Document:

exhibit10_15.htm

    
      

    

     EXECUTION
      VERSION

     

    

     

    Credit
      Agreement

    

    Dated
      as of

    August
      1, 2007

    

    among

    

    McMoRan
      Exploration Co.,

    As
      Borrower,

     

    JPMorgan
      Chase Bank, N.A.,

    as
      Administrative Agent,

    

    and

    

    The
      Lenders Party Hereto

    

     

    

     

    

     

    

     

    

     

    

     

    Joint
      Lead Arrangers and Joint Book Runners

     

    J.P.
      Morgan Securities
      Inc.                                                                                                                              
 Merrill Lynch, Pierce, Fenner & Smith
      Incorporated

    

    

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      TABLE
        OF CONTENTS

       

      Page

       

      
        	
                ARTICLE
                  I

                DEFINITIONS
                  AND ACCOUNTING MATTERS

              
	
                Section
                  1.01

                Section
                  1.02

                Section
                  1.03

                Section
                  1.04

                Section
                  1.05

              	
                Terms
                  Defined Above

                Certain
                  Defined Terms

                Types
                  of Loans and Borrowings

                Terms
                  Generally; Rules of Construction

                Accounting
                  Terms and Determinations:  GAAP

              	
                1

                1

                31

                31

                32

              
	
                ARTICLE
                  II

                THE
                  CREDITS

              
	
                Section
                  2.01

                Section
                  2.02

                Section
                  2.03

              	
                Commitments

                Procedures
                  for Borrowing

                Presumption
                  of Funding by the Lenders

              	
                32

                32

                33

              
	
                ARTICLE
                  III

                MATURITY,
                  EXCHANGE NOTES; PAYMENTS OF PRINCIPAL AND
                  INTEREST

              
	
                Section
                  3.01

                Section
                  3.02

                Section
                  3.03

                Section
                  3.04

                Section
                  3.05

              	
                Maturity
                  and Exchange Notes

                Repayment
                  of Loans

                Interest
                  Rates and Payment Dates

                [Intentionally
                  Omitted]

                Optional
                  and Mandatory Prepayments

              	
                33

                33

                34

                34

                34

              
	
                ARTICLE
                  IV

                PAYMENTS;
                  PRO RATA TREATMENT; SHARING OF SET-OFFS

              
	
                Section
                  4.01

                Section
                  4.02

                Section
                  4.03

                Section
                  4.04

              	
                Payments
                  Generally; Pro Rata Treatment; Sharing of Set-offs

                Presumption
                  of Payment by the Borrower

                Certain
                  Deductions by the Administrative Agent

                Disposition
                  of Proceeds

              	
                36

                38

                38

                38

              
	
                ARTICLE
                  V

                INCREASED
                  COSTS; BREAK FUNDING PAYMENTS; TAXES

              
	
                Section
                  5.01

                Section
                  5.02

                Section
                  5.03

                Section
                  5.04

                Section
                  5.05

              	
                Increased
                  Costs

                Break
                  Funding Payments

                Taxes

                Designation
                  of Different Lending Office

                Replacement
                  of Lenders

              	
                38

                39

                40

                41

                42

              
	 	 	 
	
                ARTICLE
                  VI

                CONDITIONS
                  PRECEDENT

              
	
                Section
                  6.01

                Section
                  6.02

              	
                Effective
                  Date

                Each
                  Credit Event

              	
                42

                44

              
	
                ARTICLE
                  VII

                REPRESENTATIONS
                  AND WARRANTIES

              
	
                Section
                  7.01

                Section
                  7.02

                Section
                  7.03

              	
                Organization;
                  Powers

                Authority;
                  Enforceability

                Approvals;
                  No Conflicts

                 

              	
                45

                45

                45

                 

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      
 

      
        
          	
                  Section
                    7.04

                  Section
                    7.05

                  Section
                    7.06

                  Section
                    7.07

                  Section
                    7.08

                  Section
                    7.09

                  Section
                    7.10

                  Section
                    7.11

                  Section
                    7.12

                  Section
                    7.13

                  Section
                    7.14

                  Section
                    7.15

                  Section
                    7.16

                  Section
                    7.17

                  Section
                    7.18

                  Section
                    7.19

                  Section
                    7.20

                  Section
                    7.21

                  Section
                    7.22

                	
                  Financial
                    Condition; No Material Adverse Change

                  Litigation

                  Environmental
                    Matters

                  Compliance
                    with the Laws and Agreements; No Defaults

                  Investment
                    Company Act

                  Taxes

                  ERISA

                  Disclosure;
                    No Material Misstatements

                  Insurance

                  Restriction
                    on Liens

                  Subsidiaries

                  Location
                    of Business and Offices

                  Properties;
                    Titles, Etc.

                  Maintenance
                    of Properties

                  Gas
                    Imbalances, Prepayments

                  Marketing
                    of Production

                  Swap
                    Agreements

                  Use
                    of Loans

                  Solvency

                	
                  45

                  46

                  46

                  47

                  48

                  48

                  48

                  49

                  50

                  50

                  50

                  50

                  50

                  51

                  52

                  52

                  52

                  52

                  52

                

        

      

      
        	
                ARTICLE
                  VIII

                AFFIRMATIVE
                  COVENANTS

              
	
                Section
                  8.01

                Section
                  8.02

                Section
                  8.03

                Section
                  8.04

                Section
                  8.05

                Section
                  8.06

                Section
                  8.07

                Section
                  8.08 

                Section
                  8.09

                Section
                  8.10

                Section
                  8.11

                Section
                  8.12

                Section
                  8.13

                Section
                  8.14

                Section
                  8.15

                Section
                  8.16

                Section
                  8.17

                Section
                  8.18

                Section
                  8.19

                Section
                  8.20

                Section
                  8.21

              	
                Financial  Statements;
                  Other Information

                Notices
                  of Material Events

                Existence;
                  Conduct of Business

                Payment
                  of Obligations

                Performance
                  of Obligations under Loan Documents

                Operation
                  and Maintenance of Properties

                Insurance

                Books
                  and Records; Inspection Rights

                Compliance
                  with Laws

                Environmental
                  Matters

                Further
                  Assurances

                Reserve
                  Reports

                [Intentionally
                  Omitted]

                Additional
                  Guarantors

                ERISA
                  Compliance

                Unrestricted
                  Subsidiaries

                Marketing
                  activities

                Swap
                  Agreements

                Second
                  Lien

                Exchange
                  Notes

                Use
                  of Proceeds of the Take-Out Securities

              	
                53

                55

                56

                56

                56

                56

                57

                57

                57

                57

                58

                58

                58

                58

                59

                59

                59

                60

                60

                60

                61

              
	
                ARTICLE
                  IX

                NEGATIVE
                  COVENANTS

              
	
                Section
                  9.01

                Section
                  9.02

                Section
                  9.03

                Section
                  9.04

                Section
                  9.05

              	
                [Intentionally
                  Omitted]

                Debt

                Liens

                Restricted
                  Payments

                [Intentionally
                  Omitted]

                 

              	
                61

                61

                65

                65

                69

                 

              

      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      
 

      
        	Section
                9.06
                Section
                  9.07

                Section
                  9.08

                Section
                  9.09

                Section
                  9.10

                Section
                  9.11

                Section
                  9.12

                Section
                  9.13

                Section
                  9.14

                Section
                  9.15

                Section
                  9.16

                Section
                  9.17

                Section
                  9.18

                Section
                  9.19

                Section
                  9.20

                Section
                  9.21

              	
                Nature
                  of Business; International Operations

                Proceeds
                  of Notes

                ERISA
                  Compliance

                [Intentionally
                  Omitted]

                Mergers,
                  Etc.

                Sale
                  of Properties and Subsidiary Stock

                Environmental
                  Matters

                Transactions
                  with Affiliates

                Subsidiaries

                Dividend
                  Restrictions

                [Intentionally
                  Omitted]

                [Intentionally
                  Omitted]

                [Intentionally
                  Omitted]

                Unrestricted
                  Subsidiaries

                Change
                  of Control

                Payments
                  for Consent

              	
                69

                69

                69

                70

                70

                72

                74

                74

                75

                75

                77

                77

                77

                77

                77

                78
 
	
                ARTICLE
                  X

                EVENTS
                  OF DEFAULT; REMEDIES

              
	
                Section
                  10.01

                Section
                  10.02

              	
                Events
                  of Default

                Remedies

              	
                78

                80

              
	
                ARTICLE
                  XI

                THE
                  ADMINISTRATIVE AGENT

              
	
                Section
                  11.01

                Section
                  11.02

                Section
                  11.03

                Section
                  11.04

                Section
                  11.05

                Section
                  11.06

                Section
                  11.07

                Section
                  11.08

                Section
                  11.09

                Section
                  11.10

                Section
                  11.11

                 

              	
                Appointment;
                  Powers

                Duties
                  and Obligations of Administrative Agent

                Action
                  by Administrative Agent

                Reliance
                  by Administrative Agent

                Subagents

                Resignation
                  of Administrative agent

                Agents
                  as Lenders

                No
                  Reliance

                Administrative
                  Agent May File Proofs of Claim

                Authority
                  of Administrative Agent to Release Collateral and Liens

                The
                  Arrangers and the Agents

              	
                81

                81

                81

                82

                82

                82

                83

                83

                83

                84

                84

              
	 	 	 
	
                ARTICLE
                  XII

                MISCELLANEOUS

              
	
                Section
                  12.01

                Section
                  12.02

                Section
                  12.03

                Section
                  12.04

                Section
                  12.05

                Section
                  12.06

                Section
                  12.07

                Section
                  12.08

                Section
                  12.09

                Section
                  12.10

                Section
                  12.11

                Section
                  12.12

              	
                Notices

                Waivers;
                  Amendments

                Expenses,
                  Indemnity; Damage Waiver

                Successors
                  and Assigns

                Survival;
                  Revival; Reinstatement

                Counterparts;
                  Integration; Effectiveness

                Severability

                Right
                  of Setoff

                GOVERNING
                  LAW; JURISDICTION; CONSENT TO SERVICE  PROCESS

                Headings

                Confidentiality

                Interest
                  Rate Limitation

                 

              	
                84

                85

                86

                88

                91

                92

                92

                92

                93

                94

                94

                94

                 

              

      

       

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

      
 

      
        	 Section
                12.13
                Section
                  12.14

                Section
                  12.15

                Section
                  12.16

              	 Intercreditor
                Agreement
                No
                  Third Party Beneficiaries

                Acknowledgements

                USA
                  Patriot Act Notice

              	
                95

                95

                95

                95
 

      

      
 

    

    
      
           

        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    ANNEX,
      EXHIBITS AND SCHEDULES

     

    Annex
      I                                  Commitments

    

    Exhibit
      A-1                            Form
      of Initial Note

    Exhibit
      A-2                            Form
      of Term Note

    Exhibit
      B                                Form
      of Borrowing Request

    Exhibit
      C                                [Intentionally
      Omitted]

    Exhibit
      D                                Form
      of Compliance Certificate

    Exhibit
      E                                Form
      of Legal Opinion of Jones Walker, special counsel to theBorrower

    Exhibit
      F                                Form
      of Guaranty Agreement

    Exhibit
      G                                Form
      of Assignment and Assumption

    Exhibit
      H                                Description
      of Exchange Notes

    Exhibit
      I                               
 Form of Intercreditor Agreement

    Exhibit
      J                                
Form of Exemption Certificate

    Exhibit
      K                                Form
      of Exchange and Registration Rights Agreement

    

    Schedule
      1.02                        Approved
      Counterparties

    Schedule
      1.02(b)                   Preferential
      Purchase Right Properties

    Schedule
      7.05                        Litigation

    Schedule
      7.10(d)                   ERISA
      Plan

    Schedule
      7.10(f)                    Under-funded
      ERISA Plan

    Schedule
      7.12                        Insurance

    Schedule
      7.14                        Subsidiaries

    Schedule
      7.16                        Title
      to Properties

    Schedule
      7.18                        Gas
      Imbalances

    Schedule
      7.19                        Marketing
      Contracts

    Schedule
      7.20                        Swap
      Agreements

    Schedule
      9.02                        Existing
      Debt

    Schedule
      9.03                        Existing
      Liens

    Schedule
      9.05                        Investments

    Schedule
      9.13                        Existing
      Affiliate Transactions

    
      
           

        
        

      

      
        v

        
          

        

      

      
        
        

      

    

    THIS
      CREDIT AGREEMENT dated as of August 1, 2007, is among: McMoRan
      Exploration Co., a Delaware corporation (the “Borrower”), each of the
      Lenders from time to time party hereto; JPMorgan Chase Bank,
      N.A. (in its individual capacity, “JPMorgan”), as
      administrative agent for the Lenders (in such capacity, together with its
      successors in such capacity, the “Administrative Agent”);  and
      Merrill Lynch, Pierce, Fenner & Smith Incorporated, as syndication agent for
      the Lenders (in such capacity, together with its successors in such capacity,
      the “Syndication Agent”).

     

    ARTICLE
      I

    Definitions
      and Accounting Matters

     

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

     

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

     

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

     

    “Accepting
      Holder” has the meaning set forth in Section 3.05(d).

     

    “Acquired
      Debt” means Debt (i) of a Person or any of its Subsidiaries existing at the
      time such Person becomes a Restricted Subsidiary or (ii) assumed in connection
      with the acquisition of assets from such Person, in each case whether or not
      Incurred by such Person in connection with, or in anticipation or contemplation
      of, such Person becoming a Restricted Subsidiary or such
      acquisition.  Acquired Debt shall be deemed to have been Incurred,
      with respect to clause (i) of the preceding sentence, on the date such Person
      becomes a Restricted Subsidiary and, with respect to clause (ii) of the
      preceding sentence, on the date of consummation of such acquisition of
      assets.

     

    “Acquisition”
      means the acquisition of certain oil, gas and mineral Properties pursuant to
      the
      terms and conditions of the Acquisition Documents.

     

    “Acquisition
      Agreement” means the Purchase and Sale Agreement between Seller and MOXY, as
      Buyer, dated June 20, 2007, to be effective July 1, 2007.

     

    “Acquisition
      Documents” means (a) the Acquisition Agreement, (b) the P&A Escrow
      Agreement, (c) the Transition Services Agreement, (d) the Title Indemnity
      Agreement and (e) all bills of sale, assignments, agreements, instruments and
      documents executed and delivered in connection therewith, in each case, as
      amended from time to time.

     

    “Acquisition
      Properties” means the Oil and Gas Properties and other properties acquired
      by MOXY pursuant to the Acquisition Documents.

     

    “Additional
      Assets” means (a) any property, plant or equipment to be used by the
      Borrower or a Restricted Subsidiary in the Oil and Gas Business, (b) Capital
      Expenditures by the Borrower or a Restricted Subsidiary in the Oil and Gas
      Business, (c) the Equity Interest of a Person that becomes a Restricted
      Subsidiary as a result of the acquisition of such Equity Interest by the
      Borrower or a Restricted Subsidiary or (d) Equity Interests constituting a
      minority interest in any Person that at such time is a Restricted Subsidiary;
      provided, however, that, in the case of clauses (c) and
      (d), such Restricted Subsidiary is primarily engaged in the Oil and Gas
      Business.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Adjusted
      Consolidated Net Tangible Assets” means (without duplication), as of the
      date of determination, the remainder of (a) the sum of: (i) discounted future
      net revenues from proved oil and gas reserves of the Borrower and its Restricted
      Subsidiaries calculated in accordance with SEC guidelines before any provincial,
      territorial, state, federal or foreign income taxes, as estimated by the
      Borrower in a reserve report prepared as of the end of the Borrower’s most
      recently completed fiscal year for which audited financial statements are
      available, as increased by, as of the date of determination, the estimated
      discounted future net revenues from (A) estimated proved oil and gas reserves
      acquired since such year end, which reserves were not reflected in such year
      end
      reserve report, and (B) estimated oil and gas reserves attributable to upward
      revisions of estimates of proved oil and gas reserves since such year end due
      to
      exploration, development or exploitation activities, in each case calculated
      in
      accordance with SEC guidelines(utilizing the prices for the fiscal quarter
      ending prior to the date of determination), and decreased by, as of the
      date of determination, the estimated discounted future net revenues from (C)
      estimated proved oil and gas reserves produced or disposed of since such year
      end, and (D) estimated oil and gas reserves attributable to downward revisions
      of estimates of proved oil and gas reserves since such year end due to changes
      in geological conditions or other factors which would, in accordance with
      standard industry practice, cause such revisions, in each case calculated on
      a
      pre-tax basis and substantially in accordance with SEC guidelines (utilizing
      the
      prices for the fiscal quarter ending prior to the date of determination), in
      each case as estimated by the Borrower’s petroleum engineers or any independent
      petroleum engineers engaged by the Borrower for that purpose; plus (ii)
      the capitalized costs that are attributable to oil and gas properties of the
      Borrower and its Restricted Subsidiaries to which no proved oil and gas reserves
      are attributable, based on the Borrower’s books and records as of a date no
      earlier than the date of the Borrower’s latest available annual or quarterly
      financial statements; plus (iii) the Net Working Capital on a date no
      earlier than the date of the Borrower’s latest annual or quarterly financial
      statements; plus (iv) the greater of (A) the net book value of other
      tangible assets of the Borrower and its Restricted Subsidiaries, as of a date
      no
      earlier than the date of the Borrower’s latest annual or quarterly financial
      statement, and (B) the appraised value, as estimated by independent appraisers,
      of other tangible assets of the Borrower and its Restricted Subsidiaries, as
      of
      a date no earlier than the date of the Borrower’s latest audited financial
      statements; minus (b) the sum of: (i) Minority Interests; plus
      (ii) any net gas balancing liabilities of the Borrower and its Restricted
      Subsidiaries reflected in the Borrower’s latest audited financial statements;
plus (iii) to the extent included in (a)(i) above, the discounted future
      net revenues, calculated in accordance with SEC guidelines (utilizing the prices
      utilized in the Borrower’s year end reserve report), attributable to reserves
      which are required to be delivered to third parties to fully satisfy the
      obligations of the Borrower and its Restricted Subsidiaries with respect to
      Volumetric Production Payments (determined, if applicable, using the schedules
      specified with respect thereto); plus (iv) the discounted future net
      revenues, calculated in accordance with SEC guidelines, attributable to reserves
      subject to Dollar-Denominated Production Payments which, based on the estimates
      of production and price assumptions included in determining the discounted
      future net revenues specified in (a)(i) above, would be necessary to fully
      satisfy the payment obligations of the Borrower and its Subsidiaries with
      respect to Dollar-Denominated Production Payments (determined, if applicable,
      using the schedules specified with respect thereto).  If the Borrower
      changes its method of accounting from the successful efforts method of
      accounting to the full cost or a similar method, ‘‘Adjusted Consolidated Net
      Tangible Assets’’ will continue to be calculated as if the Borrower were still
      using the successful efforts method of accounting. Until such time as the
      Reserve Reports for the fiscal year ended December 31, 2007 are available,
      calculations in this definition that are determined based on the most recent
      year-end reserve report will be deemed to refer to the Initial Reserve Report.
      For purposes of calculating the amount referred to in Section 9.02(b)(i), the
      Borrower will be entitled to rely on the greater of (i) Adjusted Consolidated
      Net Tangible Assets as calculated as of the date used for determining the
      borrowing base from time to time under the Borrower’s Senior Credit Agreement or
      (ii) Adjusted Consolidated Net Tangible Assets as determined above as of the
      date of determination.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

    “Adjusted
      Margin” means with respect to any Loan, 0 basis points during the three-
      month period commencing on the Initial Maturity Date and for each subsequent
      three-month period thereafter, 50 basis points higher than the Adjusted Margin
      for the immediately preceding three-month period.

     

    “Adjusted
      Rate” means the rate equal to 50 basis points plus the interest rate borne
      by the Loans on the day immediately preceding the Initial Maturity
      Date.

     

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

     

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

     

    “Agents”
      means, collectively, the Administrative Agent and the Syndication Agent; and
      “Agent” shall mean the Administrative Agent or the Syndication Agent, as the
      context requires.

     

    “Aggregated
      Subsidiaries” means any group of Subsidiaries which in the aggregate would
      constitute a Significant Subsidiary.

     

    “Agreement”
      means this Credit Agreement, dated as of August 1, 2007, as the same may from
      time to time be amended, modified, supplemented or restated.

     

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

     

    “Applicable
      Margin” means, with respect to any Loan, 0 basis points during the three-
      month period commencing on the Effective Date and for each subsequent
      three-month period thereafter until the Initial Maturity Date, 50 basis points
      higher than the Applicable Margin for the immediately preceding three-month
      period.

     

    “Approved
      Counterparty” means (a) any Lender or any Affiliate of a Lender, (b) any
      other Person whose long term senior unsecured debt rating at the time a
      particular Swap Agreement transaction is entered into is A/A2 by S&P or
      Moody’s (or their equivalent) or higher, or (c) with regard to Swap Agreements
      in respect of commodities, and subject to the conditions set forth therein,
      any
      other Person listed on Schedule 1.02.

     

    “Arrangers”
      means J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith
      Incorporated., in their capacities as the joint lead arrangers and joint book
      runners hereunder.

     

    “Asset
      Disposition” means  any direct or indirect sale, lease (other than
      an operating lease entered into in the ordinary course of the Oil and Gas
      Business), transfer, issuance or other disposition (or series of related sales,
      leases, transfers, issuances or dispositions that are part of a common plan)
      of
      shares of 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Equity
      Interests of a Subsidiary (other than directors’ qualifying shares), property or
      other assets (each referred to for the purposes of this definition as a
“disposition”) by the Borrower or any of its Restricted Subsidiaries (including
      any disposition by means of a merger, consolidation or similar transaction),
      other than (i) a disposition of assets by a Restricted Subsidiary to the
      Borrower or by the Borrower or a Restricted Subsidiary to a Restricted
      Subsidiary; provided that in the case of a sale by a Restricted
      Subsidiary to another Restricted Subsidiary, the Borrower directly or indirectly
      owns an equal or greater percentage of the Common Stock of the transferee than
      of the transferor; (ii) the sale of Cash Equivalents in the ordinary course
      of
      business; (iii) disposition of Hydrocarbons, equipment, inventory, accounts
      receivable or other properties or assets in the ordinary course of business,
      including any abandonment, farm-in, farm-out, lease or sublease of any oil
      and
      gas properties or the forfeiture or other disposition of such properties
      pursuant to standard form operating agreements, in each case in the ordinary
      course of business in a manner customary in the Oil and Gas Business; (iv)
      disposition of obsolete or worn out equipment or equipment that is no longer
      useful in the conduct of the Borrower’s and/or its Restricted Subsidiaries’
business and that is disposed of in the ordinary course of
      business;  (v) transactions permitted under Section 9.10; (vi) an
      issuance of Equity Interests by a Restricted Subsidiary of the
      Borrower  to the Borrower or to a Restricted Subsidiary; (vii) for
      purposes of Section 9.11 only, a disposition subject to Section 9.04; (viii)
      an
      Asset Swap effected in compliance with Section 9.11; (ix) dispositions of assets
      in a single transaction or series of related transactions with an aggregate
      fair
      market value during each fiscal year of the Borrower of not more than
      $10,000,000; (x) the creation of a Permitted Lien or dispositions in
      connection with Permitted Liens; (xi) dispositions of receivables in connection
      with the compromise, settlement or collection thereof in the ordinary course
      of
      business or in bankruptcy or similar proceedings and exclusive of factoring
      or
      similar arrangements; (xii) the licensing or sublicensing of intellectual
      property or other general intangibles and licenses, leases or subleases of
      other
      property in the ordinary course of business which do not materially interfere
      with the business of the Borrower and its Restricted Subsidiaries; (xiii)
      foreclosure on assets, (xiv) any Production Payments and Reserve Sales, and
      (xv)
      Casualty Events of Properties which are not Oil and Gas Properties.

     

    “Asset
      Disposition Offer” has the meaning set forth in Section
      9.11(b).

     

    “Asset
      Swap” means concurrent purchase and sale or exchange of Additional Assets
      between the Borrower or any of its Restricted Subsidiaries and another Person;
      provided that any cash received must be applied in accordance with
      Section 9.11.

     

    “Assignee”
      has the meaning set forth in Section 12.04(b).

     

    “Assignment
      and Assumption” means an assignment and assumption entered into by a Lender
      and an assignee (with the consent of any party whose consent is required by
Section 12.04(b)), and accepted by the Administrative
      Agent, in the form of Exhibit G or any other form approved by the Administrative
      Agent.

     

    “Attributable
      Debt” in respect of a Sale/Leaseback Transaction means, as at the time of
      determination, the present value (discounted at the interest rate implicit
      in
      such transaction determined in accordance with GAAP) of the total obligations
      of
      the lessee for rental payments during the remaining term of the lease included
      in such Sale/Leaseback Transaction (including any period for which such lease
      has been extended).

     

    “Average
      Life” means, as of the date of determination, with respect to any Debt or
      Preferred Stock, the quotient obtained by dividing (i) the sum of the products
      of the numbers of years from the date of determination to the dates of each
      successive scheduled principal payment of such Debt or redemption or similar
      payment with respect to such Preferred Stock multiplied by the amount of such
      payment by (ii) the sum of all such payments.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

    “Board
      of Directors”: means, as to any Person, the board of directors of such
      Person or any committee thereof duly authorized to act on behalf of such
      board.

     

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

     

    “Borrowing
      Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.02.

     

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

     

    “Capital
      Expenditures” means, for any period, (a) the additions to property, plant
      and equipment and other capital expenditures of Borrower and its Restricted
      Subsidiaries that are (or would be) set forth in a consolidated statement of
      cash flows of Borrower for such period prepared in accordance with GAAP and
      (b)
      that portion of principal payments on Capitalized Lease Obligations made by
      Borrower and its Restricted Subsidiaries during such period that are
      attributable to additions to property, plant and equipment and that have not
      otherwise been reflected on the consolidated statement of cash flows as
      additions to property, plant and equipment or other capital
      expenditures.

     

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

     

    “Capitalized
      Lease Obligations” means an obligation that is required to be classified and
      accounted for as a capitalized lease for financial reporting purposes in
      accordance with GAAP, and the amount of Debt represented by such obligation
      will
      be the capitalized amount of such obligation at the time any determination
      thereof is to be made as determined in accordance with GAAP, and the Stated
      Maturity thereof will be the date of the last payment of rent or any other
      amount due under such lease prior to the first date such lease may be terminated
      without penalty.

     

    “Cash
      Equivalents” means (i) securities issued or directly and fully guaranteed or
      insured by the United States Government, or any agency or instrumentality
      thereof, having maturities of not more than one year from the date of
      acquisition; (ii) marketable general obligations issued by any state of the
      United States of America or any political subdivision of any such state or
      any
      public instrumentality thereof maturing within one year from the date of
      acquisition thereof and, at the time of acquisition thereof, having a credit
      rating of “A” or better from either Standard & Poor’s Ratings Group or
      Moody’s Investors Service, Inc.; (iii) certificates of deposit, time deposits,
      eurodollar time deposits, overnight bank deposits or bankers’ acceptances having
      maturities of not more than one year from the date of acquisition thereof issued
      by any commercial bank the long-term debt of which is rated at the time of
      acquisition thereof at least “A” or the equivalent thereof by Standard &
Poor’s Rating Group, or “A” or the equivalent thereof by Moody’s Investors
      Service, Inc., and having capital and surplus in excess of $500,000,000; (iv)
      repurchase obligations with a term of not more than seven days for underlying
      securities of the types 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    described
      in clauses (i), (ii) and (iii) entered into with any bank meeting the
      qualifications specified in clause (iii) above; (v) commercial paper rated
      at
      the time of acquisition thereof at least “A-2” or the equivalent thereof by
      Standard & Poor’s Rating Group or “P-2” or the equivalent thereof by Moody’s
      Investors Service, Inc., or carrying an equivalent rating by a nationally
      recognized rating agency, if both of the two named rating agencies cease
      publishing ratings of investments, and in either case maturing within one year
      after the date of acquisition thereof; and (vi) interests in any investment
      company which invests solely in instruments of the type specified in clauses
      (i)
      through (v) above.

     

    “Casualty
      Event” means any loss, casualty or other insured damage to, or any
      nationalization, taking under power of eminent domain or by condemnation or
      similar proceeding of, any Property of any Loan Party having a fair market
      value
      in excess of $1,000,000.

     

    “Change
      of Control” means the occurrence of any of the following
      events:

     

    (i)           any
      “person” or “group” of related persons (as such terms are used in Sections 13(d)
      and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined
      in
      Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group
      shall be deemed to have “beneficial ownership” of all shares that any such
      person or group has the right to acquire, whether such right is exercisable
      immediately or only after the passage of time), directly or indirectly, of
      more
      than 35% of the total voting power of the Voting Stock of the Borrower (or
      a
      successor to the relevant entity by merger, consolidation or purchase of all
      or
      substantially all of its assets) (for the purposes of this clause (A), such
      person or group shall be deemed to beneficially own any Voting Stock of the
      Borrower held by a parent entity, if such person or group “beneficially owns”
(as defined above), directly or indirectly, more than 35% of the voting power
      of
      the Voting Stock of such parent entity); or

     

    (ii)           the
      first day on which a majority of the members of the Board of Directors of the
      Borrower are not Continuing Directors; or

     

    (iii)           the
      sale, lease, transfer, conveyance or other disposition (other than by way of
      merger or consolidation), in one or a series of related transactions, of all
      or
      substantially all of the assets of the Borrower and its Restricted Subsidiaries
      taken as a whole to any “person” (as such term is used in Sections 13(d) and
      14(d) of the Exchange Act); or

     

    (iv)           the
      adoption by the stockholders of the Borrower of a plan or proposal for the
      liquidation or dissolution of the Borrower; or

     

    (v)           a
      “change of control” as defined in the Senior Credit Agreement.

     

    “Change
      of Control Offer” has the meaning set forth in Section 9.20.

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

     

    “Collateral”
      has the meaning set forth in the Senior Loan Security Instruments.

     

    “Commitment”
      means, as to any Lender, its obligation to make a Loan to the Borrower on the
      Effective Date in an amount equal to the amount set forth opposite such Lender’s
      name in Schedule 1.01 under the heading “Commitment”; collectively, as to
      all such Lenders, the “Commitments”.  As of the Effective Date,
      the aggregate Commitments of the Lenders are $800,000,000.

     

    “Commitment
      Percentage” means, as to any Lender at any time, the percentage of the
      aggregate Commitments then constituted by such Lender’s Commitment (or, after
      the Loans are made on the Effective Date, the percentage of the aggregate Loans
      then constituted by such Lender’s Loans).

     

    “Commodity
      Agreements” means, in respect of any Person, any forward contract, commodity
      swap agreement, commodity option agreement or other similar agreement or
      arrangement in respect of Hydrocarbons used, produced, processed or sold by
      such
      Person that are customary in the Oil and Gas Business and designed to protect
      such Person against fluctuation in Hydrocarbon prices.

     

    “Common
      Stock” means, with respect to any Person, any and all shares, interests or
      other participations in, and other equivalents (however designated and whether
      voting or nonvoting) of such Person’s common stock whether or not outstanding on
      the Effective Date, and includes, without limitation, all series and classes
      of
      such common stock.

     

    “Conduit
      Lender” means any special purpose corporation organized and administered by
      any Lender for the purpose of making Loans otherwise required to be made by
      such
      Lender and designated by such Lender in a written instrument delivered to the
      Administrative Agent and the Borrower; provided, that the designation by
      any Lender of a Conduit Lender shall not relieve the designating Lender of
      any
      of its obligations under this Agreement if, for any reason, its Conduit Lender
      fails to meet any such obligations, and the designating Lender (and not the
      Conduit Lender) shall have the sole right and responsibility to deliver all
      consents and waivers required or requested under this Agreement with respect
      to
      its Conduit Lender, and provided, further, that no Conduit Lender
      shall (a) be entitled to receive any greater amount pursuant to Section 5.01,
      5.02, 5.03 or 12.03 than the designating Lender would have been entitled to
      receive in respect of the extensions of credit made by such Conduit Lender
      or
      (b) be deemed to have any Commitment.

     

    “Consolidated
      Coverage Ratio” means, as of any date of determination, with respect to any
      Person, the ratio of (i) the aggregate amount of Consolidated EBITDAX of such
      Person for the period of the most recent four consecutive fiscal quarters ending
      prior to the date of such determination for which financial statements are
      in
      existence to (ii) Consolidated Interest Expense for such four fiscal quarters,
      provided, however, that: (1) if the Borrower or any Restricted
      Subsidiary (x) has Incurred any Debt since the beginning of such period that
      remains outstanding on such date of determination or if the transaction giving
      rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence
      of Debt, Consolidated EBITDAX and Consolidated Interest Expense for such period
      will be calculated after giving effect on a pro forma basis to such Debt as
      if
      such Debt had been Incurred on the first day of such period (except that in
      making such computation, the amount of Debt under any revolving credit facility
      outstanding on the date of such calculation will be deemed to be
      (A)  the average daily balance of such Debt during such four fiscal
      quarters or such shorter period for which such facility was outstanding
      or  (B) if such facility was created after the end of such four fiscal
      quarters, the average daily balance of such Debt during the period from the
      date
      of creation of such facility to the date of such calculation) and the discharge
      of any other Debt repaid, repurchased, defeased or otherwise discharged with
      the
      proceeds of 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    such
      new
      Debt as if such discharge had occurred on the first day of such period; or
      (y)
      has repaid, repurchased, defeased or otherwise discharged any Debt since the
      beginning of the period that is no longer outstanding on such date of
      determination or if the transaction giving rise to the need to calculate the
      Consolidated Coverage Ratio involves a discharge of Debt (in each case other
      than Debt Incurred under any revolving credit facility unless such Debt has
      been
      permanently repaid and the related commitment terminated), Consolidated EBITDAX
      and Consolidated Interest Expense for such period will be calculated after
      giving effect on a pro forma basis to such discharge of such Debt, including
      with the proceeds of such new Debt, as if such discharge had occurred on the
      first day of such period; (2) if since the beginning of such period the Borrower
      or any Restricted Subsidiary will have made any Asset Disposition or disposed
      of
      any company, division, operating unit, segment, business, group of related
      assets or line of business or if the transaction giving rise to the need to
      calculate the Consolidated Coverage Ratio is such an Asset Disposition, (x)
      the
      Consolidated EBITDAX for such period will be reduced by an amount equal to
      the
      Consolidated EBITDAX (if positive) directly attributable to the assets which
      are
      the subject of such Asset Disposition for such period or increased by an amount
      equal to the Consolidated EBITDAX (if negative) directly attributable thereto
      for such period and (y) Consolidated Interest Expense for such period will
      be
      reduced by an amount equal to the Consolidated Interest Expense directly
      attributable to any Debt of the Borrower or any Restricted Subsidiary repaid,
      repurchased, defeased or otherwise discharged with respect to the Borrower
      and
      its continuing Restricted Subsidiaries in connection with such Asset Disposition
      for such period (or, if the Equity Interest of any Restricted Subsidiary is
      sold, the Consolidated Interest Expense for such period directly attributable
      to
      the Debt of such Restricted Subsidiary to the extent the Borrower and its
      continuing Restricted Subsidiaries are no longer liable for such Debt after
      such
      sale); (3) if since the beginning of such period the Borrower or any Restricted
      Subsidiary (by merger or otherwise) will have made an Investment in any
      Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary
      or is
      merged with or into the Borrower) or an acquisition of assets, including any
      acquisition of assets occurring in connection with a transaction causing a
      calculation to be made hereunder, which constitutes all or substantially all
      of
      a company, division, operating unit, segment, business, group of related assets
      or line of business, Consolidated EBITDAX and Consolidated Interest Expense
      for
      such period will be calculated after giving pro forma effect thereto (including
      the Incurrence of any Debt) as if such Investment or acquisition occurred on
      the
      first day of such period; and (4) if since the beginning of such period any
      Person that subsequently became a Restricted Subsidiary or was merged with
      or
      into the Borrower or any Restricted Subsidiary since the beginning of such
      period will have Incurred any Debt or discharged any Debt, made any Asset
      Disposition or any Investment or acquisition of assets that would have required
      an adjustment pursuant to clause (2) or (3) above if made by the Borrower or
      a
      Restricted Subsidiary during such period, Consolidated EBITDAX and Consolidated
      Interest Expense for such period will be calculated after giving pro forma
      effect thereto as if such Asset Disposition or Investment or acquisition of
      assets occurred on the first day of such period.  For purposes of this
      definition, whenever pro forma effect is to be given to any calculation under
      this definition, the pro forma calculations will be determined in good faith
      by
      a responsible financial or accounting officer of the Borrower (including
proforma expense and cost reductions calculated on a basis
      consistent with Regulation S-X under the Securities Act).  If any Debt
      bears a floating rate of interest and is being given pro forma effect, the
      interest expense on such Debt will be calculated as if the rate in effect on
      the
      date of determination had been the applicable rate for the entire period (taking
      into account any Interest Rate Agreement applicable to such Debt if such
      Interest Rate Agreement has a remaining term in excess of 12
      months).  If any Debt that is being given pro forma effect bears an
      interest rate at the option of the Borrower, the interest rate shall be
      calculated by applying such optional rate chosen by the Borrower.

