Document:

Credit Agreement

 EXHIBIT 10.25 
 CREDIT AGREEMENT 
 Dated as of December 22, 2004 
 among 
 SOUTHERN BAY OIL & GAS, L.P.

 as Borrower, 
 AROC OIL & GAS L.L.C., 
 AROC RESOURCES L.L.C., 
 AROC (TEXAS), INC., 
 SOUTHERN BAY ENERGY L.L.C., 
 SOUTHERN BAY LOUISIANA, L.P., 
 SOUTHERN BAY LOUISIANA, G. P., L.L.C. 
 and 
 SOUTHERN BAY OPERATING L.L.C. 

as Guarantors 
 WACHOVIA BANK, NATIONAL ASSOCIATION, 
 as Administrative Agent, 
 and 
 THE LENDERS SIGNATORY HERETO 

$25,000,000 Senior Secured Revolving Credit Facility 
 WACHOVIA CAPITAL MARKETS, LLC 
 as Sole Lead Arranger 

 TABLE OF CONTENTS 
  

					
	 	  	Page
		
	ARTICLE I Definitions and Accounting Matters	  	1
			
	 Section 1.01
	  	Terms Defined Above	  	1
	 Section 1.02
	  	Certain Defined Terms	  	1
	 Section 1.03
	  	Accounting Terms and Determinations	  	13
		
	ARTICLE II Commitments	  	13
			
	 Section 2.01
	  	Loans and Letters of Credit	  	13
	 Section 2.02
	  	Borrowings, Continuations and Conversions, Letters of Credit	  	14
	 Section 2.03
	  	Changes of Commitments	  	16
	 Section 2.04
	  	Fees	  	16
	 Section 2.05
	  	Several Obligations	  	17
	 Section 2.06
	  	Notes	  	17
	 Section 2.07
	  	Prepayments	  	17
	 Section 2.08
	  	Borrowing Base	  	18
	 Section 2.09
	  	Assumption of Risks	  	19
	 Section 2.10
	  	Obligation to Reimburse and to Prepay	  	20
	 Section 2.11
	  	Lending Offices	  	21
		
	ARTICLE III Payments of Principal and Interest	  	21
			
	 Section 3.01
	  	Repayment of Loans	  	21
	 Section 3.02
	  	Interest	  	21
		
	ARTICLE IV Payments; Pro Rata Treatment; Computations; Etc.	  	22
			
	 Section 4.01
	  	Payments	  	22
	 Section 4.02
	  	Pro Rata Treatment	  	23
	 Section 4.03
	  	Computations	  	23
	 Section 4.04
	  	Non-receipt of Funds by the Administrative Agent	  	23
	 Section 4.05
	  	Set-off, Sharing of Payments, Etc.	  	23
	 Section 4.06
	  	Taxes	  	24
		
	ARTICLE V Capital Adequacy	  	27
			
	 Section 5.01
	  	Additional Costs	  	27
	 Section 5.02
	  	Limitation on LIBOR Loans	  	28
	 Section 5.03
	  	Illegality	  	28
	 Section 5.04
	  	Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03	  	28
	 Section 5.05
	  	Compensation	  	29
	 Section 5.06
	  	Replacement Lenders	  	29
		
	ARTICLE VI Conditions Precedent	  	30
			
	 Section 6.01
	  	Initial Funding	  	30
	 Section 6.02
	  	Initial and Subsequent Loans and Letters of Credit	  	32

  

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 TABLE OF CONTENTS 
  

					
	 	  	Page
	 Section 6.03
	  	Conditions Precedent for the Benefit of Lenders	  	32
	 Section 6.04
	  	No Waiver	  	32
		
	ARTICLE VII Representations and Warranties	  	32
			
	 Section 7.01
	  	Corporate Existence	  	33
	 Section 7.02
	  	Financial Condition	  	33
	 Section 7.03
	  	Litigation	  	33
	 Section 7.04
	  	No Breach	  	33
	 Section 7.05
	  	Authority	  	33
	 Section 7.06
	  	Approvals	  	34
	 Section 7.07
	  	Use of Loans	  	34
	 Section 7.08
	  	ERISA	  	34
	 Section 7.09
	  	Taxes	  	35
	 Section 7.10
	  	Titles, etc.	  	35
	 Section 7.11
	  	No Material Misstatements	  	36
	 Section 7.12
	  	Investment Company Act	  	36
	 Section 7.13
	  	Public Utility Holding Company Act	  	36
	 Section 7.14
	  	Subsidiaries	  	36
	 Section 7.15
	  	Location of Business and Offices	  	36
	 Section 7.16
	  	Defaults	  	36
	 Section 7.17
	  	Environmental Matters	  	36
	 Section 7.18
	  	Compliance with the Law	  	37
	 Section 7.19
	  	Insurance	  	38
	 Section 7.20
	  	Hedging Agreements	  	38
	 Section 7.21
	  	Restriction on Liens	  	38
	 Section 7.22
	  	Material Agreements	  	38
	 Section 7.23
	  	Gas Imbalances	  	39
		
	ARTICLE VIII Affirmative Covenants	  	39
			
	 Section 8.01
	  	Reporting Requirements	  	39
	 Section 8.02
	  	Litigation	  	40
	 Section 8.03
	  	Maintenance, Etc.	  	41
	 Section 8.04
	  	Environmental Matters	  	42
	 Section 8.05
	  	Further Assurances	  	42
	 Section 8.06
	  	Performance of Obligations	  	42
	 Section 8.07
	  	Engineering Reports	  	43
	 Section 8.08
	  	Title Information	  	43
	 Section 8.09
	  	Additional Collateral	  	44
	 Section 8.10
	  	ERISA Information and Compliance	  	44
	 Section 8.11
	  	Hedging Agreements	  	45
		
	ARTICLE IX Negative Covenants	  	45
			
	 Section 9.01
	  	Debt	  	45
	 Section 9.02
	  	Liens	  	46
	 Section 9.03
	  	Investments, Loans and Advances	  	46
	 Section 9.04
	  	Dividends, Distributions and Redemptions	  	47
	 Section 9.05
	  	Sales and Leasebacks	  	47

  

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 TABLE OF CONTENTS 
  

					
	 	  	Page
	 Section 9.06
	  	Nature of Business	  	47
	 Section 9.07
	  	Limitation on Leases	  	47
	 Section 9.08
	  	Mergers, Etc.	  	47
	 Section 9.09
	  	Proceeds of Notes and Letters of Credit	  	47
	 Section 9.10
	  	ERISA Compliance	  	48
	 Section 9.11
	  	Sale or Discount of Receivables	  	49
	 Section 9.12
	  	Current Ratio	  	49
	 Section 9.13
	  	Funded Debt to EBITDA	  	49
	 Section 9.14
	  	Interest Coverage Ratio	  	49
	 Section 9.15
	  	Sale of Oil and Gas Properties	  	49
	 Section 9.16
	  	Environmental Matters	  	49
	 Section 9.17
	  	Transactions with Affiliates	  	49
	 Section 9.18
	  	Subsidiaries	  	49
	 Section 9.19
	  	Negative Pledge Agreements	  	49
	 Section 9.20
	  	Gas Imbalances, Take-or-Pay or Other Prepayments	  	50
	 Section 9.21
	  	Accounting Changes	  	50
		
	 ARTICLE X Events of Default; Remedies
	  	50
			
	 Section 10.01
	  	Events of Default	  	50
	 Section 10.02
	  	Remedies	  	52
		
	ARTICLE XI The Administrative Agent	  	52
			
	 Section 11.01
	  	Appointment, Powers and Immunities	  	52
	 Section 11.02
	  	Reliance by Administrative Agent	  	53
	 Section 11.03
	  	Defaults	  	53
	 Section 11.04
	  	Rights as a Lender	  	53
	 Section 11.05
	  	Indemnification	  	53
	 Section 11.06
	  	Non-Reliance on Administrative Agent and other Lenders	  	54
	 Section 11.07
	  	Action by Administrative Agent	  	54
	 Section 11.08
	  	Resignation or Removal of Administrative Agent	  	54
		
	ARTICLE XII Miscellaneous	  	55
			
	 Section 12.01
	  	Waiver	  	55
	 Section 12.02
	  	Notices	  	55
	 Section 12.03
	  	Payment of Expenses, Indemnities, etc.	  	55
	 Section 12.04
	  	Amendments, Etc.	  	57
	 Section 12.05
	  	Successors and Assigns	  	58
	 Section 12.06
	  	Assignments and Participations	  	58
	 Section 12.07
	  	Invalidity	  	59
	 Section 12.08
	  	Counterparts	  	59
	 Section 12.09
	  	References, Use of Word “Including”	  	59
	 Section 12.10
	  	Survival	  	59
	 Section 12.11
	  	Captions	  	60
	 Section 12.12
	  	No Oral Agreements	  	60
	 Section 12.13
	  	Governing law, submission to jurisdiction	  	60
	 Section 12.14
	  	Interest	  	61
	 Section 12.15
	  	Confidentiality	  	62

  

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 TABLE OF CONTENTS 
  

					
	 	  	Page
	 Section 12.16
	  	Disposition of Proceeds	  	62
	 Section 12.17
	  	USA Patriot Act Notice	  	62

 ANNEX 
  

			
	Annex I	  	List of Percentage Shares, Maximum Revolving Credit Amounts

 EXHIBITS 
  

			
	 Exhibit A
	  	Form of Note
	 Exhibit B
	  	Form of Borrowing, Continuation and Conversion Request
	 Exhibit C
	  	Form of Compliance Certificate
	 Exhibit D
	  	Security Instruments
	 Exhibit E
	  	Form of Assignment Agreement

 SCHEDULES 
  

			
	 Schedule 7.02
	  	Liabilities
	 Schedule 7.03
	  	Litigation
	 Schedule 7.09
	  	Taxes
	 Schedule 7.10
	  	Titles, Etc.
	 Schedule 7.15
	  	Place of Organization
	 Schedule 7.17
	  	Environmental Matters
	 Schedule 7.19
	  	Insurance
	 Schedule 7.20
	  	Hedging Agreements
	 Schedule 7.23
	  	Gas Imbalances, Gas Balancing Status of Operating Subsidiaries of AROC, Inc.
	 Schedule 9.01
	  	Debt
	 Schedule 9.02
	  	Liens
	 Schedule 9.03
	  	Investments, Loans and Advances

  

 iv 

 THIS CREDIT AGREEMENT dated as of December 22, 2004, among SOUTHERN BAY OIL & GAS
L.P., a Texas limited partnership (the “Borrower”); AROC (TEXAS), INC., a Texas corporation (“AROC Texas”), AROC OIL & GAS L.L.C., a Texas limited liability company,
(“AROC O&G”), AROC RESOURCES L.L.C. (“AROC Resources”) a Texas limited liability company, SOUTHERN BAY ENERGY L.L.C. (“SB Energy”) a Texas limited
liability company, and SOUTHERN BAY OPERATING L.L.C. (“SB Operating”) a Texas limited liability company, SOUTHERN BAY LOUISIANA, LP (“SB Louisiana”), a Texas limited partnership,
SOUTHERN BAY LOUISIANA GP, L.L.C. (“SB Louisiana GP”) a Texas limited liability company (AROC Texas, AROC O&G, AROC Resources, SB Energy, SB Louisiana, SB Louisiana GP and SB Operating are collectively, the
“Guarantors” and the Borrower and the Guarantors are collectively, the “Obligors”), each of the lenders that is a signatory hereto or which becomes a signatory hereto as provided in
Section 12.06 (individually, together with its successors and assigns, a “Lender” and, collectively, the “Lenders”); WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative
agent for the Lenders (in such capacity, together with its successors in such capacity the “Administrative Agent”) and as issuing bank (in such capacity, together with its successors in such capacity, the “Issuing
Bank”). 
 In consideration of the mutual covenants and agreements herein contained and of the loans, extensions of credit and
commitments hereinafter referred to, the parties hereto agree as follows: 
 ARTICLE I 
 Definitions and Accounting Matters 
 Section 1.01 Terms Defined Above. As used in this Agreement, the terms “Administrative Agent,” “AROC Texas,” “AROC O&G,” “AROC Resources,” “Borrower,”
“Guarantors,” “Issuing Bank,” “Lender,” “Lenders,” “Obligors,” “SB Energy,” “SB Louisiana,” “SB Louisiana GP” and “SB Operating,” shall have the meanings
indicated above. 
 Section 1.02 Certain Defined Terms. As used herein, the following terms shall have the following
meanings (all terms defined in this Article I or in other provisions of this Agreement in the singular to have equivalent meanings when used in the plural and vice versa): 
 Acquisition means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in
(a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock of a corporation (or similar entity), which stock has
ordinary voting power for the election of the members of such entity’s board of directors or persons exercising similar functions (other than stock having such power only by reason of the happening of a contingency), or the acquisition of in
excess of 50% of the partnership interests or equity of any Person not a corporation which acquisition gives the acquiring Person the power to direct or cause the direction of the management and policies of such Person, or (c) a merger or
consolidation or any other combination with another Person provided that Borrower is the surviving entity. 
 Additional Costs
shall have the meaning assigned such term in Section 5.01(a). 
 Affected Loans shall have the meaning
assigned such term in Section 5.04. 
 Affiliate of any Person shall mean (i) any Person directly or
indirectly controlled by, controlling or under common control with such first Person, (ii) any director or officer of such first Person or of any Person referred to in clause (i) above and (iii) if any Person in clause (i) above
is an individual, any member of the immediate family (including parents, spouse and children) of such individual and any trust 

 
whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust.
For purposes of this definition, any Person which owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or
other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to “control” (including, with its correlative meanings, “controlled by” and “under common
control with”) such corporation or other Person. 
 Agreement shall mean this Credit Agreement, as the same may from
time to time be further amended or supplemented. 
 Aggregate Maximum Revolving Credit Amounts at any time shall equal the sum
of the Maximum Revolving Credit Amounts of the Lenders ($25,000,000), as the same may be reduced pursuant to Section 2.03(b). 
 Aggregate Revolving Credit Commitments at any time shall equal the amount calculated in accordance with Section 2.03. 
 Applicable Lending Office shall mean, for each Lender and for each Type of Loan, the lending office of such Lender (or an Affiliate of such Lender) designated for such Type of Loan on the signature pages
hereof or such other offices of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained.

 Applicable Margin shall mean the applicable per annum percentage set forth at the appropriate intersection in the table
shown below, based on the Borrowing Base Utilization as in effect from time to time: 
  

							
	 Borrowing Base Utilization
	  	Applicable Margin	 
	 	  	LIBOR Loans	 	 	Base Rate Loans	 
	 Less than 25%
	  	1.75	%	 	0.25	%
	 Greater than or equal to 25%,
 but less than 50%
	  	2.50	%	 	1.00	%
	 Greater than or equal to 50%,
 but less than 75%
	  	2.75	%	 	1.25	%
	 Greater than or equal to 75%
	  	3.00	%	 	1.50	%

 Each change in the Applicable Margin resulting from a change in the Borrowing Base Utilization shall take effect
on the day such change in the Borrowing Base Utilization occurs. 
 Assignment shall have the meaning assigned such term in
Section 12.06(b). 
 Base Rate shall mean, with
respect to any Base Rate Loan, for any day, a rate per annum equal to the higher of (i) the Federal Funds Rate for any such day plus 1/2 of 1% or (ii) the Prime Rate for such day. Each change in any interest rate provided for herein based upon the Base Rate resulting from a change in the
Base Rate shall take effect at the time of such change in the Base Rate. 
 Base Rate Loans shall mean Loans that
bear interest at rates based upon the Base Rate. 
 Borrowing Base shall mean at any time an amount equal to the amount
determined in accordance with Section 2.08. 
  

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 Borrowing Base Deficiency shall mean, and occur at any time when, the amount by which the
aggregate outstanding principal amount of the Loans plus the LC Exposure exceeds the Borrowing Base, whether as the result of a redetermination, a scheduled reduction, or otherwise. 
 Borrowing Base Period shall mean the period from the Closing Date until May 1, 2005, and each six-month period commencing May 1,
2005 and each November 1 and May 1 thereafter. 
 Borrowing Base Utilization shall mean at any time, an amount equal
to the quotient of (i) the aggregate principal amount of Loans outstanding plus LC Exposure, divided by (ii) the Borrowing Base. 
 Business Day shall mean any day other than a day on which commercial banks are authorized or required to close in Texas or North Carolina and, where such term is used in the definition of “Quarterly
Date” or if such day relates to a borrowing or continuation of, a payment or prepayment of principal of or interest on, or a conversion of or into, or the Interest Period for, a LIBOR Loan or a notice by the Borrower with respect to any
such borrowing or continuation, payment, prepayment, conversion or Interest Period, any day which is also a day on which dealings in Dollar deposits are carried out in the London interbank market. 
 Change of Control means the occurrence of any of the following events: (a) any Person or two or more Persons, other than any Affiliate
of the Borrower, acting as a group shall acquire beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act, and including holding proxies to vote for the election of directors other than
proxies held by the Borrower’s management or their designees to be voted in favor of persons nominated by the Borrower’s Board of Directors) of 33% or more of the outstanding voting securities of the Borrower, measured by voting power
(including both ordinary shares and any preferred stock or other equity securities entitling the holders thereof to vote with the holders of common stock in elections for directors of the Borrower), (b) the Borrower shall fail beneficially to
own, directly or indirectly, 100% of the outstanding voting equity interests of AROC Resources, SB Louisiana, or SB Energy shall fail beneficially to own 100% of SB Operating of SB Louisiana GP, or AROC Resources shall beneficially to own 100% of
AROC O&G or AROC (Texas), or (c) one-third or more of the directors/managers of SB Energy shall consist of persons not nominated by SB Energy’s directors/managers (not including as Board nominees any directors which the Board is
obligated to nominate pursuant to shareholders agreements, voting trust arrangements or similar arrangements). 
 Closing Date
shall mean the date on which all of the conditions precedent under Section 6.01 are satisfied or waived the Lenders. 
 Code shall mean the Internal Revenue Code of 1986, as amended from time to time and any successor statute. 
 Commitment shall mean for any Lender, its Revolving Credit Commitment. 
 Consolidated Net Income shall
mean with respect to the Borrower and its Consolidated Subsidiaries, for any period, the aggregate of the net income (or loss) of the Borrower and its Consolidated Subsidiaries after allowances for taxes for such period, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein) the following: (i) the net income of any Person in which the Borrower or any Consolidated 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 its Consolidated Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or
distributions actually paid in such period by such other Person to the Borrower or to a Consolidated Subsidiary, as the case may be; 

  

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(ii) the net income (but not loss) of any Consolidated Subsidiary to the extent that the declaration or payment of dividends or similar distributions or
transfers or loans by that Consolidated Subsidiary is not at the time permitted by operation of the terms of its charter or any agreement, instrument or Governmental Requirement applicable to such Consolidated Subsidiary, or is otherwise restricted
or prohibited in each case determined in accordance with GAAP; (iii) the net income (or loss) of any Person acquired in a pooling-of-interests transaction for any period prior to the date of such transaction; (iv) any extraordinary gains
or losses, including gains or losses attributable to Property sales not in the ordinary course of business; and (v) the cumulative effect of a change in accounting principles and any gains or losses attributable to writeups or write downs of
assets. 
 Consolidated Subsidiaries shall mean each Subsidiary of a Person (whether now existing or hereafter created or
acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of such Person in accordance with GAAP. 
 Debt shall mean, for any Person the sum of the following (without duplication): (i) all obligations of such Person for borrowed money or evidenced by bonds, debentures, notes or other similar
instruments (including principal, interest, fees and charges); (ii) all obligations of such Person (whether contingent or otherwise) in respect of bankers’ acceptances, letters of credit, surety or other bonds and similar instruments;
(iii) all obligations of such Person to pay the deferred purchase price of Property or services (other than for borrowed money); (iv) all obligations under leases which shall have been, or should have been, in accordance with GAAP,
recorded as capital leases in respect of which such Person is liable (whether contingent or otherwise); (v) all obligations under operating leases which require such Person or its Affiliate to make payments over the term of such lease,
including payments at termination, based on the purchase price or appraisal value of the Property subject to such lease plus a marginal interest rate, and used primarily as a financing vehicle for, or to monetize, such Property; (vi) all Debt
(as described in the other clauses of this definition) and other obligations of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person; (vii) all Debt (as described in the other clauses of this
definition) and other obligations of others guaranteed by such Person or in which such Person otherwise assures a creditor against loss of the debtor or obligations of others; (viii) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to purchase the Debt or Property of others; (ix) obligations to deliver goods or services including Hydrocarbons in consideration of advance payments, except as permitted
by Section 9.16 and disclosed by Section 8.07(c); (x) obligations to pay for goods or services whether or not such goods or services are actually received or utilized by such Person; (xi) any capital
stock of such Person in which such Person has a mandatory obligation to redeem such stock; (xii) any Debt of a Special Entity for which such Person is liable either by agreement or because of a Governmental Requirement; (xiii) the
undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received payment; and (xiv) all obligations of such Person under Hedging Agreements. 
 Default shall mean an Event of Default or an event which with notice or lapse of time or both would become an Event of Default. 

Dollars and $ shall mean lawful money of the United States of America. 
 EBITDA shall mean, for any period, the sum of Consolidated Net Income for such period plus the following expenses or charges to the extent
deducted from Consolidated Net Income in such period: interest, income taxes, depreciation, depletion and amortization. 
 Engineering
Reports shall have the meaning assigned such term in Section 2.08. 
  

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 Environmental Laws shall mean any and all Governmental Requirements pertaining to health or
the environment in effect in any and all jurisdictions in which any Obligor or any Subsidiary is conducting or at any time has conducted business, or where any Property of any Obligor or any Subsidiary is located, including without limitation, the
Oil Pollution Act of 1990 (“OPA”), the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection laws. 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, and the terms
“solid waste” and “disposal” or “disposed” have the meanings specified in RCRA; provided, however, that (i) in the event either OPA, CERCLA or RCRA is amended
so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and (ii) to the extent the laws of the state in which any Property of any Obligor or any Subsidiary is
located establish a meaning for “oil,” “hazardous substance,” “release,” “solid waste” or “disposal” which is broader than that
specified in either OPA, CERCLA or RCRA, such broader meaning shall apply. 
 ERISA shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time and any successor statute. 
 ERISA Affiliate shall mean each trade or
business (whether or not incorporated) which together with the Borrower or any 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 shall mean (i) a “Reportable Event” described
in Section 4043 of ERISA and the regulations issued thereunder, (ii) the withdrawal of the Borrower, any 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, (iii) 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, (iv) the institution of proceedings to
terminate a Plan by the PBGC or (v) 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. 
 Event of Default shall have the meaning assigned such term in Section 10.01. 
 Excepted Liens shall mean: (i) Liens for Taxes, assessments or other governmental charges or levies not yet due or which are being
contested in good faith by appropriate action and for which adequate reserves have been maintained; (ii) Liens in connection with worker’s compensation, unemployment insurance or other social security, old age pension or public liability
obligations not yet due or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (iii) operators’ Liens in favor of Persons other than Obligors and
Subsidiaries, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, workmen’s, 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 or statutory landlord’s liens, each of which is in respect of obligations that have not been outstanding more than 90 days or which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been maintained in accordance with GAAP; (iv) any Liens reserved in leases or farmout agreements for rent or royalties and for compliance with the terms of the farmout
agreements or leases in the case of leasehold estates, to the extent that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for which such Property is held by any
Obligor 

  

 5 

 
or any Subsidiary or materially impair the value of such Property subject thereto; (v) encumbrances (other than to secure the payment of borrowed money
or the deferred purchase price of Property or services), easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any rights of way or other Property of any Obligor or any Subsidiary for the purpose of
roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, and defects,
irregularities, zoning restrictions and deficiencies in title of any rights of way or other Property which in the aggregate do not materially impair the use of such rights of way or other Property for the purposes of which such rights of way and
other Property are held by any Obligor or any Subsidiary or materially impair the value of such Property subject thereto; (vi) deposits of cash or securities to secure the performance of bids, trade contracts, leases, statutory obligations and
other obligations of a like nature incurred in the ordinary course of business; and (vii) Liens permitted by the Security Instruments. 
 Federal Funds Rate shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight federal funds transactions with a member of the
Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such- day, provided that (i) if the date for which such rate is to be determined is
not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if such rate is not so published for any day, the
Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent on such day on such transactions as determined by the Administrative Agent. 
 Financial Statements shall mean the financial statement or statements of the Borrower and its Consolidated Subsidiaries described or referred to in Section 7.02. 
 Funded Debt shall mean, for any Person the sum of the following (without duplication): (i) all obligations of such Person for borrowed
money or evidenced by bonds, debentures, notes or other similar instruments (including principal, interest, fees and charges); (ii) all obligations of such Person (whether contingent or otherwise) in respect of bankers’ acceptances,
letters of credit, surety or other bonds and similar instruments; (iii) all obligations of such Person to pay the deferred purchase price of Property or services (other than for borrowed money); (iv) all obligations under leases which
shall have been, or should have been, in accordance with GAAP, recorded as capital leases in respect of which such Person is liable (whether contingent or otherwise); (v) obligations to pay for goods or services whether or not such goods or
services are actually received or utilized by such Person; (vi) any capital stock of such Person in which such Person has a mandatory obligation to redeem such stock; (vii) the undischarged balance of any production payment created by such
Person or for the creation of which such Person directly or indirectly received payment; and (viii) all obligations of such Person under Hedging Agreements. 
 GAAP shall mean generally accepted accounting principles in the United States of America in effect from time to time. 
 Governmental Authority shall include the country, the state, county, city and political subdivisions in which any Person or such Person’s Property is located or which exercises valid jurisdiction
over any such Person or such Person’s Property, and any court, agency, department, commission, board, bureau or instrumentality of any of them including monetary authorities which exercises valid jurisdiction over any such Person or such
Person’s Property. Unless otherwise specified, all references to Governmental Authority herein shall mean a Governmental Authority having jurisdiction over, where applicable, any Obligor, their Subsidiaries or any of their Property or the
Administrative Agent, any Lender or any Applicable Lending Office. 
  

 6 

 Governmental Requirement shall mean any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement (whether or not having the force of law), including, without limitation, Environmental Laws,
energy regulations and occupational, safety and health standards or controls, of any Governmental Authority. 
 Guarantor shall
mean each of the parties named as “Guarantors” in the opening paragraph of this Agreement and each of the parties that from time to time become a party to a Guaranty Agreement pursuant to the terms of this Agreement.

 Guaranty Agreement shall mean an agreement executed by a Guarantor in form and substance satisfactory to the Administrative
Agent guarantying, unconditionally, payment of the Indebtedness, as the same may be amended, modified or supplemented from time to time. 
 Hedging Agreements shall mean any commodity, interest rate or currency swap, cap, floor, collar, forward agreement or other exchange or protection agreements or any option with respect to any such transaction. 
 Highest Lawful Rate means, as of a particular date, the highest non-usurious rate of interest, if any, permitted from day to day by
applicable law. To the extent Texas law is applicable, the Lenders hereby notify and disclose to the Borrower that, for purposes of Texas Finance Code §303.001, as it may from time to time be amended, the “applicable ceiling”
shall be the “weekly ceiling” from time to time in effect as limited by Texas Finance Code §303.009; provided, however, that to the extent permitted by applicable law, the Administrative Agent reserve the right to
change the “applicable ceiling” from time to time by further notice and disclosure to the Borrower. 
 Hydrocarbon
Interests shall mean all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and
royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature. 
 Hydrocarbons shall mean oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom. 
 Indebtedness shall mean any and all amounts owing or to be owing by the Borrower or any Subsidiary to the Administrative Agent, the Issuing
Bank and/or the Lenders in connection with the Loan Documents, any Letter of Credit Agreements, any Hedging Agreements now or hereafter arising between the Borrower or any Subsidiary and any Lender or its Affiliate and permitted by the terms of this
Agreement, and all renewals, extensions and/or rearrangements of any of the foregoing. 
 Indemnified Parties shall have the
meaning assigned such term in Section 12.03(a)(ii). 
 Indemnity Matters shall mean any and all actions,
suits, proceedings (including any investigations, litigation or inquiries), claims, demands and causes of action made or threatened against a Person and, in connection therewith, all losses, liabilities, damages (including, without limitation,
consequential damages) or reasonable costs and expenses of any kind or nature whatsoever incurred by such Person whether caused by the sole or concurrent negligence of such Person seeking indemnification. 
 Initial Borrowing Base shall have the meaning assigned such term in Section 2.08(a). 
  

 7 

 Initial Funding shall mean the funding of the initial Loans or issuance of the initial
Letters of Credit upon satisfaction of the conditions set forth in Sections 6.01 and 6.02. 
 Initial
Reserve Report shall mean collectively the reports, copies of which have been delivered to the Administrative Agent, as described in Exhibit F. 
 Interest Coverage Ratio shall mean for the Obligors, on a consolidated basis, the ratio of (i) EBITDA for the fiscal quarter ending on such date to (ii) cash interest payments made for such
fiscal quarter. 
 Interest Period shall mean, with respect to any LIBOR Loan, the period commencing on the date such LIBOR
Loan is made and ending on the numerically corresponding day in the first, second, or third calendar month thereafter, as the Borrower may select as provided in Section 2.02, except that each Interest Period which commences on the
last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding
the foregoing: (i) no Interest Period may end after the Revolving Credit Termination Date; (ii) no Interest Period for any LIBOR Loan may end after the due date of any installment, if any, provided for in Section 3.01 to
the extent that such LIBOR Loan would need to be prepaid prior to the end of such Interest Period in order for such installment to be paid when due; (iii) each Interest Period which would otherwise end on a day which is not a Business Day shall
end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day); and (iv) no Interest Period shall have a duration of less than one month and, if
the Interest Period for any LIBOR Loans would otherwise be for a shorter period, such Loans shall not be available hereunder. 
 Issuing Bank shall have the meaning assigned to such term in the introductory paragraph to this Agreement, or any other Lender agreed to between the Borrower and the Administrative Agent to issue Letters of Credit. 

LC Commitment at any time shall mean $2,000,000. 
 LC Exposure at any time shall mean the difference between (i) the aggregate face amount of all undrawn and uncancelled Letters of Credit plus (ii) the aggregate of all amounts drawn
under all Letters of Credit and not yet reimbursed. 
 Lender Termination Date shall have the meaning assigned to such term in
Section 5.06(c). 
 Letter of Credit Agreements shall mean the written agreements with the Issuing Bank, as
issuing lender for any Letter of Credit, executed in connection with the issuance by the Issuing Bank of the Letters of Credit, such agreements to be on the Issuing Bank’s customary form for letters of credit of comparable amount and purpose as
from time to time in effect or as otherwise agreed to by the Borrower and the Issuing Bank. 
 Letters of Credit shall mean the
stand-by letters of credit issued pursuant to Section 2.01(b) and all reimbursement obligations pertaining to any such letters of credit, and “Letter of Credit” shall mean any one of the Letters of Credit
and the reimbursement obligations pertaining thereto. 
 LIBOR shall mean the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) of interest determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period commencing on the first day of such Interest Period appearing on Dow Jones Market Service Page 3750
as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of 

  

 8 

 
the applicable Interest Period. In the event that such rate does not appear on Dow Jones Market Service Page 3750, “LIBOR” shall be
determined by the Administrative Agent to be the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in Dollars are offered by leading reference banks in the London interbank market to the Administrative
Agent at approximately 11:00 a.m. (London time) two Business Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period and in an amount substantially equal to the amount of the applicable Loan.

 LIBOR Loans shall mean Loans the interest rates on which are determined on the basis of rates referred to in the definition
of “LIBOR Rate”. 
 LIBOR Rate shall mean, with respect to any LIBOR Loan, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the quotient of (i) LIBOR for such Loan for the Interest Period for such Loan divided by (ii) 1 minus the Reserve Requirement for such
Loan for such Interest Period. 
 Lien shall mean 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 (i) 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 (ii) production payments and the like payable out of Oil and Gas Properties. The
term “Lien” shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting Property. For the purposes of this
Agreement, each Obligor or any Subsidiary 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
shall mean this Agreement, the Notes, the Guarantees, all Letters of Credit, all Letter of Credit Agreements, and the Security Instruments. 
 Loans shall mean the loans as provided for by Section 2.01(a). 
 Majority Lenders
shall mean, at any time while no Loans are outstanding, Lenders having at least sixty-six and two-thirds percent (66-2/3%) of the Aggregate Revolving Credit Commitments and, at any time while Loans are outstanding, Lenders holding at least sixty-six
and two-thirds percent (66-2/3%) of the outstanding aggregate principal amount of the Loans (without regard to any sale by a Lender of a participation in any Loan under Section 12.06(c)). 
 Material Adverse Effect shall mean any material and adverse effect on (i) the assets, liabilities, financial condition, business,
operations or affairs of the Borrower and its Subsidiaries taken as a whole different from those reflected in the Financial Statements or from the facts represented or warranted in any Loan Document, or (ii) the ability of the Borrower and its
Subsidiaries taken as a whole to carry out their business as at the Closing Date or as proposed as of the Closing Date to be conducted or meet their obligations under the Loan Documents on a timely basis, or (iii) the Administrative
Agent’s and the Lenders’ interests in the collateral securing the Indebtedness, taken as a whole, or the Administrative Agents’ or the Lenders’ ability to enforce their rights and remedies under this Agreement or any other Loan
Document, at law or in equity. 
 Material Agreements shall have the meaning assigned to such term in
Section 7.22. 
  

 9 

 Maximum Revolving Credit Amount shall mean, as to each Lender, the amount set forth
opposite such Lender’s name on Annex I under the caption “Maximum Revolving Credit Amounts” (as the same may be reduced pursuant to Section 2.03(b) pro rata to each Lender based on its
Percentage Share), as modified from time to time to reflect any assignments permitted by Section 12.06(b). 
 Mortgaged Property shall mean the Property owned by the Obligors and which is subject to the Liens existing and to exist under the terms of the Security Instruments. 
 Multiemployer Plan shall mean a Plan defined as such in Section 3(37) or 4001(a)(3) of ERISA. 
 Non-Recourse Debt shall mean Debt of a non-Obligor Subsidiary which is not a liability, in whole or in part, of any Obligor and which is
not secured by any Lien upon any property or assets of any Obligor. 
 Notes shall mean the Notes provided for by
Section 2.06, together with any and all renewals, extensions for any period, increases, rearrangements, substitutions or modifications thereof. 
 Notice of Termination shall have the meaning assigned such term in Section 5.06(a). 
 Oil and Gas Properties shall mean Hydrocarbon Interests; the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all presently existing or future unitization, pooling agreements
and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; all
operating agreements, contracts and other 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; all Hydrocarbons in
and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests; and 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 or other personal property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells
or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters,
apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing. 
 Other Taxes shall have the meaning assigned such term in Section 4.06(b).

 PBGC shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions.

 Percentage Share shall mean the percentage of the Aggregate Revolving Credit Commitment to be provided by a Lender under
this Agreement as indicated on Annex I hereto, as modified from time to time to reflect any assignments permitted by Section 12.06(b). 
  

 10 

 Person shall mean any individual, corporation, company, voluntary association, partnership,
joint venture, trust, unincorporated organization or government or any agency, instrumentality or political subdivision thereof, or any other form of entity. 
 Plan shall mean any employee pension benefit plan, as defined in Section 3(2) of ERISA, which (i) is currently or hereafter sponsored, maintained or contributed to by the Borrower, any
Subsidiary or an ERISA Affiliate or (ii) was at any time during the preceding six calendar years sponsored, maintained or contributed to, by the Borrower, any Subsidiary or an ERISA Affiliate. 
 Post-Default Rate shall mean, in respect of any principal of any Loan or any other amount payable by the Borrower under this Agreement or
any other Loan Document, a rate per annum equal to 4% per annum above the Base Rate as in effect from time to time plus the Applicable Margin (if any), but in no event to exceed the Highest Lawful Rate; provided however, for a LIBOR Loan, the
“Post-Default Rate” for such principal shall be 4% per annum above the interest rate for such Loan prior to Recapitalization as provided in Section 3.02(a)(i) and following Recapitalization as provided
in Section 3.02(a)(ii)(B), but in no event to exceed the Highest Lawful Rate. 
 Prime Rate shall mean the
rate of interest from time to time announced publicly by the Administrative Agent at the Principal Office as its prime commercial lending rate. 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. 
 Principal Office shall mean the principal office of the Administrative Agent, presently located at 1001 Fannin, Suite 2255, Houston, Texas 77002-6709. 
 Property shall mean any interest in any kind of property or asset, whether real, personal or mixed, moveable or immoveable, tangible or
intangible. 
 Quarterly Dates shall mean the first day of each April, July, October, and January in each year, the first of
which shall be January 1, 2005; provided, however, that if any such day is not a Business Day, such Quarterly Date shall be the next succeeding Business Day. 
 Redetermination Date shall mean the date that the redetermined Borrowing Base becomes effective subject to the notice requirements
specified in Section 2.08(b) both for scheduled redeterminations and unscheduled redeterminations. 
 Regulation
D shall mean Regulation D of the Board of Governors of the Federal Reserve System (or any successor), as the same may be amended or supplemented from time to time. 
 Regulatory Change shall mean, with respect to any Lender, any change after the Closing Date in any Governmental Requirement (including
Regulation D) or the adoption or making after such date of any interpretations, directives or requests applying to a class of lenders (including such Lender or its Applicable Lending Office) of or under any Governmental Requirement (whether or not
having the force of law) by any Governmental Authority charged with the interpretation or administration thereof. 
 Replacement
Lender shall have the meaning assigned such term in Section 5.06(b). 
 Required Payment shall have
the meaning assigned such term in Section 4.04. 
  

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 Reserve Report shall mean a report, in form and substance satisfactory to the
Administrative Agent, setting forth, as of each May 1 (or such other date in the event of an unscheduled redetermination); (i) the oil and gas reserves attributable to all of the Borrower’s and Guarantor’s Oil and Gas Properties
together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based upon the pricing assumptions consistent with SEC reporting requirements at the
time and (ii) such other information as the Administrative Agent may reasonably request. The term “Reserve Report” shall also include the information to be provided by the Borrower setting forth the foregoing information
as of November 1 of each year pursuant to Section 8.07(a). 
 Reserve Requirement shall mean, for any
Interest Period for any LIBOR Loan, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion Dollars against “Eurocurrency liabilities” (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks by reason of any Regulatory Change against (i) any category of liabilities which includes deposits by reference to which LIBOR is to be determined as provided in
the definition of “LIBOR” or (ii) any category of extensions of credit or other assets which include a LIBOR Loan. 
 Responsible Officer shall mean, as to any Person, the Chief Executive Officer, the President or any Vice President of such Person and, with respect to financial matters, the term “Responsible Officer”
shall include the Chief Financial Officer of such Person or to the extent such Person is a limited partnership, the Responsible Officer of such limited partnership’s general partner. Unless otherwise specified, all references to a Responsible
Officer herein shall mean a Responsible Officer of SB Energy, in its capacity as general partner of the Borrower. 
 Revolving Credit
Commitment shall mean, for any Lender, its obligation to make Loans and participate in the issuance of Letters of Credit as provided in Section 2.01(b) up to the lesser of (i) such Lender’s Maximum Revolving
Credit Amount and (ii) such Lender’s Percentage Share of the then effective Borrowing Base. 
 Revolving Credit Termination
Date shall mean the earlier to occur of (i) the third anniversary date of the Closing Date, (ii) the date that the Commitments are terminated pursuant to Section 10.02, and (iii) the date that the
Commitments are fully terminated pursuant to Section 2.03(b). 
 Scheduled Redetermination Date shall have
the meaning assigned such term in Section 2.08(b). 
 SEC shall mean the Securities and Exchange Commission
or any successor Governmental Authority. 
 Security Instruments shall mean the agreements or instruments described or referred
to in Exhibit D, and any and all other agreements or instruments now or hereafter executed and delivered by the Obligors 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 Notes, the Guarantees, this Agreement, or reimbursement obligations under the Letters of Credit, as such
agreements may be amended, supplemented or restated from time to time. 
 Special Entity shall mean any joint venture, limited
liability company or partnership, general or limited partnership or any other type of partnership or company other than a corporation in which the 

  

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Borrower or one or more of its other Subsidiaries is a member, owner, partner or joint venturer and owns, directly or indirectly, at least a majority of the
equity of such entity or controls such entity, but excluding any tax partnerships that are not classified as partnerships under state law. For purposes of this definition, any Person which owns directly or indirectly an equity investment in another
Person which allows the first Person to manage or elect managers who manage the normal activities of such second Person will be deemed to “control” such second Person (e.g. a sole general partner controls a limited
partnership). 
 Subsidiary shall mean (i) any entity of which at least a majority of the outstanding ownership having by
the terms thereof ordinary voting power to elect a majority of the board of directors, managers or general partner of such entity (irrespective of whether or not at the time equity ownership interest of any other class or classes of such corporation
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 (ii) any Special Entity. Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower. 
 Taxes shall have the meaning assigned such term in Section 4.06(a). 
 Terminated Lender shall have the meaning assigned such term in Section 5.06(a). 
 Transfer shall mean any sale, assignment, farm-out, conveyance or other transfer of any Oil and Gas Property, or any interest in any Oil
and Gas Property (including, without limitation, any working interest, overriding royalty interest, production payments, net profits interest, royalty interest, or mineral fee interest) of any Obligor, except for (i) the sale of Hydrocarbons in
the ordinary course of business, (ii) the sale or transfer of equipment in the ordinary course of business that is no longer necessary for the business of any Obligor or is contemporaneously replaced by equipment of at least comparable value
and use, and (iii) the sale of Oil and Gas Properties in one or more transactions of the Obligors for which value was given in the most recent Borrowing Base redetermination which in the aggregate have a fair market value of $500,000 or less.

