall be ineffective, and (ii) if the Borrowing Request requests a Eurodollar Tranche, such Tranche shall be made as an ABR Tranche. 
  
 Section 3.04 Prepayments. 
  

(a) Optional Prepayments. Subject to any break funding costs payable pursuant to Section 5.02 and prior notice in accordance with Section
3.04(b), the Borrower shall have the right to prepay the Loans at any time, in whole or in part, as follows: 
  
 (i) at any time during the period commencing on the first Business Day after the Effective Date to and including the first anniversary of the Effective
Date, with a premium equal to 2% of such amount prepaid; provided that during such period, the Borrower may, without premium or penalty, prepay Loans in an aggregate amount of up to the greater of (A) $25,000,000 or (ii) the aggregate gross cash
proceeds of the sale of Equity Interests in such period; 
  

 27 

 (ii) at any time during the period commencing on the first anniversary of the Effective Date to and
including the second anniversary of the Effective Date, with a premium equal to 1% of such amount prepaid; 
  
 (iii) at any time during the period commencing on the second anniversary of the Effective Date, without premium or penalty; provided that, in any event,
each prepayment is in an amount that is an integral multiple of $1,000,000 and not less than $1,000,000, or if such amount is less than $1,000,000, the outstanding principal amount of the Loans. 
  
 (b) Notice and Terms of Optional Prepayment. The Borrower shall notify
the Administrative Agent by telephone, electronic communication and/or fax (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Tranche, not later than 12:00 noon, New York City time, three Business Days
before the date of prepayment, or (ii) in the case of prepayment of an ABR Tranche, not later than 12:00 noon, New York City time, on the Business Day of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the
principal amount of the Loans or portion thereof to be prepaid. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each prepayment of a Tranche shall be applied ratably to the
Loans of all Lenders. Prepayments shall be accompanied by accrued and unpaid interest to the extent required by Section 3.01. 
  
 Section 3.05 Fees. 
  
 (a) Administrative Agent Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the
times separately agreed upon between the Borrower and the Administrative Agent. 
  
 (b) Payment of Fees. All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent. Fees paid shall not be refundable under any circumstances.

  
 ARTICLE IV 
 Payments; Pro Rata Treatment; Sharing of Set-offs 
  
 Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of Set-offs. 
  
 (a) Payments by the Borrower. The Borrower shall make each payment required to be made by it hereunder (whether of
principal, interest or fees, or of amounts payable under Section 5.01, Section 5.02, Section 5.03 or otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available funds, without defense, deduction, recoupment,
set-off or counterclaim. Fees, once paid, shall be fully earned and shall not be refundable under any circumstances. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business 
  

 28 

 Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its
offices specified in Section 12.01, as expressly provided herein and except that payments pursuant to Section 5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars. 
  
 (b) Application of Insufficient Payments. If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully all amounts of principal, 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 then due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal 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 its Loan resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loan 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 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; 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 its Loan 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 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 the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender with interest thereon, for each day from and including 
  

 29 

 the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. 
  
 Section 4.03 Certain Deductions by the Administrative Agent. If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.05(b) or Section 4.02 then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid. 
  
 Section 4.04 Disposition of Proceeds. The Security Instruments contain an assignment by the Borrower and/or the Guarantors unto and in favor of the
Administrative Agent for the benefit of the Lenders of all of the Borrower’s or each Guarantor’s interest in and to production and all proceeds attributable thereto which may be produced from or allocated to the Mortgaged Property. The
Security Instruments further provide in general for the application of such proceeds to the satisfaction of the Indebtedness and other obligations described therein and secured thereby. Notwithstanding the assignment contained in such Security
Instruments, until the occurrence of an Event of Default, (a) the Administrative Agent and the Lenders agree that they will neither notify the purchaser or purchasers of such production nor take any other action to cause such proceeds to be remitted
to the Administrative Agent or the Lenders, but the Lenders will instead permit such proceeds to be paid to the Borrower and its Restricted Subsidiaries and (b) the Lenders hereby authorize the Administrative Agent to take such actions as may be
necessary to cause such proceeds to be paid to the Borrower and/or such Restricted Subsidiaries. 
  
 ARTICLE V 
 Increased Costs; Break Funding Payments; Taxes; Illegality

  
 Section 5.01 Increased Costs. 
  
 (a) Eurodollar Changes in Law. If any Change in Law shall:

  
 (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or 
  
 (ii) impose on any Lender or the London interbank market any other condition
affecting this Agreement or any Eurodollar Tranche consisting of any portion of the Loan of 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 Tranche (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. 
  

 30 

 (b) Capital Requirements. If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loan made by such Lender, to a level
below that which such Lender or the or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered. 
  
 (c) Certificates. A certificate of a Lender setting forth the amount
or amounts necessary to compensate such Lender 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
the amount shown as due on any such certificate within 10 days after receipt thereof. 
  
 (d) Effect of Failure or Delay in Requesting Compensation. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s
right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section 5.01 for any increased costs or reductions incurred more than 180 days prior to the date that such Lender notifies
the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. 
  
 Section 5.02 Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Tranche 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 Tranche into an ABR Tranche other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Tranche on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Tranche other than on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 5.04(b), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Tranche, 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 its Loan had such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of
a comparable amount and period from other banks in the eurodollar market. 
  
 A
certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 5.02 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt thereof. 
  

 31 

 Section 5.03 Taxes. 
  
 (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower or any Guarantor
under any Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower or any Guarantor shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 5.03), the Administrative Agent or Lender (as the case may
be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower 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 and each Lender, within 10
days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender 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 or a Lender as to the amount of such payment or liability under this Section 5.03 shall be delivered to
the Borrower and shall be conclusive absent manifest error. 
  
 (d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or a Guarantor to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or
a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. 
  
 (e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate. 
  

 32 

 Section 5.04 Mitigation Obligations; Replacement of Lenders. 
  
 (a) Designation of Different Lending Office. If any Lender requests
compensation under Section 5.01, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.03, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loan hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 5.01 or Section 5.03, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. 
  
 (b) Replacement of Lenders. If any Lender requests compensation under Section 5.01, or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.03, or if any Lender defaults in its obligation to fund its Loan hereunder, then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.04(b)), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall
not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loan, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 5.01 or payments required to be
made pursuant to Section 5.03, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. 
  
 Section 5.05 Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its
applicable lending office to honor its obligation to make or maintain any portion of its Loan as part of any Eurodollar Tranche either generally or having a particular Interest Period hereunder, then (a) such Lender shall promptly notify the
Borrower and the Administrative Agent thereof and such Lender’s obligation to make such portion of its Loan as part of such Eurodollar Tranche shall be suspended (the “Affected Portion”) until such time as such Lender may again
make and maintain such portion of its Loan as part of such Eurodollar Tranche and (b) all Affected Portion which would otherwise be made by such Lender shall be made instead as ABR Portion (and, if such Lender so requests by notice to the Borrower
and the Administrative Agent, all Affected Portion of such Lender then outstanding shall be automatically converted into ABR Tranches on the date specified by such Lender in such notice) and, to the extent that Affected Portion are so made as (or
converted into) ABR Tranches, all payments of principal which would otherwise be applied to such Lender’s Affected Portion shall be applied instead to its ABR Tranches. 
  

 33 

 ARTICLE VI 
 Conditions Precedent 
  
 Section 6.01 Effective Date. The obligations of each Lender to make its Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 12.02):

  
 (a) The Administrative Agent, the Arranger and the Lenders
shall have received all facility and agency fees and all other fees and amounts due and payable on or prior to the Effective Date, including, to the extent invoiced two Business Days prior to the Effective Date, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder (including, without limitation, the fees and expenses of Vinson & Elkins LLP, counsel to the Administrative Agent). 
  
 (b) The Administrative Agent shall have received a certificate of the
Secretary or an Assistant Secretary of the Borrower and each Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of the Borrower or such Guarantor to execute and deliver the Loan Documents to which it
is a party and to enter into the transactions contemplated in those documents, (ii) the officers of the Borrower or such Guarantor (y) who are authorized to sign the Loan Documents to which the Borrower or such Guarantor is a party and (z) who will,
until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation and bylaws (or other organizational documents) of the Borrower and such Guarantor, certified as being true and
complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. 
  
 (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the
existence, qualification and good standing of the Borrower and each Guarantor. 
  
 (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and properly executed by a Responsible Officer and dated as of the date of
Effective Date. 
  
 (e) The Administrative Agent shall have
received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. 
  

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

 34 

 (g) The Administrative Agent shall have received from each party thereto duly executed counterparts (in
such number as may be requested by the Administrative Agent) of the Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security Instruments, the Administrative Agent shall: 
  
 (i) be reasonably satisfied that the Security Instruments create first
priority, perfected Liens (subject only to Excepted Liens identified in clauses (a) to (d) and (f) of the definition thereof, but subject to the provisos at the end of such definition) on at least 80% of the total value of the Oil and Gas Properties
evaluated in the Initial Reserve Report, all of which presently secure the Senior Revolving Credit Agreement; 
  
 (ii) have received certificates, together with undated, blank stock or equity powers for each such certificate, to the extent any issued and outstanding
Equity Interests of any Guarantor is certificated; 
  
 (iii) be
reasonably satisfied that it has a Lien on all Property constituting security for the Senior Revolving Credit Agreement. 
  
 (h) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that (i) the Borrower has sold, or
contemporaneously with the funding hereunder is selling, not less than 45,312,500 shares of common stock of the Borrower pursuant to the Private Placement which shall result in gross cash proceeds of not less than $550,000,000 and (ii) the Borrower
shall be contemporaneously closing the Senior Revolving Credit Agreement pursuant to which the Borrower shall have not less than $275,000,000 of available credit of which not more than $247,500,000 is drawn (as loans thereunder or letters of
credit), or to be drawn, on the Effective Date. 
  
 (i) The
Administrative Agent shall have received an opinion of (i) Thompson & Knight L.L.P., special counsel to the Borrower, substantially in the form of Exhibit E-1 hereto, and (ii) local counsel in California, substantially in the form of Exhibit
E-2. 
  
 (j) The Administrative Agent shall have received a
certificate of insurance coverage of the Borrower evidencing that the Borrower is carrying insurance in accordance with Section 7.13. 
  
 (k) The Administrative Agent shall be reasonably satisfied with the status of title to at least 80% of the total value of the Oil and Gas Properties
evaluated in the Initial Reserve Report. 
  
 (l) The
Administrative Agent shall be reasonably satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries (including the Acquisition Properties). 
  
 (m) The Administrative Agent shall have received a certificate of a
Responsible Officer of the Borrower certifying that the Borrower has received all consents and approvals required by Section 7.03. 
  

 35 

 (n) The Administrative Agent shall have received the financial statements referred to in Section 7.04(a)
and the Initial Reserve Report accompanied by a certificate covering the matters described in Section 8.12(c). 
  
 (o) The Administrative Agent shall have received a copy, certified by a Responsible Officer of the Borrower as true and complete, of each of the
following: (i) the Offering Memorandum and any SEC Filings made by Calpine or the Borrower in respect of the Private Placement, (ii) the Acquisition Documents, (iii) all opinions delivered by the sellers’ counsel and the Borrower’s
counsel, pursuant to the Purchase/Placement Agreement dated June 30, 2005 between the Borrower and Friedman, Billings, Ramsey & Co., Inc., as initial purchaser and addressed to the Lenders (or reliance letters to the effect that the Lenders may
rely on such opinions) and (iv) the Separation Documents. 
  
 (p)
The Administrative Agent shall be satisfied with the terms, conditions and documentation of the Acquisition, the Separation and any other matters as the Administrative Agent deems necessary. 
  
 (q) The Administrative Agent shall have received appropriate UCC search
certificates reflecting no prior Liens encumbering the Properties of the Borrower and the Restricted Subsidiaries for each of the following jurisdictions: Arkansas, California, Colorado, Delaware, Kansas, Louisiana, Mississippi, Montana, New Mexico,
North Dakota, Oklahoma, Texas and Wyoming and any other jurisdiction requested by the Administrative Agent; other than those being assigned or released on or prior to the Effective Date or Liens permitted by Section 9.03. 
  
 (r) The Administrative Agent shall have received (i) a certificate of a
Responsible Officer of the Borrower certifying: (A) that the Borrower is concurrently consummating the Acquisition in accordance with the terms of the Acquisition Documents (with all of the material conditions precedent thereto having been satisfied
in all material respects by the parties thereto) and acquiring the Acquisition Properties contemplated by the Acquisition Documents; (B) as to the final purchase price for the Acquisition Properties after giving effect to all adjustments as of the
closing date contemplated by the Acquisition Documents and specifying, by category, the amount of such adjustment; (C) that the list of the Acquisition Properties which have been excluded from the Acquisition pursuant to the terms of the Acquisition
Documents as a result of third party consents attached to the Purchase and Sale Agreement is a true and complete list thereof; and (D) that the list of Acquisition Properties which are subject to preferential purchase rights attached to the Purchase
and Sale Agreement is a true and complete list thereof; and (ii) such other related documents and information as the Administrative Agent shall have reasonably requested. 
  
 The Borrower recognizes and agrees that (a) it shall have delivered to the Administrative Agent notice of any price
adjustments to the purchase price of the Acquisition for the items listed in (B) above not less than one (1) day prior to the Effective Date and (b) if the aggregate net present value of excluded properties, as reflected in the Initial Reserve
Report, is greater than $75,000,000, then the Total Reserve Value shall be reduced by an amount equal to the PV of such excluded Properties, which shall become the new Total Reserve Value hereunder as of the Effective Date until the next
redetermination or modification thereof hereunder. 
  

 36 

 (s) The Administrative Agent shall have received evidence satisfactory to it, and a certificate of a
Responsible Officer of the Borrower certifying, that on a pro forma basis after giving effect to the proceeds of the initial funding under the Senior Revolving Credit Agreement, the Borrower has liquidity (which shall include undrawn amounts under
this Agreement) of not less than $27,500,000. 
  
 (t) The
Administrative Agent shall be satisfied that there is no litigation seeking to enjoin or prevent the Acquisition, the Separation, the Private Placement or the financing contemplated hereby or by the Second Lien Term Loan Agreement. 
  
 (u) The Administrative Agent shall have received evidence satisfactory to it
that all Liens on the Acquisition Properties associated with any credit facilities and funded Debt have been released or terminated and that arrangements satisfactory to the Administrative Agent have been made for recording and filing of such
releases. 
  
 (v) The Administrative Agent shall have received a
certificate from Calpine granting the Administrative Agent the right to rely upon the relevant representation in the Purchase and Sale Agreement from each seller that is it “not insolvent” and “will not be rendered insolvent” as
such terms are used in applicable state and federal fraudulent conveyance or transfer laws. 
  
 (w) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. 
  
 The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of each Lender to make its Loan hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 12.02) at or prior to 2:00 p.m., Houston time, on July 31, 2005 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time). 
  
 Section 6.02 Each Credit Event. The obligation of each Lender to fund
its Loan (including the initial funding) is subject to the satisfaction of the following additional conditions: 
  
 (a) At the time of and immediately after giving effect to the funding of the Loans, no Default shall have occurred and be continuing. 
  
 (b) At the time of and immediately after giving effect to the funding of the
Loans, no Material Adverse Effect shall have occurred and be continuing. 
  
 (c) The representations and warranties of the Borrower and the Guarantors set forth in this Agreement and in the other Loan Documents shall be true and correct in all material respects on and as of the Effective Date,
except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the Effective Date, such representations and warranties shall continue to be true and correct as of such specified
earlier date. 
  

 37 

 (d) The making of such Loan shall not be prohibited by any Governmental Requirement and shall not subject
any Lender to any penalty or other onerous condition under or pursuant to any such Governmental Requirement. 
  
 (e) The receipt by the Administrative Agent of the Borrowing Request in accordance with Section 2.03. 
  
 ARTICLE VII 
 Representations and Warranties 
  
 The Borrower represents and warrants to the Lenders that: 
  
 Section 7.01 Organization; Powers. Each of the Borrower and the Restricted Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority, and has all material governmental licenses, authorizations, consents and approvals necessary, to own its assets and to carry on its business as now conducted, and is qualified to do business in, and is in good standing
in, every jurisdiction where such qualification is required, except where failure to have such power, authority, licenses, authorizations, consents, approvals and qualifications could not reasonably be expected to have a Material Adverse Effect.

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

 38 

 organizational documents of the Borrower or any Restricted Subsidiary or any order of any Governmental Authority, (c)
will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any Restricted Subsidiary or its Properties, or give rise to a right thereunder to require any payment to be made by the Borrower
or such Restricted Subsidiary and (d) will not result in the creation or imposition of any Lien on any Property of the Borrower or any Restricted Subsidiary (other than the Liens created by the Loan Documents). 
  
 Section 7.04 Financial Condition; No Material Adverse Change

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

 39 

 (b) Since the date of this Agreement, there has been no change in the status of the matters disclosed in
Schedule 7.05 that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect. 
  
 Section 7.06 Environmental Matters. Except as could not be reasonably expected to have a Material Adverse Effect (or with respect to (c), (d) and
(e) below, where the failure to take such actions could not be reasonably expected to have a Material Adverse Effect): 
  
 (a) neither any Property of the Borrower or any Restricted Subsidiary nor the operations conducted thereon violate any order or requirement of any court
or Governmental Authority or any Environmental Laws. 
  
 (b) no
Property of the Borrower or any Restricted Subsidiary nor the operations currently conducted thereon or, to the knowledge of the Borrower, by any prior owner or operator of such Property or operation, are in violation of or subject to any existing,
pending or threatened action, suit, investigation, inquiry or proceeding by or before any court or Governmental Authority or to any remedial obligations under Environmental Laws. 
  
 (c) all notices, permits, licenses, exemptions, approvals or similar authorizations, if any, required to be obtained or
filed in connection with the operation or use of any and all Property of the Borrower and each Restricted Subsidiary, including, without limitation, past or present treatment, storage, disposal or release of a hazardous substance, oil and gas waste
or solid waste into the environment, have been duly obtained or filed, and the Borrower and each Restricted Subsidiary are in compliance with the terms and conditions of all such notices, permits, licenses and similar authorizations. 
  
 (d) all hazardous substances, solid waste and oil and gas waste, if any,
generated at any and all Property of the Borrower or any Restricted Subsidiary have in the past been transported, treated and disposed of in accordance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public
health or welfare or the environment, and, to the knowledge of the Borrower, all such transport carriers and treatment and disposal facilities have been and are operating in compliance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the environment, and are not the subject of any existing, pending or threatened action, investigation or inquiry by any Governmental Authority in connection with any Environmental Laws.

  
 (e) the Borrower has taken all steps reasonably necessary to
determine and has determined that no oil, hazardous substances, solid waste or oil and gas waste, have been disposed of or otherwise released and there has been no threatened release of any oil, hazardous substances, solid waste or oil and gas waste
on or to any Property of the Borrower or any Restricted Subsidiary except in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment. 
  
 (f) to the extent applicable, all Property of the Borrower and each
Restricted Subsidiary currently satisfies all design, operation, and equipment requirements imposed by the OPA, and the Borrower does not have any reason to believe that such Property, to the extent subject to the OPA, will not be able to maintain
compliance with the OPA requirements during the term of this Agreement. 
  

 40 

 (g) neither the Borrower nor any Restricted Subsidiary has any known contingent liability or Remedial
Work in connection with any release or threatened release of any oil, hazardous substance, solid waste or oil and gas waste into the environment. 
  
 Section 7.07 Compliance with the Laws and Agreements; No Defaults. 
  
 (a) Each of the Borrower and each Restricted Subsidiary is in compliance with all Governmental Requirements applicable to it
or its Property and all agreements and other instruments binding upon it or its Property, and possesses all licenses, permits, franchises, exemptions, approvals and other governmental authorizations necessary for the ownership of its Property and
the conduct of its business, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
  
 (b) Neither the Borrower nor any Restricted Subsidiary is in default nor has any event or circumstance occurred which, but
for the expiration of any applicable grace period or the giving of notice, or both, would constitute a default or would require the Borrower or a Restricted Subsidiary to Redeem or make any offer to Redeem under any indenture, note, credit agreement
or instrument pursuant to which any Material Indebtedness is outstanding or by which the Borrower or any Restricted Subsidiary or any of their Properties is bound. 
  
 (c) No Default has occurred and is continuing. 
  
 Section 7.08 Investment Company Act. Neither the Borrower nor any Subsidiary is an “investment company” or
a company “controlled” by an “investment company,” within the meaning of, or subject to regulation under, the Investment Company Act of 1940, as amended. 
  
 Section 7.09 Public Utility Holding Company Act. Neither the Borrower nor any Subsidiary is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” or a “public
utility” within the meaning of, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended. 
  
 Section 7.10 Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside
on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of Taxes and other governmental charges are, in the reasonable opinion of the Borrower, adequate. No Tax Lien has been filed and, to the knowledge of the Borrower, no claim is being asserted with respect to any such Tax or
other such governmental charge. 
  

 41 

 Section 7.11 ERISA. 
  
 (a) The Borrower, the Subsidiaries and each ERISA Affiliate have complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan. 
  
 (b) Each Plan is,
and has been, maintained in substantial compliance with ERISA and, where applicable, the Code. 
  
 (c) No act, omission or transaction has occurred which could result in imposition on the Borrower, any Subsidiary or any ERISA Affiliate (whether directly or indirectly) of (i) either a civil penalty assessed pursuant
to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under section 409 of ERISA. 
  
 (d) No Plan (other than a defined contribu­tion plan) or any trust
created under any such Plan has been terminated since September 2, 1974. No liability to the PBGC (other than for the payment of current premiums which are not past due) by the Borrower, any Subsidiary or any ERISA Affiliate has been or is expected
by the Borrower, any Subsidiary or any ERISA Affiliate to be incurred with respect to any Plan. No ERISA Event with respect to any Plan has occurred. 
  
 (e) Full payment when due has been made of all amounts which the Borrower, the Subsidiaries or any ERISA Affiliate is required under the terms of each
Plan or applicable law to have paid as contribu­tions to such Plan as of the date hereof, and no accumulated funding deficiency (as defined in section 302 of ERISA and section 412 of the Code), whether or not waived, exists with respect to any
Plan. 
  
 (f) The actuarial present value of the benefit
liabili­ties under each Plan which is subject to Title IV of ERISA does not, as of the end of the Borrower’s most recently ended fiscal year, exceed the current value of the assets (computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit liabilities. The term “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA. 
  
 (g) Neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors,
maintains, or contributes to an employee welfare benefit plan, as defined in section 3(1) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by the
Borrower, a Subsidiary or any ERISA Affiliate in its sole discretion at any time without any material liability. 
  
 (h) Neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors, maintains or contributes to, or has at any time in the six-year period
preceding the date hereof sponsored, maintained or contributed to, any Multiemployer Plan. 
  
 (i) Neither the Borrower, the Subsidiaries nor any ERISA Affiliate is required to provide security under section 401(a)(29) of the Code due to a Plan amendment that results in an increase in current liability for the
Plan. 
  
 Section 7.12 Disclosure; No Material
Misstatements. The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Restricted Subsidiaries is subject, and all other matters 

 

 42 

 known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
Neither the Offering Memorandum, as of the Effective Date, nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of the Borrower or any Restricted Subsidiary to the Administrative Agent or
any Lender or any of their Affiliates in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or under any other Loan Document (as modified or supplemented by other information so furnished), taken as a
whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected
financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. Except with respect to required notices under Section 8.02(d), there is no fact
peculiar to the Borrower or any Restricted Subsidiary which could reasonably be expected to have a Material Adverse Effect or in the future is reasonably likely to have a Material Adverse Effect and which has not been set forth in this Agreement or
the Loan Documents or the other documents, certificates and statements furnished to the Administrative Agent or the Lenders by or on behalf of the Borrower or any Restricted Subsidiary prior to, or on, the date hereof pursuant to a notice under
Section 8.02 in connection with the transactions contemplated hereby. There are no statements or conclusions in any Reserve Report which are based upon or include misleading information or fail to take into account material information regarding the
matters reported therein, it being understood that projections concerning volumes attributable to the Oil and Gas Properties and production and cost estimates contained in each Reserve Report are necessarily based upon professional opinions,
estimates and projections and that the Borrower and the Restricted Subsidiaries do not warrant that such opinions, estimates and projections will ultimately prove to have been accurate. 
  
 Section 7.13 Insurance. The Borrower has, and has caused all its Restricted Subsidiaries to have, (a) all insurance
policies sufficient for the compliance by each of them with all material Governmental Requirements and all material agreements, (b) insurance coverage in at least amounts and against such risk (including, without limitation, public liability) that
are usually insured against by companies similarly situated and engaged in the same or a similar business for the assets and operations of the Borrower and its Restricted Subsidiaries and (c) identified to the Administrative Agent the amounts and
matters for which the Borrower or its Restricted Subsidiaries have self-insurance. The Administrative Agent and the Lenders have been named as additional insureds in respect of such liability insurance policies and the Administrative Agent has been
named as loss payee with respect to Property loss insurance. 
  
 Section 7.14 Restriction on Liens. Neither the Borrower nor any of the Restricted Subsidiaries is a party to any material agreement or arrangement (other than Capital Leases creating Liens permitted by Section 9.03(c), but then only
on the Property subject of such Capital Lease, or subject to any order, judgment, writ or decree, which either restricts or purports to restrict its ability to grant Liens to the Administrative Agent and the Lenders on or in respect of their
Properties to secure the Indebtedness and the Loan Documents. 
  
 Section 7.15 Subsidiaries. Except as set forth on Schedule 7.15 or as disclosed in writing to the Administrative Agent (which shall promptly furnish a copy to the Lenders), which shall be a supplement to Schedule 7.15, the Borrower
has no Subsidiaries and the Borrower has no Foreign Subsidiaries. Schedule 7.15 identifies each Subsidiary as either Restricted or Unrestricted, and each Restricted Subsidiary on such schedule is a Wholly-Owned Subsidiary. 
  

 43 

 Section 7.16 Location of Business and Offices. The Borrower’s jurisdiction of organization is
Delaware; the name of the Borrower as listed in the public records of its jurisdiction of organization is Rosetta Resources Inc.; and the organizational identification number of the Borrower in its jurisdiction of organization is 3980164 (or, in
each case, as set forth in a notice delivered to the Administrative Agent pursuant to Section 8.01(n) in accordance with Section 12.01). The Borrower’s principal place of business and chief executive offices are located at the address specified
in Section 12.01 (or as set forth in a notice delivered pursuant to Section 8.01(n) and Section 12.01(c)). Each Restricted Subsidiary’s jurisdiction of organization, name as listed in the public records of its jurisdiction of organization,
organizational identification number in its jurisdiction of organization, and the location of its principal place of business and chief executive office is stated on Schedule 7.15 (or as set forth in a notice delivered pursuant to Section 8.01(n)).

  
 Section 7.17 Properties; Titles, Etc. 
  