     

    “Consolidated
      Current Assets” means, with respect to any Person, at any date, all amounts
      (other than cash and Cash Equivalents) that would, in conformity with GAAP,
      be
      set forth opposite the caption “total current assets” (or any like caption) on a
      consolidated balance sheet of such Person and its Restricted Subsidiaries at
      such date.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Consolidated
      Current Liabilities” means, with respect to any Person, at any date, all
      amounts that would, in conformity with GAAP, be set forth opposite the caption
      “total current liabilities” (or any like caption) on a consolidated balance
      sheet of such Person and its Restricted Subsidiaries at such date, but excluding
      the current portion of any Funded Debt of such Person and its Restricted
      Subsidiaries.

     

    “Consolidated
      EBITDAX” for any period means the Consolidated Net Income for such period,
plus, without duplication,  the following to the extent
      deducted in calculating such Consolidated Net Income: (i) Consolidated Interest
      Expense; (ii) Consolidated Income Taxes; (iii) consolidated depletion,
      depreciation and exploration expenses; (iv) consolidated amortization expense
      or
      impairment charges recorded in connection with the application of Financial
      Accounting Standard No. 142 “Goodwill and Other Intangibles” and Financial
      Accounting Standard No. 144 “Accounting for the Impairment or Disposal of Long
      Lived Assets”; and (v) other non-cash charges reducing Consolidated Net Income
      (excluding any such non-cash charge to the extent it represents an accrual
      of or
      reserve for cash charges in any future period or amortization of a prepaid
      cash
      expense that was paid in a prior period not included in the calculation),
less, to the extent included in calculating such Consolidated Net Income
      and in excess of any costs or expenses attributable thereto that were deducted
      in calculating such Consolidated Net Income, the sum of (x) the amount of
      deferred revenues that are amortized during such period and are attributable
      to
      reserves that are subject to Volumetric Production Payments and (y) amounts
      recorded in accordance with GAAP as repayments of principal and interest
      pursuant to Dollar-Denominated Production Payments. Notwithstanding the
      preceding sentence, clauses (ii) through (v) relating to amounts of a Restricted
      Subsidiary of a Person will be added to Consolidated Net Income to compute
      Consolidated EBITDAX of such Person only to the extent (and in the same
      proportion) that the net income (loss) of such Restricted Subsidiary was
      included in calculating the Consolidated Net Income of such Person and, to
      the
      extent the amounts set forth in clauses (ii) through (v) are in excess of those
      necessary to offset a net loss of such Restricted Subsidiary or if such
      Restricted Subsidiary has net income for such period included in Consolidated
      Net Income, only if a corresponding amount would be permitted at the date of
      determination to be dividended to the Borrower by such Restricted Subsidiary
      without prior approval (that has not been obtained), pursuant to the terms
      of
      its charter and all agreements, instruments, judgments, decrees, orders,
      statutes, rules and governmental regulations applicable to that Restricted
      Subsidiary or its stockholders.

     

    “Consolidated
      Income Taxes” means, with respect to any Person for any period, taxes
      imposed upon such Person or other payments required to be made by such Person
      by
      any governmental authority which taxes or other payments are calculated by
      reference to the income or profits of such Person or such Person and its
      Restricted Subsidiaries (to the extent such income or profits were included
      in
      computing Consolidated Net Income for such period), regardless of whether such
      taxes or payments are required to be remitted to any governmental
      authority.

     

    “Consolidated
      Interest Expense” means, for any period, the total consolidated interest
      expense of the Borrower and its Restricted Subsidiaries, whether paid or
      accrued, plus, to the extent not included in such interest expense: (i) interest
      expense attributable to Capitalized Lease Obligations and the interest portion
      of rent expense associated with Attributable Debt in respect of the relevant
      lease giving rise thereto, determined as if such lease were a capitalized lease
      in accordance with GAAP and the interest component of any deferred payment
      obligations; (ii) amortization of debt discount and debt issuance cost
      (provided that any amortization of bond premium will be credited to
      reduce Consolidated Interest Expense unless, pursuant to GAAP, such amortization
      of bond premium has otherwise reduced Consolidated Interest Expense); (iii)
      non-cash interest expense; (iv) commissions, discounts and other fees and
      charges owed with respect to letters of credit and bankers' acceptance
      financing; (v) the interest expense on Debt of another Person that is Guaranteed
      by such Person or one of its Restricted Subsidiaries or secured by a Lien on
      assets of such Person or one of its Restricted Subsidiaries; (vi) costs
      associated with Interest Rate Agreements (including amortization of fees);
      provided, however, that if Interest Rate 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Agreements
      result in net benefits rather than costs, such benefits shall be credited to
      reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits
      are otherwise reflected in Consolidated Net Income; (vii) the consolidated
      interest expense of such Person and its Restricted Subsidiaries that was
      capitalized during such period; (viii) the product of (A) all dividends paid
      or
      payable, in cash, Cash Equivalents or Debt or accrued during such period on
      any
      series of Disqualified Stock of such Person or on Preferred Stock of its
      Restricted Subsidiaries that are not Guarantors payable to a party other than
      the Borrower or a Wholly-Owned Subsidiary, times (B) a fraction, the numerator
      of which is one and the denominator of which is one minus the then current
      combined federal, state, provincial and local statutory tax rate of such Person,
      expressed as a decimal, in each case, on a consolidated basis and in accordance
      with GAAP; and (ix) the cash contributions to any employee stock ownership
      plan
      or similar trust to the extent such contributions are used by such plan or
      trust
      to pay interest or fees to any Person (other than the Borrower and its
      Restricted Subsidiaries) in connection with Debt Incurred by such plan or
      trust.  For the purpose of calculating the Consolidated Coverage Ratio
      in connection with the Incurrence of any Debt described in the final paragraph
      of the definition of “Debt,” the calculation of Consolidated Interest Expense
      shall include all interest expense (including any amounts described in clauses
      (i through (ix) above) relating to any Debt of the Borrower or any Restricted
      Subsidiary described in the final paragraph of the definition of
“Debt.”  For purposes of the foregoing, total interest expense will be
      determined (i) after giving effect to any net payments made or received by
      the
      Borrower and its Subsidiaries with respect to Interest Rate Agreements and
      (ii)
      exclusive of amounts classified as other comprehensive income in the balance
      sheet of the Borrower.  Notwithstanding anything to the contrary
      contained herein, commissions, discounts, yield and other fees and charges
      Incurred in connection with any transaction pursuant to which the Borrower
      or
      its Restricted Subsidiaries may sell, convey or otherwise transfer or grant
      a
      security interest in any accounts receivable or related assets shall be included
      in Consolidated Interest Expense.

     

    “Consolidated
      Net Income” means,
      for any period, the consolidated net income (loss) of the Borrower and its
      Restricted Subsidiaries determined in accordance with GAAP; provided,
however, that there will not be included in such Consolidated Net
      Income:
      (a) any net income (loss) of any Person if such Person is not a Restricted
      Subsidiary, except that: (i) subject to the limitations contained in clauses
      (c), (d) and (e) below, the Borrower’s equity in the net income of any such
      Person for such period will be included in such Consolidated Net Income up
      to
      the aggregate amount of cash actually distributed by such Person during such
      period to the Borrower or a Restricted Subsidiary as a dividend or other
      distribution (subject, in the case of a dividend or other distribution to a
      Restricted Subsidiary, to the limitations contained in clause (b) below) and
      (ii) the Borrower’s equity in a net loss of any such Person (other than an
      Unrestricted Subsidiary) for such period will be included in determining such
      Consolidated Net Income to the extent such loss has been funded with cash from
      the Borrower or a Restricted Subsidiary; (b) any net income (but not loss)
      of
      any Restricted Subsidiary if such Subsidiary is subject to restrictions,
      directly or indirectly, on the payment of dividends or the making of
      distributions by such Restricted Subsidiary, directly or indirectly, to the
      Borrower, except that: (i) subject to the limitations contained in clauses
      (c),
      (d) and (e) below, the Borrower’s equity in the net income of any such
      Restricted Subsidiary for such period will be included in such Consolidated
      Net
      Income up to the aggregate amount of cash that could have been distributed
      by
      such Restricted Subsidiary during such period to the Borrower or another
      Restricted Subsidiary as a dividend (subject, in the case of a dividend to
      another Restricted Subsidiary, to the limitation contained in this clause)
      and
      (ii) the Borrower’s equity in a net loss of any such Restricted Subsidiary for
      such period will be included in determining such Consolidated Net Income; (c)
      any gain (loss) realized upon the sale or other disposition of any property,
      plant or equipment of the Borrower or its consolidated Restricted Subsidiaries
      (including pursuant to any Sale/Leaseback Transaction) which is not sold or
      otherwise disposed of in the ordinary course of business and any gain (loss)
      realized upon the sale or other disposition of any Equity Interest of any
      Person; (d) any after-tax extraordinary, unusual or non-recurring gain or loss;
      (e) the after-tax cumulative effect of a change in accounting principles; (f)
      any asset impairment writedowns on Oil and Gas Properties under GAAP or SEC
      guidelines; (g) any unrealized non-cash gains or losses or charges in respect
      of
      Hedging Obligations (including those 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    resulting
      from the application of SFAS 133); (h) non-cash charges relating to employee
      stock-based compensation; (i) any net after-tax income or loss from discontinued
      operations and any net after-tax gain or loss on disposal of discontinued
      operations; (j) any non-cash or non recurring charges associated with any
      premium or penalty paid, write-off of deferred financing costs or other
      financial recapitalization charges in connection with redeeming or retiring
      any
      Debt prior to its Stated Maturity; and (k) fees, premiums and expenses incurred
      in connection with the Transactions, this Agreement, the Loan Documents, the
      Senior Loans, the Acquisition and the repayment of Debt under the Second Lien
      Term Loan Agreement up to $25,000,000 in the aggregate.

     

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

     

    “Consolidated
      Working Capital” means,  with respect to any Person, at any date,
      the excess of Consolidated Current Assets of such Person on such date
over Consolidated Current Liabilities of such Person on such
      date.

     

    “Continuing
      Directors” means, as of any date of determination, any member of the Board
      of Directors of the Borrower who: (1) was a member of such Board of Directors
      on
      the date of this Agreement; or (2) was nominated for election or elected to
      such
      Board of Directors with the approval of a majority of the Continuing Directors
      who were members of the relevant Board at the time of such nomination or
      election.

     

    “Control”
      means the possession, directly or indirectly, of the power to direct or cause
      the direction of the management or policies of a Person, whether through the
      ability to exercise voting power, by contract or
      otherwise.  “Controlling” and “Controlled” have meanings
      correlative thereto.

     

    “Covenant
      Effectiveness Date”: the date on which the Borrower has issued Equity
      Interests (other than Disqualified Stock and Equity Interests from conversion
      of
      the Existing Convertible Notes) generating gross cash proceeds of not less
      than
      $300,000,000.

     

    “Currency
      Agreement” means in respect of a Person any foreign exchange contract,
      currency swap agreement, currency futures contract, currency option contract
      or
      other similar agreement as to which such Person is a party or a
      beneficiary.

     

    “Debt”
      means, with respect to any Person on any date of determination (without
      duplication):

     

    (i)           the
      principal of and premium (if any) in respect of indebtedness of such Person
      for
      borrowed money;

     

    (ii)           the
      principal of and premium (if any) in respect of obligations of such Person
      evidenced by bonds, debentures, notes or other similar instruments;

     

    (iii)           the
      principal component of all obligations of such Person in respect of letters
      of
      credit, bankers' acceptances or other similar instruments (including
      reimbursement obligations with respect thereto except to the extent such
      reimbursement obligation relates to a trade payable and such obligation is
      satisfied within 30 days of Incurrence);

     

    (iv)           the
      principal component of all obligations of such Person to pay the deferred and
      unpaid purchase price of property (except trade payables), which purchase

     

    
      
        
        

      

      
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    price
      is
      due more than six months after the date of placing such property in service
      or
      taking delivery and title thereto;

     

    (v)           Capitalized
      Lease Obligations and all Attributable Debt of such Person;

     

    (vi)           the
      principal component or liquidation preference of all obligations of such Person
      with respect to the redemption, repayment or other repurchase of any
      Disqualified Stock or, with respect to any Subsidiary that is not a Guarantor,
      any Preferred Stock (but excluding, in each case, any accrued
      dividends);

     

    (vii)           the
      principal component of all Debt of other Persons secured by a Lien on any asset
      of such Person, whether or not such Debt is assumed by such Person;
provided, however, that the amount of such Debt will be
      the lesser of (a) the fair market value of such asset at such date of
      determination and (b) the amount of such Debt of such other
      Persons;

     

    (viii)           the
      principal component of Debt of other Persons to the extent Guaranteed by such
      Person; and

     

    (ix)           to
      the extent not otherwise included in this definition, net obligations of such
      Person under Commodity Agreements, Currency Agreements and Interest Rate
      Agreements (the amount of any such obligations to be equal at any time to the
      termination value of such agreement or arrangement giving rise to such
      obligation that would be payable by such Person at such time).

     

    Notwithstanding
      the preceding, Debt shall not include Volumetric Production
      Payments.  The amount of Debt of any Person at any date will be the
      outstanding balance at such date of all unconditional obligations as described
      above and the maximum liability, upon the occurrence of the contingency giving
      rise to the obligation, of any contingent obligations at such date.

     

    In
      addition, “Debt” of any Person shall include Debt described in the preceding
      paragraph that would not appear as a liability on the balance sheet of such
      Person if:

     

    (1)           such
      Debt is the obligation of a partnership or joint venture that is not a
      Restricted Subsidiary (a “Joint Venture”);

     

    (2)           such
      Person or a Restricted Subsidiary of such Person is a general partner of the
      Joint Venture (a “General Partner”); and

     

    (3)           there
      is recourse, by contract or operation of law, with respect to the payment of
      such Debt to property or assets of such Person or a Restricted Subsidiary of
      such Person; and then such Debt shall be included in an amount not to
      exceed:

     

    (a)           the
      lesser of (i) the net assets of the General Partner and (ii) the amount of
      such
      obligations to the extent that there is recourse, by contract or operation
      of
      law, to the property or assets of such Person or a Restricted Subsidiary of
      such
      Person; or

     

    (b)           if
      less than the amount determined pursuant to clause (a) immediately above, the
      actual amount of such Debt that is recourse to such Person or a Restricted
      Subsidiary of such Person, if the Debt is evidenced by a writing and is for
      a
      determinable amount.

     

    
      
        
        

      

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

     

    “Disqualified
      Stock” means, with
      respect to any Person, any Equity Interest that by its terms (or by the terms
      of
      any security into which it is convertible or for which it is exchangeable)
      or
      upon the happening of any event (i) matures or is mandatorily redeemable
      pursuant to a sinking fund obligation or otherwise, (ii) is convertible or
      exchangeable for Debt or Disqualified Stock (excluding Equity Interest that
      is
      convertible or exchangeable solely at the option of the Borrower or a Restricted
      Subsidiary) or (iii) is redeemable at the option of the holder thereof, in
      whole
      or in part, in each case, on or prior to the date that is 91 days after the
      earlier of the Final Maturity Date or the date on which there are no Loans
      or
      Exchange Notes outstanding, provided, that only the portion of Equity
      Interest which so matures or is mandatorily redeemable, is so convertible or
      exchangeable or is so redeemable at the option of the holder thereof prior
      to
      such date shall be deemed to be Disqualified Stock; provided,
further, that any Equity Interest that would constitute Disqualified
      Stock solely because the holders thereof have the right to require the Borrower
      to repurchase such Equity Interest upon the occurrence of a change of control
      or
      asset disposition (each defined in a substantially identical manner to the
      corresponding definitions in this Agreement) shall not constitute Disqualified
      Stock if the terms of such Equity Interest (and all such securities into which
      it is convertible or for which it is ratable or exchangeable) provide that
      the
      Borrower may not repurchase or redeem any such Equity Interest (and all such
      securities into which it is convertible or for which it is ratable or
      exchangeable) pursuant to such provision prior to compliance by the Borrower
      with Sections 9.04 and 9.20 and such repurchase or redemption complies with
      Section 9.11.

    

    “Dollar-Denominated
      Production Payments” means production payment obligations recorded as
      liabilities in accordance with GAAP, together with all undertakings and
      obligations in connection therewith.

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

     

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

     

    “Effective
      Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived in accordance with
      Section 12.02).  The Effective Date is
      August 6, 2007.

     

    “Environmental
      Laws” means any and all Governmental Requirements pertaining in any way to
      health, safety the environment or the preservation or reclamation of natural
      resources, in effect in any and all jurisdictions in which the Borrower or
      any
      Restricted Subsidiary is conducting or at any time has conducted business,
      or
      where any Property of the Borrower or any Restricted Subsidiary is located,
      including without limitation, the Oil Pollution Act of 1990 (“OPA”), as
      amended, the Clean Air Act, as amended, the Comprehensive Environmental,
      Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended,
      the Federal Water Pollution Control Act, as amended, the Occupational Safety
      and
      Health Act of 1970, as amended, the Resource Conservation and Recovery Act
      of
      1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the
      Toxic Substances Control Act, as amended, the Superfund Amendments and
      Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation
      Act, as amended, and other environmental conservation or protection Governmental
      Requirements.  The term “oil” shall have the meaning specified in OPA,
      the terms “hazardous substance” and “release” (or “threatened
      release”) have the meanings specified in CERCLA, the terms “solid
      waste” and “disposal” (or “disposed”) have the meanings
      specified in RCRA and the term “oil and gas waste” shall have the meaning
      specified in Section 91.1011 of the Texas Natural Resources Code (“Section
      91.1011”); provided, however, that (a) in the event either OPA, CERCLA, RCRA
      or Section 91.1011 is amended so as to broaden the meaning of any term defined
      thereby, such broader meaning shall apply subsequent to the effective date
      of
      such amendment and (b) to the extent the 

     

    
      
        
        

      

      
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    laws
      of
      the state or other jurisdiction in which any Property of the Borrower or any
      Restricted Subsidiary is located establish a meaning for “oil,”
“hazardous substance,” “release,” “solid waste,”
“disposal” or “oil and gas waste” which is broader than that
      specified in either OPA, CERCLA, RCRA or Section 91.1011, such broader meaning
      shall apply.

     

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

     

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

     

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

     

    “ERISA
      Event” means (a) a “Reportable Event” described in section 4043 of ERISA and
      the regulations issued thereunder, (b) the withdrawal of the Borrower, any
      Loan
      Party or any ERISA Affiliate from a Plan during a plan year in which it was
      a
“substantial employer” as defined in section 4001(a)(2) of ERISA, (c) the filing
      of a notice of intent to terminate a Plan or the treatment of a Plan amendment
      as a termination under section 4041 of ERISA, (d) the institution of proceedings
      to terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability
      pursuant to Section 4202 of ERISA, (f) any other event or condition which might
      constitute grounds under section 4042 of ERISA for the termination of, or the
      appointment of a trustee to administer, any Plan or (g) on and after the
      effectiveness of the Pension Act, a determination that a Plan is, or is expected
      to be, in “at risk” status (as defined n 303(i)(4) of ERISA or 430(i)(4) of the
      Code).

     

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

     

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

     

    “Excess
      Cash Flow” means for any fiscal year of the Borrower or a lesser period
      thereof, the excess, if any, of

     

    (a)
      the
      sum, without duplication, of

     

    (i)
      ECF
      Consolidated Net Income with respect to the Borrower and its Restricted
      Subsidiaries for such fiscal year or lesser period,

     

    (ii)
      the
      amount of all non-cash charges (including depreciation and amortization)
      deducted in arriving at ECF Consolidated Net Income,

     

    (iii)
      decreases in Consolidated Working Capital of the Borrower and its Restricted
      Subsidiaries for such fiscal year or lesser period, and

     

    (iv)
      the
      aggregate net amount of non-cash loss on the disposition of property by the
      Borrower and its Restricted Subsidiaries during such fiscal year or lesser
      period (other than sales 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    of
      inventory in the ordinary course of business), to the extent deducted in
      arriving at ECF Consolidated Net Income over

     

    (b)
      the
      sum, to the extent not deducted in arriving at ECF Consolidated Net Income
      and
      not included in a prior period reduction of Excess Cash Flow, without
      duplication, of

     

    (i)
      the
      amount of all non-cash credits included in arriving at ECF Consolidated Net
      Income,

     

    (ii)
      the
      amount actually paid by Borrower and its Restricted Subsidiaries in cash during
      such fiscal year or lesser period on account of Additional Assets in an
      aggregate amount not to exceed $300,000,000 in such fiscal year (excluding
      the
      principal amount of Debt incurred in connection with such
      expenditures),

     

    (iii)
      the
      aggregate amount of all principal payments of Funded Debt of Borrower and its
      Restricted Subsidiaries (A) made during such fiscal year or lesser period (other
      than in respect of any revolving credit facility to the extent there is not
      an
      equivalent permanent reduction in commitments thereunder) or without duplication
      (B) payable within 12 months of the date of determination,

     

    (iv)
      increases in Consolidated Working Capital of the Borrower and its Restricted
      Subsidiaries for such fiscal year or lesser period,

     

    (v)
      Restricted Payments made by the Borrower in cash to the extent permitted under
      Section 9.04 of this Agreement (other than Sections 9.04(b) (i), (ii) (iii)
      or
      (iv)),

     

    (vi)
      amounts actually paid by the Borrower and its Restricted Subsidiaries with
      respect to costs directly related to abandonment of any Oil and Gas
      Properties;

     

    (vii)
      cash payments associated with accrued post-retirement benefit obligations,
      insurance and other long-term liabilities; and

     

    (viii)
      the aggregate net amount of non-cash gain on the disposition of property by
      Borrower and its Restricted Subsidiaries during such fiscal year or lesser
      period (other than sales of inventory in the ordinary course of business),
      to
      the extent included in arriving at such Consolidated Net Income.

     

    For
      purposes of this definition, “ECF Consolidated Net Income” means with
      respect to Borrower and its Restricted Subsidiaries, for any period, the
      aggregate of the net income (or loss) of Borrower and its Restricted
      Subsidiaries after allowances for taxes for such period determined on a
      consolidated basis in accordance with GAAP; provided that there shall be
      excluded from such net income (to the extent otherwise included therein) the
      following: (a) the net income of any Person in which Borrower or any Restricted
      Subsidiary thereof has an interest (which interest does not cause the net income
      of such other Person to be consolidated with the net income of Borrower and
      the
      Restricted Subsidiaries thereof in accordance with GAAP), except to the extent
      of the amount of dividends or distributions actually paid in cash during such
      period by such other Person to Borrower or to a Restricted Subsidiary thereof,
      as the case may be; (b) the net income (but not loss) during such period of
      any
      Restricted Subsidiary to the extent that the declaration or payment of dividends
      or similar distributions or transfers or loans by such Restricted Subsidiary
      is
      not at the time permitted by operation of the terms of its charter or any
      agreement, instrument or Governmental Requirement applicable to such Restricted
      Subsidiary or is otherwise restricted or prohibited, in each case determined
      in
      accordance with GAAP; (c) any 

     

    
      
        
        

      

      
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    extraordinary
      non-cash gains or losses during such period, (d) non-cash gains or losses under
      FAS 133 resulting from the net change in Borrower’s or any Restricted
      Subsidiary’s mark to market portfolio of commodity price risk management
      activities during that period, (e) any gains or losses attributable to writeups
      or writedowns of assets, including ceiling test writedowns, (f) any non-cash
      gains or losses attributable to any non-cash impairment charges resulting from
      the application of Statement of Financial Accounting Standards No. 142 and
      No.
      144 and any amortization of intangibles pursuant to Statement of Financial
      Accounting Standards No. 141, (g) any net after-tax income or loss from
      discontinued operations and any net after-tax gain or loss on disposal of
      discontinued operations, (h) the cumulative effect of a change in accounting
      principles; (i) fees, premiums and expenses incurred in connection with the
      Transactions, this Agreement, the Loan Documents, the Senior Loans, the Senior
      Notes, the Acquisition and the repayment of Debt under the Second Lien Term
      Loan
      Agreement up to $25,000,000 in the aggregate, and (j) any non-cash compensation
      expense under FAS 142R recognized from grants of stock appreciation or similar
      rights, stock options, restricted stock, restricted stock units or other rights
      to officers, directors and employees of Borrower or any of its Restricted
      Subsidiaries, provided that if such non-cash expense subsequently becomes a
      cash
      expense, it will be included in the period during which it became a cash
      expense.

     

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

     

    “Exchange
      and Registration Rights Agreement” means an Exchange and Registration Rights
      Agreement relating to the Exchange Notes substantially in the form of Exhibit
      K hereto.

     

    “Exchange
      Documents” means the Exchange Notes Indenture and the Exchange
      Notes.

     

    “Exchange
      Note” means each note issued under the Exchange Notes Indenture delivered
      pursuant to Section 3.01 and 8.20; collectively, the “Exchange
      Notes”.

     

    “Exchange
      Notes Indenture” means the Indenture to be entered into relating to the
      Exchange Notes, having terms and conditions substantially as set forth in
Exhibit H hereto (with such changes therein as the Borrower may request
      and the Administrative Agent may approve, such approval not to be unreasonably
      withheld), if and when executed and delivered by the Borrower and the Trustee
      thereunder.

     

    “Exchange
      Request” has the meaning set forth in Section 8.20.

     

    “Existing
      Convertible Notes” means approximately $215,870,000 of outstanding
      convertible notes of the Borrower consisting of (i) its $100,870,000 6% senior
      convertible notes due 2008 and (ii) its $115,000,000 5 1⁄2 % senior convertible
      notes due 2011.

     

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

     

    “Final
      Maturity Date” means the seventh anniversary of the Effective
      Date.

     

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

     

    
      
        
        

      

      
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    “Financial
      Statements” means the financial statement or statements of the Borrower and
      its Consolidated Subsidiaries referred to in Section 7.04, including all
      footnotes attached thereto.

     

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

     

    “Funded
      Debt” means, as to any Person, all Debt of such Person that matures more
      than one year from the date of its creation or matures within one year from
      such
      date but is renewable or extendible, at the option of such Person, to a date
      more than one year from such date or arises under a revolving credit or similar
      agreement that obligates the lender or lenders to extend credit during a period
      of more than one year from such date, including all current maturities and
      current sinking fund payments in respect of such Indebtedness whether or not
      required to be paid within one year from the date of its creation and, in the
      case of the Borrower, Debt in respect of the Loans.

     

    “GAAP”
      means generally accepted accounting principles in the United States of America
      as in effect from time to time subject to the terms and conditions set forth
      in
Section 1.05.

     

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

     

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

     

    “Guarantee”
      means any obligation, contingent or otherwise, of any Person directly or
      indirectly guaranteeing any Debt of any other Person, and any obligation, direct
      or indirect, contingent or otherwise, of such Person (i) to purchase or pay
      (or
      advance or supply funds for the purchase or payment of) such Debt or other
      obligation of such other Person (whether arising by virtue of partnership
      arrangements, or by agreement to keep-well, to purchase assets, goods,
      securities or services, to take-or-pay, or to maintain financial statement
      conditions or otherwise) or (ii) entered into for purposes of assuring in any
      other manner the obligee of such Debt or other obligation of the payment thereof
      or to protect such obligee against loss in respect thereof (in whole or in
      part); provided, however, that the term “Guarantee”
shall not include endorsements for collection or
      deposit in the ordinary course
      of business.  The term “Guarantee” used as a verb has a corresponding
      meaning.

     

    “Guarantor
      Subordinated Obligation” means, with respect to a Guarantor, any Debt of
      such Guarantor (whether outstanding on the date of this Agreement or thereafter
      Incurred) which is expressly subordinate in right of payment to the obligations
      of such Guarantor under its Guarantee of the Loans pursuant to a written
      agreement.

     

    “Guarantors”
      means:

     

    (a)           MOXY;

     

    (b)           K-Mc
      Venture I LLC, a Delaware limited liability company;

     

    (c)           Freeport
      Canadian Exploration Company, a Delaware corporation;

     

    
      
        
        

      

      
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    (d)           McMoRan
      International Inc., a Delaware corporation; and

     

    (e)           each
      other Domestic Subsidiary which is a Wholly-Owned Subsidiary that guarantees
      the
      Indebtedness pursuant to Section 8.14(i).

     

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

     

    “Hedging
      Obligations” of any Person means the obligations of such Person pursuant to
      any Commodity Agreement, Currency Agreement or Interest Rate
      Agreement.

     

    “Holder”
      or “NoteHolder” means any Person in whose name an Exchange Note or a Loan
      (and any corresponding Note(s)) is registered.

     

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

     

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

     

    “Incur”
      means issue, create, assume, Guarantee, incur or otherwise become liable for;
      provided, however, that any Debt or Equity Interest of a Person
      existing at the time such Person becomes a Restricted Subsidiary (whether by
      merger, consolidation, acquisition or otherwise) will be deemed to be Incurred
      by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary;
      and the terms “Incurred” and “Incurrence” have meanings correlative to the
      foregoing.

     

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

     

    “Initial
      Lenders” means the collective reference to JPMorgan Chase Bank, N.A. and
      Merrill Lynch Capital Corporation and their respective Affiliates and Approved
      Funds (as defined in Section 12.04(b)) relating to such Persons.

     

    “Initial
      Loan” has the meaning set forth in Section 2.01(a).

     

    “Initial
      Loan Rate” means the rate equal to the greater of (i) the Adjusted LIBO Rate
      plus 450 basis points and (ii) the Treasury Rate plus 500 basis
      points.

     

    “Initial
      Maturity Date” means the first anniversary of the Effective
      Date.

     

    “Initial
      Note” has the meaning set forth in Section 12.04(e).

     

    “Initial
      Reserve Report” means the engineering information provided by the Borrower
      and delivered to the Administrative Agent, with respect to the value of the
      Oil
      and Gas Properties of the Borrower and its Restricted Subsidiaries as of
      December 31, 2006 and with respect to the Acquisition 

     

    
      
        
        

      

      
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    Properties
      the merged report of Ryder Scott Petroleum Company, L.P. and the Seller
      dated as of June 30, 2007.

     

    “Intercreditor
      Agreement” means the Intercreditor Agreement to be entered into among the
      Loan Parties, JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders
      and/or the Holders of the Exchange Notes, and JPMorgan Chase Bank, N.A., as
      administrative agent for the lenders under the Senior Secured Credit Agreement
      pursuant to Section 8.19, substantially in the form of Exhibit I
      hereto.

     

    “Interest
      Payment Date” means (a) with respect to Initial Loans, if any Initial Loans
      are Eurodollar Loans, for all Initial Loans whether or not Eurodollar Loans,
      the
      last day of the Interest Period applicable to the Eurodollar Loan, (b) with
      respect to Initial Loans, if no Initial Loans are Eurodollar Loans, the last
      day
      of each fiscal quarter following the Effective Date, (c) with respect to Term
      Loans, the last day of each fiscal quarter following the Initial Maturity Date,
      and (d) the date of any prepayment of any Loan.

     

    “Interest
      Period” means (a) prior to the Initial Maturity Date, as to any Initial
      Loan, (i) initially, the period commencing on the Effective Date and ending
      on
      the numerically corresponding day (or, if there is no numerically corresponding
      day, on the last day) in the calendar month that is three months thereafter
      and
      (ii) thereafter, each period commencing on the last day of the next preceding
      Interest Period and ending on the earlier of (A) the numerically corresponding
      day (or, if there is no numerically corresponding day, on the last day) in
      the
      calendar month that is three months thereafter and (B) the Initial Maturity
      Date, and (b) following the Initial Maturity Date, as to any Term Loan, (i)
      initially, the period commencing on the Initial Maturity Date and ending on
      the
      last day of the fiscal quarter of the Borrower following the Initial Maturity
      Date and (ii) thereafter, each period commencing on the last day of the next
      preceding Interest Period and ending on the earlier of (A) the last day of
      the
      fiscal quarter of the Borrower following such date, and (B) the Final Maturity
      Date; provided, however, that if any Interest Period would end on
      a day other than a Business Day, such Interest Period shall be extended to
      the
      next succeeding Business Day unless, in the case of a Eurodollar Loan only,
      such
      next succeeding Business Day would fall in the next calendar month, in which
      case such Interest Period shall end on the next preceding Business
      Day.  Interest shall accrue from and including the first day of an
      Interest Period to but excluding the last day of such Interest
      Period.

     

    “Interest
      Rate Agreement” means, with respect to any Person, any interest rate
      protection agreement, interest rate future agreement, interest rate option
      agreement, interest rate swap agreement, interest rate cap agreement, interest
      rate collar agreement, interest rate hedge agreement or other similar agreement
      or arrangement as to which such Person is party or a beneficiary.

     

    “Investment”
      means, with respect to any Person, all investments by such Person in other
      Persons (including Affiliates) in the form of any direct or indirect advance,
      loan (other than advances to customers in the ordinary course of business)
      or
      other extension of credit (including by way of Guarantee or similar arrangement,
      but excluding any debt or extension of credit represented by a bank deposit
      other than a time deposit) or capital contribution to (by means of any transfer
      of cash or other property to others or any payment for property or services
      for
      the account or use of others), or any purchase or acquisition of Equity
      Interest, Debt or other similar instruments issued by, such Person and all
      other
      items that are or would be classified as investments on a balance sheet prepared
      in accordance with GAAP; provided that none of the following will be
      deemed to be an Investment:  (a)  Hedging Obligations
      entered into in the ordinary course of business and in compliance with this
      Agreement; (b) endorsements of negotiable instruments and documents in the
      ordinary course of business; and (c) an acquisition of assets, Equity Interest
      or other securities by the Borrower or a Subsidiary for consideration to the
      extent such consideration consists of common equity securities of the
      Borrower.  For purposes of Section 9.04, (i) “Investment” shall
      include the portion (proportionate to the Borrower’s equity interest in a
      Restricted 

     

    
      
        
        

      

      
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    Subsidiary
      to be designated as an Unrestricted Subsidiary) of the fair market value of
      the
      net assets of such Restricted Subsidiary of the Borrower at the time that such
      Restricted Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
      Subsidiary, the Borrower shall be deemed to continue to have a permanent
“Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to
      (x) the Borrower’s “Investment” in such Subsidiary at the time of such
      redesignation less (y) the portion (proportionate to the Borrower’s equity
      interest in such Subsidiary) of the fair market value of the net assets of
      such
      Subsidiary at the time that such Subsidiary is so redesignated a Restricted
      Subsidiary; and (ii) any property transferred to or from an Unrestricted
      Subsidiary shall be valued at its fair market value at the time of such
      transfer, in each case as determined in good faith by the Board of Directors
      of
      the Borrower.

     

    “Lenders”
      means the Persons listed on Annex I and any Person that shall have become a
      party hereto pursuant to an Assignment and Assumption, other than any such
      Person that ceases to be a party hereto pursuant to an Assignment and
      Assumption; provided, that unless the context otherwise requires, each
      reference herein to the Lenders shall be deemed to include any Conduit
      Lender.

     

    “LIBO
      Rate” means, with respect to a Eurodollar Loan, the rate per annum
      determined on the basis of the rate for deposits in dollars for a period equal
      to the Interest Period commencing on the Effective Date appearing on the Reuters
      Screen LIBOR01 Page as of 11:00 A.M., London time, two Business Days prior
      to
      the beginning of such Interest Period.  In the event that such rate
      does not appear on such page (or otherwise on such screen), the “LIBO
      Rate” shall be determined by reference to such other comparable publicly
      available service for displaying eurodollar rates as may be selected by the
      Administrative Agent or, in the absence of such availability, by reference
      to
      the rate at which the Administrative Agent is offered dollar deposits at or
      about 11:00 A.M., London time, two Business Days prior to the beginning of
      such
      Interest Period in the interbank eurodollar market where its eurodollar and
      foreign currency and exchange operations are then being conducted for delivery
      on the first day of such Interest Period for the number of days comprised
      therein.

     

    “Lien”
      means  any interest in Property securing an obligation owed to, or a
      claim by, a Person other than the owner of the Property, whether such interest
      is based on the common law, statute or contract, and whether such obligation
      or
      claim is fixed or contingent, and including but not limited to (a) the lien
      or
      security interest arising from a mortgage, encumbrance, pledge, security
      agreement, conditional sale or trust receipt or a lease, consignment or bailment
      for security purposes or (b) production payments and the like payable out of
      Oil
      and Gas Properties.  The term “Lien” shall include easements,
      restrictions, servitudes, permits, conditions, covenants, exceptions or
      reservations. For the purposes of this Agreement, the Borrower and its
      Restricted Subsidiaries shall be deemed to be the owner of any Property which
      it
      has acquired or holds subject to a conditional sale agreement, or leases under
      a
      financing lease or other arrangement pursuant to which title to the Property
      has
      been retained by or vested in some other Person in a transaction intended to
      create a financing.