 Type shall mean, with respect to any Loan, a Base Rate Loan or a LIBOR Loan. 
 Section 1.03 Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Administrative Agent or the Lenders
hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with the audited financial statements of the Borrower referred to in Section 7.02 (except for changes concurred with by the Borrower’s
independent public accountants). Financial matters for the Borrower’s first four quarters following the Closing Date shall be computed on an annualized proforma basis after giving effect to the Borrower’s acquisition of any material
Subsidiaries and Oil and Gas Properties. 
 ARTICLE II 
 Commitments 
 Section 2.01 Loans and Letters of Credit. (a) Loans.
Each Lender severally agrees, on the terms and conditions of this Agreement, to make Loans to the Borrower during the period from and including (i) the Closing Date or (ii) such later date that such Lender becomes a party to this Agreement
as provided in Section 12.06(b), to and up to, but excluding, the Revolving Credit Termination Date in an aggregate principal amount at any one time outstanding up to, but not 
  

 13 

 
exceeding, the amount of such Lender’s Revolving Credit Commitment as then in effect; provided, however, that the aggregate principal
amount of all such Loans by all Lenders hereunder at any one time outstanding together with the LC Exposure shall not exceed the greater of (i) the Borrowing Base and (ii) the Aggregate Revolving Credit Commitments. Subject to the terms of
this Agreement, during the period from the Closing Date to and up to, but excluding, the Revolving Credit Termination Date, the Borrower may borrow, repay and reborrow the amount described in this Section 2.01(a). 
 (b) Letters of Credit. During the period from and including the Closing Date to, but excluding, the Revolving Credit
Termination Date, the Issuing Bank, as issuing bank for the Lenders, agrees to extend credit for the account of the Borrower or any Guarantor at any time and from time to time by issuing, renewing, extending or reissuing Letters of Credit;
provided however, the LC Exposure at any one time outstanding shall not exceed the lesser of (i) the LC Commitment or (ii) the Aggregate Revolving Credit Commitments, as then in effect, minus the aggregate principal amount of all
Loans then outstanding. The Lenders shall participate in such Letters of Credit according to their respective Percentage Shares. Each of the Letters of Credit shall (i) be issued by the Issuing Bank, (ii) contain such terms and provisions
as are reasonably required by the Issuing Bank, (iii) be for the account of the Borrower or a Guarantor and (iv) expire not later than the earlier of (A) twelve months from the date of issuance of such Letter of Credit and
(B) thirty (30) days before the Revolving Credit Termination Date. 
 (c) Limitation on Types of
Loans. Subject to the other terms and provisions of this Agreement, at the option of the Borrower, the Loans may be Base Rate Loans or LIBOR Loans; provided that, without the prior written consent of the Majority Lenders, no more than
five LIBOR Loans may be outstanding at any time. 
 Section 2.02 Borrowings, Continuations and Conversions, Letters of
Credit. 
 (a) Borrowings. The Borrower shall give the Administrative Agent (which shall promptly notify
the Lenders) advance notice as hereinafter provided of each borrowing hereunder, which shall specify (i) the aggregate amount of such borrowing, (ii) the Type and (iii) the date (which shall be a Business Day) of the Loans to be
borrowed, and (iv) (in the case of LIBOR Loans) the duration of the Interest Period therefor. 
 (b) Minimum
Amounts. If the initial borrowing consists in whole or in part of LIBOR Loans, such LIBOR Loans shall be in amounts of at least $500,000 or any whole multiple of $100,000 in excess thereof. 
 (c) Notices. All borrowings, continuations and conversions shall require advance written notice to the Administrative Agent
(which shall promptly notify the Lenders) in the form of Exhibit B (or telephonic notice promptly confirmed by such a written notice), which in each case shall be irrevocable, from the Borrower to be received by the Administrative
Agent not later than 11:00 a.m. Houston, Texas time at least one Business Day prior to the date of each Base Rate Loan borrowing and three Business Days prior to the date of each LIBOR Loan borrowing, continuation or conversion. Without in any way
limiting the Borrower’s obligation to confirm in writing any telephonic notice, the Administrative Agent may act without liability upon the basis of telephonic notice believed by the Administrative Agent in good faith to be from the Borrower
prior to receipt of written confirmation. In each such case, the Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of such telephonic notice except in the case of gross negligence or willful misconduct
by the Administrative Agent. 
  

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 (d) Continuation Options. Subject to the provisions made in this
Section 2.02(d), the Borrower may elect to continue all or any part of any LIBOR Loan beyond the expiration of the then current Interest Period relating thereto by giving advance notice as provided in
Section 2.02(c) to the Administrative Agent (which shall promptly notify the Lenders) of such election, specifying the amount of such Loan to be continued and the Interest Period therefor. In the absence of such a timely and
proper election, the Borrower shall be deemed to have elected to convert such LIBOR Loan to a Base Rate Loan pursuant to Section 2.02(e). All or any part of any LIBOR Loan may be continued as provided herein, provided that
(i) any continuation of any such Loan shall be (as to each Loan as continued for an applicable Interest Period) in amounts of at least $500,000 or any whole multiple of $100,000 in excess thereof and (ii) no Default shall have occurred and
be continuing. If a Default shall have occurred and be continuing, each LIBOR Loan shall be converted to a Base Rate Loan on the last day of the Interest Period applicable thereto. 
 (e) Conversion Options. The Borrower may elect to convert all or any part of any LIBOR Loan on the last day of the then
current Interest Period relating thereto to a Base Rate Loan by giving advance notice to the Administrative Agent (which shall promptly notify the Lenders) of such election. Subject to the provisions made in this Section 2.02(e),
the Borrower may elect to convert all or any part of any Base Rate Loan at any time and from time to time to a LIBOR Loan by giving advance notice as provided in Section 2.02(c) to the Administrative Agent (which shall promptly
notify the Lenders) of such election. All or any part of any outstanding Loan may be converted as provided herein, provided that (i) any conversion of any Base Rate Loan into a LIBOR Loan shall be (as to each such Loan into which there is a
conversion for an applicable Interest Period) in amounts of at least $500,000 or any whole multiple of $100,000 in excess thereof and (ii) no Default shall have occurred and be continuing. If a Default shall have occurred and be continuing, no
Base Rate Loan may be converted into a LIBOR Loan. 
 (f) Advances. Not later than 11:00 a.m. Houston, Texas
time on the date specified for each Loan hereunder, each Lender shall make available the amount of the Loan to be made by it on such date to the Administrative Agent, to an account which the Administrative Agent shall specify, in immediately
available funds, for the account of the Borrower. The amounts so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to the Borrower by depositing the same, in immediately available
funds, in an account of the Borrower, designated by the Borrower and maintained at the Principal Office. 
 (g) Letters
of Credit. The Borrower shall give the Issuing Bank (which shall promptly notify the Lenders of such request and their Percentage Share of such Letter of Credit) advance notice to be received by the Issuing Bank not later than 11:00 a.m.
Houston, Texas time not less than three Business Days prior thereto of each request for the issuance, and at least ten Business Days prior to the date of the renewal or extension, of a Letter of Credit hereunder which request shall specify
(i) the amount of such Letter of Credit, (ii) the date (which shall be a Business Day) such Letter of Credit is to be issued, renewed or extended, (iii) the duration thereof, (iv) the name and address of the beneficiary thereof,
and (v) such other information as the Issuing Bank may reasonably request, all of which shall be reasonably satisfactory to the Issuing Bank. Subject to the terms and conditions of this Agreement, on the date specified for the issuance, renewal
or extension of a Letter of Credit, the Administrative Agent shall issue, renew or extend such Letter of Credit to the beneficiary thereof. 
  

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 In conjunction with the issuance of each Letter of Credit, the Borrower shall execute a Letter of Credit
Agreement. In the event of any conflict between any provision of a Letter of Credit Agreement and this Agreement, the Borrower, the Issuing Bank, the Administrative Agent and the Lenders hereby agree that the provisions of this Agreement shall
govern. 
 The Issuing Bank will send to the Borrower and each Lender, immediately upon issuance of any Letter of Credit, or an amendment
thereto, a true and complete copy of such Letter of Credit, or such amendment thereto. 
 Section 2.03 Changes of
Commitments. 
 (a) The Aggregate Revolving Credit Commitments shall at all times be equal to the lesser of
(i) the Aggregate Maximum Revolving Credit Amounts after adjustments resulting from reductions pursuant to Section 2.03(b) or (ii) the then effective Borrowing Base as determined from time to time. 
 (b) The Borrower shall have the right to terminate or to reduce the amount of the Aggregate Maximum Revolving Credit Amounts at any time,
or from time to time, upon not less than five (5) Business Days’ prior notice to the Administrative Agent (which shall promptly notify the Lenders) of each such termination or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction (which shall not be less than $1,000,000 or any whole multiple of $1,000,000 in excess thereof) and shall be irrevocable and effective only upon receipt by the Administrative Agent. 
 (c) The Aggregate Maximum Revolving Credit Amounts once terminated or reduced may not be reinstated. 
 Section 2.04 Fees. 
 (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender a commitment fee on the daily average unused amount of the Borrowing Base for each Borrowing Base
Period up to, but excluding, the earlier of the date the Aggregate Revolving Credit Commitments are terminated or the Revolving Credit Termination Date at a rate per annum equal to one-half of one percent (1/2 of 1%). Accrued commitment fees shall
be payable quarterly in arrears on each Quarterly Date and on the earlier of the date the Aggregate Revolving Credit Commitments are terminated or the Revolving Credit Termination Date. 
 (b) Increase in Borrowing Base. The Borrower shall pay to the Administrative Agent, as a fee for the ratable account of the
Lenders (i) a fee equal to three-quarters of one percent (0.75%) of the Initial Borrowing Base and (ii) a fee equal to three-quarters of one percent (0.75%) of each marginal increase in the then current Borrowing Base. Any fee arising
under this Section 2.04(b) is to be paid upon the Closing Date in the case of clause (i) and upon the effective date of the related Borrowing Base increase in the case of clause (ii). 
 (c) Letter of Credit Fees. 
 (i) The Borrower agrees to pay the Administrative Agent, for the account of each Lender, commissions for issuing the Letters of Credit on the daily average outstanding of the maximum liability of the Issuing Bank
existing from time to time under such Letter of Credit (calculated separately for each Letter of Credit) at the rate per annum equal to the Applicable Margin in effect from time to time for LIBOR Loans, 

  

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provided that each Letter of Credit shall bear a minimum commission of $500. Each Letter of Credit shall be deemed to be outstanding up to the full face
amount of the Letter of Credit until the Issuing Bank has received the canceled Letter of Credit or a written cancellation of the Letter of Credit from the beneficiary of such Letter of Credit in form and substance acceptable to the Issuing Bank, or
for any reductions in the amount of the Letter of Credit (other than from a drawing), written notification from the beneficiary of such Letter of Credit. Such commissions are payable in advance at issuance of the Letter of Credit for the first year
thereof and thereafter, quarterly in arrears on each Quarterly Date and upon cancellation or expiration of each such Letter of Credit. 
 (ii) The Borrower agrees to pay the Administrative Agent, for the account of the Issuing Bank, commissions for issuing the Letters of Credit (calculated separately for each Letter of Credit) equal to 0.25% of the face
amount of each Letter of Credit, payable upon issuance of such Letter of Credit. 
 (d) Engineering Fee. The
Borrower shall pay to Administrative Agent for its account an engineering fee on the commencement of each Borrowing Base Period in the amount of $15,000.00 in connection with each Scheduled Borrowing Base review commencing May 1, 2005, and in
connection with each Special Borrowing Base Determination requested by the Borrower, which shall be due on the date of the Borrower’s request for the Special Borrowing Base Determination. 
 Section 2.05 Several Obligations. The failure of any Lender to make any Loan to be made by it or to provide funds for disbursements or
reimbursements under Letters of Credit on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan or provide funds on such date, but no Lender shall be responsible for the failure of any other Lender to make
a Loan to be made by such other Lender or to provide funds to be provided by such other Lender. 
 Section 2.06 Notes. The
Loans made by each Lender shall be evidenced by a single promissory note of the Borrower in substantially the form of Exhibit A dated (i) the Closing Date or (ii) the effective date of an Assignment pursuant to
Section 12.06(b), payable to the order of such Lender in a principal amount equal to its Maximum Revolving Credit Amount as originally in effect and otherwise duly completed and such substitute Notes as required by
Section 12.06(b). The date, amount, Type, interest rate and Interest Period of each Loan made by each Lender, and all payments made on account of the principal thereof, shall be recorded by such Lender on its books for its Note,
and, prior to any transfer may be endorsed by such Lender on the schedule attached to such Note or any continuation thereof or on any separate record maintained by such Lender. Failure to make any such notation or to attach a schedule shall not
affect any Lender’s or the Borrower’s rights or obligations in respect of such Loans or affect the validity of such transfer by any Lender of its Note. 
 Section 2.07 Prepayments. 
 (a) Voluntary Prepayments. The Borrower
may prepay the Base Rate Loans upon not less than one (1) Business Day’s prior notice to the Administrative Agent (which shall promptly notify the Lenders), which notice shall specify the prepayment date (which shall be a Business Day) and
the amount of the prepayment (which shall be at least $100,000 or the remaining aggregate principal balance outstanding on the Notes) and shall be irrevocable and effective only upon receipt by the Administrative Agent, provided that interest on the
principal prepaid, accrued to the prepayment date, shall be paid on the prepayment date. The Borrower may prepay LIBOR Loans on the same conditions as for Base Rate Loans (except that prior notice to the Administrative Agent shall be not less than
three (3) Business Days for LIBOR 

  

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Loans) and in addition such prepayments of LIBOR Loans shall be subject to the terms of Section 5.05 and shall be in an amount equal to
all of the LIBOR Loans for the Interest Period prepaid. In the event of a voluntary prepayment pursuant to this Section 2.07(a), Borrower shall be entitled to reborrow such amounts pursuant to Section 2.01.

 (b) Mandatory Prepayments. 
 (i) Borrowing Base. If a Borrowing Base Deficiency results from the redetermination of the Borrowing Base or a reduction in
the Borrowing Base pursuant to Section 2.08(b), then the Borrower shall, within thirty (30) days, (i) prepay the Loans in an aggregate principal amount sufficient to eliminate such Borrowing Base Deficiency, together
with interest on the principal amount paid accrued to the date of each such prepayment, (ii) pledge, or cause any Subsidiary to pledge, additional unencumbered collateral of sufficient value and character (as determined by the Administrative
Agent and the Lenders in their sole discretion) that when added to the existing collateral shall cause the Borrowing Base to equal or exceed the aggregate outstanding Loans plus the LC Exposure, or (iii) any combination of (i) and
(ii) satisfactory to the Administrative Agent and the Lenders. If, because of LC Exposure, a Borrowing Base Deficiency remains after prepaying all of the Loans, the Borrower shall pay to the Administrative Agent on behalf of the Lenders an
amount equal to such remaining Borrowing Base Deficiency to be held as cash collateral as provided in Section 2.10(b). 
 (ii) Upon Procurement of Capital. If, at any time after the Closing Date, the Borrower obtains funds by the sale of capital stock or any other equity offering or by the issuance of subordinated unsecured
Debt to the extent permitted by the terms of this Agreement, and if at such time there exists a Borrowing Base Deficiency, the proceeds obtained by such capital stock or other equity offering or issuance of such Debt shall first be used to pay such
Borrowing Base Deficiency. 
 (c) Generally. Prepayments permitted or required under this
Section 2.07 shall be without premium or penalty, except as required under Section 5.05 for prepayment of LIBOR Loans. Any prepayments on the Loans may be reborrowed subject to the then effective Aggregate
Revolving Credit Commitments. 
 Section 2.08 Borrowing Base. 
 (a) The Borrowing Base shall be determined in accordance with Section 2.08(b) by the Administrative Agent with the
concurrence of the Lenders and is subject to redetermination in accordance with Section 2.08(d). Upon any redetermination of the Borrowing Base, such redetermination shall remain in effect until the next successive Redetermination
Date. So long as any of the Commitments are in effect or any LC Exposure or Loans are outstanding hereunder, this facility shall be governed by the then effective Borrowing Base. During the period from and after the Closing Date until the first
redetermination pursuant to Section 2.08 or adjusted pursuant to Section 8.07(b), the amount of the Borrowing Base shall be $5,000,000 (the “Initial Borrowing Base”). 
 (b) Upon receipt of the reports required by Section 8.07 and such other reports, data and supplemental information as
may from time to time be reasonably requested by the Administrative Agent (the “Engineering Reports”), the Borrowing Base shall be redetermined for each Borrowing Base Period and each such redetermination shall be effective
as of the date set forth in such notice of redetermination (the “Scheduled Redetermination Date”). The 

  

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Borrowing Base shall be determined based upon the loan collateral value assigned to the Mortgaged Properties and such other credit factors (including without
limitation the assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Borrower) which the Lenders deem significant. The Lenders’ determination of the Borrowing Base shall be in their sole discretion and
shall not be subject to review or challenge. Upon each redetermination of the Borrowing Base, the Administrative Agent shall recommend to the Lenders a new Borrowing Base and the Lenders in accordance with their customary policies and procedures for
extending credit to oil and gas reserve-based customers shall (by unanimous agreement) establish the redetermined Borrowing Base. If the Borrower does not furnish the Engineering Reports by the date required, the Lenders may nonetheless determine a
new Borrowing Base. It is expressly understood that the Lenders shall have no obligation to determine the Borrowing Base at any particular amount, either in relation to the Maximum Revolving Credit Amount or otherwise. 
 (c) In addition to “Scheduled Borrowing Base Determinations” pursuant to Section 2.08(b), the
Borrower and the Lenders may each request one (1) additional redetermination of the Borrowing Base during each Borrowing Base Period. In the event the Borrower requests a “Special Borrowing Base Determination” pursuant
to this Section 2.08(d), the Borrower shall deliver written notice of such request to the Administrative Agent which shall include: (i) Engineering Report(s) prepared as of a date not more than thirty (30) calendar days
prior to the date of such request, and (ii) such other information as Administrative Agent and the Lenders shall request prepared as of a date not more than thirty (30) calendar days prior to the date of such request. Likewise, in the
event the Lenders exercise their option for a Special Borrowing Base Determination, the Administrative Agent shall give the Borrower notice of the redetermined Borrowing Base. 
 Section 2.09 Assumption of Risks. The Borrower assumes all risks of the acts or omissions of any beneficiary of any Letter of Credit
or any transferee thereof with respect to its use of such Letter of Credit. Neither the Issuing Bank (except in the case of gross negligence or willful misconduct on the part of the Issuing Bank or any of its employees), its correspondents nor any
Lender shall be responsible for the validity, sufficiency or genuineness of certificates or other documents or any endorsements thereon, even if such certificates or other documents should in fact prove to be invalid, insufficient, fraudulent or
forged; for errors, omissions, interruptions or delays in transmissions or delivery of any messages by mail, telex, or otherwise, whether or not they be in code; for errors in translation or for errors in interpretation of technical terms; the
validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason; the failure of any beneficiary or any transferee of any Letter of Credit to comply fully with conditions required in order to draw upon any Letter of Credit; or for any other consequences arising from causes beyond the Issuing
Bank’s control or the control of the Issuing Bank’s correspondents. In addition, neither the Issuing Bank, the Administrative Agent nor any Lender shall be responsible for any error, neglect, or default of any of the Issuing Bank’s
correspondents; and none of the above shall affect, impair or prevent the vesting of any of the Issuing Bank’s, the Administrative Agent’s or any Lender’s rights or powers hereunder or under the Letter of Credit Agreements, all of
which rights shall be cumulative. The Issuing Bank and its correspondents may accept certificates or other documents that appear on their face to be in order, without responsibility for further investigation of any matter contained therein
regardless of any notice or information to the contrary. In furtherance and not in limitation of the foregoing provisions, the Borrower agrees that any action, inaction or omission taken or not taken by the Issuing Bank or by any correspondent for
the Issuing Bank in good faith in connection with any Letter of Credit, or any related drafts, certificates, documents or instruments, shall be binding on the Borrower and shall not put the Issuing Bank or its correspondents under any resulting
liability to the Borrower. 
  

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 Section 2.10 Obligation to Reimburse and to Prepay. 
 (a) If a disbursement by the Issuing Bank is made under any Letter of Credit, the Borrower shall pay to the Administrative Agent within
two (2) Business Days after notice of any such disbursement is received by the Borrower, the amount of each such disbursement made by the Issuing Bank under the Letter of Credit (if such payment is not sooner effected as may be required under
this Section 2.10 or under other provisions of the Letter of Credit), together with interest on the amount disbursed from and including the date of disbursement until payment in full of such disbursed amount at a varying rate per
annum equal to (i) the then applicable interest rate for Base Rate Loans through the second Business Day after notice of such disbursement is received by the Borrower and (ii) thereafter, the Post-Default Rate for Base Rate Loans (but in
no event to exceed the Highest Lawful Rate) for the period from and including the third Business Day following the date of such disbursement to and including the date of repayment in full of such disbursed amount. The obligations of the Borrower
under this Agreement with respect to each Letter of Credit shall be absolute, unconditional and irrevocable and shall be paid or performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including, without
limitation, but only to the fullest extent permitted by applicable law, the following circumstances: (i) any lack of validity or enforceability of this Agreement, any Letter of Credit or any of the Security Instruments; (ii) any amendment
or waiver of (including any default), or any consent to departure from this Agreement (except to the extent permitted by any amendment or waiver), any Letter of Credit or any of the Security Instruments; (iii) the existence of any claim,
set-off, defense or other rights which the Borrower may have at any time against the beneficiary of any Letter of Credit or any transferee of any Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting),
the Issuing Bank, the Administrative Agent, any Lender or any other Person, whether in connection with this Agreement, any Letter of Credit, the Security Instruments, the transactions contemplated hereby or any unrelated transaction; (iv) any
statement, certificate, draft, notice or any other document presented under any Letter of Credit proves to have been forged, fraudulent, insufficient or invalid in any respect or any statement therein proves to have been untrue or inaccurate in any
respect whatsoever; (v) payment by the Issuing Bank under any Letter of Credit against presentation of a draft certificate which appears on its face to comply, but does not comply, with the terms of such Letter of Credit; and (vi) any
other circumstance or happening whatsoever, whether or not similar to any of the foregoing. 
 Notwithstanding anything in this Agreement to
the contrary, the Borrower will not be liable for payment or performance that results from the gross negligence or willful misconduct of the Issuing Bank, except (i) where the Borrower or any Subsidiary actually recovers the proceeds for itself
or the Issuing Bank of any payment made by the Issuing Bank in connection with such gross negligence or willful misconduct or (ii) in cases where the Administrative Agent makes payment to the named beneficiary of a Letter of Credit. 

(b) In the event of the occurrence of any Event of Default, a payment or prepayment pursuant to Section 2.07(b) or
the maturity of the Notes, whether by acceleration or otherwise, an amount equal to the LC Exposure (or the excess in the case of Section 2.07(b)) shall be deemed to be forthwith due and owing by the Borrower to the Issuing Bank,
the Administrative Agent and the Lenders as of the date of any such occurrence; and the Borrower’s obligation to pay such amount shall be absolute and unconditional, without regard to whether any beneficiary of any such Letter of Credit has
attempted to draw down all or a portion of such amount under the terms of a Letter of Credit, and, to the fullest extent permitted by applicable law, shall not be subject to any defense or be affected by a right of set-off, counterclaim or
recoupment which the Borrower may now or hereafter have against any such beneficiary, the Issuing Bank, the Administrative 

  

 20 

 
Agent, the Lenders or any other Person for any reason whatsoever. Such payments shall be held by the Issuing Bank on behalf of the Lenders as cash collateral
securing the LC Exposure in an account or accounts at the Principal Office; and the Borrower hereby grants to and by its deposit with the Administrative Agent grants to the Administrative Agent a security interest in such cash collateral. In the
event of any such payment by the Borrower of amounts contingently owing under outstanding Letters of Credit and in the event that thereafter drafts or other demands for payment complying with the terms of such Letters of Credit are not made prior to
the respective expiration dates thereof, the Administrative Agent agrees, if no Event of Default has occurred and is continuing or if no other amounts are outstanding under this Agreement, the Notes or the Security Instruments, to remit to the
Borrower amounts for which the contingent obligations evidenced by the Letters of Credit have ceased. 
 (c) Each Lender
severally and unconditionally agrees that it shall promptly reimburse the Issuing Bank an amount equal to such Lender’s Percentage Share of any disbursement made by the Issuing Bank under any Letter of Credit that is not reimbursed according to
this Section 2.10. 
 (d) Notwithstanding anything to the contrary contained herein, if no Default exists
and subject to availability under the Aggregate Revolving Credit Commitments (after reduction for LC Exposure), to the extent the Borrower has not reimbursed the Issuing Bank for any drawn upon Letter of Credit within one (1) Business Days
after notice of such disbursement has been received by the Borrower, the amount of such Letter of Credit reimbursement obligation shall automatically be funded by the Lenders as a Loan hereunder and used by the Lenders to pay such Letter of Credit
reimbursement obligation. If an Event of Default has occurred and is continuing, or if the funding of such Letter of Credit reimbursement obligation as a Loan would cause the aggregate amount of all Loans outstanding to exceed the Aggregate
Revolving Credit Commitments (after reduction for LC Exposure), such Letter of Credit reimbursement obligation shall not be funded as a Loan, but instead shall accrue interest as provided in Section 2.10(a). 
 Section 2.11 Lending Offices. The Loans of each Type made by each Lender shall be made and maintained at such Lender’s Applicable
Lending Office for Loans of such Type. 
 ARTICLE III 
 Payments of Principal and Interest 
 Section 3.01 Repayment of Loans. 

(a) Loans. On the Revolving Credit Termination Date the Borrower shall repay the outstanding aggregate principal of the
Notes. 
 (b) Generally. The Borrower will pay to the Administrative Agent, for the account of each Lender, the
principal payments required by this Section 3.01. 
 Section 3.02 Interest. 
 (a) Interest Rates. The Borrower will pay to the Administrative Agent, for the account of each Lender, interest on the
unpaid principal amount of each Loan made by such Lender for the period commencing on the date such Loan is made to, but excluding, the date such Loan shall be paid in full, at the following rates per annum: 
  

 21 

 (A) if such a Loan is a Base Rate Loan, the Base Rate (as in effect from time to time)
plus the Applicable Margin, but in no event to exceed the Highest Lawful Rate; and 
 (B) if such a Loan is a LIBOR Loan, for
each Interest Period relating thereto, the LIBOR Rate for such Loan plus the Applicable Margin (as in effect from time to time), but in no event to exceed the Highest Lawful Rate. 
 (b) Post-Default Rate. Notwithstanding the foregoing, the Borrower will pay to the Administrative Agent, for the account of
each Lender interest at the applicable Post-Default Rate on any of any Loan made by such Lender, and (to the fullest extent permitted by law) on any other amount payable by the Borrower hereunder, under any Loan Document or under any Note held by
such Lender to or for account of such Lender, for the period commencing on the date of an Event of Default until the same is paid in full or all Events of Default are cured or waived. 
 (c) Due Dates. Accrued interest on Base Rate Loans shall be payable on each Quarterly Date commencing on December 31,
2004, and accrued interest on each LIBOR Loan shall be payable on the last day of the Interest Period therefor and, if such Interest Period is longer than three months at three-month intervals following the first day of such Interest Period, except
that interest payable at the Post-Default Rate shall be payable from time to time on demand and interest on any LIBOR Loan that is converted into a Base Rate Loan (pursuant to Section 5.04) shall be payable on the date of
conversion (but only to the extent so converted). Any accrued and unpaid interest on the Loans on the Revolving Credit Termination Date shall be paid on such date. 
 (d) Determination of Rates. Promptly after the determination of any interest rate provided for herein or any change therein,
the Administrative Agent shall notify the Lenders to which such interest is payable and the Borrower thereof. Each determination by the Administrative Agent of an interest rate or fee hereunder shall, except in cases of manifest error, be final,
conclusive and binding on the parties. 
 ARTICLE IV 
 Payments; Pro Rata Treatment; Computations; Etc. 
 Section 4.01 Payments. Except
to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by the Borrower under this Agreement, the Notes, Letters of Credit, and the Letter of Credit Agreements shall be made in Dollars, in
immediately available funds, to the Administrative Agent at such account as the Administrative Agent shall specify by notice to the Borrower from time to time, not later than 11:00 a.m. Houston, Texas time on the date on which such payments shall
become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). Such payments shall be made without (to the fullest extent permitted by applicable law) defense, set-off or
counterclaim. Each payment received by the Administrative Agent under this Agreement or any Note for account of a Lender shall be paid promptly to such Lender in immediately available funds. Except as otherwise provided in the definition of
“Interest Period”, if the due date of any payment under this Agreement or any Note would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall
be payable for any principal so extended for the period of such extension. At the time of each payment to the Administrative Agent of any principal of or interest on any borrowing, the Borrower shall notify the Administrative Agent of the Loans to
which such payment shall apply. In the absence of such notice the Administrative Agent may specify the Loans to which such payment shall apply, but to the extent possible such payment or prepayment will be applied first to the Loans comprised of
Base Rate Loans. 
  

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 Section 4.02 Pro Rata Treatment. Except to the extent otherwise provided herein each
Lender agrees that: (i) each borrowing from the Lenders under Section 2.01 and each continuation and conversion under Section 2.02 shall be made from the Lenders pro rata in accordance with their Percentage
Share, each payment of fees under Sections 2.04(a), 2.04(b), and 2.04(c)(i) shall be made for account of the Lenders pro rata in accordance with their Percentage Share, and each termination or reduction of the amount of
the Aggregate Maximum Revolving Credit Amounts under Section 2.03(b) shall be applied to the Commitment of each Lender, pro rata according to the amounts of its respective Commitment; (ii) each payment of principal of Loans
by the Borrower shall be made for account of the Lenders pro rata in accordance with the respective unpaid principal amount of the Loans held by the Lenders; and (iii) each payment of interest on Loans by the Borrower shall be made for account
of the Lenders pro rata in accordance with the amounts of interest due and payable to the respective Lenders; and (iv) each reimbursement by the Borrower of disbursements under Letters of Credit shall be made for account of the Issuing Bank or,
if funded by the Lenders, pro rata for the account of the Lenders, in accordance with the amounts of reimbursement obligations due and payable to each respective Lender. 
 Section 4.03 Computations. Interest on LIBOR Loans and fees shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day)
occurring in the period for which such interest is payable, unless such calculation would exceed the Highest Lawful Rate, in which case interest shall be calculated on the per annum basis of a year of 365 or 366 days, as the case may be. Interest on
Base Rate Loans shall be computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. 
 Section 4.04 Non-receipt of Funds by the Administrative Agent. Unless the Administrative Agent shall have been notified by a Lender or
the Borrower prior to the date on which such notifying party is scheduled to make payment to the Administrative Agent (in the case of a Lender) of the proceeds of a Loan or a payment under a Letter of Credit to be made by it hereunder or (in the
case of the Borrower) a payment to the Administrative Agent for account of one or more of the Lenders hereunder (such payment being herein called the “Required Payment”), which notice shall be effective upon receipt, that it
does not intend to make the Required Payment to the Administrative Agent, the Administrative Agent may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not be required to), make the amount thereof
available to the intended recipient(s) on such date and, if such Lender or the Borrower (as the case may be) has not in fact made the Required Payment to the Administrative Agent, the recipient(s) of such payment shall, on demand, repay to the
Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Administrative Agent until, but excluding, the date the
Administrative Agent recovers such amount at a rate per annum which, for any Lender as recipient, will be equal to the Federal Funds Rate, and for the Borrower as recipient, will be equal to the Base Rate plus the Applicable Margin. 
 Section 4.05 Set-off, Sharing of Payments, Etc. 
 (a) The Borrower agrees that, in addition to (and without limitation of) any right of set-off, bankers’ lien or counterclaim a Lender
may otherwise have, each Lender shall have the right and be entitled (after consultation with the Administrative Agent), at its option, to offset balances held by it or by any of its Affiliates for account of the Borrower or any Subsidiary at any of
its offices, in Dollars or in any other currency, against any principal of or interest on any of such Lender’s Loans, or any other amount payable to such Lender hereunder, which is not paid 

  

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when due (regardless of whether such balances are then due to the Borrower), in which case it shall promptly notify the Borrower and the Administrative Agent
thereof, provided that such Lender’s failure to give such notice shall not affect the validity thereof. 
 (b) If any
Lender shall obtain payment of any principal of or interest on any Loan made by it to the Borrower under this Agreement (or reimbursement as to any Letter of Credit) through the exercise of any right of set-off, banker’s lien or counterclaim or
similar right or otherwise, and, as a result of such payment, such Lender shall have received a greater percentage of the principal or interest (or reimbursement) then due hereunder by the Borrower to such Lender than the percentage received by any
other Lenders, it shall promptly (i) notify the Administrative Agent and each other Lender thereof and (ii) purchase from such other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the
Loans (or participations in Letters of Credit) made by such other Lenders (or in interest due thereon, as the case may be) in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders
shall share the benefit of such excess payment (net of any expenses which may be incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal and/or interest on the Loans held by each of
the Lenders (or reimbursements of Letters of Credit). To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. The
Borrower agrees that any Lender so purchasing a participation (or direct interest) in the Loans made by other Lenders (or in interest due thereon, as the case may be) may exercise all rights of set-off, banker’s lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a direct holder of Loans (or Letters of Credit) in the amount of such participation. Nothing contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of the Borrower. If under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a set-off to which this Section 4.05 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this Section 4.05 to share the benefits of any recovery on such secured claim. 
 Section 4.06
Taxes. 
 (a) Payments Free and Clear. Any and all payments by the Borrower hereunder shall be
made, in accordance with Section 4.01, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender, the Issuing Bank and the Administrative Agent, taxes imposed on its income, and franchise or similar taxes imposed on it, by (i) any jurisdiction (or political subdivision thereof) of which the
Administrative Agent, the Issuing Bank or such Lender, as the case may be, is a citizen or resident or in which such Lender has an Applicable Lending Office, (ii) the jurisdiction (or any political subdivision thereof) in which the
Administrative Agent, the Issuing Bank or such Lender is organized, or (iii) any jurisdiction (or political subdivision thereof) in which such Lender, the Issuing Bank or the Administrative Agent is presently doing business which taxes are
imposed solely as a result of doing business in such jurisdiction (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to the Lenders, the Issuing Bank or the Administrative Agent (i) the sum payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section 4.06) such Lender, the Issuing Bank or 

  

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the Administrative Agent (as the case may be) shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxing authority or other Governmental Authority in accordance with applicable law. 
 (b) Other Taxes. In addition, to the fullest extent permitted by applicable law, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, any
Assignment or any Security Instrument (hereinafter referred to as “Other Taxes”). 
 (c)
INDEMNIFICATION. To the fullest extent permitted by applicable law, the Borrower will indemnify each Lender and the Issuing Bank and the administrative agent for the full amount of Taxes and other Taxes (including, but not limited to,
any Taxes or other Taxes imposed by any Governmental Authority on amounts payable under this Section 4.06) paid by such Lender, the Issuing Bank or the Administrative Agent (on their behalf or on behalf of any Lender), as the case
may be, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or other Taxes were correctly or legally asserted unless the payment of such Taxes was not correctly or
legally asserted and such Lender’s payment of such Taxes or other Taxes was the result of its gross negligence or willful misconduct. Any payment pursuant to such indemnification shall be made within thirty (30) days after the date any
Lender, the Issuing Bank or the Administrative Agent, as the case may be, makes written demand therefor. If any Lender, Issuing Bank or the Administrative Agent receives a refund or credit in respect of any Taxes or other Taxes for which such
Lender, Issuing Bank or the Administrative Agent has received payment from the Borrower it shall promptly notify the Borrower of such refund or credit and shall, if no default has occurred and is continuing, within thirty (30) days after
receipt of a request by the Borrower (or promptly upon receipt, if the Borrower has requested application for such refund or credit pursuant hereto), pay an amount equal to such refund or credit to the Borrower without interest (but with any
interest so refunded or credited) provided that the Borrower, upon the request of such Lender, the Issuing Bank or the Administrative Agent, agrees to return such refund or credit (plus penalties, interest or other charges) to such Lender or the
Administrative Agent in the event such Lender or the Administrative Agent is required to repay such refund or credit. 
 (d)
Lender Representations. 
 (i) Each Lender represents that it is either (1) a banking association or
corporation organized under the laws of the United States of America or any state thereof or (2) it is entitled to complete exemption from United States withholding tax imposed on or with respect to any payments, including fees, to be made to
it pursuant to this Agreement (A) under an applicable provision of a tax convention to which the United States of America is a party or (B) because it is acting through a branch, agency or office in the United States of America and any
payment to be received by it hereunder is effectively connected with a trade or business in the United States of America. Each Lender that is not a banking association or corporation organized under the laws of the United States of America or any
state thereof agrees to provide to the Borrower and the Administrative Agent on the Closing Date, or on the date of its delivery of the Assignment pursuant to which it becomes a Lender, and at such other times as required by United States law or as
the Borrower or the Administrative Agent shall reasonably request, two accurate and complete original signed copies of either (A) Internal Revenue Service Form W-8ECI (or successor form) certifying that all payments to be made to it 

  

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hereunder will be effectively connected to a United States trade or business (the “Form W-8ECI Certification”) or (B) Internal
Revenue Service Form W-8BEN (or successor form) certifying that it is entitled to the benefit of a provision of a tax convention to which the United States of America is a party which completely exempts from United States withholding tax all
payments to be made to it hereunder (the “Form W-8BEN Certification”). In addition, each Lender agrees that if it previously filed a Form W-8ECI Certification, it will deliver to the Borrower and the Administrative Agent a
new Form W-8ECI Certification prior to the first payment date occurring in each of its subsequent taxable years; and if it previously filed a Form W8BEN Certification, it will deliver to the Borrower and the Administrative Agent a new certification
prior to the first payment date falling in the third year following the previous filing of such certification. Each Lender also agrees to deliver to the Borrower and the Administrative Agent such other or supplemental forms as may at any time be
required as a result of changes in applicable law or regulation in order to confirm or maintain in effect its entitlement to exemption from United States withholding tax on any payments hereunder, provided that the circumstances of such Lender at
the relevant time and applicable laws permit it to do so. If a Lender determines, as a result of any change in either (i) a Governmental Requirement or (ii) its circumstances, that it is unable to submit any form or certificate that it is
obligated to submit pursuant to this Section 4.06, or that it is required to withdraw or cancel any such form or certificate previously submitted, it shall promptly notify the Borrower and the Administrative Agent of such fact. If
a Lender is organized under the laws of a jurisdiction outside the United States of America, unless the Borrower and the Administrative Agent have received a Form W8BEN Certification or Form W-8ECI Certification satisfactory to them indicating that
all payments to be made to such Lender hereunder are not subject to United States withholding tax, the Borrower shall withhold Taxes from such payments at the applicable statutory rate. Each Lender agrees to indemnify and hold harmless the Borrower
or Administrative Agent, as applicable, from any United States Taxes, penalties, interest and other expenses, costs and losses incurred or payable by (i) the Administrative Agent as a result of such Lender’s failure to submit any form or
certificate that it is required to provide pursuant to this Section 4.06 or (ii) the Borrower or the Administrative Agent as a result of their reliance on any such form or certificate which such Lender has provided to them
pursuant to this Section 4.06. 
 (ii) For any period with respect to which a Lender has failed to provide
the Borrower with the form required pursuant to this Section 4.06, if any (other than if such failure is due to a change in a Governmental Requirement occurring subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification under Section 4.06 with respect to Taxes imposed by the United States which Taxes would not have been imposed but for such failure to provide such forms; provided,
however, that if a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes. 
 (iii) Any Lender claiming any additional amounts payable
pursuant to this Section 4.06 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Borrower or the Administrative Agent or to change the jurisdiction
of its Applicable Lending Office or to contest any tax imposed if the making of such a filing or change or contesting such tax would avoid the need for or reduce the amount of any such additional amounts that may thereafter accrue and would not, in
the sole determination of such Lender, be otherwise disadvantageous to such Lender. 
  