 (a) Each of the Borrower and the Restricted Subsidiaries has good and
defensible title to the Oil and Gas Properties evaluated in the most recently delivered Reserve Report and good title to all its material personal Properties, in each case, free and clear of all Liens except Liens permitted by Section 9.03. After
giving full effect to the Excepted Liens, the Borrower or the Restricted Subsidiary specified as the owner owns the net interests in production in all material respects attributable to the Hydrocarbon Interests as reflected in the most recently
delivered Reserve Report, and the ownership of such Properties shall not in any material respect obligate the Borrower or such Restricted Subsidiary to bear the costs and expenses relating to the maintenance, development and operations of each such
Property in an amount in excess of the working interest of each Property set forth in the most recently delivered Reserve Report that is not offset by a corresponding proportionate increase in the Borrower’s or such Restricted Subsidiary’s
net revenue interest in such Property. 
  
 (b) All material leases
and agreements necessary for the conduct of the business of the Borrower and the Restricted Subsidiaries are valid and subsisting, in full force and effect, and there exists no default or event or circumstance which with the giving of notice or the
passage of time or both would give rise to a default under any such lease or agreement, which could reasonably be expected to have a Material Adverse Effect. 
  
 (c) The rights and Properties presently owned, leased or licensed by the Borrower and the Restricted Subsidiaries including, without limitation, all
easements and rights of way, include all rights and Properties necessary to permit the Borrower and the Restricted Subsidiaries to conduct their business in all material respects in the same manner as its business has been conducted prior to the
date hereof. 
  
 (d) All of the Properties of the Borrower and the
Restricted Subsidiaries which are reasonably necessary for the operation of their businesses are in good working condition and are maintained in accordance with prudent business standards, except for such failure as to condition or maintenance as
could not be reasonably expected to have a Material Adverse Effect. 
  

 44 

 (e) The Borrower and each Restricted Subsidiary owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual Property material to its business, and the use thereof by the Borrower and such Restricted Subsidiary does not infringe upon the rights of any other Person that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. The Borrower and its Restricted Subsidiaries either own or have valid licenses or other rights to use all databases, geological data, geophysical data, engineering data, seismic data,
maps, interpretations and other technical information used in their businesses as presently conducted, subject to the limitations contained in the agreements governing the use of the same, which limitations are customary for companies engaged in the
business of the exploration and production of Hydrocarbons, with such exceptions as could not reasonably be expected to have a Material Adverse Effect. 
  
 Section 7.18 Maintenance of Properties. Except for such acts or failures to act as could not be reasonably expected to have a Material Adverse
Effect, the Oil and Gas Properties (and Properties unitized therewith) of the Borrower and its Restricted Subsidiaries have been maintained, operated and developed in a good and workmanlike manner and in conformity with all Governmental Requirements
and in conformity with the provisions of all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas Properties of the Borrower and its Restricted
Subsidiaries. Specifically in connection with the foregoing, except for those as could not be reasonably expected to have a Material Adverse Effect, (i) no Oil and Gas Property of the Borrower or any Restricted Subsidiary is subject to having
allowable production reduced below the full and regular allowable (including the maximum permissible tolerance) because of any overproduction (whether or not the same was permissible at the time) and (ii) none of the wells comprising a part of the
Oil and Gas Properties (or Properties unitized therewith) of the Borrower or any Restricted Subsidiary is deviated from the vertical more than the maximum permitted by Governmental Requirements, and such wells are, in fact, bottomed under and are
producing from, and the well bores are wholly within, the Oil and Gas Properties (or in the case of wells located on Properties unitized therewith, such unitized Properties) of the Borrower or such Restricted Subsidiary. All pipelines, wells, gas
processing plants, platforms and other material improvements, fixtures and equipment owned in whole or in part by the Borrower or any of its Restricted Subsidiaries that are necessary to conduct normal operations are being maintained in a state
adequate to conduct normal operations, and with respect to such of the foregoing which are operated by the Borrower or any of its Restricted Subsidiaries, in a manner consistent with the Borrower’s or its Restricted Subsidiaries’ past
practices (other than those the failure of which to maintain in accordance with this Section 7.18 could not reasonably be expected to have a Material Adverse Effect). 
  
 Section 7.19 Gas Imbalances, Prepayments. Except as set forth on Schedule 7.19 or on the most recent certificate
delivered pursuant to Section 8.12(c) on a net basis there are no gas imbalances, take or pay or other prepayments which would require the Borrower or any of its Restricted Subsidiaries to deliver Hydrocarbons produced from the Oil and Gas
Properties at some future time without then or thereafter receiving full payment therefor exceeding one-half bcf of gas (on an mcf equivalent basis) in the aggregate. 
  
 Section 7.20 Marketing of Production. Except for contracts listed and in effect on the date hereof on Schedule 7.20,
and thereafter either disclosed in writing to the Administrative 
  

 45 

 Agent or included in the most recently delivered Reserve Report (with respect to all of which contracts the Borrower
represents that it or its Restricted Subsidiaries are receiving a price for all production sold thereunder which is computed substantially in accordance with the terms of the relevant contract and are not having deliveries curtailed substantially
below the subject Property’s delivery capacity), no material agreements exist which are not cancelable on 60 days notice or less without penalty or detriment for the sale of production from the Borrower’s or its Restricted
Subsidiaries’ Hydrocarbons (including, without limitation, calls on or other rights to purchase, production, whether or not the same are currently being exercised) that (a) pertain to the sale of production at a fixed price and (b) have a
maturity or expiry date of longer than six (6) months from the date hereof. 
  
 Section 7.21 Swap Agreements. The Swap Agreements required by Section 8.18 or listed in the reports required to be delivered by the Borrower pursuant to Section 8.01(e) constitute all Swap Agreements of the
Borrower and each Restricted Subsidiary. 
  
 Section 7.22 Use
of Loans. The proceeds of the Loans shall be used to provide working capital for exploration and production operations, to pay for the Acquisition and related expenses, the acquisition, exploration and development of additional Oil and Gas
Properties, and for general corporate purposes. The Borrower and its Restricted Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan will be used for any purpose which violates the provisions of Regulations T, U or X of the
Board. 
  
 Section 7.23 Solvency. After giving effect to
the transactions contemplated hereby, (a) the aggregate assets (after giving effect to amounts that could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement), at a fair valuation, of the Borrower and the
Guarantors, taken as a whole, will exceed the aggregate Debt of the Borrower and the Guarantors on a consolidated basis, as the Debt becomes absolute and matures, (b) each of the Borrower and the Guarantors will not have incurred or intended to
incur, and will not believe that it will incur, Debt beyond its ability to pay such Debt (after taking into account the timing and amounts of cash to be received by each of the Borrower and the Guarantors and the amounts to be payable on or in
respect of its liabilities, and giving effect to amounts that could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement) as such Debt becomes absolute and matures and (c) each of the Borrower and the
Guarantors will not have (and will have no reason to believe that it will have thereafter) unreasonably small capital for the conduct of its business. 
  
 Section 7.24 Acquisition Documents; Separation Documents. The copies of the Acquisition Documents and Separation Documents previously delivered by
the Borrower to the Administrative Agent are true, accurate and complete and have not been amended or modified in any material manner, other than pursuant to amendments or modifications previously delivered to the Administrative Agent. No party to
any Acquisition Document or Separation Document is in default in respect of any material term or obligation thereunder. The consideration paid or to be paid for the assets subject of the Acquisition represents “reasonably equivalent value”
for such assets. 
  

 46 

 ARTICLE VIII 
 Affirmative Covenants 
  
 Until 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, the Borrower covenants and agrees with the Lenders that: 
  
 Section 8.01 Financial Statements; Ratings Change; Other Information.
The Borrower will furnish to the Administrative Agent and each Lender: 
  
 (a) Annual Financial Statements. As soon as available, but in any event in accordance with then applicable law and not later than 90 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and
related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants
of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied. 
  
 (b) Quarterly Financial Statements. As soon as available, but in any
event in accordance with then applicable law and not later than 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its unaudited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the
case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes. 
  
 (c) Certificate of Financial Officer — Compliance. Concurrently with any delivery of financial statements under
Section 8.01(a) or Section 8.01(b), a certificate of a Financial Officer in substantially the form of Exhibit D hereto (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 8.13(b) and Section 9.01 and (iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in Section 7.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate. 
  
 (d) Certificate of Financial Officer — Consolidating Information.
If, at any time, all of the Consolidated Subsidiaries of the Borrower are not Consolidated Restricted Subsidiaries, then concurrently with any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a certificate of a Financial
Officer setting forth consolidating spreadsheets that show all Consolidated Unrestricted Subsidiaries and the eliminating entries, in such form as would be presentable to the auditors of the Borrower. 
  

 47 

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

 48 

 (k) Notice of Sales of Oil and Gas Properties. In the event the Borrower or any Restricted
Subsidiary enters into any agreement to sell, transfer, assign or otherwise dispose of any Oil or Gas Properties, including in connection with the exercise of any preferential purchase rights under the Acquisition Documents, or any Equity Interests
in any Subsidiary in accordance with Section 9.13, prior written notice of such disposition, the price thereof and the anticipated date of closing and any other details thereof requested by the Administrative Agent or any Lender. 
  
 (l) Notice of Casualty Events. Prompt written notice, and in any event
within three Business Days, of the occurrence of any Casualty Event or the commencement of any action or proceeding that could reasonably be expected to result in a Casualty Event. 
  
 (m) Certificate of Responsible Officer—Total Debt. At the times specified in Section 2.07 and promptly following
any change to Total Reserve Value pursuant to Section 8.12(b) or Section 9.13, the Borrower will deliver a certificate of a Responsible Officer of the Borrower setting forth the Total Reserve Value both prior to and after giving effect to such
event. 
  
 (n) Information Regarding Borrower and
Guarantors. Prompt written notice (and in any event within ten (10) days prior thereto) of any change (i) in the Borrower or any Guarantor’s corporate name or in any trade name used to identify such Person in the conduct of its business or
in the ownership of its Properties, (ii) in the location of the Borrower or any Guarantor’s chief executive office or principal place of business, (iii) in the Borrower or any Guarantor’s identity or corporate structure or in the
jurisdiction in which such Person is incorporated or formed, (iv) in the Borrower or any Guarantor’s jurisdiction of organization or such Person’s organizational identification number in such jurisdiction of organization, and (v) in the
Borrower or any Guarantor’s federal taxpayer identification number. 
  
 (o) Production Report and Lease Operating Statements. Within 60 days after the end of each fiscal quarter, a report setting forth, for each calendar month during the then current fiscal year to date, the volume
of production and sales attributable to production (and the prices at which such sales were made and the revenues derived from such sales) for each such calendar month from the Oil and Gas Properties, and setting forth the related ad valorem,
severance and production taxes and lease operating expenses attributable thereto and incurred for each such calendar month. 
  
 (p) Notices of Certain Changes. Promptly, but in any event within five (5) Business Days after the execution thereof, copies of any material
amendment, modification or supplement to the certificate or articles of incorporation, by-laws, any preferred stock designation or any other organic document of the Borrower or any Restricted Subsidiary. 
  
 (q) Ratings Change. Promptly after Moody’s or S&P shall have
announced a change in the rating, established or deemed to have been established for the Borrower or any Material Indebtedness, written notice of such rating change. 
  

 49 

 (r) Notices Relating to Acquisition. In the event that after the Effective Date: (i) the Borrower
is required to honor any preferential purchase right in respect of any Non-Consent Properties (as defined in Section 2.3.2 of the Purchase and Sale Agreement) which has not been waived, (ii) any matter being disputed in accordance with the terms of
the Acquisition Documents is resolved or (iii) the Borrower and the seller(s) calculate and agree upon the “Final Settlement Statement” as contemplated by Section 15.1 of the Purchase and Sale Agreement and in accordance therewith, then,
in each such case, the Borrower shall promptly give the Administrative Agent notice in reasonable detail of such circumstances and such information as to show compliance with Section 6.01(r) in the case of a purchase price adjustment or Section 9.13
in the case of preferential purchase rights being exercised. 
  
 (s) Other Requested Information. Promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary (including, without limitation, any
Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA), or compliance with the terms of this Agreement or any other Loan Document, as the Administrative Agent or any Lender may reasonably request.

  
 (s) Delivery of Information Electronically. Notices to
the Administrative Agent and the Lenders under this Section 8.01 may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent, including broadcast email to the Lenders that the available
information has been made available to the Lenders on either the Borrower’s “Intralinks” page or the Borrower’s website at www.rosettaresources.com. Notwithstanding the foregoing, any such information included in
materials otherwise filed with the SEC may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which the Borrower posts such documents, or provides a link thereto, and notifies Administrative Agent
of such posting or link. 
  
 Section 8.02 Notices of Material
Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following: 
  
 (a) the occurrence of any Default; 
  
 (b) the filing or commencement of, or the threat in writing of, any action, suit, proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against or affecting the Borrower or any Affiliate thereof not previously disclosed in writing to the Lenders or any material adverse development in any action, suit, proceeding, investigation or arbitration (whether or not
previously disclosed to the Lenders) that, in either case, if adversely determined, could reasonably be expected to result in liability in excess of $2,000,000 not fully covered by insurance, subject to normal deductibles and reasonable
self-insurance; 
  
 (c) the occurrence of any ERISA Event that,
alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $1,000,000; 
  
 (d) Calpine shall fail to make any payment in respect of any Calpine Gas
Contract or post any margin required by the terms thereof within one Business Day of when the same shall become due and payable, whether at the due date thereof, upon acceleration, termination or otherwise; and 
  

 50 

 (e) any other development that results in, or could reasonably be expected to result in, a Material
Adverse Effect. 
  
 Each notice delivered under this Section 8.02 shall be
accompanied by a statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. 
  
 Section 8.03 Existence; Conduct of Business. The Borrower will, and
will cause each Restricted Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of
its business and maintain, if necessary, its qualification to do business in each other jurisdiction in which its Oil and Gas Properties is located or the ownership of its Properties requires such qualification, except where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 9.12. 
  
 Section 8.04 Payment of Obligations. The Borrower will, and will cause
each Restricted Subsidiary to, pay its obligations, including Tax liabilities of the Borrower and all of its Subsidiaries before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Restricted Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect or result in the seizure or levy of any Property of the Borrower or any Subsidiary. 
  
 Section 8.05 Performance of Obligations under Loan Documents. The Borrower will pay the Notes according to the reading, tenor and effect thereof,
and the Borrower will, and will cause each Restricted Subsidiary to, do and perform every act and discharge all of the obligations to be performed and discharged by them under the Loan Documents, including, without limitation, this Agreement, at the
time or times and in the manner specified. 
  
 Section 8.06
Operation and Maintenance of Properties. The Borrower, at its own expense, will, and will cause each Restricted Subsidiary to, except in each case where the failure to comply could not reasonably be expected to have a Material Adverse Effect:

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

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 (b) keep and maintain all Property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, preserve, maintain and keep in good repair, working order and efficiency (ordinary wear and tear excepted) all of its Oil and Gas Properties and other material Properties, including, without limitation,
all equipment, machinery and facilities. 
  
 (c) promptly pay and
discharge, or make reasonable and customary efforts to cause to be paid and discharged, all delay rentals, royalties, expenses and indebtedness accruing under the leases or other agreements affecting or pertaining to its Oil and Gas Properties and
will do all other things necessary to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder. 
  
 (d) promptly perform or make reasonable and customary efforts to cause to be performed, in accordance with industry standards, the obligations required by
each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties and other material Properties. 
  
 (e) operate its Oil and Gas Properties and other material Properties or cause or make reasonable and customary efforts to
cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in material compliance with all applicable contracts and agreements and in compliance in all material respects with
all Governmental Requirements. 
  
 (f) to the extent the Borrower
is not the operator of any Property, the Borrower shall use reasonable efforts to cause the operator to comply with this Section 8.06. 
  
 Section 8.07 Insurance. The Borrower will, and will cause each Restricted Subsidiary to, maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations. The loss payable clauses or provisions in said insurance
policy or policies insuring any of the collateral for the Loans shall be endorsed in favor of and made payable to the Administrative Agent as its interests may appear and such policies shall name the Administrative Agent and the Lenders as
“additional insureds” and provide that the insurer will endeavor to give at least 30 days prior notice of any cancellation to the Administrative Agent. So long as no Event of Default has occurred and is continuing, except as otherwise
required by Section 9.12, the Borrower or applicable Restricted Subsidiary shall be entitled to use the proceeds received from any insurance policy as a result of a Casualty Event (without regarding to the threshold in the definition thereof) to
repair or replace the Property of the Borrower or such Restricted Subsidiary subject to such Casualty Event or to otherwise enhance the value of the collateral for the Indebtedness. 
  
 Section 8.08 Books and Records; Inspection Rights. The Borrower will, and will cause each Restricted Subsidiary to,
keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each Restricted Subsidiary to, permit any
representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its Properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as often as reasonably requested. 
  

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

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

 53 

 Section 8.11 Further Assurances. 
  
 (a) The Borrower at its expense will, and will cause each Restricted Subsidiary to, promptly execute and deliver to the
Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the Borrower or any
Restricted Subsidiary, as the case may be, in the Loan Documents, including the Notes, or to further evidence and more fully describe the collateral intended as security for the Indebtedness, or to correct any omissions in this Agreement or the
Security Instruments, or to state more fully the obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Agreement or any of the Security Instruments or the priority thereof, or to make any recordings, file
any notices or obtain any consents, all as may be reasonably necessary or appropriate, in the reasonable discretion of the Administrative Agent, in connection therewith. 
  
 (b) The Borrower hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Mortgaged Property without the signature of the Borrower or any other Guarantor where permitted by law. A carbon, photographic or other reproduction of the Security Instruments or any financing
statement covering the Mortgaged Property or any part thereof shall be sufficient as a financing statement where permitted by law. 
  
 Section 8.12 Reserve Reports. 
  
 (a) On or before March 1st and September 1st of each year, commencing March 1, 2006, the Borrower shall furnish to the Administrative Agent and the
Lenders a Reserve Report. The Reserve Report as of January 1 of each year shall be prepared by one or more Approved Petroleum Engineers, and the July 1 Reserve Report of each year (and the September Reserve Report) shall be prepared by or under the
supervision of the chief engineer of the Borrower who shall certify (i) there are no statements or conclusions in such Reserve Report which are based upon or include misleading information or fail to take into account material information regarding
the matters reported therein, it being understood that projections concerning volumes attributable to the Oil and Gas Properties and production and cost estimates contained in any Reserve Report are necessarily based upon professional opinions,
estimates and projections and that the Borrower and the Restricted Subsidiaries do not warrant that such opinions, estimates and projections will ultimately prove to have been accurate, and (ii) to have been prepared in accordance with the
procedures used in the immediately preceding January 1 Reserve Report. 
  
 (b) In the event of a determination of the Total Reserve Value as of a specified date other than January 1 and July 1, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report prepared by or under the
supervision of the chief engineer of the Borrower who shall certify such Reserve Report to be true and accurate and to have been prepared in accordance with the procedures used in the immediately preceding January 1 Reserve Report. 
  
 (c) With the delivery of each Reserve Report, the Borrower shall provide to
the Administrative Agent and the Lenders a certificate from a Responsible Officer certifying that in 
  

 54 

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

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 Administrative Agent or the Lenders. To the extent that any material title defect exists with respect to any Mortgaged
Property after the 60-day period has elapsed, the Administrative Agent may send a notice to the Borrower and the Lenders that the then outstanding Total Reserve Value shall be reduced by an amount as determined by the Majority Lenders to cause the
Borrower to be in compliance with the requirement to provide acceptable title information to the Oil and Gas Properties. This new Total Reserve Value shall become effective immediately after receipt of such notice. 
  
 Section 8.14 Additional Collateral; Additional Guarantors. 

 
 (a) In connection with each redetermination of the Total Reserve Value,
the Borrower shall review the Reserve Report and the list of current Mortgaged Properties (as described in Section 8.12(c)(vi)) to ascertain whether the Mortgaged Properties represent at least 80% of the total value of the Oil and Gas Properties
evaluated in the most recently completed Reserve Report after giving effect to exploration and production activities, acquisitions, dispositions and production. In the event that the Mortgaged Properties do not represent at least 80% of such total
value, then the Borrower shall, and shall cause its Restricted Subsidiaries to, grant, within thirty (30) days of delivery of the certificate required under Section 8.12(c), to the Administrative Agent as security for the Indebtedness a
first-priority Lien interest (subject to a Lien under the Senior Revolving Credit Documents and provided that Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof may exist, but subject to the provisos at the
end of such definition) on additional Oil and Gas Properties not already subject to a Lien of the Security Instruments such that after giving effect thereto, the Mortgaged Properties will represent at least 80% of such total value. All such Liens
will be created and perfected by and in accordance with the provisions of deeds of trust, security agreements and financing statements or other Security Instruments, all in form and substance reasonably satisfactory to the Administrative Agent and
in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes. In order to comply with the foregoing, if any Restricted Subsidiary places a Lien on its Oil and Gas Properties and such Restricted
Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with Section 8.14(b). 
  
 (b) The Borrower shall cause each Domestic Subsidiary to guarantee the Indebtedness pursuant to the Guaranty Agreement. In connection with any such
guaranty, the Borrower shall, or shall cause such Domestic Subsidiary to, promptly, but in any event no later than 15 days after the formation or acquisition (or other similar event) of such Domestic Subsidiary, (A) execute and deliver a supplement
to the Guaranty Agreement executed by such Subsidiary, (B) pledge all of the Equity Interests of such Domestic Subsidiary (including, without limitation, delivery of original stock certificates evidencing the Equity Interests of such Domestic
Subsidiary, together with an appropriate undated stock powers for each certificate duly executed in blank by the registered owner thereof) and (C) execute and deliver such other additional closing documents, certificates and legal opinions as shall
reasonably be requested by the Administrative Agent. 
  
 (c) In
the event that the Borrower or any Domestic Subsidiary creates or becomes the owner of a Foreign Subsidiary, then the Borrower shall promptly, or shall cause such Domestic Subsidiary to promptly, but in any event no later than 15 days after the date
of becoming an owner thereof, (i) pledge 65% of all the Equity Interests of such Foreign Subsidiary 
  

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 (including, without limitation, delivery of original stock certificates evidencing such Equity Interests of such Foreign
Subsidiary, together with appropriate stock powers for each certificate duly executed in blank by the registered owner thereof) and (ii) execute and deliver such other additional closing documents, certificates and legal opinions as shall reasonably
be requested by the Administrative Agent. 
  
 (d) The Borrower
agrees that it will not, and will not permit any Restricted Subsidiary to, grant a Lien on any Property to secure the Revolving Credit Senior Notes without first (i) giving fifteen (15) days’ prior written notice to the Administrative Agent
thereof and (ii) granting to the Administrative Agent to secure the Indebtedness a first-priority, perfected Lien (subject to a Lien under the Senior Revolving Credit Documents) on this same Property pursuant to Security Instruments in form and
substance satisfactory to the Administrative Agent. In connection therewith, the Borrower shall, or shall cause its Restricted Subsidiaries to, execute and deliver such other additional closing documents, certificates and legal opinions as shall
reasonably be requested by the Administrative Agent. 
  
 Section
8.15 ERISA Compliance. The Borrower will promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to promptly furnish to the Administrative Agent (i) upon request promptly after the filing thereof with the United States
Secretary of Labor, the Internal Revenue Service or the PBGC, copies of each annual and other report with respect to each Plan or any trust created thereunder, (ii) immediately upon becoming aware of the occurrence of any ERISA Event described in
Section 8.02(c) or of any “prohibited transaction,” as described in section 406 of ERISA or in section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by the President or the principal
Financial Officer, the Subsidiary or the ERISA Affiliate, as the case may be, specifying the nature thereof, what action the Borrower, the Subsidiary or the ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any
action taken or proposed by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto, and (iii) immediately upon receipt thereof, copies of any notice of the PBGC’s intention to terminate or to have a trustee
appointed to administer any Plan. With respect to each Plan (other than a Multiemployer Plan), the Borrower will, and will cause each Subsidiary and ERISA Affiliate to, (i) satisfy in full and in a timely manner, without incurring any late payment
or underpayment charge or penalty and without giving rise to any Lien, all of the contribution and funding requirements of section 412 of the Code (determined without regard to subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely manner, without incurring any late payment or underpayment charge or penalty, all premiums required pursuant to sections
4006 and 4007 of ERISA. 
  
 Section 8.16 Unrestricted
Subsidiaries. The Borrower: 
  
 (a) will cause the
management, business and affairs of each of the Borrower and its Restricted Subsidiaries to be conducted in such a manner (including, without limitation, by keeping separate books of account, furnishing separate financial statements of Unrestricted
Subsidiaries to creditors and potential creditors thereof and by not permitting Properties of the Borrower and its respective Restricted Subsidiaries to be commingled) so that each Unrestricted Subsidiary that is a corporation will be treated as a
corporate entity separate and distinct from Borrower and the Restricted Subsidiaries. 
  

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 (b) will not, and will not permit any of the Restricted Subsidiaries to, incur, assume, guarantee or be
or become liable for any Debt of any of the Unrestricted Subsidiaries. 
  
 (c) will not permit any Unrestricted Subsidiary to hold any Equity Interest in, or any Debt of, the Borrower or any Restricted Subsidiary. 
  
 Section 8.17 Marketing Activities. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, engage in marketing activities
for any Hydrocarbons or enter into any contracts related thereto other than (i) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from their proved Oil and Gas Properties during the period of such contract, (ii)
contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from proved Oil and Gas Properties of third parties during the period of such contract associated with the Oil and Gas Properties of the Borrower and its
Restricted Subsidiaries that the Borrower or one of its Restricted Subsidiaries has the right to market pursuant to joint operating agreements, unitization agreements or other similar contracts that are usual and customary in the oil and gas
business and (iii) other contracts for the purchase and/or sale of Hydrocarbons of third parties (A) which have generally offsetting provisions (i.e. corresponding pricing mechanics, delivery dates and points and volumes) such that no material
“position” is taken and (B) for which appropriate credit support has been taken to alleviate the material credit risks of the counterparty thereto. 
  
 Section 8.18 Swap Agreements. On or before July 15, 2005, the Borrower shall enter into one or more Swap Agreements (i) with one or more Approved
Counterparties and (ii) which have aggregate notional volumes of approximately (A) 80% of the reasonably estimated natural gas production from its proved developed, producing Oil and Gas Properties as determined by reference to the Initial Reserve
Report and (B) 20% of the reasonably estimated natural gas production from its proved developed, non-producing Oil and Gas Properties as determined by reference to the Initial Reserve Report, in each case for each year during the period commencing
with the Effective Date and ending on December 31, 2009. Thereafter, the Borrower shall maintain the hedge position established by the Swap Agreements required under this Section 8.18 during the period specified therein and shall neither assign,
terminate nor unwind any such Swap Agreements nor sell any Swap Agreements if the effect of such action (when taken together with any other Swap Agreements executed contemporaneously with the taking of such action) would have the effect of canceling
its positions under such Swap Agreements required hereby. 
  
 Section 8.19 Control Agreement. Within fourteen days after the Effective Date, the Borrower shall deliver a fully executed Control Agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent.

  

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 ARTICLE IX 
 Negative Covenants 
  
 Until 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, the Borrower covenants and agrees with the Lenders that: 
  
 Section 9.01 Financial Covenants. 
  
 (a) Total Reserve Value to Total Debt Ratio. The Borrower will not as
of any date of determination permit its ratio of (i) Total Reserve Value as in effect on such date of determination to (ii) Total Debt as of such date of determination to be less than 1.5 to 1.0. 
  
