Document:

berrypetroleum-thirdabcd

Execution Version    THIRD AMENDMENT TO CREDIT AGREEMENT    THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third  Amendment”), dated as of May 27, 2022 (the “Third Amendment Effective Date”), is by and  among Berry Petroleum Company, LLC, a Delaware limited liability company (the “Borrower”),  Berry Corporation (bry), a Delaware corporation (the “Parent”, and together with the Borrower,  the “Loan Parties”), each of the Lenders that is a signatory hereto and JPMorgan Chase Bank,  N.A., as administrative agent for the Lenders (in such capacity, together with its successors in such  capacity, the “Administrative Agent”).  R E C I T A L S  A. The Borrower, the Parent, the Administrative Agent, the Issuing Bank and the  Lenders are parties to that certain Credit Agreement dated as of August 26, 2021 (as amended by  that certain First Amendment to Credit Agreement dated as of December 8, 2021 and that certain  Second Amendment to Credit Agreement dated as of May 2, 2022, and as further amended,  restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”),  pursuant to which the Lenders have, subject to the terms and conditions set forth therein, made  certain credit available to and on behalf of the Borrower.   B.  The parties hereto desire to enter into this Third Amendment to, among other things,  (i) amend the Credit Agreement as set forth herein effective as of the Third Amendment Effective  Date, (ii) increase the Borrowing Base from $200,000,000 to $250,000,000 and (iii) establish the  Aggregate Elected Commitment Amounts at $200,000,000.  NOW, THEREFORE, in consideration of the premises and the mutual covenants herein  contained, for good and valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, the parties hereto agree as follows:  Section 1. Defined Terms.  Each capitalized term which is defined in the Credit  Agreement, but which is not defined in this Third Amendment, shall have the meaning ascribed  such term in the Credit Agreement, as amended hereby.  Unless otherwise indicated, all section  references in this Third Amendment refer to the Credit Agreement.  Section 2. Amendments.  In reliance on the representations, warranties, covenants and  agreements contained in this Third Amendment, and subject to the satisfaction of the conditions  precedent set forth in Section 4 hereof, the Credit Agreement shall be amended effective as of the  Third Amendment Effective Date in the manner provided in this Section 2.  2.1 Amendment of Credit Agreement. The Credit Agreement is hereby amended  effective as of the Third Amendment Effective Date to reflect the changes which are attached as  Exhibit A hereto, such that the terms set forth in Exhibit A hereto which appear in bold and double  underlined text (inserted text) shall be added to the Credit Agreement and the terms appearing as  text which is stricken (deleted text) shall be deleted from the Credit Agreement. For the avoidance  of doubt, except as set forth in Sections 2.2, 2.3, 2.4, 2.5 and 2.6 hereof, nothing in this Third  Amendment amends or modifies the Annexes, Exhibits or Schedules to the Credit Agreement.  

 

   Page 2    2.2 Amendment to Annex I.  Annex I to the Credit Agreement is hereby replaced in its  entirety with Annex I attached hereto, and Annex I attached hereto shall be deemed to be attached  as Annex I to the Credit Agreement as of the Third Amendment Effective Date.  2.3 Exhibit B to Credit Agreement. Exhibit B to the Credit Agreement is hereby  amended and restated in its entirety in the form of Exhibit B attached hereto and Exhibit B attached  hereto shall be deemed to be attached as Exhibit B to the Credit Agreement.  2.4 Exhibit C to Credit Agreement. Exhibit C to the Credit Agreement is hereby  amended and restated in its entirety in the form of Exhibit C attached hereto and Exhibit C attached  hereto shall be deemed to be attached as Exhibit C to the Credit Agreement.  2.5 Exhibit K to Credit Agreement. The Credit Agreement is hereby amended to add a  new Exhibit K in the form of Exhibit K attached hereto and Exhibit K attached hereto shall be  deemed to be attached as Exhibit K to the Credit Agreement.  2.6 Exhibit L to Credit Agreement. The Credit Agreement is hereby amended to add a  new Exhibit L in the form of Exhibit L attached hereto and Exhibit L attached hereto shall be  deemed to be attached as Exhibit L to the Credit Agreement.  Section 3. Borrowing Base.  Subject to the satisfaction of the conditions precedent set  forth in Section 4 hereof, the Administrative Agent and the Lenders hereby agree that, effective as  of the Third Amendment Effective Date, the Borrowing Base shall be increased from $200,000,000  to $250,000,000 (the “Borrowing Base Increase”), and the Borrowing Base shall remain at  $250,000,000 until the next Scheduled Redetermination, Interim Redetermination or other  adjustment of the Borrowing Base thereafter, whichever occurs first pursuant to the terms of the  Credit Agreement.  The Borrower and the Lenders acknowledge that (a) the redetermination of the  Borrowing Base provided for in this Section 3 shall constitute the Scheduled Redetermination of  the Borrowing Base that was scheduled to occur on or about May 1, 2022 for purposes of Section  2.07 of the Credit Agreement and (b) this Third Amendment constitutes a New Borrowing Base  Notice for purposes of Section 2.07(d) of the Credit Agreement with respect to the Borrowing Base  redetermination provided for in this Section 3.  Section 4. Conditions Precedent.  The effectiveness of this Third Amendment and the  Borrowing Base Increase is subject to the following:  4.1 Counterparts.  The Administrative Agent shall have received counterparts of this  Third Amendment from the Loan Parties and the Lenders.  4.2 Other Documents.  The Administrative Agent shall have received such other  documents as the Administrative Agent or counsel to the Administrative Agent may reasonably  request.  4.3 Interest. The Borrower shall have paid all accrued and unpaid interest outstanding  under the Credit Agreement immediately prior to the Third Amendment Effective Date.  Section 5. Existing Eurodollar Loans.  Notwithstanding anything to the contrary in the  Credit Agreement, all “Eurodollar Loans” (under and as defined in the Credit Agreement as in  

 

   Page 3    effect immediately prior to giving effect to this Third Amendment) outstanding immediately prior  to the effectiveness of this Third Amendment shall, on the Third Amendment Effective Date, be  rearranged and converted into a new Borrowing consisting of Term Benchmark Loans with an  Interest Period of one-month’s duration (commencing on the Third Amendment Effective Date),  and which Term Benchmark Loans shall thereafter be subject to the terms and conditions of the  Credit Agreement.  In connection with such conversion, the Borrower shall, if requested by the  Administrative Agent, deliver an Interest Election Request in accordance with Section 2.04 of the  Credit Agreement.  Each Lender hereby waives any break funding payments owing to such Lender  that are required under Section 5.02 of the Credit Agreement in connection with or as a result of  this Section 5.  Section 6. Miscellaneous.  6.1 Confirmation and Effect.  The provisions of the Credit Agreement (as amended by  this Third Amendment) shall remain in full force and effect in accordance with their terms  following the effectiveness of this Third Amendment, and this Third Amendment shall not  constitute a waiver of any provision of the Credit Agreement or any other Loan Document, except  as expressly provided for herein.  Each reference in the Credit Agreement to “this Agreement”,  “hereunder”, “hereof”, “herein”, or words of like import shall mean and be a reference to the Credit  Agreement as amended hereby, and each reference to the Credit Agreement in any other document,  instrument or agreement executed and/or delivered in connection with the Credit Agreement shall  mean and be a reference to the Credit Agreement as amended hereby.  6.2 Ratification and Affirmation of Loan Parties.  Each of the Loan Parties hereby  expressly (i) acknowledges the terms of this Third Amendment, (ii) ratifies and affirms its  obligations under the Loan Documents to which it is a party, (iii) acknowledges and renews its  continued liability under the Loan Documents to which it is a party, (iv) agrees, with respect to  each Loan Party that is a Guarantor, that its guarantee under the Guaranty Agreement remains in  full force and effect with respect to the Guaranteed Obligations as amended hereby, (v) represents  and warrants to the Lenders and the Administrative Agent that each representation and warranty  of such Loan Party contained in the Credit Agreement and the other Loan Documents to which it  is a party is true and correct in all material respects as of the date hereof, after giving effect to this  Third Amendment, except (A) to the extent any such representations and warranties are expressly  limited to an earlier date, in which case, on and as of the date hereof, such representations and  warranties shall continue to be true and correct in all material respects as of such specified earlier  date, and (B) to the extent that any such representation and warranty is expressly qualified by  materiality or by reference to Material Adverse Effect, such representation and warranty (as so  qualified) shall continue to be true and correct in all respects, (vi) represents and warrants to the  Lenders and the Administrative Agent that the execution, delivery and performance by such Loan  Party of this Third Amendment are within such Loan Party’s corporate, limited partnership or  limited liability company powers (as applicable), have been duly authorized by all necessary action  and that this Third Amendment constitutes the valid and binding obligation of such Loan Party  enforceable in accordance with its terms, except as the enforceability thereof may be limited by  bankruptcy, insolvency or similar laws affecting creditor’s rights generally, and (vii) represents  and warrants to the Lenders and the Administrative Agent that, immediately after giving effect to  this Third Amendment, no Event of Default exists.  

 

   Page 4    6.3 Counterparts.  Delivery of an executed counterparty of a signature page of this  Third Amendment that is an Electronic Signature transmitted by telecopy, emailed pdf. or any  other electronic means that reproduces an image of an actual executed signature page shall be  effective as delivery of a manually executed counterpart of this Agreement.  6.4 No Oral Agreement.  THIS THIRD AMENDMENT REPRESENTS THE  FINAL AGREEMENT AMONG THE PARTIES HERETO 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.  6.5 Governing Law.  THIS THIRD AMENDMENT SHALL BE CONSTRUED IN  ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW  YORK.  6.6 Payment of Expenses.  The Borrower agrees to pay or reimburse the Administrative  Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with this  Third Amendment, any other documents prepared in connection herewith and the transactions  contemplated hereby, including, without limitation, the reasonable fees and disbursements of  counsel to the Administrative Agent.  6.7 Severability.  Any provision of this Third Amendment 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.  6.8 Successors and Assigns.  This Third Amendment shall be binding upon and inure  to the benefit of the parties hereto and their respective successors and assigns.  6.9 Loan Document.  This Third Amendment constitutes a Loan Document under and  as defined in the Credit Agreement.  [Signature Pages Follow.] 

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  The parties hereto have caused this Third Amendment to be duly executed as of the day  and year first above written.    BORROWER: BERRY PETROLEUM COMPANY, LLC   By: /s/ Cary Baetz        Name: Cary Baetz     Title: Authorized Representative        PARENT: BERRY CORPORATION (BRY)   By: /s/ Cary Baetz        Name: Cary Baetz     Title: Executive Vice President and Chief      Financial Officer             

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]    ADMINISTRATIVE AGENT:   JPMORGAN CHASE BANK, N.A.,  as Administrative Agent and Lender  By: /s/ Michael A. Harvey     Name:  Michael A. Harvey  Title:    Authorized Officer       

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  LENDERS:      KEYBANK NATIONAL            ASSOCIATION, as a Lender      By: /s/ David M. Bornstein     Name:  David M. Bornstein  Title:   Senior Vice President     

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]     BOKF, NA as a Lender      By: /s/ Sonja Bruce      Name:  Sonja Bruce  Title: Senior Vice President, Energy Banking       

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]     TRI COUNTIES BANK, as a Lender      By: /s/ Aytom Salomon     Name: Aytom Salomon  Title: Senior Vice President     

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]     CAPITAL ONE, NATIONAL        ASSOCIATION, as a Lender      By: /s/ Christopher Kuna     Name:  Christopher Kuna  Title:    Senior Director     

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]     CATHAY BANK, as a Lender      By: /s/ Dale T Wilson      Name:  Dale T Wilson  Title:    Senior Vice President     

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]     GOLDMAN SACHS LENDING        PARTNERS LLC, as a Lender      By: /s/ Dan Martis      Name:  Dan Martis  Title:    Authorized Signatory     

 

  [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]     MACQUARIE INVESTMENTS US INC,   as a Lender       By: /s/ Ozzie Pagan      Name: Ozzie Pagan  Title:   Executive Director      By: /s/ Travis McCullough     Name: Travis McCullough  Title:   Division Director    

 

  [EXHIBIT A TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  EXHIBIT A    Amended Credit Agreement     [Attached]    

 

Exhibit A to Third Amendment to Credit Agreement  Dated as of May 27, 2022  US 8895129v.2  US 8895221  US 8895221v.5 CHA715/13038          CREDIT AGREEMENT  DATED AS OF  AUGUST 26, 2021  AMONG  BERRY PETROLEUM COMPANY, LLC,  AS BORROWER,  BERRY CORPORATION (BRY),  AS PARENT   JPMORGAN CHASE BANK, N.A.,  AS ADMINISTRATIVE AGENT AND ISSUING BANK   VALLEY REPUBLIC BANK,   AS SYNDICATION AGENT      AND  THE LENDERS PARTY HERETO           JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS  JPMORGAN CHASE BANK, N.A.,  BOKF, NA, AND  KEYBANC CAPITAL MARKETS INC.             

 

  i  TABLE OF CONTENTS    Page  ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS ....................................................1  Section 1.01 Terms Defined Above ..................................................................................1  Section 1.02 Certain Defined Terms .................................................................................1  Section 1.03 Classification of Loans and Borrowings ................................................3839  Section 1.04 Terms Generally; Rules of Construction ...............................................3839  Section 1.05 Accounting Terms and Determinations; GAAP ........................................39  Section 1.06 Interest Rates ....................................................... ; LIBOR Notification3940  Section 1.07 Letter of Credit Amounts ...........................................................................40  Section 1.08 Divisions ................................................................................................4041  ARTICLE II THE CREDITS.........................................................................................................41  Section 2.01 Commitments .............................................................................................41  Section 2.02 Loans and Borrowings ...............................................................................41  Section 2.03 Requests for Borrowings............................................................................42  Section 2.04 Interest Elections ........................................................................................43  Section 2.05 Funding of Borrowings ..............................................................................44  Section 2.06 Termination and Reduction of Aggregate Maximum Credit  Amounts; Increase, Reduction, and Termination of Aggregate  Elected Commitment Amounts ..................................................................45  Section 2.07 Borrowing Base .....................................................................................4549  Section 2.08 Letters of Credit .....................................................................................4952  ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS;  FEES ..................................................................................................................5459  Section 3.01 Repayment of Loans ..............................................................................5459  Section 3.02 Interest....................................................................................................5459  Section 3.03 Alternate Rate of Interest .......................................................................5560  Section 3.04 Prepayments ...........................................................................................5862  Section 3.05 Fees ........................................................................................................6065  ARTICLE IV PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS ...........6166  Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of Set-offs .............6166  Section 4.02 Presumption of Payment by the Borrower .............................................6267  Section 4.03 Defaulting Lenders.................................................................................6368  Section 4.04 Disposition of Proceeds .........................................................................6570  ARTICLE V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES;  ILLEGALITY ....................................................................................................6670  Section 5.01 Increased Costs ......................................................................................6670  Section 5.02 Break Funding Payments .......................................................................6772  Section 5.03 Taxes ......................................................................................................6772  Section 5.04 Mitigation Obligations; Replacement of Lenders ..................................7176  Section 5.05 Illegality .................................................................................................7277  

 

  ii  ARTICLE VI CONDITIONS PRECEDENT ............................................................................7277  Section 6.01 Effective Date ........................................................................................7277  Section 6.02 Each Credit Event ..................................................................................7580  ARTICLE VII REPRESENTATIONS AND WARRANTIES .................................................7681  Section 7.01 Organization; Powers .............................................................................7681  Section 7.02 Authority; Enforceability .......................................................................7681  Section 7.03 Approvals; No Conflicts ........................................................................7682  Section 7.04 Financial Condition; No Material Adverse Change ...............................7782  Section 7.05 Litigation ................................................................................................7782  Section 7.06 Environmental Matters...........................................................................7783  Section 7.07 Compliance with the Laws and Agreements; No Defaults ....................7884  Section 7.08 Investment Company Act ......................................................................7984  Section 7.09 Taxes ......................................................................................................7984  Section 7.10 ERISA ....................................................................................................7985  Section 7.11 Disclosure; No Material Misstatements .................................................7985  Section 7.12 Insurance ................................................................................................8085  Section 7.13 Restriction on Liens ...............................................................................8086  Section 7.14 Subsidiaries ............................................................................................8086  Section 7.15 Location of Business and Offices ..........................................................8186  Section 7.16 Properties; Titles, Etc .............................................................................8186  Section 7.17 Maintenance of Properties .....................................................................8287  Section 7.18 Gas Imbalances, Prepayments ...............................................................8288  Section 7.19 Marketing of Production ........................................................................8288  Section 7.20 Hedge Agreements and Qualified ECP Counterparty ...........................8288  Section 7.21 Use of Loans and Letters of Credit ........................................................8388  Section 7.22 Solvency .................................................................................................8389  Section 7.23 International Operations.........................................................................8389  Section 7.24 USA PATRIOT; AML Laws; Anti-Corruption Laws and Sanctions ....8389  Section 7.25 Accounts ................................................................................................8489  Section 7.26 Affected Financial Institution ................................................................8489  ARTICLE VIII AFFIRMATIVE COVENANTS ......................................................................8490  Section 8.01 Financial Statements; Other Information ...............................................8490  Section 8.02 Notices of Material Events.....................................................................8793  Section 8.03 Existence; Conduct of Business .............................................................8894  Section 8.04 Payment of Obligations..........................................................................8894  Section 8.05 Operation and Maintenance of Properties..............................................8894  Section 8.06 Insurance ................................................................................................8995  Section 8.07 Books and Records; Inspection Rights ..................................................8995  Section 8.08 Compliance with Laws ..........................................................................8995  Section 8.09 Environmental Matters...........................................................................9095  Section 8.10 Further Assurances.................................................................................9096  Section 8.11 Reserve Reports .....................................................................................9197  Section 8.12 Title Information ....................................................................................9298  Section 8.13 Additional Collateral; Additional Guarantors ........................................9399  