     

    “Loan
      Documents” means this Agreement, the Notes and the Security
      Instruments.

     

    “Loan
      Notes” means the collective reference to the Term Notes and the Initial
      Notes.

     

    “Loan
      Party” means the Borrower and the Guarantors.

     

    “Loans”
      has the meaning set forth in Section 2.01(b).

     

    “Majority
      Lenders” means, at any time while no Loans are outstanding, Lenders having
      greater than fifty percent (50%) of the Commitments; and at any time while
      any
      Loans are outstanding, Lenders 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    holding
      greater than fifty percent (50%) 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 12.04(c)).

     

    “Material
      Adverse Effect” means a material adverse change in, or material adverse
      effect on (a) the business, operations or financial condition of the Borrower
      and the Loan Parties taken as a whole, (b) the ability of any Loan Party to
      perform any of its obligations under any Loan Document to which it is a party,
      (c) the validity or enforceability of any Loan Document or (d) the rights and
      remedies of or benefits available to the Administrative Agent, any other Agent
      or any Lender under the Loan Documents.

     

    “Material
      Indebtedness” means Debt (other than the Loans), or obligations in respect
      of one or more Swap Agreements, of any one or more of any Loan Party in an
      aggregate principal amount exceeding $25,000,000.

     

    “Minority
      Interest” means the percentage interest represented by any shares of any
      class of Equity Interest of a Restricted Subsidiary that are not owned by the
      Borrower or a Restricted Subsidiary.

     

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

     

    “MOXY”
      means McMoRan Oil & Gas LLC, a Delaware limited liability
      company.

     

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

     

    “Net
      Available Cash” from an Asset Disposition means cash payments received by
      the Borrower or any Restricted Subsidiary (including any cash payments received
      by way of deferred payment of principal pursuant to a note or installment
      receivable or otherwise, but only as and when received, but excluding any other
      consideration received in the form of assumption by the acquiring person of
      Debt
      or other obligations relating to the properties or assets that are the subject
      of such Asset Disposition or received in any other noncash form) therefrom,
      in
      each case net of (i) all legal, accounting, investment banking, title and
      recording tax expenses, commissions and other fees and expenses incurred, and
      all Federal, state, provincial, foreign and local taxes required to be paid
      or
      accrued as a liability under GAAP as a consequence of such Asset Disposition,
      (ii) all payments made on any Debt that is secured by any assets subject to
      such
      Asset Disposition, in accordance with the terms of any Lien upon such assets,
      or
      that must by its terms, or in order to obtain a necessary consent to such Asset
      Disposition, or by applicable law be repaid out of the proceeds from such Asset
      Disposition, (iii) all distributions and other payments required to be made
      to
      minority interest Holders in Subsidiaries or joint ventures as a result of
      such
      Asset Disposition and (iv) the deduction of appropriate amounts to be provided
      by the seller as a reserve, in accordance with GAAP, against any liabilities
      associated with the assets disposed of in such Asset Disposition and retained
      by
      the Borrower or any Restricted Subsidiary after such Asset
      Disposition.

     

    “Net
      Cash Proceeds” means with respect to any issuance or sale of Equity
      Interests or Debt, the cash proceeds of such issuance or sale net of attorneys’
fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or
      commissions and brokerage, consultant and other fees actually incurred in
      connection with such issuance or sale and net of taxes paid or payable as a
      result of such issuance or sale (after taking into account any available tax
      credit or deductions and any tax sharing arrangements).

     

    “Net
      Working Capital” means (a) Consolidated Current Assets except current assets
      from commodity price risk management activities arising in the ordinary course
      of the Oil and Gas Business, less (b) Consolidated Current Liabilities except
      current liabilities included in Debt and any current 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    liabilities
      from commodity price risk management activities arising in the ordinary course
      of the Oil and Gas Business, in each case as set forth in the consolidated
      financial statements of the Borrower prepared in accordance with
      GAAP.

     

    “Non-Recourse
      Debt” means Debt
      of a Person:

     

    
      	
               

            	
              (i)

            	
              as
                to which neither the Borrower nor any Restricted Subsidiary (a) provides
                any Guarantee or credit support of any kind (including any undertaking,
                guarantee, indemnity, agreement or instrument that would constitute
                Debt)
                or (b) is directly or indirectly liable (as a guarantor or
                otherwise);

            

    

     

    
      	
               

            	
              (ii)

            	
              no
                default with respect to which (including any rights that the holders
                thereof may have to take enforcement action against an Unrestricted
                Subsidiary) would permit (upon notice, lapse of time or both) any
                holder
                of any other Debt of the Borrower or any Restricted Subsidiary to
                declare
                a default under such other Debt or cause the payment thereof to be
                accelerated or payable prior to its stated maturity;
                and

            

    

     

    
      	
               

            	
              (iii)

            	
              the
                explicit terms of which provide there is no recourse against any
                of the
                assets of the Borrower or its Restricted
                Subsidiaries.

            

    

     

    “Non-US
      Lender” has the meaning set forth in Section
      5.03(d).

     

    “Notes”
      means the Loan Notes and the Exchange Notes, as originally executed or as
      subsequently amended from time to time pursuant to the applicable provisions
      hereof.

     

    “Officer”
      means the Chairman of the Board, the Chief Executive Officer, the President,
      the
      Chief Operating Officer, the Chief Financial Officer, any Vice President, the
      Treasurer or the Secretary of the Borrower.  Officer of any Guarantor
      has a correlative meaning.

     

    “Officers'
      Certificate” means a certificate signed by two Officers or by an Officer and
      either an Assistant Treasurer or an Assistant Secretary of the
      Borrower.

     

    “Oil
      and Gas Business” means (a) the business of acquiring, exploring,
      exploiting, developing, producing, operating and disposing of interests in
      oil,
      gas, liquid natural gas and other Hydrocarbon properties, (b) the business
      of
      gathering, marketing, treating, processing, storage, refining, selling and
      transporting of any production from such interests or properties and products
      produced in association therewith or providing drilling and related services
      and
      supplies and equipment and (c) any business or activity relating to, arising
      from, or necessary, appropriate or incidental to the activities described in
      the
      foregoing clauses (a) and (b) of this definition.

     

    “Oil
      and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now
      or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently
      existing or future unitization, pooling agreements and declarations of pooled
      units and the units created thereby (including without limitation all units
      created under orders, regulations and rules of any Governmental Authority)
      which
      may affect all or any portion of the Hydrocarbon Interests; (d) all
      operating agreements, contracts and other agreements, including production
      sharing contracts and agreements, which relate to any of the Hydrocarbon
      Interests or the production, sale, purchase, exchange or processing of
      Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all
      Hydrocarbons in and under and which may be produced and saved or attributable
      to
      the Hydrocarbon Interests, including all oil in tanks, and all rents, issues,
      profits, proceeds, products, revenues and other incomes from or attributable
      to
      the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances
      and
      Properties in any manner appertaining, belonging, affixed or incidental to
      the
      Hydrocarbon Interests and (g) all Properties, rights, titles, interests and
      estates described or referred 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    to
      above,
      including any and all Property, real or personal, now owned or hereinafter
      acquired and situated upon, used, held for use or useful in connection with
      the
      operating, working or development of any of such Hydrocarbon Interests or
      Property (excluding drilling rigs, automotive equipment, rental equipment or
      other personal Property which may be on such premises for the purpose of
      drilling a well or for other similar temporary uses) and including any and
      all
      oil wells, gas wells, injection wells or other wells, buildings, structures,
      fuel separators, liquid extraction plants, plant compressors, pumps, pumping
      units, field gathering systems, tanks and tank batteries, fixtures, valves,
      fittings, machinery and parts, engines, boilers, meters, apparatus, equipment,
      appliances, tools, implements, cables, wires, towers, casing, tubing and rods,
      surface leases, rights-of-way, easements and servitudes together with all
      additions, substitutions, replacements, accessions and attachments to any and
      all of the foregoing.

     

    “Opinion
      of Counsel” means a written opinion from legal counsel who is acceptable to
      the Administrative Agent. The counsel may be an employee of or counsel to the
      Borrower or the Administrative Agent.

     

    “P&A
      Escrow Agreement” means that certain P&A Escrow Agreement dated as of
      August 1, 2007 among the Borrower and the Seller.

     

    “Parent
      Loan” means the intercompany loan agreement by and between MOXY, as
      borrower, and the Borrower, as lender, dated as of April 17, 2006.

     

    “Pari
      Passu Debt” means Debt that ranks equally in right of payment to the
      Loans.

     

    “Participant”
      has the meaning set forth in Section
      12.04(c)(i).

     

    “Payment
      Sharing Notice” means a written notice from the Borrower or any Lender
      informing the Administrative Agent that an Event of Default has occurred and
      is
      continuing and directing the Administrative Agent to allocate payments
      thereafter received from or on behalf of the Borrower in accordance with the
      provisions of Section 4.01.

     

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

     

    “Pension
      Act”: means the Pension Protection Act of 2006, as it presently exists or as
      it may be amended from time to time.

     

    “Permitted
      Business Investment” means any Investment made in the ordinary course of the
      Oil and Gas Business including investments or expenditures for actively
      exploiting, exploring for, acquiring, developing, producing, operating,
      processing, gathering, refining, storing, marketing, selling or transporting
      oil, gas and other Hydrocarbons through agreements, transactions, interests
      or
      arrangements which permit one to share risks or costs, comply with regulatory
      requirements regarding local ownership or satisfy other objectives customarily
      achieved through the conduct of the Oil and Gas Business jointly with third
      parties, including (i) ownership interests in oil and gas properties, liquid
      natural gas facilities, processing facilities, gathering systems, pipelines
      or
      ancillary real property interests, (ii) Investments in the form of or pursuant
      to operating agreements, processing agreements, farm-in agreements, farm-out
      agreements, development agreements, area of mutual interest agreements,
      unitization agreements, pooling agreements, joint bidding agreements, service
      contracts, joint venture agreements, partnership agreements (whether general
      or
      limited), subscription agreements, stock purchase agreements and other similar
      agreements (including for limited liability companies) with third parties and
      (iii) direct or indirect ownership interests in drilling rigs and related
      equipment, including, without limitation, transportation equipment;
provided, however, that a ‘‘Permitted Business Investment’’ shall
      not include Investments in 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    entities
      that are not classified as pass-through entities for U.S. federal, state and
      local and foreign income tax purposes.

     

    “Permitted
      Investment” means an Investment by the Borrower or any Restricted Subsidiary
      in (i) a Restricted Subsidiary; (ii) cash and Cash Equivalents; (iii)
      receivables owing to the Borrower or any Restricted Subsidiary, if created
      or
      acquired in the ordinary course of business and payable or dischargeable in
      accordance with customary trade terms; provided, however, that
      such trade terms may include such concessionary trade terms as the Borrower
      or
      any such Restricted Subsidiary deems reasonable under the circumstances; (iv)
      payroll, travel and similar advances to cover matters that are expected at
      the
      time of such advances ultimately to be treated as expenses for accounting
      purposes and that are made in the ordinary course of business; (v) loans or
      advances to officers, directors and employees of the Borrower or any Restricted
      Subsidiary made in the ordinary course of business consistent with past
      practices of the Borrower or such Restricted Subsidiary; provided,
however, that the Borrower and its Subsidiaries will comply in all
      material respects with all applicable provisions of the Sarbanes-Oxley Act
      of
      2002 and the rules and regulations promulgated in connection therewith with
      such
      loans or advances as if the Borrower has filed a registration statement with
      the
      SEC; (vi) Equity Interest, obligations or securities received in settlement
      of
      debts created in the ordinary course of business and owing to the Borrower
      or
      any Restricted Subsidiary or in satisfaction of judgments or pursuant to any
      plan of reorganization or similar arrangement upon the bankruptcy or insolvency
      of a debtor; (vii) Commodity Agreements, Currency Agreements, Interest Rate
      Agreements and related Hedging Obligations, in each case entered into in the
      ordinary course of the Borrower’s or its Restricted Subsidiaries’ businesses
      incurred in compliance with Section 9.02(b); (viii) the Guaranty Agreement
      and
      Guarantees by the Borrower of Debt otherwise permitted to be Incurred by
      Restricted Subsidiaries of the Borrower under this Agreement; (ix) Investments
      made as a result of non-cash consideration from Asset Dispositions effected
      in
      compliance with Section 9.11; (x) Investments in existence on the Effective
      Date; and (xi) after the Initial Maturity Date, (A) Investments in a Person
      that
      will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted
      Subsidiary is the Oil and Gas Business, (B) Investments in another Person if
      as
      a result of such Investment such other Person is merged or consolidated with
      or
      into, or transfers or conveys all or substantially all its assets to, the
      Borrower or a Restricted Subsidiary; provided, however, that such
      Person’s primary business is the Oil and Gas Business, (C) any Asset Swap made
      in accordance with Section 9.11(d), (D) Permitted Business Investments, and
      (E)
      Investments by the Borrower or any of its Restricted Subsidiaries, together
      with
      all other Investments pursuant to this clause (E), in an amount not to exceed
      $10,000,000 per year (with the fair market value of such Investment being
      measured at the time made and without giving effect to subsequent changes in
      value).

     

    “Permitted
      Liens” means, with respect to any Person, (i) (x) Liens securing Debt and
      other obligations under the Senior Credit Agreement and related Hedging
      Obligations and Liens on assets of Restricted Subsidiaries securing Guarantees
      of Debt and other obligations of the Borrower under the Senior Credit Agreement,
      and (y) any Liens securing the Indebtedness and any Exchange Notes and any
      Liens
      on assets of Restricted Subsidiaries securing the Guarantees under the Guaranty
      Agreement; (ii) pledges or deposits by such Person under workmen's compensation
      laws, unemployment insurance laws or similar legislation, or good faith deposits
      in connection with bids, tenders, contracts (other than for the payment of
      Debt)
      or leases to which such Person is a party, or deposits to secure public or
      statutory obligations of such Person or deposits of cash or United States
      government bonds to secure surety or appeal bonds to which such Person is a
      party, or deposits as security for contested taxes or import or customs duties
      or for the payment of rent, in each case Incurred in the ordinary course of
      business; (iii) Liens imposed by law, including carriers', warehousemen's and
      mechanics' materialmen’s and repairmen’s Liens, in each case for sums not yet
      due or being contested in good faith by appropriate proceedings if a reserve
      or
      other appropriate provisions, if any, as shall be required by GAAP shall have
      been made in respect thereof; (iv) Liens for taxes, assessments or other
      governmental charges not yet 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    subject
      to
      penalties for non-payment or which are being contested in good faith by
      appropriate proceedings provided that appropriate reserves required pursuant
      to
      GAAP have been made in respect thereof; (v) Liens in favor of issuers of surety
      or performance bonds or letters of credit or bankers' acceptances issued
      pursuant to the request of and for the account of such Person in the ordinary
      course of its business; provided, however, that such letters of
      credit do not constitute Debt; (vi) encumbrances, ground leases, easements
      or
      reservations of, or rights of others for, licenses, rights of way, sewers,
      electric lines, telegraph and telephone lines and other similar purposes, or
      zoning, building codes or other restrictions (including, without limitation,
      minor defects or irregularities in title and similar encumbrances) as to the
      use
      of real properties or liens incidental to the conduct of the business of such
      Person or to the ownership of its properties which do not in the aggregate
      materially adversely affect the value of said properties or materially impair
      their use in the operation of the business of such Person; (vii) Liens securing
      Hedging Obligations; (viii) leases, licenses, subleases and sublicenses of
      assets (including, without limitation, real property and intellectual property
      rights) which do not materially interfere with the ordinary conduct of the
      business of the Borrower or any of its Restricted Subsidiaries; (ix) judgment
      Liens not giving rise to an Event of Default so long as such Lien is adequately
      bonded and any appropriate legal proceedings which may have been duly initiated
      for the review of such judgment have not been finally terminated or the period
      within which such proceedings may be initiated has not expired; (x) Liens for
      the purpose of securing the payment of all or a part of the purchase price
      of,
      or Capitalized Lease Obligations, purchase money obligations or other payments
      Incurred to finance the acquisition, lease, improvement or construction of,
      assets or property acquired or constructed in the ordinary course of business;
      provided that (1) the aggregate principal amount of Debt secured by such
      Liens is otherwise permitted to be Incurred under this Agreement and does not
      exceed the cost of the assets or property so acquired or constructed and (2)
      such Liens are created within 180 days of construction or acquisition of such
      assets or property and do not encumber any other assets or property of the
      Borrower or any Restricted Subsidiary other than such assets or property and
      assets affixed or appurtenant thereto; (xi) Liens arising solely by virtue
      of
      any statutory or common law provisions relating to banker's Liens, rights of
      set-off or similar rights and remedies as to deposit accounts or other funds
      maintained with a depositary institution; provided that (1) such deposit
      account is not a dedicated cash collateral account and is not subject to
      restrictions against access by the Borrower in excess of those set forth by
      regulations promulgated by the Federal Reserve Board and (2) such deposit
      account is not intended by the Borrower or any Restricted Subsidiary to provide
      collateral to the depository institution; (xii) Liens arising from Uniform
      Commercial Code financing statement filings regarding operating leases entered
      into by the Borrower and its Restricted Subsidiaries in the ordinary course
      of
      business; (xiii) Liens existing on the Effective Date and disclosed on Schedule
      9.03; (xiv) Liens on property or shares of stock of a Person at the time such
      Person becomes a Restricted Subsidiary; provided, however, that
      such Liens are not created, Incurred or assumed in connection with, or in
      contemplation of, such other Person becoming a Restricted Subsidiary;
provided further, however, that any such Lien may not extend to
      any other property owned by the Borrower or any Restricted Subsidiary; (xv)
      Liens on property at the time the Borrower or a Restricted Subsidiary acquired
      the property, including any acquisition by means of a merger or consolidation
      with or into the Borrower or any Restricted Subsidiary; provided,
however, that such Liens are not created, Incurred or assumed in
      connection with, or in contemplation of, such acquisition;
providedfurther, however, that such Liens may not extend to
      any other property owned by the Borrower or any Restricted Subsidiary; (xvi)
      Liens securing Debt or other obligations of a Restricted Subsidiary owing to
      the
      Borrower or a Wholly-Owned Subsidiary; (xvii) Liens securing the Loans, the
      Exchange Notes, the Guaranty Agreement and other obligations under this
      Agreement; (xviii) Liens securing obligations under Refinancing Debt Incurred
      to
      refinance, refund, replace, amend, extend or modify Debt that was previously
      so
      secured (other than Liens permitted pursuant to clause (i) above),
provided that any such Lien is limited to all or part of the same
      property or assets (plus improvements, accessions, proceeds or dividends or
      distributions in respect thereof) that secured (or, under the written
      arrangements under which the original Lien arose, could secure) the Debt being
      refinanced or is in respect of property that is the security for a Permitted
      Lien hereunder; (xix) any interest or title of a lessor under any Capitalized
      

     

    
      
        
        

      

      
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    Lease
      Obligation or operating lease; (xx) Liens in respect of Production Payments
      and
      Reserve Sales, which Liens shall be limited to the property that is the subject
      of such Production Payments and Reserve Sales; (xxi) Liens arising under
      farm-out agreements, farm-in agreements, division orders, contracts for the
      sale, purchase, exchange, transportation, gathering or processing of
      Hydrocarbons, unitizations and pooling designations, declarations, orders and
      agreements, development agreements, operating agreements, production sales
      contracts, area of mutual interest agreements, gas balancing or deferred
      production agreements, injection, repressuring and recycling agreements, salt
      water or other disposal agreements, seismic or geophysical permits or
      agreements, and other agreements which are customary in the Oil and Gas
      Business; provided, however, in all instances that such Liens are
      limited to the assets that are the subject of the relevant agreement, program,
      order or contract; (xxii) Liens on pipelines or pipeline facilities that arise
      by operation of law; (xxiii) Liens on cash or securities pledged or subject
      to
      an escrow agreement to secure plugging and abandoning obligations under the
      P&A Escrow Agreement, performance of tenders, surety and appeal bonds,
      government contracts, performance and return of money bonds, bids, trade
      contracts, leases, statutory obligations, regulatory obligations and other
      obligations of like nature incurred in the ordinary course of business; (xxiv)
      Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary
      or
      any joint venture owned by the Borrower or any Restricted Subsidiary to the
      extent securing Non-Recourse Debt of such Unrestricted Subsidiary or joint
      venture; (xxv) Liens on amounts not to exceed the sum of up to three years
      of
      regularly scheduled interest payments in respect of any convertible Debt issued
      by the Borrower permitted hereby, which amounts shall have been placed in
      interest reserve accounts in connection with the issuance of such convertible
      Debt to secure the obligations under, such convertible Debt; and (xxvi) Liens
      securing obligations under Debt (other than Subordinated Obligations and
      Guarantor Subordinated Obligations) in an aggregate principal amount outstanding
      at any one time not to exceed the greater of $25,000,000 and 1.5% of Adjusted
      Consolidated Net Tangible Assets.

     

    “Permitted
      Refinancing Debt” means Debt (for purposes of this definition, “new
      Debt”) incurred in exchange for, or proceeds of which are used to refinance,
      all of any other Debt (the “Refinanced Debt”); provided that
      (a) such new Debt is in an aggregate principal amount not in excess of the
      sum of (i) the aggregate principal amount then outstanding of the
      Refinanced Debt (or, if the Refinanced Debt is exchanged or acquired for an
      amount less than the principal amount thereof to be due and payable upon a
      declaration of acceleration thereof, such lesser amount) and (ii) an amount
      necessary to pay interest or premiums required by the instruments governing
      such
      Refinanced Debt and fees and expenses Incurred in connection therewith; (b)(x)
      if the Stated Maturity of the Refinanced Debt is earlier than the Final Maturity
      Date, the new Debt has a Stated Maturity no earlier than the Stated Maturity
      of
      the Refinanced Debt or (y) if the Stated Maturity of the Refinanced Debt is
      later than the Final Maturity Date, the new Debt has a Stated Maturity at least
      91 days later than the Final Maturity Date; (c) the new Debt has an Average
      Life
      at the time such new Debt is Incurred that is equal to or greater than the
      Average Life of the Refinanced Debt; (d) such new Debt (and any guarantees
      thereof) is secured by no more collateral than the collateral which secured,
      or
      is permitted by the terms of this Agreement to secure, the Refinanced Debt;
      (e)
      the obligor(s) in respect of such new Debt shall be the same as the obligor(s)
      in respect of such Refinanced Debt and if such Refinanced Debt is not guarantied
      by any Loan Party, then such new Debt shall also not be guarantied by any Loan
      Party; (f) the Liens, if any, securing such new Debt are subordinated to the
      Liens securing the Indebtedness (or, if applicable, the Guaranty Agreement)
      to
      at least the same extent as the Liens securing the Refinanced Debt and (g)
      if
      the Refinanced Debt is subordinated in right of payment to the Loans or the
      Guarantees under the Guaranty Agreement, such new Debt is subordinated in right
      of payment to the Loans or the Guarantees under the Guaranty Agreement on terms
      at least as favorable to the Holders as those contained in the documentation
      governing the Refinanced Debt.

     

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

     

    
      
        
        

      

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

     

    “Preferential
      Purchase Right Properties” means each of the Oil and Gas Properties listed
      in Schedule 1.02(b).

     

    “Preferred
      Stock,” as applied to the Equity Interests of any corporation, means Equity
      Interests of any class or classes (however designated) which is preferred as
      to
      the payment of dividends, or as to the distribution of assets upon any voluntary
      or involuntary liquidation or dissolution of such corporation, over shares
      of
      Equity Interest of any other class of such corporation.

     

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

     

    “Production
      Payments and Reserve Sales” means the grant or transfer by the Borrower or a
      Restricted Subsidiary to any Person of a royalty, overriding royalty, net
      profits interest, production payment (whether volumetric or dollar denominated),
      partnership or other interest in oil and gas properties, reserves or the right
      to receive all or a portion of the production or the proceeds from the sale
      of
      production attributable to such properties where the holder of such interest
      has
      recourse solely to such production or proceeds of production, subject to the
      obligation of the grantor or transferor to operate and maintain, or cause the
      subject interests to be operated and maintained, in a reasonably prudent manner
      or other customary standard or subject to the obligation of the grantor or
      transferor to indemnify for environmental, title or other matters customary
      in
      the Oil and Gas Business, including any such grants or transfers pursuant to
      incentive compensation programs on terms that are reasonably customary in the
      Oil and Gas Business for geologists, geophysicists or other providers of
      technical services to the Borrower or a Restricted Subsidiary.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

    “Reserve
      Report” means the Initial Reserve Report and each other report setting forth
      the oil and gas reserves attributable to the Oil and Gas Properties of the
      Borrower and the Restricted Subsidiaries, together with a projection of the
      rate
      of production and future net income, taxes, operating expenses and capital
      expenditures with respect thereto as of such date based upon the economic
      assumptions consistent with the Administrative Agent’s lending requirements at
      the time.

     

    “Responsible
      Officer” means, as to any Person, the Chief Executive Officer, the
      President, any Financial Officer or any Vice President of such
      Person.  Unless otherwise specified, all references to a Responsible
      Officer herein shall mean a Responsible Officer of the Borrower.

     

    “Restricted
      Investment” means any Investment other than a Permitted
      Investment.

     

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

     

    “Restricted
      Subsidiary” means any direct or indirect Subsidiary of the Borrower that is
      not an Unrestricted Subsidiary.

     

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

     

    “Sale/Leaseback
      Transaction” means an arrangement relating to property now owned or
      hereafter acquired whereby the Borrower or a Restricted Subsidiary transfers
      such property to a Person and the Borrower or a Restricted Subsidiary leases
      it
      from such Person.

     

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

     

    “Second
      Lien Notes” means the $100,000,000 Second Lien Term Notes issued pursuant to
      the Second Lien Term Loan Agreement.

     

    “Second
      Lien Term Loan Agreement” means that certain Second Lien Term Loan Agreement
      dated as of January 19, 2007 among MOXY, JPMorgan Chase Bank, N.A., as
      administrative agent and the lenders party thereto.

     

    “Securities
      Act” means the Securities Act of 1933, as amended from time to
      time.

     

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

     

    “Seller”
      means Newfield Exploration Company, a Delaware corporation.

     

    
      
        
        

      

      
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    “Senior
      Credit Agreement” means with respect to, or guaranteed by, the Borrower, one
      or more debt facilities  (including, without limitation, the Senior
      Secured Credit Agreement) or commercial paper facilities with banks or other
      institutional lenders providing for revolving credit loans, term loans,
      receivables financing (including through the sale of receivables to such lenders
      or to special purpose entities formed to borrow from such lenders against such
      receivables) or letters of credit, in each case, as amended, restated, modified,
      renewed, refunded, replaced or refinanced in whole or in part from time to
      time
      (and whether or not with the original administrative agent and lenders or
      another administrative agent or agents or other lenders and whether provided
      under the original Senior Secured Credit Agreement or any other credit or other
      agreement or indenture).

     

    “Senior
      Loan Documents” means the Senior Credit Agreement and the “Loan Documents”
as such term is defined in the Senior Credit Agreement.

     

    “Senior
      Loan Security Instruments” means the “Security Instruments” as such term is
      defined in the Senior Credit Agreement.

     

    “Senior
      Loans” means the loans made in favor of MOXY under the Senior Credit
      Agreement in an aggregate principal amount not to exceed
      $700,000,000.

     

    “Senior
      Notes” means (a) any senior, senior subordinated or subordinated Debt issued
      by the Borrower or MOXY (and any guarantees thereof by any Loan Party) on or
      after the Effective Date under Section 9.02(b)(iv) which is unsecured and any
      Permitted Refinancing Debt in respect thereof, and (b) any convertible Debt
      issued by the Borrower (and any guarantees thereof by any Loan Party) on or
      after the Effective Date under Section 9.02(b)(iv) which is unsecured and any
      Permitted Refinancing Debt in respect thereof.

     

    “Senior
      Secured Credit Agreement” means the Amended and Restated Credit Agreement,
      dated as of August 1, 2007, among the Borrower, as parent guarantor, MOXY,
      as
      borrower, the lenders party thereto from time to time, JPMorgan Chase Bank,
      N.A., as administrative agent, Merrill Lynch Capital, a division of Merrill
      Lynch Business Financial Services, Inc., as syndication agent, and BNP Paribas,
      as documentation agent.

     

    “Significant
      Subsidiary” has the meaning set forth in the indentures relating to the
      Existing Convertible Notes.

     

    “Stated
      Maturity” means, with respect to any security, the date specified in such
      security as the fixed date on which the payment of principal of such security
      is
      due and payable, including pursuant to any mandatory redemption provision,
      but
      shall not include any contingent obligations to repay, redeem or repurchase
      any
      such principal prior to the date originally scheduled for the payment
      thereof.

     

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

     

    
      
        
        

      

      
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    “Subordinated
      Obligation” means any Debt of the Borrower (whether outstanding on the date
      of this Agreement or thereafter Incurred) which is subordinate or junior in
      right of payment to the Loans pursuant to a written agreement.

     

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

     

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

     

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

     

    “Take-Out
      Securities” means the Senior Notes and any Equity Interests that may be
      issued by the Borrower or a Restricted Subsidiary after the Effective Date
      to
      refinance the Loans or Exchange Notes.

     

    “Term
      Loan” has the meaning set forth in Section 2.01(b).

     

    “Term
      Note” has the meaning set forth in Section 12.04(e).

     

    “Title
      Indemnity Agreement” means that certain Title Indemnity Agreement dated as
      of August 1, 2007 between MOXY and the Seller.

     

    “Total
      Assets” means, with
      respect to any Person, the total consolidated assets of such Person and its
      Restricted Subsidiaries, as shown on the most recent balance sheet of such
      Person.

    

    “Transactions”
      means, with respect to (a) the Borrower, the execution, delivery and performance
      by the Borrower of this Agreement and each other Loan Document to which it
      is a
      party, the Acquisition and the borrowing of Loans and (b) each Guarantor, the
      execution, delivery and performance by such Guarantor of each Loan Document
      and
      Acquisition Document to which it is a party, the Acquisition and the
      guaranteeing of the Indebtedness and the other obligations under the Guaranty
      Agreement by such Guarantor.

     

    “Transferee”
      means any Assignee or Participant.

     

    
      
        
        

      

      
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    “Transition
      Services Agreement” means that certain Transition Services Agreement dated
      as of August 1, 2007 between MOXY and the Seller.

     

    “Treasury
      Rate” means with respect to each day during each Interest Period, the rate
      per annum determined by the Administrative Agent two days prior to the Effective
      Date as (x) the rate borne by direct obligations of the United States
      maturing on the seventh anniversary of the Effective Date or (y) if there
      are no such obligations, the rate determined by linear interpolation between
      the
      rates borne by the two direct obligations of the United States maturing closest
      to, but straddling, the seventh anniversary of the Effective Date, in each
      case
      as most recently published by the Board.

     

    “Treasury
      Rate Loan” means  a Loan bearing interest at a rate determined by
      reference to the Treasury Rate in accordance with the provisions of Section
      2.

     

    “Trustee”
      has the meaning set forth in Section 8.20(a).

     

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

     

    “Unrestricted
      Subsidiary” means Freeport-McMoRan Energy, LLC, a Delaware limited liability
      company, any other Subsidiary of the Borrower designated as such on Schedule
      7.14 and each other Subsidiary of any of the foregoing.

     

    “Volumetric
      Production Payments” means production payment obligations recorded as
      deferred revenue in accordance with GAAP, together with all undertakings and
      obligations in connection therewith.

     

    “Voting
      Stock” of any Person as of any date, means the Equity Interests of such
      Person that is as of such time entitled to vote in the election of the Board
      of
      Directors of such Person.

     

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

     

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

     

    Section
      1.04  Terms
      Generally; Rules of Construction.  The
      definitions of terms herein shall apply equally to the singular and plural
      forms
      of the terms defined.  Whenever the context may require, any pronoun
      shall include the corresponding masculine, feminine and neuter
      forms.  The words “include”, “includes” and “including” shall be
      deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of
      or reference to any agreement, instrument or other document herein shall be
      construed as referring to such agreement, instrument or other document as from
      time to time amended, supplemented or otherwise modified (subject to any
      restrictions on such amendments, supplements or modifications set forth in
      the
      Loan Documents), (b) any reference herein to any law shall be construed as
      referring to such law as amended, modified, codified or reenacted, in whole
      or
      in part, and in effect from time to time, (c) any reference herein to any Person
      shall be construed to include such Person’s successors and assigns (subject to
      the restrictions contained in the Loan Documents), (d) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
      refer to this 

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    Agreement
      in its entirety and not to any particular provision hereof, (e) with respect
      to
      the determination of any time period, the word “from” means “from and including”
and the word “to” means “to and including” and (f) any reference herein to
      Articles, Sections, Annexes, Exhibits and Schedules shall be construed to refer
      to Articles and Sections of, and Annexes, Exhibits and Schedules to, this
      Agreement.  No provision of this Agreement or any other Loan Document
      shall be interpreted or construed against any Person solely because such Person
      or its legal representative drafted such provision.

     

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

     

    ARTICLE
      II

    The
      Credits

     

    Section
      2.01  Commitments.  (a)
      Subject to the terms and conditions hereof, each Lender severally agrees to
      make
      a loan (individually, an “Initial Loan” and collectively, the “Initial
      Loans”) to the Borrower on the Effective Date, in an aggregate principal
      amount equal to such Lender’s Commitment.  Any Commitments not drawn
      on the Effective Date shall terminate.  

     

    (b)           Subject
      to the terms and conditions hereof, the Borrower and each Lender severally
      agrees, if the Initial Loans have not been repaid or exchanged for Exchange
      Notes on the Initial Maturity Date, to convert the then outstanding principal
      amount of its Initial Loans into a loan (individually, a “Term Loan” and
      collectively, the “Term Loans”; the Initial Loans and the Term Loans,
      collectively, the “Loans”) to the Borrower, on the Initial Maturity Date,
      in an aggregate principal amount equal to then outstanding principal amount
      of
      the Initial Loans held by such Lender.  Upon the making by such Lender
      of such Term Loan, each Lender shall cancel on its records a principal amount
      of
      the Initial Loans held by such Lender corresponding to the principal amount
      of
      Term Loans made by such Lender, which corresponding principal amount of the
      Initial Loans shall be satisfied by the conversion thereof into Term
      Loans.

     

    (c)           Prior
      to the Initial Maturity Date, the Initial Loans shall be comprised entirely
      of
      Eurodollar Loans, Treasury Rate Loans or ABR Loans.  Each Lender may
      at its option make any Eurodollar Loan by causing any domestic or foreign branch
      or Affiliate of such Lender to make such Loan; provided that any exercise of
      such option shall not affect the obligation of the Borrower to repay such Loan
      in accordance with the terms of this Agreement.

     

    (d)           The
      failure of any Lender to make the Initial Loan to be made by it shall not
      relieve any other Lender of its obligation, if any, hereunder to make its
      Initial Loan on the Effective Date, but no Lender shall be responsible for
      the
      failure of any other Lender to make the Initial Loan to be made by such other
      Lender on the Effective Date.

     

    Section
      2.02  Procedure
      for Borrowing.  The
      Borrower shall give the Administrative Agent an irrevocable Borrowing Request
      (which request must be received by the Administrative Agent prior to 10:00
      A.M.,
      New York City time, three Business Days prior to the anticipated Effective
      Date
      or such 

     

    
      
        
        

      

      
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    shorter
      period agreed to by the Administrative Agent) requesting that the Lenders make
      the Initial Loans on the Effective Date and specifying the amount to be
      borrowed.  Upon receipt of the Borrowing Request the Administrative
      Agent shall promptly notify each Lender thereof.  Not later than 12:00
      Noon, New York City time, on the Effective Date each Lender shall make available
      to the Administrative Agent at its office specified in Section 12.01 an amount
      in immediately available funds equal to the Initial Loans to be made by such
      Lender.  The Administrative Agent shall credit the account of the
      Borrower on the books of such office of the Administrative Agent with the
      aggregate of the amounts made available to the Administrative Agent by the
      Lenders in immediately available funds.

     

    Section
      2.03  Presumption
      of Funding by the Lenders.  Unless
      the Administrative Agent shall have received a written notice from a Lender
      prior to the Effective Date that such Lender will not make available to the
      Administrative Agent such Lender’s share of such Borrowing, the Administrative
      Agent may assume that such Lender has made such share available on such date
      and
      may, in reliance upon such assumption, make available to the Borrower a
      corresponding amount.  In such event, if a Lender has not in fact made
      its share of the Borrowing available to the Administrative Agent by the required
      time on the Effective Date, then the applicable Lender and the Borrower
      severally agree to pay to the Administrative Agent forthwith on demand such
      corresponding amount with interest thereon, for each day from and including
      the
      date such amount is made available to the Borrower to but excluding the date
      of
      payment to the Administrative Agent, at (i) in the case of such Lender, the
      greater of the Federal Funds Effective Rate and a rate determined by the
      Administrative Agent in accordance with banking industry rules on interbank
      compensation or (ii) in the case of the Borrower, the interest rate applicable
      to ABR Loans.  If such Lender pays such amount to the Administrative
      Agent, then such amount shall constitute such Lender’s Loan included in such
      Borrowing.