 (b) Ratio of Total Debt to EBITDAX. The Borrower will not, at any
time, permit its ratio of (i) Total Debt as of such time to (ii) EBITDAX for the period of four fiscal quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements are available
to be greater than 4.0 to 1.0. 
  
 Section 9.02 Debt. The
Borrower will not, and will not permit any Restricted Subsidiary to, incur, create, assume or suffer to exist any Debt, except: 
  
 (a) the Notes or other Indebtedness arising under the Loan Documents or any guaranty of or suretyship arrangement for the Notes or other Indebtedness
arising under the Loan Documents. 
  
 (b) Debt of the Borrower and
its Restricted Subsidiaries existing on the date hereof that is reflected in the Financial Statements. 
  
 (c) Debt under Capital Leases not to exceed $5,000,000. 
  
 (d) Debt associated with workers’ compensation claims, performance, bid, surety or similar bonds or surety obligations required by Governmental
Requirements or third parties in connection with the operation of the Oil and Gas Properties. 
  
 (e) intercompany Debt between the Borrower and any Restricted Subsidiary or between Restricted Subsidiaries to the extent permitted by Section 9.05(g); provided that such Debt is not held, assigned, transferred,
negotiated or pledged to any Person other than the Borrower or one of its Restricted Subsidiaries, and, provided further, that any such Debt owed by either the Borrower or a Guarantor shall be subordinated to the Indebtedness on terms set forth in
the Guaranty Agreement. 
  
 (f) endorsements of negotiable
instruments for collection in the ordinary course of business. 
  
 (g) Debt now or hereafter outstanding under the Senior Revolving Credit Agreement (and any guaranties thereof by the Guarantors), provided that (i) the aggregate principal amount of the Senior Revolving Credit Agreement shall not exceed
$400,000,000, (ii) no part of the Debt for principal owing under the Senior Revolving Credit Agreement is 
  

 59 

 subordinated in right of payment to any other Debt for principal owing under the Senior Revolving Credit Agreement, (iii)
such Debt is comprised of a single facility with no differentiation among lenders in the revolving character, pricing or maturity thereof and (iv) after giving effect to the incurrence of such Debt, no Default or Event of Default then exists under
Section 9.01. 
  
 (h) other Debt not to exceed $5,000,000 in the
aggregate at any one time outstanding. 
  
 Section 9.03
Liens. The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on any of its Properties (now owned or hereafter acquired), except: 
  
 (a) Liens securing the payment of any Indebtedness. 
  
 (b) Excepted Liens. 
  
 (c) Liens securing Capital Leases permitted by Section 9.02(c) but only on
the Property under lease. 
  
 (d) Liens on Property not
constituting collateral for the Indebtedness and not otherwise permitted by the foregoing clauses of this Section 9.03; provided that the aggregate principal or face amount of all Debt secured under this Section 9.03(d) shall not exceed $5,000,000
at any time. 
  
 (e) Liens on Property securing the Senior
Revolving Credit Agreement and any guaranties thereof as permitted by Section 9.02(g); provided, however, that such Property is subject to a Lien in favor of the Administrative Agent which secures the the Indebtedness, this Agreement and the other
Loan Documents pursuant to Security Instruments satisfactory to the Administrative Agent. 
  
 Section 9.04 Dividends, Distributions and Redemptions. The Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, return any capital to its stockholders or make any distribution of its Property to its Equity Interest holders, except (i) the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares
of its Equity Interests (other than Disqualified Capital Stock), (ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (iii) the Borrower may make Restricted Payments pursuant to and in accordance with stock
option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries and (iv) within 14 days of the Effective Date, the Borrower may purchase or redeem its shares owned by Calpine Gas Holdings, LLC at a price not to
exceed $1. 
  
 Section 9.05 Investments, Loans and
Advances. The Borrower will not, and will not permit any Restricted Subsidiary to, make or permit to remain outstanding any Investments in or to any Person, except that the foregoing restriction shall not apply to: 
  
 (a) Investments reflected in the Financial Statements or which are disclosed
to the Lenders in Schedule 9.05. 
  

 60 

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

 
 (f) deposits in money market funds investing exclusively in Investments
described in Section 9.05(c), Section 9.05(d) or Section 9.05(e). 
  
 (g) Investments (i) made by the Borrower in or to the Guarantors, (ii) made by any Restricted Subsidiary in or to the Borrower or any Guarantor, (iii) made by the Borrower or any Restricted Subsidiary in or to all other Domestic
Subsidiaries which are not Guarantors in an aggregate amount at any one time outstanding not to exceed $500,000 and (iv) made by the Borrower or any Restricted Subsidiary in or to any Foreign Subsidiary, provided that no less than 85% of the
aggregate net present value (discounted at 10% and using pricing assumptions consistent with SEC reporting requirements at such time) of the combined Borrower’s and Restricted Subsidiaries’ Oil and Gas Properties are located inside the
United States and Canada. 
  
 (h) subject to the limits in Section
9.07, Investments (including, without limitation, capital contributions) in general or limited partnerships or other types of entities (each a “venture”) entered into by the Borrower or a Restricted Subsidiary with others in the
ordinary course of business; provided that (i) any such venture is primarily engaged in oil and gas exploration, development, production, processing and related activities, including transportation, (ii) the interest in such venture is acquired in
the ordinary course of business and on fair and reasonable terms and (iii) such venture interests acquired and capital contributions made (valued as of the date such interest was acquired or the contribution made) do not exceed, in the aggregate at
any time outstanding an amount equal to $5,000,000. 
  
 (i)
subject to the limits in Section 9.07, Investments in direct ownership interests in additional Oil and Gas Properties and gas gathering systems related thereto or related to farm-out, farm-in, joint operating, joint venture or area of mutual
interest agreements, gathering systems, pipelines or other similar arrangements which are usual and customary in the oil and gas exploration and production business located within the geographic boundaries of the United States of America.

  

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 (j) loans or advances to employees, officers or directors in the ordinary course of business of the
Borrower or any of its Restricted Subsidiaries, in each case only as permitted by applicable law, including Section 402 of the Sarbanes Oxley Act of 2002, but in any event not to exceed $100,000 in the aggregate at any time. 
  
 (k) Investments in stock, obligations or securities received in settlement of
debts arising from Investments permitted under this Section 9.05 owing to the Borrower or any Restricted Subsidiary as a result of a bankruptcy or other insolvency proceeding of the obligor in respect of such debts or upon the enforcement of any
Lien in favor of the Borrower or any of its Restricted Subsidiaries; provided that the Borrower shall give the Administrative Agent prompt written notice in the event that the aggregate amount of all Investments held at any one time under this
Section 9.05(k) exceeds $1,000,000. 
  
 (l) Investments in
Unrestricted Subsidiaries, provided that (i) the aggregate amount of all such Investments at any one time shall not exceed $25,000,000 (or its equivalent in other currencies as of the date of Investment) and (ii) after giving effect to such
Investment, the Borrower would have at least $10,000,000 in unused availability under the Senior Revolving Credit Agreement. 
  
 Section 9.06 Designation and Conversion of Restricted and Unrestricted Subsidiaries; Debt of Unrestricted Subsidiaries. 
  
 (a) Unless designated as an Unrestricted Subsidiary on Schedule 7.15 as of
the date hereof or thereafter, assuming compliance with Section 9.06(b), any Person that becomes a Subsidiary of the Borrower or any of its Restricted Subsidiaries shall be classified as a Restricted Subsidiary. 
  
 (b) The Borrower may designate by written notification thereof to the
Administrative Agent, any Restricted Subsidiary, including a newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary if (i) prior, and after giving effect, to such designation, no Default or Event of Default would exist and (ii)
such designation is deemed to be an Investment in an Unrestricted Subsidiary in an amount equal to the fair market value as of the date of such designation of the Borrower’s direct and indirect ownership interest in such Subsidiary and such
Investment would be permitted to be made at the time of such designation under Section 9.05(l). Except as provided in this Section 9.06(b), no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. 
  
 (c) The Borrower may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary if after giving effect to such designation, (i) the representations and warranties of the Borrower and its Restricted Subsidiaries contained in each of the Loan Documents are true and correct on and as of such date as if made on and as of
the date of such redesignation (or, if stated to have been made expressly as of an earlier date, were true and correct as of such date), (ii) no Default would exist and (iii) the Borrower complies with the requirements of Section 8.14, Section 8.16
and Section 9.16. Any such designation shall be treated as a cash dividend in an 
  

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 amount equal to the lesser of the fair market value of the Borrower’s direct and indirect ownership interest in such
Subsidiary or the amount of the Borrower’s cash investment previously made for purposes of the limitation on Investments under Section 9.05(l). 
  
 (d) The Borrower shall not permit the aggregate principal amount of all Non-Recourse Debt outstanding at any one time to exceed $25,000,000. 

 
 Section 9.07 Nature of Business; International Operations. The
Borrower will not, and will not permit any Restricted Subsidiary to, allow any material change to be made in the character of its business as an independent oil and gas exploration and production company. From and after the date hereof, the Borrower
and its Domestic Subsidiaries will not acquire or make any other expenditure (whether such expenditure is capital, operating or otherwise) in or related to, any Oil and Gas Properties not located within the geographical boundaries of the United
States. For the avoidance of doubt, any Foreign Subsidiary may (i) acquire and make expenditures in or related to Oil and Gas Properties located within the geographical boundaries of Canada, and (ii) acquire and make expenditures in or related to
Oil and Gas Properties, in an amount not to exceed fifteen percent (15%) of the aggregate net present value (discounted at 10% and using pricing assumptions consistent with SEC reporting requirements at such time) of the Oil and Gas Properties of
the Borrower and its Restricted Subsidiaries, located outside the geographical boundaries of the United States and Canada. 
  
 Section 9.08 Limitation on Leases. The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer to
exist any obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal but excluding Capital Leases and leases of Hydrocarbon Interests), under leases or lease agreements which would cause the aggregate amount of
all payments made by the Borrower and the Restricted Subsidiaries pursuant to all such leases or lease agreements, including, without limitation, any residual payments at the end of any lease, to exceed $5,000,000 in any period of twelve consecutive
calendar months during the life of such leases. 
  
 Section 9.09
Proceeds of Notes. The Borrower will not permit the proceeds of the Notes to be used for any purpose other than those permitted by Section 7.22. Neither the Borrower nor any Person acting on behalf of the Borrower has taken or will take any
action which might cause any of the Loan Documents to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in
effect or as the same may hereinafter be in effect. If requested by the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form
U-1 or such other form referred to in Regulation U, Regulation T or Regulation X of the Board, as the case may be. 
  
 Section 9.10 ERISA Compliance. The Borrower will not, and will not permit any Subsidiary to, at any time: 
  
 (a) engage in, or permit any ERISA Affiliate to engage in, any transaction
in connection with which the Borrower, a Subsidiary or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code. 
  

 63 

 (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. 
  
 (f) contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any Multiemployer Plan. 
  
 (g) acquire, or permit any ERISA Affiliate to acquire, an interest in any
Person that causes such Person to become an ERISA Affiliate with respect to the Borrower or a Subsidiary or with respect to any ERISA Affiliate of the Borrower or a Subsidiary if such Person sponsors, maintains or contributes to, or at any time in
the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (i) any Multiemployer Plan, or (ii) any other Plan that is subject to Title IV of ERISA under which the actuarial present value of the benefit liabilities
under such Plan exceeds the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities. 
  
 (h) incur, or permit any ERISA Affiliate to incur, a liability to or on account of a Plan under sections 515, 4062, 4063,
4064, 4201 or 4204 of ERISA. 
  
 (i) contribute to or assume an
obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any employee welfare benefit plan, as defined in section 3(1) of ERISA, including, without limitation, any such plan maintained to
provide benefits to former employees of such entities, that may not be terminated by such entities in their sole discretion at any time without any material liability. 
  
 (j) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an increase in current liability such that the
Borrower, a Subsidiary or any ERISA Affiliate is required to provide security to such Plan under section 401(a)(29) of the Code. 
  

 64 

 Section 9.11 Sale or Discount of Receivables. Except for receivables obtained by the Borrower or
any Restricted Subsidiary out of the ordinary course of business or the settlement of joint interest billing accounts in the ordinary course of business or discounts granted to settle collection of accounts receivable or the sale of defaulted
accounts arising in the ordinary course of business in connection with the compromise or collection thereof and not in connection with any financing transaction, the Borrower will not, and will not permit any Restricted Subsidiary to, discount or
sell (with or without recourse) any of its notes receivable or accounts receivable. 
  
 Section 9.12 Mergers, Etc. The Borrower will not, and will not permit any Restricted Subsidiary to, merge into or with or consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its Property to any other Person (whether now owned or hereafter acquired) (any such
transaction, a “consolidation”), or liquidate or dissolve; provided that the Borrower or any Restricted Subsidiary may participate in a consolidation with any other Person; provided that: 
  
 (a) any Restricted Subsidiary (including a Foreign Subsidiary) may
participate in a consolidation with the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or any other Restricted Subsidiary that is a Domestic Subsidiary (provided that if one of such parties to the
consolidation is a Foreign Subsidiary, such Domestic Subsidiary shall be the continuing or surviving Person) and if one of such Restricted Subsidiaries is a Wholly-Owned Subsidiary, then the surviving Person shall be a Wholly-Owned Subsidiary; and

  
 (b) any Foreign Subsidiary of the Borrower may participate in
a consolidation with any one or more Foreign Subsidiaries; provided that if one of such Foreign Subsidiaries is a Wholly-Owned Subsidiary, the survivor shall be a Wholly-Owned Subsidiary. 
  
 Section 9.13 Sale of Properties. The Borrower will not, and will not permit any Restricted Subsidiary to, sell,
assign, farm-out, convey or otherwise transfer any Property except for (a) the sale of Hydrocarbons in the ordinary course of business; (b) farmouts of undeveloped acreage or undrilled depths and assignments in connection with such farmouts; (c) the
sale or transfer of (i) equipment that is no longer necessary for the business of the Borrower or such Restricted Subsidiary or is replaced by equipment of at least comparable value and use or (ii) Oil and Gas Properties or interests therein or
Restricted Subsidiaries owning Oil and Gas Properties to which there were no proved reserves attributed in the most recent Reserve Report delivered to the Lenders; (d) the sale, transfer or other disposition of Equity Interests in Unrestricted
Subsidiaries; (e) the sale or other disposition (including Casualty Events) of any Oil and Gas Property or any interest therein or any Restricted Subsidiary owning Oil and Gas Properties; provided that (i) the consideration received in respect of
such sale or other disposition shall be equal to or greater than the fair market value of the Oil and Gas Property, interest therein or Restricted Subsidiary subject of such sale, lease or other disposition (as reasonably determined by the board of
directors of the Borrower and, if requested by the Administrative Agent, the Borrower shall deliver a certificate of a Responsible Officer of the Borrower certifying to that effect); (ii) if such sale or other disposition of Oil and Gas Property or
Restricted Subsidiary owning Oil and Gas Properties included in the most recently delivered Reserve Report (whether made for cash consideration or otherwise) during any period between two successive determinations of Total Reserve Value is sold for
a price in excess of $7,500,000, individually or 
  

 65 

 in the aggregate, then the Total Reserve Value shall be reduced, effective immediately upon such sale or disposition, by
an amount equal to the value, if any, assigned such Property in the Reserve Report for such most recent determination of Total Reserve Value and (iii) an amount equal to 100% of the net proceeds received from such sale, lease or other disposition
shall be used within 90 days of such disposition: (1) to acquire Property, plant and equipment or any business entity used or useful in carrying on the business of the Borrower and its Restricted Subsidiaries and having a fair market value at least
equal to the fair market value of the Properties sold, leased or otherwise disposed of or to improve or replace any existing Property of the Borrower and its Subsidiaries used or useful in carrying on the business of the Borrower and its
Subsidiaries, (2) to repay Debt under the Senior Revolving Credit Agreement or (3) to prepay the Notes; and (f) sales and other dispositions of Properties not regulated by Section 9.13(a) to (e) having a fair market value not to exceed $2,500,000
during any 6-month period. 
  
 Section 9.14 Environmental
Matters. The Borrower will not, and will not permit any Restricted Subsidiary to, cause or permit any of its Property to be in violation of, or do anything or permit anything to be done which will subject any such Property to any Remedial Work
under any Environmental Laws, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property where such violations or remedial obligations could reasonably be
expected to have a Material Adverse Effect. 
  
 Section 9.15
Transactions with Affiliates. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property or the rendering of any
service, with any Affiliate (other than the Guarantors and Wholly-Owned Subsidiaries of the Borrower) unless such transactions are otherwise permitted under this Agreement and are upon fair and reasonable terms no less favorable to it than it would
obtain in a comparable arm’s length transaction with a Person not an Affiliate. 
  
 Section 9.16 Subsidiaries. The Borrower will not, and will not permit any Restricted Subsidiary to, create or acquire any additional Restricted Subsidiary or redesignate an Unrestricted Subsidiary as a
Restricted Subsidiary unless the Borrower gives written notice to the Administrative Agent of such creation or acquisition and complies with Section 8.14(b) and Section 8.14(c). The Borrower shall not, and shall not permit any Restricted Subsidiary
to, sell, assign or otherwise dispose of any Equity Interests in any Restricted Subsidiary except in compliance with Section 9.13(e). 
  
 Section 9.17 Negative Pledge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer
to exist any contract, agreement or understanding which in any way prohibits or restricts the granting, conveying, creation or imposition of any Lien on any of its Property in favor of the Administrative Agent and the Lenders or restricts any
Restricted Subsidiary from paying dividends or making distributions to the Borrower or any Guarantor, or which requires the consent of or notice to other Persons in connection therewith; provided, however, that the preceding restrictions will not
apply to encumbrances or restrictions arising under or by reason of (i) this Agreement or the Security Instruments, (ii) Debt securing Liens permitted by Section 9.03(c) or Section 9.03(d) or any contract, agreement or understanding creating Liens
permitted by Section 9.03(d) (but only to the 
  

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 extent related to the Property on which such Liens were created), (iii) any leases or licenses or similar contracts as
they affect any Property or Lien subject to a lease or license, (iv) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of all or substantially all the
equity or Property of such Restricted Subsidiary (or the Property that is subject to such restriction) pending the closing of such sale or disposition, or (v) customary provisions with respect to the distribution of Property in joint venture
agreements. 
  
 Section 9.18 Gas Imbalances, Take-or-Pay or
Other Prepayments. The Borrower will not, and will not permit any Restricted Subsidiary to, allow gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Borrower or any Restricted Subsidiary that would
require the Borrower or such Restricted Subsidiary to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor to exceed 500,000 Mcf of gas (on an Mcfe equivalent basis) in the aggregate. 
  
 Section 9.19 Swap Agreements. The Borrower will not, and will not
permit any Restricted Subsidiary to, enter into any Swap Agreements with any Person other than (a) those Swap Agreements required under Section 8.18; (b) Swap Agreements in respect of commodities (including price Swap Agreements, basis differential
Swap Agreements, caps, collars, floors and other similar agreements described in the definition of “Swap Agreements”) (i) with an Approved Counterparty, (ii) the notional volumes for which, from the Effective Date until December 31, 2009,
(when aggregated with other commodity Swap Agreements then in effect other than basis differential swaps on volumes already hedged pursuant to other Swap Agreements) do not exceed (A) 85% of the reasonably anticipated projected production (as shown
in the most recent Reserve Report) from proved, developed, producing Oil and Gas Properties for each month during the period during which such Swap Agreement is in effect and (B) 20% of the reasonably anticipated projected production (as shown in
the most recent Reserve Report) from proved, developed, non-producing Oil and Gas Properties for each month during the period during which such Swap Agreement is in effect and (iii) the notional volumes for which, after December 31, 2009, (when
aggregated with other commodity price Swap Agreements then in effect other than basis differential swaps) do not exceed 75% of the reasonably anticipated projected production (as shown in the most recent Reserve Report) from proved, developed,
producing Oil and Gas Properties for each month during the period during which such Swap Agreement is in effect; provided, however, that for purposes of this Section 9.19(b), put options and price floors for crude oil and natural gas shall be
disregarded; and (c) Swap Agreements in respect of interest rates with an Approved Counterparty, as follows: (i) Swap Agreements effectively converting interest rates from fixed to floating, the notional amounts of which (when aggregated with all
other Swap Agreements of the Borrower and its Restricted Subsidiaries then in effect effectively converting interest rates from fixed to floating) do not exceed 50% of the then outstanding principal amount of the Borrower’s Debt for borrowed
money which bears interest at a fixed rate (after netting out any Swap Agreements then in effect effectively converting interest rates from floating to fixed) and (ii) Swap Agreements effectively converting interest rates from floating to fixed, the
notional amounts of which (when aggregated with all other Swap Agreements of the Borrower and its Restricted Subsidiaries then in effect effectively converting interest rates from floating to fixed) do not exceed 75% of the then outstanding
principal amount of the Borrower’s Debt for borrowed money which bears interest at a floating rate (after netting out any Swap Agreements then in effect effectively 
  

 67 

 converting interest rates from floating to fixed). In no event shall any Swap Agreement contain any current requirement,
agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral or margin, other than letters of credit permitted by this Agreement (in an amount not to exceed $50,000,000 in the aggregate), to secure their obligations under
such Swap Agreement or to cover market exposures. 
  
 Section 9.20
Acquisition and Separation Documents. The Borrower will not, and will not permit any of its Subsidiaries to, amend, modify or supplement any of the Acquisition Documents or the Separation Documents if the effect thereof could reasonably be
expected to have a Material Adverse Effect (and provided that the Borrower promptly furnishes to the Administrative Agent a copy of such amendment, modification or supplement). 
  
 Section 9.21 Gas Sales Contracts. The Borrower will not, and will not permit any of its Subsidiaries to (the Borrower
or any such Subsidiary being the “Seller” for purposes of this Section), enter into any Gas Sales Contract (i) such Gas Sales Contract is with a counterparty (the “Purchaser”) who is an Approved Purchaser at the
time such Gas Sales Contract is entered into or the Purchaser has posted Acceptable Collateral to secure the Purchaser’s obligations thereunder, (ii) the terms of such Gas Sales Contract provide that if the Purchaser is not, or is no longer, an
Approved Purchaser, such counterparty will, within three (3) Business Days, post Acceptable Collateral to secure the Purchaser’s obligations thereunder, (iii) the terms of such Gas Sales Contract provide that upon the failure to provide such
Acceptable Collateral, the Seller may immediately terminate such Gas Sales Contract and sell the volumes of gas subject of the Gas Sales Contract to third party Purchasers and (iv) the proceeds of such Gas Sales Contract shall be deposited directly
into the account of the Seller. Such Gas Sales Contract may also provide that if following any posting of Acceptable Collateral the Purchaser becomes an Approved Purchaser, any Acceptable Collateral previously posted by such Purchaser shall be
immediately released and returned to such Purchaser; provided that, notwithstanding the foregoing, the Seller may enter into one or more Gas Sales Contracts which do not comply with the requirements of this sentence so long as the unpaid Exposure on
all such Gas Sales Contracts does not, in the aggregate, exceed $2,500,000 at any one time. The terms of any Gas Sales Contract that contemplates the posting of Acceptable Collateral of the type described in clause (b) of the definition thereof
shall require (A) the Seller, for each day during any delivery month, to calculate and notify the Purchaser of the Seller’s Exposure (as defined below) for the prior day (or “days” in the event any day or days are skipped) and (B) the
Purchaser to deliver to the Seller, by the close of business on the day next following the date of such notice, to the deposit account maintained with the depository bank, in each case, specified in the Control Agreement (the “Margin
Account”), collateral in the form of cash in an amount equal to such Exposure. For purposes of this Section, the term “Exposure” means, for any day, the volume of physical gas flow delivered during the previous day
multiplied by the contract price therefor. Any such Gas Sales Contract shall provide that (i) if at any time the Purchaser fails to pay any amount when due (after giving effect to any applicable grace periods), the Seller may apply any posted
collateral in respect of such Gas Sales Contract to amounts then due thereunder and (ii) upon the payment in full of the invoice price for any delivery month, the amount of cash collateral posted by the Purchaser in respect of such delivery month
shall be returned to the Purchaser. Any such Gas Sales Contract may provide that any posted collateral at any time held in the Margin Account in excess of the amount required to be posted at such time may be applied toward the payment of gas in
respect of the relevant delivery month. 
  

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 Section 9.22 Anti-Layering. Notwithstanding the foregoing, the Borrower will not, and will not
permit any Restricted Subsidiary to, incur, create, assume or suffer to exist any Debt if such Debt is subordinate or junior in ranking in right of payment to the Senior Revolving Credit Agreement, unless such Debt is expressly subordinated in right
of payment to the obligations under this Agreement. 
  
 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 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 Business Days. 
  
 (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Restricted Subsidiary in or in connection with any Loan
Document or any amendment or modification of any Loan Document or waiver under such Loan Document, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been incorrect when made or deemed made in any material respect. 
  
 (d) the Borrower or any Restricted Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in Section 8.02, Section
8.14 or in ARTICLE IX. 
  
 (e) the Borrower or any Restricted
Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in Section 10.01(a), Section 10.01(b) or Section 10.01(d)) or any other Loan Document, and such failure shall
continue unremedied for a period of 30 days after the earlier to occur of (A) notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender) or (B) a Responsible Officer of the Borrower or such
Restricted Subsidiary otherwise becoming aware of such default. 
  
 (f) the Borrower or any Restricted Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness when and as the same shall become due and payable following the
expiration of any applicable grace period therefor. 
  
 (g) any
event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or to require the Redemption thereof or any offer to Redeem to be made in respect thereof, prior to its scheduled maturity or require
the Borrower or any Restricted Subsidiary to make an offer in respect thereof and such event or condition continues beyond any applicable grace period therefor. 
  

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 (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i)
liquidation, reorganization or other relief in respect of the Borrower or any Restricted Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 30 days or an order or decree approving or ordering any of the foregoing shall be entered. 
  
 (i) the Borrower or any Restricted Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition
described in Section 10.01(h), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of its assets, (iv)
file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing.

  
 (j) the Borrower or any Restricted Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts as they become due. 
  
 (k) (i) one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 (to the extent not covered by independent third party insurance provided by insurers of the highest claims paying
rating or financial strength as to which the insurer does not dispute coverage and is not subject to an insolvency proceeding) or (ii) any one or more non-monetary judgments that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, shall be rendered against the Borrower, any Restricted Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Restricted Subsidiary to enforce any such judgment. 
  
 (l) the Loan Documents after delivery thereof shall for any reason, except to
the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding and enforceable in accordance with their terms against the Borrower or a Guarantor party thereto or shall be repudiated by any of them, or cease to
create a valid and perfected Lien of the priority required thereby on any of the collateral purported to be covered thereby, except to the extent permitted by the terms of this Agreement, or the Borrower or any Restricted Subsidiary or any of their
Affiliates shall so state in writing. 
  
 (m) the Intercreditor
Agreement, after delivery thereof shall for any reason, except to the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding 
  

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 and enforceable in accordance with its terms against the Borrower or any party thereto or holder of the Debt subordinated
thereby or shall be repudiated by any of them, or cause the payment of the obligations of the Second Lien Notes to be senior or pari passu in right to the payment of obligations of this Agreement, or any payment by the Borrower or any Guarantor in
violation of the terms of the Intercreditor Agreement. 
  