 

  iii  Section 8.14 ERISA Event ..........................................................................................9399  Section 8.15 Marketing Activities ..............................................................................9399  Section 8.16 Accounts ..............................................................................................94100  Section 8.17 Minimum Hedging ...............................................................................94100  Section 8.18 Consolidated Cash Balance Information .............................................94101  Section 8.19 Post-Closing Required Hedging ..........................................................95101  Section 8.20 Unrestricted Subsidiaries .....................................................................95101  ARTICLE IX NEGATIVE COVENANTS .............................................................................95102  Section 9.01 Financial Covenants .............................................................................96102  Section 9.02 Debt ......................................................................................................96102  Section 9.03 Liens .....................................................................................................98105  Section 9.04 Restricted Payments .............................................................................99106  Section 9.05 Investments, Loans and Advances .....................................................101108  Section 9.06 Nature of Business; International Operations ....................................102110  Section 9.07 Limitation on Leases ..........................................................................102110  Section 9.08 Proceeds of Loans; OFAC .................................................................103110  Section 9.09 ERISA Compliance ............................................................................103111  Section 9.10 Sale or Discount of Receivables ........................................................103111  Section 9.11 Mergers, Etc .......................................................................................103111  Section 9.12 Sale of Properties ...............................................................................104111  Section 9.13 Environmental Matters.......................................................................105113  Section 9.14 Transactions with Affiliates ...............................................................105113  Section 9.15 Loan Parties .......................................................................................105113  Section 9.16 Negative Pledge Agreements; Dividend Restrictions ........................105113  Section 9.17 Gas Imbalances, Take-or-Pay or Other Prepayments ........................106114  Section 9.18 Hedge Agreements .............................................................................106114  Section 9.19 Amendments to Material Agreements; Amendment to Fiscal Year ..107115  Section 9.20 New Accounts ....................................................................................107115  Section 9.21 Repayment of Permitted Additional Debt; Amendment to Terms of  Permitted Additional Debt .................................................................107115  Section 9.22 Restrictions on Activities of Parent and Intermediate Holdco...........108116  Section 9.23 Designation and Conversion of Restricted and Unrestricted  Subsidiaries; Debt of Unrestricted Subsidiaries ................................108117  ARTICLE X EVENTS OF DEFAULT; REMEDIES ...........................................................109117  Section 10.01 Events of Default ...............................................................................109117  Section 10.02 Remedies ............................................................................................111119  Section 10.03 Equity Right to Cure. .........................................................................112120  ARTICLE XI THE ADMINISTRATIVE AGENT ...............................................................113121  Section 11.01 Appointment; Powers.........................................................................113121  Section 11.02 Duties and Obligations of Administrative Agent...............................113122  Section 11.03 Action by Administrative Agent ........................................................114122  Section 11.04 Reliance by Administrative Agent .....................................................115123  Section 11.05 Subagents ...........................................................................................115123  Section 11.06 Resignation of Administrative Agent ................................................115124  

 

  iv  Section 11.07 Administrative Agent Individually ....................................................116125  Section 11.08 No Reliance ........................................................................................117125  Section 11.09 Administrative Agent May File Proofs of Claim ...............................117125  Section 11.10 Withholding Tax ................................................................................118126  Section 11.11 Authority of Administrative Agent to Release Collateral and Liens .118127  Section 11.12 The Arrangers ....................................................................................119127  Section 11.13 Credit Bidding ....................................................................................119127  Section 11.14 Certain ERISA Matters. .....................................................................120129  Section 11.15 Erroneous Payments...........................................................................121130  ARTICLE XII MISCELLANEOUS ......................................................................................122131  Section 12.01 Notices ...............................................................................................122131  Section 12.02 Waivers; Amendments .......................................................................125134  Section 12.03 Expenses, Indemnity; Damage Waiver ..............................................127135  Section 12.04 Successors and Assigns......................................................................130138  Section 12.05 Survival; Revival; Reinstatement ......................................................133142  Section 12.06 Counterparts; Integration; Effectiveness; Electronic Execution ........134142  Section 12.07 Severability ........................................................................................135144  Section 12.08 Right of Setoff....................................................................................135144  Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE  OF PROCESS ....................................................................................136145  Section 12.10 Headings ............................................................................................137146  Section 12.11 Confidentiality ...................................................................................137146  Section 12.12 Interest Rate Limitation .....................................................................138147  Section 12.13 EXCULPATION PROVISIONS .......................................................139148  Section 12.14 Collateral Matters; Secured Hedge Agreements; Secured Cash  Management Agreements ..................................................................139148  Section 12.15 No Third Party Beneficiaries .............................................................140149  Section 12.16 USA PATRIOT Act Notice ...............................................................140149  Section 12.17 No Fiduciary Duty; etc.......................................................................140149  Section 12.18 Flood Insurance Provisions ................................................................141150  Section 12.19 Acknowledgement and Consent to Bail-In of Affected Financial  Institutions..........................................................................................141150  Section 12.20 Acknowledgement Regarding Any Supported QFCs ........................142151  Section 12.21 Material Non-Public Information ......................................................142151  Section 12.22 Keepwell ..................................................................................................152  ARTICLE XIII PARENT GUARANTY ...............................................................................143152  Section 13.01 Parent Guaranty .................................................................................143152  Section 13.02 Guaranty Absolute .............................................................................144153  Section 13.03 Continuation and Reinstatement, Etc .................................................145154  Section 13.04 Waivers and Acknowledgments ........................................................145154  Section 13.05 Subrogation and Subordination..........................................................145155  Section 13.06 Representations and Warranties .........................................................146156  Section 13.07 Right of Set-Off .................................................................................146156  Section 13.08 Continuing Guaranty: Assignments ...................................................147156  

 

  v  ANNEXES, EXHIBITS AND SCHEDULES  Annex I  List of Maximum Credit Amounts and Elected Commitments  Exhibit A  Form of Note  Exhibit B  Form of Borrowing Request  Exhibit C  Form of Interest Election Request  Exhibit D  Form of Compliance Certificate  Exhibit E  Security Instruments  Exhibit F  Form of Assignment and Assumption  Exhibits G-1 – 4  Forms of Tax Certificate  Exhibit H  Form of Consolidated Cash Balance Certificate  Exhibit I  Form of Free Cash Flow Certificate  Exhibit J  Form of Guaranty Agreement  Exhibit K Form of Elected Commitment Increase Certificate  Exhibit L Form of Additional Lender Certificate  Schedule 1.02  Existing Letters of Credit  Schedule 7.05  Litigation  Schedule 7.14  Subsidiaries   Schedule 7.15  Location of Business and Offices  Schedule 7.18  Gas Imbalances; Take or Pay; Other Prepayments  Schedule 7.19  Marketing Agreements  Schedule 7.20  Hedge Agreements  Schedule 7.25  Accounts  Schedule 9.02  Debt  Schedule 9.03  Liens  Schedule 9.05  Investments  

 

  1  THIS CREDIT AGREEMENT dated as of August 26, 2021 by and among Berry  Petroleum Company, LLC, a Delaware limited liability company (the “Borrower”), Berry  Corporation (bry), a Delaware corporation (the “Parent”), each of the Lenders from time to time  party hereto, and JPMorgan Chase Bank, N.A. (in its individual capacity, “JPMorgan”), as  Administrative Agent and an Issuing Bank (each as defined below) and Valley Republic Bank as  syndication agent for the Lenders (in such capacity, together with its successors in such capacity,  the “Syndication Agent”).  R E C I T A L S  A. The Borrower has requested that the Lenders provide certain loans to and  extensions of credit on behalf of the Borrower.  B. The Lenders have agreed to make such loans and extensions of credit subject to the  terms and conditions of this Agreement.  C. The Parent receives and, as a result of its ownership of the Borrower expects to  continue to receive financial support from the Borrower, and therefore the Parent will obtain  substantial benefit from (i) the transactions contemplated by this Agreement and the other Loan  Documents, (ii) the Hedge Agreements entered into by the Borrower or any other Guarantor with  a Secured Hedge Party, and (iii) the Secured Cash Management Agreements provided by any  Lender or any Affiliate of a Lender to the Borrower or any other Guarantor. The Parent accordingly  wishes to guarantee the Obligations as more fully set forth herein.  D. In consideration of the mutual covenants and agreements herein contained and of  the loans, extensions of credit and commitments hereinafter referred to, the parties hereto agree as  follows:  ARTICLE I  DEFINITIONS AND ACCOUNTING MATTERS  Section 1.01 Terms Defined Above.  As used in this Agreement, 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, bear interest at a rate determined by reference to the  Alternate Base Rate.  “Additional Lender” has the meaning set forth in Section 2.06(c)(i).  “Additional Lender Certificate” has the meaning set forth in Section 2.06(c)(ii)(H).  “Adjusted Daily Simple SOFR” means an interest rate per annum equal to (a) the Daily Simple  SOFR, plus (b) 0.10%; provided that if the Adjusted Daily Simple SOFR Rate as so determined would be  less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.  

 

  2  “Adjusted LIBO “Adjusted Term SOFR Rate” means, with respect to any Eurodollar  Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the  next 1/16 of 1%) equal to (a) the LIBO Term SOFR Rate for such Interest Period multiplied by (b) the  Statutory Reserve Rate, plus (b) 0.10%; provided that if the Adjusted Term SOFR Rate as so determined  would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this  Agreement.  “Administrative Agent” means JPMorgan in its capacity as administrative agent hereunder,  or any successor administrative agent as provided in Section 11.06.  “Administrative Questionnaire” means an Administrative Questionnaire in a form  supplied by the Administrative Agent.  “Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK  Financial Institution.  “Affected Loans” has the meaning assigned to such term in Section 5.05.  “Affiliate” means, with respect to a specified Person, another Person that directly, or  indirectly through one or more intermediaries, Controls or is Controlled by or is under common  Control with the Person specified.    “Agents” means, collectively, the Administrative Agent and the Syndication Agents; and  “Agent” means the Administrative Agent or any Syndication Agent, as the context requires.   “Aggregate Elected Commitment Amounts” means, at any time, an amount equal to the  sum of the Elected Commitments of the Lenders, as the same may be increased, reduced or  terminated pursuant to Section 2.06(c).  As of the Third Amendment Effective Date, the Aggregate  Elected Commitment Amounts are $200,000,000.  “Aggregate Maximum Credit Amounts” at any time shall equal the sum of the Maximum  Credit Amounts, as the same may be reduced or terminated pursuant to Section 2.06.  The initial  Aggregate Maximum Credit Amounts of the Lenders is $500,000,000.  “Agreement” means this Credit Agreement, as the same may from time to time be further  amended, modified, supplemented or restated.  “Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the  Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 1⁄2 of 1.0% and  (c) the Adjusted LIBO Term SOFR Rate for a one month Interest Period on as published two U.S.  Government Securities Business Days prior to such day (or if such day is not a Business Day, the  immediately preceding Business Day) plus 1.0%; provided that, for the purpose of this definition,  the Adjusted LIBO Term SOFR Rate for any day shall be based on the LIBO Screen Rate Term  SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or if the LIBO Screen  Rate is not available for such one month Interest Period, the Interpolated Rate) at approximately  11:00 a.m. London time on such dayany amended publication time for the Term SOFR Reference  Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate  methodology).  Any change in the Alternate Base Rate due to a change in the Prime Rate, the  

 

  3  NYFRB Rate or the Adjusted LIBO Term SOFR Rate shall be effective from and including the  effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Term  SOFR Rate, respectively.  If the Alternate Base Rate is being used as an alternate rate of interest  pursuant to Section 3.03 (for the avoidance of doubt, only until the Benchmark Replacement has  been determined pursuant to Section 3.03(b)), then the Alternate Base Rate shall be the greater of  clauses (a) and (b) above and shall be determined without reference to clause (c) above.  For the  avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be  less than 1.50%, such rate shall be deemed to be 1.50% for purposes of this Agreement.  “AML Laws” means all laws, rules, and regulations of any jurisdiction applicable to any  Lender, the Loan Parties from time to time concerning or relating to anti-money laundering.  “Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction  applicable to Loan Parties or any of their Affiliates from time to time concerning or relating to  bribery or corruption.  “Applicable Margin” means, for any day, with respect to any ABR Loan or Eurodollar ,  Term Benchmark Loan, RFR Loan or with respect to the Commitment Fee Rate, as the case may  be, the applicable rate per annum set forth in the Borrowing Base Utilization Grid below based  upon the Borrowing Base Utilization Percentage then in effect:    Borrowing Base Utilization Grid  Borrowing Base  Utilization  Percentage  <25%  >25%, but  <50%  >50%, but  <75%  >75%, but  <90%  >90%  ABR Loan  Margin  2.000% 2.250% 2.500% 2.750% 3.000%  Term  Benchmark  Margin  3.000% 3.250% 3.500% 3.750% 4.000%  Eurodollar Loan  RFR Margin  3.000% 3.250% 3.500% 3.750% 4.000%  Commitment  Fee Rate  0.500% 0.500% 0.500% 0.500% 0.500%    Each change in the Applicable Margin and the Commitment Fee Rate shall apply during  the period commencing on the effective date of such change in the Borrowing Base Utilization  Percentage and ending on the date immediately preceding the effective date of the next such  change; provided, however, that if at any time the Borrower fails to deliver a Reserve Report  pursuant to Section 8.11(a), then the “Applicable Margin” and the “Commitment Fee Rate” shall  mean the rate per annum set forth on the grid when the Borrowing Base Utilization Percentage is  at its highest level, beginning on the date of such failure until such Reserve Report is delivered.  

 

  4  “Applicable Percentage” means, with respect to any Lender at any time, the percentage of  the Aggregate Maximum Credit Amounts represented by such Lender’s Maximum Credit Amount;  provided that if the Commitments have terminated or expired, each Lender’s Applicable  Percentage shall be determined based upon the Commitments most recently in effect.  “Approved Electronic Platform” means IntraLinksTM, DebtDomain, SyndTrak, ClearPar  or any other electronic platform chosen by the Administrative Agent to be its electronic  transmission system.  “Approved Counterparty” means (a) any Lender or any Affiliate of a Lender, (b) any other  Person whose (x) long-term senior unsecured debt rating is A/A2 by S&P or Moody’s (or their  equivalent) or higher or (y) affiliate guarantees the obligations under the relevant Hedge  Agreement to which such Person is a party and has a long-term senior unsecured debt rating of  A/A2 by S&P or Moody’s (or their equivalent) or higher and (c) solely to the extent that such  Person is party to a Hedge Agreement that is not a Secured Hedge Agreement but is an Other  Hedge Agreement, any Person approved in writing by the Administrative Agent in its reasonable  discretion.  “Approved Fund” has the meaning assigned to it in Section 12.04(b).   “Approved Petroleum Engineers” means (a) Ryder Scott Company, (b) Netherland,  Sewell & Associates, Inc., (c) DeGolyer and MacNaughton and (d) any other independent  petroleum engineers reasonably acceptable to the Administrative Agent.  “Arrangers” means the collective reference to JPMorgan, BOKF, NA and KeyBanc  Capital Markets Inc., each in its capacity as a joint lead arranger and joint bookrunner hereunder.  “Assignment and Assumption” means an assignment and assumption entered into by a  Lender and an assignee (with the consent of any party whose consent is required by Section  12.04(b)), and accepted by the Administrative Agent, in the form of Exhibit F or any other form  (including electronic records generated by the use of an electronic platform) approved by the  Administrative Agent.  “Availability Period” means the period from and including the Effective Date to but  excluding the Termination Date.  “Available Tenor” means, as of any date of determination and with respect to the then- current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or  payment period for interest calculated with reference to such Benchmark (or component thereof),  as applicable, that is or may be used for determining the length of an Interest Period for any term  rate or otherwise, for determining any frequency of making payments of interest calculated  pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor  for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to  Section 3.03(b)(vi).  “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the  applicable Resolution Authority in respect of any liability of an Affected Financial Institution.  

 

  5  “Bail-In Legislation” means (a) with respect to any EEA Member Country implementing  Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European  Union, the implementing law, regulation rule or requirement for such EEA Member Country from  time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the  United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time)  and any other law, regulation or rule applicable in the United Kingdom relating to the resolution  of unsound or failing banks, investment firms or other financial institutions or their affiliates (other  than through liquidation, administration or other insolvency proceedings).  “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as  now and hereafter in effect, or any successor statute.  “Bankruptcy Event” means, with respect to any Person, such Person becomes the subject  of a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver,  conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person  charged with the reorganization or liquidation of its business appointed for it, or, in the good faith  determination of the Administrative Agent, has taken any action in furtherance of, or indicating its  consent to, approval of, or acquiescence in, any such proceeding or appointment or has had any  order for relief in such proceeding entered in respect thereof; provided that a Bankruptcy Event  shall not result solely by virtue of any ownership interest, or the acquisition of any ownership  interest, in such Person by a Governmental Authority or instrumentality thereof, unless such  ownership interest results in or provides such Person with immunity from the jurisdiction of courts  within the United States or from the enforcement of judgments or writs of attachment on its assets  or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate,  disavow or disaffirm any contracts or agreements made by such Person.  “Benchmark” means, initially, LIBO with respect to any (i) RFR Loan, the Daily Simple  SOFR or (ii) Term Benchmark Loan, the Term SOFR Rate; provided that if a Benchmark  Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable, and  its and the related Benchmark Replacement Date have occurred with respect to LIBO Rate the  Daily Simple SOFR or Term SOFR Rate, as applicable, or the then-current Benchmark, then  “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark  Replacement has replaced such prior benchmark rate pursuant to clause (b) of Section 3.03(b)(ii)  or (iii).  “Benchmark Replacement” means, for any Available Tenor, the first alternative set forth  in the order below that can be determined by the Administrative Agent for the applicable  Benchmark Replacement Date:  (1) the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;  (2) the sum of: (a) (1) the Adjusted Daily Simple SOFR and (b) the related Benchmark  Replacement Adjustment; or  (3(2) the sum of: (a) the alternate benchmark rate that has been selected by the Administrative  Agent and the Borrower as the replacement for the then-current Benchmark for the applicable  Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement  benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii)  

 

  6  any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for  the then-current Benchmark for dollar-denominated syndicated credit facilities at such time in the United  States and (b) the related Benchmark Replacement Adjustment;  provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is  displayed on a screen or other information service that publishes such rate from time to time as  selected by the Administrative Agent in its reasonable discretion; provided, further, that,  notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon  the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on  the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and  shall be deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement  Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above).  If the Benchmark Replacement as determined pursuant to clause (1, (2) or (32) above  would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the  purposes of this Agreement and the other Loan Documents.  “Benchmark Replacement Adjustment” means, with respect to any replacement of the  then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest  Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement  :(1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the  first alternative set forth in the order below that can be determined by the Administrative Agent:  (a) the spread adjustment, or method for calculating or determining such spread adjustment,  (which may be a positive or negative value or zero) as of the Reference Time such Benchmark  Replacement is first set for such Interest Period that has been selected or recommended by the  Relevant Governmental Body for the replacement of such Benchmark with the applicable  Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;  (b) the spread adjustment (which may be a positive or negative value or zero) as of the  Reference Time such Benchmark Replacement is first set for such Interest Period that would apply  to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective  upon an index cessation event with respect to such Benchmark for the applicable Corresponding  Tenor; and  (2) for purposes of clause (3) of the definition of “Benchmark Replacement,” , the spread  adjustment, or method for calculating or determining such spread adjustment, (which may be a  positive or negative value or zero) that has been selected by the Administrative Agent and the  Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or  recommendation of a spread adjustment, or method for calculating or determining such spread  adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark  Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date  and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment,  or method for calculating or determining such spread adjustment, for the replacement of such  Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated  syndicated credit facilities; at such time.  