     

    ARTICLE
      III

    Maturity,
      Exchange Notes; Payments of Principal and Interest

     

    Section
      3.01  Maturity
      and Exchange Notes.  (a)  All
      the Initial Loans will mature on the Initial Maturity Date.

     

    (b)           All
      the Term Loans will mature on the Final Maturity Date.

     

    (c)           Each
      Lender will have the option on or after the Initial Maturity Date at any time
      or
      from time to time to receive Exchange Notes in exchange for the Term Loans
      or,
      on the Initial Maturity Date, the Initial Loans, of such Lender then outstanding
      in accordance with Section 8.20 of this Agreement.  The principal
      amount of the Exchange Notes will equal 100.0% of the aggregate principal amount
      (including any accrued and unpaid interest not required to be paid in cash)
      of
      the Loans for which they are exchanged.  If a Default (but not an
      Event of Default) shall have occurred and be continuing on the date of such
      exchange, any notices given or cure periods commenced while the Loan was
      outstanding shall be deemed given or commenced (as of the actual dates thereof)
      for all purposes with respect to the Exchange Note (with the same effect as
      if
      the Exchange Note had been outstanding as of the actual dates thereof). If
      not
      all Lenders holding Initial Loans elect to receive Exchange Notes in exchange
      for their Initial Loans on the Initial Maturity Date, no Initial Loans shall
      be
      permitted to be exchanged for Exchange Notes unless Lenders holding Initial
      Loans in an aggregate principal amount of at least $5,000,000 shall so
      elect.

     

    Section
      3.02  Repayment
      of Loans.  The
      Borrower hereby unconditionally promises to pay to the Administrative Agent
      for
      the account of each Lender the then unpaid principal amount of each Loan in
      accordance with the terms hereof and of the Loan Notes.  The Borrower
      hereby further agrees to pay to the Administrative Agent for the account of
      each
      Lender interest on the unpaid principal amount of the 

     

    
      
        
        

      

      
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    Loans
      from time to time outstanding from the date hereof until payment in full thereof
      at the rates per annum, and on the dates, set forth in Section
      3.03.

     

    Section
      3.03  Interest
      Rates and Payment Dates.  (a)
      Initial Loans shall bear interest for the period from and including the date
      such Initial Loans are made to, but excluding, the Initial Maturity Date on
      the
      unpaid principal thereof at a rate per annum equal to the Initial Loan Rate
      plus
      the Applicable Margin.

     

    (b)           Term
      Loans shall bear interest for the period from and including the Initial Maturity
      Date to, but excluding, the Final Maturity Date or date of exchange for an
      Exchange Note on the unpaid principal thereof at a rate per annum equal to
      the
      Adjusted Rate plus the Adjusted Margin.

     

    (c)           Notwithstanding
      Sections 3.03(a) and (b), the interest rate borne by the Loans shall not exceed
      12% per annum nor be less than 10% per annum.

     

    (d)           If
      all or a portion of (i) the principal amount of any of the Loans, (ii) any
      interest payable thereon, or (iii) any fee or other amount payable hereunder
      shall not be paid when due (whether at the stated maturity, by acceleration
      or
      otherwise, but taking into account any applicable grace period under Section
      10.01(b)), such Loan and any such overdue amount shall, without limiting the
      rights of the Lenders under Article X, bear interest at a rate per annum which
      is (x) in the case of overdue principal, the rate that would otherwise be
      applicable thereto pursuant to the foregoing provisions of this Section plus
      2%
      or (y) in the case of overdue interest, fees or other amounts due and payable
      hereunder, the applicable rate hereunder for any Loan (but without giving effect
      to the foregoing clause (x)) plus 2%.

     

    (e)           Interest
      shall be payable in arrears on each Interest Payment Date and upon the maturity
      date of the Loan in respect of which any such interest is accruing,
provided that interest accruing pursuant to Section 3.03(d) shall be
      payable from time to time on demand.

     

    (f)           Interest,
      fees and commissions payable pursuant hereto shall be calculated on the basis
      of
      a 360-day year for the actual days elapsed, except that, with respect to ABR
      Loans the rate of interest on which is calculated on the basis of the Prime
      Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
      as the case may be) day year for the actual days elapsed.  The
      Administrative Agent shall as soon as practicable notify the Borrower and the
      relevant Lenders of each determination of an Adjusted LIBO Rate.  Any
      change in the interest rate on a Loan resulting from a change in the Alternate
      Base Rate or the Adjusted LIBO Rate shall become effective as of the opening
      of
      business on the day on which such change becomes effective.  The
      Administrative Agent shall as soon as practicable notify the Borrower and the
      relevant Lenders of the effective date and the amount of each such change in
      interest rate.

     

    (g)           Each
      determination of an interest rate by the Administrative Agent pursuant to any
      provision of this Agreement shall be conclusive and binding on the Borrower
      and
      the Lenders in the absence of manifest error.  The Administrative
      Agent shall, at the request of the Borrower, deliver to the Borrower a statement
      showing the quotations used by the Administrative Agent in determining any
      interest rate pursuant to Sections 3.03(a) and (b).

     

    Section
      3.04  [Intentionally
      Omitted].

     

    Section
      3.05  Optional
      and Mandatory Prepayments.

     

    (a)  Optional
      Prepayments.  The Borrower may at any time and from time to time
      prepay the Loans, in whole or in part, without premium or penalty, upon
      irrevocable notice delivered to 

     

    
      
        
        

      

      
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    the
      Administrative Agent at least three Business Days prior thereto or such shorter
      period agreed to by the Administrative Agent, which notice shall specify the
      date and amount of prepayment; provided, that if a Loan is prepaid on any
      day other than the last day of the Interest Period applicable thereto, the
      Borrower shall also pay any amounts owing pursuant to Section 5.02 and
provided, further, that on or after the Initial Maturity Date, any
      prepayment shall be applied pro rata among the Loans and Exchange Notes as
      provided in Section 3.05(d) below.  Upon receipt of any such notice
      the Administrative Agent shall promptly notify each relevant Lender
      thereof.  If any such notice is given, the amount specified in such
      notice shall be due and payable on the date specified therein, together with
      accrued interest to such date on the amount prepaid.

     

    (b)  Mandatory
      Prepayments.

     

    (i)  If,
      subsequent to the Effective Date, the Borrower or any of its Subsidiaries shall
      issue (A) the Take-Out Securities, (B) any other Debt (other than Debt Incurred
      pursuant to Section 9.02(b) excluding the Senior Notes) or (C) Equity Interests
      (other than Equity Interests of a Subsidiary issued to the Borrower or any
      Wholly-Owned Subsidiary of the Borrower), an amount equal to 100% of the Net
      Cash Proceeds thereof shall be promptly applied toward the prepayment of the
      Loans as provided in Section 3.05(d) below.

     

    (ii)  If,
      subsequent to the Effective Date, the Borrower or any of its Subsidiaries shall
      have any Excess Proceeds (as defined in Section 9.11(b)), the Borrower shall
      make an Asset Disposition Offer in accordance with Section 9.11(b).

     

    (iii)  Subject
      to Section 3.04(c)(iv) of the Senior Credit Agreement as in effect on the date
      hereof, if, for each period of six consecutive months commencing on January
      1,
      2008, there shall be Excess Cash Flow, the Borrower shall, on the relevant
      Excess Cash Flow Application Date, apply 100% of such Excess Cash Flow toward
      the prepayment principal and interest on of the Loans and the Exchange Notes
      as
      provided in Section 3.05(c) and (d) below.  Each such prepayment shall
      be made on a date (an “Excess Cash Flow Application Date”) no later than
      ten days after the earlier of (i) the date on which the financial statements
      of
      the Borrower referred to in Section 8.01(a) or (b), as applicable, for each
      quarter ending June 30 (commencing June 30, 2008) and for each fiscal year
      (commencing fiscal year ending December 31, 2008), are required to be delivered
      to the Lenders and (ii) the date such financial statements are actually
      delivered.

     

    (iv)  The
      Borrower shall give the Administrative Agent (which shall promptly notify each
      Lender) at least three (3) Business Days’ prior notice (or such shorter period
      agreed to by the Administrative Agent) or, telephone notice promptly confirmed
      in writing of each prepayment in whole or in part pursuant to this Agreement
      setting forth the date and amount thereof.

     

    (c)  Accrued
      and unpaid interest on the amount of any principal of the Loans prepaid under
      this Section 3.05 shall be paid to and on the date of such
      prepayment.

     

    (d)  As
      promptly as practicable after the Administrative Agent receives notice of a
      prepayment pursuant to Section 3.05(b)(iv) in connection with Section 3.05(a),
      3.05(b)(i) or 3.05(b)(iii), the Administrative Agent, in cooperation with the
      Trustee, shall give notice to each Holder of an Exchange Note of the pro rata
      amount that would be payable to such Holder in respect of such Holder’s Exchange
      Note and the expected date of such prepayment.  Any Holder of
      noncallable Exchange Notes that wishes to accept such prepayment (each, an
      “Accepting Holder”) shall promptly notify the Trustee and the
      Administrative Agent in writing.  Payments and offers to prepay the
      Loans and Exchange Notes shall be made ratably among the Loans and Exchange
      Notes.  After the Administrative Agent receives the prepayment amount,
      such prepayment amount shall be distributed by the Administrative Agent, in
      

     

    
      
        
        

      

      
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    cooperation
      with the Trustee, subject to Section 4.01(c), in the following order, with
      appropriate adjustments being made to account for the receipt by the Trustee
      of
      any prepayment in respect of the Exchange Notes:  First, to
      the payment of all amounts described in clauses “First” and
“Second” of Section 4.01(c)(i); Second, to the payment of
      interest then due and payable on the Loans, Exchange Notes of Accepting Holders
      and callable Exchange Notes, ratably among the Lenders, the Accepting Holders
      and Holders of callable Exchange Notes in accordance with the aggregate amount
      of interest owed to each such Lender, Accepting Holder and Holder; and
Third, to the payment of the principal amount of the Loans, the
      Exchange Notes of Accepting Holders and the callable Exchange Notes that is
      then
      due and payable, ratably among the Lenders, the Accepting Holders and Holders
      of
      callable Exchange Notes in accordance with the aggregate principal amount owed
      to each such Lender, Accepting Holder and Holder.  Amounts offered to
      and rejected by any Exchange Note Holder shall be ratably applied to prepay
      the
      Loans, the Exchange Notes held by Accepting Holders and callable Exchange
      Notes.  Any offers to prepay non-callable Exchange Notes shall be made
      in accordance with the provisions relating thereto in the Exchange Notes
      Indenture, and with applicable law, and the distribution of the relevant
      prepayment amount hereunder shall be made promptly after the expiration of
      such
      offer.

     

    (e)  No
      Premium or Penalty.  Prepayments of Loans permitted or required
      under this Section 3.05 shall be without premium or
      penalty, except as required under Section
      5.02.

     

    ARTICLE
      IV 

    Payments;
      Pro Rata Treatment; Sharing of Set-offs

     

    Section
      4.01  Payments
      Generally; Pro Rata Treatment; Sharing of Set-offs.

     

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

     

    (b)  Pro
      Rata Borrowings and Commitment Reductions.  Except to the extent
      otherwise provided herein, the borrowing of Loans by the Borrower from the
      Lenders and any reduction of the Commitments of the Lenders hereunder shall
      be
      made prorata according to the relevant Commitment Percentages of
      the Lenders with respect to the Loans borrowed or the Commitments to be
      reduced.

     

    (c)  Application
      of Insufficient Payments.  Whenever any payment received by the
      Administrative Agent under this Agreement or any Note or any Loan Document
      is
      insufficient to pay in full all amounts then due and payable to the
      Administrative Agent and the Lenders under this Agreement:

     

    
      
        
        

      

      
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    (i)  if
      the
      Administrative Agent has not received a Payment Sharing Notice (or, if the
      Administrative Agent has received a Payment Sharing Notice but the Event of
      Default specified in such Payment Sharing Notice has been cured or waived in
      accordance with the provisions of this Agreement), such payment shall be
      distributed by the Administrative Agent and applied by the Administrative Agent,
      in cooperation with the Trustee (if any Exchange Notes are outstanding), and
      the
      Lenders in the following order, with appropriate adjustment being made to
      account for any payment received by the Trustee in respect of any outstanding
      Exchange Notes:  First, to the payment of reasonable fees and
      expenses due and payable to the Administrative Agent under and in connection
      with this Agreement or the Guaranty Agreement or, if any Exchange Notes are
      outstanding, due and payable to the Trustee under the Exchange Notes Indenture;
      Second, to the payment of all reasonable expenses due and payable under
      Section 12.03 and any equivalent section of the Exchange Notes Indenture,
      ratably among the Lenders and the Exchange Note Holders (if any) in accordance
      with the aggregate amount of such payments owed to each such Lender or Holder;
      Third, to the payment of accrued and unpaid interest then due and
      payable on the Loans and the Exchange Notes (if any) ratably among the Lenders
      and the Exchange Note Holders (if any) in accordance with the aggregate amount
      of interest owed to each Lender and Exchange Note Holder; and Fourth,
      to the payment of the principal amount of the Loans and the Exchange Notes
      (if
      any) that is then due and payable, ratably among the Lenders and the Exchange
      Note Holders (if any) in accordance with the aggregate principal amount owed
      to
      each such Lender and Exchange Note Holder (and in the case of any Exchange
      Notes
      that are classified as “Fixed Rate Notes” in the Exchange Notes Indenture,
      subject to the provisions of Section 3.05(d)); or

     

    (ii)  if
      the
      Administrative Agent has received a Payment Sharing Notice that remains in
      effect, all payments received by the Administrative Agent under this Agreement
      or any Note shall be distributed by the Administrative Agent and applied by
      the
      Administrative Agent, in cooperation with the Trustee (if any Exchange Notes
      are
      outstanding), and the Lenders in the following order, with appropriate
      adjustment being made to account for any payment received by the Trustee in
      respect of any outstanding Exchange Notes:  First, to the
      payment of all amounts described in clauses “First” and
“Second” of the foregoing clause (i), in the order set forth therein;
      Second, to the payment of the interest accrued and unpaid on all Loans
      and Exchange Notes (if any), regardless of whether any such amount is then
      due
      and payable, ratably among the Lenders and the Exchange Note Holders (if any)
      in
      accordance with the aggregate accrued interest plus the aggregate principal
      amount owed to such Lender and the Exchange Note Holders; and Third, to
      the payment of the principal amount of all Loans and Exchange Notes (if any),
      regardless of whether any such amount is then due and payable, ratably among
      the
      Lenders and the Exchange Note Holders (if any) in accordance with the aggregate
      principal amount owed to each Lender and Exchange Note Holder (and in the case
      of any Exchange Notes that are classified as “Fixed Rate Notes” in the Exchange
      Notes Indenture, subject to the provisions of Section 3.05(d)).

     

    (d)  Sharing
      of Payments by Lenders.  If any Lender shall, by exercising any
      right of set-off or counterclaim or otherwise, obtain payment in respect of
      any
      principal of or interest on any of its Loans resulting in such Lender receiving
      payment of a greater proportion of the aggregate amount of its Loans and accrued
      interest thereon than the proportion received by any other Lender, then the
      Lender receiving such greater proportion shall purchase (for cash at face value)
      participations in the Loans of other Lenders to the extent necessary so that
      the
      benefit of all such payments shall be shared by the Lenders ratably in
      accordance with the aggregate amount of principal of and accrued interest on
      their respective Loans; provided that (i) if any such participations are
      purchased and all or any portion of the payment giving rise thereto is
      recovered, such participations shall be rescinded and the purchase price
      restored to the extent of such recovery, without interest, and (ii) the
      provisions of this Section 4.01(d)

     

    
      
        
        

      

      
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    shall
      not
      be construed to apply to any payment made by the Borrower pursuant to and in
      accordance with the express terms of this Agreement or any payment obtained
      by a
      Lender as consideration for the assignment of or sale of a participation in
      any
      of its Loans to any assignee or participant, other than to the Borrower or
      any
      Restricted Subsidiary or Affiliate thereof (as to which the provisions of this
      Section 4.01(d) shall apply).  The Borrower
      consents to the foregoing and agrees, to the extent it may effectively do so
      under applicable law, that any Lender acquiring a participation pursuant to
      the
      foregoing arrangements may exercise against the Borrower rights of set-off
      and
      counterclaim with respect to such participation as fully as if such Lender
      were
      a direct creditor of the Borrower in the amount of such
      participation.

     

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

     

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

     

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

     

    ARTICLE
      V

    Increased
      Costs; Break Funding Payments; Taxes

     

    Section
      5.01  Increased
      Costs.

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    (b)  Capital
      Requirements.  If any Lender determines that any Change in Law
      regarding capital requirements has or would have the effect of reducing the
      rate
      of return on such Lender’s capital or on the capital of such Lender’s holding
      company, if any, as a consequence of this Agreement or the Loans made by such
      Lender to a level below that which such Lender or such Lender’s holding company
      could have achieved but for such Change in Law (taking into consideration such
      Lender’s policies and the policies of such Lender’s holding company with respect
      to capital adequacy), then from time to time the Borrower will pay to such
      Lender such additional amount or amounts as will compensate such Lender or
      such
      Lender’s holding company for any such reduction suffered.

     

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

     

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

     

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

     

    
      
        
        

      

      
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    were
      it
      to bid, at the commencement of such period, for dollar deposits of a comparable
      amount and period from other banks in the eurodollar market.

     

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

     

    Section
      5.03  Taxes.

     

    (a)  All
      payments made by any Loan Party under this Agreement or any Loan Document shall
      be made free and clear of, and without deduction or withholding for or on
      account of, any present or future income, stamp or other taxes, levies, imposts,
      duties, charges, fees, deductions or withholdings, now or hereafter imposed,
      levied, collected, withheld or assessed by any Governmental Authority, excluding
      net income taxes and franchise taxes (imposed in lieu of net income taxes)
      imposed on the Administrative Agent or any Lender as a result of a present
      or
      former connection between the Administrative Agent or such Lender and the
      jurisdiction of the Governmental Authority imposing such tax or any political
      subdivision or taxing authority thereof or therein (other than any such
      connection arising solely from the Administrative Agent or such Lender having
      executed, delivered or performed its obligations or received a payment under,
      or
      enforced, this Agreement or any other Loan Document).  If any such
      non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
      withholdings (“Non-Excluded Taxes”) or other taxes are required to be
      withheld from any amounts payable to the Administrative Agent or any Lender
      hereunder, the amounts so payable to the Administrative Agent or such Lender
      shall be increased to the extent necessary to yield to the Administrative Agent
      or such Lender (after payment of all Non-Excluded Taxes and other taxes)
      interest or any such other amounts payable hereunder at the rates or in the
      amounts specified in this Agreement, provided, however, that the
      Borrower shall not be required to increase any such amounts payable to any
      Lender with respect to any Non-Excluded Taxes (i) that are attributable to
      such
      Lender’s failure to comply with the requirements of Section 5.03(d) or (e) or
      (ii) that are United States withholding taxes imposed on amounts payable to
      such
      Lender at the time such Lender becomes a party to this Agreement, except to
      the
      extent that such Lender’s assignor (if any) was entitled, at the time of
      assignment, to receive additional amounts from the Borrower with respect to
      such
      Non-Excluded Taxes pursuant to this Section 5.03(a).

     

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

     

    (c)  Whenever
      any Non-Excluded Taxes or other taxes are payable by a Loan Party, as promptly
      as possible thereafter such Loan Party shall send to the Administrative Agent
      for its own account or for the account of the relevant Lender, as the case
      may
      be, a certified copy of an original official receipt received by such Loan
      Party
      showing payment thereof.  If such Loan Party fails to pay any
      Non-Excluded Taxes or other taxes when due to the appropriate taxing authority
      or fails to remit to the Administrative Agent the required receipts or other
      required documentary evidence, the Borrower shall indemnify the Administrative
      Agent and the Lenders for any incremental taxes, interest or penalties that
      may
      become payable by the Administrative Agent or any Lender as a result of any
      such
      failure.

     

    (d)  Each
      Lender (or Transferee) that is not a “U.S. Person” as defined in Section
      7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the
      Borrower and the Administrative Agent (or, in the case of a Participant, to
      the
      Lender from which the related participation shall have been purchased) two
      copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
      or,
      in the case of a Non-U.S. Lender claiming exemption from U.S. federal
      withholding tax under Section 871(h) or 881(c) of the Code with respect to
      payments of “portfolio interest”, a statement substantially in 

     

    
      
        
        

      

      
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    the
      form
      of Exhibit J and a Form W-8BEN, or any subsequent versions thereof or
      successors thereto, properly completed and duly executed by such Non-U.S. Lender
      claiming complete exemption from, or a reduced rate of, U.S. federal withholding
      tax on all payments by the Loan Parties under this Agreement and the other
      Loan
      Documents.  Such forms shall be delivered by each Non-U.S. Lender on
      or before the date it becomes a party to this Agreement (or, in the case of
      any
      Participant, on or before the date such Participant purchases the related
      participation).  In addition, each Non-U.S. Lender shall deliver such
      forms promptly upon the obsolescence or invalidity of any form previously
      delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall
      promptly notify the Borrower at any time it determines that it is no longer
      in a
      position to provide any previously delivered certificate to the Borrower (or
      any
      other form of certification adopted by the U.S. taxing authorities for such
      purpose).  Notwithstanding any other provision of this Section
      5.03(d), a Non-U.S. Lender shall not be required to deliver any form pursuant
      to
      this Section 5.03(d) that such Non-U.S. Lender is not legally able to
      deliver.

     

    (e)  A
      Lender
      that is entitled to an exemption from or reduction of non-U.S. withholding
      tax
      under the law of the jurisdiction in which the Borrower is located, or any
      treaty to which such jurisdiction is a party, with respect to payments under
      this Agreement or any Loan Document shall deliver to the Borrower (with a copy
      to the Administrative Agent), at the time or times prescribed by applicable
      law
      or reasonably requested by the Borrower, such properly completed and executed
      documentation prescribed by applicable law as will permit such payments to
      be
      made without withholding or at a reduced rate, provided that such Lender
      is legally entitled to complete, execute and deliver such documentation and
      in
      such Lender’s judgment such completion, execution or submission would not
      materially prejudice the legal position of such Lender.

     

    (f)  If
      the
      Administrative Agent or any Lender determines, in its sole discretion, that
      it
      has received a refund of any Non-Excluded Taxes or other taxes as to which
      it
      has been indemnified by the Borrower or with respect to which the Borrower
      has
      paid additional amounts pursuant to this Section
      5.03, it shall pay over such refund to the Borrower (but only to the extent
      of indemnity payments made, or additional amounts paid, by the Borrower under
      this Section 5.03 with respect to the Non-Excluded
      Taxes or other taxes giving rise to such refund), net of all out-of-pocket
      expenses of the Administrative Agent or such Lender and without interest (other
      than any interest paid by the relevant Governmental Authority with respect
      to
      such refund); provided, that the Borrower, upon the request of the
      Administrative Agent or such Lender, agrees to repay the amount paid over to
      the
      Borrower (plus any penalties, interest or other charges imposed by the relevant
      Governmental Authority) to the Administrative Agent or such Lender in the event
      the Administrative Agent or such Lender is required to repay such refund to
      such
      Governmental Authority. This Section 5.03 shall not be construed to require
      the
      Administrative Agent or any Lender to make available its tax returns (or any
      other information relating to its taxes which it deems confidential) to the
      Borrower or any other Person.

     

    (g)  The
      agreements in this Section 5.03 shall survive the
      termination of this Agreement and the payment of the Loans and all other amounts
      payable hereunder.

     

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

     

    
      
        
        

      

      
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    Section
      5.05  Replacement
      of Lenders.  If
      (a) any Lender requests compensation under Section
      5.01, (b) the Borrower is required to pay any additional amount to any
      Lender or any Governmental Authority for the account of any Lender pursuant
      to
Section 5.03, (c) any Lender defaults in its
      obligation to fund Loans hereunder, or (d) any Lender has not approved a
      proposed waiver or amendment requiring 100% approval or consent but which has
      been approved by Lenders holding 75% or more of the then outstanding
      Commitments, then the Borrower may, at its sole expense and effort, upon notice
      to such Lender and the Administrative Agent, require such Lender to assign
      and
      delegate, without recourse (in accordance with and subject to the restrictions
      contained in Section 12.04(b)), all its interests, rights and obligations under
      this Agreement to an assignee that shall assume such obligations (which assignee
      may be another Lender, if a Lender accepts such assignment); provided that
      (i)
      the Borrower shall have received the prior written consent of the Administrative
      Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
      have received payment of an amount equal to the outstanding principal of its
      Loans, accrued interest thereon, accrued fees and all other amounts payable
      to
      it hereunder, from the assignee (to the extent of such outstanding principal
      and
      accrued interest and fees) or the Borrower (in the case of all other amounts)
      and (iii) in the case of any such assignment resulting from a claim for
      compensation under Section 5.01 or payments required
      to be made pursuant to Section 5.03, such assignment
      will result in a reduction in such compensation or payments.  A Lender
      shall not be required to make any such assignment and delegation if, prior
      thereto, as a result of a waiver by such Lender or otherwise, the circumstances
      entitling the Borrower to require such  assignment and delegation
      cease to apply.

     

    ARTICLE
      VI

    Conditions
      Precedent

     

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

     

    (a)  The
      Administrative Agent, the Arrangers and the Lenders shall have received all
      fees
      and other amounts due and payable on or prior to the Effective Date, including,
      to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
      required to be reimbursed or paid by the Borrower hereunder.

     

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

     

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

     

    
      
        
        

      

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

     

    (e)  The
      Administrative Agent shall have received from each party thereto duly executed
      counterparts (in such number as may be requested by the Administrative Agent)
      of
      the Guaranty Agreement.

     

    (f)  The
      Administrative Agent shall have received an opinion of Jones Walker, special
      counsel to the Borrower, substantially in a form and of substance reasonably
      acceptable to the Administrative Agent.

     

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

     

    (h)  The
      Administrative Agent shall have received a certificate of a Responsible Officer
      of the Borrower certifying that (i) all government and third party approvals
      necessary in connection with the Transactions have been obtained on satisfactory
      terms and (ii) no action or proceeding is pending or threatened in any court
      or
      before any Governmental Authority seeking to restrain or prohibit the
      consummation of the transactions contemplated by the Acquisition Documents
      or to
      obtain substantial damages from the Borrower related to the Acquisition
      Documents.

     

    (i)  The
      Administrative Agent shall have received the financial statements referred
      to in
      Sections 7.04(a) and 7.04(b) and the Initial Reserve Report and the officer’s
      certificate relating thereto which are delivered under the Senior Credit
      Agreement.  The Administrative Agent and the Lenders shall have
      received projections (broken down by quarter for the first year and by year
      thereafter) for the Borrower and its Restricted Subsidiaries after giving effect
      to the Acquisition and the other transactions contemplated hereby through the
      fifth anniversary of the Effective Date.

     

    (j)  The
      Administrative Agent shall have received evidence that the Borrower has
      purchased one or more commodity price swaps with one or more Approved
      Counterparties which have aggregate notional volumes of not less than 80% of
      the
      reasonably estimated projected crude oil production and not less than 80% of
      the
      reasonably estimated projected natural gas production, in each case, from its
      proved developed, producing Oil and Gas Properties (excluding Main Pass 299)
      as
      determined by reference to the Initial Reserve Reports for each year during
      the
      calendar years 2008, 2009 and 2010; provided however, that the Swap Agreements
      for production related to months during July, August, September and October
      during each such calendar year shall be in the form of puts and/or
      floors.

     

    (k)  The
      Administrative Agent shall have received a certificate of a Responsible Officer
      of the Borrower certifying:  (A) that the Borrower is concurrently
      consummating the Acquisition in accordance with applicable law and the terms
      of
      the Acquisition Documents (with all of the material conditions precedent thereto
      having been satisfied in all material respects or waived by the parties thereto)
      and acquiring substantially all of the Acquisition Properties contemplated
      by
      the Acquisition Documents (other than the Preferential Purchase Right
      Properties); (B) that no provision of the Acquisition Agreement has been waived,
      amended, supplemented or otherwise modified in any respect materially adverse
      to
      the Borrower or the Lenders without the prior consent of the Arrangers; (C)
      that
      the terms of the other Acquisition Documents are not inconsistent in any
      material respect with the terms of the Acquisition Agreement; (D) that attached
      thereto is the Preliminary Closing Statement as defined in the Acquisition
      Documents in such detail as may reasonably be requested by the 

     

    
      
        
        

      

      
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    Administrative
      Agent; and (E) that attached thereto are (i) a true and complete list of all
      Preferential Purchase Right Properties which are currently pending final
      decision by a third party regarding purchase of such property in accordance
      with
      such preferential right; (ii) a true and complete executed copy of each of
      the
      Acquisition Documents; and (iii) original counterparts or copies, certified
      as
      true and complete, of the bills of sale and assignment to the Borrower for
      all
      of the Acquisition Properties.

     

    (l)  The
      Administrative Agent shall have received a certificate of a Responsible Officer
      of the Borrower certifying that immediately after giving effect to the
      Acquisition, the Borrower and its Restricted Subsidiaries will have outstanding
      no Debt for borrowed money or Disqualified Stock other than (A) the
      Indebtedness under this Agreement; (B) Debt associated with the Senior
      Loans in an aggregate principal amount of not less than $700,000,000; (C) the
      Existing Convertible Notes and (D) the Parent Loan.

     

    (m)  The
      Administrative Agent shall have received a certificate of a Financial Officer
      of
      the Borrower certifying that, after giving effect to the Acquisition, the
      borrowings under this Agreement and the Senior Credit Agreement, the Borrower
      and its Restricted Subsidiaries, taken as a whole, are solvent as contemplated
      by Section 7.22.

     

    (n)  The
      Administrative Agent shall have received evidence reasonably satisfactory to
      Administrative Agent of the payment in full of all amounts due under the Second
      Lien Term Loan Agreement and the release of all Liens securing such obligations
      and any other obligations secured thereby contemporaneously with the proceeds
      of
      the initial funding under this Agreement.

     

    (o)  The
      Administrative Agent shall have received (i) a complete and correct copy of
      the
      Senior Secured Credit Agreement, in form and substance satisfactory to the
      Administrative Agent certified as to authenticity by the Borrower and such
      agreement shall be in full force and effect and none of the provisions thereof
      shall have been amended, waived, supplemented, or otherwise modified without
      the
      prior written consent of the Administrative Agent and (ii) satisfactory evidence
      that all conditions precedent for the funding of the Senior Secured Credit
      Agreement shall have been satisfied or waived contemporaneously with the
      satisfaction of the conditions hereunder and such funding shall occur
      contemporaneously with the funding of the Initial Loans, in each case on terms
      and conditions satisfactory to the Administrative Agent, and none of the
      material terms and conditions of the Senior Secured Credit Agreement shall
      have
      been waived without the consent of the Administrative Agent.

     

    The
      Administrative Agent shall notify the Borrower and the Lenders of the Effective
      Date, and such notice shall be conclusive and
      binding.  Notwithstanding the foregoing, the obligations of the
      Lenders to make Loans hereunder shall not become effective unless each of the
      foregoing conditions is satisfied (or waived pursuant to Section 12.02) at or prior to 1:00 p.m., New York New
      York time, on August 15, 2007 (and, in the event such conditions are not so
      satisfied or waived, the Commitments shall terminate at such time).

     

    Section
      6.02  Each
      Credit Event.  The
      obligation of each Lender to make a Loan on the Effective Date is also subject
      to the satisfaction of the following conditions:

     

    (a)  At
      the
      time of and immediately after giving effect to such Borrowing, no Default shall
      have occurred and be continuing.

     

    (b)  The
      representations and warranties of the Borrower and the Guarantors set forth
      in
      this Agreement and in the other Loan Documents shall be true and correct on
      and
      as of the Effective Date; provided that with respect to the initial funding
      on
      the Effective Date, the Borrower is 

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    not
      required to make the representation contained in Section 7.04(c) and the only
      representations (and related Defaults) the making of which shall be a condition
      precedent under this Section 6.02(b) on the Effective Date shall be (i) with
      respect to the Borrower and its Restricted Subsidiaries, those representations
      contained in Sections 7.01, 7.02, 7.03(b) (but only with respect to a Loan
      Party’s charter, by-laws or other organizational documents), 7.08 and 7.22 and
      (ii) with respect to the Acquisition Properties, such of the representations
      made by or with respect to the Assets in the Acquisition Agreement as are
      material to the interests of the Lenders (but only to the extent that the
      Borrower has the right to terminate its obligations under the Acquisition
      Agreement as a result of a breach of such representations in the Acquisition
      Agreement (determined without regard to any waiver, amendment or other
      modification of the Acquisition Agreement)).

     

    (c)  The
      receipt by the Administrative Agent of a Borrowing Request in accordance with
Section 2.02.

     

    ARTICLE
      VII

    Representations
      and Warranties

     

    The
      Borrower represents and warrants to the Lenders that:

     

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

     

    Section
      7.02  Authority;
      Enforceability.  The
      Transactions are within each Loan Party’s corporate powers and have been duly
      authorized by all necessary corporate and, if required, stockholder
      action.  Each Loan Document and Acquisition Document to which a Loan
      Party is a party has been duly executed and delivered by it and constitutes
      its
      legal, valid and binding obligation, as applicable, enforceable in accordance
      with its terms, subject to applicable bankruptcy, insolvency, reorganization,
      moratorium or other laws affecting creditors’ rights generally and subject to
      general principles of equity, regardless of whether considered in a proceeding
      in equity or at law.

     

    Section
      7.03  Approvals;
      No Conflicts.  The
      Transactions (a) do not require any consent or approval of, registration or
      filing with, or any other action by, any Governmental Authority or any other
      third Person, nor is any such consent, approval, registration, filing or other
      action necessary for the validity or enforceability of any Loan Document or
      the
      consummation of the transactions contemplated thereby, except such as have
      been
      obtained or made and are in full force and effect other than the recording
      and
      filing of the Security Instruments as required by this Agreement, (b) will
      not
      violate any applicable law or regulation or the charter, by-laws or other
      organizational documents of any Loan Party or any order of any Governmental
      Authority, (c) will not violate or result in a default under any indenture,
      agreement or other instrument binding upon any Loan Party or its Properties,
      or
      give rise to a right thereunder to require any payment to be made by any Loan
      Party and (d) will not result in the creation or imposition of any Lien on
      any
      Property of any Loan Party (other than the Liens created by the Loan
      Documents).

     

    Section
      7.04  Financial
      Condition; No Material Adverse Change.

     

    
      
        
        

      

      
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    (a)  The
      Borrower has furnished to the Lenders (i) its audited consolidated balance
      sheets and related statements of income, stockholders’ equity and cash flows as
      of and for the fiscal years ended December 31, 2006, December 31, 2005 and
      December 31, 2004 (which audit reports for such financial statements are not
      subject to any qualification), (ii) its unaudited consolidated balance sheets
      and related statements of income, stockholders’ equity and cash flows for the
      fiscal quarter ended March 31, 2007, (iii) audited statements of revenues and
      operating expenses for the Assets for the fiscal year ended December 31, 2006
      (which audit reports for such financial statements are not subject to any
      qualification) and (iv) unaudited statements of revenues and operating expenses
      for the Assets for the fiscal quarter ending March 31, 2007 (and for the
      comparable period in the preceding fiscal year), which financial statements
      shall be prepared in accordance with GAAP.  The financial statements
      in clauses (i) and (ii) present fairly, in all material respects, consolidated
      financial condition of the Borrower as of the dates and for the periods set
      forth above in accordance with GAAP, subject to year-end audit adjustments
      and
      the absence of footnotes in the case of the unaudited quarterly financial
      statements.  The financial statements in clauses (iii) and (iv)
      present fairly, in all material respects, revenues and operating expenses for
      the Assets as of the dates and for the periods set forth above in accordance
      with GAAP, subject to year-end audit adjustments and the absence of footnotes
      in
      the case of the unaudited quarterly financial statements.

     

    (b)  The
      Borrower has heretofore furnished to the Lenders a pro forma
      consolidated balance sheet of the Borrower as of June 30, 2007 and a pro
      forma statement of operations as of December 31, 2006, and as of June 30,
      2007 and 12-month period ending on June 30, 2007, in each case adjusted to
      give
      effect to the Acquisition and the other transactions contemplated hereby, the
      other transactions related thereto and any other transactions that would be
      required to be given pro forma effect by Regulation S-X promulgated
      under the Securities Act and such other adjustments as are agreed between the
      Borrower and the Arrangers.