 (n) an
ERISA Event shall have occurred that, in the opinion of the Majority Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an
aggregate amount exceeding (i) $2,500,000 in any year or (ii) $5,000,000 for all periods. 
  
 (o) Calpine Energy Services, L.P., as purchaser, fails to post Acceptable Collateral in respect of any Gas Sales Contract with the Borrower or any Restricted Subsidiary when due as required by Section 9.21 and the
Seller fails to (i) exercise its right to terminate such Gas Sales Contract no later than the second Business Day of such failure by such purchaser and (ii) sell the volumes of gas subject of such Gas Sales Contract to third party Purchasers in
accordance with the provisions of Section 9.21 no later than the second Business Day after such failure by such purchaser. 
  
 (p) a Change in Control shall occur. 
  
 Section 10.02 Remedies. 
  
 (a) In the case of an Event of Default other than one described in Section 10.01(h), Section 10.01(i) or Section 10.01(j), at any time thereafter during
the continuance of such Event of Default, the Administrative Agent may (and at the request of the Majority Lenders), shall, by notice to the Borrower, 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 shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby waived by the Borrower and each Guarantor; and in case of an Event of Default described in Section 10.01(h), Section 10.01(i) or Section 10.01(j), the Notes and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and the other obligations of the Borrower and the Guarantors accrued hereunder and under the Notes and the other Loan Documents, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and each Guarantor. 
  
 (b) In the case of the occurrence of an Event of Default, the Administrative Agent and the Lenders will have all other rights and remedies available at
law and equity. 
  
 (c) All proceeds realized from the liquidation
or other disposition of collateral or otherwise received after maturity of the Notes, whether by acceleration or otherwise, shall be applied: 
  
 (i) first, to payment or reimbursement of that portion of the Indebtedness constituting fees, expenses and indemnities payable to the
Administrative Agent in its capacity as such; 
  

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 (ii) second, pro rata to payment or reimbursement of that portion of the Indebtedness
constituting fees, expenses and indemnities payable to the Lenders; 
  
 (iii) third, pro rata to payment of accrued interest on the Loans; 
  
 (iv) fourth, pro rata to payment of principal outstanding on the Loans; 
  
 (v) fifth, pro rata to any other Indebtedness; and 
  
 (vi) sixth, any excess, after all of the Indebtedness shall have been indefeasibly paid in full in cash, shall be paid to the Borrower or as
otherwise required by any Governmental Requirement. 
  
 ARTICLE
XI 
 The Administrative Agent 
  
 Section 11.01 Appointment; Powers. 
  
 (a) Each of the Lenders 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. 
  
 (b) The Administrative Agent is hereby designated as the CUSIP agent for all
parties and is authorized to take all necessary or desirable steps to obtain CUSIP Numbers from the CSB Service Bureau and to include those numbers on all Loan Documents. The Administrative Agent is further authorized to take all actions necessary
or desirable to maintain accurate and updated information with the CSB, including in connection with any amendment, modification, or restatement of this Agreement. After the Effective Date, the Administrative Agent is authorized to allow the CSB to
publish the CUSIP Data to CUSIP Subscribers. 
  
 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 
  

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 disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower
or a Lender, and shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or under any other Loan Document or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in ARTICLE VI or
elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent or as to those conditions precedent expressly required to be to the Administrative Agent’s satisfaction, (vi) the existence,
value, perfection or priority of any collateral security or the financial or other condition of the Borrower and its Subsidiaries or any other obligor or guarantor, or (vii) any failure by the Borrower or any other Person (other than itself) to
perform any of its obligations hereunder or under any other Loan Document or the performance or observance of any covenants, agreements or other terms or conditions set forth herein or therein. For purposes of determining compliance with the
conditions specified in ARTICLE VI, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to
a Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed closing date specifying its objection thereto. 
  
 Section 11.03 Action by Administrative Agent. The Administrative Agent shall have no duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Majority Lenders (or
such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02) and in all cases the Administrative Agent shall be fully justified in failing or refusing to act hereunder or under any other
Loan Documents unless it shall (a) receive written instructions from the Majority Lenders or the Lenders, as applicable, (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02)
specifying the action to be taken and (b) be indemnified to its satisfaction by the Lenders against any and all liability and expenses which may be incurred by it by reason of taking or continuing to take any such action. The instructions as
aforesaid and any action taken or failure to act pursuant thereto by the Administrative Agent shall be binding on all of the Lenders. If a Default has occurred and is continuing, then the Administrative Agent shall take such action with respect to
such Default as shall be directed by the requisite Lenders in the written instructions (with indemnities) described in this Section 11.03, provided that, unless and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interests of the Lenders. In no event, however, shall the
Administrative Agent be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, the Loan 
  

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 Documents or applicable law. The Administrative Agent shall not be liable for any action taken or not taken by it with
the consent or at the request of the Majority Lenders or the Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02), and otherwise the Administrative Agent shall not be
liable for any action taken or not taken by it hereunder or under any other Loan Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith INCLUDING ITS OWN ORDINARY
NEGLIGENCE, except for its own gross negligence or willful misconduct. 
  
 Section 11.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and
shall not incur any liability for relying thereon and each of the Borrower and the Lenders hereby waives the right to dispute the Administrative Agent’s record of such statement, except in the case of gross negligence or willful misconduct by
the Administrative Agent. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts. The Administrative Agent may deem and treat the payee of any Note as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer
thereof permitted hereunder shall have been filed with the Administrative Agent. 
  
 Section 11.05 Subagents. The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding Sections of this ARTICLE XI shall apply to any
such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as
Administrative Agent. 
  
 Section 11.06 Resignation or Removal
of Administrative Agent. Subject to the appointment and acceptance of a successor Administrative Agent as provided in this Section 11.06, the Administrative Agent may resign at any time by notifying the Lenders, and the Borrower, and the
Administrative Agent may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right, subject to the approval of the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation or removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of such bank. 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 Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. 
  

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 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 hereunder, the provisions of this ARTICLE XI and Section 12.03 shall continue in effect for the benefit of such retiring
Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent. 
  
 Section 11.07 Administrative Agent as a Lender. Each bank serving as an Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind
of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not an Administrative Agent hereunder. 
  
 Section 11.08 No Reliance. Each Lender acknowledges that it has, independently and without reliance upon the Administrative 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 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 Administrative Agent 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, neither the Administrative 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 Administrative Agent or any of its Affiliates. In this regard, each Lender acknowledges that
Vinson & Elkins L.L.P. is acting in this transaction as special counsel to the Arranger only in respect of the Senior Revolving Credit Agreement, except to the extent otherwise expressly stated in any legal opinion or any Loan Document. Each
other party hereto will consult with its own legal counsel to the extent that it deems necessary in connection with the Loan Documents and the matters contemplated therein. 
  
 Section 11.09 Administrative Agent May File Proofs of Claim. 
  
 In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Borrower or any of its Subsidiaries, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as
herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise: 
  
 (a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Indebtedness that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under
Section 12.03) allowed in such judicial proceeding; and 
  

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 (b) to collect and receive any monies or other property payable or deliverable on any such claims and to
distribute the same; 
  
 and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 12.03. 
  
 Nothing contained herein shall be
deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Indebtedness or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. 
  
 Section 11.10 Authority of Administrative Agent to Release Collateral and Liens. Each Lender hereby authorizes the Administrative Agent to release
any collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents. Each Lender hereby authorizes the Administrative Agent to execute and deliver to the Borrower, at the Borrower’s sole cost and expense, any and
all releases of Liens, termination statements, assignments or other documents reasonably requested by the Borrower in connection with any sale or other disposition of Property to the extent such sale or other disposition is permitted by the terms of
Section 9.13 or is otherwise authorized by the terms of the Loan Documents. 
  
 Section 11.11 The Arranger. The Arranger shall have no duties, responsibilities or liabilities under this Agreement and the other Loan Documents other than its duties, responsibilities and liabilities in its
capacity as Lender hereunder. 
  
 ARTICLE XII 
 Miscellaneous 
  
 Section 12.01 Notices. 
  
 (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to Section 12.01(b)), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 
  
 (i) if to the Borrower, to it at 717 Texas, Suite 2800, Houston, Texas
77002, Attention: Chief Financial Officer (Telephone No. 713-335-4000); 
  

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 (ii) if to the Administrative Agent, to it at 919 Third Avenue, New York, New York 10022, Attention:
Millie Carillo, Loan Assistant (Telecopy No. (212) 841-2683), with a copy to 1200 Smith Street, Suite 3100, Houston, Texas 77002, Attention: Donna Verwold (Telecopy No. (713) 659-6915); and 
  
 (iii) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire. 
  
 (b) Notices and
other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to ARTICLE II,
ARTICLE III, ARTICLE IV and ARTICLE V unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. 
  
 (c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to
the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. 
  
 Section 12.02 Waivers; Amendments. 
  
 (a) No failure on the part of the Administrative Agent 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 and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 12.02(b), and then such waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender 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 
  

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 no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) modify
the definition of Total Reserve Value without the consent of each Lender, (iii) reduce the principal amount of the Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, or reduce any other Indebtedness hereunder or under
any other Loan Document, without the written consent of each Lender affected thereby, (iv) postpone the scheduled date of payment or prepayment of the principal amount of any Loan, or 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 Maturity Date without the written consent of each Lender affected thereby, (v) change Section 4.01(b) or
Section 4.01(c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (vi) waive or amend Section 6.01, Section 8.14, Section 9.19 or Section 10.02(c) or change the definition of
the terms “Domestic Subsidiary”, “Foreign Subsidiary” or “Subsidiary”, without the written consent of each Lender, (vii) release any Guarantor (except as set forth in the Guaranty Agreement), release any of the
collateral (other than as provided in Section 11.10), or reduce the percentage set forth in Section 8.14(a) to less than 80%, without the written consent of each Lender, or (viii) change any of the provisions of this Section 12.02(b) or the
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 hereunder or under any other
Loan Document without the prior written consent of the Administrative Agent. Notwithstanding the foregoing, any supplement to Schedule 7.15 (Subsidiaries) shall be effective simply by delivering to the Administrative Agent a supplemental schedule
clearly marked as such and, upon receipt, the Administrative Agent will promptly deliver a copy thereof to the Lenders. 
  
 Section 12.03 Expenses, Indemnity; Damage Waiver. 
  
 (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including, without
limitation, the reasonable fees, charges and disbursements of counsel and other outside consultants for the Administrative Agent, the reasonable travel, photocopy, mailing, courier, telephone and other similar expenses, including all Intralinks
expenses, and the cost of environmental audits and surveys and appraisals, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration (both before and
after the execution hereof and including advice of counsel to the Administrative Agent as to the rights and duties of the Administrative Agent and the Lenders with respect thereto) of this Agreement and the other Loan Documents and any amendments,
modifications or waivers of or consents related to the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) including, without limitation, fees and expenses incurred in the process of
obtaining and maintaining the CUSIP Numbers and the information relative thereto with the CSB, (ii) all costs, expenses, Taxes, assessments and other charges incurred by the Administrative 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 out-of-pocket expenses incurred by the 
  

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 Administrative Agent or any Lender, including the fees, charges and disbursements of any counsel for the Administrative
Agent or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement or any other Loan Document, including its rights under this Section 12.03, or in connection with the Loans made hereunder,
including, without limitation, all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans. 
  
 (b) THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE ARRANGER AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH
PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR
ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE
FAILURE OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT
OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION, (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 
  

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 SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY OR ANY ACTUAL OR ALLEGED
PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (xiii) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY
AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN
AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE
OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES RESULTED FROM THE BREACH OF ANY OBLIGATION OF SUCH INDEMNITEE UNDER ANY
LOAN DOCUMENT OR THE GROSS NEGLIGENCE, WILFUL MISCONDUCT, OR VIOLATION OF LAW OF SUCH INDEMNITEE. 
  
 (c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent under Section 12.03(a) or (b), each
Lender severally agrees to pay to the Administrative Agent such Lender’s ratable 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 the Administrative Agent 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 the use of the proceeds thereof. 
  
 (e) All amounts due under this Section 12.03 shall be payable not later than 10 days after written demand therefor. 
  
 Section 12.04 Successors and Assigns. 
  
 (a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns permitted hereby except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations 
  

 80 

 hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 12.04. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in Section 12.04(c)) and, to the extent expressly contemplated hereby, the Related Parties of each
of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 
  
 (b) (i) Subject to the conditions set forth in Section 12.04(b)(ii), any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of: 
  
 (A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; and 
  
 (B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment to
an assignee that is a Lender immediately prior to giving effect to such assignment. 
  
 (ii) Assignments shall be subject to the following additional conditions: 
  
 (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning
Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is
continuing; 
  
 (B) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; 
  
 (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500; and 
  
 (D) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. 
  
 (iii) Subject to Section 12.04(b)(iv) and the acceptance and recording thereof, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, 
  

 81 

 and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Section 5.01, Section 5.02, Section 5.03 and Section 12.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.04 shall be
treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.04(c). 
  
 (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments and principal amounts of the Loans, 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 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 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 and each Lender. 
  
 (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire and, if required hereunder, applicable tax forms (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 12.04(b) and any written
consent to such assignment required by Section 12.04(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this Section 12.04(b). 
  
 (c) (i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described
in the proviso to Section 12.02 that affects such Participant. In addition such agreement must provide that the Participant be bound by the provisions of Section 12.03. Subject to Section 12.04(c)(ii), the Borrower agrees that each Participant shall
be entitled to the benefits of Section 5.01, 
  

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 Section 5.02 and Section 5.03 to the same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 12.04(b). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.08 as though it were a Lender, provided such Participant agrees to be subject to Section 4.01(c) as though it were a
Lender. 
  
 (ii) A Participant shall not be
entitled to receive any greater payment under Section 5.01 or Section 5.03 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 5.03 unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 5.03(e) as though it were a Lender. 
  
 (d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such
Lender, including, without limitation, any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section 12.04(d) shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. 
  
 (e) Notwithstanding any other provisions of this Section 12.04, no transfer or assignment of the interests or obligations of
any Lender or any grant of participations therein shall be permitted if such transfer, assignment or grant would require the Borrower and the Guarantors to file a registration statement with the SEC or to qualify the Loans under the “Blue
Sky” laws of any state. 
  
 Section 12.05 Survival;
Revival; Reinstatement. 
  
 (a) All covenants, agreements,
representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent 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. The provisions of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and ARTICLE XI shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans 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 
  

 83 

 bankruptcy law, common law or equitable cause, then to such extent, the Indebtedness so satisfied shall be revived and
continue as if such payment or proceeds had not been received and the Administrative Agent’s and the Lenders’ Liens, security interests, rights, powers and remedies under this Agreement and each Loan Document shall continue in full force
and effect. In such event, each Loan Document shall be automatically reinstated and the Borrower shall take such action as may be reasonably requested by the Administrative Agent and the Lenders to effect such reinstatement. 
  
 Section 12.06 Counterparts; Integration; Effectiveness. 
  
 (a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. 
  
 (b) This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the
entire contract among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof and thereof. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.  
  
 (c) Except as provided in Section 6.01, this
Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement. 
  
 Section 12.07 Severability. Any provision of this Agreement or any other Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision
in any other jurisdiction. 
  
 Section 12.08 Right of
Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time held and other obligations (of whatsoever kind, including, without limitations obligations under Swap Agreements) at any time owing by such Lender or Affiliate to or for
the credit or the account of the Borrower or any Restricted Subsidiary against any of and all the obligations of the Borrower or any Restricted Subsidiary owed to such Lender now or hereafter existing under this Agreement or any other 
  

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

  
 Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS. 
  
 (a) THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
  
 (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION. 
  
 (c) EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 12.01
(OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION. 
  
 (d) EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR
ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY 
  

 85 

 HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09. 
  
 Section 12.10 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 
  
 Section 12.11 Confidentiality. Each of the Administrative Agent 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 containing provisions substantially the same as those of this Section 12.11, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any Swap Agreement relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 12.11 or (ii) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of this Section 12.11, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary and
their businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or a Subsidiary; provided that, in the case of information received from the
Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 12.11 shall be
considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. 
  
 Section 12.12 Interest Rate Limitation. It is the intention of the
parties hereto that each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby would be usurious as to any Lender under laws applicable to it (including the laws of the United States of
America and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in any of the

  

 86 

 Loan Documents or any agreement entered into in connection with or as security for the Notes, it is agreed as follows:
(i) the aggregate of all consideration which constitutes interest under law applicable to any Lender that is contracted for, taken, reserved, charged or received by such Lender under any of the Loan Documents or agreements or otherwise in connection
with the Notes shall under no circumstances exceed the maximum amount allowed by such applicable law, and any excess shall be canceled automatically and if theretofore paid shall be credited by such Lender on the principal amount of the Indebtedness
(or, to the extent that the principal amount of the Indebtedness shall have been or would thereby be paid in full, refunded by such Lender to the Borrower); and (ii) in the event that the maturity of the Notes is accelerated by reason of an election
of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Lender may never
include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by such Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal amount of the Indebtedness (or, to the extent that the principal amount of the Indebtedness shall have been or would thereby be paid in full, refunded by such Lender to the
Borrower). All sums paid or agreed to be paid to any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to such Lender, be amortized, prorated, allocated and spread throughout the
stated term of the Loans evidenced by the Notes until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time
(i) the amount of interest payable to any Lender on any date shall be computed at the Highest Lawful Rate applicable to such Lender pursuant to this Section 12.12 and (ii) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Lender would be less than the amount of interest payable to such Lender computed at the Highest Lawful Rate applicable to such Lender, then the amount of interest payable to such Lender in respect of such
subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to such Lender until the total amount of interest payable to such Lender shall equal the total amount of interest which would have been
payable to such Lender if the total amount of interest had been computed without giving effect to this Section 12.12. 
  
 Section 12.13 No Third Party Beneficiaries. This Agreement, the other Loan Documents, and the agreement of the Lenders to make Loans hereunder are
solely for the benefit of the Borrower, and no other Person (including, without limitation, any Subsidiary of the Borrower, any obligor, contractor, subcontractor, supplier or materialsman) shall have any rights, claims, remedies or privileges
hereunder or under any other Loan Document against the Administrative Agent or any Lender for any reason whatsoever. There are no third party beneficiaries. 
  
 Section 12.14 USA Patriot Act Notice. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance with the Act. 
  

 87 

 [SIGNATURES BEGIN NEXT PAGE] 
  

 88 

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

					
	BORROWER:	 	ROSETTA RESOURCES INC.
			
	 	 	By:	 	  

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

  

 [Signature Page- Term Loan Agreement] 
 1 

					
	ADMINISTRATIVE AGENT:	 	BNP PARIBAS,
	 	 	as Administrative Agent
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  

 [Signature Page- Term Loan Agreement] 
 2 

					
	LENDERS:	 	BNP Paribas
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  

 [Signature Page- Term Loan Agreement] 
 3 

 ANNEX I 
 COMMITMENTS 
  

						
	Name of Lender

	 	Percentage

	 	Commitment Amount

	BNP Paribas	 	 100.00%
	 	$	100,000,000
	TOTAL	 	 100.00%
	 	$	100,000,000

  

 Annex I - 1 

 ANNEX II 
 TERMS OF SUBORDINATION 
  
 Section 1.1 Subordination of Obligations. The Borrower and each Restricted Subsidiary covenant and agree, and each Term Lender by its acceptance of a Term Note covenants and agrees, that the payment of the Subordinated Obligations
shall, to the extent set forth in this Annex II, be subordinate and junior and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness, whether outstanding on the date hereof or hereafter created, incurred,
assumed or guaranteed. 
  
 Section 1.2 Payment Default or
Acceleration. Except under circumstances when the terms of Section 1.5 of this Annex II are applicable, if (a) a Payment Default or Senior Indebtedness Acceleration shall have occurred and be continuing and (b) the Term Lenders or the Term
Administrative Agent or other representative shall have received a Payment Default Notice, then neither the Borrower nor any Restricted Subsidiary may make, and no Term Lender shall accept, receive or collect, any direct or indirect payment or
distribution of any kind or character (in cash, securities, other Property, by setoff, or otherwise other than Reorganization Securities) of any properties or assets of the Borrower or any Restricted Subsidiary on account of the Subordinated
Obligations during the Payment Blockage Period; provided, however, that in the case of any payment on or in respect of any Subordinated Obligation that would (in the absence of any such Payment Default Notice) have been due and payable on any date
(a “Scheduled Payment Date”) during such Payment Blockage Period pursuant to the terms of the Term Notes as in effect on the date hereof or as amended consistent with the provisions of Section 1.12 of this Annex II, the provisions
of this Section 1.2 shall not prevent the making and acceptance of such payment (a “Scheduled Payment”), together with any additional default interest as is due on the Term Notes, on or after the date immediately following the
termination of such Payment Blockage Period. In the event that, notwithstanding the foregoing, neither the Borrower nor any Restricted Subsidiary shall make any payment or distribution to any Term Lender prohibited by the foregoing provisions of
this Section 1.2, then and in such event such payment or distribution shall be held in trust for the benefit of and immediately shall be paid over to the holders of the Senior Indebtedness or the Senior Indebtedness Representative for application
against the Senior Indebtedness remaining unpaid until such Senior Indebtedness are paid in full in cash. Any Payment Default Notice shall be deemed received by the Term Lenders upon the date of actual receipt by the Term Lenders or the Term
Administrative Agent or other representative of such Payment Default Notice in writing. 
  
 Section 1.3 Non-Payment Default. Except under circumstances when the terms of Section 1.2 of this Annex II or Section 1.5 of this Annex II are applicable, if (a) a Non-Payment Default shall have occurred and be
continuing, (b) the Term Lenders or the Term Administrative Agent or other representative shall have received a Non-Payment Default Notice, and (c) no Non-Payment Default Notice shall have been given within the 360 day period immediately preceding
the giving of such Non-Payment Default Notice, then neither the Borrower nor any Restricted Subsidiary may make, and no Term Lender shall accept, receive or collect, any direct or indirect payment or distribution of any kind or character (in cash,
securities, other Property, by 
  

 Annex II - 1 

 setoff, or otherwise other than Reorganization Securities) of any properties or assets of the Borrower or any Restricted
Subsidiary on account of the Subordinated Obligations during the Non-Payment Blockage Period; provided, however, that in the case of any Scheduled Payment on or in respect of any Subordinated Obligation that would (in the absence of any such
Non-Payment Default Notice) have been due and payable on any Scheduled Payment Date during such Non-Payment Blockage Period pursuant to the terms of the Term Notes as in effect on the date hereof or as amended consistent with the requirements of
Section 1.12 of this Annex II, the provisions of this Section 1.3 shall not prevent the making and acceptance of such Scheduled Payment, together with any additional default interest as is due on the Term Notes, on or after the date immediately
following the termination of such Non-Payment Blockage Period. In the event that, notwithstanding the foregoing, the Borrower or any Restricted Subsidiary shall make any payment or distribution to any Term Lender prohibited by the foregoing
provisions of this Section 1.3, then and in such event such payment or distribution shall be held in trust for the benefit of and immediately shall be paid over to the holders of the Senior Indebtedness or the Senior Indebtedness Representative for
application against the Senior Indebtedness remaining unpaid until such Senior Indebtedness are paid in full in cash. Any Non-Payment Default Notice shall be deemed received by the Term Lenders upon the date of actual receipt by the Term Lenders or
the Term Administrative Agent or other representative of such Non-Payment Default Notice in writing. 
  
 Section 1.4 Standstill. At any time that the Term Lenders are not permitted to receive payments on the Subordinated Obligations pursuant to either
Section 1.2 or 1.3 of this Annex II, the Term Lenders and the Term Administrative Agent or other representative of the Term Lenders will not commence any Enforcement Action relative to the Borrower or any Restricted Subsidiary during the Standstill
Period. Upon the termination of the Standstill Period, the Term Lenders may exercise all rights or remedies they may have in law or equity; provided, however, that if a Standstill Period terminates pursuant to clause (e) thereof, no Term Lender and
no agent or representative thereof shall exercise any remedies against, or attempt to foreclose upon, garnish, sequester or execute upon, any Property known to it as constituting collateral for the Senior Indebtedness (other than to file or record
any judgment Liens it may have obtained against such collateral) during the period that such Standstill Period would have been in effect but for termination pursuant to clause (e) of the definition of “Standstill Period;” provided further,
that the Payment Blockage Period or the Non-Payment Blockage Period, as the case may be, if not also terminated, shall continue for its full period notwithstanding the termination of the Standstill Period. Notwithstanding the foregoing, no
Standstill Period may be commenced while any other Standstill Period exists or within 180 days following the termination of any prior Standstill Period (provided that this sentence shall not relieve any Term Lender of its obligation to provide
notice under Section 1.9 of this Annex II). 
  
 Section 1.5
Insolvency; Bankruptcy; Etc. In the event of the institution of any Insolvency Proceeding relative to the Borrower or any Restricted Subsidiary, then: 
  

(a) The holders of the Senior Indebtedness shall be entitled to receive payment in full in cash of the Senior Indebtedness before the Term Lenders are
entitled to receive any direct or indirect payment or distribution of any kind or character, whether in cash, Property or securities (other than Reorganization Securities) on account of the Subordinated Obligations. 
  

 Annex II - 2 

 (b) Any direct or indirect payment or distribution of any kind or character, whether in cash, Property or
securities, by setoff or otherwise, which may be payable or deliverable in such proceedings in respect of the Subordinated Obligations but for the provisions of this Annex II shall be paid or delivered by the Person making such payment or
distribution, whether the Borrower, a Subsidiary of the Borrower, a trustee in bankruptcy, a receiver, a liquidating trustee, or otherwise, directly to the holders of the Senior Indebtedness or the Senior Indebtedness Representative, to the extent
necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid; provided, however, that no such delivery of any Reorganization Securities shall be made to any holders of the Senior Indebtedness. In the event that,
notwithstanding the foregoing provisions of this Section 1.5, any Term Lender shall have received any such payment or distribution of any kind or character, whether in cash, Property or securities, by setoff or otherwise, before all Senior
Indebtedness is paid in full in cash, which is to be paid to the holders of the Senior Indebtedness under the foregoing provisions of this Section 1.5, then and in such event such payment or distribution shall be held in trust for the benefit of and
immediately shall be paid over to the holders of the Senior Indebtedness or the Senior Indebtedness Representative for application to the payment of all Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in
full in cash. 
  
 (c) If no proof of claim is filed in any
Insolvency Proceeding with respect to any Subordinated Obligations by the tenth day prior to the bar date for any such proof of claim, the Senior Indebtedness Representative may, after notice to the Term Lenders or the Term Administrative Agent or
other representative, file such a proof of claim on behalf of the Term Lenders, and each Term Lender hereby irrevocably appoints the Senior Indebtedness Representative as its agent and attorney-in-fact for such limited purpose; provided, that the
foregoing shall not confer to the holder of any Senior Indebtedness the right to vote on behalf of the Term Lenders in any Insolvency Proceedings. 
  
 Section 1.6 No Impairment. No right of any present or future holder of Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the part of the Borrower or any Restricted Subsidiary or by any non-compliance by the Borrower or any Restricted Subsidiary with the terms, provisions, and covenants of this
Annex II, the Term Loan Agreement or the Term Notes, regardless of any knowledge thereof any such Term Lender may have or be otherwise charged with. The provisions of this Annex II shall be enforceable directly by any present or future holder of the
Senior Indebtedness and/or the Senior Indebtedness Representative. 
  