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 ARTICLE V 
 Capital Adequacy 
 Section 5.01 Additional Costs. 
 (a) LIBOR Regulations, etc. The Borrower shall pay directly to each Lender from time to time such amounts as such Lender may
determine to be necessary to compensate such Lender for any costs which it determines are attributable to its making or maintaining of any LIBOR Loans or issuing or participating in Letters of Credit hereunder or its obligation to make any LIBOR
Loans or issue or participate in any Letters of Credit hereunder, or any reduction in any amount receivable by such Lender hereunder in respect of any of such LIBOR Loans, Letters of Credit or such obligation (such increases in costs and reductions
in amounts receivable being herein called “Additional Costs”), resulting from any Regulatory Change which: (i) changes the basis of taxation of any amounts payable to such Lender under this Agreement or any Note in
respect of any of such LIBOR Loans or Letters of Credit (other than taxes imposed on the overall net income of such Lender or of its Applicable Lending Office for any of such LIBOR Loans by the jurisdiction in which such Lender has its principal
office or Applicable Lending Office); or (ii) imposes or modifies any reserve, special deposit, minimum capital, capital ratio or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other
liabilities of such Lender, or the Commitment or Loans of such Lender or the London interbank market; or (iii) imposes any other condition affecting this Agreement or any Note (or any of such extensions of credit or liabilities) or such
Lender’s Commitment or Loans. Each Lender will notify the Administrative Agent and the Borrower of any event occurring after the Closing Date which will entitle such Lender to compensation pursuant to this Section 5.01(a) as
promptly as practicable after it obtains knowledge thereof and determines to request such compensation, and will designate a different Applicable Lending Office for the Loans of such Lender affected by such event if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Lender, be disadvantageous to such Lender, provided that such Lender shall have no obligation to so designate an Applicable Lending Office located in the
United States. If any Lender requests compensation from the Borrower under this Section 5.01(a), the Borrower may, by notice to such Lender, suspend the obligation of such Lender to make additional Loans of the Type with respect
to which such compensation is requested until the Regulatory Change giving rise to such request ceases to be in effect (in which case the provisions of Section 5.04 shall be applicable). 
 (b) Regulatory Change. Without limiting the effect of the provisions of Section 5.01(a), in the event
that at any time (by reason of any Regulatory Change or any other circumstances arising after the Closing Date affecting (A) any Lender, (B) the London interbank market or (C) such Lender’s position in such market), the LIBOR
Rate, as determined in good faith by such Lender, will not adequately and fairly reflect the cost to such Lender of funding its LIBOR Loans, then, if such Lender so elects, by notice to the Borrower and the Administrative Agent, the obligation of
such Lender to make additional LIBOR Loans shall be suspended until such Regulatory Change or other circumstances ceases to be in effect (in which case the provisions of Section 5.04 shall be applicable). 
 (c) Capital Adequacy. Without limiting the effect of the foregoing provisions of this Section 5.01 (but
without duplication), the Borrower shall pay directly to any Lender from 

  

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time to time on request such amounts as such Lender may reasonably determine to be necessary to compensate such Lender or its parent or holding company for
any costs which it determines are attributable to the maintenance by such Lender or its parent or holding company (or any Applicable Lending Office), pursuant to any Governmental Requirement following any Regulatory Change, of capital in respect of
its Commitment, its Note, or its Loans or any interest held by it in any Letter of Credit, such compensation to include, without limitation, an amount equal to any reduction of the rate of return on assets or equity of such Lender or its parent or
holding company (or any Applicable Lending Office) to a level below that which such Lender or its parent or holding company (or any Applicable Lending Office) could have achieved but for such Governmental Requirement. Such Lender will notify the
Borrower that it is entitled to compensation pursuant to this Section 5.01(c) as promptly as practicable after it determines to request such compensation. 
 (d) Compensation Procedure. Any Lender notifying the Borrower of the incurrence of Additional Costs under this
Section 5.01 shall in such notice to the Borrower and the Administrative Agent set forth in reasonable detail the basis and amount of its request for compensation. Determinations and allocations by each Lender for purposes of this
Section 5.01 of the effect of any Regulatory Change pursuant to Section 5.01(a) or (b), or of the effect of capital maintained pursuant to Section 5.01(c), on its costs or rate
of return of maintaining Loans or its obligation to make Loans or issue Letters of Credit, or on amounts receivable by it in respect of Loans or Letters of Credit, and of the amounts required to compensate such Lender under this
Section 5.01, shall be conclusive and binding for all purposes, provided that such determinations and allocations are made on a reasonable basis. Any request for additional compensation under this Section 5.01
shall be paid by the Borrower within thirty (30) days of the receipt by the Borrower of the notice described in this Section 5.01(d). 
 Section 5.02 Limitation on LIBOR Loans. Anything herein to the contrary notwithstanding, if, on or prior to the determination of any LIBOR Rate for any Interest Period: 
 (i) the Administrative Agent determines (which determination shall be conclusive, absent manifest error) that quotations of interest rates
for the relevant deposits referred to in the definition of “LIBOR Rate” in Section 1.02 are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest
for LIBOR Loans as provided herein; or 
 (ii) the Administrative Agent determines (which determination shall be conclusive,
absent manifest error) that the relevant rates of interest referred to in the definition of “LIBOR Rate” in Section 1.02 upon the basis of which the rate of interest for LIBOR Loans for such Interest Period is to
be determined are not sufficient to adequately cover the cost to the Lenders of making or maintaining LIBOR Loans; then the Administrative Agent shall give the Borrower prompt notice thereof, and so long as such condition remains in effect, the
Lenders shall be under no obligation to make additional LIBOR Loans. 
 Section 5.03 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 LIBOR Loans hereunder, then such Lender shall promptly notify the Borrower thereof and
such Lender’s obligation to make LIBOR Loans shall be suspended until such time as such Lender may again make and maintain LIBOR Loans (in which case the provisions of Section 5.04 shall be applicable). 
 Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03. If the obligation of any Lender to make LIBOR Loans shall be
suspended pursuant to Sections 5.01, 5.02 or 5.03 (“Affected 

  

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Loans”), all Affected Loans which would otherwise be made by such Lender shall be made instead as Base Rate Loans (and, if an event
referred to in Section 5.01(b) or Section 5.03 has occurred and such Lender so requests by notice to the Borrower, all Affected Loans of such Lender then outstanding shall be automatically converted into Base
Rate Loans on the date specified by such Lender in such notice) and, to the extent that Affected Loans are so made as (or converted into) Base Rate Loans, all payments of principal which would otherwise be applied to such Lender’s Affected
Loans shall be applied instead to its Base Rate Loans. 
 Section 5.05 Compensation. The Borrower shall pay to each Lender
within thirty (30) days of receipt of written request of such Lender (which request shall set forth, in reasonable detail, the basis for requesting such amounts and which shall be conclusive and binding for all purposes provided that such
determinations are made on a reasonable basis), such amount or amounts as shall compensate it for any loss, cost, expense or liability which such Lender determines are attributable to: 
 (i) any payment, prepayment or conversion of a LIBOR Loan properly made by such Lender or the Borrower for any reason (including, without
limitation, the acceleration of the Loans pursuant to Section 10.01) on a date other than the last day of the Interest Period for such Loan; or 
 (ii) any failure by the Borrower for any reason (including but not limited to, the failure of any of the conditions precedent specified in
Article VI to be satisfied) to borrow, continue or convert a LIBOR Loan from such Lender on the date for such borrowing, continuation or conversion specified in the relevant notice given pursuant to Section 2.02(c).

 Without limiting the effect of the preceding sentence, such compensation shall include an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount so paid, prepaid or converted or not borrowed for the period from the date of such payment, prepayment or conversion or failure to borrow to the last day of the Interest Period for such Loan
(or, in the case of a failure to borrow, the Interest Period for such Loan which would have commenced on the date specified for such borrowing) at the applicable rate of interest for such Loan provided for herein over (ii) the interest
component of the amount such Lender would have bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such period (as reasonably determined by such
Lender). 
 Section 5.06 Replacement Lenders. 
 (a) If any Lender has notified the Borrower and the Administrative Agent of its incurring Additional Costs under
Section 5.01 or has required the Borrower to make payments for Taxes under Section 4.06, then the Borrower may, unless such Lender has notified the Borrower and the Administrative Agent that the circumstances
giving rise to such notice no longer apply, terminate, in whole but not in part, the Commitment of any Lender (other than the Administrative Agent) (the “Terminated Lender”) at any time upon five (5) Business Days’
prior written notice to the Terminated Lender and the Administrative Agent (such notice referred to herein as a “Notice of Termination”). 
 (b) In order to effect the termination of the Commitment of the Terminated Lender, the Borrower shall: (i) obtain an agreement with
one or more Lenders to increase their Commitment or Commitments and/or (ii) request any one or more other banking institutions to become parties to this Agreement in place and instead of such Terminated Lender and agree to accept a Commitment
or Commitments; provided, however, that such one or more other banking institutions are reasonably acceptable to the Administrative Agent and become parties by 

  

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executing an Assignment (the Lenders or other banking institutions that agree to accept in whole or in part the Commitment of the Terminated Lender being
referred to herein as the “Replacement Lenders”), such that the aggregate increased and/or accepted Commitments of the Replacement Lenders under clauses (i) and (ii) above equal the Commitment of the Terminated
Lender. 
 (c) The Notice of Termination shall include the name of the Terminated Lender, the date the termination will occur
(the “Lender Termination Date”), and the Replacement Lender or Replacement Lenders to which the Terminated Lender will assign its Commitment and, if there will be more than one Replacement Lender, the portion of the
Terminated Lender’s Commitment to be assigned to each Replacement Lender. 
 (d) On the Lender Termination Date,
(i) the Terminated Lender shall by execution and delivery of an Assignment assign its Commitment to the Replacement Lender or Replacement Lenders (pro rata, if there is more than one Replacement Lender, in proportion to the portion of the
Terminated Lender’s Commitment to be assigned to each Replacement Lender) indicated in the Notice of Termination and shall assign to the Replacement Lender or Replacement Lenders each of its Loans (if any) then outstanding and participation
interests in Letters of Credit (if any) then outstanding pro rata as aforesaid), (ii) the Terminated Lender shall endorse its Note, payable without recourse, representation or warranty to the order of the Replacement Lender or Replacement
Lenders (pro rata as aforesaid), (iii) the Replacement Lender or Replacement Lenders shall purchase the Note held by the Terminated Lender (pro rata as aforesaid) at a price equal to the unpaid principal amount thereof plus interest and
facility and other fees accrued and unpaid to the Lender Termination Date, and (iv) the Replacement Lender or Replacement Lenders will thereupon (pro rata as aforesaid) succeed to and be substituted in all respects for the Terminated Lender
with like effect as if becoming a Lender pursuant to the terms of Section 12.06(b), and the Terminated Lender will have the rights and benefits of an assignor under Section 12.06(b). To the extent not in
conflict, the terms of Section 12.06(b) shall supplement the provisions of this Section 5.06(d). For each assignment made under this Section 5.06, the Replacement Lender shall pay to the
Administrative Agent the processing fee provided for in Section 12.06(b). The Borrower will be responsible for the payment of any breakage costs associated with termination and Replacement Lenders, as set forth in
Section 5.05. 
 ARTICLE VI 
 Conditions Precedent 
 Section 6.01 Initial Funding. The obligation of the Lenders
to make the Initial Funding is subject to the receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on or before the Closing Date and the receipt by the Administrative Agent of the
following documents and satisfaction of the other conditions provided in this Section 6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: 
 (a) A certificate of the Secretary or an Assistant Secretary of the Borrower’s general partner, SB Energy, setting forth
(i) resolutions of its board of directors or managers, as applicable, with respect to the authorization of SB Energy to execute and deliver the Loan Documents on behalf of the Borrower and itself, to which each is a party and to enter into the
transactions contemplated in those documents, (ii) the Responsible Officers of the Borrower (y) who are authorized to sign the Loan Documents to which Borrower 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 

  

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communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and
(iv) the articles or certificate of organization, incorporation and bylaws, as applicable, of the Borrower, 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. 
 (b) A certificate of the Secretary or an
Assistant Secretary of each Guarantor setting forth (i) resolutions of its or its general partner’s board of directors or managers, as applicable, with respect to the authorization of 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 such Guarantor (y) who are authorized to sign the Loan Documents to which 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 the authorized officers, and (iv) the articles or certificate of organization, incorporation and bylaws (or equivalent constituent documents) of such Guarantor, and its general partner, as
applicable, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificates until they receive notice in writing from any Guarantor to the contrary. 
 (c) Certificates of the appropriate state agencies with respect to the existence, qualification and good standing of the Obligors.

 (d) A compliance certificate which shall be substantially in the form of Exhibit C, duly and properly
executed by a Responsible Officer of the Borrower and dated as of the date of the Initial Funding. 
 (e) The Notes, duly
completed and executed. 
 (f) The Security Instruments, including those described on Exhibit D, duly
completed and executed in sufficient number of counterparts for recording, as necessary. 
 (g) An opinion of Adrienne Bond,
Esq., counsel to the Obligors and from other local counsel acceptable to the Administrative Agent with respect to the due formation, authorization and existence of the Obligors and the enforceability of the Loan Documents and perfection of the
Security Instruments under the laws of the states wherein the Oil and Gas Properties are located, each in form and substance satisfactory to the Administrative Agent, as to such matters incident to the transactions herein contemplated as the
Administrative Agent may reasonably request. 
 (h) A certificate of insurance coverage of the Borrower and each Guarantor
evidencing that the Borrower and each Guarantor are carrying insurance in accordance with Section 7.19 and Section 8.03(b). 
 (i) Title information as the Administrative Agent may require setting forth the status of title acceptable to the Administrative Agent to
at least 85% of the value of the Oil and Gas Properties of the Borrower and the Guarantors included in the Initial Reserve Report. 
 (j) The Administrative Agent shall have been furnished with appropriate UCC search certificates and other evidence satisfactory to the Administrative Agent with respect the Obligor’s Oil and Gas Properties reflecting no prior Liens
other than in favor of the Administrative Agent. 
  

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 (k) Environmental assessment reports relating to all of the Mortgaged Properties as may
be requested by the Administrative Agent, which may include, without limitation, environmental audits, Phase I Reports or other environmental reports of any nature whatsoever (whether prepared internally or by third party consultants) currently
existing or requested by the Administrative Agent; and the Administrative Agent must be satisfied with the results of the review and environmental condition of the Mortgaged Properties. 
 (l) Such other documents as the Administrative Agent or any Lender or special counsel to the Administrative Agent may reasonably request.

 Section 6.02 Initial and Subsequent Loans and Letters of Credit. The obligation of the Lenders to make Loans to the
Borrower upon the occasion of each borrowing hereunder and to issue, renew, extend or reissue Letters of Credit for the account of the Borrower (including the Initial Funding) is subject to the further conditions precedent that, as of the date of
such Loans and after giving effect thereto: 
 (a) no Default shall have occurred and be continuing; 
 (b) no Material Adverse Effect shall have occurred; and 
 (c) the representations and warranties made by the Borrower in Article VII and in the Security Instruments shall be
true on and as of the date of the making of such Loans or issuance, renewal, extension or reissuance of a Letter of Credit with the same force and effect as if made on and as of such date and following such new borrowing, except to the extent such
representations and warranties are expressly limited to an earlier date or the Majority Lenders may expressly consent in writing to the contrary. 
 Each request for a borrowing or issuance, renewal, extension or reissuance of a Letter of Credit by the Borrower hereunder shall constitute a certification by the Borrower to the effect set forth in Section 6.02(c) (both
as of the date of such notice and, unless the Borrower otherwise notifies the Administrative Agent prior to the date of and immediately following such borrowing or issuance, renewal, extension or reissuance of a Letter of Credit as of the date
thereof). 
 Section 6.03 Conditions Precedent for the Benefit of Lenders. All conditions precedent to the obligations of
the Lenders to make any Loan are imposed hereby solely for the benefit of the Lenders, and no other Person may require satisfaction of any such condition precedent or be entitled to assume that the Lenders will refuse to make any Loan in the absence
of strict compliance with such conditions precedent. 
 Section 6.04 No Waiver. No waiver of any condition precedent shall
preclude the Administrative Agent or the Lenders from requiring such condition to be met prior to making any subsequent Loan or preclude the Lenders from thereafter declaring that the failure of the Borrower to satisfy such condition precedent
constitutes a Default. 
 ARTICLE VII 
 Representations and Warranties 
 Each of the Obligors represents and warrants to the Administrative
Agent and the Lenders that (each representation and warranty herein is given as of the Closing Date and shall be deemed repeated 

  

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and reaffirmed on the dates of each borrowing and issuance, renewal, extension or reissuance of a Letter of Credit as provided in
Section 6.02): 
 Section 7.01 Corporate Existence. Each of the Obligors: (i) is a corporation,
limited liability company or limited partnership duly organized, formed, legally existing and in good standing under the laws of the jurisdiction of its incorporation or formation, as applicable; (ii) has all requisite corporate power, and has
all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted; and (iii) is qualified to do business in all jurisdictions in which
the nature of the business conducted by it makes such qualification necessary and where failure so to qualify would have a Material Adverse Effect. 
 Section 7.02 Financial Condition. The unaudited pro forma consolidated balance sheet of the Borrower and its Consolidated Subsidiaries (giving effect to Borrower’s acquisition of its Subsidiaries and Oil and Gas
Properties) as at September 30, 2004, and their related consolidated statements of income, owners’ equity and cash flow of the Borrower and its Consolidated Subsidiaries for the three month period ended on such date heretofore furnished to
the Administrative Agent, are/is complete and correct and fairly present the consolidated financial condition of the Borrower and its Consolidated Subsidiaries as at said dates and the results of its operations for the fiscal year and the three
month period on said dates, all in accordance with GAAP, as applied on a consistent basis (subject, in the case of the interim financial statements, to normal year-end adjustments). Neither the Borrower nor any Subsidiary has on the Closing Date any
material Debt, contingent liabilities, 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 or in Schedule 7.02. Since the date of the Borrower’s most recent consolidated balance sheet delivered to the Administrative Agent, there has been no change or event having a Material Adverse Effect. Since the date
of the Borrower’s most recent consolidated balance sheet delivered to the Administrative Agent, neither the business nor the Properties of the Borrower or any Subsidiary have been materially and adversely affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of Property or cancellation of contracts, permits or concessions by any Governmental Authority, riot, activities of armed
forces or acts of God or of any public enemy. 
 Section 7.03 Litigation. Except as disclosed to the Lenders in
Schedule 7.03 hereto, at the Closing Date there is no litigation, legal, administrative or arbitral proceeding, investigation or other action of any nature pending or, to the knowledge of the Obligors threatened against or
affecting the Obligors or any Subsidiary which involves the possibility of any judgment or liability against any Obligor or any Subsidiary not fully covered by insurance (except for normal deductibles), and which would have a Material Adverse
Effect. 
 Section 7.04 No Breach. Neither the execution and delivery of the Loan Documents, nor compliance with the terms
and provisions hereof will conflict with or result in a breach of, or require any consent which has not been obtained as of the Closing Date under, the respective charter or by-laws of the Obligors or any Subsidiary, or any Governmental Requirement
or any agreement or instrument to which any Obligor or any Subsidiary is a party or by which it is bound or to which it or its Properties are subject, or constitute a default under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any of the revenues or assets of the Obligor or any Subsidiary pursuant to the terms of any such agreement or instrument other than the Liens created by the Loan Documents. 
 Section 7.05 Authority. Each Obligor and each Subsidiary has all necessary corporate power and authority to execute, deliver and
perform its obligations under the Loan Documents to which it is a party; and the execution, delivery and performance by each Obligor and each Subsidiary of the Loan Documents to which it is a party, have been duly authorized by all necessary
corporate action on its part; 

  

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and the Loan Documents constitute the legal, valid and binding obligations of each Obligor, enforceable in accordance with their terms. 
 Section 7.06 Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority
or any other Person are necessary for the execution, delivery or performance by any Obligor of the Loan Documents to which it is a party or for the validity or enforceability thereof, except for the recording and filing of the Security Instruments
as required by this Agreement. 
 Section 7.07 Use of Loans. The proceeds of the Loans shall be used (i) for the
development of the Obligors’ Oil and Gas Properties and the acquisition of Oil and Gas Properties and related assets by the Obligors, (ii) working capital, (iii) Letters of Credit in the aggregate outstanding at any time not to exceed
$1,000,000 to support the Borrower’s and Guarantors’ obligations, and (iv) for general company purposes of the Borrower and Guarantors. Neither the Borrower nor any other Obligor is engaged principally, or as one of its 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 of Governors of the Federal Reserve System) and
no part of the proceeds of any Loan hereunder will be used to buy or carry any margin stock. 
 Section 7.08 ERISA.

 (a) Each Obligor, each Subsidiary and each ERISA Affiliate have complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan. 
 (b) Each Plan is, and has been, maintained in substantial compliance with ERISA
and, where applicable, the Code. 
 (c) No act, omission or transaction has occurred which could result in imposition on any
Obligor, any Subsidiary or any ERISA Affiliate (whether directly or indirectly) of (i) either a civil penalty assessed pursuant to section 502(c), (i) or (1) 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 any Obligor, any Subsidiary or any
ERISA Affiliate has been or is expected by any Obligor, 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 any Obligor, any Subsidiary or any ERISA Affiliate is required under the
terms of each Plan or applicable law to have paid as contributions to such Plan, 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 each Obligor’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. 
  

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 (g) None of the Obligors, any Subsidiary or any ERISA Affiliate sponsors, maintains, or
contributes to an employee welfare benefit plan, as defined in section 3(l) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by an Obligor, a
Subsidiary or any ERISA Affiliate in its sole discretion at any time without any material liability. 
 (h) None of the
Obligors, any Subsidiary or any ERISA Affiliate sponsors, maintains or contributes to, or has at any time in the preceding six calendar years, sponsored, maintained or contributed to, any Multiemployer Plan. 
 (i) None of the Obligors, any Subsidiary or 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 7.09 Taxes. Except as set
out in Schedule 7.09, each Obligor and its Subsidiaries has filed all United States federal income tax returns and all other tax returns which are required to be filed by them and have paid all material taxes due pursuant to such
returns or pursuant to any assessment received by any Obligor or any Subsidiary. The charges, accruals and reserves on the books of each Obligor and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of the
Borrower, adequate. No tax lien has been filed and, to the knowledge of the Obligors, no claim is being asserted with respect to any such tax, fee or other charge. 
 Section 7.10 Titles, etc. 
 (a) Each of the Obligors and its Subsidiaries
has good and defensible title to its material (individually or in the aggregate) Properties, free and clear of all Liens, except Liens permitted by Section 9.02. After giving full effect to the Excepted Liens, each Obligor owns
the net interests in production attributable to its Hydrocarbon Interests reflected in the most recently delivered Reserve Report and the ownership of such Properties shall not in any material respect obligate such Obligor 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. All information contained in the most
recently delivered Reserve Report is true and correct in all material respects as of the date thereof. 
 (b) All leases and
agreements necessary for the conduct of the business of each Obligor and its Subsidiaries are valid and subsisting, in full force and effect and there exists no default or event or circumstance which with the giving of notice or the passage of time
or both would give rise to a default under any such lease or leases, which would affect in any material respect the conduct of the business of any Obligor and its Subsidiaries. 
 (c) The rights, Properties and other assets presently owned, leased or licensed by each Obligor and its Subsidiaries including, without
limitation, all easements and rights of way, include all rights, Properties and other assets necessary to permit each Obligor and its Subsidiaries to conduct its business in all material respects in the same manner as its business has been conducted
prior to the Closing Date. 
 (d) All of the assets and Properties of each Obligor and its Subsidiaries which are reasonably
necessary for the operation of its business are in good working condition and are maintained in accordance with prudent business standards. 
  

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 Section 7.11 No Material Misstatements. No written information, statement, exhibit,
certificate, document or report furnished to the Administrative Agent and the Lenders (or any of them) by any Obligor or any Subsidiary in connection with the negotiation of this Agreement contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statement contained therein not materially misleading in the light of the circumstances in which made and with respect to the Obligors and their Subsidiaries taken as a whole. There is no fact
peculiar to any Obligor or any Subsidiary which has a Material Adverse Effect or in the future is reasonably likely to have (so far as the Obligors can now foresee) a Material Adverse Effect and which has not been set forth in this Agreement or the
other documents, certificates and statements furnished to the Administrative Agent by or on behalf of the Obligors or any Subsidiary prior to, or on, the Closing Date in connection with the transactions contemplated hereby. 
 Section 7.12 Investment Company Act. None of the Obligors nor any Subsidiary is an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. 
 Section 7.13 Public Utility Holding Company Act. None of the Obligors 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 the Public Utility Holding
Company Act of 1935, as amended. 
 Section 7.14 Subsidiaries. Except for AROC Energy, L.P., the Borrower has no
Subsidiaires other than the Guarantors. 
 Section 7.15 Location of Business and Offices. Each Obligor’s principal
place of business and chief executive offices are located at the address stated on the signature page of this Agreement. The principal place of business and chief executive office of each Subsidiary are located at the addresses stated on
Schedule 7.15. 
 Section 7.16 Defaults. None of the Obligors nor any Subsidiary is in default nor has
any event or circumstance occurred which, but for the expiration of any applicable grace period or the giving of notice, or both, would constitute a default under any Material Agreement or instrument to which any Obligor or any Subsidiary is a party
or by which any Obligor or any Subsidiary is bound. No Default hereunder has occurred and is continuing. 
 Section 7.17
Environmental Matters. Except as would not have a Material Adverse Effect (or with respect to (c), (d) and (e) below, where the failure to take such actions would not have a Material Adverse Effect): 
 (a) Neither any Property of any Obligor or any Subsidiary nor the operations conducted thereon violate any order or requirement of any
court or Governmental Authority or any Environmental Laws; 
 (b) Without limitation of clause (a) above, no Property of
any Obligor or any Subsidiary nor the operations currently conducted thereon or, to the best knowledge of the Obligors, 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; 
  

 36 

 (c) All notices, permits, licenses 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 Obligors and each Subsidiary, including without limitation past or present treatment, storage, disposal or release of a hazardous substance or solid waste into
the environment, have been duly obtained or filed, and the Obligors and each 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 exploration and production wastes, if any, generated at any and all Property of
any Obligor or any 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
best knowledge of the Obligors, 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 Obligors have taken all steps reasonably necessary to determine and have determined that no hazardous substances, solid waste, or
oil and gas exploration and production wastes, have been disposed of or otherwise released and there has been no threatened release of any hazardous substances on or to any Property of any Obligor or any 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 Obligors and each Subsidiary currently satisfies all design, operation, and equipment requirements imposed by the OPA or scheduled as of the Closing Date to be imposed by OPA during the term
of this Agreement, and the Obligors do not have any reason to believe that such Property, to the extent subject to OPA, will not be able to maintain compliance with the OPA requirements during the term of this Agreement; and 
 (g) None of the Obligors nor any Subsidiary has any known contingent liability in connection with any release or threatened release of any
oil, hazardous substance or solid waste into the environment. 
 Section 7.18 Compliance with the Law. None of the
Obligors nor any Subsidiary has violated any Governmental Requirement or failed to obtain any license, permit, franchise or other governmental authorization necessary for the ownership of any of its Properties or the conduct of its business, which
violation or failure would have (in the event such violation or failure were asserted by any Person through appropriate action) a Material Adverse Effect. Except for such acts or failures to act as would not have a Material Adverse Effect, the Oil
and Gas Properties of the Obligors (and properties unitized therewith) have been maintained, operated and developed in a good and workmanlike manner and in conformity with all applicable laws and all rules, regulations and orders of all duly
constituted authorities having jurisdiction 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 such Oil and Gas
Properties; specifically in this connection, (i) after the Closing Date, no Oil and Gas Property of any Obligor 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) prior to the Closing Date and (ii) none of the wells comprising a part of the Oil and Gas Properties of any Obligor (or properties unitized therewith) are
deviated from the vertical more than the maximum permitted by applicable laws, regulations, rules and orders, and such 

  

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wells are, in fact, bottomed under and are producing from, and the well bores are wholly within, such Oil and Gas Properties (or in the case of wells located
on properties unitized therewith, such unitized properties). 
 Section 7.19 Insurance. Schedule 7.19
attached hereto contains an accurate and complete description of all material policies of fire, liability, workers’ compensation and other forms of insurance owned or held by the Obligors and each Subsidiary. All such policies are in full force
and effect, all premiums with respect thereto covering all periods up to and including the date of the closing have been paid, and no notice of cancellation or termination has been received with respect to any such policy. Such policies are
sufficient for compliance with all requirements of law and of all agreements to which any Obligor or any Subsidiary is a party; are valid, outstanding and enforceable policies; provide adequate insurance coverage in at least such amounts and against
at least such risks (but including in any event public liability) as are usually insured against in the same general area by companies engaged in the same or a similar business for the assets and operations of the Obligors and each Subsidiary; will
remain in full force and effect through the respective dates set forth in Schedule 7.19 without the payment of additional premiums; and will not in any way be affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement. Schedule 7.19 identifies all material risks, if any, which each Obligor and its Subsidiaries and their respective Board of Directors or officers have designated as being self insured. None of the
Obligors nor any Subsidiary has been refused any insurance with respect to its assets or operations, nor has its coverage been limited below usual and customary policy limits, by an insurance carrier to which it has applied for any such insurance or
with which it has carried insurance during the last three years. 
 Section 7.20 Hedging Agreements.
Schedule 7.20 sets forth, as of the Closing Date, a true and complete list of all Hedging Agreements (including commodity price swap agreements, forward agreements or contracts of sale which provide for prepayment for deferred
shipment or delivery of oil, gas or other commodities) of the Obligors and each Subsidiary, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark to market value
thereof, all credit support agreements relating thereto (including any margin required or supplied), and the counter party to each such agreement. 
 Section 7.21 Restriction on Liens. None of the Obligors nor any of their Subsidiaries is a party to any agreement or arrangement (other than this Agreement and the Security Instruments), or subject to any order, judgment,
writ or decree, which either restricts or purports to restrict its ability to grant Liens to other Persons on or in respect of their respective assets or Properties. 
 Section 7.22 Material Agreements. Set forth on Schedule 7.22 is a complete list of all agreements, leases, indentures, purchase agreements, obligations in respect of letters of credit,
guarantees, joint venture agreements, and other instruments which are material to Obligors’ business, activities, and operation or ownership of Obligors’ Property (the “Material Agreements”) in effect or to be in
effect as of the Closing Date (other than Hedging Agreements) providing for, evidencing, securing or otherwise relating to any Debt of any Obligor or any of its Subsidiaries, and all obligations of any Obligor or any Subsidiaries to issuers of
surety or appeal bonds issued for account of any Obligor or any such Subsidiary. The Borrower shall also make available to Administrative Agent and Lenders all Material Agreements and other agreements and instruments (excluding any such agreements
and other instruments that are cancelable upon 60 or less days notice) of each Obligor and its Subsidiaries relating to the purchase, transportation by pipeline, gas processing, marketing, sale and supply of natural gas and other Hydrocarbons, but
in any event, any such agreement or other instrument that will account for more than 10% of the sales of the Obligors’ and their Subsidiaries during the Borrower’s current fiscal year. Upon request by Administrative Agent, the Borrower
shall deliver, or caused to be delivered, to the Administrative Agent and the Lenders a complete and correct copy of all such material credit agreements, 

  

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indentures, purchase agreements, contracts, letters of credit, guarantees, joint venture agreements, or other instruments, including any modifications or
supplements thereto, as in effect on the Closing Date. 
 Section 7.23 Gas Imbalances. As of the Closing Date, on a net
basis there are no gas imbalances, take or pay or other prepayments with respect to the Obligors’ Oil and Gas Properties which would require the Obligors to deliver, in the aggregate, five percent (5%) or more of the monthly production
from Hydrocarbons produced from their Oil and Gas Properties at some future time without then or thereafter receiving fall payment therefor. 
 ARTICLE VIII 
 Affirmative Covenants 
 Each of the Obligors covenants and agrees that, so long as any of the Commitments are in effect and until payment in full of all Loans hereunder, all interest thereon and all other amounts payable by the Obligors
hereunder: 
 Section 8.01 Reporting Requirements. The Obligors shall deliver, or shall cause to be delivered, to the
Administrative Agent with sufficient copies of each for the Lenders: 
 (a) Annual Financial Statements. As soon
as available and in any event within ninety (90) days after the end of each fiscal year of the Borrower commencing year ending 2005, the audited consolidated and unaudited consolidating statements of income, stockholders’ equity, changes
in financial position and cash flow of the Borrower and its Consolidated Subsidiaries for such fiscal year, and the related consolidated and consolidating balance sheets of the Borrower and its Consolidated Subsidiaries as at the end of such fiscal
year, and setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and accompanied by the related opinion of independent public accountants of recognized national standing acceptable to the
Administrative Agent which opinion shall state that said financial statements fairly present the consolidated and consolidating financial condition and results of operations of the Borrower and its Consolidated Subsidiaries as at the end of, and
for, such fiscal year and that such financial statements have been prepared in accordance with GAAP, except for such changes in such principles with which the independent public accountants shall have concurred and such opinion shall not contain a
“going concern” or like qualification or exception, and a certificate of such accountants stating that, in making the examination necessary for their opinion, they obtained no knowledge, except as specifically stated, of any
Default. 
 (b) Quarterly Financial Statements. As soon as available and in any event within forty-five
(45) days after the end of each of the first three fiscal quarterly periods of each fiscal year of the Borrower, consolidated and consolidating statements of income, stockholders’ equity, changes in financial position and cash flow of the
Borrower and its Consolidated Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated and consolidating balance sheets as at the end of such period, and
setting forth in each case in comparative form the corresponding figures for the corresponding period in the preceding fiscal year, accompanied by the certificate of a Responsible Officer, which certificate shall state that said financial statements
fairly present the consolidated and consolidating financial condition and results of operations of the Borrower and its Consolidated Subsidiaries in accordance with GAAP, as at the end of, and for, such period (subject to normal year-end audit
adjustments). 
  