     

    (c)  Since
      December 31, 2006, there has been no event, development or circumstance that
      has
      had or could reasonably be expected to have a Material Adverse
      Effect.

     

    (d)  Neither
      the Borrower nor any of its Restricted Subsidiaries has on the date hereof
      any
      material Debt (including Disqualified Stock) or any contingent liabilities,
      off-balance sheet liabilities or partnerships, liabilities for taxes, unusual
      forward or long-term commitments or unrealized or anticipated losses from any
      unfavorable commitments, except as referred to or reflected or provided for
      in
      the Financial Statements.

     

    Section
      7.05  Litigation.

     

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

     

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

     

    Section
      7.06  Environmental
      Matters.  Except
      as could not be reasonably expected to have a Material Adverse Effect (or with
      respect to (c), (d) and (e) below, where the failure to take such actions could
      not be reasonably expected to have a Material Adverse Effect):

     

    
      
        
        

      

      
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    (a)  neither
      any Property of the Borrower and its Restricted Subsidiaries nor the operations
      conducted thereon violate any order or requirement of any court or Governmental
      Authority or any Environmental Laws.

     

    (b)  no
      Property of the Borrower and its Restricted Subsidiaries nor the operations
      currently conducted thereon are in violation of or subject to any existing,
      pending or threatened action, suit, investigation, inquiry or proceeding by
      or
      before any court or Governmental Authority or to any remedial obligations under
      Environmental Laws.

     

    (c)  all
      notices, permits, licenses, exemptions, approvals or similar authorizations,
      if
      any, required to be obtained or filed in connection with the operation or use
      of
      any and all Property of the Borrower and its Restricted Subsidiaries, including,
      without limitation, past or present treatment, storage, disposal or release
      of a
      hazardous substance, oil and gas waste or solid waste into the environment,
      have
      been duly obtained or filed, and the Borrower and its Restricted Subsidiaries
      are in compliance with the terms and conditions of all such notices, permits,
      licenses and similar authorizations.

     

    (d)  all
      hazardous substances, solid waste and oil and gas waste, if any, generated
      at
      any and all Property of the Borrower and its Restricted Subsidiaries 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 the environment, and, to the actual knowledge of the Borrower, all
      such transport carriers and treatment and disposal facilities have been and
      are
      operating in compliance with Environmental Laws and so as not to pose an
      imminent and substantial endangerment to public health or the environment,
      and
      are not the subject of any existing, pending or threatened action, investigation
      or inquiry by any Governmental Authority in connection with any Environmental
      Laws.

     

    (e)  the
      Borrower has taken all steps reasonably necessary to determine and has
      determined that no oil, hazardous substances, solid waste or oil and gas waste,
      have been disposed of or otherwise released and there has been no threatened
      release of any oil, hazardous substances, solid waste or oil and gas waste
      on or
      to any Property of the Borrower and its Restricted Subsidiaries except in
      compliance with Environmental Laws and so as not to pose an imminent and
      substantial endangerment to public health or welfare or the
      environment.

     

    (f)  to
      the
      extent applicable, all Property of the Borrower and its Restricted Subsidiaries
      currently satisfies all design, operation, and equipment requirements imposed
      by
      the OPA, and the Borrower does not have any reason to believe that such
      Property, to the extent subject to the OPA, will not be able to maintain
      compliance with the OPA requirements during the term of this
      Agreement.

     

    (g)  neither
      the Borrower nor any Restricted Subsidiary has any known contingent liability
      or
      Remedial Work in connection with any release or threatened release of any oil,
      hazardous substance, solid waste or oil and gas waste into the
      environment.

     

    Section
      7.07  Compliance
      with the Laws and Agreements; No Defaults.

     

    (a)  The
      Borrower and its Restricted Subsidiaries are in compliance with all Governmental
      Requirements applicable to it or its Property and all agreements and other
      instruments binding upon it or its Property, and possesses all licenses,
      permits, franchises, exemptions, approvals and other governmental authorizations
      necessary for the ownership of its Property and the conduct of its 

     

    
      
        
        

      

      
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    business,
      except where the failure to do so, individually or in the aggregate, could
      not
      reasonably be expected to result in a Material Adverse Effect.

     

    (b)  Neither
      the Borrower nor any of its Restricted Subsidiaries are in default nor has
      any
      event or circumstance occurred which, but for the expiration of any applicable
      grace period or the giving of notice, or both, would constitute a default or
      would require the Borrower or any Restricted Subsidiary to Redeem or make any
      offer to Redeem all or any portion of any Debt outstanding under any indenture,
      note, credit agreement or instrument pursuant to which any Material Indebtedness
      is outstanding or by which the Borrower or any of its Restricted Subsidiaries
      or
      any of their Properties is bound.

     

    (c)  No
      Default has occurred and is continuing.

     

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

     

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

     

    Section
      7.10  ERISA.

     

    (a)  The
      Borrower 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
      the
      Borrower or any of its Subsidiaries or any ERISA Affiliate (whether directly
      or
      indirectly) of (i) either a civil penalty assessed pursuant to subsections
      (c),
      (i) or (l) of section 502 of ERISA or a tax imposed pursuant to Chapter 43
      of
      Subtitle D of the Code or (ii) breach of fiduciary duty liability damages
      under section 409 of ERISA.

     

    (d)  Except
      as
      provided in Schedule 7.10(d), no Plan (other than a defined contribu­tion
      plan) or any trust created under any such Plan has been terminated since
      September 2, 1974.  No liability to the PBGC (other than for the
      payment of current premiums which are not past due) by the Borrower or any
      of
      its Subsidiaries or any ERISA Affiliate has been or is expected by any Loan
      Party or any ERISA Affiliate to be incurred with respect to any
      Plan.  No ERISA Event with respect to any Plan has
      occurred.

     

    (e)  Full
      payment when due has been made of all amounts which Borrower or any of its
      Subsidiaries or any ERISA Affiliate is required under the terms of each Plan
      or
      applicable law to have paid as contribu­tions to such Plan as of the date
      hereof, no accumulated funding deficiency (as 

     

    
      
        
        

      

      
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    defined
      in section 302 of ERISA and section 412 of the Code), whether or not waived,
      exists with respect to any Plan and, on and after the effectiveness of the
      Pension Act, and no Plan has failed to satisfy the minimum funding standards
      (within the meaning of Section 412 of the Code or Section 302 of ERISA)
      applicable to such Plan.

     

    (f)  Except
      as
      provided in Schedule 7.10(f), the actuarial present value of the benefit
      liabilities under each Plan which is subject to Title IV of ERISA does not,
      as of the end of the Borrower’s most recently ended fiscal year, exceed the
      current value of the assets (computed on a plan termination basis in accordance
      with Title IV of ERISA) of such Plan allocable to such benefit liabilities
      by an amount in excess of $500,000.  The term “actuarial present value
      of the benefit liabilities” shall have the meaning specified in section 4041 of
      ERISA.

     

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

     

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

     

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

     

    Section
      7.11  Disclosure;
      No Material Misstatements.  The
      Borrower has disclosed to the Administrative Agent and the Lenders all material
      agreements, instruments and corporate or other restrictions to which it or
      any
      of its Restricted Subsidiaries is subject, and all other matters known to it,
      that, individually or in the aggregate, could reasonably be expected to result
      in a Material Adverse Effect.  None of the reports, financial
      statements, certificates or other information furnished by or on behalf of
      the
      Borrower and its Restricted Subsidiaries to the Administrative Agent or any
      Lender or any of their Affiliates in connection with the negotiation of this
      Agreement or any other Loan Document or delivered hereunder or under any other
      Loan Document (as modified or supplemented by other information so furnished)
      contains any material misstatement of fact or omits to state any material fact
      necessary to make the statements therein, in the light of the circumstances
      under which they were made, not misleading; provided that, with respect to
      projected financial information, the Borrower represents only that such
      information was prepared in good faith based upon assumptions believed to be
      reasonable at the time; and further provided that the representations regarding
      information and projections with respect to the Acquisition Properties shall
      be
      limited to the best knowledge of the Borrower.  There is no fact
      peculiar to the Borrower and its Restricted Subsidiaries which could reasonably
      be expected to have a Material Adverse Effect or in the future is reasonably
      likely to have a Material Adverse Effect and which has not been set forth in
      this Agreement or the Loan Documents or the other documents, certificates and
      statements furnished to the Administrative Agent or the Lenders by or on behalf
      of the Borrower and its Restricted Subsidiaries prior to, or on, the date hereof
      in connection with the transactions contemplated hereby.  There are no
      statements or conclusions in any Reserve Report which are based upon or include
      misleading information or fail to take into account material information
      regarding the matters reported therein, it being understood that projections
      concerning volumes attributable to the Oil and Gas Properties and production
      and
      cost estimates contained in each Reserve Report are necessarily based upon
      professional opinions, estimates and projections and that neither the Borrower,
      Restricted the Subsidiaries 

     

    
      
        
        

      

      
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    nor
      such
      Responsible Officer warrants that such opinions, estimates and projections
      will
      ultimately prove to have been accurate.

     

    Section
      7.12  Insurance.  The
      Borrower has, and has caused all of its Restricted Subsidiaries to have, (a)
      all
      insurance policies sufficient for the compliance by each of them with all
      material Governmental Requirements and all material agreements and (b) insurance
      coverage in at least amounts and against such risk (including, without
      limitation, public liability) that are usually insured against by companies
      similarly situated and engaged in the same or a similar business for the assets
      and operations of the Borrower and its Restricted
      Subsidiaries.  Schedule 7.12, as of the date hereof, sets forth a list
      of all insurance maintained by the Borrower and all its Restricted
      Subsidiaries.  The Administrative Agent and the Lenders have been
      named as additional insureds in respect of such liability insurance
      policies.

     

    Section
      7.13  Restriction
      on Liens.  Neither
      the Borrower nor any of its Restricted Subsidiaries is a party to any material
      agreement or arrangement (other than the Senior Credit Agreement, this Agreement
      and Capital Leases creating Liens permitted by clause (x) and clause (xxiii)
      of
      the definition of Permitted Liens), but then only on the Property subject of
      such Capital Lease), or subject to any order, judgment, writ or decree, which
      either restricts or purports to restrict its ability to grant Liens to the
      Administrative Agent and the Lenders on or in respect of their Properties to
      secure the Indebtedness and the Loan Documents.

     

    Section
      7.14  Subsidiaries.  Except
      as set forth on Schedule 7.14 or as disclosed in writing to the Administrative
      Agent (which shall promptly furnish a copy to the Lenders), which shall be
      a
      supplement to Schedule 7.14, the Borrower has no
      Subsidiaries.  Schedule 7.14 sets forth each Subsidiary’s status as a
      Restricted Subsidiary or an Unrestricted Subsidiary.

     

    Section
      7.15  Location
      of Business and Offices.  The
      Borrower’s jurisdiction of organization is Delaware; the name of the Borrower as
      listed in the public records of its jurisdiction of organization is McMoRan
      Exploration Co.; and the organizational identification number of the Borrower
      in
      its jurisdiction of organization is 2927190 (or, in each case, as set forth
      in a
      notice delivered to the Administrative Agent pursuant to Section 8.01(m) in accordance with Section 12.01). The Borrower’s principal place of
      business and chief executive offices are located at the address specified in
Section 12.01 (or as set forth in a notice delivered
      pursuant to Section 8.01(m) and Section 12.01(c)).  Each Subsidiary’s
      jurisdiction of organization, name as listed in the public records of its
      jurisdiction of organization, organizational identification number in its
      jurisdiction of organization, and the location of its principal place of
      business and chief executive office is stated on Schedule 7.14 (or as set forth
      in a notice delivered pursuant to Section
      8.01(m)).

     

    Section
      7.16  Properties;
      Titles, Etc.

     

    (a)  Except
      as
      set forth in Schedule 7.16, each of the Borrower and the Restricted Subsidiaries
      (as applicable) has good and defensible title to the Oil and Gas Properties
      evaluated in the most recently delivered Reserve Report and good title to all
      its personal Properties, in each case, free and clear of all Liens except Liens
      permitted by Section 9.03.  After giving
      full effect to the Permitted Liens, the Borrower or the Restricted Subsidiary
      specified as the owner owns the net interests in production attributable to
      the
      Hydrocarbon Interests as reflected in the most recently delivered Reserve
      Report, and the ownership of such Properties shall not in any material respect
      obligate the Borrower or such Restricted Subsidiary to bear the costs and
      expenses relating to the maintenance, development and operations of each such
      Property in an amount in excess of the working interest of each Property set
      forth in the most recently delivered Reserve Report that is not offset by a
      corresponding proportionate increase in the Borrower’s or such Restricted
      Subsidiary’s net revenue interest in such Property.  The Borrower owns
      no direct interests in any Oil and Gas Properties.

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    Section
      7.18  Gas
      Imbalances, Prepayments.  Except
      as set forth on Schedule 7.18, on a net basis there are no gas imbalances,
      take
      or pay or other prepayments which would require the Borrower or any of its
      Restricted Subsidiaries to deliver Hydrocarbons produced from the Oil and Gas
      Properties at some future time without then or thereafter receiving full payment
      therefor exceeding two and one-half percent (2.5%) of the aggregate volumes
      of
      Hydrocarbons (on an Mcf equivalent basis) listed in the most recent Reserve
      Report.

     

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

     

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

     

    Section
      7.21  Use
      of
      Loans.  The
      proceeds of the Loans shall be used to refinance the Second Lien Notes, to
      provide funding in connection with the Acquisition, to provide for bonding
      requirement with the MMS (defined herein), to provide working capital for
      exploration and production operations and to provide funding for general
      corporate purposes of the Borrower and its Restricted
      Subsidiaries.  Neither the Borrower nor any Restricted Subsidiary is
      engaged principally, or as one of its or their important activities, in the
      business of extending credit for the purpose, whether immediate, incidental
      or
      ultimate, of buying or carrying margin stock (within the meaning of Regulation
      T, U or X of the Board).  No part of the proceeds of any Loan will be
      used for any purpose which violates the provisions of Regulations T, U or X
      of
      the Board.

     

    Section
      7.22  Solvency.  After
      giving effect to the transactions contemplated hereby, (a) the aggregate assets
      (after giving effect to amounts that could reasonably be received by reason
      of
      indemnity, offset, insurance or any similar arrangement), at a fair valuation,
      of the Loan Parties, taken as a whole, will exceed the aggregate Debt of the
      Loan Parties on a consolidated basis, as the Debt becomes absolute and matures,
      (b) each Loan Party will not have incurred or intended to incur, and will not
      believe that it will incur, Debt beyond its ability to pay such Debt (after
      taking into account the timing and amounts of cash to be received by it and
      the
      amounts to be payable on or in respect of its liabilities, and giving effect
      to
      amounts that could reasonably be received by reason of indemnity, offset,
      insurance or any similar arrangement) as such Debt becomes absolute and matures
      and (c) each Loan Party will not have (and will have no reason to believe that
      it will have thereafter) unreasonably small capital for the conduct of its
      business.

     

    
      
        
        

      

      
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    ARTICLE
      VIII 

    Affirmative
      Covenants

     

    Except
      as
      modified on the Initial Maturity Date as set forth in Section 12.02, until
      the
      principal of and interest on each Loan and all fees payable hereunder and all
      other amounts payable under the Loan Documents shall have been paid in full,
      the
      Borrower covenants and agrees with the Lenders that:

     

    Section
      8.01  Financial
      Statements; Other Information.  The
      Borrower will furnish to the Administrative Agent and each Lender:

     

    (a)  Annual
      Financial Statements.  As soon as available, but in any event in
      accordance with then applicable law and not later than 90 days after the end
      of
      each fiscal year of the Borrower, its audited consolidated balance sheets and
      related statements of operations, stockholders’ equity, as applicable, and cash
      flows as of the end of and for such year, setting forth in each case in
      comparative form the figures for the previous fiscal year, all reported on
      by
      Ernst & Young LLP or other independent public accountants of recognized
      national standing (without a “going concern” or like qualification or exception
      and without any qualification or exception as to the scope of such audit) to
      the
      effect that such consolidated financial statements present fairly in all
      material respects the financial condition and results of operations of the
      Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
      with GAAP consistently applied.

     

    (b)  Quarterly
      Financial Statements.  As soon as available, but in any event in
      accordance with then applicable law and not later than 45 days after the end
      of
      each of the first three fiscal quarters of each fiscal year of the Borrower,
      its
      consolidated balance sheet and related statements of operations and cash flows
      as of the end of and for such fiscal quarter and the then elapsed portion of
      the
      fiscal year, setting forth in each case in comparative form the figures for
      the
      corresponding period or periods of (or, in the case of the balance sheet, as
      of
      the end of) the previous fiscal year, all certified by one of its Financial
      Officers as presenting fairly in all material respects the financial condition
      and results of operations of the Borrower and its consolidated Subsidiaries
      on a
      consolidated basis in accordance with GAAP consistently applied, subject to
      normal year-end audit adjustments and the absence of footnotes.

     

    (c)  Certificate
      of Financial Officer -- Compliance.  Concurrently with any
      delivery of financial statements under Section
      8.01(a) or Section 8.01(b), commencing with the
      delivery of financial statements for the fiscal quarter ending September 30,
      2007,a certificate of a Financial Officer of the Borrower in substantially
      the
      form of Exhibit D hereto certifying as to whether a Default has occurred and,
      if
      a Default has occurred, specifying the details thereof and any action taken
      or
      proposed to be taken with respect thereto.

     

    (d)  Certificate
      of Financial Officer – Swap Agreements.  Concurrently with any
      delivery of financial statements under Section
      8.01(a) and Section 8.01(b), commencing with the
      delivery of financial statements for the fiscal quarter ending September 30,
      2007, a certificate of a Financial Officer, in form and substance satisfactory
      to the Administrative Agent, setting forth as of the last Business Day of such
      fiscal quarter or fiscal year, a true and complete list of all Swap Agreements
      of each Loan Party, the material terms thereof (including the type, term,
      effective date, termination date and notional amounts or volumes), the net
      mark-to-market value therefor, any new credit support agreements relating
      thereto not listed on Schedule 7.20, any margin required or supplied under
      any
      credit support document, and the counterparty to each such
      agreement.

     

    (e)  Certificate
      of Financial Officer -- Consolidating Information.  If, at any
      time, all of the consolidated Subsidiaries of the Borrower are not Consolidated
      Subsidiaries, then 

     

    
      
        
        

      

      
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    concurrently
      with any delivery of financial statements under Section 8.01(a) or Section
      8.01(b), a certificate of a Financial Officer setting forth consolidating
      spreadsheets that show all Unrestricted Subsidiaries and the eliminating
      entries, in such form as would be presentable to the auditors of the
      Borrower.

     

    (f)  Certificate
      of Insurer -- Insurance Coverage.  Concurrently with any delivery
      of financial statements under Section 8.01(a), a
      certificate of insurance coverage with respect to the insurance required by
Section 8.07, in form and substance satisfactory to the
      Administrative Agent, and, if requested by the Administrative Agent or any
      Lender, all copies of the applicable policies.

     

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

     

    (h)  SEC
      and Other Filings; Reports to Shareholders.  Promptly after the
      same become publicly available, copies of all periodic and other reports, proxy
      statements and other materials filed by the Borrower with the SEC,
      or  with any national securities exchange, or distributed by the
      Borrower to its shareholders generally, as the case may be.  Documents
      required to be delivered pursuant to Section 8.01 may be delivered
      electronically and if so delivered, shall be deemed to have been delivered
      on
      the date on which the Borrower posts such documents to EDGAR (or such other
      free, publicly-accessible internet database that may be established and
      maintained by the SEC as a substitute for or successor to EDGAR).

     

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

     

    (j)  Lists
      of Purchasers.  Concurrently with the delivery of any Reserve
      Report to the Administrative Agent pursuant to Section
      8.12, a list of all Persons purchasing Hydrocarbons from the Borrower or any
      Restricted Subsidiary.

     

    (k)  Notice
      of Sales of Oil and Gas Properties.  In the event the Borrower or
      any Restricted Subsidiary intends to sell, transfer, assign or otherwise dispose
      of any Oil or Gas Properties or any Equity Interests in any Restricted
      Subsidiary with a fair market value in excess of $5,000,000 in accordance with
      Section 9.11, prior written notice of such disposition, the price thereof and
      the anticipated date of closing and any other details thereof reasonably
      requested by the Administrative Agent or any Lender.

     

    (l)  Notice
      of Casualty Events.  Prompt written notice, and in any event
      within three Business Days, of the occurrence of any Casualty Event or the
      commencement of any legal action or proceeding that could reasonably be expected
      to result in a Casualty Event, in each case, of any Property of any Loan Party
      having a fair market value in excess of $10,000,000.

     

    (m)  Information
      Regarding Borrower and Guarantors.  Prompt written notice of (and
      in any event at least ten (10) Business Days following) any change (i) in
      the Borrower or any Guarantor’s corporate name or in any trade name used to
      identify such Person in the conduct of its business or in the ownership of
      its
      Properties, (ii) in the location of the Borrower or any Guarantor’s

     

    
      
        
        

      

      
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    chief
      executive office or principal place of business, (iii) in the Borrower or
      any Guarantor’s identity or corporate structure or in the jurisdiction in which
      such Person is incorporated or formed, (iv) in the Borrower or any Guarantor’s
      jurisdiction of organization or such Person’s organizational identification
      number in such jurisdiction of organization, and (v) in the Borrower or any
      Guarantor’s federal taxpayer identification number.

     

    (n)  Production
      Report and Lease Operating Statements.  In connection with each
      Reserve Report delivered pursuant to Section 8.12(a), a report setting forth,
      for each month during the then current fiscal year to date, the volume of
      production and sales attributable to production (and the prices at which such
      sales were made and the revenues derived from such sales) for each such calendar
      month during such period from the Oil and Gas Properties, and setting forth
      the
      related ad valorem, severance and production taxes and lease operating expenses
      attributable thereto and incurred for each such calendar month.

     

    (o)  Notices
      Relating to Acquisition.  In the event that after the Effective
      Date:  (i) the Borrower is required to purchase any Preferential
      Purchase Right Property, (ii) the Borrower and the Seller calculate and agree
      upon the “final settlement statement” as contemplated by the Acquisition
      Documents, or (iii) the Borrower furnishes the Seller with any notices or
      reports under the P&A Escrow Agreement then, in each such case, the Borrower
      shall promptly give the Administrative Agent notice in reasonable detail of
      such
      circumstances.

     

    (p)  Patriot
      Act.  Promptly upon request, all documentation and other
      information required by regulatory authorities under applicable “know your
      customer” and anti-money laundering rules and regulations, including the USA
      Patriot Act.

     

    (q)  Other
      Requested Information.  Promptly following any request therefor,
      such other information regarding the operations, business affairs and financial
      condition of the Borrower or any Subsidiary (including, without limitation,
      any
      Plan or Multiemployer Plan and any reports or other information required to
      be
      filed under ERISA), or compliance with the terms of this Agreement or any other
      Loan Document, as the Administrative Agent or any Lender may reasonably
      request.

     

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

     

    (a)  the
      occurrence of any Default;

     

    (b)  the
      filing or commencement of, or the threat in writing of, any action, suit,
      proceeding, investigation or arbitration by or before any arbitrator or
      Governmental Authority against or affecting the Borrower or any Restricted
      Subsidiary thereof not previously disclosed in writing to the Lenders or any
      material adverse development in any action, suit, proceeding, investigation
      or
      arbitration (whether or not previously disclosed to the Lenders) that, in either
      case could reasonably be expected to result in liability in excess of
      $10,000,000, not fully covered by insurance, subject to normal
      deductibles;

     

    (c)  the
      occurrence of any ERISA Event that, alone or together with any other ERISA
      Events that have occurred, could reasonably be expected to result in liability
      of the Borrower or any Restricted Subsidiary in an aggregate amount exceeding
      $5,000,000; and

     

    (d)  any
      other
      development that results in, or could reasonably be expected to result in,
      a
      Material Adverse Effect.

     

     

    
      
        
        

      

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

     

    Section
      8.03  Existence;
      Conduct of Business.  The
      Borrower will, and will cause each Restricted Subsidiary to, do or cause to
      be
      done all things necessary to preserve, renew and keep in full force and effect
      its legal existence and the rights, licenses, permits, privileges and franchises
      material to the conduct of its business and maintain, if necessary, its
      qualification to do business in each other jurisdiction in which its Oil and
      Gas
      Properties is located or the ownership of its Properties requires such
      qualification, except where the failure to so qualify could not reasonably
      be
      expected to have a Material Adverse Effect; provided that the foregoing shall
      not prohibit any merger, consolidation, liquidation or dissolution permitted
      under Section 9.10.

     

    Section
      8.04  Payment
      of Obligations.  The
      Borrower will, and will cause each Restricted Subsidiary to, pay its
      obligations, including tax liabilities of the Borrower and all of its Restricted
      Subsidiaries before the same shall become delinquent or in default, except
      where
      (a) the validity or amount thereof is being contested in good faith by
      appropriate proceedings, (b) the Borrower or such Restricted Subsidiary has
      set
      aside on its books adequate reserves with respect thereto in accordance with
      GAAP and (c) the failure to make payment pending such contest could not
      reasonably be expected to result in a Material Adverse Effect.

     

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

     

    Section
      8.06  Operation
      and Maintenance of Properties.  The
      Borrower, at its own expense, will, and will cause each Restricted Subsidiary
      to:

     

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

     

    (b)  keep
      and
      maintain in good repair, working order and condition (ordinary wear and tear
      excepted) all of its material Oil and Gas Properties and other Properties
      material to the conduct of its business, including, without limitation, all
      equipment, machinery and facilities, except to the extent any such Property
      is
      no longer capable of producing Hydrocarbons in economically reasonable
      amounts.

     

    (c)  promptly
      pay and discharge, or make commercially reasonable 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.

     

    
      
        
        

      

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

     

    (e)  to
      the
      extent the Borrower is not the operator of any Property, the Borrower shall
      use
      commercially reasonable efforts to cause the operator to comply with this Section 8.06.

     

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

     

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

     

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

     

    Section
      8.10  Environmental
      Matters.

     

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

     

    
      
        
        

      

      
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    gas
      waste, hazardous substance or solid waste on, under, about or from any of the
      Borrower’s or its Restricted Subsidiaries’ Properties, which failure to commence
      and diligently prosecute to completion could reasonably be expected to have
      a
      Material Adverse Effect; and (v) establish and implement, and shall cause
      each Restricted Subsidiary to establish and implement, such policies of
      environmental audit and compliance as may be necessary to continuously determine
      and assure that the Borrower’s and its Restricted Subsidiaries’ obligations
      under this Section 8.10(a)
      are timely and fully satisfied, which failure to establish and implement could
      reasonably be expected to have a Material Adverse Effect.

     

    (b)  The
      Borrower will promptly, but in no event later than five days of the occurrence
      of a triggering event, notify the Administrative Agent and the Lenders in
      writing of any threatened action, investigation or inquiry by any Governmental
      Authority or any threatened demand or lawsuit by any landowner or other third
      party against the Borrower or its Restricted Subsidiaries or their Properties
      of
      which the Borrower has knowledge in connection with any Environmental Laws
      (excluding routine testing and corrective action) if the Borrower reasonably
      anticipates that such action will result in liability (whether individually
      or
      in the aggregate) in excess of $10,000,000, not fully covered by insurance,
      subject to normal deductibles.

     

    Section
      8.11  Further
      Assurances.

     

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

     

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

     

    Section
      8.12  Reserve
      Reports.  The
      Borrower shall furnish to the Administrative Agent and the Lenders any Reserve
      Reports and any officer’s certificate relating thereto promptly after furnishing
      the same to the administrative agent and lenders under the Senior Credit
      Agreement.

     

    Section
      8.13  [Intentionally
      Omitted].

     

    Section
      8.14  Additional
      Guarantors.  The
      Borrower shall promptly cause each newly created or acquired Domestic Subsidiary
      that is a Wholly-Owned Subsidiary to guarantee the Indebtedness pursuant to
      the
      Guaranty Agreement.  In connection with any such guaranty, the
      Borrower shall, or shall cause such Domestic Subsidiary to: (i) execute and
      deliver a supplement to the Guaranty Agreement executed by such Subsidiary,
      and
      (ii) execute and deliver such other additional closing documents, certificates
      and legal opinions as shall reasonably be requested by the Administrative
      Agent.

     

    
      
        
        

      

      
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    Section
      8.15  ERISA
      Compliance.  The
      Borrower will promptly furnish and will cause each Subsidiary and any ERISA
      Affiliate to promptly furnish to the Administrative Agent (i) 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 of the Borrower or such other Loan Party or ERISA Affiliate, as the
      case
      may be, specifying the nature thereof, what action such Person 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 (ii) immediately upon receipt thereof, copies of
      any
      notice of the PBGC’s intention to terminate or to have a trustee appointed to
      administer any Plan.  With respect to each Plan (other than a
      Multiemployer Plan), the Borrower will, and will cause each Subsidiary and
      ERISA
      Affiliate to, (i) satisfy in full and in a timely manner, without incurring
      any
      late payment or underpayment charge or penalty and without giving rise to any
      lien, all of the contribution and funding requirements of section 412 of the
      Code (determined without regard to subsections (d), (e), (f) and (k) thereof)
      and of section 302 of ERISA (determined without regard to sections 303, 304
      and
      306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely
      manner, without incurring any late payment or underpayment charge or penalty,
      all premiums required pursuant to sections 4006 and 4007 of ERISA.

     

    Section
      8.16  Unrestricted
      Subsidiaries.  The
      Borrower:

     

    (a)  will
      cause the management, business and affairs of each of the Borrower and each
      Restricted Subsidiary to be conducted in such a manner (including, without
      limitation, by keeping separate books of account, furnishing separate financial
      statements of the Unrestricted Subsidiaries to creditors and potential creditors
      thereof and by not permitting Properties of the Borrower and each Restricted
      Subsidiary to be commingled) so that each Unrestricted Subsidiary that is a
      corporation will be treated as a corporate entity separate and distinct from
      Borrower and the Restricted Subsidiaries.

     

    (b)  unless
      and until the Covenant Effectiveness Date shall occur, will not, and will not
      permit any of the Restricted Subsidiaries to, incur, assume, guarantee or be
      or
      become liable for any Debt of any of the Unrestricted Subsidiaries except that
      the Borrower may guarantee or otherwise give credit support for Debt (other
      than
      Debt in respect of borrowed money) of the Unrestricted Subsidiaries to the
      extent it could make an Investment in such Unrestricted Subsidiary.

     

    (c)  will
      not
      permit any Unrestricted Subsidiary to hold any Equity Interest in, or any Debt
      of, the Borrower or any Restricted Subsidiary.

     

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

     

    
      
        
        

      

      
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    Section
      8.18  Swap
      Agreements.  The
      Borrower shall maintain the hedge position established by the Swap Agreements
      required under Section 6.01(j) during the period specified therein and shall
      neither assign, terminate or unwind any such Swap Agreements nor sell any Swap
      Agreements if the effect of such action (when taken together with any other
      Swap
      Agreements executed contemporaneously with the taking of such action) would
      have
      the effect of canceling its positions under such Swap Agreements required
      hereby.

     

    Section
      8.19  Second
      Lien.  If,
      on the 120th
      day after the Effective Date, all Loans shall not have been repaid in full,
      the
      Borrower will, and will cause each Guarantor to, within 30 days, (i) grant
      to
      the Administrative Agent, for the ratable benefit of the Lenders, a security
      interest in the Collateral as collateral security for the prompt and complete
      payment and performance when due of the Indebtedness pursuant to documentation
      substantially in the form of the Senior Loan Security Instruments, such security
      interest being prior and superior in right to any other Lien on the Collateral
      (other than the Lien securing the obligations under the Senior Credit Agreement
      and the related Hedging Obligations and non-consensual Permitted Liens preferred
      by operation of law) subject to the Intercreditor Agreement and (ii) execute
      and
      deliver the Intercreditor Agreement.  The Lenders hereby authorize the
      Administrative Agent to execute and deliver the appropriate documentation and
      the Intercreditor Agreement contemplated in this Section 8.19.  Upon
      reasonable request of the Administrative Agent, the Borrower will, and will
      cause each Guarantor to, execute and deliver such further instruments, documents
      and opinions and do such further acts as may be reasonably necessary or proper
      to carry out more effectively the purpose of this Section 8.19.

     

    Section
      8.20  Exchange
      Notes.  (a)  The
      Borrower shall, as promptly as practicable after the nine month anniversary
      of
      the Effective Date and in any event prior to the Initial Maturity Date, (i)
      enter into the Exchange Notes Indenture with a bank or trust company acting
      as
      indenture trustee thereunder (the “Trustee”), which shall be a
      corporation organized and doing business under the laws of the United States
      of
      America or any state thereof, in good standing, which is authorized under such
      laws to exercise corporate trust powers and is subject to supervision or
      examination by Federal or state authority and which has a combined capital
      and
      surplus of not less than $50,000,000, (ii) enter into the Exchange and
      Registration Rights Agreement, and (iii) cause counsel to the Borrower to
      deliver to the Administrative Agent an executed legal opinion in form and
      substance customary for a transaction of that type to be mutually agreed upon
      by
      the Borrower and the Administrative Agent (including, without limitation, with
      respect to due authorization, execution and delivery; validity; and
      enforceability of the Exchange Documents and the Exchange and Registration
      Rights Agreement).

     

    (b)           The
      Borrower will, on or prior to the third Business Day following the written
      request (the “Exchange Request”) of any Lender execute, and cause the
      Trustee to authenticate, and deliver to such Lender in accordance with the
      Exchange Notes Indenture an Exchange Note bearing interest as set forth therein
      in exchange for such Lender’s Loan dated the date of the issuance of such
      Exchange Note, registered in the name specified by such Lender, in the principal
      amount equal to 100% of the aggregate principal amount (including any accrued
      and unpaid interest not required to be paid in cash) of the Loans for which
      they
      are exchanged.  Each Exchange Request shall specify the principal
      amount of the Loans to be exchanged pursuant to this Section 8.20, which shall
      be at least $1,000,000 and in integral multiples of $100,000 in excess thereof
      and, if such Lender holds Loan Notes, be accompanied by the Loan Notes to be
      exchanged for Exchange Notes.  No Exchange Request shall be made more
      than thirty (30) days prior to, and no Exchange Note will be issued prior to,
      the Initial Maturity Date.  Any Loan Notes delivered to the Borrower
      under this Section 8.20 in exchange for Exchange Notes shall be canceled by
      the
      Borrower and the corresponding amount of the Lender’s Loan deemed repaid and the
      Exchange Notes shall be governed by and construed in accordance with the terms
      of the Exchange Notes Indenture.

     

    
      
        
        

      

      
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    (c)           If
      Exchange Notes are issued pursuant to the terms hereof, the holders of such
      Exchange Notes shall have the registration rights set forth in Exhibit
      K.

     

    (d)           It
      is understood and agreed that the Term Loans exchanged for Exchange Notes
      constitute the same indebtedness as such Exchange Notes and that no novation
      shall be effected by any such exchange.

     

    Section
      8.21  Use
      of
      Proceeds of the Take-Out Securities.  The
      Borrower shall use the net proceeds received by it from the sale of the Take-Out
      Securities to repay the Loans and the Exchange Notes pursuant to Section
      3.05(d).

     

    ARTICLE
      IX

    Negative
      Covenants

     

    Except
      as
      modified on the Initial Maturity Date as set forth in Section 12.02, until
      the
      principal of and interest on each Loan and all fees payable hereunder and all
      other amounts payable under the Loan Documents have been paid in full, the
      Borrower covenants and agrees with the Lenders that:

     

    Section
      9.01  [Intentionally
      Omitted].

     

    Section
      9.02  Debt.

     

    (a)  The
      Borrower will not, and will not permit any of its Restricted Subsidiaries to,
      Incur any Debt (including Acquired Debt); provided,
however, that the Borrower and the Guarantors may Incur Debt
      if
      on the date thereof (A) the Consolidated Coverage Ratio for the Borrower and
      its
      Restricted Subsidiaries is at least 2.50 to 1.00; and (B) no Default or Event
      of
      Default shall have occurred and be continuing or would occur as a consequence
      of
      Incurring the Debt or transactions relating to such Incurrence.