 Section 1.7 Rights of Creditors; Subrogation. The provisions of this Annex II are for the purpose of defining the relative rights of the holders of the Senior Indebtedness on the one hand, and the Term Lenders on the other hand, and
nothing herein shall impair, as between the Borrower and the Guarantors and the Term Lenders, the obligation of the Borrower and the Guarantors, which are unconditional and absolute, to pay to the Term Lenders the principal thereof and interest
thereon in accordance with their terms and the provisions thereof, nor shall anything herein, except as otherwise provided in Section 1.4 of this Annex II, prevent the Term 
  

 Annex II - 3 

 Lenders from exercising all remedies otherwise permitted by applicable law or hereunder upon default under the Term Loan
Agreement or under the Term Notes (including the right to demand payment and sue for performance thereof and of the Term Notes and to accelerate the maturity thereof as provided by the terms of the Term Notes), subject to the rights of holders of
the Senior Indebtedness under this Annex II. Upon payment in full of the Senior Indebtedness in cash and termination of the commitments of any holder of the Senior Indebtedness to make loans or extensions of credit, and expiration or termination of
all letters of credit issued by any holder of the Senior Indebtedness, the Term Lenders shall, to the extent of any payments or distributions paid or delivered to the holders of the Senior Indebtedness or otherwise applied to the Senior Indebtedness
pursuant to the provisions of this Annex II, be subrogated to the rights of the holders of the Senior Indebtedness to receive payments or distributions of assets of the Borrower or any Guarantor made on Senior Indebtedness (and any security
therefor) until the Subordinated Obligations shall be paid in full (and, for this purpose, no such payments or distributions paid or delivered to the holders of the Senior Indebtedness or otherwise applied to the Senior Indebtedness shall be deemed
to have discharged the Subordinated Obligations), and, for the purposes of such subrogation, no payments to the holders of the Senior Indebtedness of any cash, assets, stock, or obligations to which the Term Lenders would be entitled except for the
provisions of this Annex II shall, as between the Borrower and the Guarantors, any of their respective creditors (other than the holders of the Senior Indebtedness), and the Term Lenders, be deemed to be a payment by the Borrower or any Guarantor to
or on account of Senior Indebtedness. The fact that failure to make any payment on account of the Subordinated Obligations is caused by reason of the operation of any provision of this Annex II shall not be construed as preventing the occurrence of
an Event of Default. 
  
 Section 1.8 Payments on Senior
Indebtedness. In the event that any Term Lender determines in good faith that evidence is required with respect to the right of any holder of the Senior Indebtedness to participate in any payment or distribution pursuant to this Annex II or the
amount of such participation, such Term Lender may request such Person to furnish evidence to the reasonable satisfaction of such Term Lender as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Annex II, and if such evidence is not furnished, such Term Lender may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment; provided that, upon the written request of such Person to such Term Lender, such payment shall be made to the court having jurisdiction over such judicial determination or to another Person
mutually satisfactory to such Person and such Term Lender, as escrowee, to be held and invested pending such judicial determination in accordance with such instructions as shall be mutually satisfactory to such Person and such Term Lender and upon
such judicial determination becoming final and non-appealable to be distributed in accordance therewith to the Person entitled thereto. 
  
 Section 1.9 Notice of Acceleration, Enforcement Action. 
  

(a) Each Term Lender agrees that in the event any Event of Default shall occur, and as a result thereof, any Term Lender or the Term Administrative
Agent or other representative of such Term Lender accelerates maturity of the Term Notes, then such Term Lender or the Term Administrative Agent or other representative shall give prompt (and in any 
  

 Annex II - 4 

 event within three (3) Business Days) notice thereof in writing to the holders of the Senior Indebtedness or the Senior
Indebtedness Representative. Neither the Borrower nor any Restricted Subsidiary may pay the Term Notes until ten (10) Business Days after the Senior Indebtedness Representative receives the notice described above and, after that ten (10) Business
Day period, may pay the Term Notes, and the Term Lenders may receive or collect such payment, only if the provisions of this Annex II do not prohibit such payment at that time. 
  
 (b) Each Term Lender agrees that in the event any Event of Default shall occur, and as a result thereof, any Term Lender or
the Term Administrative Agent or other representative of such Term Lender intends to commence any Enforcement Action, then such Term Lender or the Term Administrative Agent or other representative shall first deliver notice thereof in writing to the
Senior Indebtedness Representative both (i) not less than ten (10) days prior to taking any such Enforcement Action, and (ii) one (1) Business Day after such Enforcement Action is taken. 
  
 Section 1.10 Reinstatement. The provisions of this Annex II shall remain in force and effect until the indefeasible
payment in full of all Senior Indebtedness and the termination of all commitments of any holder of the Senior Indebtedness to make loans or extensions of credit, and expiration or termination of all letters of credit issued by any holder of the
Senior Indebtedness. To the extent any payment of or distribution in respect of the Senior Indebtedness (whether by or on behalf of the Borrower or any of its Subsidiaries, as proceeds of security or enforcement of any right of set off or otherwise)
is declared to be fraudulent or preferential, set aside or required to be paid to the Borrower or any Restricted Subsidiary or any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such payment or distribution is recovered by, or paid over to, the Borrower or any Restricted Subsidiary or such receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
Person, the Senior Indebtedness or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment has not occurred and the provisions of this Annex II shall continue to be applicable in respect
of said reinstated Senior Indebtedness. 
  
 Section 1.11 Rights
of holders of the Senior Indebtedness. The holders of the Senior Indebtedness may, at any time and from time to time subject to the terms of the Senior Indebtedness, without the consent of or notice to the Term Lenders or the Term Administrative
Agent or other representative of the Term Lenders, without incurring responsibility to the Term Lenders and without impairing or releasing the subordination or other benefits provided in this Annex II or the obligations hereunder of the Term Lenders
to the holders of the Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew, increase (but not in excess of the cap provided for in the definition of
“Senior Indebtedness”), alter or amend, Senior Indebtedness or any instrument evidencing the same or any covenant or agreement under which Senior Indebtedness is outstanding or secured or any liability of any obligor thereon; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c) settle or compromise any Senior Indebtedness or any liability of any obligor thereon or release any Person liable in any manner
for the payment of Senior Indebtedness; and (d) waive any default under Senior Indebtedness and exercise or refrain from exercising any rights against the Borrower, any Restricted Subsidiary or any other Person. The foregoing provisions are not
intended to permit a change to the definition of “Senior Indebtedness”. 
  

 Annex II - 5 

 Section 1.12 Amendments. No amendment of this Annex II, or the definitions used in this Annex II,
or which would have the effect of modifying this Annex II, or the definitions used in this Annex II, shall be effective unless it is in writing and made with the prior written consent of each of the Required Senior Revolving Lenders or by the Senior
Indebtedness Representative acting at their written discretion on their behalf. 
  
 Section 1.13 Identity of Term Lenders for Notice Purposes. For purposes of any notice required or permitted to be given hereunder by the holders of the Senior Indebtedness or the Senior Indebtedness
Representative to the Term Lenders, or any of them, the holders of the Senior Indebtedness and the Senior Indebtedness Representative shall be entitled to rely, conclusively, on the identity and address of each Term Lender as set forth in the Term
Loan Agreement or as otherwise set forth in the most recent notice received by the Senior Indebtedness Representative from a Term Lender referring to the Term Loan Agreement for purposes of providing the identity and address of each Term Lender. The
Term Lenders agree that any notices required to be given to the Term Lenders shall be effective if such notice is given to the Term Administrative Agent or other representative of the Term Lenders. For so long as the Subordinated Obligations are
outstanding, the Term Lenders agree to designate and maintain an agent or other representative for such purposes. 
  
 Section 1.14 Liens. 
  
 (a) All Liens granted by the Borrower, or, if applicable, any Guarantor, which at any time secure the Term Loan Agreement, any Term Note or any other Term
Loan Document are hereby made, and will at all times prior to the full payment or discharge of the Senior Indebtedness be, subject and subordinate to all Liens granted by the Borrower or any Guarantor which at any time secure the Senior
Indebtedness, which subordination shall be effective whether or not all such Liens securing Senior Indebtedness have been properly recorded, filed and otherwise perfected prior to all such Liens securing any Term Note and regardless of the relative
priority of such Liens as determined without regard to this Annex II. The mortgages included in the Senior Revolving Credit Documents do (and other mortgages, security agreements and similar Senior Revolving Credit Documents may) describe the
indebtedness secured thereby in a manner which might include indebtedness other than the Senior Indebtedness. For so long as any Term Note is outstanding, as between the Term Lenders and the holders of the Senior Indebtedness, only the Senior
Indebtedness shall be deemed to be secured by any Liens granted under the Senior Revolving Credit Documents. 
  
 (b) Each Term Lender agrees that it will not initiate, join in or prosecute any claim, action or other proceeding challenging the validity or
enforceability of the Senior Indebtedness or the Liens securing the Senior Indebtedness. 
  

 Annex II - 6 

 Section 1.15 Legend. 
  
 (a) Each Term Note shall be conspicuously inscribed with a legend substantially in the form and substance as follows:

  
 PAYMENT OF THIS INSTRUMENT SHALL, TO THE EXTENT SET FORTH IN
ANNEX II OF THE TERM LOAN AGREEMENT DATED JULY 7, 2005 BY AND AMONG ROSETTA RESOURCES INC., BNP PARIBAS, AS ADMINISTRATIVE AGENT AND THE TERM LENDERS PARTIES THERETO, BE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL
SENIOR INDEBTEDNESS, THE PROVISIONS OF WHICH ANNEX II OF SUCH LOAN AGREEMENT BEING INCORPORATED HEREIN AND BY THIS REFERENCE BEING MADE A PART HEREOF. 
  
 (b) The Borrower and each Term Lender or the Term Administrative Agent or other representative of the Term Lenders shall cause each mortgage, security
agreement and other instrument securing all or any part of the Subordinated Obligations to be conspicuously inscribed with a legend substantially in the form and substance as follows: 
  
 ALL LIENS GRANTED BY THIS INSTRUMENT SHALL, TO THE EXTENT SET FORTH IN ANNEX II OF THE TERM LOAN AGREEMENT DATED JULY 7,
2005 BY AND AMONG ROSETTA RESOURCES INC., BNP PARIBAS, AS ADMINISTRATIVE AGENT AND TERM LENDERS PARTIES THERETO, BE SUBORDINATE AND JUNIOR TO ALL LIENS GRANTED BY GRANTOR TO SECURE THE SENIOR INDEBTEDNESS REGARDLESS OF THE RELATIVE PRIORITY OF SUCH
LIENS AS DETERMINED WITHOUT REGARD TO SUCH ANNEX II OF SUCH TERM LOAN AGREEMENT, THE PROVISIONS OF WHICH ANNEX II OF SUCH TERM LOAN AGREEMENT BEING INCORPORATED HEREIN AND BY THIS REFERENCE BEING MADE A PART HEREOF. 
  
 Section 1.16 Successors and Assigns. Each Term Lender acknowledges and
agrees that the provisions of this Annex II are, and are intended to be, an inducement and a consideration to each holder of the Senior Indebtedness to make, extend and continue the Senior Indebtedness; and each holder of the Senior Indebtedness
shall be deemed conclusively to have relied upon the provisions of this Annex II in permitting the Borrower to incur the Subordinated Obligations and in making, extending, continuing and/or acquiring such Senior Indebtedness. This Annex II shall
pass to and be fully binding upon the successors and assigns of each Term Lender and shall inure to the benefit of the present and future holders of the Senior Indebtedness and the Senior Indebtedness Representative and their respective successors
and assigns (including without limitation any Person refinancing any Senior Indebtedness). 
  

 Annex II - 7 

 Section 1.17 Defined Terms. 
  
 (a) Each capitalized term used in this Annex II, but not defined herein, shall have the meaning ascribed such term in the
Term Loan Agreement. 
  
 (b) The following terms have the
following meanings when used in this Annex II: 
  
 “Blockage Period” means a Non-Payment Blockage Period or a Payment Blockage Period. 
  
 “Eligible Swap Agreement” means any present or future Swap Agreement between the Borrower or any Restricted Subsidiary and any Senior
Revolving Lender or any Affiliate of any Senior Revolving Lender. For the avoidance of doubt, a Swap Agreement ceases to be an Eligible Swap Agreement if the Person that is the counterparty to the Borrower under a Swap Agreement ceases to be a
Senior Revolving Lender under the Senior Revolving Credit Agreement (or, in the case of an affiliate of a Senior Revolving Lender, the Person affiliated therewith ceases to be a Senior Revolving Lender under the Senior Revolving Credit Agreement).

  
 “Enforcement Action” means, with respect to
any Subordinated Obligations: any enforcement of any right or remedy including any enforcement or foreclosure of Liens granted by the Borrower or any Restricted Subsidiary to secure any or all of such Subordinated Obligations, any enforcement or
foreclosure of Liens on any capital stock or other equity interests in the Borrower or any Restricted Subsidiary which may be granted by the Borrower or its Subsidiaries or any holder of equity in the Borrower to secure any or all of such
Subordinated Obligations, or any other efforts to collect proceeds from the Borrower’s or any of its Subsidiary’s assets or properties (including proceeds of production) to satisfy the Subordinated Obligations, including, without
limitation, the commencement, or the joining with any other creditor of the Borrower or any Restricted Subsidiary in the commencement of any Insolvency Proceeding against the Borrower or any Restricted Subsidiary; provided, that none of the
following shall constitute an Enforcement Action: (a) acceleration of any of the Subordinated Obligations following acceleration of any of the Senior Indebtedness (provided that such acceleration of Senior Indebtedness has not previously been
rescinded), (b) acceleration of any of the Senior Indebtedness following acceleration of any of the Subordinated Obligations (provided that such acceleration of the Subordinated Obligations has not previously been rescinded), (c) actions by any Term
Lender to obtain possession of or receive Reorganization Securities, or (d) taking any action described above during the existence of any Insolvency Proceeding subject to the jurisdiction of a court of competent authority. 
  
 “Insolvency Proceeding” shall mean (a) any voluntary or
involuntary case, action, or proceeding before any Governmental Authority having jurisdiction over the applicable Person or its assets relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up, or relief
of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case
whether undertaken under U.S. Federal, state, or foreign law. 
  

 Annex II - 8 

 “Non-Payment Blockage Period” means, with respect to any Non-Payment Default, the period
from and including the date of receipt by the Term Lenders or the Term Administrative Agent or other representative of a Non-Payment Default Notice relating thereto until the first to occur of (a) the date upon which the Senior Indebtedness have
been paid in full in cash, all commitments of any holder of Senior Indebtedness to make loans or extensions of credit have terminated, and all letters of credit issued by any holder of Senior Indebtedness have expired, terminated or fully
collateralized in cash, (b) the 179th day after receipt of such Non-Payment Default Notice, (c) the date on which the Non-Payment Default which is the subject of such Non-Payment Default Notice has been waived in writing by the applicable holder or
holders of the Senior Indebtedness or an agent or representative on their behalf, cured, or ceased to exist, or (d) the date upon which the Person(s) giving such Non-Payment Default Notice notify the Term Lenders or the Term Administrative Agent or
other representative in writing of the termination of such Non-Payment Blockage Period. 
  
 “Non-Payment Default” means the occurrence of any event under any Senior Revolving Document evidencing Senior Indebtedness, not constituting a Payment Default, which gives the holder(s) of such Senior
Indebtedness, or an agent or representative acting on behalf of such holder(s), the right to cause the maturity of such Senior Indebtedness to be accelerated immediately without any further notice (except such notice as may be required to effect
such acceleration) or the expiration of any applicable grace period. 
  
 “Non-Payment Default Notice” means a written notice from or on behalf of the Senior Indebtedness Representative that a Non-Payment Default has occurred and is continuing which identifies such Non-Payment Default and
specifically designates such notice as a “Non-Payment Default Notice”. 
  
 “Payment Blockage Period” means, with respect to any Payment Default or Senior Indebtedness Acceleration, the period from and including the date of receipt by the Term Lenders or the Term
Administrative Agent or other representative of a Payment Default Notice relating thereto until the first to occur of (a) the date upon which the Senior Indebtedness have been paid in full in cash, all commitments of any holder of Senior
Indebtedness to make loans or extensions of credit have terminated, and all letters of credit issued by any holder of Senior Indebtedness have expired, terminated or fully collateralized in cash, (b) if such Payment Default Notice relates to a
Payment Default, the date on which the Payment Default which is the subject of such Payment Default Notice has been waived in writing by the applicable holder or holders of the Senior Indebtedness or an agent or representative on their behalf, cured
or ceased to exist, or if such Payment Default Notice relates to a Senior Indebtedness Acceleration, the date on which such acceleration is rescinded, annulled or ceased to exist, or (c) the day upon which the Person(s) giving such Payment Default
Notice notify the Term Lenders or the Term Administrative Agent or other representative in writing of the termination of such Payment Blockage Period. 
  
 “Payment Default” means a default by the Borrower or any Guarantor in the payment of any amount owing with respect to the Senior
Indebtedness, whether with respect to principal, interest, premium, letter of credit reimbursement obligations, commitment fees or letter of credit fees or otherwise when the same becomes due and payable, whether at maturity or at a date fixed for
payment of an installment or prepayment or by declaration or acceleration or otherwise. 
  

 Annex II - 9 

 “Payment Default Notice” means a written notice from or on behalf of the Senior
Indebtedness Representative that either (i) a Payment Default with respect to such Senior Indebtedness has occurred and is continuing, or (ii) a Senior Indebtedness Acceleration with respect to such Senior Indebtedness has occurred and is
continuing. 
  
 “Reorganization Securities” means
(a) debt securities that are issued pursuant to an Insolvency Proceeding the payment of which is subordinate and junior at least to the extent provided in this Annex II to the payment of the Senior Indebtedness outstanding at the time of the
issuance thereof (including any refinancing of Senior Indebtedness pursuant to an Insolvency Proceeding) and to the payment of all debt securities issued in exchange for such Senior Indebtedness in such Insolvency Proceeding (whether such
subordination is effected by the terms of such securities, an order or decree issued in such Insolvency Proceeding, by agreement of the Term Lenders or otherwise), or (b) equity securities that are issued pursuant to an Insolvency Proceeding;
provided, in either case, that such securities are authorized by an order or decree made by a court of competent jurisdiction in such Insolvency Proceeding. 
  
 “Required Senior Revolving Lenders” means Senior Revolving Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of the outstanding Senior Indebtedness, or if no principal amount of Loans or letters of credit is then
outstanding, Senior Revolving Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of the total
commitments. 
  
 “Senior
Indebtedness” means and includes (a) all principal indebtedness for loans now outstanding or hereafter incurred, and all letter of credit reimbursement obligations now existing or hereafter arising, under the Senior Revolving Credit
Agreement, provided that the aggregate outstanding principal amount of Senior Indebtedness under this clause (a) shall not exceed $400,000,000 at any time, and provided further, that if the aggregate principal amount of Senior Indebtedness
(constituting principal and letter of credit reimbursement obligations) shall exceed $400,000,000, then the subordination of the Term Notes as contemplated by Annex II to the Senior Indebtedness of $400,000,000 or less shall not be impaired, (b) all
amounts now or hereafter owing to any of the Senior Revolving Lenders or any of their Affiliates under any Eligible Swap Agreement, (c) all interest accruing on the Senior Indebtedness described in the preceding clauses (a) and (b), and (d) all
other monetary obligations (whether now outstanding or hereafter incurred) for which the Borrower or any Guarantor is responsible or liable as obligor, guarantor or otherwise under or pursuant to any of the Senior Revolving Credit Documents
including, without limitation, all fees, penalties, yield protections, breakage costs, damages, indemnification obligations, reimbursement obligations, and expenses (including, without limitation, fees and expenses of counsel to the Senior
Indebtedness Representative and the Senior Revolving Lenders) together with interest on the foregoing to the extent provided for in the Senior Revolving Credit Documents. The interest described in the preceding clause (c) and the premiums and
penalties described in the preceding clause (d) include, without limitation, all interest accruing after the commencement of any Insolvency Proceeding under the terms of the Senior Revolving Credit Documents whether or not such interest constitutes
an allowed claim in any such Insolvency Proceeding. 
  

 Annex II - 10 

 “Senior Indebtedness Acceleration” means with respect to the Senior Indebtedness that
the holder or holders of such Senior Indebtedness, or an agent or representative on behalf of such holder or holders, have caused the maturity of such Senior Indebtedness to be accelerated. 
  
 “Senior Indebtedness Default” means a Payment Default or a
Non-Payment Default. 
  
 “Senior Indebtedness
Representative” means (a) initially, BNP Paribas, as administrative agent for the Senior Revolving Lenders under the Senior Revolving Credit Agreement or (b) such other Person selected by the Majority Lenders (as such term is defined in the
Senior Revolving Credit Agreement) to replace BNP Paribas or the then Senior Indebtedness Representative. 
  
 “Senior Revolving Credit Agreement” means that certain $400,000,000 Senior Revolving Credit Agreement dated as of the July 7, 2005 among
the Borrower, BNP Paribas, as administrative agent and the financial institutions listed therein from time to time as Senior Revolving Lenders, as from time to time renewed, extended, amended, supplemented, or restated, and any agreements
representing the refinancing, replacement, or substitution in whole or in part of the revolving credit loans and letter of credit liabilities made or incurred under such Senior Revolving Credit Agreement. 
  
 “Senior Revolving Credit Documents” means, collectively, (a)
the Senior Revolving Credit Agreement and the Eligible Swap Agreements, (b) any note, bond or other instrument evidencing Senior Indebtedness, (c) all mortgages, security agreements, pledge agreements or financing statements evidencing, creating or
perfecting any Lien to secure the Senior Indebtedness in any way, (d) all guarantees of the Senior Indebtedness, (d) all other documents, instruments or agreements relating to the Senior Indebtedness now or hereafter executed or delivered by and
among the Borrower, any Restricted Subsidiary, the Senior Indebtedness Representative or any Senior Revolving Lender, including without limitation each of the other the “Loan Documents” as such term is defined in the Senior Revolving
Credit Agreement, and (e) all renewals, extensions, amendments, modifications or restatements of the foregoing. 
  
 “Senior Revolving Lenders” means all Persons which now or hereafter constitute a “Lender” under the Senior Revolving Credit
Agreement and their respective successors and assigns, and all Person refinancing any Senior Indebtedness and their respective successors and assigns. 
  
 “Standstill Period” means the period beginning with the commencement of a Blockage Period and ending on the earliest of (a) the date when
the Senior Indebtedness Default giving rise to such Blockage Period has been cured or waived in writing, (b) the date of the repayment in full in cash of the Senior Indebtedness, (c) the date that is 90 days after the commencement of a Blockage
Period, (d) the end of the Non-Payment Blockage Period applicable to such Senior Indebtedness Default, (e) the date on which the Senior Indebtedness shall have been declared due and payable prior to its stated maturity or any holder of Senior
Indebtedness commences proceedings to collect any Senior Indebtedness or realize upon any material part of the collateral for any Senior Indebtedness and (f) the date upon which any Insolvency Proceeding is commenced. 
  

 Annex II - 11 

 “Subordinated Obligations” means any and all indebtedness (whether for principal,
interest, fees, indemnifications or otherwise, but not expenses) now or hereafter owing by the Borrower or any Restricted Subsidiary under or in connection with the Term Loan Agreement, the Term Notes, any mortgage, guaranty or other security
instrument given in connection therewith, and any letter agreement or other agreement providing for payment of fees in connection therewith. 
  
 “Term Administrative Agent” means BNP Paribas, in its capacity as administrative agent for the Term Lenders under the Term Loan
Agreement, together with any successors in such capacity. 
  
 “Term Lenders” means all Persons which now or hereafter constitute a “Lender” under the Term Loan Agreement and their respective successors and assigns, and all Person refinancing any Senior Indebtedness and their
respective successors and assigns. 
  
 “Term Loan
Agreement” means that certain $100,000,000 Second Lien Term Loan Agreement dated as of the July 7, 2005 among the Borrower, BNP Paribas, as administrative agent and the financial institutions listed therein from time to time as Term
Lenders, as from time to time renewed, extended, amended, supplemented, or restated, and any agreements representing the refinancing, replacement, or substitution in whole or in part of the loans made or incurred under such Term Loan Agreement.

  
 “Term Loan Documents” means, collectively,
(a) the Term Loan Agreement, (b) the Term Notes and any other note, bond or other instrument evidencing Senior Indebtedness, (c) all mortgages, security agreements, pledge agreements or financing statements evidencing, creating or perfecting any
Lien to secure the Term Loan Agreement and the Term Notes in any way, (d) all guarantees thereof, (d) all other documents, instruments or agreements relating to the Term Loan Agreement or the Term Note now or hereafter executed or delivered by and
among the Borrower, any Restricted Subsidiary, the Term Administrative Agent or any Term Lender, including without limitation each of the other the “Loan Documents” as such term is defined in the Term Loan Agreement, and (e) all renewals,
extensions, amendments, modifications or restatements of the foregoing. 
  
 “Term Notes” means each promissory note issued under the Term Loan Agreement evidencing the term loans made pursuant to the term thereof, as from time to time renewed, extended, amended, supplemented, or restated, and any
agreements representing the refinancing, replacement, or substitution in whole or in part thereof. 
  

 Annex II - 12 

 EXHIBIT A 
 FORM OF 
  
 NOTE

  
 PAYMENT OF THIS INSTRUMENT SHALL, TO THE EXTENT SET FORTH IN ANNEX II OF
THE SECOND LIEN TERM LOAN AGREEMENT DATED JULY 7, 2005 BY AND AMONG ROSETTA RESOURCES INC., BNP PARIBAS, AS ADMINISTRATIVE AGENT AND THE TERM LENDERS PARTIES THERETO, BE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL
SENIOR INDEBTEDNESS, THE PROVISIONS OF WHICH ANNEX II OF SUCH SECOND LIEN TERM LOAN AGREEMENT BEING INCORPORATED HEREIN AND BY THIS REFERENCE BEING MADE A PART HEREOF. 
  

			
	$[            ]	  	July 7, 2005                    

  
 FOR VALUE RECEIVED,
ROSETTA RESOURCES INC., a corporation validly formed and existing under the laws of the State of Delaware (the “Borrower”) hereby promises to pay to the order of [ ] (the “Lender”), at the principal office of BNP
Paribas, as administrative agent (the “Administrative Agent”), at [            ], the principal sum of
[            ] Dollars ($[            ]), 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 Second Lien Term Loan 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 Second Lien Term Loan Agreement. 
  
 The date, amount, Type, interest rate, Interest Period and maturity of the 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 Loan or affect the validity of such transfer by any Lender of this Note. 

 
 This Note is one of the Notes referred to in the Second Lien Term Loan
Agreement dated as of July 7, 2005 among the Borrower, the Administrative Agent, and the lenders signatory thereto (including the Lender), and evidences the Loan made by the Lender thereunder (such Second Lien Term Loan Agreement as the same may be
amended, supplemented or restated from time to time, the “Second Lien Term Loan Agreement”). Capitalized terms used in this Note have the respective meanings assigned to them in the Second Lien Term Loan Agreement. 
  