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 (c) Notice of Default, Etc. Promptly after any Obligor knows that any
Default, Event of Default, labor dispute, or any Material Adverse Effect has occurred, a notice of such Default or Material Adverse Effect, describing the same in reasonable detail and the action the Borrower or any Guarantor proposes to take with
respect thereto. 
 (d) Other Accounting Reports. Promptly upon receipt thereof, a copy of each other report or
letter submitted to the Borrower or any Subsidiary by independent accountants in connection with any annual, interim or special audit made by them of the books of the Borrower and its Subsidiaries, and a copy of any response by the Borrower or any
Subsidiary of the Borrower, or the Board of Directors of the Borrower or any Subsidiary of the Borrower, to such letter or report. 
 (e) Reports to Partners. Promptly upon its becoming available, each financial statement, report, notice or proxy statement sent by the Borrower to its partners. 
 (f) Notices Under Other Loan Agreements. Promptly after the furnishing thereof, copies of any statement, report or notice
furnished to any Person pursuant to the terms of any indenture, loan or credit or other similar agreement, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this
Section 8.01. 
 (g) Other Matters. From time to time such other information regarding the
business, affairs or financial condition of any Obligor or any Subsidiary (including, without limitation, any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA) as any Lender or the Administrative Agent
may reasonably request. 
 (h) Hedging Agreements. As soon as available and in any event within fifteen
(15) Business Days after the last day of each fiscal quarter, a report, in form and substance satisfactory to the Administrative Agent, setting forth as of the last Business Day of such fiscal quarter a true and complete list of all Hedging
Agreements (including commodity price swap agreements, forward agreements or contracts of sale which provide for prepayment for deferred shipment or delivery of oil, gas or other commodities) of the Obligors and each Subsidiary, the material terms
thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark to market value therefor, any new credit support agreements relating thereto not listed on Schedule 7.20, any
margin required or supplied under any credit support document, and the counter party to each such agreement. 
 The Borrower will furnish to the
Administrative Agent, at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate substantially in the form of Exhibit C executed by a Responsible Officer
(i) certifying as to the matters set forth therein and stating that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail), and (ii) setting forth in
reasonable detail the computations necessary to determine whether the Borrower is in compliance with Sections 9.12, 9.13, 9.14, and 9.15 as of the end of the respective fiscal quarter or fiscal year. 
 Section 8.02 Litigation. The Obligors shall promptly give to the Administrative Agent notice of (i) all legal or arbitral
proceedings, and of all proceedings before any Governmental Authority affecting any Obligor or any Subsidiary, except proceedings which, if adversely determined, would not reasonably be expected to have a Material Adverse Effect, and (ii) any
litigation or proceeding against or adversely affecting any Obligor or any Subsidiary in which the amount claimed exceeds $500,000 and is not covered in full by insurance (subject to normal and customary deductibles and for which the insurer has not
assumed the defense), or in which injunctive or similar relief is sought. Each Obligor will, and will 

  

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cause each of its Subsidiaries to, promptly notify the Administrative Agent and each of the Lenders of any claim, judgment, Lien or other encumbrance
affecting any Property of such Obligor or any Subsidiary if the value of the claim, judgment, Lien, or other encumbrance affecting such Property shall exceed $500,000. 
 Section 8.03 Maintenance, Etc. 
 (a) Generally. Each Obligor shall and shall cause each of its Subsidiaries to: preserve and maintain its organization existence and all of its material rights, privileges and franchises; keep books of record and account in
which full, true and correct entries will be made of all dealings or transactions in relation to its business and activities; comply with all Governmental Requirements if failure to comply with such requirements will have a Material Adverse Effect;
pay and discharge all Taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; upon reasonable notice, permit representatives of the Administrative Agent or any Lender, during normal
business hours, to examine, copy and make extracts from its books and records, to inspect its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by such Lender or the Administrative Agent
(as the case may be); and keep, or cause to be kept, insured by financially sound and reputable insurers all Property of a character usually insured by Persons engaged in the same or similar business similarly situated against loss or damage of the
kinds and in the amounts customarily insured against by such Persons and carry such other insurance as is usually carried by such Persons including, without limitation, environmental risk insurance to the extent reasonably available. 
 (b) Proof of Insurance. Contemporaneously with the delivery of the financial statements required by
Section 8.01(a) to be delivered for each year, the Borrower will furnish or cause to be furnished to the Administrative Agent and the Lenders a certificate of insurance coverage from the insurer in form and substance satisfactory
to the Administrative Agent listing Administrative Agent as “loss payee” and “additional insured” and, if requested, will furnish the Administrative Agent and the Lenders copies of the applicable policies. 
 (c) Oil and Gas Properties. Each Obligor will and will cause each of its Subsidiaries to, at its own expense, do or cause to
be done all things reasonably necessary to preserve and keep in good repair, working order and efficiency all of its Oil and Gas Properties and other material Properties including, without limitation, all equipment, machinery and facilities, and
from time to time will make all the reasonably necessary repairs, renewals and replacements so that at all times the state and condition of its Oil and Gas Properties and other material Properties will be fully preserved and maintained, except to
the extent a portion of such Properties is no longer capable of producing Hydrocarbons in economically reasonable amounts. Each Obligor will and will cause each of its Subsidiaries to promptly: (i) 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, (ii) 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, (iii) will and will cause each Subsidiary to do all other things necessary to keep unimpaired, except for Liens described in Section 9.02, its rights with respect to its Oil and Gas
Properties and other material Properties and prevent any forfeiture thereof or a default thereunder, except to the extent a portion of such 

  

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Properties is no longer capable of producing Hydrocarbons in economically reasonable amounts and except for Transfers permitted by
Section 9.16. Each Obligor will and will cause each of its Subsidiaries to 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 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 in all material respects with all
Governmental Requirements. 
 Section 8.04 Environmental Matters. 
 (a) Establishment of Procedures. The Obligors will and will cause each of their Subsidiaries to establish and implement such
procedures as may be reasonably necessary to continuously determine and assure that any failure of the following does not have a Material Adverse Effect: (i) all Property of the Obligors and their Subsidiaries and the operations conducted
thereon and other activities of the Obligors and their Subsidiaries are in compliance with and do not violate the requirements of any Environmental Laws, (ii) no oil, hazardous substances or solid wastes are disposed of or otherwise released on
or to any Property owned by any such party except in compliance with Environmental Laws, (iii) no hazardous substance will be released on or to any such Property in a quantity equal to or exceeding that quantity which requires reporting
pursuant to Section 103 of CERCLA, and (iv) no oil, oil and gas exploration and production wastes or hazardous substance is released on or to any such Property so as to pose an imminent and substantial endangerment to public health or
welfare or the environment. 
 (b) Notice of Action. The Obligors will promptly notify the Administrative Agent
and the Lenders in writing of any threatened action, investigation or inquiry by any Governmental Authority of which any Obligor has knowledge in connection with any Environmental Laws, excluding routine testing and corrective action. 
 (c) Future Acquisitions. The Obligors will and will cause each of their Subsidiaries to provide environmental audits and
tests in accordance with American Society for Testing and Materials standards as reasonably requested by the Administrative Agent and the Lenders (or as otherwise required to be obtained by the Administrative Agent or the Lenders by any Governmental
Authority) in connection with any future acquisitions of Oil and Gas Properties or other material Properties. 
 Section 8.05
Further Assurances. The Obligors will and will cause each of their Subsidiaries to cure promptly any defects in the creation and issuance of the Notes and the execution and delivery of the Security Instruments and this Agreement. The
Obligors at their expense will and will cause each Subsidiary to promptly execute and deliver to the Administrative Agent upon request all such other documents, agreements and instruments to comply with or accomplish the covenants and agreements of
the Obligors or any Subsidiary, as the case may be, in any Loan Document, or to further evidence and more fully describe the collateral intended as security for the Notes, or to correct any omissions in any Loan Document, or to state more fully the
security obligations set out herein or in any Loan Document, or to perfect, protect or preserve any Liens created pursuant to any of the Security Instruments, or to make any recordings, to file any notices or obtain any consents, all as may be
necessary or appropriate in connection therewith. 
 Section 8.06 Performance of Obligations. The Borrower will pay the
Notes according to the reading, tenor and effect thereof; and the Obligors will and will cause each of their Subsidiaries to do and perform every act and discharge all of the obligations to be performed and discharged by them under this Agreement
and any other Loan Document, at the time or times and in the manner specified. 
  

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 Section 8.07 Engineering Reports. 
 (a) Not less than 30 days prior to each Scheduled Borrowing Base Redetermination Date, commencing with the Scheduled Borrowing Base
Redetermination to occur on or around May 1, 2005, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report. The Reserve Report due not less than 30 days prior to May 1 of each year shall be prepared by
certified independent petroleum engineers or other independent petroleum consultant(s) acceptable to the Administrative Agent and the Reserve Report due not less than 30 days prior to November 1 of each year shall be prepared by or under the
supervision of the chief engineer of the Obligors and for which a Responsible Officer shall certify such Reserve Report to be true and accurate and to have been prepared in accordance with the procedures used in the immediately proceeding May 1
Reserve Report. 
 (b) In the event of an unscheduled redetermination, the Borrower shall furnish to the Administrative Agent
and the Lenders a Reserve Report prepared by or under the supervision of the chief engineer of the Obligors together with the certificate of a Responsible Officer 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 Reserve Report. For any unscheduled redetermination requested by the Lenders or the Borrower pursuant to Section 2.08(d), the Borrower shall provide such
Reserve Report with an “as of” date as required by the Lenders as soon as possible, but in any event no later than 30 days following the receipt of the request by the Administrative Agent. 
 (c) With the delivery of each Reserve Report, the Borrower shall provide, or cause to be provided, to the Administrative Agent and the
Lenders, a certificate from a Responsible Officer certifying that, to the best of his knowledge and in all material respects: (i) the information contained in the Reserve Report and any other information delivered in connection therewith is
true and correct, (ii) the Guarantors own 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 9.02,
(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 with respect to its Oil and Gas Properties evaluated in such Reserve Report which would require any Obligor
to deliver Hydrocarbons produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, (iv) none of its Oil and Gas Properties have been sold since the date of the last Borrowing Base
determination except as set forth on an exhibit to the certificate, which certificate shall list all of its Oil and Gas Properties sold and in such detail as reasonably required by the Majority Lenders, (v) attached to the certificate is a list
of its Oil and Gas Properties added to and deleted from the immediately prior Reserve Report and a list showing any change in working interest or net revenue interest in its Oil and Gas Properties occurring and the reason for such change,
(vi) attached to the certificate is a list of all Persons disbursing proceeds to the Guarantors from their Oil and Gas Properties and (vii) except as set forth on a schedule attached to the certificate all of the Oil and Gas Properties
evaluated by such Reserve Report are Mortgaged Property. 
 Section 8.08 Title Information. 
 (a) Delivery. On or before the delivery to the Administrative Agent and the Lenders of each Reserve Report required by
Section 8.07(a), the Obligors will deliver, or cause to be delivered, title information in form and substance acceptable to the Administrative Agent covering enough of the Oil and Gas Properties evaluated by such Reserve Report
that were not included in the immediately preceding Reserve Report, so that the Administrative Agent shall 

  

 43 

 
have received together with title information previously delivered to the Administrative Agent, satisfactory title information on at least 85% of the value
of the Oil and Gas Properties evaluated by such Reserve Report. 
 (b) Cure of Title Defects. The Obligors shall
cure, or cause to be cured, any title defects or exceptions which are not Excepted Liens raised by such information, or substitute acceptable Mortgaged Properties with no title defects or exceptions except for Excepted Liens covering Mortgaged
Properties of an equivalent value, within 30 days after a request by the Administrative Agent or the Lenders to cure such defects or exceptions. 
 Section 8.09 Additional Collateral. 
 (a) Lien in Acquired Oil and Gas Properties.
Should any Obligor acquire any additional Oil and Gas Properties, such Obligor will grant to the Administrative Agent as security for the Indebtedness a first-priority Lien interest (subject only to Excepted Liens) on such Obligor’s interest in
any Oil and Gas Properties not already subject to a Lien of the Security Instruments, which Lien will be created and perfected by and in accordance with the provisions of mortgages, deeds of trust, security agreements and financing statements, or
other Security Instruments, all in form and substance satisfactory to the Administrative Agent in its sole discretion and in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes. 
 (b) Title Information. Concurrently with the granting of the Lien or other action referred to in
Section 8.07(a) above, the Borrower or such Obligor will provide to the Administrative Agent title information in form and substance satisfactory to the Administrative Agent in its sole discretion with respect to such
Obligor’s interests in such Oil and Gas Properties. 
 (c) Legal Opinions. Also, promptly after the filing
of any new Security Instrument in any state, upon the reasonable request of the Administrative Agent, the Obligors will provide, or cause to be provided, to the Administrative Agent an opinion addressed to the Administrative Agent for the benefit of
the Lenders in form and substance satisfactory to the Administrative Agent in its sole discretion from counsel acceptable to Administrative Agent, stating that the Security Instrument is valid, binding and enforceable in accordance with its terms
and in legally sufficient form for such jurisdiction. 
 Section 8.10 ERISA Information and Compliance. The Obligors will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to promptly furnish to the Administrative Agent with sufficient copies to the Lenders (i) promptly after the filing thereof with the United States Secretary of Labor, the
Internal Revenue Service or the PBGC, copies of each annual and other report with respect to each Plan or any trust created thereunder, (ii) immediately upon becoming aware of the occurrence of any ERISA Event or of any “prohibited
transaction,” as described in section 406 of ERISA or in section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by a Responsible Officer specifying the nature thereof, what
action the Obligors, 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 PBGCs intention to terminate or to have a trustee appointed to administer any Plan. With respect to each Plan (other than a Multiemployer Plan), the Obligors 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 

  

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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 8.11 Hedging Agreements. Within five (5) days following the Closing Date, the Borrower or one or more Subsidiaries, as
applicable, shall purchase one or more commodity price floors or collars or enter into one or more commodity price swaps with one or more counterparties acceptable to Administrative Agent having a minimum floor strike price, minimum notational
amounts and durations set forth below: 
  

											
	 	  	Oil	  	Gas
	 	  	Minimum Yearly
Volumes	  	Minimum Price	  	Minimum Yearly
Volumes	  	Minimum Price
	 2005
	  	60,000 bls	  	$	40.00	  	220 mmcf	  	$	6.00
	 2006
	  	36,000 bls	  	$	38.00	  	180 mmcf	  	$	5.50

 And thereafter, Borrower or one or more Subsidiaries, as applicable, shall purchase such Hedging Agreements at
such volumes and quantities reasonably satisfactory to the Administrative Agent. 
 ARTICLE IX 
 Negative Covenants 
 The Obligors
covenant and agree that, so long as any of the Commitments are in effect and until payment in full of Loans hereunder, all interest thereon and all other amounts payable by the Obligors hereunder, without the prior written consent of the Majority
Lenders: 
 Section 9.01 Debt. 
 (a) None of the Obligors will incur, create, assume or permit to exist any Debt, except: 
 (i) the Notes and other Indebtedness arising under the Loan Documents; 
 (ii) Debt of the Borrower disclosed in Schedule 9.01, and any renewals or extensions (but not increases) thereof;

 (iii) accounts payable (for the deferred purchase price of Property or services) from time to time incurred in the ordinary
course of business which, if greater than 90 days past the invoice or billing date, are being contested in good faith by appropriate proceedings if reserves adequate under GAAP shall have been established therefor; 
 (iv) Debt under capital leases (as required to be reported on the financial statements of the Borrower pursuant to GAAP) not to exceed
$500,000; 
  

 45 

 (v) Debt associated with bonds or surety obligations pursuant to Governmental
Requirements in connection with the operation of any Obligor’s Oil and Gas Properties; and 
 (vi) Debt of the Obligors
under Hedging Agreements covering oil and gas production of the Obligors or their Subsidiaries; provided, however, that such Hedging Agreements shall not in the aggregate cover more than eighty percent (80%) of projected proved
developed producing reserves of the Obligors for each individual period covered by such Hedging Agreements and no such Hedging Agreement shall exceed a term of 36 months. 
 (b) The Borrower will not permit any Subsidiary that is not an Obligor to incur, create, assume, or permit to exist any Debt except
Non-Recourse Debt not to exceed $100,000. 
 Section 9.02 Liens. None of the Obligors nor any Subsidiary will 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 leases allowed under Section 9.01(a)(iv), but only on the Property under such permitted lease;

 (d) Liens disclosed on Schedule 9.02; 
 (e) Liens on cash or securities of the Borrower securing the Debt described in Section 9.01(a)(v); and 
 (f) Liens securing Non-Recourse Debt permitted pursuant to Section 9.01(b). 
 Section 9.03 Investments, Loans and Advances. None of the Obligors nor any Subsidiary will make or permit to remain outstanding any
loans or advances to or investments in any Person, except that the foregoing restriction shall not apply to: 
 (a)
investments, loans or advances reflected in the Financial Statements or which are disclosed to the Lenders in Schedule 9.03; 
 (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 Standard &
Poor’s Corporation or Moody’s Investors Service, Inc.; 
 (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 $100,000,000.00 (as 

  

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of the date of such Lender’s or 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 Standard & Poor’s Corporation or Moody’s Investors Service, Inc., respectively; 
 (f) deposits in money market funds investing exclusively in investments described in Section 9.03(c), 9.03(d) or 9.03(e); 
 (g) investments, loans or advances in or to any Guarantor; and 
 (h) investments by the Borrower or any Guarantor in direct ownership interests in additional Oil and Gas Properties and gas gathering
systems related thereto. 
 Section 9.04 Dividends, Distributions and Redemptions. The Borrower will not declare or pay
any distribution, dividend, purchase, redeem or otherwise acquire for value any of its stock, membership or partnership equity now or hereafter outstanding, return any capital to its stockholders, members or partners or make any distribution of its
assets to its stockholders, members or partners (“Distributions”); provided, however; so long as an Event of Default has not occurred and is continuing or would occur as a result of such Distribution, the
Borrower may make (a) payments of reasonable amounts of regularly scheduled salary and other compensation to such stockholders, members, or partners, as applicable, to the extent such Person is employed by the Borrower, and
(b) distributions from the Guarnators to Borrower and/or to the Borrower’s partners within thirty (30) days prior to the date any tax payment is due in an amount equal to cash payments due under the United States federal income taxes
payable by such Person in respect to items of income, loss, credit or deduction of any such Obligor attributable to such Person for such period. 
 Section 9.05 Sales and Leasebacks. None of the Obligors nor any Subsidiary will enter into any arrangement, directly or indirectly, with any Person whereby any Obligor or any Subsidiary shall sell or transfer any of its
Property, whether now owned or hereafter acquired, and whereby such Obligor or Subsidiary shall then or thereafter rent or lease as lessee such Property or any part thereof or other Property which such Obligor or Subsidiary intends to use for
substantially the same purpose or purposes as the Property sold or transferred. 
 Section 9.06 Nature of Business. None
of the Obligors nor any Subsidiary will allow any material change to be made in the character of its business as an independent oil and gas exploration and production company. 
 Section 9.07 Limitation on Leases. None of the Obligors nor any Subsidiary will create, incur, assume or permit to exist any
obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal including capital leases, but excluding leases of Hydrocarbon Interests), under leases or lease agreements which would cause the aggregate amount of all
payments made by the Obligors and their Subsidiaries pursuant to all such leases or lease agreements to exceed $500,000 in any period of twelve consecutive calendar months during the life of such leases. 
 Section 9.08 Mergers, Etc. None of the Obligors will merge into or with or consolidate with any other Person, or sell, lease or
otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its Property or assets to any other Person. 
 Section 9.09 Proceeds of Notes and Letters of Credit. The Borrower will not permit the proceeds of the Notes or Letters of Credit to be used for any purpose other than those permitted by
Section 7.07. Neither the Borrower nor any Person acting on behalf of the Borrower has taken or will take any action which might cause any of the Loan Documents to violate Regulation T, U or X or any 

  

 47 

 
other regulation of the Board of Governors of the Federal Reserve System or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect. 
 Section 9.10 ERISA
Compliance. The Obligors will not at any time: 
 (a) Engage in, or permit any Subsidiary or ERISA Affiliate to engage
in, any transaction in connection with which any Obligor, any Subsidiary or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to section 502(c), (i) or (1) of ERISA or a tax imposed by Chapter 43 of
Subtitle D of the Code; 
 (b) Terminate, or permit any Subsidiary or 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 to any Obligor, any Subsidiary or any ERISA Affiliate to the PBGC; 
 (c) Fail to make, or permit any Subsidiary or 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, any Obligor, a
Subsidiary or any ERISA Affiliate is required to pay as contributions thereto; 
 (d) Permit to exist, or allow any Subsidiary
or 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 Subsidiary or ERISA Affiliate to permit, the actuarial present value of the benefit liabilities under any Plan
maintained by any Obligor, any Subsidiary or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the cur-rent 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 Subsidiary or ERISA Affiliate to contribute to or assume an
obligation to contribute to, any Multiemployer Plan; 
 (g) Acquire, or permit any Subsidiary or ERISA Affiliate to acquire,
an interest in any Person that causes such Person to become an ERISA Affiliate with respect to any Obligor, any Subsidiary or any ERISA Affiliate if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding
such acquisition has sponsored, maintained, or contributed to, (1) any Multiemployer Plan, or (2) any other Plan that is subject to Title IV of ERISA 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 Subsidiary or 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 Subsidiary or
ERISA Affiliate to contribute to or assume an obligation to contribute to, any employee welfare benefit plan, as defined in section 3(l) of ERISA, including, without limitation, any such 

  

 48 

 
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; or 
 (j) Amend or permit any Subsidiary or ERISA Affiliate to amend, a Plan resulting in an
increase in current liability such that any Obligor, any Subsidiary or any ERISA Affiliate is required to provide security to such Plan under section 401 (a)(29) of the Code. 
 Section 9.11 Sale or Discount of Receivables. None of the Obligors nor any Subsidiary will discount or sell (with or without recourse)
any of its notes receivable or accounts receivable. 
 Section 9.12 Current Ratio. The Obligors will not permit the ratio
of (i) current assets (including any unused amount under the Borrowing Base) to (ii) current liabilities (excluding current maturities of the Notes) for the Obligors to be less than 1.0 to 1.0 at any time. 
 Section 9.13 Funded Debt to EBITDA. The Obligors will not permit the ratio of Funded Debt to EBITDA of the Obligors as of the end of
any fiscal quarter of the Obligors beginning December 31, 2004 (calculated quarterly as of the end of each fiscal quarter) to be greater than 4.00 to 1.00. 
 Section 9.14 Interest Coverage Ratio. The Obligors will not permit the Interest Coverage Ratio of the Obligors as of the end of any fiscal quarter of the Obligors beginning December 31, 2004
(calculated quarterly at the end of each fiscal quarter) to be less than 3.00 to 1.00. 
 Section 9.15 Sale of Oil and Gas
Properties. The Obligors will not, and will not permit any Subsidiary to Transfer any Oil and Gas Property or any interest in any Oil and Gas Property for which value was given in the most recent Borrowing Base redetermination in excess of
$500,000 in the aggregate and no Default exists or would result therefrom. 
 Section 9.16 Environmental Matters. None of
the Obligors nor any Subsidiary will 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 obligations 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 would have a Material Adverse Effect. 
 Section 9.17 Transactions with Affiliates. None of the Obligors nor any Subsidiary will enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate unless such transactions are otherwise permitted under this Agreement, are in the ordinary course of its business 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 9.18 Subsidiaries. The Borrower shall not, and shall not permit any Subsidiary to, create any additional Subsidiaries. The Borrower shall not and shall not permit any Subsidiary to sell or to issue any stock or
ownership interest of a Subsidiary, except to the Borrower or any Guarantor and except in compliance with Section 9.03. 
 Section 9.19 Negative Pledge Agreements. None of the Obligors nor any of their Subsidiaries will create, incur, assume or permit to exist any contract, agreement or understanding (other than this Agreement and the
Security Instruments) which in any way prohibits or restricts the granting, conveying, creation or imposition of any Lien on any of its Property or restricts any Subsidiary from paying dividends to the Borrower, or which requires the consent of or
notice to other Persons in connection therewith. 
  

 49 

 Section 9.20 Gas Imbalances, Take-or-Pay or Other Prepayments. The Obligors will not
allow gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Obligors which would require the Obligors to deliver in the aggregate five percent (5%) or more of their Hydrocarbons produced on a monthly
basis from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor. 
 Section 9.21
Accounting Changes. Borrower shall not and shall not permit any Subsidiary to make any significant change in accounting treatment or reporting practices except as required by GAAP, or change the fiscal year of the Borrower or any
Subsidiary. 
 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 default in the payment or prepayment
when due of any principal of or interest on any Loan, or any reimbursement obligation for a disbursement made under any Letter of Credit, or any fees or other amount payable by it hereunder or under any Security Instrument; or 
 (b) any Obligor or any Subsidiary shall default in the payment when due of any principal of or interest on any of its other Debt
aggregating $500,000 or more, or any event specified in any note, agreement, indenture or other document evidencing or relating to any such Debt shall occur if the effect of such event is to cause, or (with the giving of any notice or the lapse of
time or both) to permit the holder or holders of such Debt (or a trustee or agent on behalf of such holder or holders) to cause, such Debt to become due prior to its stated maturity; or 
 (c) any representation, warranty or certification made or deemed made herein or in any Loan Document by any Obligor or any Subsidiary, or
any certificate furnished to any Lender or the Administrative Agent pursuant to the provisions hereof or any Security Instrument, shall prove to have been false or misleading as of the time made or furnished in any material respect; or 

(d) any Obligor shall default in the performance of any of its obligations under Article IX or any other Article of
this Agreement other than under Article VIII; or any Obligor shall default in the performance of any of its obligations under Article VIII or under any Loan Document to which it is a party (other than the
payment of amounts due which shall be governed by Section 10.01(a)) and such default shall continue unremedied for a period of thirty (30) days after the earlier to occur of (i) notice thereof to the Borrower by the
Administrative Agent or any Lender (through the Administrative Agent), or (ii) the Borrower otherwise becoming aware of such default; or 
 (e) any Obligor shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or 
  

 50 

 (f) any Obligor shall (i) apply for or consent to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, liquidation or composition or readjustment of debts, (v) fail
to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Federal Bankruptcy Code, or (vi) take any corporate action for the purpose of effecting any of the
foregoing; or 
 (g) a proceeding or case shall be commenced, without the application or consent of any Obligor, in any court
of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of such
Obligor of all or any substantial part of its assets, or (iii) similar relief in respect of such Obligor under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or
case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 days; or (iv) an order for relief against any Obligor shall be
entered in an involuntary case under the Federal Bankruptcy Code; or 
 (h) a judgment or judgments for the payment of money
in excess of [$100,000.00] in the aggregate shall be rendered by a court against any Obligor and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be
procured, within thirty (30) days from the date of entry thereof and such Obligor shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal; or 
 (i) 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, or, with respect to the Security Instruments, 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 any Obligor shall so state in writing; or 
 (j) an event having a Material Adverse Effect shall occur; or 
 (k) a Change of Control occurs; provided, any Change of Control that occurs as a result of the Recapitalization and/or Tender Offer
shall not create a Default; or 
 (1) an “Event of Default” as defined thereunder shall occur under any of
the documents creating, evidencing or otherwise executed in connection with the Subordinated Debt; or 
 (m) any Obligor
conceals any of its Property with the intent to hinder, delay or defraud any Lender, the Issuing Bank, or the Administrative Agent with respect to their rights in the Mortgaged Property or any other Property of the Obligors; or 
 (n) either (i) Frank A. Lodzinski shall cease or fail for any reason to serve and function in his current capacity as President and
Chief Executive Officer of Borrower’s general partner and such officer shall not be succeeded in such position by a Person acceptable to Administrative Agent. 
  

 51 

 Section 10.02 Remedies. 
 (a) In the case of an Event of Default other than one referred to in clauses (e), (f) or (g) of Section 10.01
or in clause (1) to the extent it relates to clauses (e), (f) or (g), the Administrative Agent, upon request of the Majority Lenders, shall, by notice to the Borrower, cancel the Commitments (in whole or part) and/or declare the principal
amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Borrower hereunder and under the Notes (including without limitation the payment of cash collateral to secure the LC Exposure as provided in
Section 2.10(b)) to be forthwith due and payable, whereupon such amounts shall be immediately due and payable without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other formalities of any
kind, all of which are hereby expressly waived by the Borrower. 
 (b) In the case of the occurrence of an Event of Default
referred to in clauses (e), (f) or (g) of Section 10.01 or in clause (1) to the extent it relates to clauses (e), (f) or (g), the Commitments shall be automatically canceled and the principal amount
then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Borrower hereunder and under the Notes (including without limitation the payment of cash collateral to secure the LC Exposure as provided in
Section 2.10(b)) shall become automatically immediately due and payable without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other formalities of any kind, all of which are hereby
expressly waived by the Borrower. 
 (c) All proceeds received after maturity of the Notes, whether by acceleration or
otherwise shall be applied first to reimbursement of expenses and indemnities provided for in this Agreement and the Security Instruments; second to accrued interest on the Notes; third to fees; fourth pro rata to principal outstanding on the Notes
and other Indebtedness; fifth to serve as cash collateral to be held by the Administrative Agent to secure the LC Exposure; and any excess shall be paid to the Borrower or as otherwise required by any Governmental Requirement. 
 ARTICLE XI 
 The Administrative
Agent 
 Section 11.01 Appointment, Powers and Immunities. Each Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent hereunder and under the Security Instruments with such powers as are specifically delegated to the Administrative Agent by the terms of this Agreement and the Security Instruments, together with such other
powers as are reasonably incidental thereto. The Administrative Agent (which term as used in this sentence and in Section 11.05 and the first sentence of Section 11.06 shall include reference to its Affiliates
and its and its Affiliates’ officers, directors, employees, attorneys, accountants, experts and agents): (i) shall have no duties or responsibilities except those expressly set forth in the Loan Documents, and shall not by reason of the
Loan Documents be a trustee or fiduciary for any Lender; (ii) makes no representation or warranty to any Lender and shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement,
or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement, or for the value, validity, effectiveness, genuineness, execution, effectiveness, legality, enforceability or sufficiency of
this Agreement, any Note or any other document referred to or provided for herein or for any failure by any of the Obligors or any 

  

 52 

 
other Person (other than the Administrative Agent) to perform any of its obligations hereunder or thereunder or for the existence, value, perfection or
priority of any collateral security or the financial or other condition of the Borrower, its Subsidiaries or any other obligor or guarantor; (iii) except pursuant to Section 11.07 shall not be required to initiate or conduct
any litigation of collection proceedings hereunder; and (iv) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection
herewith including its own ordinary negligence, except for its own gross negligence or willful misconduct. The Administrative Agent may employ agents, accountants, attorneys and experts and shall not be responsible for the negligence or misconduct
of any such agents, accountants, attorneys or experts selected by it in good faith or any action taken or omitted to be taken in good faith by it in accordance with the advice of such agents, accountants, attorneys 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. The
Administrative Agent is authorized to release any collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents. 
 Section 11.02 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telex, telecopier, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the
Administrative Agent. 
 Section 11.03 Defaults. The Administrative Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the non-payment of principal of or interest on Loans or of fees or failure to reimburse for Letter of Credit drawings) unless the Administrative Agent has received notice from a Lender or the Borrower specifying
such Default and stating that such notice is a “Notice of Default”. In the event that the Administrative Agent receives such a notice of the occurrence of a Default, the Administrative Agent shall give prompt notice thereof
to the Lenders. In the event of a payment Default, the Administrative Agent shall give each Lender prompt notice of each such payment Default. 
 Section 11.04 Rights as a Lender. With respect to its Commitments and the Loans made by it and its participation in the issuance of Letters of Credit, First Union National Bank (and any successor acting as Administrative
Agent) in its capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Administrative Agent, and the term “Lender” or
“Lenders” shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. Wachovia Bank (and any successor acting as Administrative Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with the Obligors (and any of their Affiliates) as if it were not acting as the Administrative Agent, and Wachovia Bank
and its Affiliates may accept fees and other consideration from the Obligors for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 
 Section 11.05 Indemnification. The Lenders agree to indemnify the Administrative Agent and the Issuing Bank ratably in accordance with
their percentage shares for the indemnity matters as described in Section 12.03 to the extent not indemnified or reimbursed by the Obligors under Section 12.03, but without limiting the obligations of the
Obligors under said Section 12.03 and for any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Administrative Agent or the Issuing Bank in any way relating to or arising out of: (1) this Agreement, the Security Instruments or any other documents contemplated by or referred to herein or the 

  

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transactions contemplated hereby, but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder or (ii) the enforcement of any of the terms of this Agreement, any Security Instrument or of any such other documents; WHETHER OR NOT ANY OF THE FOREGOING SPECIFIED IN THIS SECTION
11.05 ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF THE ADMINISTRATIVE AGENT OR THE ISSUING BANK, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful
misconduct of the Administrative Agent. 
 Section 11.06 Non-Reliance on Administrative Agent and other Lenders. Each
Lender acknowledges and agrees that it has, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Borrower
and its decision to enter into this Agreement, and 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 deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this Agreement. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by the Obligors of this Agreement, the Notes, the
Security Instruments or any other document referred to or provided for herein or to inspect the properties or books of the Obligors. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of the Obligors (or any of
their Affiliates) which may come into the possession of the Administrative Agent or any of its Affiliates. In this regard, each Lender acknowledges that Haynes and Boone, LLP is acting in this transaction as special counsel to the Administrative
Agent only, except to the extent otherwise expressly stated in any legal opinion or any Loan Document. Each Lender 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 11.07 Action by Administrative Agent. Except for action or other matters expressly
required of the Administrative Agent hereunder, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder unless it shall (i) receive written instructions from the Majority Lenders (or all of the
Lenders as expressly required by Section 12.04) specifying the action to be taken, and (ii) 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 of the Majority Lenders (or all of the Lenders as expressly required by Section 12.04) 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, the Administrative Agent shall take such action with respect to such Default as shall be directed by the Majority Lenders (or all of the Lenders as required
by Section 12.04) in the written instructions (with indemnities) described in this Section 11.07, 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 and the Security Instruments or applicable law. 
 Section 11.08 Resignation or Removal of Administrative Agent. Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by giving notice thereof to 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 to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Majority Lenders and shall have 

  

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accepted such appointment within thirty (30) days after the retiring Administrative Agent’s giving of notice of resignation or the Majority
Lenders’ removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent. Upon the acceptance of such appointment hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon 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. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article XI and Section 12.03 shall continue
in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent. 
 ARTICLE XII 
 Miscellaneous 
 Section 12.01 Waiver. 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
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 remedies provided herein are cumulative and not exclusive of any remedies provided by law. 
 Section 12.02 Notices. All notices and other communications provided for herein and in the other Loan Documents (including, without limitation, any modifications of, or waivers or consents under, this Agreement or the
other Loan Documents) shall be given or made by telex, telecopy, courier or U.S. Mail or in writing and telexed, telecopied, mailed or delivered to the intended recipient at the “Address for Notices” specified below its name on the
signature pages hereof or in the Loan Documents or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement or in the other Loan Documents, all such
communications shall be deemed to have been duly given when transmitted, if transmitted before 1:00 p.m. local time on a Business Day (otherwise on the next succeeding Business Day) by telex or telecopier and evidence or confirmation of receipt is
obtained, or personally delivered or, in the case of a mailed notice, three (3) Business Days after the date deposited in the mails, postage prepaid, in each case given or addressed as aforesaid. 
 Section 12.03 Payment of Expenses, Indemnities, etc. 
 (a) The Obligors agree: 
 (i) whether or not the transactions hereby contemplated are consummated, to pay all reasonable expenses of the Administrative Agent in the administration (both before and after the execution hereof and including
advice of counsel as to the rights and duties of the Administrative Agent and the Lenders with respect thereto) of, and in connection with the negotiation, syndication, investigation, preparation, execution and delivery of, recording or filing of,
preservation of rights under, enforcement of, and refinancing, renegotiation or restructuring of, the Loan Documents and any amendment, waiver or consent relating thereto (including, without limitation, travel, photocopy, mailing, courier, telephone
and other similar expenses of the Administrative Agent, the cost of environmental audits, surveys and appraisals at reasonable intervals, the reasonable fees and disbursements of counsel and other outside consultants for the Administrative Agent
and, in the case of enforcement, the reasonable fees and 

  

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disbursements of counsel for the Administrative Agent and any of the Lenders); and promptly reimburse the Administrative Agent for all amounts expended,
advanced or incurred by the Administrative Agent or the Lenders to satisfy any obligation of the Obligors under this Agreement or any Security Instrument, including without limitation, all costs and expenses of foreclosure; 
 (ii) To indemnify the Administrative Agent and each Lender and each of their affiliates and each of their officers, directors, employees,
representatives, agents, attorneys, accountants and experts (“Indemnified Parties”) from, hold each of them harmless against and promptly upon demand pay or reimburse each of them for, the indemnity matters which may be
incurred by or asserted against or involve any of them (whether or not any of them is designated a party thereto) as a result of, arising out of or in any way related to (i) any actual or proposed use by the Borrower or any Guarantor of the
proceeds of any of the loans or letters of credit, (ii) the execution, delivery and performance of the loan documents, (iii) the operations of the business of the Obligors and their Subsidiaries, (iv) the failure of the Obligors or
any Subsidiary to comply with the terms of any loan document, or with any governmental requirement, (v) any inaccuracy of any representation or any breach of any warranty of the Obligors set forth in any of the loan documents, (vi) the
issuance, execution and delivery or transfer of or payment or failure to pay under any letter of credit, or (vii) the payment of a drawing under any letter of credit notwithstanding the non-compliance, non-delivery or other improper
presentation of the manually executed draft(s) and certification(s), (viii) any assertion that the Lenders were not entitled to receive the proceeds received pursuant to the Security Instruments, or (ix) any other aspect of the Loan
Documents, including, without limitation, the reasonable fees and disbursements of counsel and all other expenses incurred in connection with investigating, defending or preparing to defend any such action, suit, proceeding (including any
investigations, litigation or inquiries) or claim and INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY, but excluding all indemnity matters arising solely by reason of claims between the
Lenders or any Lender and the Administrative Agent or a Lender’s shareholders against the Administrative Agent or Lender or by reason of the gross negligence or willful misconduct on the part of the Indemnified Party; and 
 (iii) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST
RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE OBLIGORS OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING
WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY ANY OBLIGOR OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO ANY OBLIGOR OR ANY
SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY ANY OBLIGOR 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, (IV) THE
PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE 

  

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PROPERTIES OWNED OR OPERATED BY ANY OBLIGOR OR ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN
DOCUMENTS. 
 (b) No Indemnified Party may settle any claim to be indemnified without the consent of the indemnitor, such
consent not to be unreasonably withheld; provided, that the indemnitor may not reasonably withhold consent to any settlement that an Indemnified Party proposes, if the indemnitor does not have the financial ability to pay all its obligations
outstanding and asserted against the indemnitor at that time, including the maximum potential claims against the Indemnified Party to be indemnified pursuant to this Section 12.03. 
 (c) In the case of any indemnification hereunder, the Administrative Agent or Lender, as appropriate shall give notice to the Obligors of
any such claim or demand being made against the Indemnified Party and the Obligors shall have the non-exclusive right to join in the defense against any such claim or demand provided that if any Obligor provides a defense, the Indemnified Party
shall bear its own cost of defense unless there is a conflict between the Obligors and such Indemnified Party. 
 (d) THE
FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES 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 INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. To the
extent that an Indemnified Party is found to have committed an act of gross negligence or willful misconduct, this contractual obligation of indemnification shall continue but shall only extend to the portion of the claim that is deemed to have
occurred by reason of events other than the gross negligence or willful misconduct of the Indemnified Party. 
 (e) The
Obligors’ obligations under this Section 12.03 shall survive any termination of this Agreement and the payment of the Notes and shall continue thereafter in full force and effect. 
 (f) The Obligors shall pay any amounts due under this Section 12.03 within thirty (30) days of the receipt by the
Obligors of notice of the amount due. 
 Section 12.04 Amendments, Etc. Any provision of this Agreement or any other Loan
Document may be amended, modified or waived with the Obligors’ and the Majority Lenders’ prior written consent; provided that (i) no amendment, modification or waiver which extends the final maturity of the Loans, increases the
Aggregate Maximum Revolving Credit Amounts, modifies the Borrowing Base, forgives the principal amount of any Indebtedness outstanding under this Agreement, releases any guarantor of the Indebtedness, or releases Security Instruments which in the
aggregate cover more than five percent (5%) by value of the Mortgaged Property (as reflected on the most recent Reserve Report delivered under Section 8.07) during each Borrowing Base Period, reduces the interest rate
applicable to the Loans or the fees payable to the Lenders generally, affects Section 2.03 (a), this Section 12.04 or Section 12.06(a) or modifies the definition of “Majority
Lenders” shall be effective without consent of all Lenders; (ii) no amendment, modification or waiver which increases the Maximum Revolving Credit Amount of any Lender shall be effective without the consent of such Lender; and
(iii) no amendment, 

  

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modification or waiver which modifies the rights, duties or obligations of the Administrative Agent shall be effective without the consent of the
Administrative Agent. 
 Section 12.05 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns. 
 Section 12.06 Assignments and
Participations. 
 (a) The Borrower may not assign its rights or obligations hereunder or under the Notes or any
Letters of Credit without the prior consent of all of the Lenders and the Administrative Agent. 
 (b) Any Lender may, upon
the written consent of the Administrative Agent and, if no Default exists, the Borrower (which consent will not be unreasonably withheld or delayed), assign to one or more assignees all or a portion of its rights and obligations under this Agreement
pursuant to an Assignment Agreement substantially in the form of Exhibit E (an “Assignment”); provided, however, that (i) any such assignment shall be in the amount of the lesser of (A) at
least $5,000,000 or (B) the total amount of a Lender’s rights and obligations under this Agreement and (ii) the assignee or assignor shall pay to the Administrative Agent a processing and recordation fee of $3,500 for each assignment.
Any such assignment will become effective upon the execution and delivery to the Administrative Agent of the Assignment and the consent of the Administrative Agent. Promptly after receipt of an executed Assignment, the Administrative Agent shall
send to the Borrower a copy of such executed Assignment. Upon receipt of such executed Assignment, the Borrower, will, at its own expense, execute and deliver new Notes to the assignor and/or assignee, as appropriate, in accordance with their
respective interests as they appear. Upon the effectiveness of any assignment pursuant to this Section 12.06(b), the assignee will become a “Lender,” if not already a “Lender,” for all purposes of
this Agreement and the Security Instruments. The assignor shall be relieved of its obligations hereunder to the extent of such assignment (and if the assigning Lender no longer holds any rights or obligations under this Agreement, such assigning
Lender shall cease to be a “Lender” hereunder except that its rights under Sections 4.06, 5.01, 5.05 and 12.03 shall not be affected). The Administrative Agent will prepare on the last
Business Day of each month during which an assignment has become effective pursuant to this Section 12.06(b), a new Annex I giving effect to all such assignments effected during such month, and will promptly provide
the same to the Borrower and each of the Lenders. 
 (c) Each Lender may transfer, grant or assign participations in all or
any part of such Lender’s interests hereunder pursuant to this Section 12.06(c) to any Person, provided that: (i) such Lender shall remain a “Lender” for all purposes of this Agreement and the
transferee of such participation shall not constitute a “Lender” hereunder; and (ii) no participant under any such participation shall have rights to approve any amendment to or waiver of any of the Loan Documents except to the
extent such amendment or waiver would (w) modify the definition of “Majority Lenders,” (x) forgive any principal owing on any Indebtedness or extend the final maturity of the Loans, (y) reduce the interest rate (other
than as a result of waiving the applicability of any post-default increases in interest rates) or fees applicable to any of the Commitments or Loans or Letters of Credit in which such participant is participating, or postpone the payment of any
thereof, or (z) release any guarantor of the Indebtedness or release Security Instruments which in the aggregate cover more than five percent (5%) by value of the Mortgaged Property (as reflected on the most recent Reserve Report delivered
under Section 8.07) during each Borrowing Base Period supporting any of the Commitments or Loans or Letters of Credit in which such participant is participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the Security Instruments (the participant’s 

  

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rights against the granting Lender in respect of such participation to be those set forth in the agreement with such Lender creating such participation), and
all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation, provided that such participant shall be entitled to receive additional amounts under Article V on the same
basis as if it were a Lender and be indemnified under Section 12.03 as if it were a Lender. In addition, each agreement creating any participation must include an agreement by the participant to be bound by the provisions of
Section 12.15. 
 (d) The Lenders may furnish any information concerning the Borrower in the possession of
the Lenders from time to time to assignees and participants (including prospective assignees and participants); provided that, such Persons agree to be bound by the provisions of Section 12.15. 
 (e) Notwithstanding anything in this Section 12.06 to the contrary, any Lender may assign and pledge its Note to any
Federal Reserve Bank. No such assignment and/or pledge shall release the assigning and/or pledging Lender from its obligations hereunder. 
 (f) Notwithstanding any other provisions of this Section 12.06, 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 to file a registration statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any state. 
 Section 12.07 Invalidity. In the event that any one or more of the provisions contained in any of the Loan Documents 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 the Notes, this Agreement or any other Loan Document. 
 Section 12.08 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 12.09
References, Use of Word “Including”. 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 or Article shall be deemed to refer to the applicable Section or Article of this Agreement unless otherwise stated herein. Any reference herein to an
exhibit, schedule, or other attachment shall be deemed to refer to the applicable exhibit, schedule, or other attachment attached hereto unless otherwise stated herein. The words “including,” “includes” and words of
similar import mean “including, without limitation.” 
 Section 12.10 Survival. The obligations of the
parties under Section 4.06, Article V, and Sections 11.05 and 12.03 shall survive the repayment of the Loans and the termination of the Commitments. To the extent that any
payments on the Indebtedness or proceeds of any collateral are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Indebtedness so satisfied shall be revived and continue as if such payment or proceeds had not been received and the Administrative Agent’s and the Lenders’ Liens, security
interests, rights, powers and remedies under this Agreement and each Security Instrument shall continue in full force and effect. In such event, each Security Instrument shall be automatically reinstated and the Obligors shall take such action as
may be reasonably requested by the Administrative Agent and the Lenders to effect such reinstatement. 
  