 

  7  provided that, in the case of clause (1) above, such adjustment is displayed on a screen or  other information service that publishes such Benchmark Replacement Adjustment from time to  time as selected by the Administrative Agent in its reasonable discretion.  “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark  Replacement and/or any Term Benchmark Loan, any technical, administrative or operational  changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business  Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest  Period,” timing and frequency of determining rates and making payments of interest, timing of  borrowing requests or prepayment, conversion or continuation notices, length of lookback periods,  the applicability of breakage provisions, and other technical, administrative or operational matters)  that the Administrative Agent decides in its reasonable discretion may be appropriate to reflect the  adoption and implementation of such Benchmark Replacement and to permit the administration  thereof by the Administrative Agent in a manner substantially consistent with market practice (or,  if the Administrative Agent decides that adoption of any portion of such market practice is not  administratively feasible or if the Administrative Agent determines that no market practice for the  administration of such Benchmark Replacement exists, in such other manner of administration as  the Administrative Agent decides is reasonably necessary in connection with the administration of  this Agreement and the other Loan Documents).  “Benchmark Replacement Date” means the earliest , with respect to any Benchmark, the  earlier to occur of the following events with respect to the such then-current Benchmark:  (1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the  later of (a) the date of the public statement or publication of information referenced therein and (b)  the date on which the administrator of such Benchmark (or the published component used in the  calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such  Benchmark (or such component thereof); or  (2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the first  date of the public on which such Benchmark (or the published component used in the calculation  thereof) has been determined and announced by the regulatory supervisor for the administrator of  such Benchmark (or such component thereof) to be no longer representative; provided, that such  non-representativeness will be determined by reference to the most recent statement or publication  of information referenced therein; referenced in such clause (c) and even if any Available Tenor  of such Benchmark (or such component thereof) continues to be provided on such date;   (3) in the case of a Term SOFR Transition Event, the date that is thirty (30) days after the  date a Term SOFR Notice is provided to the Lenders and the Borrower pursuant to Section 3.03(b);  or  (4) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice  of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has  not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date  notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such  Early Opt-in Election from Lenders comprising the Majority Lenders.  

 

  8  For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date  occurs on the same day as, but earlier than, the Reference Time in respect of any determination,  the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time  for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have  occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the  applicable event or events set forth therein with respect to all then-current Available Tenors of  such Benchmark (or the published component used in the calculation thereof).  “Benchmark Transition Event” means , with respect to any Benchmark, the occurrence of  one or more of the following events with respect to the such then-current Benchmark:  (1) a public statement or publication of information by or on behalf of the administrator of  such Benchmark (or the published component used in the calculation thereof) announcing that  such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or  such component thereof), permanently or indefinitely, provided that, at the time of such statement  or publication, there is no successor administrator that will continue to provide any Available  Tenor of such Benchmark (or such component thereof);  (2) a public statement or publication of information by the regulatory supervisor for the  administrator of such Benchmark (or the published component used in the calculation thereof), the  Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, an insolvency official  with jurisdiction over the administrator for such Benchmark (or such component), a resolution  authority with jurisdiction over the administrator for such Benchmark (or such component) or a  court or an entity with similar insolvency or resolution authority over the administrator for such  Benchmark (or such component), in each case, which states that the administrator of such  Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such  Benchmark (or such component thereof) permanently or indefinitely, ; provided that, at the time  of such statement or publication, there is no successor administrator that will continue to provide  any Available Tenor of such Benchmark (or such component thereof); or  (3) a public statement or publication of information by the regulatory supervisor for the  administrator of such Benchmark (or the published component used in the calculation thereof)  announcing that all Available Tenors of such Benchmark (or such component thereof) are no  longer , or as of a specified future date will no longer be, representative.  For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have  occurred with respect to any Benchmark if a public statement or publication of information set  forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or  the published component used in the calculation thereof).  “Benchmark Unavailability Period” means , with respect to any Benchmark, the period  (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or  (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the  such then-current Benchmark for all purposes hereunder and under any Loan Document in  accordance with Section 3.03(b) and (y) ending at the time that a Benchmark Replacement has  replaced the such then-current Benchmark for all purposes hereunder and under any Loan  Document in accordance with Section 3.03(b).  

 

  9  “Beneficial Ownership Certification” means a certification regarding beneficial  ownership or control as required by the Beneficial Ownership Regulation.  “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.  “Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of  ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to  which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of  the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the  Code) the assets of any such “employee benefit plan” or “plan”.  “BHC Act Affiliate” of a party means an “affiliate’ (as such term is defined under, and  interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.  “Borrowing” means Loans of the same Type, made, converted or continued on the same  date and, in the case of Eurodollar Term Benchmark Loans, as to which a single Interest Period is  in effect.  “Borrowing Base” means at any time an amount equal to the amount determined in  accordance with Section 2.07, as the same may be adjusted from time to time pursuant to Section  2.07(e), Section 2.07(f), or Section 8.12(c).  “Borrowing Base Deficiency” occurs if at any time the total Revolving Credit Exposures  exceeds the Borrowing Base then in effect.  The amount of the Borrowing Base Deficiency is the  amount by which the total Revolving Credit Exposures exceeds the Borrowing Base then in effect.  “Borrowing Base Properties” means the Oil and Gas Properties of the Loan Parties  included in the most recently delivered Reserve Report hereunder.  “Borrowing Base Utilization Percentage” means, as of any day, the fraction expressed as  a percentage, the numerator of which is the sum of the Revolving Credit Exposures of the Lenders  on such day, and the denominator of which is the Borrowing Base in effect on such day.  “Borrowing Request” means a request by the Borrower for a Borrowing in accordance  with Section 2.03, which shall be substantially in the form of Exhibit B or any other form approved  by the Administrative Agent.  “Business Day” means any day that is not a Saturday, Sunday or other day on which  commercial banks in New York City or Dallas, Texas are authorized or required by law to remain  closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day”  shall also exclude any day on which banks are not open for dealings in dollar deposits in the  London interbank marketin relation to RFR Loans and any interest rate settings, fundings,  disbursements, settlements or payments of any such RFR Loan, or any other dealings of such RFR  Loan, any such day that is only a U.S. Government Securities Business Day.  “Capital Leases” means, subject to Section 1.05, 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  

 

  10  balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent  thereunder.  “Cash Equivalents” means Investments of the type described in Sections 9.05(c) through  (f).  “Cash Management Agreement” means any agreement to provide cash management  services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer  and other cash management services.  “Casualty Event” means any loss, casualty or other insured damage to, or any  nationalization, taking under power of eminent domain or by condemnation or similar proceeding  of, any Property of the Loan Parties.  “Change in Control” means the occurrence of any of the following events:  (a) the Parent ceases to (i) directly or indirectly (through the Intermediate Holdco, if  applicable) own 100% of the Equity Interests of the Borrower, and (ii) directly or indirectly own  100% of the Equity Interests in any Restricted Subsidiary other than as a result of a transaction  permitted under Section 9.12;  (b) the consummation of any transaction or series of transactions (including any merger or  consolidation) the result of which is that any “person” (as that term is used in Section 13(d) and  14(d) of the Exchange Act, but excluding (i) the Permitted Holders, (ii) any employee benefit plan  of the Loan Parties, and (iii) any Person acting in its capacity as trustee, agent or other fiduciary  or administrator of any such plan) or related persons constituting a “group” (as such term is used  in Rule 13d-5 under the Exchange Act) becomes the “beneficial owner,” directly or indirectly, of  more than 40% of the Voting Securities of the Parent (or any of their respective successors by  merger, consolidation or purchase of all or substantially all of their respective assets), measured  by voting power rather than number of shares (for purposes of this clause (iii), such person or  group shall be deemed to beneficially own any Voting Securities held by a parent entity if such  person or group “beneficially owns”, directly or indirectly, more than 40% of the voting power of  the Voting Securities of such parent entity);  (c) the first day on which a majority of the members of the board of directors of the Parent  shall not constitute Continuing Directors; or  (d) the occurrence of a “change of control” or analogous concept or term however described  or defined under any Permitted Additional Debt.    “Change in Law” means the occurrence after the date of this Agreement of (a) the adoption  of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation  or treaty or in the administration, interpretation, implementation or application thereof by any  Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or, for purposes of  Section 5.01(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s  holding company, if any) with any request, guideline or directive (whether or not having the force  of law) of any Governmental Authority made or issued after the date of this Agreement; provided  that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and  

 

  11  Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder  or issued in connection therewith (whether or not having the force of law) or in implementation  thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for  International Settlements, the Basel Committee on Banking Supervision (or any successor or  similar authority) or the United States or foreign regulatory authorities, in each case pursuant to  Basel III, shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted,  adopted, promulgated, issued or implemented.  “CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as  administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor  administrator).  “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any  successor statute.  “Collateral” means all Property now owned or hereafter acquired which is subject to a Lien  created or purported to be created under one or more Security Instruments.  “Commitment” means, with respect to each Lender, the commitment of such Lender to  make Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount  representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure  hereunder, as such commitment may be (a) modified from time to time pursuant to Section 2.06  and (b) modified from time to time pursuant to assignments by or to such Lender pursuant to  Section 12.04(b). The amount representing each Lender’s Commitment shall at any time be the  lesser of least of (i) such Lender’s Maximum Credit Amount and , (ii) such Lender’s Applicable  Percentage of the then effective Borrowing Base and (iii) such Lender’s Elected Commitment.  “Commitment Fee Rate” has the meaning set forth in the definition of “Applicable  Margin”.  “Commodity Account” has the meaning assigned to such term in UCC.  “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.),  as amended from time to time, and any successor statute.  “Communications” means, collectively, any notice, demand, communication, information,  document or other material provided by or on behalf of any Loan Party pursuant to any Loan  Document or the transactions contemplated therein which is distributed by the Administrative  Agent, any Lender or the Issuing Bank by means of electronic communications pursuant to Section  12.01(e), including through an Approved Electronic Platform.  “Connection Income Taxes” means Other Connection Taxes that are imposed on or  measured by net income (however denominated) or that are franchise Taxes or branch profits  Taxes.   “Consolidated Cash Balance” means, at any time, (a) the aggregate amount of cash, Cash  Equivalents, marketable securities, treasury bonds and bills, certificates of deposit, investments in  money market funds and commercial paper, in each case, held or owned by (whether directly or  

 

  12  indirectly), credited to the account of, or otherwise reflected as an asset on the balance sheet of,  the Loan Parties less (b) the sum of: (i) while and to the extent refundable, any cash or Cash  Equivalents of the Loan Parties constituting purchase price deposits held in escrow pursuant to a  binding and enforceable purchase and sale agreement with an unaffiliated third party, plus (ii)  amounts for which the Loan Parties have issued checks or have initiated wires or ACH transfers  to pay expenditures in the ordinary course of business to unaffiliated third parties, including for  working capital purposes and for permitted acquisitions, but which have not yet been subtracted  from the balance in the relevant account of the Loan Parties (or, in the Borrower’s discretion,  amounts for which the Loan Parties will issue checks or initiate wires or ACH transfers to pay  expenditures in the ordinary course of business to unaffiliated third parties within five (5) Business  Days), plus (iii) any cash held in Excluded Accounts referred to in clauses (a), (b) and (d) of the  definition thereof, plus (iv) any amounts held in suspense, any cash set aside to pay royalty  obligations, working interest obligations, production payments, severance taxes and similar  obligations of the Loan Parties which are then due and owing to unaffiliated third parties, plus (v)  purchase price deposits held in escrow by an unaffiliated third party pursuant to a binding and  enforceable purchase and sale agreement containing customary provisions regarding the payment  and refunding of such deposits, plus (vi) any cash or Cash Equivalents held in collateral accounts  with respect to Debt solely to the extent permitted by Section 9.02(n).  “Consolidated Cash Balance Threshold” means $20,000,000.  “Consolidated Interest Expense” means, for the Loan Parties, on a consolidated basis for  any period, total cash interest expense, letter of credit fees and other fees and expenses incurred  by such Persons in connection with any Debt (including, but not limited to, Debt under this  Agreement) for such period, whether paid or accrued (including interest expense attributable to  Capital Leases), including, without limitation, all commissions, discounts, and other fees and  charges owed or accrued with respect to letters of credit and bankers’ acceptance financing, fees  owed with respect to the Borrowings, and net costs under Hedge Agreements entered into with  respect to interest rates, all as determined in conformity with GAAP.   “Consolidated Income Tax Expense” means, for the Loan Parties, on a consolidated basis  for any period, all state and federal franchise and income taxes paid or due to be paid during such  period.  “Consolidated Net Income” means with respect to the Loan Parties, for any period, the  aggregate of the net income (or loss) of the Loan Parties 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 Unrestricted Subsidiary, except to the extent of the amount of dividends or  distributions attributable to net income of such Unrestricted Subsidiary actually paid in cash during  such period by such Unrestricted Subsidiary to a Loan Party; (b) the net income of any Person in  which a Loan Party has an interest (which interest does not cause the net income of such other  Person to be consolidated with the net income of the Loan Parties in accordance with GAAP),  except to the extent of the amount of dividends or distributions attributable to net income of such  Person actually paid in cash during such period by such other Person to a Loan Party; (c) the net  income (but not losses) during such period of any other Loan Party to the extent that the declaration  or payment of dividends or similar distributions or transfers or loans by that Loan Party is not at  

 

  13  the time permitted by operation of the terms of its charter or any agreement, instrument or legal  requirement applicable to such Loan Party, in each case determined in accordance with GAAP;  (d) the net income (or deficit) of any Person accrued prior to the date it becomes a Loan Parties or  is merged into or consolidated with the Loan Parties; (e) any extraordinary gains or losses during  such period; (f) any gains or losses attributable to write-ups or write-downs of assets, including  ceiling test write-downs; (g) any non-cash gains or losses; and (h) positive or negative adjustments  under FASB ASC 815 as a result of changes in the fair market value of derivatives  “Consolidated Net Tangible Assets” means, as of any date of determination, the total assets  of the Loan Parties determined on a consolidated basis, less all outstanding liabilities and less any  intangible assets such as goodwill, patents and trademarks, in each case as determined in  accordance with GAAP.   “Continuing Directors” means (a) the directors of the Parent on the Effective Date and  (b) each other director of the Parent if such other Person’s nomination for election to the board of  directors of the Parent is approved by at least 51% of the then Continuing Directors.   “Control” means the possession, directly or indirectly, of the power to direct or cause the  direction of the management or policies of a Person, whether through the ability to exercise voting  power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative  thereto.  “Control Agreement” means a control agreement, in form and substance reasonably  satisfactory to the Administrative Agent, providing for the Administrative Agent’s exclusive  control of a Commodity Account, Deposit Account or Securities Account, after notice, executed  and delivered by the Borrower or a Loan Party, as applicable, and the applicable securities  intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account or  Commodity Account), in each case at which such relevant account is maintained.  “Control Agreement Delivery Date” has the meaning assigned to such term in Section  8.16.  “Corresponding Tenor” with respect to any Available Tenor means, as applicable, either  a tenor (including overnight) or an interest payment period having approximately the same length  (disregarding business day adjustment) as such Available Tenor.  “Covenant Cure Payment” has the meaning assigned to such term in Section 10.03(a).  “Covered Entity” means any of the following:  (a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12  C.F.R. § 252.82(b);  (b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12  C.F.R. § 47.3(b); or  (c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12  C.F.R. § 382.2(b).  