     

    (b)  Notwithstanding
      Section 9.02(a), the Borrower and its Restricted Subsidiaries may Incur the
      following Debt:

     

    (i)  Debt
      of
      the Borrower or a Guarantor Incurred pursuant to (x) the Senior Credit Agreement
      in an aggregate principal amount at any time outstanding not to exceed the
      greater of (A) $700,000,000, which amount shall be reduced by $300,000,000
      in
      five consecutive and equal quarterly installments of $60,000,000, the initial
      reduction of which shall occur on December 31, 2007 and the last reduction
      shall
      occur on December 31, 2008 and (B) 30% of Adjusted Consolidated Net Tangible
      Assets, and Guarantees of the Borrower or any Restricted Subsidiaries in respect
      of the Debt Incurred pursuant to the Senior Credit Agreement, (y) this
      Agreement, and (z) any Exchange Notes;

     

    (ii)  Debt
      represented by the Guaranty Agreement and other Guarantees by the Guarantors
      of
      Debt Incurred in accordance with the provisions of this Agreement;
provided that in the event such Debt that is being Guaranteed is a
      Subordinated Obligation or a Guarantor Subordinated Obligation, then the related
      Guarantee shall be subordinated in right of payment to the Guaranty Agreement,
      as the case may be;

     

    (iii)  Debt
      of
      the Borrower owing to and held by any Restricted Subsidiary or Debt of a
      Restricted Subsidiary owing to and held by the Borrower or any Restricted
      Subsidiary; provided, however, (A) if the Borrower is the obligor
      on such Debt, such Debt is expressly subordinated to the prior payment in full
      in cash of all obligations with respect to the Loans; (B) 

     

    
      
        
        

      

      
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    if
      a
      Guarantor is the obligor on such Debt and the Borrower or a Guarantor is not
      the
      obligee, such Debt is subordinated in right of payment to the Guaranty Agreement
      of such Guarantor; and (C) (1) any subsequent issuance or transfer of Equity
      Interest or any other event which results in any such Debt being beneficially
      held by a Person other than the Borrower or a Restricted Subsidiary of the
      Borrower and (2) any sale or other transfer of any such Debt to a Person other
      than the Borrower or a Restricted Subsidiary of the Borrower shall be deemed,
      in
      each case, to constitute an Incurrence of such Debt by the Borrower or such
      Subsidiary, as the case may be;

     

    (iv)  Debt
      represented by (x) the Senior Notes, (y) any Debt (other than Debt described
      in
      clauses (i), (ii), (iii), (vi), (viii), (ix) and (x) of this Section 9.02(b))
      outstanding on the Effective Date, including without limitation the Existing
      Convertible Notes, and (z) any Refinancing Debt Incurred in respect of any
      Debt
      described in this clause (iv), clause (v), clause (vii) or clause (xvi) of
      this
      paragraph or Incurred pursuant to Section 9.02(a);

     

    (v)  Debt
      of a
      Restricted Subsidiary Incurred and outstanding on the date on which such
      Restricted Subsidiary was acquired by, or merged into, the Borrower or any
      Restricted Subsidiary (other than Debt Incurred (a) to provide all or any
      portion of the funds utilized to consummate the transaction or series of related
      transactions pursuant to which such Restricted Subsidiary became a Restricted
      Subsidiary or was otherwise acquired by the Borrower or (b) otherwise in
      connection with, or in contemplation of, such acquisition); provided,
however, that at the time such Restricted Subsidiary is
      acquired, the Borrower would have been able to Incur $1.00 of additional Debt
      pursuant to Section 9.02(a) after giving effect to the Incurrence of such Debt
      pursuant to this clause (v);

     

    (vi)  Debt
      under Hedging Obligations that are Incurred in the ordinary course of business
      or as otherwise required to be incurred under the Senior Credit Agreement (and
      not for speculative purposes) (x) for the purpose of fixing or hedging interest
      rate risk with respect to any Debt Incurred without violation of this Agreement;
      (y) for the purpose of fixing or hedging currency exchange rate risk with
      respect to any currency exchanges; or (z) for the purpose of fixing or hedging
      commodity price risk with respect to any commodities;

     

    (vii)  Debt
      represented by Capitalized Lease Obligations, mortgage financings or purchase
      money obligations or other Debt, in each case Incurred for the purpose of
      financing all or any part of the purchase price or cost of construction or
      improvements of property used in the business of the Borrower or such Guarantor,
      and Attributable Debt, in an aggregate principal amount not to exceed at any
      time outstanding the greater of $25,000,000 and 1.5% of Adjusted Consolidated
      Net Tangible Assets;

     

    (viii)  Debt
      Incurred in respect of workers' compensation claims, self-insurance obligations,
      performance, surety and similar bonds and completion guarantees issued for
      the
      account of or provided by the Borrower or a Restricted Subsidiary in the
      ordinary course of business, including guarantees and obligations of the
      Borrower or any Restricted Subsidiary with respect to letters of credit
      supporting such obligations (in each case other than an obligation for borrowed
      money);

     

    (ix)  Debt
      arising from agreements of the Borrower or a Restricted Subsidiary providing
      for
      indemnification, adjustment of purchase price or similar obligations, in each
      case, Incurred or assumed in connection with the disposition of any business
      or
      assets of the Borrower or any business, assets or Equity Interest of a
      Restricted Subsidiary, provided that the maximum aggregate liability in
      respect of all such Debt shall at no time exceed the gross proceeds actually
      received by the Borrower and its Restricted Subsidiaries in connection with
      such
      disposition;

     

    
      
        
        

      

      
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    (x)  Debt
      arising from the honoring by a bank or other financial institution of a check,
      draft or similar instrument (except in the case of daylight overdrafts) drawn
      against insufficient funds in the ordinary course of business; provided,
however, that such Debt is extinguished within five business days
      of
      Incurrence;

     

    (xi)  Indebtedness
      Incurred in respect of obligations relating to net gas balancing positions
      arising in the ordinary course of business;

     

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

     

    (xiii)  Debt
      (other than for borrowed money) incurred in the ordinary course of business
      in
      connection with Hydrocarbon transportation, Hydrocarbon purchasing or other
      similar arrangements, provided that such arrangements are disclosed to the
      Administrative Agent;

     

    (xiv)  Debt
      incurred in connection with vendor financing provided by Midland Pipe
      Corporation and its affiliates not to exceed $15,000,000 in the aggregate at
      any
      one time outstanding;

     

    (xv)  Debt
      incurred to finance insurance premiums;

     

    (xvi)  Debt
      in
      connection with trade payables owed to FM Services, Inc. arising in the ordinary
      course of business; and

     

    (xvii)  in
      addition to the items referred to in clauses (i) through (xvi) above, Debt
      of
      the Borrower and the Guarantors in an aggregate outstanding principal amount
      which, when taken together with the principal amount of all other Debt Incurred
      pursuant to this clause (xvii) (including any Refinancing Debt incurred under
      clause (iv) above with respect to such Debt) and then outstanding, will not
      exceed the greater of $30,000,000 and 2% of Adjusted Consolidated Net Tangible
      Assets.

     

    (c)  Notwithstanding
      the foregoing, the Borrower will not Incur any Debt under Section 9.02(b) if
      the
      proceeds thereof are used, directly or indirectly, to refinance any Subordinated
      Obligations of the Borrower unless such Debt will be subordinated to the Loans
      to at least the same extent as such Subordinated Obligations.  No
      Guarantor will Incur any Debt under Section 9.02(b) if the proceeds thereof
      are
      used, directly or indirectly, to refinance any Guarantor Subordinated
      Obligations of such Guarantor unless such Debt will be subordinated to the
      obligations of such Guarantor under the Guaranty Agreement to at least the
      same
      extent as such Guarantor Subordinated Obligations.  No Restricted
      Subsidiary (other than a Guarantor) may Incur any Debt if the proceeds are
      used
      to refinance Debt of the Borrower.

     

    (d)  For
      purposes of determining compliance with, and the outstanding principal amount
      of
      any particular Debt Incurred pursuant to and in compliance with, this
      covenant:

     

    (i)  in
      the
      event that Debt meets the criteria of more than one of the types of Debt
      described in Section 9.02(a) or 9.02(b), the Borrower, in its sole discretion,
      will classify such item of Debt on the date of Incurrence and, subject to clause
      (ii) below, may later classify such item of Debt in any manner that complies
      with this covenant and only be required to include the amount and type of such
      Debt in one of such clauses; provided that all Debt outstanding on the
      Effective Date under the Senior Credit Agreement shall be deemed initially
      Incurred on the Effective Date under Section 9.02(b)(i) and not Section 9.02(a)
      or 9.02(b)(iv) and may not later be reclassified;

     

    
      
        
        

      

      
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    (ii)  Guarantees
      of, or obligations in respect of letters of credit relating to, Debt which
      is
      otherwise included in the determination of a particular amount of Debt shall
      not
      be included;

     

    (iii)  if
      obligations in respect of letters of credit are Incurred pursuant to the Senior
      Credit Agreement and are being treated as Incurred pursuant to Section
      9.02(b)(i) and the letters of credit relate to other Debt, then such other
      Debt
      shall not be included;

     

    (iv)  the
      principal amount of any Disqualified Stock of the Borrower or a Restricted
      Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not a
      Guarantor, will be equal to the greater of the maximum mandatory redemption
      or
      repurchase price (not including, in either case, any redemption or repurchase
      premium) or the liquidation preference thereof;

     

    (v)  Debt
      permitted by this covenant need not be permitted solely by reference to one
      provision permitting such Debt but may be permitted in part by one such
      provision and in part by one or more other provisions of this covenant
      permitting such Debt; and

     

    (vi)  the
      amount of Debt issued at a price that is less than the principal amount thereof
      will be equal to the amount of the liability in respect thereof determined
      in
      accordance with GAAP.

     

    Accrual
      of interest, accrual of dividends, the accretion of accreted value, the payment
      of interest in the form of additional Debt and the payment of dividends in
      the
      form of additional shares of Preferred Stock or Disqualified Stock will not
      be
      deemed to be an Incurrence of Debt for purposes of this covenant.

     

    (e)  If
      at any
      time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Debt of
      such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as
      of
      such date (and, if such Debt is not permitted to be Incurred as of such date
      under this Section 9.02, the Borrower shall be in Default of this
      covenant).

     

    (f)  For
      purposes of determining compliance with any U.S. dollar-denominated restriction
      on the Incurrence of Debt, the U.S. dollar-equivalent principal amount of Debt
      denominated in a foreign currency shall be calculated based on the relevant
      currency exchange rate in effect on the date such Debt was Incurred, in the
      case
      of term Debt, or first committed, in the case of revolving credit Debt;
provided that if such Debt is Incurred to refinance other Debt
      denominated in a foreign currency, and such refinancing would cause the
      applicable U.S. dollar-dominated restriction to be exceeded if calculated at
      the
      relevant currency exchange rate in effect on the date of such refinancing,
      such
      U.S. dollar-dominated restriction shall be deemed not to have been exceeded
      so
      long as the principal amount of such refinancing Debt does not exceed the
      principal amount of such Debt being refinanced.  Notwithstanding any
      other provision of this covenant, the maximum amount of Debt that the Borrower
      may Incur pursuant to this covenant shall not be deemed to be exceeded solely
      as
      a result of fluctuations in the exchange rate of currencies.  The
      principal amount of any Debt Incurred to refinance other Debt, if Incurred
      in a
      different currency from the Debt being refinanced, shall be
      calculated  based on the currency exchange rate applicable to the
      currencies in which such Refinancing Debt is denominated that is in effect
      on
      the date of such refinancing.

     

    (g)  Unless
      and until the Covenant Effectiveness Date shall occur, the Borrower,
      notwithstanding any other provision of this Section 9.02 to the contrary, will
      not, and will not permit any of its Restricted Subsidiaries to, Incur any Debt
      except Debt permitted to be Incurred pursuant to Section 9.02 of the Senior
      Secured Credit Agreement as in effect on the date hereof the terms of which
      are
      hereby incorporated by reference whether or not the Senior Secured Credit
      Agreement shall then be in effect.

     

    
      
        
        

      

      
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    Section
      9.03  Liens.  (a)
      The Borrower will not, and will not permit any of its Restricted Subsidiaries
      to, directly or indirectly, create, Incur or suffer to exist any Lien (other
      than Permitted Liens) upon any of its property or assets (including Equity
      Interest of Restricted Subsidiaries), whether owned on the Effective Date or
      acquired after that date, which Lien is securing any Debt, unless
      contemporaneously with the Incurrence of such Liens effective provision is
      made
      to secure the Loans or, in respect of Liens on any Restricted Subsidiary’s
      property or assets, the Guaranty Agreement, equally and ratably with (or senior
      in priority to in the case of Liens with respect to Subordinated Obligations
      or
      Guarantor Subordinated Obligations, as the case may be) the Debt secured by
      such
      Lien for so long as such Debt is so secured.

     

    (b)           Unless
      and until the Covenant Effectiveness Date shall occur, the Borrower,
      notwithstanding any other provision of this Section 9.03 to the contrary, will
      not, and will not permit any of its Restricted Subsidiaries to, directly or
      indirectly, create, Incur or suffer to exist any Lien on any of its Property
      except Liens permitted under Section 9.03 of the Senior Secured Credit Agreement
      as in effect on the date hereof the terms of which are hereby incorporated
      by
      reference whether or not the Senior Secured Credit Agreement shall then be
      in
      effect.

     

    Section
      9.04  Restricted
      Payments.

     

    (a)  The
      Borrower shall not, and shall not permit any Restricted Subsidiary, directly
      or
      indirectly, to (i) declare or pay any dividend or make any distribution (whether
      made in cash, securities or other property) on or in respect of its Equity
      Interests (including any payment in connection with any merger or consolidation
      involving the Borrower or any of its Restricted Subsidiaries) except dividends
      or distributions payable solely in Equity Interests of the Borrower (other
      than
      Disqualified Stock) or in options, warrants or rights to purchase such Equity
      Interest and except dividends or distributions payable to the Borrower or any
      Restricted Subsidiary (and if such Restricted Subsidiary is not a Wholly-Owned
      Subsidiary, its other holders of Equity Interests on a pro rata
      basis),  (ii) purchase, redeem, retire or otherwise acquire for value
      any Equity Interest of the Borrower or any direct or indirect parent of the
      Borrower held by Persons other than the Borrower or a Restricted Subsidiary
      of
      the Borrower (other in exchange for its Equity Interest (other than Disqualified
      Stock)), (iii) purchase, repurchase, redeem, defease or otherwise acquire or
      retire for value, prior to scheduled maturity, scheduled repayment or scheduled
      sinking fund payment any Subordinated Obligations or Guarantor Subordinated
      Obligations (other than (x) Debt of the Borrower owing to and held by any
      Restricted Subsidiary or Debt of a Restricted Subsidiary owing to and held
      by
      the Borrower or any other Restricted Subsidiary permitted under Section
      9.02(b)(iii) or (y) the purchase, repurchase, redemption, defeasance or other
      acquisition or retirement of Subordinated Obligations or Guarantor Subordinated
      Obligations purchased in anticipation of satisfying a sinking fund obligation,
      principal installment or final maturity, in each case due within one year of
      the
      date of purchase, repurchase, redemption, defeasance or other acquisition or
      retirement) or (iv) make any Restricted Investment in any Person (any such
      dividend, distribution, purchase, redemption, repurchase, defeasance, other
      acquisition, retirement or Restricted Investment referred to in clauses (i)
      through (iv) being herein referred to as a “Restricted Payment”) if at
      the time the Borrower or such Restricted Subsidiary makes such Restricted
      Payment: (1) a Default shall have occurred and be continuing (or would result
      therefrom); or (2) the Borrower is not able to Incur an additional $1.00 of
      Debt
      pursuant to Section 9.02(a) after giving effect, on a pro forma basis, to such
      Restricted Payment; or (3) the aggregate amount of such Restricted Payment
      and
      all other Restricted Payments declared or made subsequent to the Effective
      Date
      would exceed the sum of: (A) 50% of Consolidated Net Income for the period
      (treated as one accounting period) from the beginning of the fiscal
      quarter in which the Effective Date occurs to the end of the most recent fiscal
      quarter ending prior to the date of such Restricted Payment for which financial
      statements are in existence (or, in case such Consolidated Net Income is a
      deficit, minus 100% of such deficit); (B) 100% of the aggregate Net Cash
      Proceeds received by the Borrower from the issue or sale of its Equity Interest
      (other than Disqualified 

     

    
      
        
        

      

      
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    Stock)
      or
      other capital contributions subsequent to the Effective Date (other than Net
      Cash Proceeds received from an issuance or sale of such Equity Interest to
      a
      Subsidiary of the Borrower or an employee stock ownership plan, option plan
      or
      similar trust to the extent such sale to an employee stock ownership plan or
      similar trust is financed by loans from or Guaranteed by the Borrower or any
      Restricted Subsidiary unless such loans have been repaid with cash on or prior
      to the date of determination) or the merger or consolidation of an Unrestricted
      Subsidiary with and into the Borrower or any of its Restricted Subsidiaries;
      (C)
      the amount by which Debt of the Borrower or its Restricted Subsidiaries is
      reduced on the Borrower's balance sheet upon the conversion or exchange (other
      than by a Subsidiary of the Borrower) subsequent to the Effective Date of any
      Debt of the Borrower or its Restricted Subsidiaries convertible or exchangeable
      for Equity Interest (other than Disqualified Stock) of the Borrower (less the
      amount of any cash, or the fair market value of any other property, distributed
      by the Borrower upon such conversion or exchange); and (D) the amount equal
      to
      the net reduction in Restricted Investments made by the Borrower or any of
      its
      Restricted Subsidiaries in any Person resulting from: (x) repurchases or
      redemptions of such Restricted Investments by such Person, proceeds realized
      upon the sale of such Restricted Investment to an unaffiliated purchaser,
      repayments of loans or advances or other transfers of assets (including by
      way
      of dividend or distribution) by such Person to the Borrower or any Restricted
      Subsidiary (other than for reimbursement of tax payments); or (y) the
      redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries or the
      merger or consolidation of an Unrestricted Subsidiary with and into the Borrower
      or any of its Restricted Subsidiaries (valued in each case as provided in the
      definition of “Investment”) not to exceed the amount of Investments previously
      made by the Borrower or any Restricted Subsidiary in such Unrestricted
      Subsidiary, which amount in each case under this clause (D) was included in
      the
      calculation of the amount of Restricted Payments; provided,
however,  that no amount will be included under this clause (D)
      to the extent it is already included in Consolidated Net Income.

     

    (b)  The
      provisions of Section 9.04(a) will not prohibit:

     

    (i)  any
      purchase, repurchase, redemption, defeasance or other acquisition or retirement
      of Equity Interest, Disqualified Stock or Subordinated Obligations of the
      Borrower or Guarantor Subordinated Obligations of any Guarantor made by exchange
      for, or out of the proceeds of the substantially concurrent sale of, Equity
      Interest of the Borrower (other than Disqualified Stock and other than Equity
      Interest issued or sold to a Subsidiary or an employee stock ownership plan
      or
      similar trust to the extent such sale to an employee stock ownership plan or
      similar trust is financed by loans from or Guaranteed by the Borrower or any
      Restricted Subsidiary unless such loans have been repaid with cash on or prior
      to the date of determination); provided, however, that (a) such
      purchase, repurchase, redemption, defeasance, acquisition or retirement will
      be
      excluded from subsequent calculations of the amount of Restricted Payments
      and
      (b) the Net Cash Proceeds from such sale of Equity Interest will be excluded
      from clause Section 9.04(a)(3)(B);

     

    (ii)  any
      purchase, repurchase, redemption, defeasance or other acquisition or retirement
      of Subordinated Obligations of the Borrower or Guarantor Subordinated
      Obligations of any Guarantor made by exchange for, or out of the proceeds of
      the
      substantially concurrent sale of, Subordinated Obligations of the Borrower
      or
      any purchase, repurchase, redemption, defeasance or other acquisition or
      retirement of Guarantor Subordinated Obligations made by exchange for or out
      of
      the proceeds of the substantially concurrent sale of Guarantor Subordinated
      Obligations that, in each case, is permitted to be Incurred pursuant to Section
      9.02 and that in each case constitutes Refinancing Debt; provided,
however, that such purchase, repurchase, redemption, defeasance,
      acquisition or retirement will be excluded from subsequent calculations of
      the
      amount of Restricted Payments;

     

    
      
        
        

      

      
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    (iii)  any
      purchase, repurchase, redemption, defeasance or other acquisition or retirement
      of Disqualified Stock of the Borrower or a Restricted Subsidiary made by
      exchange for or out of the proceeds of the substantially concurrent sale of
      Disqualified Stock of the Borrower or such Restricted Subsidiary, as the case
      may be, that, in each case, is permitted to be Incurred pursuant to Section
      9.02
      and that in each case constitutes Refinancing Debt; provided,
however, that such purchase, repurchase, redemption, defeasance,
      acquisition or retirement will be excluded from subsequent calculations of
      the
      amount of Restricted Payments;

     

    (iv)  so
      long
      as no Default or Event of Default has occurred and is continuing, any purchase
      or redemption of Subordinated Obligations or Guarantor  Subordinated
      Obligations of a Guarantor from Net Available Cash to the extent permitted
      under
      Section 9.11; provided, however, that such purchase or redemption
      will be excluded from subsequent calculations of the amount of Restricted
      Payments;

     

    (v)  dividends
      paid within 60 days after the date of declaration or the consummation of any
      irrevocable redemption within 60 days after the date of giving the redemption
      price if at such date of declaration or notice of redemption such dividend
      or
      redemption payment would have complied with this provision; provided,
however, that such dividends or redemption payments will be included
      in
      subsequent calculations of the amount of Restricted Payments;

     

    (vi)  so
      long
      as no Default or Event of Default has occurred and is continuing, (A) the
      purchase, redemption or other acquisition, cancellation or retirement for value
      of Equity Interest, or options, warrants, equity appreciation rights or other
      rights to purchase or acquire Equity Interest of the Borrower or any parent
      of
      the Borrower held by any existing or former employees or directors of the
      Borrower or any Subsidiary of the Borrower or their assigns, estates or heirs,
      in each case in connection with the repurchase provisions under employee stock
      option or stock purchase agreements or other agreements to compensate employees
      or directors; provided that such purchase, redemption,
      acquisition, cancellation or retirement pursuant to this clause will not exceed
      $5,000,000 in the aggregate during any calendar year; provided,
however, that the amount of any such purchase, redemption, acquisition,
      cancellation or retirement will be excluded from subsequent calculations of
      the
      amount of Restricted Payments; and (B) loans or advances to employees or
      directors of the Borrower or any Subsidiary of the Borrower the proceeds of
      which are used to purchase Equity Interest of the Borrower, in an aggregate
      amount not in excess of $5,000,000 at any one time outstanding; provided,
however, that the Borrower and its Subsidiaries shall comply in all
      material respects with all applicable provisions of the Sarbanes-Oxley Act
      of
      2002 and the rules and regulations promulgated in connection therewith in
      connection with such loans or advances as if the Borrower had filed a
      registration statement with the SEC; provided,
further, that the amount of such loans and advances will be
      included in subsequent calculations of the amount of Restricted
      Payments;

     

    (vii)  so
      long
      as no Default or Event of Default has occurred and is continuing, the
      declaration and payment of dividends to holders of any class or series of
      Disqualified Stock of the Borrower, or Preferred Stock of a Restricted
      Subsidiary that is not a Guarantor, issued in accordance with the terms of
      this
      Agreement to the extent such dividends are included in the definition of
“Consolidated Interest Expense”;  provided that the payment of
      such dividends will be excluded from subsequent calculations of the amount
      of
      Restricted Payments;

     

    (viii)  repurchases
      of Equity Interest deemed to occur upon the exercise of stock options, warrants
      or other convertible securities if such Equity Interest represents a portion
      of
      the exercise price thereof; provided, however, that such
      repurchases will be excluded from subsequent calculations of the amount of
      Restricted Payments;

     

    
      
        
        

      

      
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    (ix)  the
      purchase, repurchase, redemption, defeasance or other acquisition or retirement
      for value of any Subordinated Obligation (A) at a purchase price not greater
      than 101% of the principal amount of such Subordinated Obligation in the event
      of a Change of Control in accordance with provisions similar to Section 9.20
      or
      (B) at a purchase price not greater than 100% of the principal amount thereof
      in
      accordance with provisions similar to Section 9.11;
provided that, prior to or simultaneously with such
      purchase, repurchase, redemption, defeasance or other acquisition or retirement,
      the Borrower has made the Change of Control Offer or Asset Disposition Offer,
      as
      applicable, as provided in such covenant with respect to the Loans and Notes
      and
      has completed the repurchase or redemption of all Loans and Notes validly
      tendered for payment in connection with such Change of Control Offer or Asset
      Disposition Offer; provided, further, that any such
      purchase, repurchase, redemption, defeasance or other acquisition will be
      excluded from subsequent calculations of the amount of Restricted
      Payments;

     

    (x)  MOXY
      may
      make Restricted Payments to the Borrower and each other Restricted Subsidiary
      may make Restricted Payments to the Borrower, MOXY or any other Restricted
      Subsidiary (which, in the case of Restricted Subsidiaries that are not
      Wholly-Owned Subsidiaries, shall be made to the Borrower, to MOXY or to any
      Restricted Subsidiary that is the direct or indirect parent of such Restricted
      Subsidiary and to each other owner of Equity Interests of such Restricted
      Subsidiary ratably, based on the relative ownership interests in such Restricted
      Subsidiary);

     

    (xi)  so
      long
      as no Default or Event of Default has occurred and is continuing, the
      declaration and payment of dividends to holders of any class or series of
      Preferred Stock of the Borrower, provided, however, to the extent
      the cash proceeds of such equity issuance were used to make an Investment under
      clause (xii)(B) below, such dividends may be paid only to the extent of cash
      actually received by the Borrower as dividends, interest or a return of capital
      in respect of such Investment;

     

    (xii)  Restricted
      Payments to Unrestricted Subsidiaries, provided that the aggregate amount of
      all
      such Restricted Payments shall not exceed (A) $20,000,000 in any fiscal year
      plus (B) an amount equal to the net cash proceeds of any Equity Issuance (other
      than Disqualified Stock) in excess of $300,000,000 after the Effective Date;
      and

     

    (xiii)  Restricted
      Payments in an amount not to exceed $25,000,000; provided that the amount
      of such Restricted Payments will be included in subsequent calculations of
      the
      amount of Restricted Payments.

     

    The
      amount of all Restricted Payments (other than cash) shall be the fair market
      value on the date of such Restricted Payment of the asset(s) or securities
      proposed to be paid,  transferred or issued by the Borrower or such
      Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
      The fair market value of any cash Restricted Payment shall be its face amount
      and any non-cash Restricted Payment shall be determined conclusively by the
      Board of Directors of the Borrower acting in good faith whose resolution with
      respect thereto shall be delivered to the Administrative Agent, such
      determination to be based upon an opinion or appraisal issued by an accounting,
      appraisal or investment banking firm of recognized standing (as determined
      in
      good faith by the Board of Directors of the Borrower) if such fair market value
      is estimated in good faith by the Board of Directors of the Borrower to exceed
      $25,000,000. Not later than the date of making any Restricted Payment, the
      Borrower shall deliver to the Administrative Agent an Officers' Certificate
      stating that such Restricted Payment is permitted and setting forth the basis
      upon which the calculations required by this covenant were computed, together
      with a copy of any fairness opinion or appraisal required hereby.

     

    
      
        
        

      

      
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    (c)  Unless
      and until the Covenant Effectiveness Date shall occur, the Borrower,
      notwithstanding any other provision of this Section 9.04 to the contrary, shall
      not, and shall not permit any Restricted Subsidiary, directly or indirectly,
      to
      declare or make, or agree to pay or make, any Restricted Payment, return any
      capital or make any distribution of Property to its Equity Interest holders
      except Restricted Payments (as defined in the Senior Secured Credit Agreement
      as
      in effect on the date hereof, the terms of which are hereby incorporated by
      reference whether or not the Senior Secured Credit Agreement shall then be
      in
      effect), return of capital or distributions permitted pursuant to Section 9.04
      of such Senior Secured Credit Agreement and, to the extent included therein
      and
      notwithstanding the restrictions set forth in this Section 9.04, any Investment
      (as defined in such Senior Secured Credit Agreement) permitted pursuant to
      Section 9.05 of such Senior Secured Credit Agreement.

     

    Section
      9.05  [Intentionally
      Omitted].

     

    Section
      9.06  Nature
      of Business; International Operations.  The
      Borrower will not, and will not permit any Restricted Subsidiary to, engage
      in
      any business other than the Oil and Gas Business.  Except in an amount
      not to exceed an amount of $5,000,000 per year, the Borrower and its Restricted
      Subsidiaries will not acquire or make any other expenditures (whether such
      expenditure is capital, operating or otherwise) in or related to, any Oil and
      Gas Properties not located within the geographical boundaries of the United
      States or Canada.

     

    Section
      9.07  Proceeds
      of Notes.  The
      Borrower will not permit the proceeds of the Notes to be used for any purpose
      other than those permitted by Section
      7.21.  No Loan Party nor any Person acting on behalf of the
      Borrower has taken or will take any action which might cause any of the Loan
      Documents to violate Regulations T, U or X or any other regulation of the Board
      or to violate Section 7 of the Securities Exchange Act of 1934 or any rule
      or
      regulation thereunder, in each case as now in effect or as the same may
      hereinafter be in effect.  If requested by the Administrative Agent,
      the Borrower will furnish to the Administrative Agent and each Lender a
      statement to the foregoing effect in conformity with the requirements of FR
      Form
      U-1 or such other form referred to in Regulation U, Regulation T or Regulation
      X
      of the Board, as the case may be.

     

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

     

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

     

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

     

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

     

    (d)  permit
      to
      exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding
      deficiency within the meaning of section 302 of ERISA or section 412 of the
      Code, or, on and after the effectiveness of the Pension Act, fail to satisfy
      the
      minimum funding standards (within the meaning of Section 412 of the Code or
      Section 302 of ERISA), in any case whether or not waived, with respect to any
      Plan.

     

    
      
        
        

      

      
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    (e)  except
      as
      provided in Schedule 7.10(f), permit, or allow any ERISA Affiliate to permit,
      the actuarial present value of the benefit liabilities under any Plan maintained
      by any Loan Party or any ERISA Affiliate which is regulated under Title IV
      of ERISA to exceed the current value of the assets (computed on a plan
      termination basis in accordance with Title IV of ERISA) of such Plan
      allocable to such benefit liabilities.  The term “actuarial present
      value of the benefit liabilities” shall have the meaning specified in section
      4041 of ERISA.

     

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

     

    (g)  acquire,
      or permit any ERISA Affiliate to acquire, an interest in any Person that causes
      such Person to become an ERISA Affiliate with respect to any Subsidiary or
      with
      respect to 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 ERISA Affiliate to incur, a liability to or on account of a Plan
      under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA.

     

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

     

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

     

    Section
      9.09  [Intentionally
      Omitted].

     

    Section
      9.10  Mergers,
      Etc.  (a)  The
      Borrower will not consolidate with or merge with or into, or convey, transfer
      or
      lease all or substantially all its assets to, any Person, unless:

     

    (i)  the
      resulting, surviving or transferee Person (the “Successor Company”) will
      be a corporation organized and existing under the laws of the United States
      of
      America, any State of the United States or the District of Columbia and the
      Successor Company (if not the Borrower) will expressly assume, by an assumption
      agreement supplemental hereto, executed by the Successor Company and delivered
      to the Administrative Agent, in form and substance satisfactory to the
      Administrative Agent, all the obligations of the Borrower under the Notes,
      the
      Loans and this Agreement;

     

    (ii)  immediately
      after giving effect to such transaction (and treating any Debt that becomes
      an
      obligation of the Successor Company or any Subsidiary of the Successor Company
      as a result of such transaction as having been Incurred by the Successor Company
      or such Subsidiary at the time of such transaction), no Default or Event of
      Default shall have occurred and be continuing;

     

    
      
        
        

      

      
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    (iii)  immediately
      after giving effect to such transaction, the Successor Company would be able
      to
      Incur at least an additional $1.00 of Debt pursuant to Section
      9.02(a);

     

    (iv)  each
      Guarantor (unless it is the other party to the transactions above, in which
      case
      clause (i) shall apply) shall have confirmed that the Guaranty Agreement shall
      apply to such Person’s obligations in respect of the Notes and the Loans shall
      continue to be in effect; and

     

    (v)  the
      Borrower shall have delivered to the Administrative Agent an Officers’
Certificate and an Opinion of Counsel to the Borrower, each stating that such
      consolidation, merger or transfer and such assumption agreement (if any) comply
      with this Agreement.

     

    (b)           For
      purposes of this Section 9.10, the sale, lease, conveyance, assignment,
      transfer, or other disposition of all or substantially all of the properties
      and
      assets of one or more Subsidiaries of the Borrower, which properties and assets,
      if held by the Borrower instead of such Subsidiaries, would constitute all
      or
      substantially all of the properties and assets of the Borrower on a consolidated
      basis, shall be deemed to be the transfer of all or substantially all of the
      properties and assets of the Borrower.

     

    (c)           The
      predecessor Borrower will be released from its obligations under this Agreement
      and the Successor Company will succeed to, and be substituted for, and may
      exercise every right and power of, the Borrower under this Agreement, but,
      in
      the case of a lease of all or substantially all its assets, the predecessor
      Borrower will not be released from the obligation to pay the principal of and
      interest on the Notes and the Loans.

     

    (d)           Notwithstanding
      Section 9.10(a)(ii), (1) any Restricted Subsidiary may consolidate or merge
      with, merge into or transfer all or part of its properties and assets to the
      Borrower and (2) the Borrower may merge with an Affiliate incorporated solely
      for the purpose of reincorporating the Borrower in another jurisdiction to
      realize tax benefits; provided that, in the case of a Restricted
      Subsidiary that merges into the Borrower, the Borrower will not be required
      to
      comply with Section 9.10(a)(v).

     

    (e)           The
      Borrower will not permit any Guarantor to consolidate with or merge with or
      into
      any person (other than another Guarantor) and will not permit the conveyance,
      transfer or lease of substantially all of the assets of any Guarantor unless
      (i)
      (A) the resulting, surviving or transferee Person will be a corporation,
      partnership, trust or limited liability company organized and existing under
      the
      laws of the United States of America, any State of the United States or the
      District of Columbia and such Person (if not such Guarantor) will expressly
      assume, by an assumption agreement supplemental to the Guaranty Agreement,
      executed and delivered to the Administrative Agent, all the obligations of
      such
      Guarantor under the Guaranty Agreement;  (B) immediately after giving
      effect to such transaction (and treating any Debt that becomes an obligation
      of
      the resulting, surviving or transferee Person or any Restricted Subsidiary
      as a
      result of such transaction as having been Incurred by such Person or such
      Restricted Subsidiary at the time of such transaction), no Default of Event
      of
      Default shall have occurred and be continuing; and (C) the Borrower will have
      delivered to the Administrative an Officers’ Certificate and an Opinion of
      Counsel, each stating that such consolidation, merger or transfer and such
      assumption agreement (if any) comply with this Agreement; and (ii) the
      transaction is made in compliance with Section 9.11 and this Section
      9.10.

     

    (f)           Unless
      and until the Covenant Effectiveness Date shall occur, the Borrower,
      notwithstanding any other provision of this Section 9.10 to the contrary, will
      not, and will not permit any Restricted Subsidiary, to 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 

     

    
      
        
        

      

      
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    Property
      to any other Person, except as permitted pursuant to Section 9.10 of the Senior
      Secured Credit Agreement as in effect on the date hereof the terms of which
      are
      hereby incorporated by reference whether or not the Senior Secured Credit
      Agreement shall then be in effect.

     

    Section
      9.11  Sale
      of Properties and Subsidiary Stock.

     

    (a)  The
      Borrower will not, and will not permit any of its Restricted Subsidiaries to,
      make any Asset Disposition unless: (i) the Borrower or such Restricted
      Subsidiary, as the case may be, receives consideration at least equal to the
      fair market value (such fair market value to be determined on the date of
      contractually agreeing to such Asset Disposition), as determined in good faith
      (A) if the consideration is less than or equal to $10,000,000, by a Responsible
      Officer of the Borrower or (B) if the consideration is greater than such amount,
      by the Board of Directors (including as to the value of all non-cash
      consideration), of the shares and assets subject to such Asset Disposition;
      and
      (ii) unless and until the Covenant Effectiveness Date shall occur, 100%, and
      thereafter, at least 75% of the consideration from such Asset Disposition
      received by the Borrower or such Restricted Subsidiary, as the case may be,
      is
      in the form of cash or Cash Equivalents; of which the Borrower shall apply
      the
      Net Available Cash from such Asset Disposition to reduce the Debt outstanding
      under the Senior Secured Credit Agreement as in effect on the date hereof (and
      to the extent applicable, the commitments of the lenders thereunder) to an
      amount not greater than the principal amount of Debt permitted to be outstanding
      thereunder after giving effect to the Borrower’s obligations under this Section
      9.11(a).