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 Section 12.11 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 12.12 No Oral Agreements. 
 The loan documents 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 12.13 Governing law, submission to jurisdiction. 
 (a) This agreement and the notes shall
be governed by, and construed in accordance with, the laws of the state of Texas except to the extent that United States federal law permits any lender to charge interest at the rate allowed by the laws of the state where such lender is located. Ch.
346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving tri-party accounts) shall not apply to this agreement or the notes. 
 (b) Any legal action or proceeding with respect to the loan documents shall be brought in the courts of the state of Texas or of the
United States of America for the Southern District of Texas, and, by execution and delivery of this Agreement, the Borrower and each Guarantor 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. The Borrower and each Guarantor 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 the Administrative Agent or any Lender from
obtaining jurisdiction over the Borrower or any Guarantor in any court otherwise having jurisdiction. 
 (c) The Borrower and
each Guarantor hereby irrevocably designates Southern Bay Energy, LLC, 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, as the designee, appointee and administrative agent of the Borrower and each Guarantor to receive, for and on behalf
of the Borrower and each Guarantor, service of process in such respective jurisdictions in any legal action or proceeding with respect to the Loan Documents. It is understood that a copy of such process served on such administrative agent will be
promptly forwarded by overnight courier to the Borrower and the relevant Guarantor at their addresses set forth under its signature below, but the failure of the Borrower or such Guarantor to receive such copy shall not affect in any way the service
of such process. The Borrower and each Guarantor further 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 the Borrower and any Guarantor at its said address, such service to become effective thirty (30) days after such mailing. 
 (d) Nothing herein shall affect the right of the Administrative Agent or any Lender 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 the Borrower or any Guarantor in any other jurisdiction. 
  

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 (e) The Borrower, each Guarantor 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 Security Instrument 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 of administrative agent or counsel for any party hereto has represented, expressly or otherwise, or implied that such party would not, in the event of litigation, seek to enforce the foregoing waivers, and (iv) acknowledge
that it has been induced to enter into this Agreement, the Security Instruments and the transactions contemplated hereby and thereby by, among other things, the mutual waivers and certifications contained in this
Section 12.13. 
 Section 12.14 Interest. It is the intention of the parties hereto to conform
strictly to Applicable Usury Laws regarding the use, forbearance or detention of the indebtedness evidenced by this Agreement, the Notes and the other Loan Documents, whether such laws are now or hereafter in effect, including the laws of the United
States of America or any other jurisdiction whose laws are applicable, and including any subsequent revisions to or judicial interpretations of those laws, in each case to the extent they are applicable to this Agreement, the Notes and the other
Loan Documents (the “Applicable Usury Laws”). Accordingly, if any acceleration of the maturity of the Notes or any payment by Borrower or any other Person produces a rate in excess of the Highest Lawful Rate or otherwise
results in Borrower or such other Person being deemed to have paid any interest in excess of the Maximum Amount, as hereinafter defined, or if any Lender shall for any reason receive any unearned interest in violation of any Applicable Usury Laws,
or if any transaction contemplated hereby would otherwise be usurious under any Applicable Usury Laws, then, in that event, regardless of any provision contained in this Agreement or any other Loan Document or other agreement or instrument executed
or delivered in connection herewith, the provisions of this Section 12.14 shall govern and control, and neither Borrower nor any other Person shall be obligated to pay, or apply in any manner to, any amount that would be excessive
interest. No Lender shall ever be deemed to have contracted for or be entitled to receive, collect, charge, reserve or apply as interest on any Loan (whether termed interest therein or deemed to be interest by judicial determination or operation of
law), any amount in excess of the Highest Lawful Rate, and, in the event that such Lender ever receives, collects, or applies as interest any such excess, such amount which would be excessive interest shall be applied as a partial prepayment of
principal and treated hereunder as such, and, if the principal amount of the applicable Loans are paid in full, any remaining excess shall forthwith be paid to Borrower. In determining whether or not the interest contracted for, received, collected,
charged reserved, paid or payable, including under any specific contingency, exceeds the Highest Lawful Rate, Borrower and each Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal payment
(other than payments which are expressly designated as interest payments hereunder) as an expense or fee rather than as interest, (b) exclude voluntary pre-payments and the effect thereof, and (c) amortize and spread the total amount of
interest throughout the entire stated term of the Loans so that the interest rate is uniform throughout such term; provided that if the Loans are paid in full prior to the end of the full contemplated term hereof, and if the interest received
for the actual period of existence thereof exceeds the Highest Lawful Rate, if any, then the Lenders shall refund to Borrower the amount of such excess, or credit the amount of such excess against the aggregate unpaid principal balance of all Loans
made by Lender. As used herein, the term “Maximum Amount” means the maximum nonusurious amount of interest which may be lawfully contracted for, reserved, charged, collected or received by Lender in connection with the
indebtedness evidenced by this Agreement, the Notes and other Loan Documents under all Applicable Usury Laws. Texas Finance Code, Chapter 346, which regulates certain revolving loan accounts and revolving tri-party accounts, shall not apply to any
revolving loan accounts created under, or apply in any manner to, the Note, this Agreement or the other Loan Documents. 
  

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 Section 12.15 Confidentiality. In the event that the Borrower provides to the
Administrative Agent or the Lenders written confidential information belonging to the Borrower, if the Borrower shall denominate such information in writing as “confidential,” the Administrative Agent and the Lenders shall
thereafter maintain such information in confidence in accordance with the standards of care and diligence that each utilizes in maintaining its own confidential information. This obligation of confidence shall not apply to such portions of the
information which (i) are in the public domain, (ii) hereafter become part of the public domain without the Administrative Agent or the Lenders breaching their obligation of confidence to the Borrower, (iii) are previously known by
the Administrative Agent or the Lenders from some source other than the Borrower, (iv) are hereafter developed by the Administrative Agent or the Lenders without using the Borrower’s information, (v) are hereafter obtained by or
available to the Administrative Agent or the Lenders from a third party who owes no obligation of confidence to the Borrower with respect to such information or through any other means other than through disclosure by the Borrower, (vi) are
disclosed with the Borrower’s consent, (vii) must be disclosed either pursuant to any Governmental Requirement or to Persons regulating the activities of the Administrative Agent or the Lenders provided, Administrative Agent and Lenders
shall endeavor to provide notice to the Borrower as soon as practicable in the event Borrower desires to enjoin the disclosure of such information, however, failure of Administrative Agent or Lenders to provide such prior notice to Borrower shall
not give rise to any claim or cause of action by Borrower or any Obligor against Administrative Agent or such Lenders, or (viii) as may be required by law or regulation or order of any Governmental Authority in any judicial, arbitration or
governmental proceeding. Further, the Administrative Agent or a Lender may disclose any such information to any other Lender, any independent petroleum engineers or consultants, any independent certified public accountants, any legal counsel
employed by such Person in connection with this Agreement or any Security Instrument, including without limitation, the enforcement or exercise of all rights and remedies thereunder, or any assignee or participant (including prospective assignees
and participants) in the Loans; provided, however, that the Administrative Agent or the Lenders shall receive a confidentiality agreement from the Person to whom such information is disclosed such that said Person shall have the same obligation to
maintain the confidentiality of such information as is imposed upon the Administrative Agent or the Lenders hereunder. Notwithstanding anything to the contrary provided herein, this obligation of confidence shall cease three (3) years from the
date the information was furnished, unless the Borrower requests in writing at least thirty (30) days prior to the expiration of such three year period, to maintain the confidentiality of such information for an additional three year period.
The Borrower waives any and all other rights it may have to confidentiality as against the Administrative Agent and the Lenders arising by contract, agreement, statute or law except as expressly stated in this Section 12.15.

 Section 12.16 Disposition of Proceeds. Certain of the Security Instruments contain an assignment by the Obligors unto
and in favor of the Administrative Agent for the benefit of the Lenders of all production and all proceeds attributable thereto which may be produced from or allocated to the Mortgaged Property, and such 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, so long as no Default exists,
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 Lenders, but the Lenders will instead permit such proceeds to be paid to the
Obligors. 
 Section 12.17 USA Patriot Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Loan Parties 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 
  

 62 

 
information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. 
 [SIGNATURES BEGIN ON NEXT PAGE] 
  

 63 

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

											
	BORROWER:	 		 	 SOUTHERN BAY OIL & GAS, L.P.,
 a Texas limited partnership

					
		 		 		 	By:	 	 Southern Bay Energy L.L.C.,
 a Texas limited
liability company,
 its General Partner

						
		 		 		 		 	By:	 	/s/ Howard E. Ehler
		 		 		 		 		 	Howard E. Ehler
		 		 		 		 		 	Vice President - Financing
		 		 		 		 		 	
		 		 		 	Address for Notices:
				
		 		 		 	 110 Cypress Station Drive, Suite 220
 Houston, Texas 77090
 Attention: Frank A. Lodzinski

			
	GUARANTORS:	 		 	 AROC OIL & GAS L.L.C., a Texas limited liability company
 AROC RESOURCES, L.L.C., a Texas limited liability company
 AROC (TEXAS), INC., a Texas corporation

SOUTHERN BAY ENERGY L.L.C., a Texas limited liability company
 SOUTHERN BAY LOUISIANA, L.P., a Texas limited partnership

		 		 		 		 	By: SOUTHERN BAY LOUISIANA GP, L.L.C., a Texas limited liability company
		 		 		 	 SOUTHERN BAY OPERATING, L.L.C., a Texas limited liability company
 SOUTHERN BAY LOUISIANA GP, L.L.C., a Texas limited liability company

					
		 		 		 	By:	 	/s/ Howard E. Ehler
		 		 		 		 	Howard E. Ehler
		 		 		 		 	Vice President - Financing

 Signature Page 1 to Credit Agreement 

									
	LENDER AND ADMINISTRATIVE AGENT:	 		 	 WACHOVIA BANK, NATIONAL ASSOCIATION,
 Individually and Administrative Agent

					
		 		 		 	By:	 	/s/ Philip J. Trinder
		 		 		 		 	Philip J. Trinder
		 		 		 		 	Vice President
		 		 		 	  
 Lending Office for Base Rate Loans and LIBOR Loans:
  
 Wachovia Bank, National Association
 301 South College Street
 Charlotte, North Carolina 28288
 Attention: Cynthia Rawson
 Facsimile No. (704) 715-0097
  
 Address for Notices:
  
 Wachovia Bank, National Association
 301 South College Street
 Charlotte, North Carolina 28288
 Attention: Cynthia Rawson
 Facsimile No. (704) 715-0097
  
 With a copy to:
  
 1001 Fannin, Suite 2255
 Houston, Texas 77002
 Telecopier No.: 713-650-6354
 Telephone No.: 713-346-2716
 Attention: Philip J. Trinder

 Signature Page 2 to Credit Agreement 

 ANNEX I 
 LIST OF PERCENTAGE SHARES, MAXIMUM REVOLVING CREDIT AMOUNTS 
  

						
	 Name of Lender
	  	Percentage Share	 	 	Maximum Revolving
Credit Agreement
	 Wachovia Bank, National Association
	  	100	%	 	25,000,000.00

  

 1 

 EXHIBIT A 
 FORM OF NOTE 
  

			
	 	  	December     , 2004

 FOR VALUE RECEIVED, SOUTHERN BAY OIL & GAS L.P., a Texas limited partnership (the
“Borrower”) hereby promises to pay to the order of
                                        
         (the “Lender”), at the Principal Office of WACHOVIA BANK, NATIONAL ASSOCIATION (the “Administrative Agent”), at
                                        
    , the principal sum of
                                        
     Dollars ($                                ) (or such
lesser amount as shall equal the aggregate unpaid principal amount of the Loans made by the Lender to the Borrower under the Credit Agreement, as hereinafter defined), in lawful money of the United States of America and in immediately available
funds, on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount of each such Loan, at such office, in like money and funds, for the period commencing on the date of such Loan
until such Loan shall be paid in full, at the rates per annum and on the dates provided in the Credit Agreement. 
 The date, amount, Type,
interest rate, Interest Period and maturity of each Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedules attached hereto or any continuation thereof. 
 This Note is one of the Notes referred to in the Credit Agreement
dated as of December __, 2004 among the Borrower, the Lenders which are or become parties thereto (including the Lender) and the Administrative Agent (as the same may be amended or supplemented from time to time, the “Credit
Agreement”), and evidences Loans made by the Lender thereunder. Capitalized terms used in this Note have the respective meanings assigned to them in the Credit Agreement. 
 This Note is issued pursuant to the Credit Agreement and is entitled to the benefits provided for in the Credit Agreement and the Security Instruments.
The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events, for prepayments of Loans upon the terms and conditions specified therein and other provisions relevant to this Note. 

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

					
	 SOUTHERN BAY OIL & GAS L.P.,
 a Texas limited partnership

		
	By:	 	 Southern Bay Energy L.L.C.,
 a Texas limited
liability company,
 its General Partner

			
		 	By:	 	 
		 		 	 Frank A. Lodzinski
 President

  

 1 

 EXHIBIT B 
 FORM OF BORROWING, CONTINUATION AND CONVERSION REQUEST 
                      , 200     
 SOUTHERN BAY OIL & GAS L.P., a Texas limited partnership (the “Borrower”), pursuant to the Credit Agreement dated as of
December     , 2004 among the Borrower, certain subsidiaries of the Borrower, Wachovia Bank, National Association as Administrative Agent for the lenders (the “Lenders”) which are or become
parties thereto, and such Lenders (together with all amendments or supplements thereto, the “Credit Agreement”), hereby makes the requests indicated below (unless otherwise defined herein, capitalized terms are defined in the
Credit Agreement): 
  

	 	1.	Loans: 

  

	 	(a)	Aggregate amount of new Loans to be
$                        ; 

  

	 	(b)	Requested funding date is
                                , 200    ;

  

	 	(c)	$                      of such borrowings are to be LIBOR Loans;

 $
                     of such borrowings are to be Base Rate Loans; and 
  

	 	(d)	Length of Interest Period for LIBOR Loans is: 

  

	 	 	                                      
      . 

  

	 	2.	LIBOR Loan Continuation for LIBOR Loans maturing on
                                : 

  

	 	(a)	Aggregate amount to be continued as LIBOR Loans is
$                                ; 

  

	 	(b)	Aggregate amount to be converted to Base Rate Loans is
$                                ; 

  

	 	(c)	Length of Interest Period for continued LIBOR Loans is
                                . 

  

	 	3.	Conversion of Outstanding Base Rate Loans to LIBOR Loans: 

  

	 	 	Convert
$                                 of the outstanding Base Rate Loans to LIBOR
Loans on                                  with an Interest Period of
                                . 

  

	 	4.	Conversion of outstanding LIBOR Loans to Base Rate Loans: 

  

	 	 	Convert $                     of the outstanding LIBOR Loans with Interest
Period maturing on _______, 200__, to Base Rate Loans. 

 The undersigned certifies that he is the President of Southern Bay
Energy, L.L.C., the general partner of the Borrower, and that as such he 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 

  

 1 

 
Borrower is entitled to receive the requested borrowing, continuation or conversion under the terms and conditions of the Credit Agreement. 
  

					
	 SOUTHERN BAY OIL & GAS L.P.,
 a Texas limited partnership

		
	By:	 	 Southern Bay Energy L.L.C.,
 a Texas limited
liability company,
 its General Partner

			
		 	By:	 	 
		 		 	Frank A. Lodzinski
		 		 	President

  

 2 

 EXHIBIT C 
 FORM OF COMPLIANCE CERTIFICATE 
 The undersigned hereby certifies that he is the
                                 of SOUTHERN BAY OIL & GAS, L.P., a Texas
limited partnership (the “Borrower”) and that as such he is authorized to execute this certificate on behalf of the Borrower. With reference to the Credit Agreement dated as of December     , 2004
among the Borrower, Wachovia Bank, National Association, as Administrative Agent for the lenders (the “Lenders”) which are or become a party thereto, and such Lenders (together with all amendments or supplements thereto being
the “Credit Agreement”), the undersigned represents and warrants as follows (each capitalized term used herein having the same meaning given to it in the Credit Agreement unless otherwise specified): 
 (a) The representations and warranties of the Obligors contained in Article VII of the Credit Agreement and in the
Security Instruments and otherwise made in writing by or on behalf of the Obligors pursuant to the Credit Agreement and the Security Instruments were true and correct when made, and are repeated at and as of the time of delivery hereof and are true
and correct at and as of the time of delivery hereof, except as such representations and warranties are modified to give effect to the transactions expressly permitted by the Credit Agreement. 
 (b) The Obligors have performed and complied with all agreements and conditions contained in the Credit Agreement and in the Security
Instruments required to be performed or complied with by it prior to or at the time of delivery hereof 
 (c) None of the
Obligors nor any Subsidiary has incurred any material liabilities, direct or contingent, since
                                    , except those set forth
in Schedule 9.01 to the Credit Agreement and except those allowed by the terms of the Credit Agreement or consented to by the Lenders in writing. 
 (d) Since
                                    , no change has occurred,
either in any case or in the aggregate, in the condition, financial or otherwise, of the Obligors or any Subsidiary which would have a Material Adverse Effect. 
 (e) There exists, and, after giving effect to the loan or loans with respect to which this certificate is being delivered, will exist, no
Default under the Credit Agreement or any event or circumstance which constitutes, or with notice or lapse of time (or both) would constitute, an event of default under any loan or credit agreement, indenture, deed of trust, security agreement or
other agreement or instrument evidencing or pertaining to any Debt of the Obligors or any Subsidiary, or under any material agreement or instrument to which any Obligor or any Subsidiary is a party or by which any Obligor or any Subsidiary is bound.

 (f) The financial statements furnished to the Administrative Agent with this certificate fairly present the consolidated
financial condition and results of operations of the Borrower and its Consolidated Subsidiaries as at the end of, and for, the [fiscal quarter] [fiscal year] ending
                                     and such financial
statements have been approved in accordance with the accounting procedures specified in the Credit Agreement. 
  

 1 

 (g) Attached hereto are the detailed computations necessary to determine whether the
Borrower and its Consolidated Subsidiaries are in compliance with Sections 9.12, 9.13 and 9.14 of the Credit Agreement as of the end of the [fiscal quarter] [fiscal year] ending
                                . 
 EXECUTED AND DELIVERED this
                     day of 200    . 
  

					
	 SOUTHERN BAY OIL & GAS L.P.,
 a Texas limited partnership

		
	By:	 	 Southern Bay Energy L.L.C.,
 a Texas limited
liability company,
 its General Partner

			
		 	By:	 	 
		 		 	Frank A. Lodzinski
		 		 	President
	
	[Other Obligor Signature Blocks]

  

 2 

 EXHIBIT D 
 SECURITY INSTRUMENTS 
  

	1.	Mortgage, Deed of Trust, Security Agreement, Fixture Filing and Financing Statement executed by Borrower. 

  

	2.	Financing Statement (UCC-1) relating to item 1 above. 

  

	3.	Mortgage, Deed of Trust, Security Agreement, Fixture Filing and Financing Statement executed by AROC Oil & Gas, L.L.C. 

  

	4.	Financing Statement (UCC- 1) relating to item 3 above. 

  

	5.	Mortgage, Deed of Trust, Security Agreement, Fixture Filing and Financing Statement executed by Southern Bay Louisiana, L.P. 

  

	6.	Financing Statement (UCC-1) relating to item 5 above. 

  

	7.	Guaranty executed by Southern Bay Energy, L.L.C. 

  

	8.	Guaranty executed by Southern Bay Operating, L.L.C. 

  

	9.	Guaranty executed by Southern Bay Louisiana, L.P. 

  

	10.	Guaranty executed by AROC Resources, L.L.C. 

  

	11.	Guaranty executed by AROC (Texas) Inc. 

  

	12.	Guaranty executed by AROC Oil & Gas, L.L.C. 

  

	13.	Pledge and Collateral Agreement executed by Southern Bay Energy, L.L.C. 

  

	14.	Pledge and Collateral Agreement executed by Borrower. 

  

	15.	Pledge and Collateral Agreement executed by AROC Resources, L.L.C. 

  

	16.	Financing Statements (UCC-1) relating to items 13, 14, and 15 above. 

  

 1 

 EXHIBIT E 
 FORM OF ASSIGNMENT AGREEMENT 
 ASSIGNMENT AGREEMENT (“Agreement”)
dated as of                         , 200     between:
                                        
     (the “Assignor”)and (the “Assignee”). 
 RECITALS

 A. The Assignor is a party to the Credit Agreement dated as of December     , 2004 (as amended and
supplemented and in effect from time to time, the “Credit Agreement”) among Southern Bay Oil & Gas, L.P., a Texas limited partnership (the “Borrower”), each of the lenders that is or becomes a
party thereto as provided in Section 12.06 of the Credit Agreement (individually, together with its successors and assigns, a “Lender”, and collectively, together with their successors and assigns, the
“Lenders”), and Wachovia Bank, National Association, in its individual capacity, and as Administrative Agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative
Agent ”). 
 B. The Assignor proposes to sell, assign and transfer to the Assignee, and the Assignee proposes to purchase and
assume from the Assignor, [all] [a portion] of the Assignor’s Maximum Revolving Credit Amount, outstanding Loans and its Percentage Share of the outstanding LC Exposure, all on the terms and conditions of this Agreement. 
 C. In consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 Definitions 
 Section 1.01
Definitions. All capitalized terms used but not defined herein have the respective meanings given to such terms in the Credit Agreement. 
 Section 1.02 Other Definitions. As used herein, the following terms have the following respective meanings: 
 “Assigned Interest” shall mean all of Assignor’s (in its capacity as a “Lender”) rights and obligations (i) under the Credit Agreement and the other Security Instruments in respect
of the Maximum Revolving Credit Amount of the Assignor in the principal amount equal to $                        ,
including, without limitation, any obligation to participate pro rata in any LC Exposure, and (ii) to make Loans under the Maximum Revolving Credit Amount and any right to receive payments for the Loans outstanding under the Maximum
Revolving Credit Amount assigned hereby of [the following amounts: 
  

				
	 Loans
	  	Amount
	 Revolving Credit
	  	$	_____________

  

 1 

 (the “Loan Balance”), plus the interest and fees which will accrue from and after
the Assignment Date. 
 “Assignment Date” shall mean
                     , 200    . 
 ARTICLE II 
 Sale and Assignment 
 Section 2.01 Sale and Assignment. On the terms and conditions set forth herein, effective on and as of the Assignment Date, the Assignor
hereby sells, assigns and transfers to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, all of the right, title and interest of the Assignor in and to, and all of the obligations of the Assignor in respect of, the
Assigned Interest. Such sale, assignment and transfer is without recourse and, except as expressly provided in this Agreement, without representation or warranty. 
 Section 2.02 Assumption of Obligations. The Assignee agrees with the Assignor (for the express benefit of the Assignor and the Borrower) that the Assignee will, from and after the Assignment Date, perform
all of the obligations of the Assignor in respect of the Assigned Interest. From and after the Assignment Date: (a) the Assignor shall be released from the Assignor’s obligations in respect of the Assigned Interest, and (b) the
Assignee shall be entitled to all of the Assignor’s rights, powers and privileges under the Credit Agreement and the other Security Instruments in respect of the Assigned Interest. 
 Section 2.03 Consent by Administrative Agent. By executing this Agreement as provided below, in accordance with
Section 12.06(b) of the Credit Agreement, the Administrative Agent hereby acknowledges notice of the transactions contemplated by this Agreement and consents to such transactions. 
 ARTICLE III 
 Payments 

 Section 3.01 Payments. As consideration for the sale, assignment and transfer contemplated by Section 2.01
hereof, the Assignee shall, on the Assignment Date, assume Assignor’s obligations in respect of the Assigned Interest and pay to the Assignor an amount equal to the Loan Balance, if any. An amount equal to all accrued and unpaid interest and
fees shall be paid to the Assignor as provided in Section 3.02(iii) below. Except as otherwise provided in this Agreement, all payments hereunder shall be made in Dollars and in immediately available funds, without setoff,
deduction or counterclaim. 
 Section 3.02 Allocation of Payments. The Assignor and the Assignee agree that (i) the Assignor
shall be entitled to any payments of principal with respect to the Assigned Interest made prior to the Assignment Date, together with any interest and fees with respect to the Assigned Interest accrued prior to the Assignment Date, (ii) the
Assignee shall be entitled to any payments of principal with respect to the Assigned Interest made from and after the Assignment Date, together with any and all interest and fees with respect to the Assigned Interest accruing from and after the
Assignment Date, and (iii) the Administrative Agent is authorized and instructed to allocate payments received by it for account of the Assignor and the Assignee as provided in the foregoing clauses. Each party hereto agrees that it will hold
any interest, fees or other amounts that it may receive to which the other party hereto shall be entitled pursuant to the preceding sentence. for account of such other party and pay, in like money and funds, any such amounts that it may receive to
such other party promptly upon receipt. 
  

 2 

 Section 3.03 Delivery of Notes. Promptly following the receipt by the Assignor of the
consideration required to be paid under Section 3.01 hereof, the Assignor shall, in the manner contemplated by Section 12.06(b) of the Credit Agreement, (i) deliver to the Administrative Agent (or its
counsel) the Note[s] held by the Assignor and (ii) notify the Administrative Agent to request that the Borrower execute and deliver new Notes to the Assignor, if Assignor continues to be a Lender, and the Assignee, dated the date of this
Agreement in respective principal amounts equal to the respective Maximum Revolving Credit Amounts of the Assignor (if appropriate) and the Assignee after giving effect to the sale, assignment and transfer contemplated hereby. 
 Section 3.04 Further Assurances. The Assignor and the Assignee hereby agree to execute and deliver such other instruments, and take such
other actions, as either party may reasonably request in connection with the transactions contemplated by this Agreement. 
 ARTICLE IV

 Conditions Precedent 
 Section 4.01 Conditions Precedent. The effectiveness of the sale, assignment and transfer contemplated hereby is subject to the satisfaction of each of the following conditions precedent: 
 (a) the execution and delivery of this Agreement by the Assignor and the Assignee; 
 (b) the receipt by the Assignor of the payment required to be made by the Assignee under Section 3.01 hereof; and

 (c) the acknowledgment and consent by the Administrative Agent contemplated by Section 2.03 hereof.

 ARTICLE V 
 Representations and Warranties. 
 Section 5.01 Representations and Warranties of the Assignor. The
Assignor represents and warrants to the Assignee as follows: 
 (a) it has all requisite power and authority, and has taken
all action necessary to execute and deliver this Agreement and to fulfill its obligations under, and consummate the transactions contemplated by, this Agreement; 
 (b) the execution, delivery and compliance with the terms hereof by Assignor and the delivery of all instruments required to be delivered
by it hereunder do not and will not violate any Governmental Requirement applicable to it; 
 (c) this Agreement has been duly
executed and delivered by it and constitutes the legal, valid and binding obligation of the Assignor, enforceable against it in accordance with its terms; 
 (d) all approvals and authorizations of, all filings with and all actions by any Governmental Authority necessary for the validity or enforceability of its obligations under this Agreement have been obtained;

  

 3 

 (e) the Assignor has good title to, and is the sole legal and beneficial owner of, the
Assigned Interest, free and clear of all Liens, claims, participations or other charges of any nature whatsoever; and 
 (f)
the transactions contemplated by this Agreement are commercial banking transactions entered into in the ordinary course of the banking business of the Assignor. 
 Section 5.02 Disclaimer. Except as expressly provided in Section 5.01 hereof, the Assignor does not make any representation or warranty, nor shall it have any responsibility to the
Assignee, with respect to the accuracy of any recitals, statements, representations or warranties contained in the Credit Agreement or in any certificate or other document referred to or provided for in, or received by any Lender under, the
Credit Agreement, or for the value, validity, effectiveness, genuineness, execution, effectiveness, legality, enforceability or sufficiency of the Credit Agreement, the Notes or any other document referred to or provided for therein or for any
failure by the Borrower or any other Person (other than Assignor) to perform any of its obligations thereunder prior or for the existence, value, perfection or priority of any collateral security or the financial or other condition of the Borrower
or the Subsidiaries [or any other obligor or guarantor], or any other matter relating to the Credit Agreement or any other Security Instrument or any extension of credit thereunder. 
 Section 5.03 Representations and Warranties of the Assignee. The Assignee represents and warrants to the Assignor as follows: 
 (a) it has all requisite power and authority, and has taken all action necessary to execute and deliver this Agreement and to fulfill its
obligations under, and consummate the transactions contemplated by, this Agreement; 
 (b) the execution, delivery and
compliance with the terms hereof by Assignee and the delivery of all instruments required to be delivered by it hereunder do not and will not violate any Governmental Requirement applicable to it; 
 (c) this Agreement has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of the Assignee,
enforceable against it in accordance with its terms; 
 (d) all approvals and authorizations of, all filings with and all
actions by any Governmental Authority necessary for the validity or enforceability of its obligations under this Agreement have been obtained; 
 (e) the Assignee has fully reviewed the terms of the Credit Agreement and the other Security Instruments and has independently and without reliance upon the Assignor, and based on such information as the Assignee has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement; 
 (f) the Assignee hereby affirms
that the representations contained in Section 4.06(d)[(i)][(ii)] of the Credit Agreement are true and accurate as to it [IF (ii) IS SELECTED ADD: and, the Assignee has contemporaneously herewith delivered to the
Administrative Agent and the Borrower such certifications as are required thereby to avoid the withholding taxes referred to in Section 4.061; and 
 (g) the transactions contemplated by this Agreement are commercial banking transactions entered into in the ordinary course of the banking
business of the Assignee. 
  

 4 

 ARTICLE VI  
 Miscellaneous. 
 Section 6.01 Notices. All notices and other communications
provided for herein (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telex or telecopy) to the intended recipient at
its “Address for Notices” specified below its name on the signature pages hereof or, as to either party, at such other address as shall be designated by such party in a notice to the other party. 
 Section 6.02 Amendment, Modification or Waiver. No provision of this Agreement may be amended, modified or waived except by an instrument in
writing signed by the Assignor and the Assignee, and consented to by the Administrative Agent . 
 Section 6.03 Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The representations and warranties made herein by the Assignee are also made for the benefit of
the Administrative Agent and the Borrower, and the Assignee agrees that the Administrative Agent and the Borrower are entitled to rely upon such representations and warranties. 
 Section 6.04 Assignments. Neither party hereto may assign any of its rights or obligations hereunder except in accordance with the terms of
the Credit Agreement. 
 Section 6.05 Captions. The 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 6.06
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be identical and all of which, taken together, shall constitute one and the same instrument, and each of the parties hereto may execute this
Agreement by signing any such counterpart. 
 Section 6.07 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of Texas. 
 Section 6.08 Expenses. To the extent not paid by the Borrower pursuant to the
terms of the Credit Agreement, each party hereto shall bear its own expenses in connection with the execution, delivery and performance of this Agreement. 
 Section 6.09 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 
  

 5 

 IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed and delivered
as of the date first above written. 
  

			
	ASSIGNOR:
	
	 
		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	Address for Notices:
	
	 
	
	 
	
	 

			
		
	Telecopier No.:	 	 
	Telephone No.:	 	 
	Attention:	 	 

			
	
	ASSIGNEE:
	
	 
		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	Address for Notices:
	
	 
	
	 
	
	 

			
		
	Telecopier No.:	 	 
	Telephone No.:	 	 
	Attention:	 	 

  

 6 

			
	ACKNOWLEDGED AND CONSENTED TO:
	
	 
	as Administrative Agent
		
	By:	 	 
	Name:	 	 
	Title:	 	 

  

 7 

 EXHIBIT F 
 INITIAL RESERVE REPORT 
  

 1 

 SCHEDULE 7.02 
 LIABILITIES 
  

 1 

 SCHEDULE 7.03 
 LITIGATION 
 SCHEDULE 7.09 
 TAXES 
  

 1 

 SCHEDULE 7.10 
 TITLES, ETC. 

 SCHEDULE 7.15 
 PLACE OF ORGANIZATION 
  
  

			
	 Obligor
	  	State of Organization
	Southern Bay Oil & Gas, L.P.	  	Texas
	Southern Bay Energy, L.L.C.	  	Texas
	Southern Bay Operating, L.L.C.	  	Texas
	Southern Bay Louisiana, L.P.	  	Texas
	Southern Bay Louisiana, LP GP, L.L.C.	  	Texas
	AROC Resources, L.L.C.	  	Texas
	AROC (Texas), Inc.	  	Texas
	AROC Oil & Gas, L.L.C.	  	Texas

 Location of Business and Chief Executive Offices: 
 110 Cypress Station Drive, Suite 220 
 Houston, Texas 77090 

 SCHEDULE 7.17 
 ENVIRONMENTAL MATTERS 
 NONE 

 SCHEDULE 7.19 
 INSURANCE 

 SCHEDULE 7.20 
 HEDGING AGREEMENTS 

 SCHEDULE 7.23 
 GAS IMBALANCES 
 GAS BALANCING STATUS 
 FOR OPERATING SUBSIDIARIES OF AROC INC. 
 (operated and non-operated
properties) 
  

 Schedule 7.23 - 1 

 SCHEDULE 9.01 
 DEBT 

 SCHEDULE 9.02 
 LIENS 

 SCHEDULE 9.03 
 INVESTMENTS, LOANS AND ADVANCESOffice Building Lease

 EXHIBIT 10.26 
 OFFICE BUILDING LEASE 
 BY AND BETWEEN 
 475-17TH STREET, CO., 
 a Colorado limited partnership 
 (“Landlord”) 
 and 
 Collis P. Chandler III 
 (“Tenant”) 
 Dated January 31, 2000 

 TABLE OF CONTENTS 
  

					
	 1.
	  	Premises	  	1
			
	 2.
	  	Term	  	1
			
	 3.
	  	Rent	  	1
			
	 4.
	  	Expense and Tax Adjustments	  	2
			
	 5.
	  	Character of Occupancy	  	8
			
	 6.
	  	Service and Utilities	  	9
			
	 7.
	  	Quiet Enjoyment	  	11
			
	 8.
	  	Maintenance, Repairs, Alterations and Additions	  	11
			
	 9.
	  	Entry by Landlord	  	14
			
	 10.
	  	Mechanic’s Liens	  	15
			
	 11.
	  	Damage to Property, Injury to Persons	  	15
			
	 12.
	  	Insurance	  	16
			
	 13.
	  	Casualty and Restoration of Premises	  	18
			
	 14.
	  	Condemnation	  	19
			
	 15.
	  	Assignment and Subletting	  	20
			
	 16.
	  	Estoppel Certificate	  	22
			
	 17.
	  	Default	  	22
			
	 18.
	  	Remedies for Default	  	23
			
	 19.
	  	Completion of Premises	  	27
			
	 20.
	  	Removal of Tenant’s Property	  	27
			
	 21.
	  	Holding Over	  	27
			
	 22.
	  	Control of Common Areas; Parking	  	27

					
	 23.
	  	Surrender	  	28
			
	 24.
	  	Subordination and Attornment	  	28
			
	 25.
	  	Payments After Termination	  	28
			
	 26.
	  	Authorities for Action and Notice	  	29
			
	 27.
	  	Security Deposit	  	29
			
	 28.
	  	Compliance With Law	  	30
			
	 29.
	  	Transfer by Landlord and Limited Liability	  	31
			
	 30.
	  	Hazardous Substances	  	31
			
	 31.
	  	Substitution of Premises	  	32
			
	 32.
	  	Brokerage	  	32
			
	 33.
	  	Lien for Rent	  	32
			
	 34.
	  	Miscellaneous	  	33

  

			
	EXHIBIT “A”	  	
	PLAN OF PREMISES	  	38
		
	EXHIBIT “B”	  	
	LEGAL DESCRIPTION	  	39
		
	EXHIBIT “C”	  	
	TENANT IMPROVEMENT WORK AGREEMENT	  	40
		
	EXHIBIT “D”	  	
	RULES AND REGULATIONS	  	44
		
	EXHIBIT “E”	  	
	RIDER	  	50
		
	EXHIBIT “F”	  	
	JANITORIAL SERVICES	  	51
		
	EXHIBIT “G”	  	
	ACCEPTANCE LETTER	  	52

 OFFICE BUILDING LEASE 
 THIS LEASE (this “Lease”) is made this 31st day of January , 2000, by and between 475-17TH STREET, CO., a Colorado limited partnership (“Landlord”) and Collis P. Chandler III (“Tenant”).