 

  14  “Covered Party” has the meaning assigned to it in Section 12.20.  “Credit Party” means the Administrative Agent, the Issuing Bank or any other Lender.  “Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which  will include a lookback) being established by the Administrative Agent in accordance with the  conventions for this rate selected or recommended by the Relevant Governmental Body for  determining “Daily Simple SOFR” for business loans; provided that if the Administrative Agent  decides that any such convention is not administratively feasible for the Administrative Agent,  then the Administrative Agent may establish another convention in its reasonable discretion.  “Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum equal  SOFR for the day (such day “SOFR Determination Date”) that is five (5) U.S. Government  Securities Business Day prior to (i) if such SOFR Rate Day is a U.S. Government Securities  Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government  Securities Business Day, the U.S. Government Securities Business Day immediately preceding  such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the  SOFR Administrator’s Website.  Any change in Daily Simple SOFR due to a change in SOFR  shall be effective from and including the effective date of such change in SOFR without notice to  the Borrower.  “Debt” means, for any Person, the sum of the following (without duplication): (a) all  obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances,  debentures, notes or other similar instruments; (b) all obligations of such Person (whether  contingent or otherwise) in respect of letters of credit and similar instruments; (c) all accounts  payable and all accrued expenses, liabilities or other obligations of such Person to pay the deferred  purchase price of Property or services (excluding current operating liabilities (other than for  borrowed money) and accounts payable and accrued expenses, liabilities or other obligations of  such Person to pay the deferred purchase price of Property or services from time to time incurred  in the ordinary course of business which are not greater than ninety (90) days past due or which  are being contested in good faith by appropriate action and for which adequate reserves have been  maintained in accordance with GAAP); (d) the principal component of all obligations under  Capital Leases; (e) the principal component of all obligations under Synthetic Leases; (f) all Debt  (as defined in the other clauses of this definition) of others secured by (or for which the holder of  such Debt has an existing right, contingent or otherwise, to be secured by) a Lien on any Property  of such Person, whether or not such Debt is assumed by such Person; (g) all Debt (as defined in  the other clauses of this definition) of others guaranteed by such Person or in which such Person  otherwise assures a creditor against loss of the Debt (howsoever such assurance shall be made) to  the extent of the lesser of the amount of such Debt and the maximum stated amount of such  guarantee or assurance against loss; (h) all obligations or undertakings of such Person to maintain  or cause to be maintained the financial position or financial covenants of others or to purchase the  Debt of others; (i) obligations to deliver commodities, goods or services, including, without  limitation, Hydrocarbons, in consideration of one or more advance payments, other than gas  balancing arrangements in the ordinary course of business; (j) obligations to pay for goods or  services even if such goods or services are not actually received or utilized by such Person; (k) any  Debt of a partnership for which such Person is liable either by agreement, by operation of law or  by a Governmental Requirement but only to the extent of such liability; (l) Disqualified Capital  

 

  15  Stock; and (m) the undischarged balance of any production payment created by such Person or for  the creation of which such Person directly or indirectly received payment. The Debt of any Person  shall include all obligations of such Person of the character described above to the extent such  Person remains legally liable in respect thereof notwithstanding that any such obligation is not  included as a liability of such Person under GAAP.  Notwithstanding the above, “Debt” shall not  include (i) any earn-out obligation pursuant to a binding and enforceable agreement entered into  in the ordinary course of business until such obligation becomes a liability on the balance sheet of  such Person in accordance with GAAP, (ii) obligations resulting under firm transportation  contracts or take or pay contracts entered into in the ordinary course of business), (iii) deferred or  prepaid revenues, (iv) purchase price holdbacks in respect of a portion of the purchase price of an  asset to satisfy warranty or other unperformed obligations of the respective seller pursuant to a  binding and enforceable agreement containing a requirement that such holdback be refunded to  such seller, (v) unfunded or undrawn obligations in respect of surety and bonding requirements  (including with respect to utilities) required by a Governmental Requirement, (vi) in-kind  obligations relating to net oil, natural gas liquids or natural gas balancing positions arising in the  ordinary course of business, (vii) any obligation in respect of a binding and enforceable farm-in  agreement or similar arrangement entered into in the ordinary course of business whereby such  Person agrees to pay all or a share of the drilling, completion or other expenses of an exploratory  or development well (which agreement may be subject to a maximum payment obligation, after  which expenses are shared in accordance with the working or participation interest therein or in  accordance with the agreement of the parties) or perform the drilling, completion or other operation  on such well in exchange for an ownership interest in an oil or gas property and (viii) customary  reservations or retentions of title under binding and enforceable agreements with suppliers entered  into the ordinary course of business.  “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.  “Default Right” has the meaning assigned to that term in, and shall be interpreted in  accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.  “Defaulting Lender” means any Lender that (a) has failed, within two Business Days of  the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of  its participations in Letters of Credit or (iii) pay over to any Credit Party any other amount required  to be paid by it hereunder, (b) has notified the Borrower or any Credit Party in writing, or has made  a public statement to the effect, that it does not intend or expect to comply with any of its funding  obligations under this Agreement or generally under other agreements in which it commits to  extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in  good faith, to provide a certification in writing from an authorized officer of such Lender that it  will comply with its obligations (and is financially able to meet such obligations as of the date of  certification) to fund prospective Loans and participations in then outstanding Letters of Credit  under this Agreement; provided that such Lender shall cease to be a Defaulting Lender pursuant  to this clause (c) upon such Credit Party’s receipt of such certification in form and substance  satisfactory to it and the Administrative Agent, or (d) has, or whose Lender Parent has, become  the subject of (i) a Bankruptcy Event or (ii) a Bail-In Action.  “Deposit Account” has the meaning assigned to such term in the UCC.   

 

  16  “Designated Basic NewCo” means, individually and collectively, (i) C&J Well Services,  LLC, a Delaware limited liability company, and (ii) CJ Berry Well Services Management, LLC, a  Delaware limited liability company.  “Disposition” means any conveyance, sale, lease, sale and leaseback, assignment, farm- out, transfer or other disposition of any Property, and includes, for the avoidance of doubt, any  Casualty Event.  “Dispose” has a correlative meaning thereto.  “Disqualified Capital Stock” means any Equity Interest that, by its terms (or by the terms  of any security into which it is convertible or for which it is exchangeable) or upon the happening  of any event, matures or is mandatorily redeemable for any consideration other than other Equity  Interests (which would not constitute Disqualified Capital Stock), pursuant to a sinking fund  obligation or otherwise, or is convertible or exchangeable for Debt or redeemable for any  consideration other than other Equity Interests (which would not constitute Disqualified Capital  Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is 190  days after the earlier of (a) the Maturity Date and (b) the date on which there are no Loans, LC  Exposure or other obligations hereunder outstanding and all of the Commitments are terminated.  “Dollars” or “$” refers to lawful money of the United States of America.  “Domestic Subsidiary” means any Subsidiary that is organized under the laws of the  United States of America or any state thereof or the District of Columbia.  “Early Opt-in Election” means, if the then-current Benchmark is LIBO Rate, the  occurrence of:  (1) a notification by the Administrative Agent to (or the request by the Borrower to the  Administrative Agent to notify) each of the other parties hereto that at least five  currently outstanding dollar-denominated syndicated credit facilities at such time  contain (as a result of amendment or as originally executed) a SOFR-based rate  (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark  rate (and such syndicated credit facilities are identified in such notice and are publicly  available for review), and  (2)the joint election by the Administrative Agent and the Borrower to trigger a fallback  from LIBO Rate and the provision by the Administrative Agent of written notice of  such election to the Lenders.  “EBITDAX” means for the Loan Parties, on a consolidated basis for any period, the sum  of (a) Consolidated Net Income for such period, plus (b) without duplication and to the extent  deducted in determining such Consolidated Net Income (i) Consolidated Interest Expense for such  period, plus (ii) Consolidated Income Tax Expense for such period, plus (iii) depreciation,  amortization, depletion and exploration expenses for such period, plus (iv) non-cash charges  resulting from extraordinary or non-recurring events or circumstances for such period,  plus (v) non-cash charges, including non-cash charges resulting from any provision for the  reduction in the carrying value of assets recorded in accordance with GAAP for such period  and non-cash charges resulting from the requirements of ASC 410, 718 and 815 for such period  (including, for avoidance of doubt, ceiling test and other write downs and impairment charges),  minus (c) to the extent included in determining Consolidated Net Income, (i) non-cash income  resulting from extraordinary or non-recurring events or circumstances for such period and (ii) all  

 

  17  other non-cash items of income which were included in determining such Consolidated Net  Income (including non-cash income resulting from the requirements of ASC 410, 718 and  815); provided that such EBITDAX shall be subject to pro forma adjustments for permitted  Material Acquisitions and for Material Dispositions assuming that such transactions had occurred  on the first day of the determination period, which adjustments shall be made in a manner, and  subject to supporting documentation, set forth by the SEC in Regulation S-X or otherwise  reasonably acceptable to the Administrative Agent. For the avoidance of doubt, EBITDAX shall  include realized gains and losses with respect to Hedge Agreements in connection with monthly  settlements in the ordinary course of business, but shall not otherwise include realized gains and  losses in connection with early hedge unwinds or terminations, and EBITDAX shall also not  include unrealized mark-to-market gains and losses with respect to Hedge Agreements.  “EEA Financial Institution” means (a) any institution established in any EEA Member  Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity  established in an EEA Member Country which is a parent of an institution described in clause (a)  of this definition, or (c) any institution established in an EEA Member Country which is a  subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to  consolidated supervision with its parent.  “EEA Member Country” means any of the member states of the European Union, Iceland,  Liechtenstein, and Norway.  “EEA Resolution Authority” means any public administrative authority or any Person  entrusted with public administrative authority of any EEA Member Country (including any  delegee) having responsibility for the resolution of any EEA Financial Institution.  “Effective Date” means the date on which the conditions specified in Section 6.01 are  satisfied (or waived in accordance with Section 12.02).  “Elected Commitment” means, as to each Lender, the amount set forth opposite such  Lender’s name on Annex I under the caption “Elected Commitment”, as the same may be  increased, reduced or terminated from time to time in connection with an optional increase,  reduction or termination of the Aggregate Elected Commitment Amounts pursuant to Section  2.06(c).  “Elected Commitment Increase Certificate” has the meaning given to such term in Section  2.06(c)(ii)(G).  “Electronic Signature” means an electronic sound, symbol, or process attached to, or  associated with, a contract or other record and adopted by a Person with the intent to sign,  authenticate or accept such contract or record.  “Engineering Reports” has the meaning assigned to such term in Section 2.07(c)(i).  “Environmental Laws” means any and all Governmental Requirements pertaining in any  way to health, safety, the environment, the preservation or reclamation of natural resources, or the  management, Release or threatened Release of any Hazardous Materials, in effect in any and all  jurisdictions in which the Borrower or any other Loan Party is conducting, or at any time has  

 

  18  conducted business, or where any Property of the Borrower or any other Loan Party is located,  including the Oil Pollution Act of 1990 (“OPA”), as amended, the Outer Continental Shelf Lands  Act (“OCSLA”), 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 Law, as amended, and other environmental conservation or protection  Governmental Requirements.  “Environmental Permit” means any permit, registration, license, notice, approval,  consent, exemption, variance, or other authorization required under or issued pursuant to  applicable Environmental Laws.  “Equity Interests” means shares of capital stock, partnership interests, membership  interests in a limited liability company, beneficial interests in a trust or other equity ownership  interests in a Person, and any warrants, options or other rights entitling the holder thereof to  purchase or acquire any such Equity Interest.  “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from  time to time, and the rules and regulations promulgated thereunder, and any successor statute.  “ERISA Affiliate” means each trade or business (whether or not incorporated) which  together with the Borrower, any other Loan Party, or any Unrestricted Subsidiary would be deemed  to be a “single employer” within the meaning of section 4001(b) (1) of ERISA or subsections (b),  (c), (m) or (o) of section 414 of the Code.  “ERISA Event” means any of the following:  (a) a reportable event described in Section  4043(b) of ERISA (or, unless the 30-day notice requirement has been duly waived under the  applicable regulations, Section 4043(c) of ERISA) with respect to a Plan; (b) the withdrawal of  the Borrower, any other Loan Party, any Unrestricted Subsidiary or any ERISA Affiliate from a  Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer,  as defined in Section 4001(a)(2) of ERISA; (c) the incurrence by the Borrower, any other Loan  Party, any Unrestricted Subsidiary or any ERISA Affiliate of liability due to the complete or partial  withdrawal from any Multiemployer Plan; (d) with respect to any Multiemployer Plan, the receipt  by the Borrower, any other Loan Party, or any Unrestricted Subsidiary of a notice of insolvency  or termination under Section 4041A of ERISA; (e) the receipt by the Borrower, any other Loan  Party, or any Unrestricted Subsidiary of a notice of intent to terminate a Plan under Section 4041  of ERISA; (f) the receipt by the Borrower, any other Loan Party, or any Unrestricted Subsidiary  of any notice of the institution of proceedings to terminate a Plan by the PBGC; (g) the failure by  the Borrower, any other Loan Party, or any Unrestricted Subsidiary or ERISA Affiliate to make  by its due date any required contribution under Section 430(j) of the Code to any Plan; (h) the  imposition of a Lien (other than an Excepted Lien) under Section 412 or 430(k) of the Code or  Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of  the Borrower, any other Loan Party, or any Unrestricted Subsidiary.   

 

  19  “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published  by the Loan Market Association (or any successor Person), as in effect from time to time.  “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such  Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by  reference to the Adjusted LIBO Rate.  “Event of Default” has the meaning assigned to such term in Section 10.01.  “Excepted Liens” means:  (a) Liens for Taxes, assessments or other governmental charges  or levies which are not delinquent  or which are being contested in good faith by appropriate action  and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens in  connection with workers’ compensation, unemployment insurance or other social security, old age  pension or public liability obligations which are not delinquent for more than 90 days or which are  being contested in good faith by appropriate action and for which adequate reserves have been  maintained in accordance with GAAP; (c) landlord’s liens, operators’, vendors’, carriers’,  warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or  other like Liens not securing Debt and arising in the ordinary course of business or incident to the  exploration, development, operation and maintenance of Oil and Gas Properties each of which is  in respect of obligations that are not delinquent or which are being contested in good faith by  appropriate action and for which adequate reserves have been maintained in accordance with  GAAP; provided that any such Lien referred to in this clause (c) does not materially impair the use  of the Property covered by such Lien for the purposes for which such Property is held by the  Borrower or any other Loan Party or materially impair the value of such Property subject thereto;  (d) royalties, overriding royalties, net profits interests, production payments, reversionary  interests, calls on production, preferential purchase rights and other burdens on or deductions from  the proceeds of production, that do not secure Debt for borrowed money and that are taken into  account in computing the net revenue interests and working interests of the Borrower or any of its  Restricted Subsidiaries warranted in the Security Instruments or in this Agreement, (e) Liens which  arise in the ordinary course of business under operating agreements, joint venture agreements, oil  and gas partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts  for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations  and agreements, area of mutual interest agreements, overriding royalty agreements, marketing  agreements, processing agreements, net profits agreements, development agreements, gas  balancing or deferred production agreements, injection, repressuring and recycling agreements,  salt water or other disposal agreements, seismic or other geophysical permits or agreements, and  other agreements which are usual and customary in the oil and gas business and are for claims  which are not delinquent or which are being contested in good faith by appropriate action and for  which adequate reserves have been maintained in accordance with GAAP; provided that any such  Lien referred to in this clause (e) does not materially impair the use of the Property covered by  such Lien for the purposes for which such Property is held by the Borrower or any other Loan  Party or materially impair the value of such Property subject thereto; (f) Liens arising solely by  virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or  similar rights and remedies and burdening only deposit accounts or other funds maintained with a  creditor depository institution; provided that no such deposit account is a dedicated cash collateral  account or is subject to restrictions against access by the depositor in excess of those set forth by  regulations promulgated by the Federal Reserve Board and no such deposit account is intended by  

 

  20  the Loan Parties to provide collateral to the depository institution; (g) easements, restrictions,  servitudes, permits, conditions, covenants, exceptions or reservations in any Property of the  Borrower or any other Loan Party for the purpose of roads, pipelines, transmission lines,  transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber,  and other like purposes, or for the joint or common use of real estate, rights of way, facilities and  equipment, that do not secure any monetary obligations and which in the aggregate do not  materially impair the use of such Property for the purposes of which such Property is held by the  Borrower or any other Loan Party or materially impair the value of such Property subject thereto;  (h) Liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds,  government contracts, performance and return of money bonds, bids, trade contracts, leases,  statutory obligations, regulatory obligations and other obligations of a like nature incurred in the  ordinary course of business; and (i) judgment and attachment Liens not giving rise to an Event of  Default; provided that (x) Liens described in clauses (a) through (e) shall remain “Excepted Liens”  only for so long as no action to enforce such Lien has been commenced (and not stayed) and no  intention to subordinate the first priority Lien granted in favor of the Administrative Agent and the  Lenders is to be hereby implied or expressed by the permitted existence of such Excepted Liens;  and (y) in no event shall “Excepted Liens” secure Debt for borrowed money.  “Excess Cash” has the meaning assigned to such term in Section 3.04(c)(vi).    “Excess Cash Measurement Date” has the meaning assigned to such term in  Section 3.04(c)(vi).    “Excluded Accounts” means, with respect to each Loan Party, each deposit account, to the  extent used exclusively and solely for (a) payroll accounts containing a balance not exceeding by  more than 5% the amount of payroll expenses for one payroll period at any time, (b) tax  withholding accounts, (c) employee benefit trust accounts, (d) zero balance accounts (other than  lockbox accounts to the extent Control Agreements are permitted by the applicable depository  bank), (e) petty cash accounts containing a balance not exceeding $25,000 per account at any time  and not to exceed $250,000 for all such accounts in the aggregate, (f) trust accounts holding royalty  payment and working interest payments solely to the extent constituting property of a third party  held in trust; (g) during the Transition Period, the Wells Fargo Accounts, but only so long as the  amount of cash and Cash Equivalents in all Wells Fargo Accounts does not exceed $10,000,000.00  in the aggregate and (h) the Existing Letter of Credit Account but only so long as (i) Debt under  the Existing Letters of Credit is permitted pursuant to Section 9.02(n), and (ii) the amount of cash  and Cash Equivalents in such account does not exceed $7,385,546.70.  “Excluded Hedge Obligations” means, with respect to the Loan Parties individually  determined on a Loan Party by Loan Party basis, any Secured Hedge Obligation if, and solely to  the extent that, all or a portion of the guarantee by such Loan Party of, or the grant by such Loan  Party of a security interest to secure, such Secured Hedge Obligation (or any guarantee thereof) is  or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the  Commodity Futures Trading Commission (or the application or official interpretation of any  thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract  participant” as defined in the Commodity Exchange Act at the time such guarantee or grant of a  security interest becomes effective with respect to such Secured Hedge Obligation. If any Secured  Hedge Obligation arises under a master agreement governing more than one swap, such exclusion  

 

  21  shall apply only to the portion of such Secured Hedge Obligation that is attributable to swaps for  which such guarantee or security interest is or becomes illegal.  “Excluded Taxes” means any of the following Taxes imposed on or with respect to a  Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed  on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes,  in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having  its principal office or, in the case of any Lender, its applicable lending office located in, the  jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other  Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts  payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter  of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires  such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment  request by the Borrower under Section 5.04 or (ii) such Lender changes its lending office, except  in each case to the extent that, pursuant to Section 5.03, amounts with respect to such Taxes were  payable either to such Lender’s assignor immediately before such Lender became a party hereto  or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such  Recipient’s failure to comply with Section 5.03(e), and (d) any withholding Taxes imposed under  FATCA.  “Existing Credit Agreement” means that certain Credit Agreement, dated as of July 31,  2017 by and among the Borrower, the Parent, Wells Fargo Bank, National Association, as  administrative agent, and the other parties thereto, as amended, supplemented or otherwise  modified prior to the Effective Date.  “Existing Letter of Credit Account” means that certain account of the Loan Parties  maintained by Wells Fargo Bank, National Association ending in XXXX21721.  “Existing Letters of Credit” means those letters of credit set forth on Schedule 1.02 as of  the Effective Date.  “Existing Permitted Additional Debt” means the Borrower’s 7.0% senior unsecured notes  due 2026 in an aggregate principal amount equal to $400,000,000 as of the Effective Date.  “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement  (or any amended or successor version that is substantively comparable and not materially more  onerous to comply with), any current or future regulations or official interpretations thereof, any  agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory  legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or  convention among Governmental Authorities and implementing such Sections of the Code.  “Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB  based on such day’s federal funds transactions by depositary institutions, as determined in such  manner as shall be set forth on the NYFRB’s Website from time to time, and published on the next  succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if the  Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed  to be zero for the purposes of this Agreement.  