 This Note is issued pursuant to the Second Lien Term Loan Agreement and is
entitled to the benefits provided for in the Second Lien Term Loan Agreement and the other Loan Documents. The Second Lien Term Loan 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. 
  

 Exhibit A - 1 

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

  

			
	ROSETTA RESOURCES INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 Annex II - 2 

 EXHIBIT B 
 FORM OF BORROWING REQUEST 
  
 July 7, 2005 
  
 Rosetta Resources Inc., a Delaware
corporation (the “Borrower”), pursuant to Section 2.03 of the Second Lien Term Loan Agreement dated as of July 7, 2005 (together with all amendments, restatements, supplements or other modifications thereto, the
“Agreement”) among the Borrower, BNP Paribas, as Administrative Agent and lenders (the “Lenders”) which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in
the Second Lien Term Loan Agreement), hereby requests the Loans as follows: 
  
 (i) Aggregate amount of the requested Loan is $100,000,000; 
  
 (ii) Date of such Loan is July 7, 2005 
  
 (iii) Requested Loan is to be [an ABR Tranche] [a Eurodollar Tranche]; 
  
 (iv) In the case of a Eurodollar Tranche, the initial Interest Period applicable thereto is [                    ];
and 
  
 (v) 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 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 Loan under the terms and conditions of the Agreement. 
  

			
	Rosetta Resources Inc.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 Exhibit B - 2 

 EXHIBIT C 
 FORM OF INTEREST ELECTION REQUEST 
  
 July 7, 2005 
  
 ROSETTA RESOURCES INC., a Delaware
corporation (the “Borrower”), pursuant to Section 2.04 of the Second Lien Term Loan Agreement dated as July 7, 2005 (together will all amendments, restatements, supplements or other modifications thereto, the
“Agreement”) among the Borrower, BNP Paribas, as Administrative Agent and the lenders (the “Lenders”) which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is
defined in the Agreement), hereby makes an Interest Election Request as follows: 
  
 (i) The Tranche 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 Tranche
(in which case the information specified pursuant to (iii) and (iv) below shall be specified for each resulting Tranche) is [                     ];

  
 (ii) The effective date of the election made pursuant to this
Interest Election Request is [                    ], 200[   ];[and] 
  
 (iii) The resulting Tranche is to be [an ABR Tranche] [a Eurodollar Tranche][; and] 
  
 [(iv) [If the resulting Tranche is a Eurodollar Tranche] The Interest Period
applicable to the resulting Tranche 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 Agreement. 
  

			
	Rosetta Resources Inc.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 Exhibit C - 1 

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

			
	ROSETTA RESOURCES INC.
		
	By:	 	  

	Name:	 	 
	Title:	 	 

  

 Exhibit D - 1 

 EXHIBIT E-1 
  
 Exhibit E-1 - 1 

 EXHIBIT E-2 
 FORM OF LEGAL OPINION OF LOCAL COUNSEL 
  
 Exhibit E-2 - 1 

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

 

	 	•	 	Rosetta Resources Inc.; 

  

	 	•	 	Rosetta Resources California, LLC; 

  

	 	•	 	Rosetta Resources Offshore, LLC; 

  

	 	•	 	Rosetta Resources Rockies, LLC; 

  

	 	•	 	Rosetta Resources Texas GP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP; 

  

	 	•	 	Calpine Natural Gas Holdings, LLC; 

  

	 	•	 	Calpine Natural Gas GP, LLC; and 

  

	 	•	 	Calpine Natural Gas L.P. 

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

	 	•	 	Rosetta Resources California, LLC; 

  

	 	•	 	Rosetta Resources Offshore, LLC; 

  

	 	•	 	Rosetta Resources Rockies, LLC; 

  

	 	•	 	Rosetta Resources Texas GP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP, LLC; 

  

	 	•	 	Rosetta Resources Texas LP; 

  

	 	•	 	Calpine Natural Gas Holdings, LLC; 

  

	 	•	 	Calpine Natural Gas GP, LLC; and 

  

	 	•	 	Calpine Natural Gas L.P. 

  
 Exhibit F-1 - 1 

 4) Deed of Trust, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing
Statement dated as of July 7, 2005 by Rosetta Resources Texas LP, as mortgagor, in favor of Evans Swann, as Trustee, for the benefit the Administrative Agent, the Lenders and others. (Texas) 
  
 5) Financing Statement in respect of item 4. 
  
 6) Deed of Trust, Fixture Filing, Assignment of As-Extracted Collateral,
Security Agreement and Financing Statement dated as of July 7, 2005 by Calpine Natural Gas L.P., as mortgagor, in favor of Evans Swann, as Trustee, for the benefit the Administrative Agent, the Lenders and others. (Texas) 
  
 7) Financing Statement in respect of item 6. 
  
 8) Deed of Trust, Fixture Filing, Assignment of As-Extracted Collateral,
Security Agreement and Financing Statement dated as of July 7, 2005 by Rosetta Resources California LLC, as mortgagor, in favor of Evans Swann, as Trustee, for the benefit the Administrative Agent, the Lenders and others. (California) 
  
 9) Financing Statement in respect of item 8. 
  
 10) Fee Letter with Administrative Agent. 
  
 Exhibit F-1 - 2 

 EXHIBIT F-2 
 FORM OF GUARANTY AND COLLATERAL AGREEMENT 
  
 Exhibit F-2 - 1 

 EXHIBIT G 
 FORM OF ASSIGNMENT AND ASSUMPTION 
  
 This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Second Lien Term Loan Agreement identified below (as
amended, the “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 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 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 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 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:	 	Rosetta Resources Inc.
			
	4.	  	Administrative Agent:	 	BNP Paribas, as the administrative agent under the Agreement
			
	5.	  	Agreement:	 	The Second Lien Term Loan Agreement dated as of July 7, 2005 among Rosetta Resources Inc., the Lenders parties thereto, and BNP Paribas, as Administrative Agent.

  

 Exhibit G - 1 

	6.	Assigned Interest: 

  

							
	 Commitment Assigned

	  	 Aggregate Amount of
 Commitment/Loans for
 all Lenders

	  	 Amount of
 Commitment/Loans
 Assigned

	  	Percentage Assigned of
Commitment/Loans1

	 	  	$	  	$	  	%
	 	  	$	  	$	  	%
	 	  	$	  	$	  	%

  
 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 G - 2 

			
	Consented to and Accepted:
	
	BNP PARIBAS, as
	    Administrative Agent
		
	By	 	  

	Title:	 	 
		
	By	 	  

	Title:	 	 
	
	[Consented to:]
	
	ROSETTA RESOURCES INC.
		
	By	 	  

	Title:	 	 

  

 Exhibit G - 3 

 ANNEX 1 
  
 ROSETTA RESOURCES INC. SECOND LIEN TERM LOAN 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
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
Agreement, (ii) it satisfies the requirements, if any, specified in the 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 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 Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 8.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any
other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 
  
 2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date. 
  
 3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this 
  

 Exhibit G - 4 

 Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York. 
  

 Exhibit G - 5 

 SCHEDULE 7.05 
 LITIGATION 
  
 None

  

 Schedule 7.05 - 1 

 SCHEDULE 7.15 
 SUBSIDIARIES AND PARTNERSHIPS; UNRESTRICTED SUBSIDIARIES 
  

					
	 Subsidiary

	  	 Owner(s)

	  	 Interest(s)

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

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

  
 Rosetta Resources California, LLC

  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988722 

  

	 	•	 	Taxpayer Identification Number: 51-0546842 

  

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

  

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

  
 Rosetta Resources Offshore, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3989132 

  

	 	•	 	Taxpayer Identification Number: 51-0546843 

  

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

  

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

  
 Rosetta Resources Rockies, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

	

	

  

 Schedule 7.15 - 1 

	 	•	 	Delaware Secretary of State File Number 3988719 

  

	 	•	 	Taxpayer Identification Number: 51-0546844 

  

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

  

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

  
 Rosetta Resources Texas LP 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3993646 

  

	 	•	 	Taxpayer Identification Number: 41-2179091 

  

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

  

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

  
 Rosetta Resources Texas GP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988077 

  

	 	•	 	Taxpayer Identification Number: 51-0546839 

  

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

  

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

  
 Rosetta Resources Texas LP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988727 

  

	 	•	 	Taxpayer Identification Number: 51-0546841 

  

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

  

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

  
 Calpine Natural Gas L.P. 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3518137 

  

	 	•	 	Taxpayer Identification Number: 71-0882453 

  

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

  

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

  
 Calpine Natural Gas Holdings, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3980115 

  

	 	•	 	Taxpayer Identification Number: 20-2943018 

  

 Schedule 7.15 - 2 

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

  

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

  
 Calpine Natural Gas GP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3518133 

  

	 	•	 	Taxpayer Identification Number: 27-0011349 

  

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

  

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

  

 Schedule 7.15 - 3 

 SCHEDULE 7.19 
 GAS IMBALANCES 
  
 None

  

 Schedule 7.19 - 1 

 SCHEDULE 7.20 
 MARKETING CONTRACTS 
  
 None

  

 Schedule 7.20 - 1 

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

 Schedule 9.05 - 1Guarantee and Collateral Agreement

 Exhibit 10.20 
  
 Execution Version 
  
 GUARANTEE AND COLLATERAL AGREEMENT 
  
 made by 
  
 each of the Grantors (as defined herein) 
  
 in favor of 
  
 BNP PARIBAS, 
  
 as Administrative Agent 
  
 Dated as of July 7, 2005 

 TABLE OF CONTENTS 
  

							
	 ARTICLE I Definitions
	  	1
				
	 	 	Section 1.01	  	Definitions	  	1
	 	 	Section 1.02	  	Other Definitional Provisions; References	  	3
		
	 ARTICLE II Guarantee
	  	3
				
	 	 	Section 2.01	  	Guarantee	  	3
	 	 	Section 2.02	  	Payments	  	4
		
	 ARTICLE III Grant of Security Interest
	  	4
				
	 	 	Section 3.01	  	Grant of Security Interest	  	4
	 	 	Section 3.02	  	Transfer of Pledged Securities	  	5
	 	 	Section 3.03	  	Grantors Remains Liable under Accounts, Chattel Paper and Payment Intangibles	  	5
		
	 ARTICLE IV Acknowledgments, Waivers and Consents
	  	6
				
	 	 	Section 4.01	  	Acknowledgments, Waivers and Consents	  	6
	 	 	Section 4.02	  	No Subrogation, Contribution or Reimbursement	  	8
		
	 ARTICLE V Representations and Warranties
	  	9
				
	 	 	Section 5.01	  	Representations in Credit Agreement	  	9
	 	 	Section 5.02	  	Benefit to the Guarantor	  	9
	 	 	Section 5.03	  	Solvency	  	9
	 	 	Section 5.04	  	Perfected First Priority Liens	  	10
	 	 	Section 5.05	  	Legal Name, Organizational Status, Chief Executive Office	  	10
	 	 	Section 5.06	  	Prior Names, Addresses	  	10
	 	 	Section 5.07	  	Pledged Securities	  	10
	 	 	Section 5.08	  	Truth of Information; Accounts	  	10
	 	 	Section 5.09	  	Governmental Obligors	  	10
		
	 ARTICLE VI Covenants
	  	10
				
	 	 	Section 6.01	  	Covenants in Credit Agreement	  	11
	 	 	Section 6.02	  	Maintenance of Perfected Security Interest; Further Documentation	  	11
	 	 	Section 6.03	  	Maintenance of Records	  	11
	 	 	Section 6.04	  	Right of Inspection	  	12
	 	 	Section 6.05	  	Further Identification of Collateral	  	12
	 	 	Section 6.06	  	Changes in Locations, Name, etc.	  	12
	 	 	Section 6.07	  	Limitations on Dispositions of Collateral	  	12
	 	 	Section 6.08	  	Pledged Securities	  	13
	 	 	Section 6.09	  	Instruments and Tangible Chattel Paper	  	14
	 	 	Section 6.10	  	Commercial Tort Claims	  	14
		
	 ARTICLE VII Remedial Provisions
	  	15
				
	 	 	Section 7.01	  	Pledged Securities	  	15
	 	 	Section 7.02	  	Collections on Accounts, Etc	  	15
	 	 	Section 7.03	  	Proceeds	  	16

  

 i 

							
	 	 	Section 7.04	  	UCC and Other Remedies	  	16
	 	 	Section 7.05	  	Private Sales of Pledged Securities	  	17
	 	 	Section 7.06	  	Waiver; Deficiency	  	18
	 	 	Section 7.07	  	Non-Judicial Enforcement	  	18
	 	 	Section 7.08	  	Control Agreement	  	18
	 ARTICLE VIII The Administrative Agent
	  	18
				
	 	 	Section 8.01	  	Administrative Agent's Appointment as Attorney-in-Fact, Etc	  	18
	 	 	Section 8.02	  	Duty of Administrative Agent	  	21
	 	 	Section 8.03	  	Execution of Financing Statements	  	21
	 	 	Section 8.04	  	Authority of Administrative Agent	  	22
		
	 ARTICLE IX Subordination of Indebtedness
	  	22
				
	 	 	Section 9.01	  	Subordination of All Guarantor Claims	  	22
	 	 	Section 9.02	  	Claims in Bankruptcy	  	22
	 	 	Section 9.03	  	Payments Held in Trust	  	22
	 	 	Section 9.04	  	Liens Subordinate	  	23
	 	 	Section 9.05	  	Notation of Records	  	23
		
	 ARTICLE X Miscellaneous
	  	23
				
	 	 	Section 10.01	  	Waiver	  	23
	 	 	Section 10.02	  	Notices	  	23
	 	 	Section 10.03	  	Indemnities, Etc	  	24
	 	 	Section 10.04	  	Amendments in Writing	  	24
	 	 	Section 10.05	  	Successors and Assigns	  	24
	 	 	Section 10.06	  	Invalidity	  	24
	 	 	Section 10.07	  	Counterparts	  	24
	 	 	Section 10.08	  	Survival	  	24
	 	 	Section 10.09	  	Captions	  	25
	 	 	Section 10.10	  	No Oral Agreements	  	25
	 	 	Section 10.11	  	Governing Law; Submission to Jurisdiction	  	25
	 	 	Section 10.12	  	Acknowledgments	  	26
	 	 	Section 10.13	  	Additional Grantors	  	26
	 	 	Section 10.14	  	Set-Off	  	27
	 	 	Section 10.15	  	Releases	  	27
	 	 	Section 10.16	  	Reinstatement	  	28
	 	 	Section 10.17	  	Acceptance	  	28

  
 SCHEDULES: 

	 	1.	Notice Addresses of Guarantors 

	 	2.	Description of Pledged Securities 

	 	3.	Filings and Other Actions Required to Perfect Security Interests 

  

 ii 

	 	4.	Legal Name, Location of Jurisdiction of Organization, Organizational Identification Number, Taxpayor Identification Number and Chief Executive Office 

	 	5.	Prior Names, Prior Chief Executive Office, Location of Tangible Assets 

  
 ANNEX: 

	 	I.	Form of Assumption Agreement 

  

 iii 

 This GUARANTEE AND COLLATERAL AGREEMENT, dated as of July 7, 2005, is made by Rosetta Resources
Inc., a corporation duly formed and existing under the laws of the State of Delaware (the “Borrower”), and each of the other signatories hereto other than the Administrative Agent (the Borrower and each of the other signatories
hereto other than the Administrative Agent, together with any other Subsidiary of the Borrower that becomes a party hereto from time to time after the date hereof, the “Grantors”), in favor of BNP Paribas, as administrative agent
(in such capacity, together with its successors in such capacity, the “Administrative Agent”), for the banks and other financial institutions (the “Lenders”) from time to time parties to the Senior Revolving Credit
Agreement, dated as of July 7, 2005 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lenders, the Administrative Agent and the other Agents party thereto.

  
 NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows: 
  
 ARTICLE I

 Definitions 
  
 Section 1.01 Definitions. 
  
 (a) As used in this Agreement, each term defined above shall have the meaning indicated above. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms as well as all uncapitalized terms which are defined in the UCC on the date hereof are used herein as so defined: Accounts,
As-Extracted Collateral, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Payment
Intangibles, Proceeds, Supporting Obligations, and Tangible Chattel Paper. 
  
 (b) The following terms shall have the following meanings: 
  
 “Account Debtor” shall mean a Person (other than any Grantor) obligated on an Account, Chattel Paper, or General Intangible. 
  
 “Agreement” shall mean this Guarantee and Collateral Agreement, as the same may be amended, supplemented or
otherwise modified from time to time. 
  
 “Collateral” shall have the meaning assigned such term in Section 3.01. 
  
 “Guarantors” shall mean, collectively, each Grantor other than the Borrower. 
  
 “Issuers” shall mean, collectively, each issuer of a Pledged
Security. 
  
 “Obligations” shall mean,
collectively, all Indebtedness, liabilities and obligations of the Borrower and each Guarantor to the Administrative Agent, the Issuing Bank, the Lenders and 

 each Affiliate of a Lender party to a Permitted Hedging Agreement (including any Permitted Hedging Agreements between
such Persons in existence prior to the date hereof), of whatsoever nature and howsoever evidenced, due or to become due, now existing or hereafter arising, whether direct or indirect, absolute or contingent, which may arise under, out of, or in
connection with the Credit Agreement, the other Loan Documents, each Permitted Hedging Agreement (to the extent that the Obligations arise under, out of, or in connection with such Permitted Hedging Agreement before or during such time as the Lender
party to such Permitted Hedging Agreement is a party to the Credit Agreement, or in the case of an Affiliate of a Lender party to such Permitted Hedging Agreement, the Lender affiliated with such Affiliate, is a party to the Credit Agreement) and
all other agreements, guarantees, notes and other documents entered into by any party in connection therewith, and any amendment, restatement or modification of any of the foregoing, including, but not limited to, the full and punctual payment when
due of any unpaid principal of the Loans and LC Exposure, any amounts payable in respect of an early termination under any Permitted Hedging Agreement, interest (including, without limitation, interest accruing at any post-default rate and interest
accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), fees, reimbursement
obligations, guaranty obligations, penalties, indemnities, legal and other fees, charges and expenses, and amounts advanced by and expenses incurred in order to preserve any collateral or security interest, whether due after acceleration or
otherwise. 
  
 “Permitted Hedging Agreement”
shall mean any Swap Agreement permitted to be entered into by the Borrower or any Guarantor pursuant to Section 9.19 of the Credit Agreement that is between any Grantor and any Lender or any Affiliate of any Lender. 
  
 “Pledged Securities” shall mean: (i) the Equity
Interests described or referred to in Schedule 2; and (ii) (a) the certificates or instruments, if any, representing such Equity Interests, (b) all dividends (cash, stock or otherwise), cash, instruments, rights to subscribe, purchase
or sell and all other rights and property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Equity Interests, (c) all replacements, additions to and substitutions for any of the
property referred to in this definition, including, without limitation, claims against third parties, (d) the proceeds, interest, profits and other income of or on any of the property referred to in this definition and (e) all books and
records relating to any of the property referred to in this definition. 
  
 “Secured Parties” shall mean, collectively, the Administrative Agent, the Lenders and any Affiliate of any Lender that is a party to a Permitted Hedging Agreement. 
  
 “Securities Act” shall mean the Securities Act of 1933, as
amended. 
  
 “UCC” shall mean the Uniform
Commercial Code as from time to time in effect in the State of New York; provided, however, that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of the Administrative Agent’s and the
Guaranteed Creditors’ security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection, the effect thereof or priority and for purposes of definitions related to such provisions. 
  

 - 2 - 

 Section 1.02 Other Definitional Provisions; References. The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms. The gender of all words shall include the masculine, feminine, and neuter, as appropriate. The words “herein,” “hereof,” “hereunder” and
other words of similar import when used in this Agreement refer to this Agreement as a whole, and not to any particular article, section or subsection. Any reference herein to a Section shall be deemed to refer to the applicable Section of this
Agreement unless otherwise stated herein. Any reference herein to an exhibit, schedule or annex shall be deemed to refer to the applicable exhibit, schedule or annex attached hereto unless otherwise stated herein. Where the context requires, terms
relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof. 
  

ARTICLE II 
 Guarantee

  
 Section 2.01 Guarantee. 
  
 (a) Each of the Guarantors hereby, jointly and severally, unconditionally
and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties and each of their respective successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and
the Guarantors when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations. This is a guarantee of payment and not collection and the liability of each Guarantor is primary and not secondary. 
  
 (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of
debtors. 
  
 (c) Each Guarantor agrees that the Obligations may at
any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Article II or affecting the rights and remedies of the Administrative Agent or any Secured Party
hereunder. 
  
 (d) Each Guarantor agrees that if the maturity of
any of the Obligations is accelerated by bankruptcy or otherwise, such maturity shall also be deemed accelerated for the purpose of this guarantee without demand or notice to such Guarantor. The guarantee contained in this Article II shall remain in
full force and effect until all the Obligations shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and all Permitted Hedging Agreements secured hereby and the Credit Agreement and the Aggregate Commitments shall
be terminated, notwithstanding that from time to time during the term of the Credit Agreement, no Obligations may be outstanding. 
  
 (e) No payment made by the Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent
or any other 
  

 - 3 - 

 Secured Party from the Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of the Obligations), remain liable for the Obligations up
to the maximum liability of such Guarantor hereunder until the Obligations are paid in full, no Letter of Credit shall be outstanding, and all Permitted Hedging Agreements secured hereby and the Credit Agreement and the Aggregate Commitments are
terminated. 
  
 Section 2.02 Payments. Each Guarantor
hereby agrees and guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the Principal Office of the Administrative Agent specified pursuant to the Credit Agreement. 
  
 ARTICLE III 
 Grant of Security Interest 
  
 Section 3.01 Grant of Security Interest. Each Grantor hereby pledges, assigns and transfers to the Administrative Agent, and grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a
security interest in all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest and whether now existing or
hereafter coming into existence (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations:

  
 (1) all Accounts; 
  
 (2) all Chattel Paper (whether Tangible Chattel Paper or
Electronic Chattel Paper); 
  
 (3) all Commercial
Tort Claims; 
  
 (4) that certain deposit account
that is the Margin Account (as defined in the Credit Agreement); 
  
 (5) all Documents; 
  
 (6) all General Intangibles (including, without limitation, rights in and under any Hedging Agreements); 
  
 (7) all Goods (including, without limitation, all Inventory and all Equipment, but excluding all Fixtures); 
  
 (8) all Instruments; 
  

 - 4 - 

 (9) all Letter-of-Credit Rights (whether or not the letter of credit is evidenced by a
writing; 
  
 (10) all Pledged Securities;

  
 (11) all Supporting Obligations; 

 
 (12) all books and records pertaining to the Collateral;
and 
  
 (13) to the extent not otherwise
included, all Proceeds and products of any and all of the foregoing and all collateral security, income, royalties and other payments now or hereafter due and payable with respect to, and guarantees and supporting obligations relating to, any and
all of the Collateral and, to the extent not otherwise included, all payments of insurance (whether or not the Administrative Agent is the loss payee thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, all other claims, including all cash, guarantees and other Supporting Obligations given with respect to any of the foregoing. 
  
 Section 3.02 Transfer of Pledged Securities. All certificates and instruments, if any, representing or evidencing the
Pledged Securities shall be delivered to and held pursuant hereto by the Administrative Agent or a Person designated by the Administrative Agent and, in the case of an instrument or certificate in registered form, shall be duly indorsed to the
Administrative Agent or in blank by an effective endorsement (whether on the certificate or instrument or on a separate writing), and accompanied by any required transfer tax stamps to effect the pledge of the Pledged Securities to the
Administrative Agent. Notwithstanding the preceding sentence, all Pledged Securities must be delivered or transferred in such manner, and each Grantor shall take all such further action as may be requested by the Administrative Agent, as to permit
the Administrative Agent to be a “protected purchaser” to the extent of its security interest as provided in Section 8-303 of the UCC (if the Administrative Agent otherwise qualifies as a protected purchaser). 
  
 Section 3.03 Grantors Remains Liable under Accounts, Chattel Paper and
Payment Intangibles. Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Accounts, Chattel Paper and Payment Intangibles to observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account, Chattel Paper or Payment Intangible. Neither the Administrative Agent nor any other Secured Party shall have any obligation or liability
under any Account, Chattel Paper or Payment Intangible (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any such other Secured Party of any payment relating to such
Account, Chattel Paper or Payment Intangible, pursuant hereto, nor shall the Administrative Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Account, Chattel Paper
or Payment Intangible (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account,
Chattel Paper or Payment Intangible (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times. 
  

 - 5 - 

 ARTICLE IV 
 Acknowledgments, Waivers and Consents 
  
 Section 4.01 Acknowledgments, Waivers and Consents. 
  
 (a) Each Guarantor acknowledges and agrees that the obligations undertaken by it under this Agreement involve the guarantee and the provision of collateral security for the obligations of Persons other than such
Guarantor and that such Guarantor’s guarantee and provision of collateral security for the Obligations are absolute, irrevocable and unconditional under any and all circumstances. In full recognition and furtherance of the foregoing, each
Guarantor understands and agrees, to the fullest extent permitted under applicable law and except as may otherwise be expressly and specifically provided in the Loan Documents, that each Guarantor shall remain obligated hereunder (including, without
limitation, with respect to the guarantee made such Guarantor hereby and the collateral security provided by such Guarantor herein) and the enforceability and effectiveness of this Agreement and the liability of such Guarantor, and the rights,
remedies, powers and privileges of the Administrative Agent and the other Secured Parties under this Agreement and the other Loan Documents shall not be affected, limited, reduced, discharged or terminated in any way: 
  
 (i) notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, (A) any demand for payment of any of the Obligations made by the Administrative Agent or any other Secured Party may be rescinded by the Administrative Agent or such other
Secured Party and any of the Obligations continued; (B) the Obligations, the liability of any other Person upon or for any part thereof or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by, or any indulgence or forbearance in respect thereof granted by, the Administrative Agent or any other Secured Party;
(C) the Credit Agreement, the other Loan Documents, any Permitted Hedging Agreement and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders, the Majority Lenders or all Lenders, as the case may be) may deem advisable from time to time; (D) the Borrower, any Guarantor or any other Person may from time to time accept or enter into new or
additional agreements, security documents, guarantees or other instruments in addition to, in exchange for or relative to, any Loan Document or Permitted Hedging Agreement, all or any part of the Obligations or any Collateral now or in the future
serving as security for the Obligations; (E) any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any other Secured Party for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released; and (F) any other event shall occur which constitutes a defense or release of sureties generally; and 
  
 (ii) without regard to, and each Guarantor hereby expressly waives to the fullest extent permitted by law any defense now or in the future arising by
reason of, (A) the illegality, invalidity or unenforceability of the Credit Agreement, any other Loan Document, any 
  

 - 6 - 

 Permitted Hedging Agreement, any of the Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the Administrative Agent or any other Secured Party, (B) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be
available to or be asserted by any Guarantor or any other Person against the Administrative Agent or any other Secured Party, (C) the insolvency, bankruptcy arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of any Guarantor or any other Person at any time liable for the payment of all or part of the Obligations or the failure of the Administrative Agent or any other Secured Party to file or enforce a claim in bankruptcy or
other proceeding with respect to any Person; or any sale, lease or transfer of any or all of the assets of the any Guarantor, or any changes in the partners of any Guarantor; (D) the fact that any Collateral or Lien contemplated or intended to
be given, created or granted as security for the repayment of the Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other Lien, it being recognized and agreed by each of the Guarantors
that it is not entering into this Agreement in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectability or value of any of the Collateral for the Obligations; (E) any failure of the Administrative Agent
or any other Secured Party to marshal assets in favor of any Guarantor or any other Person, to exhaust any collateral for all or any part of the Obligations, to pursue or exhaust any right, remedy, power or privilege it may have against any
Guarantor or any other Person or to take any action whatsoever to mitigate or reduce any Guarantor’s liability under this Agreement or any other Loan Document; (F) any law which provides that the obligation of a surety or guarantor must
neither be larger in amount nor in other respects more burdensome than that of the principal or which reduces a surety’s or guarantor’s obligation in proportion to the principal obligation; (G) the possibility that the Obligations may
at any time and from time to time exceed the aggregate liability of such Guarantor under this Agreement; or (H) any other circumstance or act whatsoever, including any action or omission of the type described (with or without notice to or
knowledge of any Guarantor), which constitutes, or might be construed to constitute, an equitable or legal discharge or defense of the Borrower for the Obligations, or of such Guarantor under the guarantee contained in Article II or with respect to
the collateral security provided by such Guarantor herein, or which might be available to a surety or guarantor, in bankruptcy or in any other instance. 
  