  

	1.	Premises: In consideration of the payment of rent and the keeping and performance by Tenant of the covenants and agreements hereinafter set forth, Landlord hereby leases to
Tenant and Tenant hereby rents from Landlord those certain premises designated on the plan attached hereto as Exhibit A (the “Premises”), and by this reference made a part hereof, said Premises consisting of approximately 566
rentable square feet of space comprising suite 860 of the building located at 475 17th Street, Denver, Colorado 80202 (the “Building”), together with a non-exclusive license, subject to the provisions hereof, to use all appurtenances
thereto, including, but not limited to, any plazas, common areas and other areas designated by Landlord for use by tenants of the Building. The Building, plazas, common areas, other areas and appurtenances, plus the real property on which the same
is situated, being more particularly described on Exhibit B, attached hereto and by this reference made a part hereof, are hereinafter collectively sometimes called the “Building Complex.” 

  

	2.	Term: Except as provided to the contrary in Exhibit C, the Tenant Improvement Work Agreement (the “Work Letter”), attached hereto and by this reference made
a part hereof, the term of this Lease shall be for a period of Thirty Six ( 36 ) months, commencing at 12:01 a.m. on February 1, 2000 , (the “Commencement Date”), and ending at 5:00 p.m. on January 31, 2003 , unless sooner
terminated pursuant to this Lease (the “Primary Lease Term”). 

  

	3.	Rent: 

  

	 	A.	Tenant shall pay to Landlord, as rent for the Primary Lease Term, the sum of Thirty One Thousand, Four Hundred Thirteen and no /100 Dollars ($ 31,413.00 ) (the “Base
Rent”) which sum shall be payable in monthly installments commencing on February 1, 2000 , and continuing thereafter on or before the first day of each succeeding calendar month. 

 The Base Rent schedule payable in monthly installments and based on a Thirty Six ( 36 ) month Primary Lease Term for the Premises shall be as follows:

  

			
	 Months After
 Commencement Date
	  	 Base Rent
 Per Month

		
	02/01/00 – 01/31/01	  	$ 17.50/rsf = $825.42/month
		
	02/01/01 – 01/31/02	  	$ 18.50/rsf = $872.58/month
		
	02/01/02 – 01/31/03	  	$ 19.50/rsf = $919.75/month

 All Base Rent or other rentals or sums due hereunder shall be paid in advance without notice, abatement,
deduction or offset at the office of Landlord or to such other person or at such other place as Landlord may designate in writing in lawful money of the United States. 
 Notwithstanding the above, in the event any rent or other amounts owing hereunder are not paid within five (5) days after the due date, then Landlord and Tenant agree that Landlord will incur additional
administrative expenses, the amount of which will be difficult if not impossible to determine. Accordingly, in addition to such required payment, Tenant shall pay to Landlord an additional one time late charge for any such late payment in the amount
of five percent (5%) of the amount of such late payment. Failure to charge or collect such late charge in connection with any one or more such late payments shall not constitute a waiver of Landlord’s right to charge and collect such late
charges in connection with any other or similar or like late payments. 
  

	 	B.	Any Base Rent, Additional Rent, as hereinafter defined, or other amounts owing hereunder which are not paid within five (5) days after they are due shall bear interest at the
rate which is three (3) percentage points above the then current prime interest rate published by Norwest Bank, or successor thereto (the “Prime Rate”), from the due date of such payment until received by Landlord. Similarly,
any amounts paid by Landlord to cure any defaults of Tenant hereunder, which Landlord shall have the right, but not the obligation, to do, shall, if not repaid by Tenant within five (5) days after demand by Landlord, thereafter bear interest at
the above rate until received by Landlord. Failure to charge or collect such interest in connection with any one or more such late payments shall not constitute a waiver of Landlord’s right to charge and collect such interest in connection with
any other or similar or like late payments. 

  

	 	C.	“Additional Rent” shall mean any sums of money or charges to be paid by the Tenant pursuant to the provisions of this Lease other than Base Rent. A failure to pay
Additional Rent shall be treated in all events as the failure to pay rent. The Base Rent and/or Additional Rent are sometimes hereinafter collectively called “Rent.” 

  

	 	D.	If the Primary Lease Term commences on a date other than the first day of a calendar month or terminates on a date other than the last day of a calendar month, the Rent for such
partial month shall be prorated to the actual number of days Tenant is in occupancy of the Premises for said partial month. 

  

	4.	Expense and Tax Adjustments: In addition to Base Rent, Tenant shall reimburse Landlord for Operating Expenses (which sum may be adjusted pursuant to Section 4.B) for the
Building Complex as hereinafter set forth in this Section. 

  

	 	A.	Definitions: In addition to the terms elsewhere defined in this Lease, the following terms shall have the following meanings with respect to the provisions of this Lease:

  

	 	(1)	“Base Operating Expenses” shall mean an amount equal to the actual Operating Expenses, as hereinafter defined, for calendar year 2000. It is understood and agreed
by Tenant that Landlord has not made any representation that the Base Operating Expenses will equal or approximate the actual operating expenses for any Lease Year, as hereinafter defined. 

  

 2 

	 	(2)	“Rentable Area” shall mean all rentable space available for lease in the Building calculated on the basis set forth in the Building Owners’ and Managers
Association International publication for Standard Method for Measuring Floor Area in Office Buildings #ANSI-Z65.1-1980. 

  

	 	(3)	“Pro Rata Share” shall mean that fraction, the numerator of which is the total number of rentable square feet of the Premises (i.e. 566 rentable square feet) and
the denominator of which is the Rentable Area, (i.e. 151,425 rentable square feet), and is equal to .3738 %. At such time, if ever, as any space is added to or subtracted from the Premises, the Pro Rata Share shall be increased or decreased
accordingly. If there is a significant change in the aggregate Rentable Area as a result of an addition to the Building, partial destruction thereof, modification to the Building design, or similar circumstance which causes a reduction or increase
thereto on a permanent basis, Landlord’s Accountants, as hereinafter defined, shall make such adjustments in the computations as shall be necessary to provide for any such change. Landlord shall so notify Tenant and the Pro Rata Share shall be
recalculated accordingly. 

  

	 	(4)	“Lease Year” shall mean each twelve (12) month period beginning with the date the Primary Lease Term commenced, or any anniversary thereof, and ending on the
same date one (1) year later. If the Lease Year is not concurrent with a calendar year, then Landlord reserves the right at any time to make all adjustments provided for herein on a calendar year basis, with an appropriate proration for the
Lease Years in which such conversion is made and in which the term ends, and “Lease Year” as used in this Subsection (4) shall thereafter be deemed to refer to “calendar year”. 

  

	 	(5)	“Operating Expenses” shall mean all operating expenses of any kind or nature which are necessary, ordinary, or customarily incurred in connection with the operation
and maintenance of the Building Complex as determined by Landlord’s Accountants. Operating Expenses shall include, but not be limited to: 

  

	 	(a)	 All real property Taxes and Assessments, as such terms are hereinafter defined, levied against the Building Complex by any governmental or quasi-governmental
authority. As used in this Lease, the term “Taxes” means any and all general and special taxes and impositions of every kind and nature whatsoever levied, assessed, or imposed upon, or with respect to, the Building Complex, any
leasehold improvements, fixtures, installations, additions, and equipment, whether owned by Landlord or Tenant, or either because of or in connection with the Landlord’s ownership, leasing, and operation of the Building Complex, including,
without limitation, real estate taxes, personal property taxes, sewer rents, water rents, general or special assessments, and duties or levies charged or levied upon or assessed against the Building Complex and personal property, transit taxes, all
costs and expenses (including legal fees and court costs) charged for the protest or reduction of property Taxes or Assessments in connection with the Building 

  

 3 

	 	 
Complex, or any tax or excise on Rent or any other tax (however described) on account of rental received for use and occupancy of any or all of the Building
Complex, whether any such taxes are imposed by the United States, the State of Colorado, the City and County of Denver, or any local governmental municipality, authority, or agency or any political subdivision of any of the foregoing. Taxes shall
not include any net income, capital stock, succession, transfer, franchise, gift, estate, and inheritance taxes; provided, however, if at any time during the Primary Lease Term hereof, a tax or excise on rents or income or other tax, however
described (herein called “Rent Tax”), is levied or assessed by the State of Colorado or the City and County of Denver, respectively, or any political subdivision thereof, on account of the Rent hereunder or the interest of Landlord
under this Lease, such Rent Tax shall constitute Taxes; provided, further, in no event shall Tenant be obligated (i) to pay for any calendar year any greater amount by way of such Rent Tax than would have been payable by Tenant had the rentals
paid to Landlord under all Building leases (being the rentals upon which such Rent Tax is imposed) been the sole taxable income of Landlord for the calendar year in question, or (ii) to pay or to reimburse Landlord for any tax of any kind
assessed against Landlord on account of any such Rent Tax having been reimbursed to Landlord. “Assessments” shall include any and all so-called special assessments, license tax, business license fee, business license tax, commercial
rental tax, levy, charge or tax, imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, water, drainage or other improvement or special district
thereof, against the Premises, the Building or the Building Complex, or against any legal or equitable interest of Landlord therein. For the purposes of this Lease, any special assessments shall be deemed payable in such number of installments as is
permitted by law, whether or not actually so paid. If the Building Complex has not been fully assessed as a completed project, for the purposes of computing the Operating Expenses for any adjustment required herein, the Taxes and Assessments shall
be increased by Landlord’s Accountants in accordance with their estimate of what the assessment will be upon full completion of the Building Complex, including installation of all tenant finish items; 

  

	 	(b)	Costs of supplies, including but not limited to the cost of “relamping” all tenant lighting or lighting located in the common areas of the Building Complex as the same may
be required from time to time; 

  

	 	(c)	Costs incurred in connection with obtaining and providing energy for the Building Complex, including but not limited to costs of propane, butane, natural gas, steam, electricity,
solar energy and fuel oils, coal or any other energy sources; 

  

	 	(d)	Costs of water and sanitary and storm drainage services; 

  

	 	(e)	Costs of window cleaning, janitorial and security services; 

  

 4 

	 	(f)	Costs of both interior and exterior general maintenance and repair of the Building Complex; including HVAC systems and structural components of the Building; costs under HVAC and
other mechanical maintenance contracts; and repairs and replacements of equipment used in connection with such maintenance and repair work; 

  

	 	(g)	Costs of maintenance and replacement of landscaping; and costs of maintenance of parking areas, common areas, plazas and other areas used by tenants of the Building Complex;

  

	 	(h)	Insurance premiums, including fire and all-risk coverage, together with loss of rent endorsement; public liability insurance; any other insurance carried by Landlord on the Building
Complex or any component parts thereof; and the part of any claim required to be paid under the deductible portion of any insurance policies carried by Landlord in connection with the Building Complex (where Landlord is unable to obtain insurance
without such deductible from a major insurance carrier at reasonable rates). All such insurance shall be in such amounts as may be required by any mortgagee of Landlord or as Landlord may reasonably determine; 

  

	 	(i)	Labor costs, including wages and other payments, costs to Landlord of workmen’s compensation and disability insurance, payroll taxes, welfare fringe benefits and all legal fees
and other costs or expenses incurred in resolving any labor disputes; 

  

	 	(j)	Professional building management fees, including, but not limited to, rental for the Manager’s office space and costs of supplying the Manager with necessary office equipment
and storage space in the Building; and a general overhead and administration charge equal to two percent (2%) of all other operating expenses incurred by Landlord; 

  

	 	(k)	Legal, accounting, inspection, and other consultation fees (including, without limitation, fees charged by consultants retained by Landlord for services that are designed to produce
a reduction in Operating Expenses or reasonably to improve the operation, maintenance or state of repair of the Building Complex) incurred in the ordinary course of operating the Building Complex; 

  

	 	(l)	 The costs of capital improvements and structural repairs and replacements made in or to the Building Complex in order to conform to changes, subsequent to the date
Landlord obtained its building permit to construct the Building Complex, in any applicable laws, ordinances, rules, regulations, or orders of any governmental or quasi-governmental authority having jurisdiction over the Building Complex (the
“Required Capital Improvements”); the costs of any capital improvements, structural repairs, replacements, or other modifications to the Building Complex or any part 

  

 5 

	 	 
thereof, which costs shall be amortized over the useful life of such improvement or modification with interest at the rate of eighteen percent (18%) per
annum on the unamortized amount, in accordance with such reasonable life and amortization schedules as shall be determined by Landlord in accordance with generally accepted accounting principles, and a reasonable annual reserve for all other capital
improvements and structural repairs and replacements reasonably necessary to permit Landlord to maintain the Building as a first-class office building; 

  

	 	(m)	Costs incurred by Landlord’s Accountants in engaging experts or other consultants to assist them in making the computations required hereunder; and 

  

	 	(n)	Rental payments or acquisition costs, allocated over the useful life, for machinery or equipment, including vehicles, necessary to timely and economically perform the cleaning and
maintenance functions imposed on Landlord together with the interest on such acquisition costs at the Prime Rate in effect as of the acquisition date. 

  

	 	(6)	“Operating Expenses” shall not include: 

  

	 	(a)	Costs of work, including painting and decorating and tenant change work, which Landlord performs for any tenant or in any tenant’s space in the Building other than work of a
kind and scope which Landlord would be obligated to furnish to all tenants whose leases contain a rental adjustment provision similar to this one; 

  

	 	(b)	Costs of repairs or other work occasioned by fire, windstorm or other insured casualty to the extent of insurance proceeds received; 

  

	 	(c)	Leasing commissions, advertising expenses, and other costs incurred in leasing space in the Building; 

  

	 	(d)	Costs of repairs or rebuilding necessitated by condemnation; 

  

	 	(e)	Any interest on borrowed money or debt amortization, except as specifically set forth above; or 

  

	 	(f)	Depreciation on the Building. 

  

	 	(7)	 Notwithstanding anything contained herein to the contrary, if any lease entered into by Landlord with any tenant in the Building is on a so-called “net”
basis, or provides for a separate basis of computation for any Operating Expenses with respect to its leased premises, then, to the extent that Landlord’s Accountants determine that an adjustment should be made in making the computations herein
provided for, Landlord’s Accountants shall be permitted to modify the computation of Base Operating Expenses, Rentable Area, and Operating Expenses for a particular Lease 

  

 6 

	 	 
Year in order to eliminate or otherwise modify any such expenses which are paid for in whole or in part by such tenant. Furthermore, in making any
computations contemplated hereby, Landlord’s Accountants shall also be permitted to make such adjustments and modifications to the provisions of this Section 4 as shall be reasonably necessary to achieve the intention of the parties
hereto. 

  

	 	(8)	“Landlord’s Accountants” shall mean that individual or firm employed by Landlord from time to time to keep the books and records for the Building Complex, and
to prepare the federal and state income tax returns for Landlord with respect to the Building Complex, all of which books and records shall be certified to by an appropriate representative of Landlord. 

  

	 	B.	Adjustment Mechanism: 

  

	 	(1)	It is hereby agreed that during each Lease Year Tenant shall pay to Landlord, as Additional Rent, the Pro Rata Share of the Operating Expenses for such Lease Year in excess of the
Base Operating Expenses, payable monthly, in advance, at the rate of one twelfth (1/12) of Landlord’s estimate thereof, on the same date and at the same place Base Rent is payable, with an adjustment to be made between the parties at a
later date as hereinafter provided. As soon as practicable following the end of any Lease Year, Landlord shall submit to Tenant a statement setting forth the exact amount of the Operating Expenses for the Lease Year just completed and the
difference, if any, between the actual Pro Rata Share of the Operating Expenses for the Lease Year just completed in excess of the Base Operating Expenses and the total amount of the estimated payments of the Pro Rata Share of Operating Expenses
which was paid in accordance with this Subsection for such year. Such statement may also set forth the amount of the estimated Operating Expenses reimbursement for the new Lease Year or Landlord may provide such information in a separate statement
issued to Tenant at such earlier date to coincide with the start of the new Lease Year. To the extent that the actual Pro Rata Share of Operating Expenses in excess of the Base Operating Expenses for any period covered by such statement is greater
than the estimated amounts previously paid by Tenant during the same period, Tenant shall pay to Landlord the difference by cashier’s check or money order within thirty (30) days following receipt of said statement from Landlord. To the
extent that the actual Pro Rata Share of Operating Expenses for the period covered by the statement is less than the estimated amount which Tenant previously paid during such period, Landlord shall credit the excess against any sums then owing or
next coming due from Tenant to Landlord. In addition, until Tenant receives a statement indicating otherwise, Tenant’s monthly payment of its estimated share of Operating Expenses for the new Lease Year shall continue to be paid at the rate for
the previous Lease Year, but Tenant shall commence payment to Landlord of the monthly installments of Tenant’s estimated share of Operating Expenses on the basis of the new statement beginning on the first day of the month following the month
in which Tenant receives such statement. If the statement reflects a change in the monthly reimbursement amount, such difference shall be adjusted by increasing or decreasing the first monthly reimbursement payment after the statement is given in
order to bring the reimbursement amount for the new Lease Year current as of such date. 

  

 7 

	 	(2)	Tenant’s obligation with respect to its Pro Rata Share of the Operating Expenses shall survive the expiration or early termination of this Lease, and subsequent to such
expiration or termination Tenant shall pay its Pro Rata Share of the actual Operating Expenses for the portion of the final Lease Year of the Lease during which Tenant was obligated to pay such expenses. If Tenant occupies the demised Premises for
less than a full calendar year during the first or last Lease Years of the term hereof, the Pro Rata Share for such partial year shall be prorated based upon the number of calendar months and days during which Tenant occupied the Premises. Tenant
shall pay its Pro Rata Share of any such increases within thirty (30) days following receipt of notice thereof. 

  

	 	(3)	Tenant shall have the right, at any time within ninety (90) days after a statement of actual Operating Expenses for a particular Lease Year has been rendered by Landlord as
provided herein, at its sole cost and expense, to examine Landlord’s books and records relating to the determination of Operating Expenses; provided, however, that Tenant shall give Landlord prior written notice of its intent to exercise such
right, the inspection may not take place outside of normal business hours, and Tenant shall not interfere with Landlord’s normal business activities. Unless Tenant objects to the rental adjustment within said ninety (90) day period, such
statement and adjustment shall be deemed conclusive. 

  

	 	(4)	In the event that the Rentable Area is not fully occupied during any particular Lease Year, Landlord’s Accountants may adjust those Operating Expenses for the particular Lease
Year, or portion thereof, as the case may be, which are affected by the occupancy rates to reflect an occupancy of not less than ninety-five percent (95%) of all such Rentable Area. 

  

	5.	Character of Occupancy: 

  

	 	A.	The Premises are to be used for general or executive offices, or both, and for no other purpose without the prior written consent of Landlord, which consent may be unreasonably
withheld. 

  

	 	B.	Tenant shall not use or permit the Premises to be used for any act which will increase the existing rate of insurance upon the Building or the Building Complex, or cause a
cancellation of any insurance policy covering the Building, the Building Complex or any part thereof, nor shall Tenant sell, or permit to be kept, used, or sold in or about the Premises any article which may be prohibited by Landlord’s
insurance policies. Tenant shall not use any apparatus, machinery or device in or about the Premises which shall make any noise or set up any vibration which will unreasonably disturb other tenants. Tenant agrees not to connect any apparatus,
machinery or device to any mechanical, electrical or other Building system without the prior consent of Landlord. Tenant shall not commit waste or suffer or permit waste to be committed, nor shall Tenant permit any nuisance in or about the Premises.

  

	 	C.	Tenant shall not use the Premises or permit anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or governmental rule or
regulation now in force or hereafter enacted or promulgated. 

  

 8 

	 	D.	The rules and regulations attached hereto and marked Exhibit D, as well as such rules and regulations as may hereafter be adopted by Landlord for the safety, care and
cleanliness of the Premises and the Building Complex and the preservation of good order therein, are hereby expressly made a part hereof; and Tenant agrees to obey all such rules and regulations. The violation of any of such rules and regulations by
Tenant shall be deemed an event of default of this Lease by Tenant, affording Landlord all those remedies set out herein. Landlord shall not be responsible to Tenant for the failure of any other tenant or occupant of the Building to comply with any
of said rules and regulations. 

  

	6.	Service and Utilities: 

  

	 	A.	Landlord, in accordance with standards from time to time prevailing for first-class office buildings of similar age and quality in the greater Denver, Colorado area, agrees:
(1) to furnish water to the Building for use in lavatories and drinking fountains (and to the Premises if the tenant finish plans for the Premises so provide); (2) to furnish during Ordinary Business Hours, as hereinafter defined, such
heated or cooled air to the Premises as may, in the judgment of Landlord, be reasonably required for the comfortable use and occupancy of the Premises; (3) to provide a general office janitorial service, as set forth in Exhibit F,
attached hereto and made a part hereof, for the Premises on Monday through Friday, excluding Holidays, as hereinafter defined; (4) to provide such window washing as may, in the judgment of Landlord, be reasonably required; (5) to provide,
during Ordinary Business Hours, passenger elevators for ingress to and egress from the Premises, (one elevator shall be available at all times, except in the case of emergency or repair); and (6) to cause electric current to be supplied to the
Premises for all of Tenant’s Standard Electrical Usage, as hereinafter defined, during Ordinary Business Hours. “Tenant’s Standard Electrical Usage”, as used herein, shall mean and refer to electrical consumption by
equipment capable of operating from outlets serviced by less than 20 ampere, single phase, 115 volt circuit breakers installed in the Premises as part of the original tenant finish pursuant to the Work Letter. “Ordinary Business
Hours,” as used herein, shall mean 7:00 a.m. to 6:00 p.m. Monday through Friday and 8:00 a.m. to 12:00 p.m. on Saturdays, Holidays excepted. “Holidays”, as used herein, shall mean New Year’s Day, Presidents’ Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and such other days as may hereafter be established by Landlord. 

  

	 	B.	 Tenant shall reimburse Landlord for costs incurred by Landlord for Excess Usage, as hereinafter defined, and for After Hours Usage, as hereinafter defined.
“Excess Usage” shall be defined as any usage by Tenant of electricity (1) in an amount in excess of Tenant’s Standard Electrical Usage; or (2) for “Special Equipment,” which, as used herein, shall
mean: (a) any equipment with power requirements other than that defined as Tenant’s Standard Electrical Usage; or (b) self-contained heating, ventilation and air conditioning (“HVAC”) equipment; or (c) equipment
that requires the use of self-contained HVAC units. Prior to the installation of Special Equipment or any consumption of Excess Usage, Tenant shall notify Landlord and shall obtain Landlord’s consent therefor. Monthly charges for Excess Usage
shall be determined on the basis of the amount of power required for such Excess Usage, in kilowatt hours, as determined by Landlord, multiplied by the then current average kilowatt hour cost (“AKWHC”) for the Building Complex.
AKWHC will be determined by Landlord 

  

 9 

	 	 
by totalling the electricity charges for the Building Complex for the preceding twelve month period and dividing that sum by the number of kilowatt hours of
electricity consumed during the same period. Tenant shall be billed monthly for Excess Usage and shall pay such charges monthly as Additional Rent. In addition to the foregoing, Tenant, at Tenant’s option, at the time of notice to Landlord of
Excess Usage, or at any time thereafter, may request Landlord, at Tenant’s sole cost and expense, to install a check meter or flow meter to assist in determining the cost to Landlord of Tenant’s Excess Usage. 

 

	 	C.	“After Hours Usage” shall be defined as any use of lighting and HVAC services during hours other than Ordinary Business Hours. Tenant shall pay for all costs for
After Hours Usage monthly as Additional Rent. Tenant agrees to give Landlord at least one business day’s notice prior to any After Hours Usage, and agrees that after hours HVAC and lighting cannot be supplied to less than one full floor at a
time. 

  

					
	D.	  	(1)	  	If Tenant requires janitorial services other than those required to be provided to other tenants of the Building Complex generally, Tenant shall separately pay for such services monthly as
Additional Rent upon billing by Landlord, or Tenant shall, at Landlord’s option, separately contract for such services with the same company furnishing janitorial services to Landlord. Notwithstanding the foregoing, Tenant shall have the right,
subject to Landlord’s prior written consent and to such rules, regulations and requirements as Landlord may impose (including but not limited to the requirement that such janitors belong to a trade union), to employ Tenant’s own janitors
to perform such additional services.

  

	 	(2)	Tenant agrees that Landlord shall not be liable for failure to supply any heating, air conditioning, elevator, electrical, janitorial, lighting or other services during any period
when Landlord uses reasonable diligence to supply such services, or during any period when Landlord is required to reduce or curtail such services pursuant to any applicable laws, rules or regulations now or hereafter in force or effect, it being
understood that Landlord may discontinue, reduce or curtail such services, or any of them (either temporarily or permanently), at such times as may be necessary by reason of accident, unavailability of employees or materials at reasonable cost,
repairs, alterations, improvements, strikes, lockouts, riots, acts of God, application of applicable laws, statutes, rules and regulations, or due to any other happening beyond the control of Landlord. In the event of any such interruption,
reduction or discontinuance of Landlord’s services (either temporarily or permanently), Landlord shall not be liable for damages to persons or property as a result thereof, nor shall the occurrence of any such event in any way be construed as
an eviction of Tenant, or cause or permit an abatement, reduction or setoff of Base Rent or Additional Rent, or operate to release Tenant from any of Tenant’s obligations hereunder. 

  

	 	E.	Whenever machines or equipment which generate heat either as a prime purpose or as an incidental effect and which affect the temperature otherwise maintained by the air conditioning
system are used by Tenant in the Premises, Landlord reserves the right to install supplementary air conditioning units in the Premises, and the costs therefor, including the costs of installation, operation and maintenance thereof, shall be paid by
Tenant as Additional Rent upon demand by Landlord. 

  

 10 

	 	F.	Unless otherwise provided by Landlord, Tenant shall separately arrange with the applicable local public authorities or utilities, as the case may be, for the furnishing of and
payment for all telephone services as may be required by Tenant in the use of the Premises. Tenant shall directly pay for such telephone services, including the establishment and connection thereof, at the rates charged for such services by said
authority or utility and the failure of Tenant to obtain or to continue to receive such services for any reason whatsoever shall not relieve Tenant of any of its obligations under this Lease. 

  

	7.	Quiet Enjoyment: Subject to liens, covenants, easements and restrictions of record and the terms and provisions of this Lease, Landlord covenants and agrees that Tenant shall
peaceably and quietly enjoy the Premises, and Tenant’s rights hereunder during the term hereof, without hindrance by Landlord so long as Tenant complies with the provisions hereof. 

  

	8.	Maintenance, Repairs, Alterations and Additions: 

  

	 	A.	Maintenance and Repairs: 

  

	 	(1)	Landlord shall maintain the Building, and all other portions of the Building Complex not the obligation of Tenant or any other tenant in the Building, in good order, condition and
repair. 

  

	 	(2)	Except for services furnished by Landlord pursuant to Section 6 hereof, Tenant shall, at Tenant’s sole cost and expense, maintain the Premises in good order, condition and
repair, ordinary wear and tear excepted, including without limitation: the interior surfaces of the ceilings, walls and floors; all doors and interior windows; and all plumbing pipes, electrical fixtures, furnishings and equipment.

  

	 	(3)	In the event that Tenant fails to maintain the Premises in good order, condition and repair, Landlord shall give Tenant notice to do such acts as are required to so maintain the
Premises. In the event that Tenant fails to commence such work promptly upon demand by Landlord, and diligently prosecute it to completion, then Landlord shall have the right, but shall not be required, to do such acts and expend such funds at the
expense of Tenant as are reasonably required to perform such work. Landlord shall have no liability to Tenant for any damage, inconvenience or interference with Tenant’s use of the Premises as a result of performing any such work.

  

	 	(4)	Tenant, at Tenant’s expense shall comply with all laws, rules, orders, ordinances, directions, regulations, and requirements of federal, state, county and municipal
authorities, now in force or which may hereafter be in force, which shall impose any duty upon Landlord or Tenant with respect to the use, occupancy or alteration of the Premises. 

  

	 	(5)	Tenant shall leave the Premises at the end of each Business Day in a reasonably tidy condition for the purpose of allowing the performance of the Landlord’s cleaning services
hereinafter described. 

  

 11 

	 	(6)	Tenant shall pay on demand the cost of replacement with identical quality, size and characteristics of glass broken on the Premises, including outside windows and doors of the
perimeter of the Premises (including perimeter windows in the exterior walls) during the continuance of this Lease, unless the glass shall be broken by Landlord, its servants, employees or agents acting on its behalf. 

  

	 	(7)	If the Building, the Premises or any portion thereof including but not limited to the elevators, boilers, engines, pipes and other apparatus, or members of elements of the Building
(or any of them) used for the purpose of climate control of the Building or operating the elevators, or if the water pipes, drainage pipes, electric lighting or other equipment of the Building or the roof or outside walls of the Building or parking
facilities of Landlord and also the Premises improvements including but not limited to the carpet, wall covering, doors and woodwork, become damaged or are destroyed through the negligence, carelessness or misuse of the Tenant, its servants, agents,
employees or anyone permitted by Tenant to be in the Building Complex, or through it or them, then the cost of the necessary repairs, replacements or alterations shall be borne by the Tenant who shall forthwith pay the same on demand to the Landlord
as Additional Rent. Landlord shall have the exclusive right, but not the obligation, to make any repairs necessitated by such damage. 

  

	 	B.	Alterations and Additions: 

  

	 	(1)	Tenant shall make no alterations, additions or improvements to the Premises or any part thereof without obtaining the prior written consent of Landlord, which consent shall not be
withheld unreasonably. Landlord may condition its consent to any alterations, additions or improvements upon such reasonable requirements as Landlord may deem necessary in its sole discretion, including without limitation the manner in which the
work is done, the right to approve the contractor by whom the work is to be performed, and the times during which the work is to be accomplished. 

  

	 	(2)	All alterations and additions to the Premises including, by way of illustration but not limitation, all partitions, paneling, carpeting, drapes, other window coverings, and light
fixtures (but not including movable office furniture not attached to the Building) shall, upon completion or installation, be deemed to be a part of the real estate and the property of Landlord and shall remain upon and be surrendered with the
Premises as a part thereof without molestation, disturbance or injury at the end of said term, whether by lapse of time or otherwise. Notwithstanding the foregoing, Landlord, by notice given to Tenant no later than thirty (30) days prior to the
end of the Primary Lease Term, may elect to have Tenant remove any or all of such alterations or additions, and, in such event, Tenant shall promptly, at its sole cost and expense, remove such alterations and additions and shall restore the Premises
to their condition prior to the making of the same, reasonable wear and tear excepted. Tenant shall indemnify Landlord against any loss or liability resulting from delay by Tenant in so surrendering the Premises, including without limitation any
claims made by any succeeding tenant founded on such delay. 

  

 12 

	 	(3)	If Landlord authorizes persons requested by Tenant to perform any alterations, repairs, modifications or additions to the Premises, then, prior to the commencement of any such work,
Tenant shall upon request deliver to Landlord such payment and performance bonds or other security as Landlord may require, and certificates issued by insurance companies qualified to do business in the state of Colorado, evidencing that
workmen’s compensation, public liability insurance and property damage insurance, all in amounts, with companies and on forms satisfactory to Landlord, are in force and effect and maintained by all contractors and subcontractors engaged by
Tenant to perform such work. All such policies shall name Landlord as an additional insured. Each such certificate shall provide that the insurance policy may not be canceled or modified without thirty (30) days’ prior written notice to
Landlord. All Tenant alterations, repair and maintenance work shall be performed in such a manner as not to interfere with, delay, or impose any additional expense upon Landlord in the maintenance or operation of the Building or upon other
tenants’ use of their premises. 

  

	 	(4)	The work necessary to make any repairs required pursuant to this Section, or to make any alterations, improvements, or additions to the Premises to which Landlord may consent
pursuant hereto, shall be done by employees or contractors employed by Landlord, or with Landlord’s consent in writing given prior to the letting of a contract by contractors employed by Tenant, but in each case, only under written contract
approved in writing by Landlord, and subject to all conditions Landlord may impose. Tenant shall promptly pay to Landlord or to Tenant’s contractors, as the case may be, when due, the cost of all such work and of all decorating required by
reason thereof, and upon completion, deliver to Landlord, if payment is made directly to Tenant’s contractors, evidence of payment and waivers of all liens for labor, services, or materials, and furthermore, Tenant shall defend and hold
Landlord, the Premises, the Building, and the Property harmless from all costs, damages, liens for labor, services or materials relating to such work, and shall defend and hold Landlord harmless from all costs, damages, liens, and expenses related
thereto. In the event that Landlord incurs any expenses in the removal of trash or cleaning of elevators, public corridors, and loading areas as a result of Tenant’s contractors’ work then Tenant agrees it shall reimburse Landlord within
seven (7) days of billing. 

  

	 	(5)	At least five (5) days prior to the commencement of any work on the Premises Tenant shall notify Landlord of the names and addresses of the persons supplying labor or materials
for the proposed work so that Landlord may avail itself of the provisions of statutes such as Section 38-22-105(2) of the Colorado Revised Statutes (1982). During the progress of any such work on the Premises, Landlord or its representatives
shall have the right to go upon and inspect the Premises at all reasonable times, and shall have the right to post and keep posted thereon notices such as those provided for by Section 38-22-105(2) of the Colorado Revised Statutes
(1982) or to take any further action which Landlord may deem to be proper for the protection of Landlord’s interest in the Premises. 

  

	 	(6)	 Landlord’s approval of Tenant’s plans for any improvements or repairs shall create no responsibility or liability on the part of Landlord for their
completeness, design 

  

 13 

	 	 
sufficiency, or compliance with all laws, rules and regulations of governmental agencies or authorities. 

  

	 	C.	Alterations by Landlord: 

  

	 	(1)	Landlord hereby reserves the right at any time and from time to time to make changes in, additions to, subtractions from or rearrangements of the Building Complex, including,
without limitation, all improvements at any time thereto, all entrances and exits thereto, and to grant, modify and terminate easements or other agreements pertaining to the use and maintenance of all or parts of the Building Complex, including, but
not limited to, the entrance foyer and lobby, and the common corridors and to make changes or additions to the pipes, conduits, ducts, utilities and other necessary building services in the Premises which serve other portions of the Building,
provided that prior to the Commencement Date, the Landlord may alter the Premises to the extent found necessary by the Landlord to accommodate changes in construction design or facilities including major alterations but provided always that the
Premises, as altered, shall be in all material aspects comparable to the Premises as defined herein. 

  

	 	(2)	Landlord shall have the right to change the name of the Building, to construct other buildings or improvements in any plaza or other area designated by Landlord for use by tenants,
or to change the location or character of, or make alterations of or additions to, any of said plazas or other areas. 

  

	 	(3)	Tenant agrees that for the purposes of completing or making repairs or alterations in any portion of the Building, Landlord may use one or more of the street entrances, halls,
passageways and elevators of the Building. 

  

	9.	Entry by Landlord: Landlord and its agents shall have the right to enter the Premises at all reasonable times for the purpose of: (1) examining or inspecting the same;
(2) supplying janitorial services and any other services to be provided by Landlord or Tenant hereunder; (3) showing the same to prospective purchasers or tenants of the Building; and (4) making such alterations, repairs, improvements
or additions to the Premises or to the Building of which they are a part as Landlord may deem necessary or desirable. If Tenant shall not be personally present to open and permit an entry into the Premises at any time when such entry by Landlord is
necessary or permitted hereunder, Landlord may enter by means of a master key without liability to Tenant, except for any failure to exercise due care for Tenant’s property, and without affecting this Lease. If during the last month of the term
hereof, Tenant shall have removed substantially all of its property therefrom, Landlord may immediately enter and alter, renovate and redecorate the Premises without elimination or abatement of Rent and without incurring liability to Tenant for any
compensation. Such entry shall not be construed as a manifestation by the Landlord of an intent to terminate this Lease. Landlord, during the entire term of this Lease, shall have the right, upon ninety (90) days’ prior written notice to
Tenant, to change the number, designation or name of the Building without liability to Tenant. Tenant shall not, without the prior consent of Landlord, change the locks or install additional locks on any entry door or doors to the Premises.

  

 14 

	10.	Mechanic’s Liens: Tenant shall pay or cause to be paid all costs for work done by Tenant or caused to be done by Tenant on the Premises of a character which will or may
result in liens on Landlord’s interest therein. Tenant will keep the Premises and Building Complex free and clear of all mechanic’s liens and other liens on account of work done or claimed to have been done for Tenant or persons claiming
under it. Tenant hereby agrees to indemnify Landlord for, save Landlord harmless from, and defend Landlord against all liability, loss, damage, cost or expense, including attorneys’ fees and interest, incurred on account of any claims of any
nature whatsoever, including lien claims of laborers, materialmen, or others for work actually or allegedly performed for, or for materials or supplies actually or allegedly furnished to Tenant or persons claiming under Tenant. Should any liens be
filed or recorded against the Premises or any portion of the Building Complex, or should any action affecting the title thereto be commenced on account of work done or claimed to have been done for Tenant or persons claiming under it, Tenant shall
cause such liens to be contested or removed of record within five (5) days after notice from Landlord. If Tenant desires to contest any such claim or lien, Tenant may do so only if, within such five (5) day period, Tenant posts adequate
security with a court of competent jurisdiction and obtains an order discharging the lien of record, as then provided by the Colorado mechanics’ lien statute. If a final judgment is entered establishing the validity or existence of any lien for
any amount which lien has not been discharged or bonded off as hereinabove required, Tenant shall pay and satisfy the same at once. If Tenant shall be in default in paying any charge for which a mechanic’s lienor suit to foreclose the lien has
been recorded or filed, and shall not have caused the same to be released of record, Landlord may (but without being required to do so) pay such lien or claim and any costs, and the amount so paid, together with reasonable attorneys’ fees
incurred in connection therewith, shall be immediately due from Tenant to Landlord as Additional Rent. 

  

	11.	Damage to Property, Injury to Persons: 

  

	 	A.	Tenant hereby indemnifies and agrees to hold Landlord harmless from and to defend Landlord against any and all claims of liability for any injury (including death) or damage to any
person or property whatsoever: (1) occurring in, on or about the Premises or any part thereof; or (2) occurring in or about the Building Complex, when such injury or damage is caused in whole or in part by the act, neglect, fault or
omission to act on the part of Tenant, its agents, contractors, employees, or invitees. Tenant further indemnifies and agrees to hold Landlord harmless from and to defend Landlord against any and all claims arising from any breach or default in the
performance of any obligation on Tenant’s part to be performed under the terms of this Lease, or arising from any act or negligence of Tenant, or any of its agents, contractors, employees or invitees, and from and against all costs,
attorneys’ fees, expenses and liabilities incurred as a result of any such claim or any action or proceeding brought thereon. Landlord shall not be liable to Tenant for any damage by or from any act or negligence of any co-tenant or other
occupant of the Building, or by any owner or occupant of adjoining or contiguous property. Tenant agrees to pay for all damage to the Building Complex, and to tenants or occupants thereof, caused by Tenant’s misuse or neglect of the Premises or
any portion of the Building Complex. 

  

	 	B.	 Neither Landlord nor its agents shall be liable for any damage, including resulting loss of use and additional expenses, to property entrusted to Landlord, its
agents or employees, or the building manager, if any, nor for the loss or damage, including resulting loss of use and additional expenses, to any property by theft or otherwise, by any means whatsoever, nor for 

  

 15 

	 	 
any injury (including death) or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, or rain which
may leak from any part of the Building Complex or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface, or from any other place, or resulting from dampness or any other cause whatsoever; provided, however, that
nothing contained herein shall be construed to relieve Landlord from liability for any personal injury or property damage, including loss of use and additional reasonable expenses resulting from its gross negligence or that of its agents, servants
or employees. Landlord or its agents shall not be liable for interference with the light, view or other incorporeal hereditaments. Tenant shall give prompt notice to Landlord in case of fire or accidents in the Premises or in the Building Complex,
or of defects therein or in the fixtures or equipment. Neither Landlord nor its agents shall be liable for any loss, cost, damage, bodily injury (including death) or personal injury arising or resulting from the criminal activities of third persons.

  

	 	C.	In case any action or proceeding is brought against Landlord by reason of any obligation on Tenant’s part to be performed under the terms of this Lease, or arising from any act
or negligence of Tenant, or of its agents or employees, Tenant, upon notice from Landlord, shall defend the same at Tenant’s expense by counsel reasonably satisfactory to Landlord. 