 

  22  “Federal Reserve Board” means the Board of Governors of the Federal Reserve System  of the United States of America.  “Financial Officer” means, for any Person, the chief financial officer, principal accounting  officer, treasurer or controller of such Person (or in the case of any Person that is a partnership, of  such Person’s general partner). Unless otherwise specified, all references herein to a Financial  Officer means a Financial Officer of the Borrower.  “Financial Statements” means the financial statement or statements of the Loan Parties  referred to in Section 7.04(a).   “First Amendment” means that certain First Amendment to Credit Agreement dated as of  the First Amendment Effective Date among the Borrower, the Parent, the Administrative Agent  and the Lenders party thereto.  “First Amendment Effective Date” means December 8, 2021.  “Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of  the execution of this Agreement, the modification, amendment or renewal of this Agreement or  otherwise) with respect to LIBO Ratethe Adjusted Term SOFR Rate or the Adjusted Daily Simple  SOFR, as applicable. For the avoidance of doubt the initial Floor for each of Adjusted Term SOFR  Rate or the Adjusted Daily Simple SOFR shall be 0.50%.  “Foreign Lender” means a Lender that is not a U.S. Person.  “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.  “Fraudulent Transfer Laws” has the meaning set forth in Section 13.01(b).  “Free Cash Flow” means, for any fiscal quarter for which financial statements have been  delivered (for purposes of Section 9.04(c)), (a) EBITDAX (without regard for any pro forma  adjustments for Material Acquisitions or Material Dispositions) for such fiscal quarter minus (b)  the increase (or plus the decrease) in Working Capital from the previous fiscal quarter (except any  increase or decrease in Working Capital due to the reclassification of liabilities from short-term  liabilities to long-term liabilities or vice versa)  minus (c) the sum, in each case without duplication,  of the following amounts paid during such fiscal quarter: (i) voluntary and scheduled cash  prepayments and repayments of Debt during such fiscal quarter, in each case, which cannot be  reborrowed pursuant to the terms of such Debt (and for the avoidance doubt, in the case of a  voluntary or a mandatory prepayment of Borrowings, solely to the extent such prepayment is  accompanied by a simultaneous and equivalent reduction in the Commitments), (ii) the aggregate  amount actually paid in cash by the Loan Parties during such fiscal quarter on account of capital  expenditures, (iii) interest expense paid in cash during such fiscal quarter, (iv) taxes paid in cash  during such fiscal quarter, (v) exploration expenses paid in cash during such fiscal quarter, (vi)   Restricted Payments made in cash (other than to the Borrower or any Guarantor and other than  Restricted Payments made pursuant to Section 9.04(e)) during such fiscal quarter, (vii)  Investments made in cash (other than any such Investments (A) to any Loan Party or any Restricted  Subsidiary thereof to the extent permitted under this Agreement or (B) to Designated Basic NewCo  to the extent permitted under Section 9.05(r) of this Agreement) during such fiscal quarter and  

 

  23  (viii) to the extent not included in the foregoing and added back in the calculation of EBITDAX  (other than Material Acquisitions or Material Dispositions) for such fiscal quarter, any other cash  charge that reduces the earnings of the Loan Parties except, in the case of each of the forgoing  clauses in this definition, to the extent financed with proceeds of issuances of any Equity Interests  or capital contributions other than proceeds from Disqualified Capital.  “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.  “Governmental Requirement” means any law, statute, code, ordinance, order,  determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license,  rules of common law, authorization or other directive or requirement, whether now or hereinafter  in effect, of any Governmental Authority.  “Guarantors” means (a) the Parent and the Intermediate Holdco (if applicable) and (b)  each Restricted Subsidiary that becomes a party to the Guaranty Agreement as a “Guarantor” and  “Grantor” (as such terms are defined in the Guaranty Agreement and the Pledge and Security  Agreement, respectively) and guarantees the Obligations (including pursuant to Section 6.01 and  Section 8.13(b)).    “Guaranty Agreement” means that certain Guaranty Agreement, in the form attached  hereto as Exhibit J, executed by the Guarantors (other than the Parent) in favor of the  Administrative Agent and each of the other Secured Parties, as the same may be amended,  modified or supplemented from time to time.  “Guaranteed Obligations” has the meaning set forth in Section 13.01.  “Hazardous Material” means any substance regulated or as to which liability might arise  under any applicable Environmental Law including:  (a) any chemical, compound, material,  product, byproduct, substance or waste defined as or included in the definition or meaning of  “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic waste,”  “extremely hazardous substance,” “toxic substance,” “contaminant,” “pollutant,” or words of  similar meaning or import found in any applicable Environmental Law; (b) Hydrocarbons,  petroleum products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any  components, fractions, or derivatives thereof; and (c) radioactive materials, explosives, asbestos  or asbestos containing materials, polychlorinated biphenyls, radon, infectious or medical wastes.  “Hedge Agreement” means any agreement with respect to any hedge, call, put, swap,  collar, floor, cap, option, swaption, forward, future, derivative transaction or other similar  agreement, contract or arrangement, whether exchange traded, “over-the-counter” or otherwise,  involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt  instruments or securities, or economic, financial or pricing indices or measures of economic,  

 

  24  financial or pricing risk or value or any similar transaction or any combination of these  transactions; provided that (1) no phantom stock or similar plan providing for payments only on  account of services provided by current or former directors, officers, employees or consultants of  the Loan Parties shall be a Hedge Agreement and (2) any agreement governing the purchase or  future purchase of electricity for use in the ordinary course of operations and not for speculative  purposes shall not be a Hedge Agreement.  “Hedge Termination Value” means, in respect of any one or more Hedge Agreements,  after taking into account the effect of any legally enforceable netting agreement relating to such  Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed  out and termination value(s) determined in accordance therewith, such termination value(s)  payable by the Borrower or any other Loan Party, as applicable, and (b) for any date prior to the  date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such  Hedge Agreements, with respect to which the Borrower or any other Loan Party, as applicable, is  “out-of-the-money”, as determined by the counterparties to such Hedge Agreements (including,  without duplication, any unpaid amounts due on the date of calculation).  “Highest Lawful Rate” means, with respect to each Lender, the maximum nonusurious  interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved,  charged or received on the Notes or on other Obligations under laws applicable to such Lender  which are presently in effect or, to the extent allowed by law, under such applicable laws which  may hereafter be in effect and which allow a higher maximum nonusurious interest rate than  applicable laws allow as of the date hereof.  “Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter  acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous  hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit  interests and production payment interests, including any reserved or residual interests of whatever  nature. Unless otherwise indicated herein, each reference to the term “Hydrocarbon Interests” shall  mean Hydrocarbon Interests of the Loan Parties, as the context requires.  “Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline,  condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or  separated therefrom.  “IBA” has the meaning assigned to such term in Section 1.06.  “Impacted Interest Period” has the meaning assigned to it in the definition of “LIBO  Rate.”  “Ineligible Institution” has the meaning assigned to it in Section 12.04(b).   “Information” has the meaning assigned to it in Section 12.11.  “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with  respect to any payment made by or on account of any obligation of the Borrower or any Guarantor  under any Loan Document and (b) to the extent not otherwise described in clause (a) hereof, Other  Taxes.  

 

  25  “Initial Reserve Report” means the Reserve Report prepared by DeGolyer &  MacNaughton prepared as of January 28, 2021 evaluating the Oil and Gas Properties of the  Borrower and the Guarantors as of December 31, 2020.  “Interest Election Request” means a request by the Borrower to convert or continue a  Borrowing in accordance with Section 2.04, which shall be substantially in the form of Exhibit C  or any other form approved by the Administrative Agent.  “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each  March, June, September and December and the Termination Date and (b) with respect to any  Eurodollar Loan, , (b) with respect to any RFR Loan, (i) each date that is on the numerically  corresponding day in each calendar month that is one month after the Borrowing of such Loan (or,  if there is no such numerically corresponding day in such month, then the last day of such month)  and (ii) the Termination Date and (c) with respect to any Term Benchmark Loan, (i) the last day  of each Interest Period applicable to the Borrowing of which such Loan is a part and, in the case  of a Eurodollar Term Benchmark Borrowing with an Interest Period of more than three months’  duration, each day prior to the last day of such Interest Period that occurs at intervals of three  months’ duration after the first day of such Interest Period, and (ii) the Termination Date.  “Interest Period” means with respect to any Eurodollar Term Benchmark Borrowing, the  period commencing on the date of such Borrowing and ending on the numerically corresponding  day in the calendar month that is one, three or six months (or, with the consent of each Lender,  twelve months) thereafterthereafter (in each case, subject to the availability for the Benchmark  applicable to the relevant Loan or Commitment), as the Borrower may elect; provided , that (i) if  any Interest Period would end on a day other than a Business Day, such Interest Period shall be  extended to the next succeeding Business Day unless such next succeeding Business Day would  fall in the next calendar month, in which case such Interest Period shall end on the next preceding  Business Day and , (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences  on the last Business Day of a calendar month (or on a day for which there is no numerically  corresponding day in the last calendar month of such Interest Period) shall end on the last Business  Day of the last calendar month of such Interest Period and (iii) no tenor that has been removed  from this definition pursuant to Section 3.03(e) and not thereafter reinstated pursuant to such  Section 3.03(e) shall be available for specification in such Borrowing Request or Interest Election  Request.  For purposes hereof, the date of a Borrowing initially shall be the date on which such  Borrowing is made and thereafter shall be the effective date of the most recent conversion or  continuation of such Borrowing.  “Interim Redetermination” has the meaning assigned to such term in Section 2.07(b).  “Interim Redetermination Date” means the date on which a Borrowing Base that has been  redetermined pursuant to an Interim Redetermination becomes effective as provided in Section  2.07(d).  “Intermediate Holdco” means a wholly-owned subsidiary of the Parent created after the  Effective Date solely to hold 100% of the Equity Interests of the Borrower (directly) and that  otherwise also complies with Section 9.22.   

 

  26  “Interpolated Rate” means, at any time, for any Interest Period, the rate per annum  (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the  Administrative Agent (which determination shall be conclusive and binding absent manifest error)  to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen  Rate for the longest period (for which the LIBO Screen Rate is available) that is shorter than the  Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that  LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such  time.   “Investment” means, for any Person: (a) the acquisition (whether for cash, Property,  services or securities or otherwise) of Equity Interests of any other Person or any agreement to  make any such acquisition (including, without limitation, any “short sale” or any sale of any  securities at a time when such securities are not owned by the Person entering into such short sale);  (b) the making of any deposit with, or advance, loan or capital contribution to, assumption of Debt  of, purchase or other acquisition of any other Debt or equity participation or interest in, or other  extension of credit to, any other Person (including the purchase of Property from another Person  subject to an understanding or agreement, contingent or otherwise, to resell such Property to such  Person, but excluding any such advance, loan or extension of credit having a term not exceeding  ninety (90) days representing the purchase price of inventory or supplies sold by such Person in  the ordinary course of business); (c) the purchase or acquisition (in one or a series of transactions)  of Property of another Person that constitutes a business unit; or (d) the entering into of any  guarantee of, or other contingent obligation (including the deposit of any Equity Interests to be  sold) with respect to, Debt or other liability of any other Person and (without duplication) any  amount committed to be advanced, lent or extended to such Person.  “IRS” means the United States Internal Revenue Service.   “ISDA Definitions” means the 2006 ISDA Definitions published by the International  Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented  from time to time, or any successor definitional booklet for interest rate derivatives published from  time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.  “Issuing Bank” means each of (a) JPMorgan, (b) BOKF, NA and (c) Keybank National  Association, each in its capacity as the issuer of Letters of Credit hereunder, and each of their  successors in such capacity as provided in Section 2.08(i).  The Issuing Bank may, in its discretion,  arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which  case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit  issued by such Affiliate.  Each reference herein to the “Issuing Bank” in connection with a Letter  of Credit or other matter shall be deemed to be a reference to the relevant Issuing Bank with respect  thereto.  “LC Commitment” means the commitment of the Issuing Bank to issue Letters of Credit  hereunder.  The aggregate amount of the LC Commitment for all Issuing Banks is $20,000,000.  The aggregate amount of the LC Commitment for all Issuing Banks may be modified from time  to time by agreement between the Administrative Agent and the Borrower.   

 

  27  “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of  Credit.  “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all  outstanding Letters of Credit at such time, plus (b) the aggregate amount of all LC Disbursements  that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure  of any Lender at any time shall be its Applicable Percentage of the LC Exposure at such time. For  all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by  its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a)  of the Uniform Customs and Practice for Documentary Credits, International Chamber of  Commerce Publication No. 600 (or such later version thereof as may be in effect at the applicable  time) or Rule 3.13 or Rule 3.14 of the International Standby Practices, International Chamber of  Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable  time) or similar terms of the Letter of Credit itself, or if compliant documents have been presented  but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in  the amount so remaining available to be paid, and the obligations of the Borrower and each Lender  shall remain in full force and effect until the Issuing Bank and the Lenders shall have no further  obligations to make any payments or disbursements under any circumstances with respect to any  Letter of Credit.  “Lender Parent” means, with respect to any Lender, any Person as to which such Lender  is, directly or indirectly, a subsidiary.  “Lenders” means the Persons listed on Annex I and any other Person that shall have  become a party hereto pursuant to an Assignment and Assumption or otherwise, other than any  such Person that ceases to be a party hereto pursuant to an Assignment and Assumption or  otherwise.  Unless the context otherwise requires, the term “Lenders” includes the Issuing Bank.  “Letter of Credit” means any letter of credit issued pursuant to this Agreement.  “Letter of Credit Agreement” has the meaning assigned to it in Section 2.08(b).  “Letter of Credit Fee Letter” means any fee letter or similar agreement between the  Borrower and any Issuing Bank setting for the applicable fronting fee for Letters of Credit issued  by such Issuing Bank.  “Leverage Ratio” has the meaning assigned to such term in Section 9.01(a).  “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the  LIBO Screen Rate at approximately 11:00 a.m., London time, two Business Days prior to the  commencement of such Interest Period; provided that if the LIBO Screen Rate shall not be  available at such time for such Interest Period (an “Impacted Interest Period”) then the LIBO Rate  shall be the Interpolated Rate.  “LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar  Borrowing for any Interest Period, the London interbank offered rate as administered by ICE  Benchmark Administration (or any other Person that takes over the administration of such rate for  U.S. Dollars for a period equal in length to such Interest Period as displayed on such day and time  

 

  28  on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such  rate does not appear on a Reuters page or screen, on any successor or substitute page on such  screen that displays such rate, or on the appropriate page of such other information service that  publishes such rate from time to time as selected by the Administrative Agent in its reasonable  discretion); provided that if the LIBO Screen Rate as so determined would be less than 0.50%,  such rate shall be deemed to 0.50% for the purposes of this Agreement.  “LIBOR” has the meaning assigned to it in Section 1.06.  “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 deed of trust, 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 Loan Parties 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.  “Liquidate” means, with respect to any Hedge Agreement, the sale, assignment, novation,  unwind or early termination of all or any part of such Hedge Agreement or the creation of an  offsetting position against all or any part of such Hedge Agreement.  The terms “Liquidated” and  “Liquidation” have correlative meanings thereto.  “Liquidity” means, as of any date of determination, the sum of (a) the aggregate amount of  the Commitments which have not been drawn but may be drawn subject to compliance with  Section 6.02 as of such date plus (b) the aggregate amount of Unrestricted Cash on such date,  minus (c) the amount of any Borrowing Base Deficiency on such date.  “Loan Documents” means this Agreement, the Notes, the Letter of Credit Agreements, the  Letters of Credit, the Letter of Credit Fee Letters, the Security Instruments, the First Amendment,  the Second Amendment, the Third Amendment and any certificate or fee letter delivered under, or  in connection with, this Agreement by or on behalf of the Borrower or any other Loan Party.  “Loan Guaranty” means, in the case of Parent, Article XIII of this Agreement and, in all  other cases, the Guaranty Agreement.  “Loan Limit” means, at any time, the least of (a) the Aggregate Maximum Credit Amounts,  (b) the then effective Borrowing Base and (c) the then effective Aggregate Elected Commitment  Amounts.  “Loan Parties” means the collective reference to the Borrower and each Guarantor.  “Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.  