 (b) Each Guarantor hereby waives to the extent permitted by law: (i) except as expressly provided otherwise in any Loan Document, all notices to such
Guarantor, or to any other Person, including but not limited to, notices of the acceptance of this Agreement, the guarantee contained in Article II or the provision of collateral security provided herein, or the creation, renewal, extension,
modification, accrual of any Obligations, or notice of or proof of reliance by the Administrative Agent or any other Secured Party upon the guarantee contained in Article II or upon the collateral security provided herein, or of default in the
payment or performance of any of the Obligations owed to the Administrative Agent or any other Secured Party and enforcement of any right or remedy with respect thereto; or notice of any other matters relating thereto; the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in Article II and the collateral security provided herein and no notice of creation of
the Obligations or any extension of credit already or hereafter contracted by or extended to the Borrower need be given to any Guarantor; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Administrative Agent
and the other Secured 
  

 - 7 - 

 Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in Article II and on the collateral security provided herein; (ii) diligence and demand of payment, presentment, protest, dishonor and notice of dishonor; (iii) all rights of revocation with respect to the Obligations,
the guarantee contained in Article II and the provision of collateral security herein; and (iv) all principles or provisions of law which conflict with the terms of this Agreement and which can, as a matter of law, be waived. 
  
 (c) When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Grantor, the Administrative Agent or any other Secured Party may, but shall be under no obligation to, join or make a similar demand on or otherwise pursue or exhaust such rights and remedies as it may have against the
Borrower, any other Grantor or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any other Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Grantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release
of the Borrower, any Grantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Grantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or any other Secured Party against any Grantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings. Neither
the Administrative Agent nor any other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for the guarantee contained in Article II or any property subject
thereto. 
  
 Section 4.02 No Subrogation, Contribution or
Reimbursement. Notwithstanding any payment made by any Grantor hereunder or any set-off or application of funds of any Grantor by the Administrative Agent or any other Secured Party, no Grantor shall be entitled to be subrogated to any of the
rights of the Administrative Agent or any other Secured Party against the Borrower or any other Grantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any other Secured Party for the payment of the
Obligations, nor shall any Grantor seek or be entitled to seek any indemnity, exoneration, participation, contribution or reimbursement from the Borrower or any other Grantor in respect of payments made by such Grantor hereunder, and each Grantor
hereby expressly waives, releases, and agrees not to exercise any all such rights of subrogation, reimbursement, indemnity and contribution. Each Grantor further agrees that to the extent that such waiver and release set forth herein is found by a
court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement, indemnity and contribution such Grantor may have against the Borrower, any other Grantor or against any collateral or security or
guarantee or right of offset held by the Administrative Agent or any other Secured Party shall be junior and subordinate to any rights the Administrative Agent and the other Secured Parties may have against the Borrower and such Grantor and to all
right, title and interest the Administrative Agent and the other Secured Parties may have in any collateral or security or guarantee or right of offset. The Administrative Agent, for the benefit of the Secured Parties, may use, sell or dispose of
any item of Collateral or security as it sees fit without regard to any subrogation rights any Grantor may have, and upon any disposition or sale, any rights of subrogation any Grantor may have shall terminate. 
  

 - 8 - 

 ARTICLE V 
 Representations and Warranties 
  
 To induce the Administrative Agent and the other Secured Parties to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder and to induce the Lenders and Affiliates
of the Lenders to enter into Permitted Hedging Agreements, each Grantor hereby represents and warrants to the Administrative Agent and each other Secured Party that: 
  
 Section 5.01 Representations in Credit Agreement. In the case of each Guarantor, the representations and warranties
set forth in Article VII of the Credit Agreement as they relate to such Guarantor (in its capacity as a Subsidiary of the Borrower) or to the Loan Documents to which such Guarantor is a party are true and correct in all material respects, provided
that each reference in each such representation and warranty to the Borrower’s knowledge shall, for the purposes of this Section 5.01, be deemed to be a reference to such Guarantor’s knowledge. 
  
 Section 5.02 Benefit to the Guarantor. The Borrower is a member of an
affiliated group of companies that includes each Guarantor, and the Borrower and the Guarantors are engaged in related businesses. Each Guarantor is a Subsidiary of the Borrower and its guaranty and surety obligations pursuant to this Agreement
reasonably may be expected to benefit, directly or indirectly, it; and it has determined that this Agreement is necessary and convenient to the conduct, promotion and attainment of the business of such Guarantor and the Borrower. 
  
 Section 5.03 Solvency. Such Grantor (i) is not insolvent as of
the date hereof and will not be rendered insolvent as a result of this Agreement (after giving effect to Section 2.01(a)), (ii) is not engaged in a business or a transaction, or about to engage in a business or a transaction, for which any
Property or assets remaining with it constitute unreasonably small capital, and (iii) does not intend to incur, or believe it will incur, debts that will be beyond its ability to pay as such debts mature. 
  

 - 9 - 

 Section 5.04 Perfected First Priority Liens. The security interests granted pursuant to this
Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (which, in the case of all filings and other documents referred to on said Schedule, have been delivered to the Administrative Agent in completed and duly
executed form) will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, as collateral security for such Grantor’s obligations, enforceable
in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for
Excepted Liens which have priority over the Liens on the Collateral. 
  
 Section 5.05 Legal Name, Organizational Status, Chief Executive Office. On the date hereof, the correct legal name of such Grantor, such Grantor’s jurisdiction of organization, organizational number, taxpayor identification
number and the location of such Grantor’s chief executive office or sole place of business are specified on Schedule 4. 
  
 Section 5.06 Prior Names, Addresses. Schedule 4 correctly sets forth (a) all names and trade names that such Grantor has used in the last five
years and (b) the chief executive office of such Grantor over the last five years (if different from that which is set forth in Section 5.05 above). 
  
 Section 5.07 Pledged Securities. The shares (or such other interests) of Pledged Securities pledged by such Grantor hereunder constitute all the
issued and outstanding shares (or such other interests) of all classes of the capital stock or other Equity Interests of each Issuer owned by such Grantor. All the shares (or such other interests) of the Pledged Securities have been duly and validly
issued and, in the case of shares of stock of a corporation, are fully paid and nonassessable; and such Grantor is the record and beneficial owner of, and has good title to, the Pledged Securities pledged by it hereunder, free of any and all Liens
except Excepted Liens or options, warrants, puts, calls or other rights of any other Person, and restrictions or options in favor of, or claims of, any other Person, except the security interest created by this Agreement. 
  
 Section 5.08 Truth of Information; Accounts. All information with
respect to the Collateral set forth in any schedule, certificate or other writing at any time heretofore or hereafter furnished by such Grantor to the Administrative Agent or any other Secured Party, and all other written information heretofore or
hereafter furnished by such Grantor to the Administrative Agent or any other Secured Party is and will be true and correct in all material respects as of the date furnished. The place where each Grantor keeps its records concerning the Accounts is
717 Texas, Suite 2800, Houston, Texas 77002. 
  
 Section 5.09
Governmental Obligors. None of the Account Debtors on such Grantor’s Accounts, Chattel Paper or Payment Intangibles is a Governmental Authority. 
  
 ARTICLE VI 
 Covenants 

 
 Each Grantor covenants and agrees with the Administrative Agent and the
other Secured Parties that, from and after the date of this Agreement until the Obligations shall have been paid 
  

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 in full, no Letter of Credit shall be outstanding and the Aggregate Commitments shall have terminated: 
  
 Section 6.01 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor or any of its Subsidiaries. 
  
 Section 6.02 Maintenance of Perfected Security Interest; Further Documentation. 
  
 (a) Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in
Section 5.04 and shall defend such security interest against the claims and demands of all Persons whomsoever except for Excepted Liens. 
  
 (b) At any time and from time to time, upon the request of the Administrative Agent or any other Secured Party, and at the sole expense of such Grantor,
such Grantor will promptly and duly take or cause to be taken any and all steps or acts that may be necessary or advisable or as the Administrative Agent may reasonably request to create, perfect, establish the priority of, or to preserve the
validity, perfection or priority of, the Liens granted by this Agreement or to enable the Administrative Agent or any other Secured Party to enforce its rights, remedies, powers and privileges under this Agreement with respect to such Liens or to
otherwise obtain or preserve the full benefits of this Agreement and the rights, powers and privileges herein granted. 
  
 (c) Without limiting the obligations of the Grantors under Section 5.02(b), upon the request of the Administrative Agent or any other Secured Party,
such Grantor shall take or cause to be taken all actions (other than any actions required to be taken by the Administrative Agent or any Lender) requested by the Administrative Agent to cause the Administrative Agent to (A) have
“control” (within the meaning of the UCC) over any Collateral constituting the Margin Account and all certificated Pledged Securities, if any, including, without limitation, executing and delivering any agreements, in form and substance
satisfactory to the Administrative Agent, with securities intermediaries, Issuers or other Persons in order to establish “control”, and each Grantor shall promptly notify the Administrative Agent and the other Secured Parties of such
Grantor’s acquisition of any such Collateral, and (B) be a “protected purchaser” (as defined in Section 8-303 of the UCC). 
  
 (d) This Section 6.02 and the obligations imposed on each Grantor by this Section 6.02 shall be interpreted as broadly as possible in favor of the
Administrative Agent and the other Secured Parties in order to effectuate the purpose and intent of this Agreement. 
  
 Section 6.03 Maintenance of Records. Such Grantor will keep and maintain at its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments received and all credits granted with respect to the Accounts. For the Administrative Agent’s and the other Secured Parties’ further security, the Administrative Agent,
for the ratable benefit of the Secured Parties, shall have a security interest in all of such 
  

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 Grantor’s books and records pertaining to the Collateral, and such Grantor shall make available any such books and
records to the Administrative Agent or to its representatives at such reasonable times, at the reasonable request of the Administrative Agent and upon reasonable prior notice and shall provide such clerical and other assistance as may be reasonably
requested with regard thereto. 
  
 Section 6.04 Right of
Inspection. The Administrative Agent and the other Secured Parties and their respective representatives shall have reasonable access, at such reasonable times, at the reasonable request of the Administrative Agent and upon reasonable prior
notice, to all the books, correspondence and records of such Grantor, and the Administrative Agent and the other Secured Parties and their respective representatives may examine the same, take extracts therefrom and make photocopies thereof and
shall have the right to enter into and upon any premises where any of the Collateral (including, without limitation, Inventory or Equipment) is located for the purpose of inspecting the same, observing its use or otherwise protecting its interests
therein, at such reasonable times, at the reasonable request of the Administrative Agent and upon reasonable prior notice, and such Grantor agrees to render to the Administrative Agent and the other Secured Parties and their respective
representatives, at such Grantor’s sole cost and expense, such clerical and other assistance as may be reasonably requested with regard to any of the foregoing. 
  
 Section 6.05 Further Identification of Collateral. Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time, at such Grantor’s sole cost and expense, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail. 
  
 Section 6.06 Changes in
Locations, Name, etc. Such Grantor recognizes that financing statements pertaining to the Collateral have been or may be filed where such Grantor maintains any Collateral or is organized. Without limitation of any other covenant herein, such
Grantor will not cause or permit any change to be made in its name, identity or corporate structure or such Grantor’s jurisdiction of organization, unless such Grantor shall have first (1) notified the Administrative Agent and the other
Secured Parties of such change at least ten (10) days prior to the effective date of such change, and (2) taken all action reasonably requested by the Administrative Agent or any other Secured Party for the purpose of maintaining the
perfection and priority of the Administrative Agent’s security interests under this Agreement. In any notice furnished pursuant to this Section 6.06, such Grantor will expressly state in a conspicuous manner that the notice is required by this
Agreement and contains facts that may require additional filings of financing statements or other notices for the purposes of continuing perfection of the Administrative Agent’s security interest in the Collateral. 
  
 Section 6.07 Limitations on Dispositions of Collateral. The
Administrative Agent and the other Secured Parties do not authorize, and such Grantor agrees not to sell, transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer or contract to do so except to the extent expressly permitted
by the Credit Agreement. 
  

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 Section 6.08 Pledged Securities. 
  
 (a) If such Grantor shall become entitled to receive or shall receive any stock certificate or other instrument (including,
without limitation, any certificate or instrument representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate or instrument issued in connection with any reorganization),
option or rights in respect of the capital stock or other Equity Interests of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares (or such other interests) of the Pledged Securities, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of the Administrative Agent and the other Secured Parties, hold the same in trust for the Administrative Agent and the other Secured Parties and deliver the same forthwith
to the Administrative Agent in the exact form received, duly indorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power or other equivalent instrument of transfer, if applicable, acceptable to the
Administrative Agent covering such certificate or instrument duly executed in blank by such Grantor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. 
  
 (b) Except
as permitted under the Credit Agreement or except with the prior written consent of the Administrative Agent, such Grantor will not (i) sell, assign, transfer, exchange or otherwise dispose of, or grant any option with respect to, the Pledged
Securities or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreement), (ii) create, incur or permit to exist any Lien except for Excepted Liens or option in favor of, or any claim of any Person with
respect to, any of the Pledged Securities or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iii) enter into any agreement or undertaking restricting the right or ability of such
Grantor or the Administrative Agent to sell, assign or transfer any of the Pledged Securities or Proceeds thereof. 
  
 (c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 6.08(a)
with respect to the Pledged Securities issued by it and (iii) the terms of Section 7.01(c) and Section 7.05 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 7.01(c) or
Section 7.05 with respect to the Pledged Securities issued by it. 
  
 (d) Such Grantor shall furnish to the Administrative Agent such stock powers and other equivalent instruments of transfer, if applicable, as may be required by the Administrative Agent to assure the transferability of and the perfection of
the security interest in the Pledged Securities when and as often as may be reasonably requested by the Administrative Agent. 
  
 (e) The Pledged Securities will at all times constitute not less than 100% of the capital stock or other Equity Interests of the Issuer thereof owned by
any Grantor. Each Grantor will not permit any Issuer of any of the Pledged Securities to issue any new shares (or other interests) of any class of capital stock or other Equity Interests of such Issuer without the prior written consent of the
Administrative Agent. 
  

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 (f) Each Pledgor shall not agree to any amendment of a partnership agreement, LLC agreement or other
organic document relating to any Pledged Security that in any way adversely affects the perfection of the security interest of the Administrative Agent in the Pledged Securities, including any amendment electing to treat the membership interest or
partnership interest of such Pledgor as a security under Section 8-103 of the UCC. In the event of a foreclosure or a taking of Pledged Securities consisting of partnership interests or LLC interests in lieu of foreclosure pursuant to any
Security Instrument executed in connection with the Credit Agreement, the Administrative Agent or its assignee or transferee, at any of their option, will, without any further action or consent, become a member or partner upon the exercise of such
option by the Administrative Agent, its assignee or transferee, having all of the rights, powers and privileges of a member or partner with respect to such Equity Interest, including, without limitation, the right to participate in the management of
the business, to vote such Equity Interest and to receive distributions hereunder. 
  
 Section 6.09 Instruments and Tangible Chattel Paper. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument or Tangible Chattel Paper, such
Instrument or Tangible Chattel Paper shall be immediately delivered to the Administrative Agent, duly endorsed in a manner satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement. 
  
 Section 6.10 Commercial Tort Claims. If such Grantor shall at any time
hold or acquire a Commercial Tort Claim that satisfies the requirements of the following sentence, such Grantor shall, within thirty (30) days after such Commercial Tort Claim satisfies such requirements, notify the Administrative Agent and the
other Secured Parties in a writing signed by such Grantor containing a brief description thereof, and granting to the Administrative Agent in such writing (for the benefit of the Secured Parties) a security interest therein and in the Proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Administrative Agent and the other Secured Parties. The provisions of the preceding sentence shall apply only to a Commercial Tort Claim
that satisfies the following requirements: (i) the monetary value claimed by or payable to the relevant Grantor in connection with such Commercial Tort Claim shall exceed $1,000,000, and either (ii) (A) such Grantor shall have filed a
law suit or counterclaim or otherwise commenced legal proceedings (including, without limitation, arbitration proceedings) against the Person against whom such Commercial Tort Claim is made, or (B) such Grantor and the Person against whom such
Commercial Tort Claim is asserted shall have entered into a settlement agreement with respect to such Commercial Tort Claim. In addition, to the extent that the existence of any Commercial Tort Claim held or acquired by any Grantor is disclosed by
such Grantor in any public filing with the Securities Exchange Commission or any successor thereto or analogous Governmental Authority, or to the extent that the existence of any such Commercial Tort Claim is disclosed in any press release issued by
any Grantor, then, upon the request of the Administrative Agent, the relevant Grantor shall, within thirty (30) days after such request is made, transmit to the Administrative Agent and the other Secured Parties a writing signed by such Grantor
containing a brief description of such Commercial Tort Claim and granting to the Administrative Agent in such writing (for the benefit of the Secured Parties) a security interest therein and in the Proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to the Administrative Agent and the other Secured Parties. 
  

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 ARTICLE VII 
 Remedial Provisions 
  
 Section 7.01 Pledged Securities. 
  
 (a) Unless
an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 7.01(b), each
Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Securities paid in the normal course of business of the relevant Issuer, to the extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Securities. 
  
 (b)
If an Event of Default shall occur and be continuing, then at any time in the Administrative Agent’s discretion without notice, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other
Proceeds paid in respect of the Pledged Securities and make application thereof to the Obligations in accordance with Section 10.02 of the Credit Agreement, and (ii) any or all of the Pledged Securities shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Securities at any meeting of shareholders (or other equivalent
body) of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Securities as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and all of the Pledged Securities upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the organizational structure of any Issuer,
or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Pledged Securities, and in connection therewith, the right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the
Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 
  
 (c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Securities pledged by such Grantor hereunder
(and each Issuer party hereto hereby agrees) to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby,
pay any dividends or other payments with respect to the Pledged Securities directly to the Administrative Agent. 
  
 Section 7.02 Collections on Accounts, Etc. The Administrative Agent hereby authorizes each Grantor to collect upon the Accounts, Instruments,
Chattel Paper and Payment Intangibles; provided that the Administrative Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default. Upon the request of the Administrative Agent at
any time after the occurrence and during the continuance of an 
  

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 Event of Default, each Grantor shall notify the Account Debtors that the applicable Accounts, Chattel Paper and Payment
Intangibles have been assigned to the Administrative Agent for the ratable benefit of the Secured Parties and that payments in respect thereof shall be made directly to the Administrative Agent. The Administrative Agent may in its own name or in the
name of others communicate with the Account Debtors to verify with them to its satisfaction the existence, amount and terms of any Accounts, Chattel Paper or Payment Intangibles. 
  
 Section 7.03 Proceeds. If required by the Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Accounts, Instruments, Chattel Paper and Payment Intangibles, when collected or received by each Grantor, and any other cash or non-cash Proceeds received by each Grantor upon the sale or other
disposition of any Collateral, shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Administrative Agent if required, in a special collateral
account maintained by the Administrative Agent, subject to withdrawal by the Administrative Agent for the ratable benefit of the Secured Parties only, as hereinafter provided, and, until so turned over, shall be held by such Grantor in trust for the
Administrative Agent for the ratable benefit of the Secured Parties, segregated from other funds of any such Grantor. Each deposit of any such Proceeds shall be accompanied by a report identifying in reasonable detail the nature and source of the
payments included in the deposit. All Proceeds (including, without limitation, Proceeds constituting collections of Accounts, Chattel Paper, Instruments) while held by the Administrative Agent (or by any Grantor in trust for the Administrative Agent
for the ratable benefit of the Secured Parties) shall continue to be collateral security for all of the Obligations and shall not constitute payment thereof until applied as hereinafter provided. At such intervals as may be agreed upon by each
Grantor and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent’s election, the Administrative Agent shall apply all or any part of the funds on deposit in said
special collateral account on account of the Obligations in such order as the Administrative Agent may elect, and any part of such funds which the Administrative Agent elects not so to apply and deems not required as collateral security for the
Obligations shall be paid over from time to time by the Administrative Agent to each Grantor or to whomsoever may be lawfully entitled to receive the same. 
  
 Section 7.04 UCC and Other Remedies. 
  
 (a) If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Secured Parties, may exercise in its discretion, in
addition to all other rights, remedies, powers and privileges granted to them in this Agreement, the other Loan Documents, any Permitted Hedging Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations,
all rights, remedies, powers and privileges of a secured party under the UCC or any other applicable law or otherwise available at law or equity. Without limiting the generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of
and deliver the Collateral or any part thereof (or contract to do 
  

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 any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or
office of the Administrative Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent or any other Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold,
free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. If an Event of Default shall occur and be continuing, each Grantor further agrees, at the Administrative Agent’s request, to assemble
the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. Any such sale or transfer by the Administrative Agent either to
itself or to any other Person shall be absolutely free from any claim of right by Grantor, including any equity or right of redemption, stay or appraisal which Grantor has or may have under any rule of law, regulation or statute now existing or
hereafter adopted. Upon any such sale or transfer, the Administrative Agent shall have the right to deliver, assign and transfer to the purchaser or transferee thereof the Collateral so sold or transferred. The Administrative Agent shall apply the
net proceeds of any action taken by it pursuant to this Section 7.04, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in
accordance with Section 10.02 of the Credit Agreement, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-615 of
the UCC, need the Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any other
Secured Party arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition. 
  
 (b) In the event that
the Administrative Agent elects not to sell the Collateral, the Administrative Agent retains its rights to dispose of or utilize the Collateral or any part or parts thereof in any manner authorized or permitted by law or in equity, and to apply the
proceeds of the same towards payment of the Obligations. Each and every method of disposition of the Collateral described in this Agreement shall constitute disposition in a commercially reasonable manner. The Administrative Agent may appoint any
Person as agent to perform any act or acts necessary or incident to any sale or transfer of the Collateral. 
  
 Section 7.05 Private Sales of Pledged Securities. Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of
any or all the Pledged Securities, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of
purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding 
  

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 such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Securities for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such Issuer would agree to do so. Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may reasonably be necessary to make such sale or sales of all or any
portion of the Pledged Securities pursuant to this Section 7.05 valid and binding and in compliance with any and all other applicable Governmental Requirements, other than the registration of securities for public sale. Each Grantor further agrees
that a breach of any of the covenants contained in this Section 7.05 will cause irreparable injury to the Administrative Agent and the other Secured Parties, that the Administrative Agent and the other Secured Parties have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant contained in this Section 7.05 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants. 
  
 Section
7.06 Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights or privileges which it may acquire under the UCC or any other applicable law. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any other Secured Party to collect such deficiency. 
  
 Section 7.07 Non-Judicial Enforcement. The Administrative Agent may
enforce its rights hereunder without prior judicial process or judicial hearing, and to the extent permitted by law, each Grantor expressly waives any and all legal rights which might otherwise require the Administrative Agent to enforce its rights
by judicial process. 
  
 Section 7.08 Control Agreement.
Notwithstanding the unconditional nature of any rights provided for under the Control Agreement establishing the Administrative Agent’s “control” over the Margin Account, the Administrative Agent will not give notice that it is
exercising its right to direct the disposition of funds or otherwise exercise exclusive control over such Collateral until the occurrence and during the continuance of an Event of Default. 
  
 ARTICLE VIII 
 The Administrative Agent 
  
 Section 8.01 Administrative Agent’s Appointment as Attorney-in-Fact, Etc. 
  
 (a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and
all reasonably appropriate action and to execute any and all documents and instruments which may be reasonably necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, 
  

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 each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following: 
  
 (i) unless being disputed under Section 9.03(a) of the Credit Agreement, pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs thereof; 
  
 (ii) execute, in connection with any sale provided for in Section 7.04 or Section 7.05, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and 
  
 (iii) (A) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (B) take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any Account, Instrument, General Intangible, Chattel Paper or Payment Intangible or with respect to any other Collateral, and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any all such moneys due under any Account, Instrument or General Intangible or with respect to any other Collateral
whenever payable; (C) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (D) sign and indorse
any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (E) receive, change the address
for delivery, open and dispose of mail addressed to any Grantor, and to execute, assign and indorse negotiable and other instruments for the payment of money, documents of title or other evidences of payment, shipment or storage for any form of
Collateral on behalf of and in the name of any Grantor; (F) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (G) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (H) settle, compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent may deem appropriate; and (I) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely
as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Administrative
Agent deems necessary to protect, preserve or realize upon the Collateral and the Administrative Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do. 
  
 Anything in this Section 8.01(a) to the
contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 8.01(a) unless an Event of Default shall have occurred and be continuing. 
  

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 (b) If any Grantor fails to perform or comply with any of its agreements contained herein within the
applicable grace periods, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. 
  
 (c) The reasonable expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 8.01, together with interest thereon at any post-default rate from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by
such Grantor to the Administrative Agent on demand. 
  
 (d) Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue and in compliance hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released. 
  

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 Section 8.02 Duty of Administrative Agent. The Administrative Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its
own account and shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which comparable secured parties accord
comparable collateral. Neither the Administrative Agent, any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Administrative Agent and the other Secured Parties hereunder are solely to protect the Administrative Agent’s and the other Secured Parties’ interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any other Secured Party to exercise any such powers. The Administrative Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. To the fullest extent permitted by
applicable law, the Administrative Agent shall be under no duty whatsoever to make or give any presentment, notice of dishonor, protest, demand for performance, notice of non-performance, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Obligations, or to take any steps necessary to preserve any rights against any Grantor or other Person or ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not it has or is deemed to have knowledge of such matters. Each Grantor, to the extent permitted by applicable law, waives any right of marshaling in respect of any and all
Collateral, and waives any right to require the Administrative Agent or any other Secured Party to proceed against any Grantor or other Person, exhaust any Collateral or enforce any other remedy which the Administrative Agent or any other Secured
Party now has or may hereafter have against each Grantor, any Grantor or other Person. 
  
 Section 8.03 Execution of Financing Statements. Pursuant to the UCC and any other applicable law, each Grantor authorizes the Administrative Agent, its counsel or its representative, at any time and from time
to time, to file or record financing statements, continuation statements, amendments thereto and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and in such offices
as the Administrative Agent reasonably determines appropriate to perfect the security interests of the Administrative Agent under this Agreement. Additionally, each Grantor authorizes the Administrative Agent, its counsel or its representative, at
any time and from time to time, to file or record such financing statements that describe the collateral covered thereby as “all assets of the Grantor”, “all personal property of the Grantor” or words of similar effect. A
photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. 
  