     

    (b)  Any
      Net
      Available Cash from Asset Dispositions that are not applied as provided in
      clause (a) above will be deemed to constitute “Excess Proceeds.”  Not
      later than the 10th day after
      the
      later of the date of an Asset Disposition or the receipt of such Net Available
      Cash, the Borrower will be required to make an offer (“Asset Disposition
      Offer”) to all Holders and to the extent required by the terms of other Pari
      Passu Debt, to all holders of other Pari Passu Debt outstanding with similar
      provisions requiring the Borrower to make an offer to purchase such Pari Passu
      Debt with the proceeds from any Asset Disposition, to purchase the maximum
      principal amount of Loans and any such Pari Passu Debt to which the Asset
      Disposition Offer applies that may be purchased out of the Excess Proceeds,
      at
      an offer price in cash in an amount equal to 100% of the principal amount of
      the
      Loans and Pari Passu Debt plus accrued and unpaid interest to the date of
      purchase (subject to the right of holders of record on the relevant record
      date
      to receive interest due on the relevant interest payment date), in accordance
      with the procedures set forth in this Agreement or the agreements governing
      the
      Pari Passu Debt, as applicable, in each case in denominations of $2,000 and
      larger integral multiples of $1,000. To the extent that the aggregate amount
      of
      Loans and Pari Passu Debt so validly tendered and not properly withdrawn
      pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the
      Borrower may use any remaining Excess Proceeds for general corporate purposes,
      subject to other covenants contained in this Agreement.   If the
      aggregate principal amount of Loans and other Pari Passu Debt surrendered by
      holders or lenders, collectively, exceeds the amount of Excess Proceeds, the
      Administrative Agent, in consultation with the trustee(s) with respect to such
      other Pari Passu Debt shall select the Loans and Pari Passu Debt to be purchased
      on a prorata basis on the basis of the aggregate principal amount
      of tendered Loans and Pari Passu Debt.  Upon completion of such Asset
      Disposition Offer, the amount of Excess Proceeds shall be reset at
      zero.  The Asset Disposition Offer will remain open for a period of 20
      Business Days following its commencement, except to the extent that a longer
      period is required by applicable law (the “Asset Disposition Offer
      Period”). No later than five Business Days after the termination of the
      Asset Disposition Offer Period (the “Asset Disposition Purchase Date”),
      the Borrower will purchase the principal amount of Loans and Pari Passu Debt
      required to be purchased pursuant to this covenant (the “Asset Disposition
      Offer Amount”) or, if less than the Asset Disposition Offer Amount has been
      so validly tendered, all Loans and Pari Passu Debt validly tendered in response
      to the Asset Disposition Offer.  If the Asset Disposition Purchase
      Date is 

     

    
      
        
        

      

      
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    on
      or
      after an interest record date and on or before the related interest payment
      date, any accrued and unpaid interest will be paid to the Person in whose name
      a
      Loan or Note is registered at the close of business on such record date, and
      no
      additional interest will be payable to holders who tender Loans or Notes
      pursuant to the Asset Disposition Offer.  On or before the Asset
      Disposition Purchase Date, the Borrower will, to the extent lawful, accept
      for
      payment, on a pro rata basis to the extent necessary, the Asset Disposition
      Offer Amount of Loans and Pari Passu Debt or portions of Loans and Pari Passu
      Debt so validly tendered and not properly withdrawn pursuant to the Asset
      Disposition Offer, or if less than the Asset Disposition Offer Amount has been
      validly tendered and not properly withdrawn, all Loans and Pari Passu Debt
      so
      validly tendered and not properly withdrawn, in each case in denominations
      of
      $2,000 and larger integral multiples of $1,000.  The Borrower will
      deliver to the Administrative Agent an Officers’ Certificate stating that such
      Loans or portions thereof were accepted for payment by the Borrower in
      accordance with the terms of this covenant and, in addition, the Borrower will
      deliver all certificates and notes required, if any, by the agreements governing
      the Pari Passu Debt.  The Borrower or the paying agent, as the case
      may be, will promptly (but in any case not later than five Business Days after
      termination of the Asset Disposition Offer Period) mail or deliver to each
      tendering holder of Loans or holder or lender of Pari Passu Debt, as the case
      may be, an amount equal to the purchase price of the Loans or Pari Passu Debt
      so
      validly tendered and not properly withdrawn by such holder or lender, as the
      case may be, and accepted by the Borrower for purchase, and the Borrower will
      promptly issue a new Note (if required), and with respect to any Exchange Notes,
      the Trustee, upon delivery of an Officers’ Certificate from the Borrower, will
      authenticate and mail or deliver such new Note to such holder, in a principal
      amount equal to any unpurchased portion of the Note surrendered; provided
      that each such new Note will be in a principal amount of $2,000 or larger
      integral multiples of $1,000.  In addition, the Borrower will take any
      and all other actions required by the agreements governing the Pari Passu
      Debt.  Any Note not so accepted will be promptly mailed or delivered
      by the Borrower to the holder thereof.  The Borrower will publicly
      announce the results of the Asset Disposition Offer on the Asset Disposition
      Purchase Date.

     

    (c)  For
      the
      purposes of this covenant, the following will be deemed to be cash: (x) the
      assumption by the transferee of Debt or other liabilities (other than
      Subordinated Obligations or Disqualified Stock) of the Borrower or Debt of
      a
      Restricted Subsidiary (other than Guarantor Subordinated Obligations or
      Disqualified Stock of any Wholly-Owned Subsidiary that is a Guarantor) and
      the
      release of the Borrower or such Restricted Subsidiary from all liability on
      such
      Debt in connection with such Asset Disposition (in which case the Borrower
      will,
      without further action, be deemed to have applied such deemed cash to Debt
      in
      accordance with clause (a)(iii)(A) above); and (y) securities, notes or other
      obligations received by the Borrower or any Restricted Subsidiary from the
      transferee that are promptly converted by the Borrower or such Restricted
      Subsidiary into cash.

     

    (d)  The
      Borrower will not, and will not permit any Restricted Subsidiary to, engage
      in
      any Asset Swaps, unless: (i) at the time of entering into such Asset Swap and
      immediately after giving effect to such Asset Swap, no Default or Event of
      Default shall have occurred and be continuing or would occur as a consequence
      thereof; (ii) in the event such Asset Swap involves the transfer by the Borrower
      or any Restricted Subsidiary of assets having an aggregate fair market value,
      as
      determined by the Board of Directors of the Borrower in good faith, in excess
      of
      $10,000,000, the terms of such Asset Swap have been approved by a majority
      of
      the members of the Board of Directors of the Borrower; and (iii) in the event
      such Asset Swap involves the transfer by the Borrower or any Restricted
      Subsidiary of assets having an aggregate fair market value, as determined by
      the
      Board of Directors of the Borrower in good faith, in excess of $25,000,000,
      the
      Borrower has received a written opinion from an independent investment banking
      firm of recognized standing (as determined in good faith by the Board of
      Directors of the Borrower) that such Asset Swap is fair to the Borrower or
      such
      Restricted Subsidiary, as the case may be, from a financial point of
      view.

     

    
      
        
        

      

      
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    (e)  The
      Borrower will comply, to the extent applicable, with the requirements of Rule
      14e-1 under the Exchange Act and any other securities laws or regulations in
      connection with the repurchase of Exchange Notes pursuant to the Exchange Notes
      Indenture. To the extent that the provisions of any securities laws or
      regulations conflict with provisions of this covenant, the Borrower will comply
      with the applicable securities laws and regulations and will not be deemed
      to
      have breached its obligations under the Exchange Notes Indenture by virtue
      of
      any conflict.

     

    (f)  The
      Borrower will not, and will not permit any Restricted Subsidiary to, transfer,
      convey, sell, lease or otherwise dispose of any Voting Stock of any Restricted
      Subsidiary or to issue any of the Voting Stock of a Restricted Subsidiary (other
      than, if necessary, shares of its Voting Stock constituting directors’
qualifying shares) to any Person except (i) to the Borrower or a Wholly-Owned
      Subsidiary or (ii) in compliance with the other provisions of this Section
      9.11
      and immediately after giving effect to such issuance or sale, such Restricted
      Subsidiary would continue to be a Restricted
      Subsidiary.  Notwithstanding the preceding sentence, the Borrower or
      any Restricted Subsidiary may sell all the Voting Stock of a Restricted
      Subsidiary as long as the Borrower complies with the terms of the other
      provisions of this Section 9.11.

     

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

     

    Section
      9.13  Transactions
      with Affiliates.

     

    (a)  The
      Borrower will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly, enter into or conduct any transaction (including the
      purchase, sale, lease or exchange of any property or the rendering of any
      service) with any Affiliate of the Borrower (an “Affiliate Transaction”)
      unless: (i) the terms of such Affiliate Transaction are no less favorable to
      the
      Borrower or such Restricted Subsidiary, as the case may be, than those that
      could be obtained in a comparable transaction at the time of such transaction
      in
      arm's-length dealings with a Person who is not such an Affiliate; (ii) in the
      event such Affiliate Transaction involves an aggregate consideration in excess
      of $5,000,000 prior to the Initial Maturity Date and $10,000,000 thereafter,
      the
      terms of such transaction have been approved by a majority of the members of
      the
      Board of Directors of the Borrower and by a majority of the members of such
      Board having no personal stake in such transaction, if any (and such majority
      or
      majorities, as the case may be, determines that such Affiliate Transaction
      satisfies the criteria in clause (i) above); and (iii) in the event such
      Affiliate Transaction involves an aggregate consideration in excess of
      $10,000,000 prior to the Initial Maturity Date and $20,000,000 thereafter,
      the
      Borrower has received a written opinion from an independent investment banking,
      accounting or appraisal firm of recognized standing (as determined in good
      faith
      by the Board of Directors of the Borrower) that such Affiliate Transaction
      is
      not materially less favorable than those that might reasonably have been
      obtained in a comparable transaction at such time on an arm’s-length basis from
      a Person that is not an Affiliate.

     

    (b)  The
      foregoing provisions of Section 9.13(a) will not apply to (i) any Restricted
      Payment permitted to be made pursuant to Section 9.04; (ii) any issuance of
      securities, or other payments, awards or grants in cash, securities or otherwise
      pursuant to, or the funding of, employment agreements and other compensation
      arrangements, options to purchase Equity Interest of the Borrower, restricted
      stock plans, long-term incentive plans, stock appreciation rights
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    similar
      employee benefits plans and/or indemnity provided on behalf of officers and
      employees approved by the Board of Directors of the Borrower; (iii) loans or
      advances to employees, officers or directors in the ordinary course of business
      of the Borrower or any of its Restricted Subsidiaries but in any event not
      to
      exceed $5,000,000 in the aggregate outstanding at any one time with respect
      to
      all loans or advances made since the Issue Date; provided,
however, that the Borrower and its Subsidiaries will comply in all
      material respects with all applicable provisions of the Sarbanes-Oxley Act
      of
      2002 and the rules and regulations promulgated in connection therewith that
      would be applicable to an issuer with debt securities registered under the
      Securities Act relating to such loans and advances; (iv) any transaction between
      the Borrower and a Restricted Subsidiary or between Restricted Subsidiaries
      and
      Guarantees issued by the Borrower or a Restricted Subsidiary for the benefit
      of
      the Borrower or a Restricted Subsidiary, as the case may be, in accordance
      with
      Section 9.02; (v) the payment of reasonable and customary fees paid to, and
      indemnity provided on behalf of, directors of the Borrower or any Restricted
      Subsidiary; (vi) the existence of, and the performance of obligations of the
      Borrower or any of its Restricted Subsidiaries under the terms of any agreement
      to which the Borrower or any of its Restricted Subsidiaries is a party as of
      or
      on the Effective Date and identified on Schedule 9.13, as these agreements
      may
      be amended, modified, supplemented, extended or renewed from time to time;
      provided, however, that any future amendment,
      modification, supplement, extension or renewal entered into after the Effective
      Date will be permitted to the extent that its terms are not more disadvantageous
      to the Lenders than the terms of the agreements in effect on the Effective
      Date;
      (vii) transactions in the ordinary course of the business of the Borrower and
      its Restricted Subsidiaries; provided that such transactions are on terms
      that are no less favorable to the Borrower  or the relevant Restricted
      Subsidiary than those that would have been obtained in a comparable transaction
      by the Borrower or such Restricted Subsidiary with an unrelated Person; and
      (viii) any issuance or sale of Equity Interest (other than Disqualified Stock)
      for fair consideration, in the reasonable judgment of the Board of Directors
      of
      the Borrower, to Affiliates of the Borrower and the granting of registration
      and
      other customary rights in connection therewith.

     

    Section
      9.14  Subsidiaries.  The
      Borrower will not, and will not permit any Restricted Subsidiary to, create
      or
      acquire any additional Subsidiaries unless the Borrower gives written notice
      to
      the Administrative Agent of such creation or acquisition and complies with
      Section 8.14.

     

    Section
      9.15  Dividend
      Restrictions.  The
      Borrower will not, and will not permit any Restricted Subsidiary to, create
      or
      otherwise cause or permit to exist or become effective any consensual
      encumbrance or consensual restriction on the ability of any Restricted
      Subsidiary to (i) pay dividends or make any other distributions on its Equity
      Interest or pay any Debt or other obligations owed to the Borrower or any
      Restricted Subsidiary (it being understood that the priority of any Preferred
      Stock in receiving dividends or liquidating distributions prior to dividends
      or
      liquidating distributions being paid on Common Stock shall not be deemed a
      restriction on the ability to make distributions on Equity Interest); (ii)
      make
      any loans or advances to the Borrower or any Restricted Subsidiary (it being
      understood that the subordination of loans or advances made to the Borrower
      or
      any Restricted Subsidiary to other Debt Incurred by the Borrower or any
      Restricted Subsidiary shall not be deemed a restriction on the ability to make
      loans or advances); or (iii) transfer any of its property or assets to the
      Borrower or any Restricted Subsidiary; except:

     

    (1)  any
      encumbrance or restriction pursuant to an agreement in effect at or entered
      into
      on the Effective Date, including this Agreement and the Senior Secured Credit
      Agreement, or pursuant to the Exchange Notes Indenture;

     

    (2)  any
      encumbrance or restriction with respect to a Restricted Subsidiary pursuant
      to
      an agreement relating to any Equity Interest or Debt Incurred by a Restricted
      Subsidiary on or before the date on which such Restricted Subsidiary was
      acquired by the Borrower or a Restricted 

     

    
      
        
        

      

      
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    Subsidiary
      (other than Equity Interest or Debt Incurred as consideration in, or to provide
      all or any portion of the funds utilized to consummate, the transaction or
      series of related transactions pursuant to which such Restricted Subsidiary
      became a Restricted Subsidiary or was acquired by the Borrower or in
      contemplation of the transaction) and outstanding on such date provided,
      that any such encumbrance or restriction shall not extend to any assets or
      property of the Borrower or any other Restricted Subsidiary other than the
      assets and property so acquired;

     

    (3)  any
      encumbrance or restriction with respect to a Restricted Subsidiary pursuant
      to
      an agreement effecting a refunding, replacement or refinancing of Debt Incurred
      pursuant to an agreement referred to in clause (1) or (2) or this clause (3)
      or
      contained in any amendment, restatement, modification, renewal, supplement,
      refunding, replacement or refinancing of an agreement referred to in clause
      (1)
      or (2) or this clause (3); provided, however, that the
      encumbrances and restrictions with respect to such Restricted Subsidiary
      contained in any such agreement are no less favorable in any material respect,
      taken as a whole, to the Lenders, in the reasonable judgment of the Borrower’s
      Board of Directors or senior management, than the encumbrances and restrictions
      contained in such agreements referred to in clauses (1) or (2) on the Effective
      Date or the date such Restricted Subsidiary became a Restricted Subsidiary
      or
      was merged into a Restricted Subsidiary, whichever is applicable;

     

    (4)  in
      the
      case of clause (iii) above, any encumbrance or restriction: (A) that restricts
      in a customary manner the subletting, assignment or transfer of any property
      or
      asset that is subject to a lease, license or similar contract, or the assignment
      or transfer of any such lease, license or other contract; (B) contained in
      mortgages, pledges or other security agreements permitted under this Agreement
      securing Debt of the Borrower or a Restricted Subsidiary to the extent such
      encumbrances or restrictions restrict the transfer of the property subject
      to
      such mortgages, pledges or other security agreements; or (C) pursuant to
      customary provisions restricting dispositions of real property interests set
      forth in any reciprocal easement agreements of the Borrower or any Restricted
      Subsidiary;

     

    (5)  (A)
      purchase money obligations for property acquired in the ordinary course of
      business and (B) Capitalized Lease Obligations permitted under this Agreement,
      in each case, that impose encumbrances or restrictions of the nature described
      in clause (iii) above on the property so acquired;

     

    (6)  any
      restriction with respect to a Restricted Subsidiary (or any of its property
      or
      assets) imposed pursuant to an agreement entered into for the direct or indirect
      sale or disposition of all or substantially all the Equity Interest or assets
      of
      such Restricted Subsidiary (or the property or assets that are subject to such
      restriction) pending the closing of such sale or disposition;

     

    (7)  customary
      encumbrances or restrictions imposed pursuant to any agreement referred to
      in
      the definition of ‘‘Permitted Business Investment’’;

     

    (8)  net
      worth
      provisions in leases and other agreements entered into by the Borrower or any
      Restricted Subsidiary in the ordinary course of business;

     

    (9)  encumbrances
      or restrictions arising or existing by reason of applicable law or any
      applicable rule, regulation or order; and

     

    (10)  encumbrances
      or restrictions contained in indentures or debt instruments or other debt
      arrangements Incurred by Guarantors in accordance with Section 9.02 that are
      not
      more 

     

    
      
        
        

      

      
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    restrictive,
      taken as a whole, than those applicable to the Borrower in either this Agreement
      or the Senior Secured Credit Agreement on the Effective Date (which results
      in
      encumbrances or restrictions comparable to those applicable to the Borrower
      at a
      Restricted Subsidiary level).

     

    Section
      9.16  [Intentionally
      Omitted].

     

    Section
      9.17  [Intentionally
      Omitted].

     

    Section
      9.18  [Intentionally
      Omitted].  

     

    Section
      9.19  Unrestricted
      Subsidiaries.  Unless
      and until the Covenant Effectiveness Date shall occur, the Borrower will not
      permit its Unrestricted Subsidiaries to incur or suffer to exist any Debt for
      borrowed money except Non-Recourse Debt.  No Unrestricted Subsidiary
      will be redesignated as a Restricted Subsidiary and no Restricted Subsidiary
      will be redesignated as an Unrestricted Subsidiary.

     

    Section
      9.20  Change
      of Control.  (a)  Upon
      a Change of Control, each Holder shall have the right to require that the
      Borrower repurchase all or any part of such Holder’s Loans and Exchange Notes
      (if any) at a purchase price in cash equal to 100% of the principal amount
      thereof (and in the case of any Exchange Notes that are classified as “Fixed
      Rate Notes” in the Exchange Notes Indenture, 101% of the principal amount
      thereof) plus accrued and unpaid interest, if any, to the date of purchase
      (subject to the right of Holders of record on the relevant record date to
      receive interest on the relevant interest payment date), such repurchase to
      be
      made in accordance with Section 9.20(b).

     

    (b)           Within
      thirty (30) days following any such Change of Control, the Borrower shall mail
      a
      notice to each Holder (the “Change of Control Offer”) with a copy to the
      Administrative Agent stating:

     

    (i)  that
      a
      Change of Control has occurred and that such Holder has the right to require
      the
      Borrower to purchase such Holder’s Loans and Exchange Notes (if
      any)  at a purchase price in cash equal to 100% of the principal
      amount thereof (and in the case of any Exchange Notes that are classified as
      “Fixed Rate Notes” in the Exchange Notes Indenture, 101% of the principal amount
      thereof) plus accrued and unpaid interest, if any, to the date of purchase
      (subject to the right of Holders of record on a record date to receive interest
      on the relevant interest payment date);

     

    (ii)  the
      repurchase date (which shall be no earlier than thirty (30) days nor later
      than
      sixty (60) days from the date such notice is mailed); and

     

    (iii)  the
      procedures determined by the Borrower, consistent with this Section, that a
      Holder must follow in order to have its Loans and Exchange Notes (if any)
      purchased.

     

    (c)           Holders
      electing to have a Loan or Exchange Note purchased will be required to give
      notice in writing to the Borrower at the address specified in Section 12.01
      at
      least three (3) Business Days prior to the purchase date.  Each Holder
      will be entitled to withdraw its election if the Borrower receives, not later
      than one Business Day prior to the purchase date, a facsimile transmission
      or
      letter from such Holder setting forth the name of such Holder, the principal
      amount of the Loan or Exchange Note which was to be purchased and a statement
      that such Holder is withdrawing its election to have such Loan or Exchange
      Note
      purchased.

     

    
      
        
        

      

      
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    (d)           On
      the purchase date, the Borrower shall pay the purchase price for the Loans
      and
      Exchange Notes to be purchased, to the Holders entitled thereto upon surrender
      of the corresponding Notes.

     

    (e)           The
      Borrower shall comply, to the extent applicable, with the requirements of
      Section 14(e) of the Exchange Act and any other securities laws or regulations
      in connection with the repurchase of Loans and Exchange Notes pursuant to this
      Section.  To the extent that the provisions of any securities laws or
      regulations conflict with provisions of this Section, the Borrower shall comply
      with the applicable securities laws and regulations and shall not be deemed
      to
      have breached its obligations under this Section by virtue thereof.

     

    Section
      9.21  Payments
      for Consent.  The
      Borrower will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly, pay or cause to be paid any consideration to or for
      the
      benefit of any Lender for or as an inducement to any consent, waiver or
      amendment of any of the terms or provisions of this Agreement or the Loans
      unless such consideration is offered to be paid and is paid to all Lenders
      that
      consent, waive or agree to amend in the time frame set forth in the solicitation
      documents relating to such consent, waiver or agreement.

     

    ARTICLE
      X

    Events
      of Default; Remedies

     

    Section
      10.01  Events
      of Default.  Except
      as modified on the Initial Maturity Date as set forth in Section 12.02, one
      or
      more of the following events shall constitute an “Event of
      Default”:

     

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

     

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

     

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

     

    (d)  the
      Borrower or any Restricted Subsidiary shall fail to observe or perform any
      covenant, condition or agreement contained in Section 8.01(j), Section 8.01(m), Section
      8.02, Section 8.03, Section 8.14 or in ARTICLE IX.

     

    (e)  the
      Borrower or any Restricted Subsidiary shall fail to observe or perform any
      covenant, condition or agreement contained in this Agreement (other than those
      specified in Section 10.01(a), Section 10.01(b) or Section
      10.01(d)) or any other Loan Document, and such failure shall continue
      unremedied for a period of 30 days after the earlier to occur of (i) notice
      thereof from the Administrative Agent to the Borrower (which notice will be
      given at the request of any Lender) or (ii) a Responsible Officer of the
      Borrower or such Restricted Subsidiary otherwise becoming aware of such
      default.

     

    
      
        
        

      

      
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    (f)  (i)
      the
      Borrower or any Guarantor shall fail to make any payment (whether of principal
      or interest and regardless of amount) in respect of any Material Indebtedness,
      when and as the same shall become due and payable or (ii) so long as any
      Existing Convertible Notes remain outstanding, (A) any Significant Subsidiary
      fails to make any payment by the end of the applicable grace period, if any,
      after the final scheduled payment date for such payment with respect to any
      indebtedness for borrowed money in an aggregate amount in excess of $10,000,000
      or (B) indebtedness for borrowed money of any Significant Subsidiary in an
      aggregate amount in excess of $10,000,000 shall have been accelerated or
      otherwise declared due and payable, or required to be prepaid or repurchased
      (other than by regularly scheduled required prepayment) prior to the scheduled
      maturity thereof as a result of a default with respect to such indebtedness,
      in
      either case without such indebtedness referred to in subclause (A) or (B) above
      having been discharged, cured, waived, rescinded or annulled, for a period
      of 30
      days after receipt by the Borrower of a notice of default.

     

    (g)  any
      event
      or condition occurs (i) that results in any Material Indebtedness becoming
      due
      prior to its scheduled maturity or (ii) that enables or permits (following
      any
      applicable grace period and notice) the holder or holders of any Material
      Indebtedness or any trustee or agent on its or their behalf to cause any
      Material Indebtedness to become due, or to require the Redemption thereof or
      any
      offer to Redeem to be made in respect thereof, prior to its scheduled maturity
      or require the Borrower or any Restricted Subsidiary to make an offer in respect
      thereof; provided, however, that an event referred to in clause (ii) arising
      under the Senior Secured Credit Agreement shall not become an Event of Default
      unless such event or condition is continuing after the expiration of a
      standstill period ending 45 days after the occurrence of such event or
      condition.

     

    (h)  an
      involuntary proceeding shall be commenced or an involuntary petition shall
      be
      filed seeking (i) liquidation, reorganization or other relief in respect of
      the
      Borrower, any Restricted Subsidiary or, so long as any Existing Convertible
      Notes remain outstanding, any Significant Subsidiary or any Aggregated
      Subsidiaries, or its or their debts, or of a substantial part of its or their
      assets, under any  Federal, state or foreign bankruptcy, insolvency,
      receivership or similar law now or hereafter in effect or (ii) the appointment
      of a receiver, trustee, custodian, sequestrator, conservator or similar official
      for the Borrower, any Restricted Subsidiary or, so long as any Existing
      Convertible Notes remain outstanding, any Significant Subsidiary or any
      Aggregated Subsidiaries or for a substantial part of its or their assets, and,
      in any such case, such proceeding or petition shall continue undismissed for
      thirty (30) days or an order or decree approving or ordering any of the
      foregoing shall be entered.

     

    (i)  the
      Borrower, any Restricted Subsidiary or, so long as any Existing Convertible
      Notes remain outstanding, any Significant Subsidiary or any Aggregated
      Subsidiaries, shall (i) voluntarily commence any proceeding or file any petition
      seeking liquidation, reorganization or other relief under any Federal, state
      or
      foreign bankruptcy, insolvency, receivership or similar law now or hereafter
      in
      effect, (ii) consent to the institution of, or fail to contest in a timely
      and
      appropriate manner, any proceeding or petition described in Section 10.01(h),
      (iii) apply for or consent to the appointment of a receiver, trustee, custodian,
      sequestrator, conservator or similar official for the Borrower, any Restricted
      Subsidiary or, so long as any Existing Convertible Notes remain outstanding,
      any
      Significant Subsidiary or any Aggregated Subsidiaries, or for a substantial
      part
      of its or their assets, (iv) file an answer admitting the material allegations
      of a petition filed against it or them in any such proceeding, (v) make a
      general assignment for the benefit of creditors or (vi) take any action for
      the
      purpose of effecting any of the foregoing; or any stockholder of the Borrower
      shall make any request or take any action for the purpose of calling a meeting
      of the stockholders of the Borrower to consider a resolution to dissolve and
      wind up the Borrower’s affairs.

     

    
      
        
        

      

      
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    (j)  the
      Borrower or any Restricted Subsidiary shall become unable, admit in writing
      its
      inability or fail generally to pay its debts as they become due.

     

    (k)  (i)
      one
      or more judgments for the payment of money in an aggregate amount in excess
      of
      $25,000,000 (to the extent not covered by independent third party insurance
      provided by insurers of the highest claims paying rating or financial strength
      as to which the insurer does not dispute coverage and is not subject to an
      insolvency proceeding) or (ii) any one or more non-monetary judgments that
      have,
      or could reasonably be expected to have, individually or in the aggregate,
      a
      Material Adverse Effect, shall be rendered against any Loan Party or any
      combination thereof and the same shall remain undischarged for a period of
      30
      consecutive days during which execution shall not be effectively stayed, or
      any
      action shall be legally taken by a judgment creditor to attach or levy upon
      any
      assets of any Loan Party to enforce any such judgment.

     

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

     

    (m)  an
      ERISA
      Event shall have occurred that, in the opinion of the Majority Lenders, when
      taken together with all other ERISA Events that have occurred, could reasonably
      be expected to result in liability of the Borrower and its Subsidiaries in
      an
      aggregate amount exceeding $25,000,000 in any year.

     

    Section
      10.02  Remedies.  Except
      as modified on the Initial Maturity Date as set forth in Section
      12.02:

     

    (a)  In
      the
      case of an Event of Default other than one described in Section 10.01(h),
      Section 10.01(i) or Section 10.01(j), at any time
      thereafter during the continuance of such Event of Default, the Majority Lenders
      shall, by notice to the Borrower, take either or both of the following actions,
      at the same or different times:  (i) declare the Loans then
      outstanding to be due and payable in whole (or in part, in which case any
      principal not so declared to be due and payable may thereafter be declared
      to be
      due and payable), and thereupon the principal of the Loans so declared to be
      due
      and payable, together with accrued interest thereon and all fees and other
      obligations of the Loan Parties accrued hereunder and under the Loans and the
      other Loan Documents shall become due and payable immediately, without
      presentment, demand, protest, notice of intent to accelerate, notice of
      acceleration or other notice of any kind, all of which are hereby waived by
      each
      Loan Party; and in case of an Event of Default described in Section 10.01(h),
      Section 10.01(i) or Section 10.01(j), the Notes and
      the principal of the Loans then outstanding, together with accrued interest
      thereon and all fees and the other obligations of the Borrower and the
      Guarantors accrued hereunder and under the Notes and the other Loan Documents
      shall automatically become due and payable, without presentment, demand, protest
      or other notice of any kind, all of which are hereby waived by each Loan
      Party.

     

    (b)  In
      the
      case of the occurrence of an Event of Default, the Administrative Agent and
      the
      Lenders will have all other rights and remedies available at law and
      equity.

     

    (c)  All
      proceeds realized from the liquidation or other disposition of any collateral
      or
      otherwise received after maturity of the Notes, whether by acceleration or
      otherwise, shall be applied in accordance with Section 4.01(c).

     

    
      
        
        

      

      
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    ARTICLE
      XI

    The
      Administrative Agent

     

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

     

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

     

    Section
      11.03  Action
      by Administrative Agent.  The
      Administrative Agent shall have no duty to take any discretionary action or
      exercise any discretionary powers, except discretionary rights and powers
      expressly contemplated hereby or by the other Loan Documents that the
      Administrative Agent is required to exercise in writing as directed by the
      Majority Lenders (or such other number or percentage of the Lenders as shall
      be
      necessary under the circumstances as provided in Section
      12.02) and in all cases the Administrative Agent shall be fully justified in
      failing or refusing to act hereunder or under any other Loan Documents unless
      it
      shall (a) receive written instructions from the Majority Lenders or the Lenders,
      as applicable, (or such other number or percentage of the Lenders as shall
      be
      necessary under the circumstances as provided in Section
      12.02) specifying the action to be taken and (b) be indemnified to its

     

    
      
        
        

      

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

     

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

     

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

     

    Section
      11.06  Resignation
      of Administrative Agent.  Subject
      to the appointment and acceptance of a successor Agent as provided in this
Section 11.06, any Agent may resign at any time by
      notifying the Lenders and the Borrower. Upon any such resignation, the Majority
      Lenders shall have the right, in consultation with the Borrower, to appoint
      a
      successor.  If no successor shall have been so appointed by the
      Majority Lenders and shall have accepted such appointment within 30 days after
      the retiring Agent gives notice of its resignation of the retiring Agent, then
      the retiring Agent may, on behalf of the Lenders, appoint a successor
      Agent.  Upon the acceptance of its appointment as Agent hereunder by a
      successor, such successor shall succeed to and become vested with all the
      rights, powers, privileges and duties of the retiring Agent, and the retiring
      Agent shall be discharged from its duties and obligations
      hereunder.  The 

     

    
      
        
        

      

      
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    fees
      payable by the Borrower to a successor Agent shall be the same as those payable
      to its predecessor unless otherwise agreed between the Borrower and such
      successor.  After the Agent’s resignation hereunder, the provisions of
      this ARTICLE XI and Section
      12.03 shall continue in effect for the benefit of such retiring Agent, its
      sub-agents and their respective Related Parties in respect of any actions taken
      or omitted to be taken by any of them while it was acting as Agent.

     

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

     

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

     

    Section
      11.09  Administrative
      Agent May File Proofs of Claim.  In
      case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
      reorganization, arrangement, adjustment, composition or other judicial
      proceeding relative to the Borrower or any of its Restricted Subsidiaries,
      the
      Administrative Agent (irrespective of whether the principal of any Loan shall
      then be due and payable as herein expressed or by declaration or otherwise
      and
      irrespective of whether the Administrative Agent shall have made any demand
      on
      the Borrower) shall be entitled and empowered, by intervention in such
      proceeding or otherwise:

     

    (a)  to
      file
      and prove a claim for the whole amount of the principal and interest owing
      and
      unpaid in respect of the Loans and all other Indebtedness that are owing and
      unpaid and to file such other documents as may be necessary or advisable in
      order to have the claims of the Lenders and the Administrative Agent (including
      any claim for the reasonable compensation, expenses, disbursements and advances
      of the Lenders and the Administrative Agent and their respective agents and
      counsel and all other amounts due the Lenders and the Administrative Agent
      under
Section 12.03) allowed in such judicial proceeding;
      and

     

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

     

    
      
        
        

      

      
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    and
      any
      custodian, receiver, assignee, trustee, liquidator, sequestrator or other
      similar official in any such judicial proceeding is hereby authorized by each
      Lender to make such payments to the Administrative Agent and, in the event
      that
      the Administrative Agent shall consent to the making of such payments directly
      to the Lenders, to pay to the Administrative Agent any amount due for the
      reasonable compensation, expenses, disbursements and advances of the
      Administrative Agent and its agents and counsel, and any other amounts due
      the
      Administrative Agent under Section
      12.03.

     

    Nothing
      contained herein shall be deemed to authorize the Administrative Agent to
      authorize or consent to or accept or adopt on behalf of any Lender any plan
      of
      reorganization, arrangement, adjustment or composition affecting the
      Indebtedness or the rights of any Lender or to authorize the Administrative
      Agent to vote in respect of the claim of any Lender in any such
      proceeding.

     

    Section
      11.10  Authority
      of Administrative Agent to Release Collateral and Liens.  Each
      Lender hereby authorizes the Administrative Agent to release any collateral
      that
      is permitted to be sold or released pursuant to the terms of the Loan
      Documents.  Each Lender hereby authorizes the Administrative Agent to
      execute and deliver to the Borrower, at the Borrower’s sole cost and expense,
      any and all releases of Liens, termination statements, assignments or other
      documents reasonably requested by the Borrower in connection with any sale
      or
      other disposition of Property to the extent such sale or other disposition
      is
      permitted by the terms of Section 9.11 or is otherwise authorized by the terms
      of the Loan Documents.

     

    Section
      11.11  The
      Arrangers and the Agents.  The
      Arrangers and the Syndication Agent shall have no duties, responsibilities
      or
      liabilities under this Agreement and the other Loan Documents other than their
      duties, responsibilities and liabilities in their capacity as Lenders
      hereunder.

     

    ARTICLE
      XII

    Miscellaneous

     

    Section
      12.01  Notices.

     

    (a)  Except
      in
      the case of notices and other communications expressly permitted to be given
      by
      telephone (and subject to Section 12.01(b)), all
      notices and other communications provided for herein shall be in writing and
      shall be delivered by hand or overnight courier service, mailed by certified
      or
      registered mail or sent by telecopy, as follows:

     

    (i)   if
      to the Borrower, to it at 1615 Poydras Street, New Orleans,
      Louisiana  70112, Attention of Kathleen Quirk (Telecopy No. (504)
      582-4511);

     

    (ii)  if
      to the
      Administrative Agent, to it at:  1 Chase Tower, 10 South Dearborn,
      IL1-0010, Chicago, Illinois 60603 Attention:  Mi Y Kim, Phone No.
      312.732.4853, Fax No. 312.385.7096, and for all other correspondence other
      than
      borrowings, continuation and conversion requests 712 Main, 8th Floor, Houston,
      Texas 77002, Attention of Ronald Dierker (Telecopy No. (713)
      216-7770);

     

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

     

    (b)  Notices
      and other communications to the Lenders hereunder may be delivered or furnished
      by electronic communications pursuant to procedures approved by the
      Administrative Agent; provided that the foregoing shall not apply to notices
      pursuant to ARTICLE II, ARTICLE III, ARTICLE
      IV and
ARTICLE V unless otherwise agreed by the
      Administrative Agent 

     

    
      
        
        

      

      
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    and
      the
      applicable Lender.  The Administrative Agent or the Borrower may, in
      its discretion, agree to accept notices and other communications to it hereunder
      by electronic communications pursuant to procedures approved by it; provided
      that approval of such procedures may be limited to particular notices or
      communications.

     

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

     

    Section
      12.02  Waivers;
      Amendments.