 

  29  “Majority Lenders” means, at any time while no Loans or LC Exposure is outstanding,  Non-Defaulting Lenders having more than fifty percent (50%) of the Aggregate Maximum Credit  Amounts of all Non-Defaulting Lenders; and at any time while any Loans or LC Exposure is  outstanding, Non-Defaulting Lenders holding more than fifty percent (50%) of the outstanding  aggregate principal amount of the Loans, participation interests in Letters of Credit of all Non- Defaulting Lenders (without regard to any sale by a Lender of a participation in any Loan under  Section 12.04(c)).  “Material Acquisition” means any acquisition of Property or series of related acquisitions  of Property that involves the payment of consideration by the Loan Parties in excess of  $15,000,000.  “Material Adverse Effect” means a material adverse change in, or material adverse effect  on (a) the business, Property, operations or condition (financial or otherwise) of the Loan Parties  taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under any Loan  Document, (c) the validity or enforceability of any Loan Document or (d) the rights and remedies  of or benefits available to the Administrative Agent, the Issuing Bank or any Lender under any  Loan Document.  “Material Debt” means Debt (other than the Loans and Letters of Credit), or obligations in  respect of one or more Hedge Agreements, of any one or more of the Loan Parties in an aggregate  principal amount exceeding $20,000,000. For purposes of determining Material Debt, the  “principal amount” of the obligations of the Loan Parties in respect of any Hedge Agreement at  any time shall be the Hedge Termination Value of such Hedge Agreement.  “Material Disposition” means any Disposition of Property or series of related Dispositions  of Property that yields gross proceeds to the Loan Parties (valued at the initial principal amount  thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at  fair market value in the case of other non-cash proceeds) in excess of $15,000,000.  “Maturity Date” means August 26, 2025.  “Maximum Credit Amount” means, as to each Lender, the amount set forth opposite such  Lender’s name on Annex I under the caption “Maximum Credit Amounts”, as the same may be  (a) reduced or terminated from time to time in connection with a reduction or termination of the  Aggregate Maximum Credit Amounts pursuant to Section 2.06(b) or (b) modified from time to  time pursuant to any assignment permitted by Section 12.04(b).  “Minimum Hedging Requirement Date” has the meaning assigned to such term in Section  8.17.  “Moody’s” means Moody’s Investors Service, Inc.  “Mortgaged Property” means any Property owned by the Borrower or any Guarantor  which is subject to the Liens existing and to exist under the terms of the Security Instruments.  “Multiemployer Plan” means any multiemployer plan, as defined in Section 3(37) or  4001(a)(3) of ERISA, which (a) is currently or hereafter contributed to by the Borrower, a Loan  

 

  30  Party or an ERISA Affiliate or (b) was at any time during the six calendar years preceding the date  hereof contributed to by the Borrower, a Loan Party or an ERISA Affiliate.   “New Borrowing Base Notice” has the meaning assigned to such term in Section 2.07(d).  “Non-Consenting Lender” means any Lender that does not approve any consent, waiver  or amendment to any provision of this Agreement or any other Loan Document requested by the  Borrower (excluding, for the avoidance of doubt, any Borrowing Base increase) that (i) requires  the approval of all Lenders or all affected Lenders in accordance with the terms of Section 12.02(b)  and (ii) has been approved by the Majority Lenders.  “Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender  at such time.  “Non-Recourse” means, with respect to any Person, any Debt or other obligations, if  (a) such Person is not obligated to provide credit support for such Debt or other obligations in any  form (including any undertaking, agreement or instrument that would constitute Debt or a Lien),  (b) such Person is not directly or indirectly liable for such Debt or other obligations and (c) the  holder of such Debt or other obligations has no recourse to such Person or any of such Person’s  assets in connection with Debt or other obligations.   “Notes” means the promissory notes of the Borrower described in Section 2.02(e) and  being substantially in the form of Exhibit A, together with all amendments, modifications,  replacements, extensions and rearrangements thereof.  “NYFRB” means the Federal Reserve Bank of New York.  “NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in  effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day  that is not a Business Day, for the immediately preceding Business Day); provided that if none of  such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the  rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative  Agent from a federal funds broker of recognized standing selected by it; provided, further, that if  any of the aforesaid rates as so determined be less than zero, such rate shall be deemed to be zero  for purposes of this Agreement.   “NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or  any successor source.  “Obligations” means (a) any and all amounts owing or to be owing by the Borrower or any  Guarantor (whether direct or indirect (including those acquired by assumption), absolute or  contingent, due or to become due, now existing or hereafter arising) to the Administrative Agent,  any other Agent, the Arrangers, the Issuing Bank, any Lender or any Related Party of any of the  foregoing under any Loan Document; (b) all Secured Hedge Obligations; (c) all Secured Cash  Management Obligations; and (d) all renewals, extensions and/or rearrangements of any of the  above.  Without limitation of the foregoing, the term “Obligations” shall include the unpaid  principal of and interest on the Loans and LC Exposure (including, without limitation, interest  accruing at the then applicable rate provided in this Agreement after the maturity of the Loans and  

 

  31  LC Exposure and interest accruing at the then applicable rate provided in this Agreement after the  filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or  like proceeding, relating to the Loan Parties, whether or not a claim for post-filing or post-petition  interest is allowed in such proceeding), reimbursement obligations (including, without limitation,  to reimburse LC Disbursements), obligations to post cash collateral in respect of Letters of Credit,  payments in respect of an early termination of Secured Hedge Obligations and unpaid amounts,  fees, expenses, indemnities, costs, and all other obligations and liabilities of every nature of the  Loan Parties, whether absolute or contingent, due or to become due, now existing or hereafter  arising under this Agreement, the other Loan Documents, any Secured Hedge Agreement or any  Secured Cash Management Agreement; provided that the Obligations of any other Loan Party shall  not include any Excluded Hedge Obligations of such Loan Party.   “OFAC” means the U.S. Department of the Treasury Office of Foreign Assets Control.  “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 agreements, pooling agreements and declarations of pooled units and the units created  thereby (including without limitation all units created under orders, regulations and rules of any  Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all  operating agreements, contracts and other agreements, including production sharing contracts and  agreements, which relate to any of the Hydrocarbon Interests or the production, sale, purchase,  exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all  Hydrocarbons in and under and which may be produced and saved or attributable to the  Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products,  revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements,  hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or  incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates  described or referred to above, including any and all Property, real or personal, now owned or  hereinafter acquired and situated upon, used, held for use or useful in connection with the  operating, working or development of any of such Hydrocarbon Interests or Property (excluding  drilling rigs, automotive equipment, rental equipment or other personal Property which may be on  such premises for the purpose of drilling a well or for other similar temporary uses) and including  any and all oil wells, gas wells, injection wells or other wells, structures, fuel separators, liquid  extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and  tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus,  equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface  leases, rights-of-way, easements and servitudes together with all additions, substitutions,  replacements, accessions and attachments to any and all of the foregoing. Unless otherwise  indicated herein, each reference to the term “Oil and Gas Properties” shall mean Oil and Gas  Properties of the Loan Parties, as the context requires.  “Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result  of a present or former connection between such Recipient and the jurisdiction imposing such Tax  (other than connections arising from such Recipient having executed, delivered, become a party  to, performed its obligations under, received payments under, received or perfected a security  interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or  sold or assigned an interest in any Loan, Letter of Credit or Loan Document).  

 

  32  “Other Hedge Agreement” means any Hedge Agreement (other than any Hedge  Agreement hedging reasonably anticipated production from Oil and Gas Properties) governing the  purchase or future purchase of fuel, power, steam, natural gas and greenhouse gas carbon credits  and other environmental and sustainability-linked products, in each case, for use in the ordinary  course of operations and not for speculative purposes.  “Other Taxes” means all present or future stamp, court or documentary, intangible,  recording, filing or similar Taxes that arise from any payment made under, from the execution,  delivery, performance, enforcement or registration of, from the receipt or perfection of a security  interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are  Other Connection Taxes imposed with respect to an assignment (other than an assignment made  pursuant to Section 5.04).  “Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight  federal funds and overnight Eurodollar borrowings eurodollar transactions denominated in Dollars  by U.S.-managed banking offices of depository institutions, as such composite rate shall be  determined by the NYFRB as set forth on the NYFRB’s Website from time to time, and published  on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.   “Parent” has the meaning set forth in the recitals.  “Participant” has the meaning assigned to such term in Section 12.04(c).  “Participant Register” has the meaning assigned to such term in Section 12.04(c).  “Payment” has the meaning assigned to it in Section 11.15.  “Payment Notice” has the meaning assigned to it in Section 11.15.  “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in  ERISA and any successor entity performing similar functions.  “Permitted Additional Debt” means (a) the Existing Permitted Additional Debt and (b)  unsecured senior notes or unsecured senior subordinated notes of the Borrower incurred after the  Effective Date under Section 9.02(h).  “Permitted Additional Debt Documents” means any credit agreement, notes, indenture,  agreement, instrument or other definitive document governing, evidencing or related to, or  securing, guaranteeing or otherwise providing credit support for, any Permitted Additional Debt,  as the same may be amended, modified or supplemented to the extent permitted by Section 9.21.   “Permitted Holders” means, individually or collectively, (a) Benefit Street Partners,  L.L.C., (b) Oaktree Capital Management and (c) trusts, partnerships, limited liability companies,  corporations or other entities that are Controlled by one or more Persons in foregoing clauses (a)  and (b) (other than their portfolio companies).  “Person” means any natural person, corporation, limited liability company, trust, joint  venture, association, company, partnership, Governmental Authority or other entity.  

 

  33  “Petroleum Industry Standards” shall mean the Definitions for Oil and Gas Reserves  promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in  effect at the time in question.   “Plan” means any employee pension benefit plan, as defined in section 3(2) of ERISA  subject to Section 412 of the Code or Section 302 or Title IV of ERISA (other than a  Multiemployer Plan), which (a) is currently or hereafter sponsored, maintained or contributed to  by the Borrower, 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 the Borrower, a Loan  Party or an ERISA Affiliate.  “Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section  3(42) of ERISA, as amended from time to time.   “Pledge and Security Agreement” means that certain Pledge and Security Agreement,  dated as of the date hereof, among the grantors party thereto and the Administrative Agent, as the  same may be amended, modified or supplemented from time to time.  “Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the  “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per  annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release  H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer  quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any  similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each  change in the Prime Rate shall be effective from and including the date such change is publicly  announced or quoted as being effective.  “Property” means any interest in any kind of property or asset, whether real, personal or  mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and  contract rights.  “Proposed Borrowing Base” has the meaning assigned to such term in Section 2.07(c)(i).  “Proposed Borrowing Base Notice” has the meaning assigned to such term in Section  2.07(c)(ii).  “PTE” means a prohibited transaction class exemption issued by the U.S. Department of  Labor, as any such exemption may be amended from time to time.   “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be  interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).  “QFC Credit Support” has the meaning assigned to it in Section 12.20.  “Qualified ECP Counterparty” means, in respect of any Hedge Agreement, any Loan  Party that (a) has total assets exceeding $10,000,000 at the time any guarantee of obligations under  such Hedge Agreement or grant of the relevant security interest to secure such Hedge Agreement  becomes effective or (b) otherwise constitutes an “eligible contract participant” under and as  

 

  34  defined in the Commodity Exchange Act and can cause another Person to qualify as an “eligible  contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the  Commodity Exchange Act.  “Recipient” means (a) the Administrative Agent, (b) any Lender and (c) the Issuing Bank,  as applicable.  “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.  “Redetermination Date” means, with respect to any Scheduled Redetermination or any  Interim Redetermination, the date that the redetermined Borrowing Base related thereto becomes  effective pursuant to Section 2.07(d).  “Reference Period” has the meaning assigned to such term in the definition of EBITDAX.   “Reference Time” with respect to any setting of the then-current Benchmark means (1a) if  such Benchmark is LIBO the Term SOFR Rate, 11:00 5:00 a.m. (London Chicago time) on the  day that is two London banking days Business Days preceding the date of such setting, and (2b) if  the RFR for such Benchmark is not LIBO RateDaily Simple SOFR, then four Business Days prior  to such setting or (c) if such Benchmark is none of the Term SOFR Rate or Daily Simple SOFR,  the time determined by the Administrative Agent in its reasonable discretion.  “Register” has the meaning assigned to such term in Section 12.04(b)(iv).  “Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time  to time and all official rulings and interpretations thereunder or thereof.  “Related Parties” means, with respect to any specified Person, such Person’s Affiliates  and the respective directors, officers, employees, agents and advisors (including attorneys,  accountants and experts) of such Person and such Person’s Affiliates.  “Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting,  discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping,  or disposing.  “Relevant Governmental Body” means the Federal Reserve Board and/or the NYFRB, the  CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened  by the Federal Reserve Board and/or the NYFRB or, or in each case, any successor thereto.  “Relevant Rate” means (i) with respect to any Term Benchmark Borrowing, the Adjusted  Term SOFR Rate or (ii) with respect to any RFR Borrowing, the Adjusted Daily Simple SOFR, as  applicable.  “Remedial Work” has the meaning assigned to such term in Section 8.09(a).  

 

  35  “Required Lenders” means, at any time while no Loans or LC Exposure is outstanding,  Non-Defaulting Lenders having at least sixty-six and two-thirds percent (66-2/3%) of the  Aggregate Maximum Credit Amounts of all Non-Defaulting Lenders; and at any time while any  Loans or LC Exposure is outstanding, Non-Defaulting Lenders holding at least sixty-six and two- thirds percent (66-2/3%) of the outstanding aggregate principal amount of the Loans, participation  interests in Letters of Credit of all Non-Defaulting Lenders (without regard to any sale by a Lender  of a participation in any Loan under Section 12.04(c)).  “Reserve Report” means a report, in form and substance reasonably satisfactory to the  Administrative Agent, setting forth, as of each January 1st or July 1st (or such other date in the  event of an Interim Redetermination) the oil and gas reserves attributable to the Oil and Gas  Properties of the Loan Parties, together with a projection of the rate of production and future net  income, Taxes, operating expenses and capital expenditures with respect thereto as of such date,  based upon the pricing assumptions consistent with the Administrative Agent’s lending  requirements at the time.  “Resolution Authority” means an EEA Resolution Authority or, with respect to any UK  Financial Institution, a UK Resolution Authority.  “Responsible Officer” means, as to any Person, the Chief Executive Officer, the President,  any Financial Officer or any Vice President of such Person or of such Person’s manager, managing  member, general partner or such other Person having authority to bind that Person (or in the case  of any Person that is a partnership, of such Person’s general partner).  Unless otherwise specified,  all references to a Responsible Officer herein means a Responsible Officer of the Borrower.  “Restricted Payment” means any dividend or other distribution (whether in cash, securities  or other Property) with respect to any Equity Interests in the Loan Parties, or any payment (whether  in cash, securities or other Property), including any sinking fund or similar deposit, on account of  the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity  Interests in Loan Parties or any option, warrant or other right to acquire any such Equity Interests  in the Loan Parties.  “Restricted Subsidiary” means any Subsidiary (including the Intermediate Holdco) other  than any Unrestricted Subsidiary.  “Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of  the outstanding principal amount of such Lender’s Loans and its LC Exposure at such time.  “RFR Borrowing” means, as to any Borrowing, the RFR Loans comprising such  Borrowing.  “RFR Loan” means a Loan that bears interest at a rate based on the Adjusted Daily Simple  SOFR.  “S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial Services  LLC business.  

 

  36  “Sanctioned Country” means, at any time, a country, region or territory which is itself the  subject or target of any Sanctions (at the time of this Agreementas of the Third Amendment  Effective Date, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic,  Crimea, Cuba, Iran, North Korea and Syria).   “Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list  of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations  Security Council, the European Union, any European Union member state, Her Majesty’s Treasury  of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized  or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or  Persons described in the foregoing clauses (a) or (b) or (d) any Person otherwise the subject of any  Sanctions.  “Sanctions” means all economic or financial sanctions or trade embargoes imposed,  administered or enforced from time to time by (a) the U.S. government, including those  administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council,  the European Union, any European Union member state, Her Majesty’s Treasury of the United  Kingdom or other relevant sanctions authority.   “Scheduled Redetermination” has the meaning assigned to such term in Section 2.07(b).  “Scheduled Redetermination Date” means the date on which a Borrowing Base that has  been redetermined pursuant to a Scheduled Redetermination becomes effective as provided in  Section 2.07(d).  “SEC” means the Securities and Exchange Commission of the United States of America  or any successor Governmental Authority.  “Second Amendment” means that certain Second Amendment to Credit Agreement and  Limited Consent and Waiver, dated as of the Second Amendment Effective Date, among the  Borrower, the Parent, the Administrative Agent and the Lenders party thereto.  “Second Amendment Effective Date” means May 2, 2022.  “Secured Cash Management Agreement” means a Cash Management Agreement between  (a) the Borrower or any other Loan Party and (b) a Secured Cash Management Provider.  “Secured Cash Management Obligations” means any and all amounts and other  obligations owing by the Borrower or any other Loan Party to any Secured Cash Management  Provider under any Secured Cash Management Agreement.  “Secured Cash Management Provider” means a Lender, an Affiliate of a Lender, the  Administrative Agent or an Affiliate of the Administrative Agent.  “Secured Hedge Agreement” means any Hedge Agreement, including any Other Hedge  Agreement, between the Borrower or any other Loan Party and any Person that is entered into  prior to the time, or during the time, that such Person was, a Lender or an Affiliate of a Lender  (including any such Hedge Agreement in existence prior to the date hereof), even if such Person  

 

  37  subsequently ceases to be a Lender (or an Affiliate of a Lender) for any reason (any such Person,  a “Secured Hedge Party”); provided that the term “Secured Hedge Agreement” shall not include  any Hedge Agreement or transactions under any Hedge Agreement entered into after the time that  such Secured Hedge Party ceases to be a Lender or an Affiliate of a Lender.  “Secured Hedge Obligations” means all amounts and other obligations, owing to any  Secured Hedge Party under any Secured Hedge Agreement (other than Excluded Hedge  Obligations).  “Secured Hedge Party” has the meaning assigned to such term in the definition of  “Secured Hedge Agreement”.  “Secured Parties” means the Administrative Agent, each Lender, the Issuing Bank, each  Secured Cash Management Provider and each Secured Hedge Party, and “Secured Party” shall  mean any one of them.  “Securities Account” has the meaning assigned to such term in the UCC.   “Security Instruments” means the Guaranty, the Pledge and Security Agreement, and  mortgages, deeds of trust, Control Agreements and other agreements, instruments or certificates  described or referred to in Exhibit E, 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 Secured Hedge Agreements or participation or similar agreements between any Lender and  any other lender or creditor with respect to any Obligations pursuant to this Agreement) in  connection with, or as security for the payment or performance of the Obligations, the Notes, this  Agreement, or reimbursement obligations under the Letters of Credit, as such agreements may be  amended, modified, supplemented or restated from time to time.  “SOFR” means, with respect to any Business Day,  a rate per annum equal to the secured  overnight financing rate for such Business Day published as administered by the SOFR  Administrator on the SOFR Administrator’s Website on the immediately succeeding Business  Day.    “SOFR Administrator” means the NYFRB (or a successor administrator of the secured  overnight financing rate).    “SOFR Administrator’s Website” means the NYFRB’s Website, currently at  http://www.newyorkfed.org, or any successor source for the secured overnight financing rate  identified as such by the SOFR Administrator from time to time.  “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 Federal Reserve 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).  Such reserve percentages  shall include those imposed pursuant to Regulation D.  Eurodollar Loans shall be deemed to  

 

  38  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 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.  “SOFR Determination Date” has the meaning specified in the definition of “Daily Simple  SOFR”.  “SOFR Rate Day” has the meaning specified in the definition of “Daily Simple SOFR”.  “subsidiary” means, with respect to any Person (the “parent”) at any date, any other Person  the accounts of which would be consolidated with those of the parent in the parent’s consolidated  financial statements if such financial statements were prepared in accordance with GAAP as of  such date, as well as any other Person (a) of which Equity Interests representing more than 50%  of the equity or more than 50% of the ordinary voting power (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) or, in the case of a partnership, any general  partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date,  otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and  one or more subsidiaries of the parent.  “Subordinated Guarantor Obligations” has the meaning assigned to it in Section 13.05(b).  “Subsidiary” means any subsidiary of the Borrower or the Parent, as applicable.  “Supported QFC” has the meaning assigned to it in Section 12.20.  “Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform  under any agreement, contract or transaction that constitutes a “swap” within the meaning of  section 1a(47) of the Commodity Exchange Act.  “Syndication Agent” means Valley Republic Bank in its role as syndication agent for the  Lenders.  “Synthetic Leases” means, in respect of any Person, all leases which shall have been, or  should have been, in accordance with GAAP, treated as operating leases on the financial statements  of the Person liable (whether contingently or otherwise) for the payment of rent thereunder and  which were properly treated as indebtedness for borrowed money for purposes of U.S. federal  income Taxes, if the lessee in respect thereof is obligated to either purchase for an amount in excess  of, or pay upon early termination an amount in excess of, 80% of the residual value of the Property  subject to such operating lease upon expiration or early termination of such lease.  “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings  (including backup withholding), value added taxes, or any other goods and services, use or sales  taxes, assessments, fees or other charges imposed by any Governmental Authority including any  interest, additions to tax or penalties applicable thereto.  