  

	12.	Insurance: 

  

	 	A.	Tenant shall, during its occupancy of the Premises and during the entire term hereof, at its sole cost and expense, obtain, maintain and keep in full force and effect the following
types and kinds of insurance: 

  

	 	(1)	Upon property of every description and kind owned by the Tenant and located in the Building Complex or for which the Tenant is legally liable or installed by or on behalf of the
Tenant, including, without limitation, furniture, fittings, installations, alterations, additions, partitions, fixtures and anything in the nature of a leasehold improvement in an amount not less than the full replacement cost thereof, with a
minimum coverage including sprinkler leakage (where applicable); and in the event that there shall be a dispute as to the amount which comprises full replacement cost, the decision of the Landlord or the mortgagees of the Landlord shall be
conclusive. 

  

	 	(2)	Property damage and public liability insurance including personal liability, contractual liability, non-owned automotive liability, tenants’ legal liability for the full
replacement costs of the Premises, and owners’ and contractors’ protective insurance coverage and a cross-liability clause with respect to the Premises and the Tenant’s use of any part of the Building Complex and which coverage shall
include the business operations conducted by the Tenant and any other persons on the Premises. Such policies shall be written on a comprehensive basis with limits of not less than $1,000,000 with respect to injuries or death of one or more persons,
and not less than $500,000.00 with respect to property damage and not less than $1,000,000 for any one occurrence and such higher limits as the Landlord or the mortgagees of the Landlord may reasonably require from time-to-time.

  

 16 

	 	(3)	Any other form or forms of insurance as the Landlord or the mortgagees of the Landlord may reasonably require from time-to-time in form, in amounts and for insurance risks against
which a prudent tenant would protect itself. 

  

	 	(4)	Business interruption insurance in such amounts as will reimburse the Tenant for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent
tenants or attributable to prevention of access to the Premises or to the Building as a result of such perils. 

  

	 	(5)	If Tenant performs any work on the Premises, prior to the commencement of any such work, Tenant shall deliver to Landlord certificates issued by insurance companies qualified to do
business in the state of Colorado, evidencing that workmen’s compensation and public liability insurance and property damage insurance, all in the amounts satisfactory to Landlord, are in force and effect and maintained by all contractors and
subcontractors engaged by Tenant to perform such work. 

 All policies shall be taken out with insurers acceptable to the
Landlord and in form satisfactory from time-to-time to the Landlord and shall name Landlord and any mortgagee of Landlord or holder of a deed of trust on the Building as an additional insured. The Tenant agrees that certificates of insurance, or, if
required by the Landlord or the mortgagees of the Landlord, certified copies of each such insurance policies will be delivered to the Landlord as soon as practicable after the placing of the required insurance, but in no event later than ten
(10) days after Tenant takes possession of all or any part of the Premises. All policies shall contain an undertaking by the insurers to notify the Landlord and the mortgagees of the Landlord in writing not less than thirty (30) days prior
to any material change, cancellation or sooner termination thereof. The limits of such insurance shall not, under any circumstances, limit the liability of Tenant hereunder. 
 The Tenant covenants and agrees that in the event of damage or destruction to the leasehold improvements in the Premises covered by insurance as required
to be taken out by the Tenant herein, and if the Landlord or Tenant do not terminate this Lease pursuant to Section 13, the Tenant will use the proceeds of such insurance for the purpose of repairing or restoring such leasehold improvements. In
the event that Landlord or Tenant are entitled to terminate the Lease pursuant to Section 13, then if the Premises have also been damaged, Tenant shall pay to Landlord all of its insurance proceeds relative to the leasehold improvements.

  

	 	B.	All insurance required to be maintained by Tenant shall be primary to any insurance provided by Landlord. If Tenant obtains any general liability insurance policy on a claims-made
basis, Tenant shall provide continuous liability coverage for claims arising during the entire term of this Lease, regardless of when such claims are made, either by obtaining an endorsement providing for an unlimited extended reporting period in
the event such policy is canceled or not renewed for any reason whatsoever or by obtaining new coverage with a retroactive date the same as or earlier than the expiration date of the canceled or expired policy. The limits of such insurance shall
not, under any circumstances, limit the liability of Tenant hereunder. 

  

 17 

	 	C.	Landlord agrees to carry or cause to be carried during the term hereof public liability insurance on the Building Complex providing coverage of not less than One Million and No/100
Dollars ($1,000,000.00) for personal injury or death arising out of any one occurrence. Landlord also agrees to carry during the term hereof insurance for fire, extended coverage, vandalism and malicious mischief, insuring the Building Complex
(excluding foundations, excavations and other non-insurable items) for the full insurable value thereof. Landlord may, but shall not be obligated to, take out and carry any other form or forms of insurance as it or the mortgagees of Landlord may
reasonably determine to be advisable. Notwithstanding any contribution by Tenant to the cost of insurance premiums, as provided in Section 4, Tenant acknowledges that it has no right to receive any proceeds from any such insurance policies
carried by Landlord, and that such insurance will be for the sole benefit of Landlord, with no coverage for Tenant for any risk insured against. 

  

	13.	Casualty and Restoration of Premises: 

  

	 	A.	In the event that the Premises or the Building is damaged by fire or other insured casualty and insurance proceeds in an amount sufficient to repair the damages have been made
available therefor by the holder or holders of any mortgages or deeds of trust encumbering the Building Complex, the damage shall be repaired by and at the expense of Landlord to the extent of such available insurance proceeds, provided that such
repairs and restoration can, in Landlord’s sole opinion, be made within one hundred eighty (180) days after the occurrence of such damage without the payment of overtime or other premiums. Until such repairs and restoration are completed
the Base Rent and Additional Rent shall be abated in proportion to the part of the Premises which is unusable by Tenant in the conduct of its business. But there shall be no abatement of Base Rent or Additional Rent by reason of any portion of the
Premises being unusable for a period equal to one (1) day or less. If the damage is due to the fault or neglect of Tenant or its employees, agents or invitees, there shall be no abatement of Base Rent or Additional Rent. Landlord agrees to
notify Tenant within sixty (60) days after such casualty if it estimates that it will be unable to repair and restore the Premises or Building within said one hundred eighty (180) day period. Such notice will set forth the approximate
length of time Landlord estimates will be required to complete such repairs and restoration. If Landlord estimates it cannot make such repairs and restoration within said one hundred eighty (180) day period, then either party, by written notice
to the other, may cancel this Lease as of the date of occurrence of such damage, provided that such notice is given to the other party within fifteen (15) days after Landlord notifies Tenant of the estimated time for completion of such repairs
and restoration. If no notice is given by Tenant evidencing its intent to terminate this Lease, this Lease shall continue in effect and the Base Rent and Additional Rent shall be apportioned in the manner provided above. 

  

	 	B.	Except as provided in this Section, there shall be no abatement of Base Rent or Additional Rent and no liability of Landlord by reason of any injury to or interference with
Tenant’s business or property arising from the making of any repairs, alterations or improvements in or to the fixtures, appurtenances and equipment in the Building Complex. Tenant understands that the Landlord will not carry insurance of any
kind on Tenant’s furniture and furnishings or on any fixtures or equipment removable by Tenant under the provisions of this Lease, and agrees that Tenant shall be obligated to promptly repair any damage thereto or to replace the same. Landlord
shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of removable improvements installed in the Premises by or for Tenant. 

  

 18 

	 	C.	In case sufficient insurance proceeds are unavailable, or the Building throughout shall be so injured or damaged, whether by fire or otherwise (though said Premises may not be
affected, or if affected, can be repaired within said one hundred eighty (180) days), that Landlord, within sixty (60) days after the happening of such injury, shall decide not to reconstruct or rebuild said Building, then, notwithstanding
anything contained herein to the contrary, upon notice in writing to that effect given by Landlord to Tenant within said sixty (60) days, Tenant shall pay the Base Rent and Additional Rent, properly apportioned up to said date, this Lease shall
terminate from the date of delivery of said written notice, and both parties hereto shall be freed and discharged from all further obligations hereunder. A total destruction of the Building shall automatically terminate this Lease.

  

	 	D.	The parties hereto agree that any and all fire, extended coverage and/or property damage insurance which is required to be carried by either shall be endorsed with a subrogation
clause, substantially as follows: “This insurance shall not be invalidated should the insured waive, in writing prior to a loss, any and all right of recovery against any party for loss occurring to the property described therein”; and
each party hereto waives all claims for recovery from the other party, its officers, agents or employees for any loss or damage (whether or not such loss or damage is caused by negligence of the other party), and, notwithstanding any provisions
contained in this Lease to the contrary, to any of its real or personal property, insured under valid and collectible insurance policies to the extent of the collectible recovery under such insurance. 

  

	14.	Condemnation: If any portion of the Premises which materially affects Tenant’s ability to continue to use the remainder thereof for the purposes set forth herein, or if
any portion of the Building, the loss of which renders the Premises untenantable, is taken by right of eminent domain or in condemnation, or is conveyed in lieu of any such taking, then this Lease may be terminated at the option of either Landlord
or Tenant. Such option shall be exercised by either party giving notice to the other of such termination within thirty (30) days after such taking or conveyance; whereupon this Lease shall forthwith terminate and the Base Rent and Additional
Rent shall be duly apportioned as of the date of such taking or conveyance. Upon such termination, Tenant shall surrender to Landlord the Premises and all of Tenant’s interest therein under this Lease, and Landlord may re-enter and take
possession of the Premises or remove Tenant therefrom. If any portion of the Premises or of any area appurtenant thereto is taken which does not materially affect Tenant’s right to use the remainder of the Premises for the purposes set forth
herein, this Lease shall continue in full force and effect and Landlord shall promptly perform any repair or restoration work required to restore the Premises, insofar as possible, to its former condition, and the Base Rent and Additional Rent owing
hereunder shall be adjusted, if necessary, in such just manner and proportion as the part so taken (and its effect on Tenant’s ability to use the remainder of the Premises) bears to the whole. All compensation awarded for any taking (or the
proceeds of private sale in lieu thereof) of the Premises or Building Complex shall be the property of Landlord and Tenant hereby assigns its interest in any such award to Landlord; provided, however, Landlord shall have no interest in any award
made to Tenant for the taking of Tenant’s fixtures and other personal property or moving expenses if a separate award for such items is made to Tenant. 

  

 19 

	15.	Assignment and Subletting: 

  

	 	A.	Tenant shall not permit any part of the Premises to be used or occupied by any persons other than Tenant and the employees of Tenant, nor shall Tenant permit any part of the
Premises to be used or occupied by any licensee or concessionaire, or permit any persons to be upon the Premises other than Tenant, and employees, customers and others having lawful business with Tenant. Tenant shall not assign this Lease, or sublet
or part with the possession of all or part of the Premises, without the prior written consent of Landlord, which consent shall be withheld in Landlord’s sole discretion except as hereinafter expressly otherwise provided. Landlord agrees not to
withhold consent to any proposed assignment of Tenant’s entire interest in this Lease or to a subletting of the entire Premises for all of the then remaining term of this Lease less one (1) day, provided Tenant requests the same in
writing, and provided: (1) such consent to any assignment or subletting shall not relieve the Tenant from its obligations as primary obligor (and not as surety or guarantor) for the payment of all Base Rent and Additional Rent due hereunder,
and for the full and faithful observance and performance of the covenants, terms and conditions herein contained; (2) Landlord, in its sole discretion reasonably exercised, determines that the reputation, business, proposed use of the Premises,
and financial responsibility of and by the proposed assignee or sublessee, as the case may be, are satisfactory to Landlord and Tenant shall have provided Landlord with reasonable proof and Adequate Assurance, as such term is defined in
Section 15.I., hereof; (3) any assignee shall expressly assume all the obligations of this Lease on Tenant’s part to be performed; (4) Tenant is not in default hereunder at the time it makes its request for such consent; and
(5) Tenant and/or Tenant’s assignee in the case of an assignment specifically agree to pay over to Landlord, as Rent, all sums provided to be paid under the terms and conditions of such sublease or assignment which would be in excess of
the amounts otherwise required to be paid by Tenant pursuant to this Lease. Consent of the Landlord to an assignment or subletting shall not in any way be construed to relieve the Tenant from obtaining the consent of the Landlord to any further
assignment or subletting. Subletting or assignment by subtenants or assignees shall not be permitted under any circumstances. 

  

	 	B.	Notwithstanding the provisions of Section 15.A., if Tenant requests Landlord’s consent to an assignment of this Lease or to a subletting of the whole or any part of the
Premises, Tenant shall submit to Landlord the information required in Section 15.A. above. Upon receipt of such request and information from Tenant, Landlord shall have the right, exercisable by notice in writing within fourteen (14) days
after such receipt, to terminate this Lease if the request is to assign this Lease or to sublet all of the Premises or, if the request is to sublet more than fifty percent (50%) of the Premises, to terminate this Lease with respect to such
portion, in each case as of the date set forth in Landlord’s notice of exercise of such right, which shall be not more than thirty (30) days following the giving of such notice. If Landlord exercises such right, Tenant shall surrender
possession of the entire Premises or of the portion which is the subject of the right, as the case may be, on the date set forth in such notice in accordance with the provisions of this Lease relating to surrender of the Premises at the expiration
of the Primary Lease Term. If this Lease shall be canceled as to a portion of the Premises only, the Base Rent and other charges payable by Tenant under this Lease shall be abated proportionately. If Landlord gives such notice of termination, Tenant
may withdraw its request for consent to assignment or subletting by delivering written notice of such withdrawal prior to the termination date set forth in Landlord’s notice, and this Lease shall remain in full force and effect.

  

 20 

	 	C.	In the event that Landlord does not exercise its rights as provided in Section 15.B., all documents utilized by Tenant to evidence any subletting or assignment to which
Landlord has consented shall be subject to prior approval by Landlord or its counsel. Tenant shall pay on demand all of Landlord’s costs and expenses, including reasonable attorneys’ fees, incurred in determining whether or not to consent
to any requested sublease or assignment and in reviewing and approving such documentation. 

  

	 	D.	Notwithstanding anything to the contrary contained in this Lease, if a trustee in bankruptcy is entitled to assume control over Tenant’s rights under this Lease, and assigns
such rights to any third party, the Base Rent to be paid hereunder by such party shall be increased to the then current Base Rent (if greater than then being paid for the Premises) which Landlord would charge for comparable space in the Building as
of the date of such third party’s occupancy of the Premises. 

  

	 	E.	Notwithstanding anything to the contrary contained in this Lease, Tenant shall have no right to assign this Lease or sublet any portion of the Premises during any period that all or
any portion of the Base Rent is abated. 

  

	 	F.	Without in any way limiting Landlord’s right to refuse to give consent, Landlord reserves the right in the event it does give consent to impose such conditions upon its consent
and from time-to-time as Landlord deems necessary, including but not limited to, payment to Landlord of any and all sums required to be paid under the terms and conditions of such sublease or assignment, including sums in excess of the Base Rent,
and to the requirement of additional security which in Landlord’s business judgment shall insure the state of the Premises and the rentals due under this Lease, but no such assignment, subletting, occupancy or collection shall be deemed an
acceptance of the assignee, subtenant or occupant as the Tenant hereof, or constitute a release of Tenant from further performance by Tenant of the covenants on the part of Tenant herein contained. 

  

	 	G.	Neither this Lease nor any interest therein shall be assignable as to the interest of Tenant by operation of law without the written consent of Landlord, which consent may be
arbitrarily withheld. 

  

	 	H.	In the event of a permitted subletting or assignment, any and all allowances, concessions and options set forth in this Lease shall, effective as of the date of the subletting or
assignment, be deemed null and void, it being understood that said allowances, concessions and options were solely for the benefit of the original Tenant. In no event shall this be deemed to retroactively void any allowances or concessions disbursed
or given prior to the subletting or assignment. 

  

	 	I.	Landlord and Tenant understand that notwithstanding certain provisions to the contrary contained herein, a trustee or debtor in possession under the Bankruptcy Code of the United
States or any state thereof may have certain rights to assume or assign this Lease. Landlord and Tenant further understand that, in any event, Landlord is entitled under the Bankruptcy Code to Adequate Assurance, as hereinafter defined, of future
performance of the terms and provisions of this Lease. For purposes of any such assumption or assignment, “Adequate Assurance” shall include at least the following: 

  

 21 

	 	(1)	In order to assure Landlord that the proposed assignee will have the resources with which to pay the Base Rent and Additional Rent called for herein, any proposed assignee must
have, as demonstrated to Landlord’s satisfaction, a net worth (as defined in accordance with generally accepted accounting principles consistently applied) at least as great as the net worth of Tenant on the date this Lease became effective,
increased by seven percent (7%), compounded annually, for each year from the Lease Commencement Date through the date of the proposed assignment. The financial condition and resources of Tenant were a material inducement to Landlord in entering into
this Lease. 

  

	 	(2)	Any proposed assignee of this Lease must assume and agree to be personally bound by the terms, provisions, and covenants of this Lease. 

  

	 	J.	A sale, transfer, pledge or hypothecation by Tenant of all or substantially all of its assets or all or substantially all of its stock, if Tenant is a publicly traded corporation; a
merger of Tenant with another corporation; the sale, transfer, pledge or hypothecation of twenty-five percent (25%) or more of the stock of Tenant if Tenant’s stock is not publicly traded; or the sale, transfer, pledge or hypothecation of
twenty-five percent (25%) or more of the beneficial ownership interest in Tenant if Tenant is a partnership or other non-corporate entity, without the prior written consent of Landlord, shall constitute a prohibited assignment hereunder,
subject to the limitations set forth above. 

  

	 	 K.
	 In no event shall proposed subtenant or assignee be an existing tenant of the 475 17th Street Building or it’s subtenant or assignee. 

  

	16.	Estoppel Certificate: Tenant agrees, at any time and from time to time, upon not less than ten (10) days’ prior written request by Landlord, to execute, acknowledge
and deliver to Landlord, or to any third party designated by Landlord, an estoppel certificate certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that it is in full force and effect as
modified, and stating the modifications), that there have been no defaults thereunder by Landlord or Tenant (or if there have been defaults, setting forth the nature thereof), the date to which the Base Rent and other charges have been paid in
advance, if any, and such other matters as are reasonably requested by Landlord, it being intended that any such statement delivered pursuant to this Section may be relied upon by Landlord and by any prospective purchaser of all or any portion of
Landlord’s interest herein, or a holder or prospective holder of any mortgage or deed of trust encumbering the Building Complex. Tenant’s failure to deliver such statement within such time shall constitute an event of default (as that term
is defined elsewhere in this Lease) and shall conclusively be deemed to be an admission by Tenant of the matters set forth in the request for an estoppel certificate. 

  

	17.	Default: The happening of any one or more of the following events shall constitute an “event of default”: 

  

	 	A.	 Tenant shall fail to pay when due any installment of Base Rent, Additional Rent or other amount owing under this Lease, and such default shall continue for three
(3) days after receipt of written notice from Landlord; provided, however, that Tenant shall not be entitled to more than two (2) notices of a delinquency in a monetary obligation during any Lease Year, and if 

  

 22 

	 	 
thereafter any Base Rent or other amount owing hereunder is not paid when due, a default shall be considered to have occurred even though no notice thereof
is given; or Tenant shall fail to procure the release of any mechanic’s lien as set forth in Section 10. 

  

	 	B.	Tenant shall vacate or abandon the Premises, or shall not continually operate its business in the Premises during Ordinary Business Hours and such cessation or curtailment of
operations occurs for more than ten (10) days. 

  

	 	C.	This Lease or the estate of Tenant hereunder shall be transferred to or shall pass to or devolve upon any other person or party except in a manner permitted herein.

  

	 	D.	This Lease or the Premises or any part thereof shall be taken upon execution or by other process of law directed against Tenant, or shall be taken upon or subject to any attachment
at the instance of any creditor or claimant against Tenant, and said attachment shall not be discharged or disposed of within fifteen (15) days after the levy thereof. 

  

	 	E.	Tenant or any guarantor of this Lease shall file a petition in bankruptcy or insolvency or for reorganization or arrangement under the bankruptcy laws of the United States or under
any insolvency act of any state, or shall voluntarily take advantage of any such law or act by answer or otherwise, or shall die, be dissolved, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay
its debts as they mature. 

  

	 	F.	Involuntary proceedings under any such bankruptcy law or insolvency act or for the dissolution of Tenant or any guarantor of this Lease shall be instituted against Tenant or such
guarantor, or a receiver or trustee of all or substantially all of the property of Tenant or any guarantor of this Lease shall be appointed, and such proceeding shall not be dismissed or such receivership or trusteeship vacated within sixty
(60) days after such institution or appointment. 

  

	 	G.	Tenant shall fail to take possession of the Premises within thirty (30) days of the commencement of the Primary Lease Term. 

  

	 	H.	Tenant shall fail to perform any of the other agreements, terms, covenants or conditions hereof on Tenant’s part to be performed, and such nonperformance shall continue for a
period of thirty (30) days after notice thereof by Landlord to Tenant. 

  

	 	I.	In no event will Landlord or any mortgagee be responsible for any consequential damages incurred by Tenant, including, but not limited to, lost profits or interruption of business,
as a result of any alleged default by Landlord. 

  

	18.	Remedies for Default: 

  

	 	A.	If any one or more events of default shall happen, then Landlord shall have the right at Landlord’s election, then or at any time thereafter without demand or notice, to
reenter and take possession of the Premises or any part thereof and repossess the same as Landlord’s former estate and expel Tenant and those claiming through or under Tenant, and remove the effects of both or either, without being deemed
guilty of any manner of trespass, and without prejudice to any remedies for arrears of Base Rent or Additional Rent or breach of covenants or prior conditions. 

  

 23 

	 	B.	Should Landlord take possession pursuant to legal proceedings or pursuant to any notice provided for by law including a proceeding for possession pursuant to Colorado’s
Forcible Entry and Unlawful Detainer Statutes, Landlord may, from time to time, with or without terminating this Lease either: 

  

	 	(1)	Relet the Premises or any part thereof, either alone or in conjunction with other portions of the Building of which the Premises are a part, in Landlord’s or Tenant’s
name, but for the account of Tenant, for such term or terms (which may be greater or less than a period which would otherwise have constituted the balance of the term of this Lease) and on such conditions and upon such other terms (which may include
concessions of free rent and alteration and repair of the Premises) as Landlord, in its sole discretion, may determine, and Landlord may collect and receive the rents therefor. Landlord shall use reasonable efforts to relet the Premises after all
other space available for leasing in the Building has been let, but, Landlord shall not have any duty to lease the Premises below the then current market rental rates being obtained for competing high rise office buildings in downtown Denver,
Colorado and shall in no way be responsible or liable for any failure to relet the Premises, or any part thereof, or for any failure to collect any rent due upon such reletting. No such reentry or taking possession of the Premises by Landlord shall
be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such intention be given to Tenant. No notice from Landlord hereunder or under a forcible entry and unlawful detainer statute or similar law shall
constitute an election by Landlord to terminate this Lease unless such notice specifically so states. Landlord reserves the right following any such reentry and/or reletting to exercise its right to terminate this Lease by giving Tenant such written
notice, in which event the Lease will terminate as specified in said notice. 

 If Landlord elects to take possession of the
Premises as provided in this Subsection (1) without terminating the Lease, Tenant shall pay to Landlord (i) the Base Rent and other sums as herein provided, which would be payable hereunder if such repossession had not occurred, less
(ii) the net proceeds, if any, of any reletting of the Premises after deducting all Landlord’s reasonable and actual expenses in connection with such reletting, including, but without limitation, all repossession costs, brokerage
commissions, legal expenses, attorneys’ fees, expenses of employees, alteration, remodeling and repair costs and expenses of preparation for such reletting. If, in connection with any reletting, the new lease term extends beyond the existing
term, or the premises covered thereby include other premises not part of the Premises, a fair apportionment of the rent received from such reletting and the expenses incurred in connection therewith as provided aforesaid will be made in determining
the net proceeds received from such reletting. Tenant shall pay such other amounts to Landlord monthly on the days on which the Base Rent and all other amounts owing hereunder would have been payable if possession had not been retaken and Landlord
shall be entitled to receive the same from Tenant on each such day; or 
  

 24 

	 	(2)	Give Tenant written notice of intention to terminate this Lease on the date of such given notice, or on any later date specified therein, and on the date specified in such notice,
Tenant’s right to possession of the Premises shall cease and the Lease shall thereupon be terminated, except as to Tenant’s liability hereunder as hereinafter provided, as if the expiration of the term fixed in such notice were the end of
the term herein originally demised. In the event this Lease is terminated pursuant to the provisions of this Subsection (2), or terminated pursuant to a proceeding for possession under the Colorado Forcible Entry and Unlawful Detainer Statutes,
Tenant shall remain liable to Landlord for damages in an amount equal to the Base Rent and other sums which would have been owing by Tenant hereunder for the balance of the Primary Lease Term had this Lease not been terminated, less the net
proceeds, if any, of any reletting of the Premises by Landlord subsequent to such termination, after deducting all Landlord’s expenses in connection with such reletting, including, but without limitation, the expenses enumerated in Subsection
(1) above. Landlord shall be entitled to collect such damages from Tenant monthly on the days on which the Base Rent and other amounts would have been payable hereunder if this Lease had not been terminated, and Landlord shall be entitled to
receive the same from Tenant on each such day. Alternatively, at the option of Landlord, in the event this Lease is terminated, Landlord shall be entitled to recover forthwith against Tenant as damages for loss of the bargain and not as a penalty,
an amount equal to the worth at the time of termination of the excess, if any, of the amount of Base Rent and Additional Rent reserved in this Lease for the balance of the Primary Lease Term hereof over the then reasonable rental value of the
Premises for the same period plus all amounts incurred by Landlord in order to obtain possession of the Premises and relet the same, including attorneys’ fees, reletting expenses, alterations and repair costs, brokerage commissions and all
other like amounts. 

  

	 	C.	Suit or suits for the recovery of the Base Rent, Additional Rent and other amounts and damages set forth hereinabove may be brought by Landlord, from time to time, at
Landlord’s election, and nothing herein shall be deemed to require Landlord to await the date whereon this Lease or the Primary Lease Term hereof would have expired by limitation had there been no such default by Tenant, or no such termination,
as the case may be. Each right and remedy provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise
including but not limited to suits for injunctive relief and specific performance. The exercise or beginning of the exercise by Landlord of any one or more of the rights or remedies provided for in this Lease or now or hereafter existing at law or
in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. All
costs incurred by Landlord in connection with collecting any Base Rent or other amounts and damages owing by Tenant pursuant to the provisions of this Lease, or to enforce any provision of this Lease, including reasonable attorneys’ fees from
the date such matter is turned over to an attorney, whether or not one or more actions are commenced by Landlord, shall also be recoverable by Landlord from Tenant. 

  

	 	D.	 No failure by Landlord to insist upon the strict performance of any agreement, term, covenant or condition hereof or to exercise any right or remedy consequent upon
a breach thereof, and 

  

 25 

	 	 
no acceptance of full or partial payment of Base Rent or Additional Rent during the continuance of any such breach, shall constitute a waiver of any such
breach or of such agreement, term, covenant or condition. No agreement, term, covenant or condition hereof to be performed or complied with by Tenant, and no breach thereof, shall be waived, altered or modified except by written instrument executed
by Landlord. No waiver of any breach shall affect or alter this Lease, but each and every agreement, term, covenant and condition hereof shall continue in full force and effect with respect to any other then existing or subsequent breach thereof.
Notwithstanding any termination of this Lease, the same shall continue in force and effect as to any provisions which require observance or performance by Landlord or Tenant subsequent to such termination. 

  

	 	E.	Nothing contained in this Section 18 shall limit or prejudice the right of Landlord to prove and obtain as liquidated damages in any bankruptcy, insolvency, receivership,
reorganization or dissolution proceeding, an amount equal to the maximum allowed by any statute or rule of law governing such a proceeding and in effect at the time when such damages are to be proved, whether or not such amount be greater, equal or
less than the amounts recoverable, either as damages or rent, referred to in any of the preceding provisions of this Section. Notwithstanding anything contained in this Section to the contrary, any such proceeding or action involving bankruptcy,
insolvency, reorganization, arrangement assignment for the benefit of creditors, or appointment of a receiver or trustee, as set forth above, shall be considered to be an event of default only when such proceeding, action or remedy shall be taken or
brought by or against the then holder of the leasehold estate under this Lease. 

  

	 	F.	Landlord and Tenant agree that any action or proceeding arising out of this Lease shall be heard by the court sitting without a jury, and they hereby waive all rights to trial by
jury. In the event of default, in addition to all other remedies therefor, Landlord shall be entitled to receive from Tenant all sums the payment of which may previously have been waived by Landlord, or which may have been paid by Landlord, pursuant
to any agreement by Landlord to grant Tenant a rental abatement or other monetary inducement or concession, including any tenant finish allowance and all other payments made by Landlord to or on behalf of Tenant, together with interest on such
amounts at three (3) percentage points above the Prime Rate, from the date or dates such amounts were paid by Landlord or would have been due from Tenant but for the abatement, until finally paid or repaid. 

  

	 	G.	Any amounts paid by Landlord to cure any defaults of Tenant hereunder, which Landlord shall have the right, but not the obligation, to do, shall, if not repaid by Tenant within five
(5) days of demand by Landlord, thereafter bear interest at the rate of three percent (3%) over the then Prime Rate, or the highest rate permitted by applicable usury law, whichever is lower, until paid. 

  

 26 

	19.	Completion of Premises: Landlord, subject to delays beyond its control, hereby agrees to perform its obligations with respect to the Work Letter. Other than as set forth in
the Work Letter, Landlord shall have no obligation for the completion of the Premises, and Tenant shall accept the Premises in its “as is” condition as of the date Landlord delivers possession of the Premises to Tenant in accordance with
the provisions hereof and of the Work Letter. In any event, Landlord shall not have any obligation for the repair or replacement of any portions of the interior of the Premises which are damaged or wear out during the term hereof, regardless of the
cause therefor, except if the cause is attributable to the gross negligence or intentional misconduct of Landlord. 

  

	20.	Removal of Tenant’s Property: All movable furniture and personal effects of Tenant not removed from the Premises upon the vacation or abandonment thereof or upon the
termination of this Lease for any cause whatsoever shall conclusively be deemed to have been abandoned and may be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without notice to Tenant or any other person and without
obligation to account therefor; and Tenant shall pay Landlord for all expenses incurred in connection with the disposition of such property. 

  

	21.	Holding Over: Should Tenant hold over after the termination of this Lease and continue to pay Base Rent and Additional Rent, and should Landlord accept such Base Rent and
Additional Rent, without any express written agreement as to such holding over, Tenant shall become a tenant from month-to-month only upon each and all of the terms herein provided as may be applicable to such month-to-month tenancy, but any such
holding over shall not constitute an extension of this Lease. During such holding over, Tenant shall pay rental equal to one hundred fifty percent (150%) of the last monthly rental rate and the other charges as provided herein. Such tenancy
shall continue until terminated by Landlord as provided by law or until Tenant shall have given to Landlord a written notice at least thirty (30) days prior to the intended date of termination of such monthly tenancy of Tenant’s intention
to terminate such tenancy. Nothing contained herein shall be construed as requiring Landlord to accept any rental tendered by Tenant after the expiration of this Lease. 

  

	22.	 Control of Common Areas; Parking: All automobile parking areas, driveways, entrances and exits thereto and other facilities furnished by Landlord, including
all parking areas, truck way or ways, loading areas, pedestrian walkways and ramps, landscaped areas, stairways and other areas and improvements provided by Landlord both inside and outside the Building (all of the foregoing are hereinafter
collectively referred to as “Common Areas”) for the general use in common of tenants, their officers, employees, agents, invitees, licensees, visitors and customers (all of the foregoing are hereinafter collectively referred to as
“Permitted Users”), shall be at all times subject to the exclusive control and management of Landlord, and Landlord shall have the right at any time and from time-to-time to establish, modify and enforce reasonable rules and
regulations with respect to all such Common Areas. Landlord shall have the right to construct, maintain and operate lighting facilities within the Common Areas; to employ personnel to operate and maintain the Common Areas; to change at any time and
from time-to-time the area, level, location and arrangement of parking areas and other Common Areas; to restrict parking and impose parking charges; to close all or any portion of the Common Areas to such extent as may, in the opinion of
Landlord’s counsel, be legally sufficient to prevent a public dedication thereof or the accrual of any rights therein to any person or the public; to discourage parking by other than Permitted Users; and to do and perform such other acts in and
to the Common Areas as, in the use of good business judgment, Landlord shall determine to be advisable with a view to the improvement of the convenience and use thereof by the Permitted Users. Reference in this Section to parking areas shall in no
way be construed as giving Tenant any rights or privileges 

  

 27 

	 	 
in connection with such parking areas unless such rights or privileges are expressly set forth herein. All reasonable expenses incurred by Landlord in the
maintenance and operation of the Common Areas shall be included in the definition of Operating Expenses. 

  

	23.	Surrender: Upon the expiration or other termination of the term of this Lease, Tenant shall promptly quit the Premises and surrender the Premises to Landlord broom clean, in
good order and condition, except for ordinary wear and tear and loss by fire or other casualty (unless caused, whether by action or inaction, by Tenant, its agents, servants, employees or invitees). Tenant shall remove all of its movable furniture
and other effects and such alterations, additions and improvements as Landlord shall require Tenant to remove pursuant to Section 8 hereof. In the event that Tenant fails to vacate the Premises in a timely manner as required, Tenant shall be
responsible to Landlord for all costs incurred by Landlord as a result of such failure, including, but not limited to, any amounts required to be paid to third parties who were to have occupied the Premises and any attorneys’ fees related
thereto. 

  

	24.	Subordination and Attornment: This Lease, at Landlord’s option, shall be subordinate to any mortgage, deed of trust (now or hereafter placed upon the Building Complex),
ground lease or declaration of covenants (hereafter placed upon the Building Complex) regarding maintenance and use of any areas contained in any portion of the Building Complex, and to any and all advances made under any mortgage or deed of trust
and to all renewals, modifications, consolidations, replacements and extensions thereof. Tenant agrees, with respect to any of the foregoing documents, that no documentation other than this Lease shall be required to evidence such subordination. If
any holder of a mortgage or deed of trust shall elect for this Lease to be superior to the lien of its mortgage or deed of trust, and shall give written notice thereof to Tenant, then this Lease shall automatically be deemed prior to such mortgage
or deed of trust, whether this Lease is dated earlier or later than the date of said mortgage or deed of trust or the date of recording thereof. Tenant agrees to execute such documents as may be further required to evidence such subordination or to
make this Lease prior to the lien of any mortgage or deed of trust, as the case may be, and by failing to do so within ten (10) days after written demand, Tenant does hereby make, constitute and irrevocably appoint Landlord as Tenant’s
attorney-in-fact and in Tenant’s name, place and stead, to do so. This power of attorney is coupled with an interest. Tenant hereby attorns to all successor owners of the Building, whether or not such ownership is acquired as a result of a sale
through foreclosure of a deed of trust or mortgage, or otherwise. Notwithstanding the foregoing, Tenant shall only be obligated to subordinate its leasehold interest to any mortgage, deed of trust, ground lease or declaration of covenants now or
hereafter placed upon the Building Complex if the holder of such mortgage or deed of trust or the landlord under such ground lease or the declarant under such declaration of covenants will grant to Tenant a nondisturbance agreement, using the form
of document then being employed by such holder, landlord or declarant for such purposes, which will provide that Tenant, notwithstanding any default of Landlord hereunder, shall have the right to remain in possession of the Premises described herein
in accordance with the terms and provisions of this Lease for so long as Tenant shall not be in default under this Lease. 

  

	25.	 Payments After Termination: No payments of money by Tenant to Landlord after the termination of this Lease, in any manner, or after giving of any notice of
default (other than a demand for payment of money) by Landlord to Tenant, shall reinstate, continue or extend the term of this Lease or affect any notice given to Tenant prior to the payment of such money, it being agreed that after the service of
notice of the commencement of a suit or after any final judgment granting Landlord possession of the Premises, Landlord may receive and collect any sums of Base Rent due, or any other sums of money due under the terms of this Lease, or may otherwise
exercise any of its rights and remedies hereunder. 

  

 28 

	 	 
The payment of such sums of money, whether as Base Rent, Additional Rent or otherwise, shall not waive said notice, or in any manner affect any suit
theretofore commenced or judgment theretofore obtained. 

  

	26.	Authorities for Action and Notice: 

  

	 	A.	Except as herein otherwise provided, Landlord may act in any matter provided for herein by and through its Building manager, or through any other person who may from time to time be
designated by Landlord in writing. 

  

	 	B.	All notices or demands required or permitted to be given to Landlord hereunder shall be in writing, and shall be deemed duly served when deposited in the United States Mail, with
proper postage prepaid, by certified or registered mail, return receipt requested, addressed to Landlord at 475 17th Street Company by The Jones Realty Group, Inc., 475 17th Street, Suite 940, Denver, Colorado 80202, or at the most recent address of
which Landlord has notified Tenant in writing. All notices or demands required to be given to Tenant hereunder shall be in writing, and shall be deemed duly served when deposited in the United States Mail, with proper postage prepaid, by certified
or registered mail, return receipt requested, addressed to 475 17th Street, #860, Denver, CO 80202, with a copy to                    
. If Tenant fails to designate an address, such notice may be mailed to Tenant’s Premises in the Building. Either party shall have the right to designate in writing, served as above provided, a different address to which notice is to
be mailed. The foregoing shall in no event prohibit notice from being given as provided in Rule 4 of the Colorado Rules of Civil Procedure, as the same may be amended from time to time. 

  

	 	C.	In the event of any alleged default on the part of Landlord hereunder, Tenant shall give written notice to Landlord in the manner herein set forth and shall afford Landlord a
reasonable opportunity to cure any such default. Notice to Landlord of any such alleged default shall be ineffective unless Tenant shall send notice of such default by certified or registered mail, with proper postage prepaid, to each holder of a
mortgage or deed of trust covering the Building Complex or any portion thereof of whose address Tenant has been notified in writing, and unless Tenant shall afford such holder a reasonable opportunity to cure any alleged default on Landlord’s
behalf. 

  

	27.	 Security Deposit: It is agreed that Tenant shall deposit with Landlord, and will keep on deposit at all times during the term hereof, the sum of Eight
Hundred Twenty Five and 42 /100 Dollars ($825.42), payable upon the Tenant’s execution hereof, as security for the payment by Tenant of the Base Rent and Additional Rent herein agreed to be paid and for the faithful performance of all the
terms, conditions and covenants of this Lease. If, at any time during the term hereof, Tenant shall be in default in the performance of any provision of this Lease, Landlord shall have the right to use said deposit, or so much thereof as is
necessary, in payment of any Base Rent and Additional Rent in default as aforesaid, reimbursement of any expense incurred by Landlord, and in payment of any damages, including but not limited to any damages or deficiencies incurred in the reletting
of the Premises, or any attorneys’ fees associated therewith, regardless of whether the accrual of such damages or deficiencies occurs before or after an eviction, or for the cost of cleaning the Premises, incurred by Landlord by reason of
Tenant’s default. In such event, Tenant shall, on written demand of Landlord, forthwith remit to Landlord a sufficient amount by cashier’s check or money order to restore 

  

 29 

	 	 
said deposit to its original amount. In the event said deposit has not been used as aforesaid, said deposit, or as much thereof as has not been used for such
purposes, shall be refunded to Tenant, without interest, upon full performance of this Lease by Tenant. Landlord shall have the right to commingle said deposit with other funds of Landlord. Landlord may deliver the funds deposited herein by Tenant
to any purchaser of Landlord’s interest in the Premises in the event such interest is sold, and thereupon Landlord shall be discharged from further liability with respect to such deposit. If claims of Landlord exceed said deposit, Tenant shall
remain liable for the balance of such claims. Failure by Tenant to replace or replenish the Security Deposit within said time shall constitute an act of default and shall enable Landlord to resort to any of its remedies under Section 18 hereof.
The Security Deposit shall not be considered an advance payment of Rent nor a measure of Landlord’s damages in case of default by Tenant. 