     

    (a)  No
      failure on the part of the Administrative Agent or any Lender to exercise and
      no
      delay in exercising, and no course of dealing with respect to, any right, power
      or privilege, or any abandonment or discontinuance of steps to enforce such
      right, power or privilege, under any of the Loan Documents shall operate as
      a
      waiver thereof, nor shall any single or partial exercise of any right, power
      or
      privilege under any of the Loan Documents preclude any other or further exercise
      thereof or the exercise of any other right, power or privilege.  The
      rights and remedies of the Administrative Agent and the Lenders hereunder and
      under the other Loan Documents are cumulative and are not exclusive of any
      rights or remedies that they would otherwise have.  No waiver of any
      provision of this Agreement or any other Loan Document or consent to any
      departure by any Loan Party therefrom shall in any event be effective unless
      the
      same shall be permitted by Section 12.02(b), and
      then such waiver or consent shall be effective only in the specific instance
      and
      for the purpose for which given.  Without limiting the generality of
      the foregoing, the making of a Loan shall not be construed as a waiver of any
      Default, regardless of whether the Administrative Agent, any Lender may have
      had
      notice or knowledge of such Default at the time.

     

    (b)  Neither
      this Agreement nor any provision hereof nor any Security Instrument nor any
      provision thereof may be waived, amended or modified except pursuant to an
      agreement or agreements in writing entered into by the Borrower and the Majority
      Lenders or by the Borrower and the Administrative Agent with the consent of
      the
      Majority Lenders; provided that no such agreement shall (i) reduce the principal
      amount of any Loan or reduce the rate of interest thereon, or reduce any fees
      payable hereunder, or reduce any other Indebtedness hereunder or under any
      other
      Loan Document, without the written consent of each Lender affected thereby,
      (ii)
      postpone the scheduled date of payment or prepayment of the principal amount
      of
      any Loan, or any interest thereon, or any fees payable hereunder, or any other
      Indebtedness hereunder or under any other Loan Document, or reduce the amount
      of, waive or excuse any such payment, or postpone or extend the Initial Maturity
      Date or the Final Maturity Date without the written consent of each Lender
      affected thereby, (iii) change Section 4.01(b),
      Section 4.01(c) or Section 4.01(d) in a manner that
      would alter the pro rata sharing of payments required thereby, without the
      written consent of each Lender, (iv) waive or amend Section 10.02(c) without the written consent of each
      Lender, (v) release any Guarantor (except as set forth in the Guaranty
      Agreement), release any collateral (other than as provided in Section 11.10) without the written consent of each
      Lender, (vi) restrict the right of each Lender to exchange Term Loans or Initial
      Loans on the Initial Maturity Date, for Exchange Notes or amend the rate of
      such
      exchange without the written consent of each Lender directly affected thereby,
      (vii) amend, modify or waive any provision in the Exchange Notes that require
      (or would, if any Exchange Notes were outstanding, require) the approval of
      all
      holders of Exchange Notes without the consent of all the Lenders, or (viii)
      change any of the provisions of this Section
      12.02(b) or the definitions of “Majority Lenders” or any other provision
      hereof specifying the number or percentage of Lenders required to waive, amend
      or modify any rights hereunder or under any other Loan Documents or make any
      determination or grant any consent hereunder or any other Loan Documents,
      without the written consent of each Lender; provided 

     

    
      
        
        

      

      
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    further
      that no such agreement shall amend, modify or otherwise affect the rights or
      duties of the Administrative Agent or any other Agent hereunder or under any
      other Loan Document without the prior written consent of the Administrative
      Agent or such other Agent, as the case may be.  Notwithstanding the
      foregoing, any supplement to Schedule 7.14 (Subsidiaries) shall be effective
      simply by delivering to the Administrative Agent a supplemental schedule clearly
      marked as such and, upon receipt, the Administrative Agent will promptly deliver
      a copy thereof to the Lenders.

     

    (c)  Notwithstanding
      anything in clause (a) above or in this Agreement and the other Loan Documents
      to the contrary, without notice to or the consent of any Lender, the
      Administrative Agent or the Borrower, immediately following the Initial Maturity
      Date:

     

    (i)
      the
      affirmative covenants set forth in Article VIII (other than (A) Section 8.20
      (Exchange Notes) and (B) for so long as any Loans are outstanding, Section
      8.01
      (Financial Statements; Other Information), Section 8.14 (Additional Guarantors)
      and Section 8.19 (Second Lien)) shall be deemed deleted;

    

    (ii)
      for
      so long as any Loans are outstanding, Sections 9.07, 9.08, 9.12, 9.14 and 9.19
      shall be deleted and the other negative covenants set forth in Article IX (other
      than Section 9.20 (Change of Control)) shall be deemed to have been
      automatically replaced by the corresponding covenants set forth in Exhibit
      H
      hereto, and

    

    (iii)
      the
      Events of Default and remedies set forth in Article X shall be deemed to have
      been automatically replaced by the defaults and remedies described in Exhibit
      H
      hereto under the heading “Events of default,”

    

    each
      as
      applicable, which replacement provisions, along with the relevant defined terms
      used therein for the purposes thereof, will thereupon be deemed incorporated
      by
      reference herein, with references therein to the “Issuer” and the “Trustee”
being deemed to be references to the “Borrower” and the “Administrative Agent,”
respectively, and with such other modifications to this Agreement necessary
      to
      give effect to the foregoing; in furtherance of the foregoing, the
      Administrative Agent will, at the request of the Borrower, enter into such
      technical amendments to the Loan Documents reasonably necessary to effect the
      foregoing; provided that following the Initial Maturity Date, the
      proceeds of any mandatory prepayment event set forth in Section 3.05(b) shall
      continue to be applied in accordance with Section 3.05(b) and 3.05(d), as
      applicable.

    

    Section
      12.03  Expenses,
      Indemnity; Damage Waiver.

     

    (a)  The
      Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
      Administrative Agent and its Affiliates, including, without limitation, the
      reasonable fees, charges and disbursements of counsel and other outside
      consultants for the Administrative Agent, the reasonable travel, photocopy,
      mailing, courier, telephone and other similar expenses, and the cost of
      environmental audits and surveys and appraisals, in connection with the
      syndication of the credit facilities provided for herein, the preparation,
      negotiation, execution, delivery and administration (both before and after
      the
      execution hereof and including advice of counsel to the Administrative Agent
      as
      to the rights and duties of the Administrative Agent and the Lenders with
      respect thereto) of this Agreement and the other Loan Documents and any
      amendments, modifications or waivers of or consents related to the provisions
      hereof or thereof (whether or not the transactions contemplated hereby or
      thereby shall be consummated), (ii) all costs, expenses, taxes, assessments
      and
      other charges incurred by the any Agent or any Lender in connection with any
      filing, registration, recording or perfection of any security interest
      contemplated by this Agreement or any Security Instrument or any other document
      referred to therein, (iii) all out-of-pocket expenses incurred by any Agent
      or
      any 

     

    
      
        
        

      

      
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    Lender,
      including the fees, charges and disbursements of any counsel for any Agent
      or
      any Lender, in connection with the enforcement or protection of its rights
      in
      connection with this Agreement or any other Loan Document, including its rights
      under this Section 12.03, or in connection with the
      Loans made hereunder, including, without limitation, all such out-of-pocket
      expenses incurred during any workout, restructuring or negotiations in respect
      of such Loans.

     

    (b)  THE
      BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER AND EACH LENDER, AND EACH
      RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED
      AN
“INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND
      ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE
      FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED
      BY
      OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS
      A
      RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN
      DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, (ii)
      THE
      PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT
      OF
      THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF
      THE
      TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (iii) THE
      FAILURE OF THE BORROWER OR ANY LOAN PARTY TO COMPLY WITH THE TERMS OF ANY LOAN
      DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iv)
      ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT
      OF THE BORROWER OR ANY LOAN PARTY SET FORTH IN ANY OF THE LOAN DOCUMENTS OR
      ANY
      INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH,
      (v)
      ANY LOAN OR THE USE OF THE PROCEEDS THEREFROM, (vi) ANY OTHER ASPECT OF THE
      LOAN
      DOCUMENTS, (vii) THE OPERATIONS OF THE BUSINESS OF THE BORROWER OR ANY LOAN
      PARTY BY SUCH PERSONS, (viii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED
      TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (ix)
      ANY
      ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR
      ANY
      OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION,
      STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT
      OF
      DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS
      SUBSTANCES ON ANY OF THEIR PROPERTIES, (x) THE BREACH OR NON-COMPLIANCE BY
      THE
      BORROWER OR ANY RESTRICTED SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE
      TO
      THE BORROWER OR ANY RESTRICTED SUBSIDIARY, (xi) THE PAST OWNERSHIP BY THE
      BORROWER OR ANY RESTRICTED 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, (xii) THE PRESENCE, USE,
      RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE,
      TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF OIL, OIL
      AND
      GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES
      OWNED OR OPERATED BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR ANY ACTUAL
      OR
      ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY
      OWNED
      OR OPERATED BY THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES, (xiii) ANY
      ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS
      RESTRICTED SUBSIDIARIES, (xiv) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
      CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xv) ANY ACTUAL OR
      PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING 

     

    
      
        
        

      

      
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    RELATING
      TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY
      AND
      REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
      SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
      NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
      WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
      TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS
      OF
      ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
      FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
      NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
      DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
      JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE
      GROSS
      NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

     

    (c)  To
      the
      extent that the Borrower fails to pay any amount required to be paid by it
      to
      any Agent or the Arrangers under Section 12.03(a) or
(b), each Lender severally
      agrees to pay to such
      Agent or the Arrangers, as the case may be, such Lender’s Commitment Percentage
      (determined as of the time that the applicable unreimbursed expense or indemnity
      payment is sought) of such unpaid amount; provided that the unreimbursed expense
      or indemnified loss, claim, damage, liability or related expense, as the case
      may be, was incurred by or asserted against such Agent or the Arrangers in
      their
      capacity as such.

     

    (d)  To
      the
      extent permitted by applicable law, no Loan Party shall assert, and hereby
      waives, any claim against any Indemnitee, on any theory of liability, for
      special, indirect, consequential or punitive damages (as opposed to direct
      or
      actual damages) arising out of, in connection with, or as a result of, this
      Agreement, any other Loan Document or any agreement or instrument contemplated
      hereby or thereby, the Transactions, any Loan or the use of the proceeds
      thereof.

     

    (e)  All
      amounts due under this Section 12.03 shall be payable
      not later than 10 days after written demand therefor.

     

    Section
      12.04  Successors
      and Assigns.

     

    (a)  The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns permitted hereby,
      except that (i) the Borrower may not assign or otherwise transfer any of its
      rights or obligations hereunder without the prior written consent of each Lender
      (and any attempted assignment or transfer by the Borrower without such consent
      shall be null and void) and (ii) no Lender may assign or otherwise transfer
      its
      rights or obligations hereunder except in accordance with this Section 12.04.  Nothing in this Agreement,
      expressed or implied, shall be construed to confer upon any Person (other than
      the parties hereto, their respective successors and assigns permitted hereby,
      Participants (to the extent provided in Section
      12.04(c)) and, to the extent expressly contemplated hereby, the Related
      Parties of each of the Administrative Agent and the Lenders) any legal or
      equitable right, remedy or claim under or by reason of this
      Agreement.

     

    (b)  (i)
      Subject to the conditions set forth in Section
      12.04(b)(ii), any Lender may assign to one or more assignees (each an
“Assignee”) all or a portion of its rights and obligations under this
      Agreement (including all or a portion of the Loans at the time owing to it)
      with
      the prior written consent of:

     

    
      
        
        

      

      
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    (A)  the
      Borrower solely if such assignment is made prior to the Initial Maturity Date
      and after giving effect to such assignment, the Initial Lenders will hold less
      than 50% of the outstanding aggregate principal of the Loans, provided that
      no
      consent of the Borrower shall be required for an assignment to a Lender, an
      Affiliate of a Lender, an Approved Fund (as defined below), or, if an Event
      of
      Default under Section 10.01(a), (h), (i) or (j) has occurred and is continuing;
      and

     

    (B)  the
      Administrative Agent (such consent not to be unreasonably
      withheld).

     

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

     

    (A)  except
      in
      the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
      Fund or an assignment of the entire remaining amount of the assigning Lender’s
      Loans, the amount of the Loans of the assigning Lender subject to each such
      assignment (determined as of the date the Assignment and Assumption with respect
      to such assignment is delivered to the Administrative Agent) shall not be less
      than $5,000,000 unless each of the Borrower and the Administrative Agent
      otherwise consent, provided that (1) no such consent of the Borrower shall
      be
      required if an Event of Default has occurred and is continuing and (2) such
      amounts shall be aggregated in respect of each Lender and its Affiliates or
      Approved Funds;

     

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

     

    (C)  the
      Assignee, if it shall not be a Lender, shall deliver to the Administrative
      Agent
      an Administrative Questionnaire.

     

    For
      the
      purposes of this Section 12.04, “Approved Fund” means any Person (other
      than a natural person) that is engaged in making, purchasing, holding or
      investing in bank loans and similar extensions of credit in the ordinary course
      of its business and that is administered or managed by (a) a Lender, (b) an
      Affiliate of a Lender or (c) Person or an Affiliate of a Person that administers
      or manages a Lender.

     

    (iii)  Subject
      to Section 12.04(b)(iv) and the acceptance and
      recording thereof, from and after the effective date specified in each
      Assignment and Assumption the Assignee thereunder shall be a party hereto and,
      to the extent of the interest assigned by such Assignment and Assumption, have
      the rights and obligations of a Lender under this Agreement, and the assigning
      Lender thereunder shall, to the extent of the interest assigned by such
      Assignment and Assumption, be released from its obligations under this Agreement
      (and, in the case of an Assignment and Assumption covering all of the assigning
      Lender’s rights and obligations under this Agreement, such Lender shall cease to
      be a party hereto but shall continue to be entitled to the benefits of Section 5.01, Section 5.02,
Section
      5.03 and Section
      12.03).  Any assignment or transfer by a Lender of rights or
      obligations under this Agreement that does not comply with this Section 12.04 shall be treated for purposes of this
      Agreement as a sale by such Lender of a participation in such rights and
      obligations in accordance with Section
      12.04(c).

     

    (iv)  The
      Administrative Agent, acting for this purpose as an agent of the Borrower,
      shall
      maintain at one of its offices a copy of each Assignment and Assumption
      delivered to it and a register for the recordation of the names and addresses
      of
      the Lenders, and the principal amount of the Loans owing to, each Lender
      pursuant to the terms hereof from time to time (the 

     

    
      
        
        

      

      
        89

        
          

        

      

      
        
        

      

    

     

    “Register”).  The
      entries in the Register shall be conclusive, and the Borrower, the
      Administrative Agent and the Lenders may treat each Person whose name is
      recorded in the Register pursuant to the terms hereof as a Lender hereunder
      for
      all purposes of this Agreement, notwithstanding notice to the
      contrary.  The Register shall be available for inspection by the
      Borrower and any Lender, at any reasonable time and from time to time upon
      reasonable prior notice.

     

    (v)  Upon
      its
      receipt of a duly completed Assignment and Assumption executed by an assigning
      Lender and an assignee, the Assignee’s completed Administrative Questionnaire
      and, if required hereunder, applicable tax forms (unless the Assignee shall
      already be a Lender hereunder), the processing and recordation fee referred
      to
      in Section 12.04(b) and any written consent to such
      assignment required by Section 12.04(b), the
      Administrative Agent shall accept such Assignment and Assumption and record
      the
      information contained therein in the Register.  No assignment shall be
      effective for purposes of this Agreement unless it has been recorded in the
      Register as provided in this Section
      12.04(b).

     

    (c)  (A)  Any
      Lender may, without the consent of the Borrower but subject to the prior
      approval of the Administrative Agent (such approval not to be unreasonably
      withheld), sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and
      obligations under this Agreement (including all or a portion of the Loans owing
      to it); provided that (A) such Lender’s obligations under this Agreement
      shall remain unchanged, (B) such Lender shall remain solely responsible to
      the other parties hereto for the performance of such obligations, (C) the
      Borrower, the Administrative Agent and the other Lenders shall continue to
      deal
      solely and directly with such Lender in connection with such Lender’s rights and
      obligations under this Agreement and (D) such Lender shall continue to give
      prompt attention to and process (including, if required, through discussions
      with Participants) requests for waivers or amendments hereunder.  Any
      agreement or instrument pursuant to which a Lender sells such a participation
      shall provide that such Lender shall retain the sole right to enforce this
      Agreement and to approve any amendment, modification or waiver of any provision
      of this Agreement; provided that such agreement or instrument may provide that
      such Lender will not, without the consent of the Participant, agree to any
      amendment, modification or waiver described in the proviso to Section 12.02 that affects such
      Participant.  In addition such agreement must provide that the
      Participant be bound by the provisions of Section
      12.03.  Subject to Section
      12.04(c)(ii), the Borrower agrees that each Participant shall be entitled to
      the benefits of Section 5.01, Section 5.02 and Section
      5.03
      to the same extent as if it were a Lender and had acquired its interest by
      assignment pursuant to Section
      12.04(b).  To the extent permitted by law, each Participant also
      shall be entitled to the benefits of Section 12.08 as
      though it were a Lender, provided such Participant agrees to be subject to
Section 4.01(d) as though it were a Lender.

     

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

     

    (d)  Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of such Lender,
      including, without limitation, any pledge or assignment to secure obligations
      to
      a Federal Reserve Bank, and this Section 12.04(d)
      shall not apply to any such pledge or assignment of a security interest;
      provided that no such pledge or assignment of a security interest shall release
      a Lender from any of its obligations hereunder or substitute any such pledgee
      or
      Assignee for such Lender as a party hereto.

     

    
      
        
        

      

      
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    (e)  (B)  To
      the extent requested by any Lender, the Borrower shall execute and deliver
      to
      such Lender an Initial Note dated the Effective Date substantially in the form
      of Exhibit A-1 hereto to evidence the portion of the Initial Loan made by
      such Lender and with appropriate insertions (“Initial
      Notes”).

     

    (i)  Unless
      converted to an Exchange Note and, to the extent requested by any Lender, the
      Borrower shall execute and deliver to such Lender a Term Note dated the Initial
      Maturity Date substantially in the form of Exhibit A-2 hereto to evidence
      the Term Loan made on such date, in the principal amount of the Initial Notes
      held by such Lender on such date and with other appropriate insertions
      (collectively, the “Term Notes”).

     

    (ii)  On
      or
      prior to the effective date of any Assignment and Assumption, the assigning
      Lender shall surrender any outstanding Loan Notes held by it all or a portion
      of
      which are being assigned, and the Borrower, at its own expense, shall, upon
      a
      request to the Administrative Agent by the assigning Lender or the Assignee,
      as
      applicable, execute and deliver to the Administrative Agent (in exchange for
      outstanding Loan Notes of the assigning Lender, if any) a new Loan Note to
      the
      order of such Assignee in an amount equal to the amount of such Assignee’s Loans
      after giving effect to such Assignment and Assumption and, if the assigning
      Lender has retained a Loan hereunder, a new Loan Note, to the order of the
      assigning Lender in an amount equal to the amount of such Lender’s Loans after
      giving effect to such Assignment and Assumption.  Any such new Loan
      Notes shall be dated the Effective Date and shall otherwise be in the form
      of
      the Loan Note replaced thereby.  Any Loan Notes surrendered by the
      assigning Lender shall be returned by the Administrative Agent to the Borrower
      marked “cancelled.”

     

    (f)  Notwithstanding
      the foregoing, any Conduit Lender may assign any or all of the Loans it may
      have
      funded hereunder to its designating Lender without the consent of the Borrower
      or the Administrative Agent and without regard to the limitations set forth
      in
      Section 12.04(b).  Each of the Borrower, each Lender and the
      Administrative Agent hereby confirms that it will not institute against a
      Conduit Lender or join any other Person in instituting against a Conduit Lender
      any bankruptcy, reorganization, arrangement, insolvency or liquidation
      proceeding under any state bankruptcy or similar law, for one year and one
      day
      after the payment in full of the latest maturing commercial paper note issued
      by
      such Conduit Lender; provided, however, that each Lender
      designating any Conduit Lender hereby agrees to indemnify, save and hold
      harmless each other party hereto for any loss, cost, damage or expense arising
      out of its inability to institute such a proceeding against such Conduit Lender
      during such period of forbearance.

     

    (g)  Notwithstanding
      any other provisions of this Section 12.04, no
      transfer or assignment of the interests or obligations of any Lender or any
      grant of participations therein shall be permitted if such transfer, assignment
      or grant would require the Borrower and the Guarantors to file a registration
      statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any
      state.

     

    Section
      12.05  Survival;
      Revival; Reinstatement.

     

    (a)  All
      covenants, agreements, representations and warranties made by the Loan Parties
      herein and in the certificates or other instruments delivered in connection
      with
      or pursuant to this Agreement or any other Loan Document shall be considered
      to
      have been relied upon by the other parties hereto and shall survive the
      execution and delivery of this Agreement and the making of any Loans, regardless
      of any investigation made by any such other party or on its behalf and
      notwithstanding that the Administrative Agent, any other Agent or any Lender
      may
      have had notice or knowledge of any Default or incorrect representation or
      warranty at the time any credit is extended hereunder, and shall continue in
      full force and effect as long as the principal of or any accrued interest

     

    
      
        
        

      

      
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    on
      any
      Loan or any fee or any other amount payable under this Agreement is outstanding
      and unpaid.  The provisions of Section
      5.01, Section 5.02, Section 5.03 and Section
      12.03 and ARTICLE XI shall survive and remain in
      full force and effect regardless of the consummation of the transactions
      contemplated hereby, the repayment of the Loans or the termination of this
      Agreement, any other Loan Document or any provision hereof or
      thereof.

     

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

     

    Section
      12.06  Counterparts;
      Integration; Effectiveness.

     

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

     

    (b)  This
      Agreement, the other Loan Documents and any separate letter agreements with
      respect to fees payable to the Administrative Agent constitute the entire
      contract among the parties relating to the subject matter hereof and thereof
      and
      supersede any and all previous agreements and understandings, oral or written,
      relating to the subject matter hereof and thereof.  This Agreement and
      the other Loan Documents represent the final agreement among the parties hereto
      and thereto and may not be contradicted by evidence of prior, contemporaneous
      or
      subsequent oral agreements of the parties.  There are no unwritten
      oral agreements between the parties.

     

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

     

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

     

    Section
      12.08  Right
      of Setoff.  If
      an Event of Default shall have occurred and be continuing, each Lender and
      each
      of its Affiliates is hereby authorized at any time and from time to time, to
      the
      fullest extent permitted by law, to set off and apply any and all deposits
      (general or special, time or demand, provisional or final) at any time held
      and
      other obligations (of whatsoever kind, including, without limitations
      obligations under Swap Agreements) at any time owing by such Lender or Affiliate
      to or for the credit or the account of the Borrower or any Loan Party against
      any of and all the obligations of the 

     

    
      
        
        

      

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

     

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

     

    (a)  THIS
      AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
      THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT UNITED STATES
      FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR
      TAKE
      INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
      LOCATED.

     

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

     

    (c)  EACH
      PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
      AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
      THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
      SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO
      SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME
      EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL
      AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY
      OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
      PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.

     

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

     

    
      
        
        

      

      
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    AND
      (iv)
      ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN
      DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER
      THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
      12.09.

     

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

     

    Section
      12.11  Confidentiality.  Each
      of the Administrative Agent and each Lender agrees to keep confidential all
      non-public information provided to it by the Borrower or any of their
      Subsidiaries, the Administrative Agent or any Lender pursuant to or in
      connection with this Agreement that is designated by the provider thereof as
      confidential; provided that nothing herein shall prevent the Administrative
      Agent or any Lender from disclosing any such information (a) to the
      Administrative Agent, any other Lender or any affiliate thereof, (b) subject
      to
      an agreement to comply with the provisions of this Section, to any actual or
      prospective Transferee or any direct or indirect counterparty to any Swap
      Agreement (or any professional advisor to such counterparty), (c) to its
      employees, directors, agents, attorneys, accountants and other professional
      advisors or those of any of its affiliates, (d) upon the request or demand
      of
      any Governmental Authority, (e) in response to any order of any court or other
      Governmental Authority or as may otherwise be required pursuant to any
      Governmental Requirement, (f) if requested or required to do so in connection
      with any litigation or similar proceeding, (g) that has been publicly disclosed,
      (h) to the National Association of Insurance Commissioners or any similar
      organization or any nationally recognized rating agency that requires access
      to
      information about a Lender’s investment portfolio in connection with ratings
      issued with respect to such Lender, or (i) in connection with the exercise
      of
      any remedy hereunder or under any other Loan Document.

     

    Each
      Lender acknowledges that information furnished to it pursuant to this Agreement
      or the other Loan Documents may include material non-public information
      concerning the Borrower and its Affiliates and their related parties or their
      respective securities, and confirms that it has developed compliance procedures
      regarding the use of material non-public information and that it will handle
      such material non-public information in accordance with those procedures and
      applicable law, including Federal and state securities laws.

     

    All
      information, including requests for waivers and amendments, furnished by the
      Borrower or the Administrative Agent pursuant to, or in the course of
      administering, this Agreement or the other Loan Documents will be
      syndicate-level information, which may contain material non-public information
      about the Borrower and its Affiliates and their related parties or their
      respective securities.  Accordingly, each Lender represents to the
      Borrower and the Administrative Agent that it has identified in its
      Administrative Questionnaire a credit contact who may receive information that
      may contain material non-public information in accordance with its compliance
      procedures and applicable law, including Federal and state securities
      laws.

     

    Section
      12.12  Interest
      Rate Limitation.  It
      is the intention of the parties hereto that each Lender shall conform strictly
      to usury laws applicable to it.  Notwithstanding anything herein to
      the contrary, if at any time the interest rate applicable to any Loan, together
      with all fees, charges and other amounts which are treated as interest on such
      Loan under applicable law (collectively the “Charges”), shall exceed the
      maximum lawful rate (the “Maximum Rate”) which may be contracted for,
      charged, taken, received or reserved by the Lender holding such Loan in
      accordance with applicable law, the rate of interest payable in respect of
      such
      Loan, together with all Charges payable in respect thereof, shall be limited
      to
      the Maximum Rate and, to the extent lawful, the interest and Charges that would
      have been payable in respect of such Loan but were not payable as a result
      of
      the operation of this Section shall be cumulated 

     

    
      
        
        

      

      
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    and
      the
      interest and Charges payable to such Lender in respect of other Loans or periods
      shall be increased (but not above the Maximum Rate therefor) until such
      cumulated amount, together with interest thereon at the Federal Funds Effective
      Rate to the date of repayment, shall have been received by such
      Lender.

     

    Section
      12.13  Intercreditor
      Agreement.  This
      Agreement and each Security Instrument shall be subject to the terms of the
      Intercreditor Agreement upon execution thereof.

     

    Section
      12.14  No
      Third Party Beneficiaries.  This
      Agreement, the other Loan Documents, and the agreement of the Lenders to make
      Loans hereunder are solely for the benefit of the Borrower, and no other Person
      (including, without limitation, any Restricted Subsidiary of the Borrower,
      any
      obligor, contractor, subcontractor, supplier or materialsman) shall have any
      rights, claims, remedies or privileges hereunder or under any other Loan
      Document against the Administrative Agent, any other Agent or any Lender for
      any
      reason whatsoever.  There are no third party
      beneficiaries.

     

    Section
      12.15  Acknowledgements.  The
      Borrower hereby acknowledges that:

     

    (a)  it
      has
      been advised by counsel in the negotiation, execution and delivery of this
      Agreement and the other Loan Documents;

     

    (b)  neither
      the Administrative Agent nor any Lender has any fiduciary relationship with
      or
      duty to the Borrower arising out of or in connection with this Agreement or
      any
      of the other Loan Documents, and the relationship between Administrative Agent
      and Lenders, on one hand, and the Borrower, on the other hand, in connection
      herewith or therewith is solely that of debtor and creditor; and

     

    no
      joint
      venture is created hereby or by the other Loan Documents or otherwise exists
      by
      virtue of the transactions contemplated hereby among the Lenders or among the
      Borrower and the Lenders.

     

    Section
      12.16  USA
      Patriot Act Notice.  Each
      Lender hereby notifies the Borrower that pursuant to the requirements of the
      USA
      Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
      (the “Act”), it is required to obtain, verify and record information that
      identifies the Borrower, which information includes the name and address of
      the
      Borrower and other information that will allow such Lender to identify the
      Borrower in accordance with the Act.

     

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

     

    BORROWER:                                                                MCMORAN
      EXPLORATION CO.

    

    

    By: ___________________________                                                                      

    Name:

    Title:

    
      
            

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ADMINISTRATIVE
      AGENT:                                                                JPMORGAN
      CHASE BANK, N.A.,

    as
      Administrative Agent and as a Lender

    

    

    By: ___________________________                                                                      

    Name:

    Title:

    

    
      
            

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              SYNDICATION
                AGENT:

            	
              MERRILL
                LYNCH, PIERCE, FENNER & SMITH 

              INCORPORATED,
                as Syndication Agent

            

    

    

    

    By:_________________________________                                                                       

    Name:

    Title:

    

    

    
      	
               

            	
              MERRILL
                LYNCH CAPITAL CORPORATION, as a 

              Lender

            

    

    

    

    By: ________________________________                                                                   

    Name:

    Title:ex10-1.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 

    

     

    Exhibit
      10.1

     

    OMNIBUS
      AMENDMENT AND WAIVER

     

    This
      OMNIBUS AMENDMENT AND WAIVER (this “Amendment”), dated as of
      October 26, 2007, is entered into by and between AMS HEALTH SCIENCES, INC.,
      a
      corporation organized under the laws of Oklahoma (the
“Company”), LAURUS MASTER FUND, LTD., a
      Cayman Islands company (“Laurus”), VALENS OFFSHORE SPV I, LTD.
      a Cayman Islands company (“VOFSPVI”), VALENS U.S. SPV I, LLC, a
      Delaware limited liability company (“VUSSPVI”), ERATO CORP., a
      Delaware corporation (“Erato”) and VALENS OFFSHORE SPV II,
      CORP., a Delaware corporation (“VOFSPVII” and together with
      Laurus, VOFSPVI, VUSSPVI and ERATO, the “Holders” and each, a
“Holder”) for the purpose of amending and amending
      and
      restating and waiving certain terms of (i) the Secured Convertible Term Note,
      dated as of June 28, 2006 (as amended and restated, amended, modified and/or
      supplemented from time to time, the “Term Note”), issued
      by the Company to Laurus, and subsequently assigned in part by Laurus to each
      of
      VOFSPVI and VUSSPVI, (ii)  the Securities Purchase Agreement, dated as
      of June 28, 2006 (as amended, modified or supplemented from time to time, the
      “Purchase Agreement”), by and between the Company and Laurus,
      and (iii) the Common Stock Purchase Warrant, dated June 28, 2006 (as amended
      and
      restated, amended, modified and/or supplemented from time to time,
      the “Warrant”), issued by the Company to Laurus, and
      subsequently assigned by Laurus to Erato, VOFSPVII and
      VUSSPVI.  Capitalized terms used herein without definition shall have
      the meanings ascribed to such terms in the Term Note, the Purchase Agreement
      or
      the Warrant, as the case may be.

     

    WHEREAS,
      the Company and each relevant Holder has agreed to make certain changes to
      the
      Term Note, the Purchase Agreement and the Warrant as set forth
      herein.

     

    NOW,
      THEREFORE, in consideration of the above, and for other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      the
      parties hereto agree as follows:

    

    AMENDMENTS

     

    1.
      For
      payments of Monthly Amounts (as defined in the Term Note) on four Amortization
      Dates only, commencing with the Amortization Date occurring on October 1, 2007
      and ending with the Amortization Date occurring on January 1, 2008, the amount
      of the principal portion of the Monthly Amount due on each of such dates, shall
      be $15,000, rather than $83,333.33. The aggregate amount of the difference
      between the aggregate amount of the four principal payments payable on such
      Amortization Dates prior to the effectiveness of this Amendment and the
      aggregate amount of the principal payments payable on such Amortization Dates
      after giving effect to this Amendment on the Amendment Effective Date shall
      be
      referred to herein as “Aggregate Deferred Principal Payment
      Amount.” The Aggregate Deferred Principal Payment Amount shall be paid
      in full on the Maturity Date (as defined in the Term Note), together with all
      accrued and unpaid interest thereon and all other amounts due and payable on
      the
      Maturity Date under the Term Note, the Purchase Agreement and the other Related
      Agreements referred to in the Purchase Agreement.  Monthly Amount
      payments shall resume pursuant to the Term Note (as in effect immediately prior
      to the Amendment Effective Date as defined below) on February 1,
      2008.

    

    2.  Subsections
      (a), (b) and (c) of Section 2.3 (Optional Redemption in Cash) of the Term
      Note is deleted in its entirety and replaced as follows:

    

    “2.3  Optional
      Redemption in Cash. The Company may prepay this Note at any time
      (“Optional Redemption”) by paying to the Holder a sum of money
      equal to one hundred twenty-three percent (123%) of the Principal Amount
      outstanding.”

    

    3.
      The
      definition of Exercise Price set forth in clause (d) in the definition section
      of the Warrant shall be deleted in its entirety and replaced as
      follows:

    

    “(a)
      The
      Exercise Price” per share applicable under this Warrant shall be $
      0.20.”

    

    MISCELLANEOUS

    

    4.
      Each Holder understands that the
      Company has an affirmative obligation to make prompt public disclosure of
      material agreements and material amendments to such agreements and
      securities.  The Company hereby covenants to report the terms and
      provisions of this Amendment on a current report on Form 8-K within four (4)
      business days of the date hereof.

    

    5.
      Each amendment and waiver set forth
      herein shall be effective as of the date first above written (the
“Amendment Effective Date”) on the date when each of the
      Company and each Holder shall have executed and the Company shall have delivered
      to the Holders its respective counterpart to this Amendment.

    

    6.
      All
      representations and warranties made in the Purchase Agreement with respect
      to
      the Warrant or Warrant Shares shall be deemed to have been made as of the date
      hereof with respect to the Warrant, as modified hereby, and the shares of the
      Company’s Common Stock issuable to Erato, VOFSPVII and/or VUSSPVI upon exercise
      thereof.

    

    7.
      Except
      as specifically set forth in this Amendment, there are no other amendments,
      modifications or waivers to the Term Note, the Purchase Agreement or the
      Warrant, and all of the other forms, terms and provisions of the Term Note,
      the
      Purchase Agreement and the Warrant shall remain in full force and
      effect.

    

    8.
      The Company hereby represents and
      warrants to each Holder that after giving effect to this
      Amendment:  (i) on the date hereof, all representations, warranties
      and covenants made by the Company in connection with the Purchase Agreement
      and
      the Related Agreements referred to therein are true, correct and complete;
      and
      (ii) on the date hereof, all of the Company’s and its Subsidiaries’ covenant
      requirements set forth in the Purchase Agreement and the Related Agreements
      referred to therein have been met.

    

    9.
      From
      and after the Amendment Effective Date, all references to the Term Note, the
      Purchase Agreement and the Warrant shall be deemed to be references to the
      Term
      Note, Purchase Agreement and the Warrant as modified hereby.

    

    10.
      This
      Amendment shall be binding upon the parties hereto and their respective
      successors and permitted assigns and shall inure to the benefit of and be
      enforceable by each of the parties hereto and their respective successors and
      permitted assigns.  THIS AMENDMENT SHALL BE CONSTRUED AND
      ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
      NEW YORK.  This Amendment may be executed in any number
      of counterparts, each of which shall be an original, but all of which shall
      constitute one instrument.

    

     

    [THE
      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     

    
      
              

                  
    

         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, each of the Company and Laurus has caused this
      Amendment to be signed in its name effective as of this __ day of
      October
      2007.

     

                        AMS
      HEALTH SCIENCES,
      INC.

     

                        By:/s/
      Robin L.
      Jacob                   

                        Name:  Robin
      L. Jacob

                        Title:    Vice
      President and Chief Financial Officer

    

                        LAURUS
      MASTER FUND,
      LTD.

                        By:
      Laurus Capital
      Management, LLC, its investment manager

    

                                                        By:/s/
      Scott
      Bluestein                 

                        Name:
      Scott
      Bluestein

                        Title:   Senior
      Managing Director

        

                        VALENS
      OFFSHORE SPV
      I, LTD.

                        By:
      Valens Capital
      Management, LLC, its investment manager

    

     

                        By:/s/
      Scott
      Bluestein                 

                        Name:
      Scott
      Bluestein

                        Title:   Senior
      Managing Director

     

                        VALENS
      U.S. SPV I,
      LLC

                        By:
      Valens Capital
      Management, LLC, its investment manager

    

     

                        By:/s/
      Scott
      Bluestein                 

                        Name:
      Scott
      Bluestein

                        Title:   Senior
      Managing Director

     

                        ERATO
      CORP.

                        By:
      Laurus Capital
      Management, LLC, its investment manager

    

     

                        By:/s/
      Scott
      Bluestein                 

                        Name:
      Scott
      Bluestein

                        Title:   Senior
      Managing Director

     

                        VALENS
      OFFSHORE SPV
      II, CORP.

                        By:
      Valens Capital
      Management, LLC, its investment manager

    

     

                        By:/s/
      Scott
      Bluestein                 

                        Name:
      Scott
      Bluestein

                        Title:   Senior
      Managing Director

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