 

  39  “Term SOFR” means, for the applicable Corresponding Tenor as of the applicable  Reference Time, “Term Benchmark”   the forward-looking term rate based on SOFR that has been selected or recommended by  the Relevant Governmental Body.“Term SOFR Notice” means a notification by the  Administrative Agent to the Lenders and the Borrower of the occurrence of a Term SOFR  Transition Event.  “Term SOFR Transition Event” means the determination by the Administrative Agent  that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the  administration of Term SOFR is administratively feasible for the Administrative Agent and (c) a  Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred  resulting in a Benchmark Replacement in accordance with Section 3.03(b) that is not Term SOFR.  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 Term SOFR Rate.  “Term SOFR Determination Day” has the meaning assigned to it under the definition of  Term SOFR Reference Rate.  “Term SOFR Rate” means, with respect to any Term Benchmark Borrowing and for any  tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at  approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to  the commencement of such tenor comparable to the applicable Interest Period, as such rate is  published by the CME Term SOFR Administrator.  “Term SOFR Reference Rate”  means, for any day and time (such day, the “Term SOFR  Determination Day”), with respect to any Term Benchmark Borrowing denominated in Dollars  and for any tenor comparable to the applicable Interest Period, the rate per annum determined by  the Administrative Agent as the forward-looking term rate based on SOFR.  If by 5:00 pm (New  York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for  the applicable tenor has not been published by the CME Term SOFR Administrator and a  Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the  Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR  Reference Rate as published in respect of the first preceding U.S. Government Securities Business  Day for which such Term SOFR Reference Rate was published by the CME Term SOFR  Administrator, so long as such first preceding Business Day is not more than five (5) Business  Days prior to such Term SOFR Determination Day.    “Termination Date” means the earlier of the Maturity Date and the date of termination of  the Commitments.  “Third Amendment” means that certain Third Amendment to Credit Agreement, dated as  of the Third Amendment Effective Date, among the Borrower, the Parent, the Administrative  Agent and the Lenders party thereto.  “Third Amendment Effective Date” means May 27, 2022.  

 

  40    “Total Debt” means, at any date, all Debt of the Loan Parties on a consolidated basis,  excluding (a) non-cash obligations under FASB ASC 815, (b)  Debt under clause (c) of the  definition thereof and (c) Debt permitted by Section 9.02(d).     “Transactions” means, (a) with respect to (i) the Borrower, the execution, delivery and  performance by the Borrower of this Agreement and each other Loan Document to which it is a  party, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit  hereunder, and the grant of Liens by the Borrower on Mortgaged Properties and other Properties  pursuant to the Security Instruments and (ii) each Guarantor, the execution, delivery and  performance by such Guarantor of each Loan Document to which it is a party and the guaranteeing  of the Obligations under the Guaranty Agreement by such Guarantor and (b) the payment of fees  and expenses in connection with the foregoing.  “Transition Period” has the meaning assigned to it in Section 8.16(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 Adjusted Term SOFR Rate, the Alternate Base Rate or the Adjusted LIBO RateDaily Simple  SOFR.  “U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30)  of the Code.  “U.S. Special Resolution Regime” has the meaning assigned to it in Section 12.20.  “U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section  5.03(e)(ii)(B)(3).   “UCC” means the Uniform Commercial Code as in effect from time to time in the State of  New York.  “UK Financial Institution” means any BRRD Undertaking (as such term is defined under  the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential  Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended  from time to time) promulgated by the United Kingdom Financial Conduct Authority, which  includes certain credit institutions and investment firms, and certain affiliates of such credit  institutions or investment firms.  “UK Resolution Authority” means the Bank of England or any other public administrative  authority having responsibility for the resolution of any UK Financial Institution.  “Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement  excluding the related Benchmark Replacement Adjustment.  “Unrestricted Cash” means cash or Cash Equivalents of the Loan Parties that is (a) held in  Deposit Accounts and/or Securities Accounts subject to a Control Agreement and (b) during the  

 

  41  Transition Period, not subject to a Control Agreement to the extent permitted by Section 8.16, in  either case, other than cash collateral held pursuant to Section 2.08(j).  “Unrestricted Subsidiary” means any Subsidiary of the Borrower designated in writing to  the Administrative Agent to be an Unrestricted Subsidiary pursuant to Section 9.23 (including, for  the avoidance of doubt, once meeting the requirements of the definition thereof, Designated Basic  NewCo).  “U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii)  a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association  recommends that the fixed income departments of its members be closed for the entire day for  purposes of trading in United States government securities.  “USA PATRIOT Act” means the Uniting and Strengthening America by Providing  Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L.  107-56), as amended.  “Utilization Percentage” means, as of any day, the fraction expressed as a percentage, the  numerator of which is the sum of the Revolving Credit Exposures of the Lenders on such day, and  the denominator of which is the Loan Limit in effect on such day.  “Voting Securities” means (a) with respect to any corporation, capital stock of the  corporation having general voting power under ordinary circumstances to elect directors of such  corporation (irrespective of whether at the time stock of any other class or classes shall have or  might have special voting power or rights by reason of the happening of any contingency), (b) with  respect to any partnership, any partnership interest or other ownership interest having general  voting power to elect the general partner or other management of the partnership or other Person,  and (c) with respect to any limited liability company, membership certificates or interests having  general voting power under ordinary circumstances to elect managers of such limited liability  company.  “Wells Fargo Accounts” means, individually or collectively, those certain accounts of the  Loan Parties maintained by Wells Fargo Bank, National Association ending in (a) XXXX1739;  (b) XXXX15481; (c) XXXX82127; and (d) XXXX19420.  “Wholly-Owned Subsidiary” means any Restricted Subsidiary of which all of the  outstanding Equity Interests (other than any directors’ qualifying shares mandated by applicable  law), on a fully-diluted basis, are owned by the Borrower or one or more of the Wholly-Owned  Subsidiaries or are owned by the Borrower and one or more of the Wholly-Owned Subsidiaries.  “Working Capital” means, as of any date of determination, the difference of consolidated  current assets under GAAP of the Loan Parties as of such date (but excluding assets under ASC  815, cash and cash equivalents, and taxes receivable) and consolidated current liabilities under  GAAP of the Loan parties as of such date (but excluding obligations under ASC 815, current  liabilities in respect of Indebtedness, interest payable and taxes payable).   “Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution  Authority, the write-down and conversion powers of such EEA Resolution Authority from time to  

 

  42  time under the Bail-In Legislation for the applicable EEA Member Country, which write-down  and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect  to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In  Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial  Institution or any contract or instrument under which that liability arises, to convert all or part of  that liability into shares, securities or obligations of that person or any other person, to provide that  any such contract or instrument is to have effect as if a right had been exercised under it or to  suspend any obligation in respect of that liability or any of the powers under that Bail-In  Legislation that are related to or ancillary to any of those powers.  Section 1.03 Classification of Loans and Borrowings.  For purposes of this Agreement,  Loans may be classified and referred to by Type (e.g., a “Eurodollar Term Benchmark Loan”).   Borrowings also may be classified and referred to by Type (e.g., a “Eurodollar Term Benchmark  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” as used in this Agreement shall be deemed to be  followed by the phrase “without limitation”. The word “will” shall be construed to have the same  meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of  or reference to any agreement, instrument or other document herein shall be construed as referring  to such agreement, instrument or other document as from time to time amended, supplemented or  otherwise modified (subject to any restrictions on such amendments, supplements or modifications  set forth in the Loan Documents), (b) any reference herein to any law shall be construed as referring  to such law as amended, modified, codified or reenacted, in whole or in part, and in effect from  time to time, (c) any reference herein to any Person shall be construed to include such Person’s  successors and assigns (subject to the restrictions contained in the Loan Documents), (d) the words  “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this  Agreement in its entirety and not to any particular provision hereof, (e) with respect to the  determination of any time period, the word “from” means “from and including” and the word “to”  means “to and including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits and  Schedules shall be construed to refer to Articles and Sections of, and Annexes, Exhibits and  Schedules to, this Agreement. No provision of this Agreement or any other Loan Document shall  be interpreted or construed against any Person solely because such Person or its legal  representative drafted such provision.  Section 1.05 Accounting Terms and Determinations; GAAP.  Unless otherwise specified  herein, all accounting terms used herein shall be interpreted, all determinations with respect to  accounting matters hereunder shall be made, and all financial statements and certificates and  reports as to financial matters required to be furnished to the Administrative Agent or the Lenders  hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with the  Financial Statements except for changes in which the Parent’s independent certified public  accountants concur and which are disclosed to the Administrative Agent on the next date on which  financial statements are required to be delivered to the Lenders pursuant to Section 8.01(a);  provided that, unless the Borrower and the Majority Lenders shall otherwise agree in writing, no  such change shall modify or affect the manner in which compliance with the covenants set forth  

 

  43  in Section 9.01 are computed such that all such computations shall be conducted utilizing financial  information presented consistently with prior periods.  Notwithstanding anything to the contrary  contained herein, (a) all terms of an accounting or financial nature used herein shall be construed,  and all computations of amounts and ratios referred to herein shall be made, without giving effect  to (i) any election under Financial Accounting Standards Board Accounting Standards  Codification 825 (or any other Financial Accounting Standard having a similar result or effect) to  value any Debt or other liabilities of the Loan Parties at “fair value”, as defined therein and (ii)  any treatment of Debt under Accounting Standards Codification 470-20 or 2015-03 (or any other  Accounting Standards Codification or Financial Accounting Standard having a similar result or  effect) to value any such Debt in a reduced or bifurcated manner as described therein, and such  Debt shall at all times be valued at the full stated principal amount thereof; and (b) in the event  that the Parent adopts ASC 842 (requiring all leases to be capitalized), only those leases (assuming  for purposes hereof that such leases were in existence prior to the date of the Parent’s adoption of  ASC 842) that would constitute Capital Leases prior to the date of the Parent’s adoption of ASC  842 shall be considered Capital Leases and all calculations and deliverables under this Agreement  or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.  Section 1.06 Interest Rates; LIBOR Notification.  The interest rate on Eurodollar Loans  is determined by reference to the LIBO Rate, which is derived from the London interbank offered  rate (“LIBOR”).  LIBOR is intended to represent the rate at which contributing banks may obtain  short-term borrowings from each other in the London interbank market.  On March 5, 2021, the  U.K. Financial Conduct Authority (“FCA”) publicly announced that: (a) immediately after  December 31, 2021, publication of all seven euro LIBOR settings, all seven Swiss Franc LIBOR  settings, the spot next, 1-week, 2-month and 12-month Japanese Yen LIBOR settings, the  overnight, 1-week, 2-month and 12-month British Pound Sterling LIBOR settings, and the 1-week  and 2-month U.S. Dollar LIBOR settings will permanently cease; (b) immediately after June 30,  2023, publication of the overnight and 12-month U.S. Dollar LIBOR settings will permanently  cease; (c) immediately after December 31, 2021, the 1-month, 3-month and 6-month Japanese Yen  LIBOR settings and the 1-month, 3-month and 6-month British Pound Sterling LIBOR settings  will cease to be provided or, subject to consultation by the FCA, be provided on a changed  methodology (or “synthetic”) basis and no longer be representative of the underlying market and  economic reality they are intended to measure and that representativeness will not be restored; and  (d) immediately after June 30, 2023, the 1-month, 3-month and 6-month U.S. Dollar LIBOR  settings will cease to be provided or, subject to the FCA’s consideration of the case, be provided  on a synthetic basis and no longer be representative of the underlying market and economic reality  they are intended to measure and that representativeness will not be restored.  There is no assurance  that dates announced by the FCA will not change or that the administrator of LIBOR and/or  regulators will not take further action that could impact the availability, composition, or  characteristics of LIBOR or the currencies and/or tenors for which LIBOR is published.  Each  party to this Agreement should consult its own advisors to stay informed of any such  developments.  Public and private sector industry initiatives are currently underway to identify  new or alternative reference rates to be used in place of LIBORa Loan denominated in dollars may  be derived from an interest rate benchmark that may be discontinued or is, or may in the future  become, the subject of regulatory reform.  Upon the occurrence of a Benchmark Transition Event,  a Term SOFR Transition Event or an Early Opt-in Election, Section 3.03(b) provides the a  mechanism for determining an alternative rate of interest.  The Administrative Agent will promptly  notify the Borrower, pursuant to Section 3.03(b), of any change to the reference rate upon which  

 

  44  the interest rate on Eurodollar Loans is based.  However, the Administrative Agent does not  warrant or accept any responsibility for, and shall not have any liability with respect to, the  administration, submission , performance or any other matter related to LIBOR or other rates in  the definition of “LIBO Rate” any interest rate used in this Agreement, or with respect to any  alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i)  any such alternative, successor or replacement rate implemented pursuant to Section 3.03(b),  whether upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or  an Early Opt-in Election, and (ii) or the implementation of any Benchmark Replacement  Conforming Changes pursuant to Section 3.03(b)), including without limitation, whether the  composition or characteristics of any such alternative, successor or replacement reference rate will  be similar to, or produce the same value or economic equivalence of, the LIBO Rate existing  interest rate being replaced or have the same volume or liquidity as did the London interbank  offered any existing interest rate prior to its discontinuance or unavailability.  The Administrative  Agent and its affiliates and/or other related entities may engage in transactions that affect the  calculation of any  interest rate used in this Agreement or any alternative, successor or alternative  rate (including any Benchmark Replacement) and/or any relevant adjustments thereto, in each  case, in a manner adverse to the Borrower.  The Administrative Agent may select information  sources or services in its reasonable discretion to ascertain any interest rate used in this Agreement,  any component thereof, or rates referenced in the definition thereof, in each case pursuant to the  terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other  person or entity for damages of any kind, including direct or indirect, special, punitive, incidental  or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and  whether at law or in equity), for any error or calculation of any such rate (or component thereof)  provided by any such information source or service.  Section 1.07 Letter of Credit Amounts.  Unless otherwise specified herein, the amount  of a Letter of Credit at any time shall be deemed to be the amount of such Letter of Credit available  to be drawn at such time; provided that with respect to any Letter of Credit that, by its terms or the  terms of any Letter of Credit Agreement related thereto, provides for one or more automatic  increases in the available amount thereof, the amount of such Letter of Credit shall be deemed to  be the maximum amount of such Letter of Credit after giving effect to all such increases, whether  or not such maximum amount is available to be drawn at such time.  Section 1.08 Divisions.  For all purposes under the Loan Documents, in connection with  any division or plan of division under Delaware law (or any comparable event under a different  jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset,  right, obligation or liability of a different Person, then it shall be deemed to have been transferred  from the original Person to the subsequent Person, and (b) if any new Person comes into existence,  such new Person shall be deemed to have been organized and acquired on the first date of its  existence by the holders of its Equity Interests at such time.  ARTICLE II  THE CREDITS  Section 2.01 Commitments.  Subject to the terms and conditions set forth herein, each  Lender agrees to make Loans to the Borrower from time to time during the Availability Period in  an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit Exposure  

 