  

	28.	Compliance With Law: 

  

	 	A.	Tenant shall comply with all provisions of law imposed upon Landlord or Tenant, including without limitation, federal, state, county and city laws, ordinances and regulations and
any other governmental, quasi-governmental or municipal regulations which relate to the partitioning, equipment operation, alteration, occupancy and use of the Premises, and to the making of any repairs, replacements, alterations, additions,
changes, substitutions or improvements of or to the Premises. Moreover, Tenant shall comply with all police, fire and sanitary regulations imposed upon Landlord or Tenant by any federal, state, county or municipal authorities, or made by insurance
underwriters, and to observe and obey all governmental and municipal regulations and other requirements, governing the conduct of any business conducted in the Premises. 

  

	 	B.	Tenant shall fully and timely pay all business and other taxes, charges, rates, duties, assessments and license fees levied, rates imposed, charged or assessed against or in respect
of the Tenant’s occupancy of the Premises or in respect of the personal property, trade fixtures, furniture and facilities of the Tenant or the business or income of the Tenant on and from the Premises, if any, as and when the same shall become
due, and shall indemnify and hold Landlord harmless from and against all payment of such taxes, charges, rates, duties, assessments and license fees and against all loss, costs, charges and expenses occasioned by or arising from any and all such
taxes, rates, duties, assessments and license fees, and shall promptly deliver to Landlord for inspection, upon written request of the Landlord, evidence satisfactory to Landlord of any such payments. In the event that any or all of Tenant’s
leasehold improvements, equipment, furniture, fixtures and personal property shall be assessed and taxed with the Building, Tenant shall pay to Landlord as Additional Rent hereunder its share of such taxes within ten (10) days after delivery to
Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant’s property. 

  

 30 

	29.	Transfer by Landlord and Limited Liability: 

  

	 	A.	The term “Landlord”, as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the
owner or owners of the Building at the time in question. In the event of any transfer or transfers of the title to the Building, the Landlord herein named (and in the case of any subsequent transfers or conveyances, the then-grantor) shall be
automatically released, from and after the date of such transfer or conveyance, from all liability with respect to the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed; provided
that the grantee assumes the duty to perform Landlord’s covenants and obligations hereunder, and provided that any funds in which Tenant has an interest in the hands of Landlord or the then grantor at the time of such transfer shall be turned
over to the grantee. Any amount then due and payable to Tenant by Landlord or the then grantor under any provisions of this Lease shall be paid to Tenant at the time of any transfer or conveyance. 

  

	 	B.	Notwithstanding anything to the contrary contained herein, Landlord’s liability under this Lease shall be limited to its interest in the Building Complex.

  

	30.	Hazardous Substances: 

 With respect to
Tenant’s use of the Premises, Tenant shall at all times, at its own cost and expense, comply with all federal, state and local laws, ordinances, regulations and standards relating to the use, analysis, production, storage, sale, disposal or
transportation of any hazardous materials (“Hazardous Substance Laws”), including oil or petroleum products or their derivatives, solvents, PCB’s, explosive substances, asbestos, radioactive materials or waste, and any other
toxic, ignitable, reactive, corrosive, contaminating or pollution materials (“Hazardous Substances”) which are now or in the future subject to any governmental regulation. 
 Prior to commencing use of the Premises for any business or activity involving production, storage, use or distribution of (a) any Hazardous
Substance, or (b) products or materials which (i) include any Hazardous Substances as a component and (ii) which, if an accident occurred, might result in the release or discharge of any Hazardous Substance, Tenant shall secure
Landlord’s prior written approval which such approval may be withheld in Landlord’s sole discretion. 
 Tenant shall cause any
Hazardous Substances to be removed from the Premises for disposal and to be transported solely by duly licensed Hazardous Substances transporters to duly licensed facilities for final disposal to the extent required by and in accordance with
applicable Hazardous Substances Laws, and shall deliver to Landlord copies of any hazardous waste manifest reflecting the proper disposal of such substances. 
 Except in emergencies or as otherwise required by law, Tenant shall not take any remedial action in response to the presence or release of any Hazardous Substances on or about the Premises without first giving written
notice of the same to Landlord. Tenant shall not enter into any settlement agreement, consent decree or other compromise with respect to any claims relating to any Hazardous Substances in any way connected with the Premises without first notifying
Landlord of Tenant’s intention to do so and affording Landlord the opportunity to participate in any such proceedings. 
  

 31 

 All costs and expenses incurred by Landlord in connection with any environmental audit shall be paid by
Landlord (and may be included in Operating Expenses), except that if any such environmental audit shows that Tenant has failed to comply with the provisions of this Section, or that the Premises (including surrounding soil and any underlying or
adjacent groundwater) have become contaminated due to the operations or activities in anyway attributable to Tenant, then all of the costs and expense of such audit shall be paid by Tenant. 
  

	31.	Substitution of Premises: Landlord shall have the right upon thirty (30) days’ written notice to Tenant to substitute other premises comparable to and with similar
configuration to the Premises within the Building for the Premises, subject to the same terms and conditions as though such substitute premises were originally leased to Tenant at the time of the execution and delivery of this Lease; provided,
however, that the substituted premises shall contain at least as much square footage as the originally leased Premises without any increase in the Base Rent and other charges then being paid. Landlord agrees to pay all reasonable moving expenses of
Tenant, including the reasonable replacement of tenant improvements incidental to such substitution of premises. 

  

	32.	Brokerage: Tenant represents and warrants to Landlord that it has dealt only with The Jones Realty Group, Inc., and___________ (collectively the
“Broker”) in the negotiation of this Lease. Landlord shall make payment of the brokerage fee due to the Broker pursuant to and in accordance with a separate agreement with the Broker. Tenant hereby agrees to indemnify and hold
Landlord and/or Landlord’s agent harmless of and from any and all damages, losses, costs or expenses (including without limitation, all attorneys’ fees and disbursements) by reason of any claim of or liability to any other broker or other
person claiming through Tenant and arising out of or in connection with the negotiation, execution and delivery of this Lease. Additionally, Tenant acknowledges and agrees that Landlord and/or Landlord’s agent shall have no obligation for
payment of any brokerage fee or similar compensation to any person with whom Tenant has dealt or may in the future deal with respect to leasing of any additional or expansion space in the Building or renewals or extensions of this Lease.

  

	33.	Lien for Rent: To secure the payment of all Rent due and to become due hereunder and the faithful performance of all the other covenants of this Lease required to be
performed by Tenant, Tenant hereby gives to Landlord an express contract lien on and security interest in and to all property, chattels or merchandise (“Lien”) which may be placed in the Premises and also upon all proceeds of any
insurance which may accrue to Tenant by reason of damage to or destruction of any such property. All exemption laws are hereby waived by Tenant. This Lien is given in addition to the Landlord’s statutory lien and shall be cumulative thereto.
This Lien may be foreclosed with or without court proceedings or notice, by public or private sale, and Landlord shall have the right to become purchaser, upon being the highest bidder, at such sale. Upon request of Landlord, Tenant agrees to
execute a Uniform Commercial Code financing statement relating to the aforesaid security interest. If requested hereafter by Tenant, Landlord shall also execute and deliver to Tenant Uniform Commercial Code Financing Statement change instruments in
sufficient form to reflect any proper amendment or modification in or extension of the aforesaid contract lien and security interest herein granted. Tenant shall, in addition to all of its rights hereunder, also have all of the rights and remedies
of a secured party under the Uniform Commercial Code as adopted in Colorado. 

  

 32 

	34.	Miscellaneous: 

  

	 	A.	The termination or mutual cancellation of this Lease shall not work a merger, and such termination or mutual cancellation shall, at the option of Landlord, either terminate all
subleases and subtenancies or operate as an assignment to Landlord of any or all of such subleases or subtenancies. 

  

	 	B.	This Lease shall be construed as though the covenants herein between Landlord and Tenant are independent, and not dependent. Tenant shall not be entitled to any setoff of the Base
Rent, Additional Rent or other amounts owing hereunder against Landlord if Landlord fails to perform its obligations set forth herein; provided, however, that the foregoing shall in no way impair the right of Tenant to commence a separate action
against Landlord for any violation by Landlord of the provisions hereof so long as notice is first given to Landlord and to any holder of a mortgage or deed of trust covering the Building Complex or any portion thereof, and an opportunity is granted
to Landlord and such holder to correct such violation as provided in Section 26. 

  

	 	C.	If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws effective during the term of this Lease, then and in that event, it is the
intention of the parties hereto that the remainder of this Lease shall not be affected thereby; and it is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or
unenforceable, there shall be added as a part of this Lease a legal, valid and enforceable clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible. 

  

	 	D.	The captions of each section and paragraph are added as a matter of convenience only and shall be considered to be of no effect in the construction of any provision or provisions of
this Lease. 

  

	 	E.	Except as herein specifically set forth, all terms, conditions and covenants to be observed and performed by the parties hereto shall be applicable to and binding upon their
respective heirs, administrators, executors, successors and assigns. 

  

	 	F.	If the Tenant under this Lease is more than one entity or person, the obligations imposed upon Tenant under this Lease shall be joint and several. 

  

	 	G.	No act or thing done by Landlord or Landlord’s agent during the term hereof, including, but not limited to, any agreement to accept surrender of the Premises or to amend or
modify this Lease, shall be deemed to be binding upon Landlord unless such act or thing shall be done by a general partner of Landlord or a party designated in writing by Landlord as so authorized to act. The delivery of keys to Landlord or
Landlord’s agent, employees or officers shall not operate as a termination of this Lease or a surrender of the Premises. No payment by Tenant, or receipt by Landlord, of a lesser amount than the monthly Base Rent and Additional Rent herein
stipulated shall be deemed to be other than on account of the earliest stipulated Base Rent and Additional Rent, nor shall any endorsement or statement on any check or any letter accompanying any check, or payment as Base Rent or Additional Rent, be
deemed an accord and satisfaction; Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Base Rent or Additional Rent or to pursue any other remedy available to Landlord.

  

 33 

	 	H.	Tenant acknowledges and agrees that it has not relied upon any statements, representations, agreements or warranties except such as are expressed in this Lease, and that no
amendment or modification of the Lease shall be valid or binding unless expressed in writing and executed by Landlord and Tenant in the same manner as the execution of this Lease. 

  

	 	I.	Time is of the essence hereof. 

  

	 	J.	Tenant and the parties executing this Lease on behalf of Tenant represent to Landlord that such parties are authorized to do so by requisite action of Tenant’s board of
directors, or partners, as the case may be, and agree, upon request, to deliver to Landlord a resolution or similar document to that effect. 

  

	 	K.	Any obligation of the Landlord hereunder which is delayed or not performed due to acts of God, strike, riot, war, weather, failure to obtain labor and materials at a reasonable
cost, or any other reason beyond the control of the Landlord, shall not constitute a default hereunder and shall be performed within a reasonable time after the end of such cause for delay or nonperformance. 

  

	 	L.	Tenant shall not record this Lease or a memorandum hereof without the prior written consent of Landlord. In the event that Tenant violates this provision, this Lease shall be null,
void, and of no further force and effect, except that Tenant shall be liable to Landlord, as liquidated damages, in the amount of the remaining rental to be paid hereunder. 

  

	 	M.	This Lease may be executed in two or more duplicate originals. Each duplicate original shall be deemed to be an original hereof, and it shall not be necessary for a party hereto to
produce more than one such original as evidence hereof. 

  

	 	N.	The Tenant does hereby specifically allow and permit the Landlord to execute an assignment agreement, including a general assignment of rents, and to assign this particular Lease.

  

	 	O.	The submission of this document for examination and review does not constitute an option, an offer to lease space in the Building or an agreement to lease. This document shall have
no binding effect on the parties unless and until executed by both Landlord and Tenant and will be effective only upon Landlord’s execution of the same. 

  

	 	P.	A rider consisting of one (1) page(s), with sections numbered 1 through 2 consecutively, is attached hereto and incorporated herein by this reference as
Exhibit E. 

  

 34 

 IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the day and year first above written.

  

			
	LANDLORD:
	
	475-17TH STREET, CO., a Colorado limited partnership
		
	By:	 	/s/ John Fletcher III
		 	John Fletcher III
		 	General Partner

  
  

					
	TENANT:
	
	Collis P. Chandler III
		
	By:	 	/s/ Collis P. Chandler III
		 	Print Name: Collis P. Chandler III
		 	Its:	 	President

 ACKNOWLEDGMENT OF TENANT 
  

			
	State of
                                        
        	  	)
		  	) ss.
	County of
                                        
        	  	)

 The foregoing Office Building Lease was acknowledged before me this ____ day of ______________,
2003, by ________________ as ___________________ of ________________________________, Tenant. 
 WITNESS my hand and official seal.

 My Commission expires:____________________ 
  

					
	  	  	Notary Public	  	 

  

 35 

 ACKNOWLEDGEMENT OF LANDLORD 
  

			
	State of
                                        
        	  	)
		  	) ss.
	County of
                                        
        	  	)

 The foregoing Office Building Lease was acknowledged before me this _____ day of _____________,
2003 by _______________ as General Partner of 475-17TH STREET, CO., a Colorado limited partnership, Landlord. 
 WITNESS my hand and official
seal. 
 My Commission expires: _____________________ 
  

					
	  	  	Notary Public	  	 

  

 36 

 List of Exhibits: 
 Exhibit
A - Plan of Premises 
 Exhibit B - Legal Description 
 Exhibit C
- Tenant Improvement Work Agreement 
 Exhibit D - Rules and Regulations 
 Exhibit E - Rider 
 Exhibit F - Janitorial Services 
 Exhibit G - Acceptance Letter 
  

 37 

 EXHIBIT “A” 
 PLAN OF PREMISES 
  

 38 

 EXHIBIT “B” 
 LEGAL DESCRIPTION 
 Commonly known as 475 17th Street, Denver, Colorado 80202. Lots 13 through 16 inclusive, Block
194, East Denver, City and County of Denver, Colorado. 
  

 39 

 EXHIBIT “C” 
 TENANT IMPROVEMENT WORK AGREEMENT 
  

	1.	Tenant Finish Allowance: Landlord hereby grants to Tenant a tenant finish allowance (the “Tenant Finish Allowance”) equal to $ 10,833.44 ($ 19.14 per
rentable square foot of the Premises), inclusive of space planning and engineering fees and expenses. Said Tenant Finish Allowance shall be credited against the aggregate cost of Tenant Work, as hereinafter defined. If Tenant requires Tenant Work in
excess of the Tenant Finish Allowance, then Tenant agrees that it shall pay for said work in excess of the Tenant Finish Allowance in accordance with the terms for payment of Additional Work as more specifically set forth in Section 2 hereof,
including provision for profit and overhead. 

  

	2.	Tenant Work: Landlord agrees to complete the work depicted in the space plan attached hereto as Exhibit C-1 (the “Tenant Work”) in a good and workmanlike manner on
or before February 1, 2000 , subject, however, to extensions equal to the delays suffered by Landlord and caused by strikes, lockouts, fire or other casualty loss, acts of God, unavailability of materials, hostile or war-like action, riot or
other causes beyond Landlord’s reasonable control. If Tenant shall require any changes to the attached plans and specifications or the Tenant Work depicted in such attached plans and specifications (“Additional Work”), then,
providing Landlord agrees to such changes, Tenant shall, within five (5) days of the billing therefore, deposit with Landlord Landlord’s projected costs and expenses for the Additional Work, which costs shall include profit and overhead at
the rate of fifteen percent ( 15 %), expected to be incurred by Landlord in connection with preparation of such additional plans and specifications and/or such Additional Work. Such reimbursement shall be made by Tenant to Landlord prior to
Landlord’s undertaking any changes in the Tenant Work. If such projected costs for the Additional Work are in excess of Landlord’s actual costs, then Landlord shall refund any excess to Tenant, and if Landlord’s costs for the
Additional Work are in excess of the estimated sum paid by Tenant, then Tenant shall pay such deficiency to Landlord on demand. 

  

	3.	Commencement of Rent: Tenant’s obligation to pay Base Rent and Additional Rent under the Lease shall not commence until the date the Premises are Ready for Occupancy, as
defined below; provided, however, that if Landlord shall be delayed in rendering the Premises Ready for Occupancy by the Commencement Date set out in Section 2 of this Lease as a result of one or more of the following: 

 

	 	A.	Tenant’s failure to devote the time or furnish the information required in connection with the space plan for the Tenant Work; or 

  

	 	B.	Tenant’s failure to timely deposit the estimated costs for the Additional Work within the time period specified in Section 2 above; or 

  

	 	C.	Tenant’s changes in the Tenant Work, in the space plan relating thereto, or in the plans for the Additional Work (notwithstanding Landlord’s approval of any such changes);
or 

  

	 	D.	Any other material act or omission by Tenant or its agents; then and in any such event, Tenant’s obligation to commence the payment of Base Rent and Additional Rent under the
Lease on the Commencement Date provided for in Section 2 shall not be affected or deferred on account of such delay. 

  

 40 

	4.	Alternate Commencement Date: If Landlord is unable to cause the Premises to be Ready for Occupancy by the Commencement Date for reasons other than those set out in Subsection
A. through D. of Section 3 above, or if the Landlord shall have the Premises Ready for Occupancy prior to the Commencement Date set out in Section 2 of the Lease, then in either such event the Commencement Date of the Lease shall be on the
first date the Premises are Ready for Occupancy; provided, however if the date the Premises are Ready for Occupancy is not the first day of a month, then the Commencement Date shall be the first day of the month immediately following the date the
Premises are Ready for Occupancy. The period between the date the Premises are Ready for Occupancy and the Commencement Date shall be deemed to be the “Interim Lease Term” and Tenant shall be obligated to pay Base Rent and
Additional Rent for such Interim Lease Term on a pro rata basis based on the Base Rent and Additional Rent for the first full month of the Primary Lease Term and Tenant shall hold the Premises during the Interim Lease Term under all of the other
terms and conditions of this Lease. In the event the Commencement Date set out in Section 2 of the Lease is changed as provided for in this Section 4 then: 

  

	 	A.	If the Premises are Ready for Occupancy after the Commencement Date set out in Section 2 of the Lease, then the expiration date of the Primary Lease Term as provided for in
Section 2 of the Lease shall be extended such that beginning with the adjusted Commencement Date, the Primary Lease Term shall extend for the number of months set out in Section 2 of the Lease. Such postponement of Base Rent and Additional
Rent for the period prior to the delivery to Tenant of the Premises Ready for Occupancy shall be in full settlement of all claims which Tenant might otherwise have by reason of said Premises not being Ready for Occupancy on the date specified in
Section 3; or 

  

	 	B.	If the Premises are Ready for Occupancy prior to the Commencement Date set out in Section 2 of the Lease then the Commencement Date shall be adjusted as provided for in this
Section 4, however the expiration date shall remain as set out in Section 2 of the Lease. 

 In either such event,
Tenant shall, at Landlord’s request, execute a Memorandum of Commencement Date in which the parties specify the Commencement Date and expiration date of the Primary Lease Term. 
 “Ready for Occupancy” as used herein shall mean the date on which Landlord shall have substantially completed all its work outlined in
this Work Letter. The issuance of a certificate of occupancy (or its equivalent) for the Premises or a certificate from Landlord’s architect or space planner certifying substantial completion of the work shall conclusively control the date the
Premises are substantially complete, the date on which the Premises are Ready for Occupancy and the date Tenant’s obligation to pay Base Rent and Additional Rent commences. Landlord agrees to use its best efforts to provide Tenant with at least
fifteen (15) days prior notice of the date the Premises are expected to be Ready for Occupancy. Landlord’s undertaking to provide fifteen (15) days prior notice to Tenant shall not change, alter, or otherwise affect Tenant’s
obligations under this Lease to take occupancy of the Premises when the same are Ready for Occupancy. 
  

 41 

	5.	Miscellaneous: 

  

	 	A.	Except to the extent otherwise indicated herein, the initially capitalized terms used in this Tenant Improvement Work Agreement shall have the meanings assigned to them in the
Lease. 

  

	 	B.	The terms and provisions of this Tenant Improvement Work Agreement are intended to supplement and are specifically subject to all the terms and provisions of the Lease. In the event
of conflict between the terms of this Tenant Improvement Work Agreement and the Lease, then the provisions of the Lease shall govern. 

  

	 	C.	Prior to the date the Premises are Ready for Occupancy, Landlord’s contractor and Tenant shall inspect the Premises and jointly complete a “punch list” of incomplete
or defective work and thereafter Landlord shall exercise due diligence to cause such punch list items to be completed. 

  

	 	D.	This Tenant Improvement Work Agreement may not be amended or modified other than by supplemental written agreement executed by authorized representatives of the parties hereto.

  

	 	E.	Tenant shall not be entitled to any credits, whether in the form of materials or money, for unused work or materials. 

  

	 	F.	Landlord’s approval of Tenant’s plans for the Tenant Work shall create no responsibility or liability on the part of Landlord for their completeness, design sufficiency,
or compliance with all laws, rules and regulations of governmental agencies or authorities. 

  

			
	LANDLORD:
	
	475-17TH STREET, CO., a Colorado limited partnership
		
	By:	 	/s/ John Fletcher III
		 	John Fletcher III
		 	General Partner
	
	TENANT:
	
	Collis P. Chandler, III
		
	By:	 	/s/ Collis P. Chandler III
	Print Name: Collis P. Chandler III

  

 42 

         Its: President 
 EXHIBIT “C-1” 
 TENANT
WORK 
  

 43 

 EXHIBIT “D” 
 RULES AND REGULATIONS 
 Landlord and Tenant agree that the following Rules and Regulations shall be
and hereby are made a part of this Lease, and Tenant agrees that Tenant’s employees and agents, or any others permitted by Tenant to occupy or enter the Premises, will at all times abide by said Rules and Regulations: 
  

	1.	The sidewalks, entries, passages, corridors, stairways, and elevators of the Building shall not be obstructed by Tenant, or Tenant’s agents or employees, or used for any
purpose other than ingress to and egress from the Premises. 

  

	2.	Movement in or out of the Premises of furniture or office equipment, or dispatch or receipt by Tenant of any bulky materials, merchandise, or materials which requires use of
elevators, is restricted to the freight elevator. Movement through the Building entrances or lobby shall be restricted to such hours as Landlord shall designate. All such movement shall be scheduled with the Building management office and done in a
manner agreed between the Tenant and Landlord by prearrangement before performance. Such prearrangement initiated by Tenant shall include determination by Landlord, and subject to its decisions and control, as to the time, method, and routing of
movement and as to limitations for safety or other concerns which may prohibit any article, equipment, or any other item being brought into the Building. Tenant shall assume all risk regarding damage to articles moved and injury to persons or public
engaged or not engaged in such movement, including equipment, property, and personnel of Landlord if damaged or injured as a result of an act in connection with carrying out this service for Tenant from time of entering Premises to completion of
work; and Landlord shall not be liable for acts of any persons engaged in, or any damage or loss to any of said property or persons resulting from any act in connection with such service performed for Tenant. 

  

	3.	Tenant shall not place within the Building any objects which exceed the floor weight specifications of the Building without the express prior written consent of Landlord. The
placement and positioning of all such objects within the Building shall be reasonably prescribed by Landlord and such objects shall, in all cases, be placed upon plates or footings of such size as shall be reasonably prescribed by Landlord. Any
damage done to the Building by taking in or removing any heavy article or from overloading any floor in any way shall be paid by Tenant. Defacing or injuring in any way any part of the Premises by Tenant, his agents or servants, shall be paid by
Tenant. 

  

	4.	During the entire term of this Lease, Tenant shall at Tenant’s expense install and maintain under each and every caster chair a chair pad to protect the carpeting.

  

	5.	 No signs, awnings, showcases, advertising devices or other projections or obstructions shall be attached to the outside walls of the Building or attached or placed
upon any Common Areas without the express prior written consent of Landlord. No blinds, drapes or other window coverings shall be installed in the Building without the express prior written consent of Landlord. Tenant agrees to abide by
Landlord’s rules with respect to maintaining uniform curtains, draperies and linings at all windows and hallways. No sign, picture, advertisement, window display or other public display or notice shall be inscribed, exhibited, painted or
affixed by Tenant upon or within any part of the Premises in such a 

  

 44 

	 	 
fashion as to be seen from the outside of the Premises or the Building without the express prior written consent of Landlord. In the event of the violation
of any of the foregoing by Tenant, Landlord may within fifteen (15) days of written notice to Tenant during which period Tenant may repair same, remove the articles constituting the violation without any liability unless a loss other than said
removal, arises from Landlord’s willful or negligent acts or omissions, and Tenant shall reimburse Landlord for the reasonable expenses incurred in such removal upon demand and upon submission of applicable bills as Additional Rent under the
Lease. Interior signs on doors and upon the Building directory shall be subject to the express prior written approval of Landlord and shall be inscribed, painted, or affixed by Landlord at the reasonable expense of Tenant upon submission of
applicable bills to Tenant. 

  

	6.	Initial name and number plates on doors shall be provided by Landlord and any revisions or changes thereto shall be at the expense of Tenant. A directory, located in a conspicuous
place and listing the names of the tenants of the Building, shall be provided by Landlord. Initial directory listings, not to exceed one line on the directory board for the Tenant, shall be at the cost of Landlord and any revisions or changes
thereto shall be at the expense of Tenant. Any necessary revision in such directory shall be made by Landlord within a reasonable time after written notice from Tenant, but the Landlord shall not be responsible for any inconvenience or damage caused
to Tenant as a result of error in such directory. 

  

	7.	Tenant shall not employ any person or persons other than the janitor or cleaning contractor of Landlord for the purpose of cleaning or taking care of the Premises without the prior
written consent of Landlord. Landlord shall be in no way responsible to Tenant for any loss of property from the Premises, however occurring, or for any damage done to Tenant’s furniture or equipment by the janitor or any of the janitor’s
staff, or by any other person or persons whomsoever. The janitor of the Building may at all times keep a pass key, and other agents of Landlord shall at all times be allowed admittance to the Premises. 

  

	8.	Water closets and other water fixtures shall not be used for any purpose other than that for which they are intended; any damage resulting to the same from misuse on the part of
Tenant or Tenant’s agents or employees shall be paid for by Tenant. No person shall waste water by tying back or wedging the faucets or in any other manner. 

  

	9.	Except for seeing eye dogs for the blind and hearing ear dogs for the deaf, no animals shall be allowed in the offices, halls, corridors and elevators of the Building. No persons
shall disturb the occupants of this or adjoining buildings or premises by the use of any radio, sound equipment or musical instrument or by the making of loud or improper noises. 

  

	10.	Except for wheelchairs, no vehicles, including bicycles, shall be permitted in the offices, hall, corridors, and elevators in the Building, nor shall any vehicles be permitted to
obstruct the sidewalks or entrances of the Building. 

  

	11.	Tenant shall not allow anything to be placed on the outside of the Building, nor shall anything be thrown by Tenant or Tenant’s agents or employees out of the windows or doors,
or down the corridors, elevator shafts, or ventilating ducts or shafts of the Building. Tenant, except in case of fire or other emergency, shall not open any outside window. 

  

 45 

	12.	Landlord shall furnish Tenant two (2) keys for each corridor door entering the Premises. Additional keys shall be furnished at a charge by Landlord on an order signed by Tenant
or Tenant’s authorized representative. All keys to the exterior doors of the Premises shall be obtained by Tenant from Landlord, and Tenant shall pay to Landlord a reasonable deposit determined by Landlord from time to time upon written notice
to Tenant for such keys. Tenant shall not make duplicate copies of such keys. Tenant shall not install additional locks or bolts of any kind upon any of the doors or windows of or within the Building, nor shall Tenant make any changes in existing
locks or the mechanisms thereof. Tenant shall, upon the termination of its tenancy, provide Landlord or its representative with the combinations to all combination locks on safes, safe cabinets and vaults and deliver to Landlord all keys to the
Building, the Premises and all interior doors, cabinets, and other key-controlled mechanisms therein, whether or not such keys were furnished to Tenant by Landlord. Tenant shall pay to Landlord the reasonable cost of replacing the same or of
changing the lock or locks opened by such lost key if Landlord shall reasonably deem it necessary to make such a change. 

  

	13.	Tenant shall not mark, paint, drill into, cut, string wires within, or in any way deface any part of the Building except normal picture hanging apparatus, without the express prior
written consent of Landlord. Upon removal of any wall decorations or installations or floor coverings by Tenant, any damage to the walls or floors shall be repaired by Tenant at Tenant’s sole cost and expense. Without limitation upon any of the
provisions of the Lease, Tenant shall refer all contractor’s representatives, installation technicians, and other mechanics, artisans and laborers rendering any service in connection with the repair or permanent improvements of the Premises to
Landlord for Landlord’s approval before performance of any such service. This Section 13 shall apply to all work performed in the Building, including without limitation installation of telephones, telegraph equipment, electrical devices
and attachments and installations of any nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment or any other portion of the Building. Plans and specifications for such work, prepared at Tenant’s sole expense, shall be
submitted to Landlord and shall be subject to Landlord’s express prior written approval in each instance before the commencement of work. All installations, alterations and additions shall be constructed by Tenant in a good and workmanlike
manner and only good grades of material shall be used in connection therewith. The means by which telephone, telegraph and similar wires are to be introduced to the Premises and the location of telephones, call boxes and other office equipment
affixed to the Premises shall be subject to the express prior written approval of Landlord. 

  

	14.	Tenant shall not install or use in the Building any air conditioning unit, engine, boiler, generator, machinery, heating unit, stove, water cooler, ventilator, radiator or any other
similar apparatus without the express prior written consent of Landlord, and then only as Landlord may reasonably direct. Explosives or other articles deemed extrahazardous shall not be brought into the Building Complex. 

  

	15.	Any painting or decorating as may be agreed to be done by and at the expense of Landlord shall be done during regular weekday working hours. Should Tenant desire such work on
Saturdays, Sundays, holidays or outside of regular working hours, Tenant shall pay for the extra cost thereof. 

  

	16.	Landlord shall at all times have the right, by and through Landlord’s officers or agents, to enter the Premises and show the same to persons wishing to lease them, and may, at
any time within sixty (60) days preceding the termination of Tenant’s Primary Lease Term, and any extension thereof, place upon the doors and windows of the Premises the notice “For Rent,” which notice shall not be removed by
Tenant. 

  

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	17.	Use of the parking areas of the Building Complex shall be subject to the following rules: 

  

	 	A.	Drivers shall use due care not to injure pedestrians, other vehicles, or the fixtures and improvements within the parking areas. 

  

	 	B.	Vehicles shall be parked only in marked parking spaces, and not in ramps, corridors, fire lanes, entrances, exits or other areas posted for no parking. 

  

	 	C.	From time to time Landlord may promulgate such other reasonable and nondiscriminatory rules and regulations as Landlord deems necessary or useful, and Tenant and its Permitted Users
shall be bound thereby. 

  

	 	D.	Should such a violation exist, Landlord, at its option, shall have the right to tow such vehicle away at owner’s expense. 

  

	18.	Tenant, its agents, servants and employees shall, before leaving the Premises unattended, close and lock all doors and shut off all lights. Corridor doors, when not in use, shall be
kept closed. Subject to applicable fire or other safety regulations, all doors opening onto Common Areas, as hereinafter defined, and all doors upon the perimeter of the Premises shall be kept closed and, during non-business hours, locked, except
when in use for ingress or egress. If Tenant uses the Premises after regular business hours or on non-business days, Tenant shall lock any entrance doors to the Building or to the Premises used by Tenant immediately after using such doors. Tenant
and its employees shall use ordinary care to safeguard their belongings by locking the Premises when not in use and during times other than Ordinary Business Hours, by locking their automobiles, and by taking reasonable precautions with respect to
items such as handbags, wallets and other valuables. 

  

	19.	Tenant shall comply with all requirements necessary for the security of the Premises, including the use of service passes issued by Landlord for after hours removal of office
equipment, packages, and signing in and/or out in security register in Building lobby after hours. Landlord reserves the right to deny entrance to the Building or remove any person from the Premises in any case where the conduct of such person
involves a hazard or nuisance to any tenant of the Premises or to the public or in the event of fire or other emergency, riot, civil commotion or similar disturbance involving risk to the Premises, tenants or the general public. The Landlord also
reserves the right to make such rules and regulations as it may see fit concerning the use of electric current, water and other supplies of the Building and to designate such hours as the Building may be closed. 

  

	20.	All glass, locks and trimmings, in or about the doors and windows and all electric globes and shades belonging to Tenant or Landlord in the Premises shall be kept whole; and
whenever broken by Tenant, shall be immediately replaced or repaired and put in order by Tenant under the direction and to the satisfaction of Landlord. 

  

	21.	Canvassing, soliciting and peddling in the Building is prohibited, and Tenant shall cooperate to prevent the same. Tenant shall notify the Building Manager promptly of any
unauthorized person who is soliciting from or causing annoyance to tenants, their employees, guests or invitees. 

  

 47 

	22.	Tenant shall not deposit any trash, refuse, cigarettes, or other substances of any kind within or out of the Building except in refuse containers provided therefor. Tenant shall
exercise its best efforts to keep the Common Areas clean and free from rubbish. 

  

	23.	To ensure orderly operation of the Premises, no deliveries of any kind or nature shall be made to any leased area except by persons appointed or approved by Landlord in writing.
There shall not be used in any space or in the public halls of the Building, either by Tenant, by jobbers, or others, in the delivery or receipt of merchandise, any hand trucks, except those equipped with rubber tires and side guards. Hand trucks
are not permitted in the Passenger elevators. 

  

	24.	Tenant shall be responsible for any damage to carpeting and flooring as a result of rust or corrosion of the file cabinets, pot holders, roller chairs and metal objects.

  

	25.	Tenant shall not use the Building for lodging, sleeping, cooking, or for any immoral or illegal purposes or for any purpose that will damage the Building, or the reputation thereof,
or for any purposes other than those specified in the Lease in the Landlord’s reasonable judgment. 

  

	26.	Tenant shall not obstruct or interfere with the rights of other tenants of the Building or of persons having business in the Building or in any way injure or annoy such tenants or
persons. 

  

	27.	Tenant shall not commit any act or permit anything in or about the Building which shall or might subject Landlord to any liability or responsibility for injury to any person or
property by reason of any business or operation being carried on, in or about the Building or for any other reason, subject to the terms of this Lease. 

  

	28.	Tenant shall not use the name of the Building or the name of the Landlord in its business name, trademarks, signs, advertisements, descriptive material, letterhead, insignia or any
other similar item without Landlord’s express prior written consent. 

  

	29.	Employees of Landlord shall not receive or carry messages for or to Tenant or any other person, nor contract with nor render free or paid services to Tenant or Tenant’s
servants, employees, contractors, jobbers, agents, invitees, licensees, guests or visitors. 

  

	30.	For purposes hereof, the terms “Landlord,” “Tenant,” “Building,” and “Premises” are defined as those terms are
defined in the Lease to which these Rules and Regulations are attached. Wherever Tenant is obligated under these Rules and Regulations to do or refrain from doing an act or thing, such obligation shall include the exercise by Tenant of its best
efforts to secure compliance with such obligation by the servants, employees, contractors, jobbers, agents, invitees, licensees, guests and visitors of Tenant. The term “Building” and “Premises” shall include the
Premises, and any obligations of Tenant hereunder with regard to the Building and Premises shall apply with equal force to the Premises and to other parts of the Premises. 

  

	31.	Tenant shall not tamper with or attempt to adjust temperature control thermostats in the Premises. Landlord shall make adjustments to thermostats on call from Tenant.

  

	32.	 Tenant agrees that Landlord may reasonably amend, modify, delete or add new and additional rules and regulations for the use and care of the Premises, the Building
and the Building Complex. Tenant 

  

 48 

	 	 
agrees to comply with all such rules and regulations upon notice to Tenant from Landlord. In the event of any breach of any rules and regulations herein set
forth, or any reasonable amendments, modifications or additions thereto, Landlord shall have all remedies set forth in this Lease in the event of default by Tenant. 

  

 49 

 EXHIBIT “E” 
 RIDER 
 This Rider forms a part of that certain Lease of January 31 , 2000 made by and between 475-17TH STREET,
CO., as Landlord, and Collis P. Chandler III , as Tenant. 
  

	1.	Tenant Finish: Landlord hereby agrees to replace carpet, base, remove existing interior walls, and replace existing ceiling and lighting with new. 

  

	2.	Termination: Tenant shall have a right to terminate this lease after January 31, 2001 with written notification to “Landlord” no later than November 30, 2000.
Tenant shall have a right to terminate this lease after January 31, 2002 with written notification to “Landlord” no later than November 30, 2001. Upon termination, a fee equal to the sum of the unamortized commission incurred be
the “Landlord” shall be paid to “Landlord”. 

  

 50 

 EXHIBIT “F” 
 JANITORIAL SERVICES 
 Landlord shall furnish janitorial and cleaning services adequate to keep the demised premises
clean at all times, subject, however, to the following minimum requirements: 
  

	 	A.	Daily cleaning routine: 

 Empty waste baskets and other
waste receptacles. 
 Empty ash trays and wipe clean. 
 Dust railings, ledges, furniture, phones and cabinets. 
 Sweep floors and steps, vacuum carpet traffic areas.

 Spot clean doors, walls and glass. Remove rubbish. 
 Toilets and lavatories—clean bowls, basins, seats, urinals, partitions and walls; damp mop floors, polish fixtures, dispensers, mirrors and other polished surfaces; and replenish all dispensers. 
  

	 	B.	Other routines: 

 Scrub and wax resilient floors, outside
of business hours, monthly. Wash windows inside and outside at least tri-annually. 
  

	 	C.	Areas not included: 

 Kitchen areas will only be swept,
mopped and have the trash removed. An extra charge will be required for any special janitorial needs over and above “normal” cleaning practices. 
  

 51 

 EXHIBIT “G” 
 ACCEPTANCE LETTER 
  

			
	Tenant:	 	Collis P. Chandler III
		
	Date:	 	January 31, 2000
		
	RE:	 	Lease Agreement (the “Lease”) dated January 31, 2000 by and between 475-17TH STREET, CO., a Colorado Limited Partnership (“Landlord”) and Collis P. Chandler III
(“Tenant”) on the Leased Premises located at 475 17th Street, Suite 860 , Denver, Colorado 80202.

 This is to advise that the undersigned, as Tenant, has inspected the improvements at the above-referenced Leased
Premises, and hereby confirms the following: 
  

	1.	That it has accepted possession of the Premises pursuant to the terms of the Lease. 

  

	2.	That the improvements and space required to be furnished according to the aforesaid Lease have been completed and supplied in all respects. 

  

	3.	That the Landlord has fulfilled all of its’ obligations under the Lease. 

  

	4.	That no Rent has been prepaid except as provided by the Lease. 

  

	5.	That there are no existing defenses or offsets which the undersigned has against the enforcement of said Lease by the Landlord. 

  

	6.	That the aforesaid Lease has not been modified, altered except as follows: 

  

	7.	That the Base Rent shall be revised to commence on the day of , 2003. The primary Lease Term shall expire on the
                     day of
                    , 2003. 

  

 52 

	8.	That the Lease is now in full force and effect. 

  

			
	LANDLORD:
	
	 475-17TH STREET, CO.,
 a Colorado limited
partnership

		
	By:	 	/s/ John Fletcher III
		 	John Fletcher III
		 	General Partner

  

			
	TENANT:
	
	Collis P. Chandler III
		
	By:	 	/s/ Collis P. Chandler III
	Print Name: Collis P. Chandler III
	Its: President

  

 53

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