 - 21 - 

 Section 8.04 Authority of Administrative Agent. Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority. 
  
 ARTICLE IX 
 Subordination of Indebtedness 
  
 Section 9.01 Subordination of All Guarantor Claims. As used herein,
the term “Guarantor Claims” shall mean all debts and obligations of the Borrower or any other Grantor to any Grantor, whether such debts and obligations now exist or are hereafter incurred or arise, or whether the obligation of the debtor
thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or obligations be evidenced by note, contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by. After and during the continuation of an Event of Default, no Grantor
shall receive or collect, directly or indirectly, from any obligor in respect thereof any amount upon the Guarantor Claims. 
  
 Section 9.02 Claims in Bankruptcy. In the event of receivership, bankruptcy, reorganization, arrangement, debtor’s relief or other insolvency
proceedings involving any Grantor, the Administrative Agent on behalf of the Secured Parties shall have the right to prove their claim in any proceeding, so as to establish their rights hereunder and receive directly from the receiver, trustee or
other court custodian, dividends and payments which would otherwise be payable upon Guarantor Claims. Each Grantor hereby assigns such dividends and payments to the Administrative Agent for the benefit of the Secured Parties for application against
the Obligations as provided under Section 10.02 of the Credit Agreement. Should any Agent or Secured Party receive, for application upon the Obligations, any such dividend or payment which is otherwise payable to any Grantor, and which, as
between such Grantor, shall constitute a credit upon the Guarantor Claims, then upon payment in full of the Obligations, the intended recipient shall become subrogated to the rights of the Administrative Agent and the other Secured Parties to the
extent that such payments to the Administrative Agent and the other Secured Parties on the Guarantor Claims have contributed toward the liquidation of the Obligations, and such subrogation shall be with respect to that proportion of the Obligations
which would have been unpaid if the Administrative Agent and the other Secured Parties had not received dividends or payments upon the Guarantor Claims. 
  
 Section 9.03 Payments Held in Trust. In the event that notwithstanding Section 9.01 and Section 9.02, any Grantor should receive any
funds, payments, claims or distributions which is prohibited by such Sections, then it agrees: (a) to hold in trust for the Administrative Agent 
  

 - 22 - 

 and the other Secured Parties an amount equal to the amount of all funds, payments, claims or distributions so received,
and (b) that it shall have absolutely no dominion over the amount of such funds, payments, claims or distributions except to pay them promptly to the Administrative Agent, for the benefit of the Secured Parties; and each Grantor covenants
promptly to pay the same to the Administrative Agent. 
  
 Section
9.04 Liens Subordinate. Each Grantor agrees that, until the Obligations are paid in full and the Aggregate Commitments terminated, any Liens securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any Liens
securing payment of the Obligations, regardless of whether such encumbrances in favor of such Grantor, the Administrative Agent or any other Secured Party presently exist or are hereafter created or attach. Without the prior written consent of the
Administrative Agent, no Grantor, during the period in which any of the Obligations are outstanding or the Aggregate Commitments are in effect, shall (a) exercise or enforce any creditor’s right it may have against any debtor in respect of
the Guarantor Claims, or (b) foreclose, repossess, sequester or otherwise take steps or institute any action or proceeding (judicial or otherwise, including without limitation the commencement of or joinder in any liquidation, bankruptcy,
rearrangement, debtor’s relief or insolvency proceeding) to enforce any Lien held by it. 
  
 Section 9.05 Notation of Records. Upon the request of the Administrative Agent, all promissory notes and all accounts receivable ledgers or other evidence of the Guarantor Claims accepted by or held by any
Grantor shall contain a specific written notice thereon that the indebtedness evidenced thereby is subordinated under the terms of this Agreement. 
  
 ARTICLE X 
 Miscellaneous

  
 Section 10.01 Waiver. No failure on the part of the
Administrative Agent or any other Secured Party to exercise and no delay in exercising, and no course of dealing with respect to, any right, remedy, 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, remedy, power or privilege. The rights, remedies, powers and privileges
provided herein are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. The exercise by the Administrative Agent of any one or more of the rights, powers and remedies herein shall not be construed as a waiver
of any other rights, powers and remedies, including, without limitation, any rights of set-off. 
  
 Section 10.02 Notices. All notices and other communications provided for herein shall be given in the manner and subject to the terms of
Section 12.01 of the Credit Agreement; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 1. 
  

 - 23 - 

 Section 10.03 Indemnities, Etc. Each Grantor agrees to pay, and to save the Administrative Agent
and the other Secured Parties harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, and reasonable costs, expenses or disbursements of any kind or nature whatsoever (including, without
limitation, court costs and reasonable attorneys’ fees, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement) incurred because of, incident to, or with respect to, the Collateral (including, without limitation, any exercise of rights or remedies in
connection therewith) or the execution, delivery, enforcement, performance and administration of this Agreement, to the extent the Borrower would be required to do so pursuant to Section 12.03 of the Credit Agreement. All amounts for which any
Grantor is liable pursuant to this Section 10.03 shall be due and payable by such Grantor to the Secured Parties upon demand. 
  
 Section 10.04 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 12.04 of the Credit Agreement. 
  
 Section 10.05 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Administrative Agent and the other Secured Parties and their successors and
assigns; provided that except as set forth in Section 8.14 or Section 9.13 of the Credit Agreement, no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the
Administrative Agent and the Lenders. 
  
 Section 10.06
Invalidity. In the event that any one or more of the provisions contained in this Agreement or in any of the Loan Documents to which a Grantor is a party shall, for any reason, be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or such other Loan Document. 
  
 Section 10.07 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 
  
 Section 10.08 Survival. The obligations of the parties under Section 10.03 shall survive the repayment of the Loans and the termination
of the Letters of Credit, Permitted Hedging Agreements, Credit Agreement and Aggregate Commitments. To the extent that any payments on the Obligations 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 Obligations so satisfied shall be revived and continue as
if such payment or proceeds had not been received and the Administrative Agent’s and the other Secured Parties’ Liens, security interests, rights, powers and remedies under this Agreement and each Security Instrument shall continue in full
force and effect. In such event, each Security Instrument shall be automatically reinstated and each Grantor shall take such action as may be reasonably requested by the Administrative Agent and the other Secured Parties to effect such
reinstatement. 
  

 - 24 - 

 Section 10.09 Captions. Captions and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 
  
 Section 10.10 No Oral Agreements. The Loan Documents (other than the Letters of Credit) embody the entire agreement and understanding between the
parties and supersede all other agreements and understandings between such parties relating to the subject matter hereof and thereof. The Loan Documents represent the final agreement between the parties 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. 
  
 Section 10.11 Governing Law; Submission to Jurisdiction. 
  

(a) This Agreement shall be governed by, and construed in accordance with, the laws of the state of New York. 
  
 (b) Any legal action or proceeding with respect to this Agreement or any
other Loan Documents to which a Grantor is a party may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, and each of the Lenders, the Administrative Agent and the Grantors
hereby accepts for itself and (to the extent permitted by law) in respect of its Property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each of the Lenders, the Administrative Agent and the Grantors hereby irrevocably
waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any such action or proceeding in such respective
jurisdictions. This submission to jurisdiction is non-exclusive and does not preclude any party to this Agreement from obtaining jurisdiction over any other party in any court otherwise having jurisdiction. 
  
 (c) Each of the Lenders, the Administrative Agent and the Grantors
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 such Person at the address specified on its
signature page of this Agreement or the Credit Agreement, as applicable, such service to become effective thirty (30) days after such mailing. Nothing herein shall affect the right of the Administrative Agent or any Lender or any holder of a
Note or Grantor to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against such Grantor in any other jurisdiction. 
  
 (d) Each Grantor and each Lender hereby (i) irrevocably and unconditionally waive, 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 waive, 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) certify that no party hereto nor any representative or agent of counsel for any party
hereto has represented, expressly or otherwise, or implied that such party would not, in the event of litigation, seek to enforce the foregoing waivers, and (iv) acknowledge 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 9.12. 
  

 - 25 - 

 Section 10.12 Acknowledgments. Each Grantor hereby acknowledges that: 
  
 (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party; 
  
 (b) neither the Administrative Agent nor any other Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Grantors, on the one hand, and the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and 
  
 (c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Grantors and the Lenders. 
  
 (d) Each of the parties hereto specifically agrees that it has a duty to read this Agreement and the Security Instruments and agrees that it is charged
with notice and knowledge of the terms of this Agreement and the Security Instruments; 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 Security Instruments; and has received the advice of its attorney in entering into this Agreement and the
Security Instruments; and that it recognizes that certain of the terms of this Agreement and the Security Instruments 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 Security Instruments on the basis that the party had no notice
or knowledge of such provision or that the provision is not “conspicuous.” 
  
 (e) Each Grantor warrants and agrees that each of the waivers and consents set forth in this Agreement are made voluntarily and unconditionally after consultation with outside legal counsel and with full knowledge of
their significance and consequences, with the understanding that events giving rise to any defense or right waived may diminish, destroy or otherwise adversely affect rights which such Grantor otherwise may have against the Borrower, any other
Grantor, the Secured Parties or any other Person or against any collateral. If, notwithstanding the intent of the parties that the terms of this Agreement shall control in any and all circumstances, any such waivers or consents are determined to be
unenforceable under applicable law, such waivers and consents shall be effective to the maximum extent permitted by law. 
  
 Section 10.13 Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to
Section 8.11 of the Credit Agreement and is not a signatory hereto shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex I hereto. 
  

 - 26 - 

 Section 10.14 Set-Off. Each Grantor agrees that, in addition to (and without limitation of) any
right of set-off, bankers’ lien or counterclaim a Secured Party may otherwise have, each Secured Party shall have the right and be entitled (after the occurrence and during the continuation of an Event of Default and after consultation with the
Administrative Agent), at its option, to offset (i) balances held by it or by any of its Affiliates for account of any Grantor or any Subsidiary at any of its offices, in Dollars or in any other currency, and (ii) amounts due and payable
to such Lender (or any Affiliate of such Lender) under any Permitted Hedging Agreement, against any principal of or interest on any of such Secured Party’s Loans, or any other amount due and payable to such Secured Party hereunder, which is not
paid when due (regardless of whether such balances are then due to such Person), in which case it shall promptly notify the Borrower and the Administrative Agent thereof, provided that such Secured Party’s failure to give such notice shall not
affect the validity thereof. 
  
 Section 10.15 Releases.

  
 (a) Release Upon Payment in Full. The grant of a
security interest hereunder and all of rights, powers and remedies in connection herewith shall remain in full force and effect until the Administrative Agent has (i) retransferred and delivered all Collateral in its possession to the Grantors,
and (ii) executed a written release or termination statement and reassigned to the Grantors without recourse or warranty any remaining Collateral and all rights conveyed hereby. Upon the complete payment of the Obligations, the termination of
the Letters of Credit, Permitted Hedging Agreements secured hereby, Credit Agreement and the Aggregate Commitments and the compliance by the Grantors with all covenants and agreements hereof, the Administrative Agent, at the written request and
expense of the Borrower, will promptly release, reassign and transfer the Collateral to the Grantors and declare this Agreement to be of no further force or effect. 
  
 (b) Further Assurances. If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor
in a transaction permitted by the Credit Agreement, then the Administrative Agent, at the request and sole expense of such Grantor, shall promptly execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable
for the release of the Liens created hereby on such Collateral and the capital stock of such Grantor. At the request and sole expense of the Borrower, a Grantor shall be released from its obligations hereunder in the event that all the capital stock
of such Grantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided that the Borrower shall have delivered to the Administrative Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant Grantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any reasonable expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents. 
  
 (c) Retention in Satisfaction. Except as may be expressly applicable pursuant to Section 9-620 of the UCC, no action taken or omission to act
by the Administrative Agent or the other Secured Parties hereunder, including, without limitation, any exercise of voting or 
  

 - 27 - 

 consensual rights or any other action taken or inaction, shall be deemed to constitute a retention of the Collateral in
satisfaction of the Obligations or otherwise to be in full satisfaction of the Obligations, and the Obligations shall remain in full force and effect, until the Administrative Agent and the other Secured Parties shall have applied payments
(including, without limitation, collections from Collateral) towards the Obligations in the full amount then outstanding or until such subsequent time as is provided in Section 10.15(a). 
  
 Section 10.16 Reinstatement. The obligations of each Grantor
under this Agreement (including, without limitation, with respect to the guarantee contained in Article II and the provision of collateral herein) shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Grantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Grantor or any substantial part of its property, or otherwise, all as though such payments had not
been made. 
  
 Section 10.17 Acceptance. Each Grantor
hereby expressly waives notice of acceptance of this Agreement, acceptance on the part of the Administrative Agent and the other Secured Parties being conclusively presumed by their request for this Agreement and delivery of the same to the
Administrative Agent. 
  

 - 28 - 

 IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement to be duly
executed and delivered as of the date first above written. 
  

					
	BORROWER:	 	ROSETTA RESOURCES INC.
			
	 	 	 By:
	 	  

	 	 	 Name:
	 	 B. A. Berilgen

	 	 	 Title:
	 	 President and Chief Executive Officer

			
	GUARANTORS:	 	 	 	 
		
	 	 	ROSETTA RESOURCES CALIFORNIA, LLC
			
	 	 	 By:
	 	  

	 	 	 Name:
	 	 B. A. Berilgen

	 	 	 Title:
	 	 President and Chief Executive Officer

		
	 	 	ROSETTA RESOURCES OFFSHORE, LLC
			
	 	 	 By:
	 	  

	 	 	 Name:
	 	 B. A. Berilgen

	 	 	 Title:
	 	 President and Chief Executive Officer

		
	 	 	ROSETTA RESOURCES ROCKIES, LLC
			
	 	 	 By:
	 	  

	 	 	 Name:
	 	 B. A. Berilgen

	 	 	 Title:
	 	 President and Chief Executive Officer

		
	 	 	ROSETTA RESOURCES TEXAS GP, LLC
			
	 	 	 By:
	 	  

	 	 	 Name:
	 	 B. A. Berilgen

	 	 	 Title:
	 	 President and Chief Executive Officer

		
	 	 	ROSETTA RESOURCES TEXAS LP, LLC
			
	 	 	 By:
	 	  

	 	 	 Name:
	 	 B. A. Berilgen

	 	 	 Title:
	 	 President and Chief Executive Officer

  

 SIGNATURE PAGE 
 REVOLVER - GUARANTEE AND COLLATERAL AGREEMENT 

			
	ROSETTA RESOURCES TEXAS LP
	
	By: Rosetta Resources Texas GP, LLC, its general partner
		
	 By:
	 	  

	 Name:
	 	 B. A. Berilgen

	 Title:
	 	 President and Chief Executive Officer

	
	CALPINE NATURAL GAS HOLDINGS, LLC
		
	 By:
	 	  

	 Name:
	 	 B. A. Berilgen

	 Title:
	 	 President and Chief Executive Officer

	
	CALPINE NATURAL GAS GP, LLC
		
	 By:
	 	  

	 Name:
	 	 B. A. Berilgen

	 Title:
	 	 President and Chief Executive Officer

	
	CALPINE NATURAL GAS L.P.
	
	By: Calpine Natural Gas GP, LLC, its general partner
		
	 By:
	 	  

	 Name:
	 	 B. A. Berilgen

	 Title:
	 	 President and Chief Executive Officer

  

 SIGNATURE PAGE 
 REVOLVER - GUARANTEE AND COLLATERAL AGREEMENT 

					
	 	 	Acknowledged and Agreed to as of the date hereof by:
		
	ADMINISTRATIVE AGENT:	 	 BNP PARIBAS

			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  

 SIGNATURE PAGE 
 REVOLVER - GUARANTEE AND COLLATERAL AGREEMENT 

 SCHEDULE 1 
  
 NOTICE ADDRESS OF OBLIGORS 
  

			
	 Obligor

	  	 Address

		
	 Rosetta Resources Inc.
	  	 c/o Calpine Corporation
 717 Texas, Suite 2800
 Houston, Texas 77002

		
	 Rosetta Resources California, LLC
	  	 c/o Calpine Corporation
 717 Texas, Suite 2800
 Houston, Texas 77002

		
	 Rosetta Resources Offshore, LLC
	  	 c/o Calpine Corporation
 717 Texas, Suite 2800
 Houston, Texas 77002

		
	 Rosetta Resources Rockies, LLC
	  	 c/o Calpine Corporation
 717 Texas, Suite 2800
 Houston, Texas 77002

		
	 Rosetta Resources Texas LP
	  	 c/o Calpine Corporation
 717 Texas, Suite 2800
 Houston, Texas 77002

		
	 Rosetta Resources Texas GP, LLC
	  	 c/o Calpine Corporation
 717 Texas, Suite 2800
 Houston, Texas 77002

		
	 Rosetta Resources Texas LP, LLC
	  	 c/o Corporation Services Company, 2711
 Centerville Rd., Suite 400, Wilmington,
 Delaware 19808

		
	 Calpine Natural Gas L.P.
	  	 c/o Calpine Corporation
 717 Texas, Suite 2800
 Houston, Texas 77002

		
	 Calpine Natural Gas Holdings, LLC
	  	 c/o Corporation Services Company, 2711
 Centerville Rd., Suite 400, Wilmington,
 Delaware 19808

		
	 Calpine Natural Gas GP, LLC
	  	 c/o Calpine Corporation
 717 Texas, Suite 2800
 Houston, Texas 77002

  

 Schedule 1 - 1 

 SCHEDULE 2 
  
 DESCRIPTION OF PLEDGED SECURITIES 
  

											
	 Owner

	 	 Issuer

	 	 Class of Stock or
 other Equity
Interest

	 	 Percentage Interest

	 	 # of Shares/Units

	 	 Certificate #

	 Rosetta
 Resources
 Inc.
	 	 Rosetta
 Resources
 California,
 LLC
	 	 Membership
 interest in limited

liability company
	 	100%	 	N/A	 	2
						
	 Rosetta
 Resources
 Inc.
	 	 Rosetta
 Resources
 Offshore,
 LLC
	 	 Membership
 interest in limited

liability company
	 	100%	 	N/A	 	2
						
	 Rosetta
 Resources
 Inc.
	 	 Rosetta
 Resources
 Rockies,
 LLC
	 	 Membership
 interest in limited

liability company
	 	100%	 	N/A	 	2
						
	 Rosetta
 Resources
 Inc.
	 	 Rosetta
 Resources
 Texas LP,
 LLC
	 	 Membership
 interest in limited

liability company
	 	100%	 	N/A	 	2
						
	 Rosetta
 Resources
 Inc.
	 	 Rosetta
 Resources
 Texas GP,
 LLC
	 	 Membership
 interest in limited

liability company
	 	100%	 	N/A	 	2
						
	 Rosetta
 Resources
 Inc.
	 	 Calpine
 Natural Gas
 Holdings,
 LLC
	 	 Membership
 interest in limited

liability company
	 	100%	 	N/A	 	2
						
	 Rosetta
 Resources
 Inc.
	 	 Calpine
 Natural Gas
 GP, LLC
	 	 Membership
 interest in limited

liability company
	 	100%	 	N/A	 	2
						
	 Rosetta
 Resources
 Texas LP,
 LLC
	 	 Rosetta
 Resources
 Texas LP
	 	 Limited
 partnership
 interest
	 	99%	 	N/A	 	2

  

 Schedule 2 - 1 

											
	 Rosetta
 Resources
 Texas GP,
 LLC
	 	 Rosetta
 Resources
 Texas LP
	 	 General partner
 interest in
limited
 partnership
	 	1%	 	N/A	 	1
						
	 Calpine
 Natural Gas
 Holdings,
 LLC
	 	 Calpine
 Natural Gas
 L.P.
	 	 Limited
 partnership
 interest
	 	99%	 	N/A	 	 
						
	 Calpine
 Natural
 Gas GP,
 LLC
	 	 Calpine
 Natural Gas
 L.P.
	 	 General partner
 interest in
limited
 partnership
	 	1%	 	N/A	 	 

  

 Schedule 2 - 2 

 SCHEDULE 3 
  
 FILINGS AND OTHER ACTIONS 
 REQUIRED TO PERFECT SECURITY INTERESTS 
  
 Uniform Commercial Code Filings 
  

	1.	UCC-1 Filing in the name of Rosetta Resources Inc. in the office of the Delaware Secretary of State 

  

	2.	UCC-1 Filing in the name of Rosetta Resources California, LLC in the office of the Delaware Secretary of State 

  

	3.	UCC-1 Filing in the name of Rosetta Resources Offshore, LLC in the office of the Delaware Secretary of State 

  

	4.	UCC-1 Filing in the name of Rosetta Resources Rockies, LLC in the office of the Delaware Secretary of State 

  

	5.	UCC-1 Filing in the name of Rosetta Resources Texas LP in the office of the Delaware Secretary of State 

  

	6.	UCC-1 Filing in the name of Rosetta Resources Texas GP, LLC in the office of the Delaware Secretary of State 

  

	7.	UCC-1 Filing in the name of Rosetta Resources Texas LP, LLC in the office of the Delaware Secretary of State 

  

	8.	UCC-1 Filing in the name of Calpine Natural Gas L.P. in the office of the Delaware Secretary of State 

  

	9.	UCC-1 Filing in the name of Calpine Natural Gas Holdings, LLC in the office of the Delaware Secretary of State 

  

	10.	UCC-1 Filing in the name of Calpine Natural Gas GP, LLC in the office of the Delaware Secretary of State 

  
 Delivery to Administrative Agent of Pledged Securities 
  

	1.	Rosetta Resources California, LLC membership interest; certificate number: 2 

  

	2.	Rosetta Resources Offshore, LLC membership interest; certificate number: 2 

  

	3.	Rosetta Resources Rockies, LLC membership interest; certificate number: 2 

  

	4.	Rosetta Resources Texas LP partnership interest; certificate numbers: 1 and 2; 

  

	5.	Rosetta Resources Texas GP, LLC membership interest; certificate number: 2 

  

	6.	Rosetta Resources Texas LP, LLC membership interest; certificate number: 2 

  

	7.	Calpine Natural Gas L.P. partnership interest; certificate number: ______ 

  

	8.	Calpine Natural Gas Holdings, LLC membership interest; certificate number: 2 

  

	9.	Calpine Natural Gas GP, LLC membership interest; certificate number: 2 

  

 Schedule 3 - 1 

 Deposit Account 
  
 The execution of the Blocked Account Control Agreement by and among the Borrower, the Administrative Agent and the depository bank named
therein, granting the Administrative Agent “control” over the Margin Account. 
  

 Schedule 3 - 2 

 SCHEDULE 4 
  
 LOCATION OF JURISDICTION OF 
 ORGANIZATION AND CHIEF EXECUTIVE OFFICE 
  
 Rosetta Resources Inc. 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3980164 

  

	 	•	 	Taxpayer Identification Number: 43-2083519 

  

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

  

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

  
 Rosetta Resources California, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988722 

  

	 	•	 	Taxpayer Identification Number: 51-0546842 

  

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

  

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

  
 Rosetta Resources Offshore, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3989132 

  

	 	•	 	Taxpayer Identification Number: 51-0546843 

  

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

  

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

  
 Rosetta Resources Rockies, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988719 

  

	 	•	 	Taxpayer Identification Number: 51-0546844 

  

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

  

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

  
 Rosetta Resources Texas LP 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3993646 

  

	 	•	 	Taxpayer Identification Number: 41-2179091 

  

 Schedule 4 - 1 

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

  

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

  
 Rosetta Resources Texas GP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988077 

  

	 	•	 	Taxpayer Identification Number: 51-0546839 

  

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

  

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

  
 Rosetta Resources Texas LP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3988727 

  

	 	•	 	Taxpayer Identification Number: 51-0546841 

  

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

  

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

  
 Calpine Natural Gas L.P. 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3518137 

  

	 	•	 	Taxpayer Identification Number: 71-0882453 

  

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

  

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

  
 Calpine Natural Gas Holdings, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3980115 

  

	 	•	 	Taxpayer Identification Number: 20-2943018 

  

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

  

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

  
 Calpine Natural Gas GP, LLC 
  

	 	•	 	Jurisdiction of Organization: Delaware 

  

	 	•	 	Delaware Secretary of State File Number 3518133 

  

	 	•	 	Taxpayer Identification Number: 27-0011349 

  

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

  

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

  

 Schedule 4 - 2 

 ACKNOWLEDGMENT AND CONSENT 
  
 The undersigned hereby acknowledges receipt of a copy of the Guarantee and Collateral Agreement dated as of July 7,
2005 (the “Agreement”), made by the Grantors parties thereto for the benefit of BNP Paribas, as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows: 
  
 1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned. 
  
 2. The terms of Sections 6.01(c) and 6.03 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Sections 6.01(c) or 6.03 of the Agreement.

  

			
	[NAME OF ISSUER]
		
	 By:
	 	  

	 Title:
	 	  

	
	 Address for Notices:

	
	 __________________________________________

	
	 __________________________________________

	
	 __________________________________________

		
	 Fax:
	 	 __________________________________________

 *This consent is necessary only with respect
to any Issuer which is not also a Grantor. This consent may be modified or eliminated with respect to any Issuer that is not controlled by a Grantor. 
  

 Acknowledgment and Consent 

 Annex I 
  
 Assumption Agreement 
  
 ASSUMPTION AGREEMENT, dated as of     , 200[], made by
                                        ,
a corporation duly formed and existing under the laws of the state of [                    ] (the “Additional Grantor”), in favor of
BNP Paribas, as administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions (the “Lenders”) parties to the Credit Agreement referred to below. All capitalized terms not
defined herein shall have the meaning ascribed to them in such Credit Agreement. 
  
 W I T N E S S E T H: 
  
 WHEREAS,
Rosetta Resources Inc. (the “Borrower”), the Lenders, the Administrative Agent and the other Agents, have entered into a Credit Agreement, dated as of July 7, 2005 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”); 
  
 WHEREAS, in connection with the
Credit Agreement, the Borrower and certain of its Subsidiaries have entered into the Guarantee and Collateral Agreement, dated as of July 7, 2005 (as amended, supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) in favor of the Administrative Agent for the benefit of the Lenders and Affiliates of the Lenders; 
  
 WHEREAS, the Credit Agreement requires the Additional Grantor to become a party to the Guarantee and Collateral Agreement; and 
  
 WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement; 
  
 NOW, THEREFORE, IT IS AGREED: 
  
 1. Guarantee
and Collateral Agreement. By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 10.13 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral
Agreement as a Grantor thereunder with the same force and effect as if originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor thereunder and
expressly grants to the Administrative Agent, for the benefit of the Secured Parties (as defined in the Guarantee and Collateral Agreement), a security interest in all Collateral owned by such Additional Grantor to secure all of such Additional
Grantor’s obligations and liabilities thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules 1 through 5 to the Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties contained in Article IV of the Guarantee and Collateral Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on
and as of such date. 
  

 Annex I - 1 

 2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS. 
  
 IN WITNESS WHEREOF, the
undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written. 
  

			
	[ADDITIONAL GRANTOR]
		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

  

 Annex I - 2

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