  45  exceeding such Lender’s Commitment or (b) the total Revolving Credit Exposures exceeding the  total Commitments. Within the foregoing limits and subject to the terms and conditions set forth  herein, the Borrower may borrow, prepay and reborrow Loans.  Section 2.02 Loans and Borrowings.  (a) Borrowings; Several Obligations. Each Loan shall be made as part of a  Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective  Commitments. The failure of any Lender to make any Loan required to be made by it shall not  relieve any other Lender of its obligations hereunder; provided that the Commitments are several  and no Lender shall be responsible for any other Lender’s failure to make Loans as required.  (b) Types of Loans. Subject to Section 3.03, each Borrowing shall be comprised  entirely of ABR Loans or Eurodollar Term Benchmark Loans as the Borrower may request in  accordance herewith.  Each Lender at its option may make any Eurodollar Term Benchmark 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. For the avoidance of doubt, as of the Third  Amendment Effective Date, the Type of Borrowings available to the Borrower shall solely be  comprised of either ABR Loans or Term Benchmark Loans.  (c) Minimum Amounts; Limitation on Number of Borrowings. At the  commencement of each Interest Period for any Eurodollar Term Benchmark Borrowing, such  Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less  than $500,000. At the time that each ABR Borrowing (or if then applicable, RFR Borrowing) is  made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and  not less than $500,000; provided that, notwithstanding the foregoing, an ABR Borrowing may be  in an aggregate amount that is equal to the entire unused balance of the total Commitments or that  is required to finance the reimbursement of an LC Disbursement as contemplated by Section  2.08(e).  Borrowings of more than one Type may be outstanding at the same time; provided that  there shall not at any time be more than a total of five (5) Eurodollar Term Benchmark Borrowings  or RFR Borrowings outstanding.   (d) Notwithstanding any other provision of this Agreement, the Borrower shall  not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period  requested with respect thereto would end after the Maturity Date.  (e) Notes. Any Lender may request that Loans made by it be evidenced by a  single promissory note of the Borrower in substantially the form of Exhibit A, dated, in the case  of (i) any Lender party hereto as of the date of this Agreement, as of the date of this Agreement,  or (ii) any Lender that becomes a party hereto pursuant to an Assignment and Assumption, as of  the effective date of the Assignment and Assumption, or (iii) any Additional Lender that becomes  a party hereto in connection with an increase in the Aggregate Elected Commitment Amounts  pursuant to Section 2.06(c), as of the effective date of such increase, as applicable, payable to such  Lender or its registered assigns in a principal amount equal to its Maximum Credit Amount as in  effect on such date, and otherwise duly completed. In the event that any Lender’s Maximum Credit  Amount increases or decreases for any reason (whether pursuant to Section 2.06, Section 12.04(b)  

 

  46  or otherwise), upon the request of such Lender, the Borrower shall deliver or cause to be delivered  on the effective date of such increase or decrease, a new Note payable to such Lender or its  registered assigns in a principal amount equal to its Maximum Credit Amount after giving effect  to such increase or decrease, and otherwise duly completed and, upon request by the Borrower,  such Lender shall promptly return to the Borrower the previously issued Note held by such Lender.  The date, amount, Type, interest rate and, if applicable, Interest Period of each Loan made by each  Lender, and all payments made on account of the principal thereof, shall be recorded by such  Lender on its books for its Note, and, prior to any transfer, may be endorsed by such Lender on a  schedule attached to such Note or any continuation thereof or on any separate record maintained  by such Lender. Failure to make any such notation or to attach a schedule shall not affect any  Lender’s or the Borrower’s rights or obligations in respect of such Loans or affect the validity of  such transfer by any Lender of its Note.  Section 2.03 Requests for Borrowings.  To request a Borrowing, the Borrower shall  notify the Administrative Agent of such request by telephone (a) (i) in the case of a Eurodollar  Term Benchmark Borrowing, not later than 12:00 noon, Dallas, Texas time, three Business Days  before the date of the proposed Borrowing or (ii) in the case of an RFR Borrowing, not later than  12:00 noon, Dallas, Texas time, five Business Days before the date of the proposed Borrowing or  (b) in the case of an ABR Borrowing, not later than 12:00 noon, Dallas, Texas time, one Business  Day before the date of the proposed Borrowing; provided that no such notice shall be required for  any deemed request of an ABR Borrowing to finance the reimbursement of an LC Disbursement  as provided in Section 2.08(e). Each such telephonic Borrowing Request shall be irrevocable and  shall be confirmed promptly by hand delivery, facsimile or electronic communication to the  Administrative Agent of a written Borrowing Request signed by a Responsible Officer of the  Borrower. Each such telephonic and written Borrowing Request shall specify the following  information in compliance with Section 2.02:  (i) the aggregate amount of the requested Borrowing;  (ii) the date of such Borrowing, which shall be a Business Day;  (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar  , a Term Benchmark Borrowing or an RFR Borrowing;  (iv) in the case of a Eurodollar Term Benchmark Borrowing, the initial  Interest Period to be applicable thereto, which shall be a period contemplated by the definition of  the term “Interest Period”;  (v) the amount of the then effective Borrowing Base, the amount of the  then effective Aggregate Elected Commitment Amounts, the current total Revolving Credit  Exposures (without regard to the requested Borrowing) and the pro forma total Revolving Credit  Exposures (giving effect to the requested Borrowing);   (vi) the Consolidated Cash Balance (without regard to the requested  Borrowing) and the pro forma Consolidated Cash Balance (giving effect to the requested  Borrowing); and  

 

  47  (vii) the location and number of the Borrower’s account to which funds  are to be disbursed, which shall comply with the requirements of Section 2.05.  If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an  ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Term  Benchmark Borrowing, then the Borrower shall be deemed to have selected an Interest Period of  one month’s duration. Each Borrowing Request shall constitute a representation that (a) the  amount of the requested Borrowing shall not cause the total Revolving Credit Exposures to exceed  the total Commitments (i.e., the lesser of the Aggregate Maximum Credit Amounts and the then  effective Borrowing Base) and (b) after giving pro forma effect to the requested Borrowing, the  Consolidated Cash Balance shall not exceed the Consolidated Cash Balance Threshold.  Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the  Administrative Agent shall advise each Lender of the details thereof and of the amount of such  Lender’s Loan to be made as part of the requested Borrowing.  Section 2.04 Interest Elections.  (a) Conversion and Continuance. Each Borrowing initially shall be of the Type  specified in the applicable Borrowing Request and, in the case of a Eurodollar Term Benchmark  Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter,  the Borrower may elect to convert such Borrowing to a different Type or to continue such  Borrowing and, in the case of a Eurodollar Term Benchmark Borrowing, may elect Interest Periods  therefor, all as provided in this Section 2.04. The Borrower may elect different options with respect  to different portions of the affected Borrowing, in which case each such portion shall be allocated  ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans  comprising each such portion shall be considered a separate Borrowing.   (b) Interest Election Requests. To make an election pursuant to this Section  2.04, the Borrower shall notify the Administrative Agent of such election by telephone by the time  that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting  a Borrowing of the Type resulting from such election to be made on the effective date of such  election. Each such telephonic Interest Election Request shall be irrevocable and shall be  confirmed promptly by hand delivery, facsimile or electronic communication to the Administrative  Agent of a written Interest Election Request signed by a Responsible Officer of the Borrower.  (c) Information in Interest Election Requests. Each telephonic and written  Interest Election Request shall specify the following information in compliance with Section 2.02:  (i) the Borrowing to which such Interest Election Request applies and,  if different options are being elected with respect to different portions thereof, the portions thereof  to be allocated to each resulting Borrowing (in which case the information to be specified pursuant  to Section 2.04(c)(iii) and (iv) shall be specified for each resulting Borrowing);  (ii) the effective date of the election made pursuant to such Interest  Election Request, which shall be a Business Day;  

 

  48  (iii) whether the resulting Borrowing is to be an ABR Borrowing or a  Eurodollar , a RFR Borrowing or a Term Benchmark Borrowing; and  (iv) if the resulting Borrowing is a Eurodollar Term Benchmark  Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which  shall be a period contemplated by the definition of the term “Interest Period”.  If any such Interest Election Request requests a Eurodollar Term Benchmark Borrowing but does  not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest  Period of one month’s duration.  (d) Notice to Lenders by the Administrative Agent. Promptly following receipt  of an Interest Election Request, the Administrative Agent shall advise each Lender of the details  thereof and of such Lender’s portion of each resulting Borrowing.  (e) Effect of Failure to Deliver Timely Interest Election Request and Events of  Default on Interest Election. If the Borrower fails to deliver a timely Interest Election Request with  respect to a Eurodollar Term Benchmark Borrowing prior to the end of the Interest Period  applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such  Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any  contrary provision hereof, if an Event of Default has occurred and is continuing:  (i) no outstanding  Borrowing may be converted to or continued as a Eurodollar Term Benchmark Borrowing (and  any Interest Election Request that requests the conversion of any Borrowing to, or continuation of  any Borrowing as, a Eurodollar Term Benchmark Borrowing shall be ineffective) and (ii) unless  repaid, each Eurodollar Term Benchmark Borrowing shall be converted to an ABR Borrowing at  the end of the Interest Period applicable thereto.  Section 2.05 Funding of Borrowings.  (a) Funding by Lenders. Each Lender shall make each Loan to be made by it  hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00  p.m., Dallas, Texas time, to the account of the Administrative Agent most recently designated by  it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loans  available to the Borrower by promptly crediting the amounts so received, in like funds, to an  account of the Borrower maintained with the Administrative Agent subject, from and after the  Control Agreement Delivery Date, to a Control Agreement and designated by the Borrower in the  applicable Borrowing Request; provided that ABR Loans made to finance the reimbursement of  an LC Disbursement as provided in Section 2.08(e) shall be remitted by the Administrative Agent  to the Issuing Bank. Nothing herein shall be deemed to obligate any Lender to obtain the funds for  its Loan in any particular place or manner or to constitute a representation by any Lender that it  has obtained or will obtain the funds for its Loan in any particular place or manner.  (b) Presumption of Funding by the Lenders. Unless the Administrative Agent  shall have received notice from a Lender prior to the proposed date of any Borrowing that such  Lender will not make available to the Administrative Agent such Lender’s share of such  Borrowing, the Administrative Agent may assume that such Lender has made such share available  on such date in accordance with Section 2.05(a) and may, in reliance upon such assumption, make  

 

  49  available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made  its share of the applicable Borrowing available to the Administrative Agent, then the applicable  Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand  such corresponding amount with interest thereon, for each day from and including the date such  amount is made available to the Borrower to but excluding the date of payment to the  Administrative Agent, at (i) in the case of such Lender, the greater of the NYFRB 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.  Section 2.06 Termination and Reduction of Aggregate Maximum Credit Amounts;  Increase, Reduction, and Termination of Aggregate Elected Commitment Amounts.  (a) Scheduled Termination of Commitments. Unless previously terminated, the  Commitments shall terminate on the Maturity Date. If at any time the Aggregate Maximum Credit  Amounts or the Borrowing Base is terminated or reduced to zero, then the Commitments shall  terminate on the effective date of such termination or reduction.  (b) Optional Termination and Reduction of Aggregate Credit Amounts.  (i) The Borrower may at any time terminate, or from time to time  reduce, the Aggregate Maximum Credit Amounts; provided that (A) each such partial reduction  of the Aggregate Maximum Credit Amounts shall be in an amount that is an integral multiple of  $500,000 and not less than $1,000,000 and (B) the Borrower shall not terminate or reduce the  Aggregate Maximum Credit Amounts if, after giving effect to any concurrent prepayment of the  Loans in accordance with Section 3.04(c)(i), the total Revolving Credit Exposures would exceed  the total Commitments.  (ii) The Borrower shall notify the Administrative Agent of any election  to terminate or reduce the Aggregate Maximum Credit Amounts under Section 2.06(b)(i) at least  three Business Days prior to the effective date of such termination or reduction, specifying such  election and the effective date thereof. Promptly following receipt of any notice, the  Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by  the Borrower pursuant to this Section 2.06(b)(ii) shall be irrevocable; provided that such a notice  may state that it is conditioned upon the occurrence of one or more specified events (including the  effectiveness of other credit facilities), in which case such notice may be revoked by the Borrower  (by at least one (1) Business Days’ notice to the Administrative Agent on or prior to the specified  effective date) if such specified event(s) do not occur.  Any termination or reduction of the  Aggregate Maximum Credit Amounts shall be permanent and may not be reinstated. Each  reduction of the Aggregate Maximum Credit Amounts shall be made ratably among the Lenders  in accordance with each Lender’s Applicable Percentage.  (c) Optional Increases, Reductions and Terminations of Aggregate Elected  Commitment Amounts.  

 

  50  (i) Subject to the conditions set forth in Section 2.06(c)(ii), the  Borrower may, from time to time, increase the Aggregate Elected Commitment Amounts then in  effect by increasing the Elected Commitment of a Lender or by causing a Person that is reasonably  acceptable to the Administrative Agent, the Swingline Lenders, and the Issuing Banks that at such  time is not a Lender to become a Lender (an “Additional Lender”).  Notwithstanding anything to  the contrary contained in this Agreement, in no case shall an Additional Lender be the Borrower,  an Affiliate of the Borrower, the Sponsor, or a natural person (or any holding company, investment  vehicle, or trust owned and operated for the primary benefit of a natural person).  (ii) Any increase in the Aggregate Elected Commitment Amounts shall  be subject to the following additional conditions:  (A) such increase shall not be less than $5,000,000 (and shall be  in increments of $1,000,000 above such minimum amount) unless the Administrative Agent  otherwise consents, and no such increase shall be permitted if after giving effect thereto, the  aggregate amount of all such increases after the Effective Date exceeds the Aggregate Maximum  Credit Amounts then in effect;  (B) no Event of Default shall have occurred and be continuing  on the effective date of such increase;  (C) to the extent that there are any Borrowings outstanding under  the then-current Benchmark, the effective date of such increase shall be, at the option of the  Borrower, either (x) the last day of the Interest Period in respect of such Borrowings or (y) such  earlier date selected by the Borrower provided that the Borrower shall pay compensation as  required by Section 5.02;  (D) no Lender’s Elected Commitment may be increased without  the consent of such Lender;  (E) all of the terms and conditions applicable to such increased  Aggregate Elected Commitment Amounts (and the Loans made pursuant thereto) shall be identical  to the terms and conditions applicable to the existing Commitments and Loans under this  Agreement (other than with respect to any arrangement, structuring, upfront or other fees or  discounts payable in connection with such increased commitment as may have been agreed to  between the Borrower and the increasing Lender or Additional Lender, as applicable, and/or the  Administrative Agent), provided that if the Applicable Margin of such increased Aggregate  Elected Commitment Amounts is higher than that for the then existing Commitments and Loans,  then the Applicable Margin shall be increased for all existing Commitments and Loans to be  consistent with such increased Applicable Margin;  (F) after giving effect to any increase in the Aggregate Elected  Commitment Amounts, the Aggregate Elected Commitment Amounts shall not exceed the  Borrowing Base then in effect;  (G) if the Borrower elects to increase the Aggregate Elected  Commitment Amounts by increasing the Aggregate Elected Commitment Amount of a Lender,  

 

  51  the Borrower and such Lender shall execute and deliver to the Administrative Agent a certificate  substantially in the form of Exhibit I (an “Elected Commitment Increase Certificate”);  (H) if the Borrower elects to increase the Aggregate Elected  Commitment Amounts by causing an Additional Lender to become a party to this Agreement,  then the Borrower and such Additional Lender shall execute and deliver to the Administrative  Agent a certificate substantially in the form of Exhibit J (an “Additional Lender Certificate”),  together with an Administrative Questionnaire and a processing and recordation fee of $3,500  (provided that the Administrative Agent may, in its discretion, elect to waive such processing and  recordation fee in connection with any such increase), and the Borrower shall (1) if requested by  the Additional Lender, deliver a Note payable to such Additional Lender in a principal amount  equal to its Maximum Credit Amount, and otherwise duly completed and (2) pay any applicable  fees as may have been agreed to between the Borrower and the Additional Lender and, to the extent  applicable, the Administrative Agent;   (I) prior to offering any increase amount to an Additional  Lender, (1) the Borrower shall first offer such increase amount to the existing Lenders, pro rata on  the basis of each Lender’s Applicable Percentage, in a written offer delivered to the Administrative  Agent and the Lenders, which offer shall specify the proposed increase amount and the deadline  (which deadline shall be no earlier than the date that is ten (10) Business Days from the date of  delivery of such offer) for the Lenders to accept such offer by countersigning an Elected  Commitment Increase Certificate to be attached to such offer, and (2) if any Lender declines or  fails to provide its ratable share of such increase amount by the specified deadline, the increasing  Lenders shall be so notified by the Borrower and any such increasing Lender may, within five (5)  Business Days and otherwise following the foregoing procedures, elect to further increase its  Elected Commitment by its ratable share of the declined portion of the proposed increase amount  (which shall be determined based on the percentage of the aggregate Elected Commitments of all  increasing Lenders electing to provide such declined portion of the increase amount represented  by such increasing Lender’s Elected Commitment); and  (J) the Borrower shall deliver or cause to be delivered any  customary legal opinions or other documents (including, without limitation, a resolution duly  adopted by the board of directors (or equivalent governing body) of each Loan Party authorizing  such increase in the Aggregate Maximum Credit Amounts) reasonably requested by  Administrative Agent.  (iii) Subject to acceptance and recording thereof pursuant to  Section 2.06(c)(iv), (A) on the effective date specified in the Elected Commitment Increase  Certificate or the Additional Lender Certificate (or if any Term Benchmark Borrowings are  outstanding, then the last day of the Interest Period in respect of such Term Benchmark  Borrowings), unless the Borrower has paid any compensation required by Section 5.02:  (1) the  amount of the Aggregate Elected Commitment Amounts shall be increased as set forth therein,  and (2) in the case of an Additional Lender Certificate, any Additional Lender party thereto shall  become a party to this Agreement and have the rights and obligations of a Lender under this  Agreement and the other Loan Documents; and (B) in addition, the Lender or the Additional  Lender, as applicable, shall purchase a pro rata portion of the outstanding Loans (and participation  interests in Letters of Credit) of each of the other Lenders (and such Lenders hereby agree to sell  

 

  52  and to take all such further action to effectuate such sale) such that each Lender (including any  Additional Lender, if applicable) shall hold its Applicable Percentage of the outstanding Loans  (and participation interests) after giving effect to the increase in the Aggregate Elected  Commitment Amounts (and the resulting modifications of each Lender’s Maximum Credit  Amount pursuant to Section 2.06(c)(iv) or Section 2.06(c)(v)).  (iv) Upon its receipt of a duly completed Elected Commitment Increase  Certificate or an Additional Lender Certificate, executed by the Borrower and the Lender or by the  Borrower and the Additional Lender party thereto, as applicable, the Administrative Questionnaire  referred to in Section 2.06(c)(ii), if applicable, the written consent of the Administrative Agent to  such increase required by Section 2.06(c)(i), and the written consent of the existing Lenders  required by Section 2.06(c)(ii), the Administrative Agent shall accept such Elected Commitment  Increase Certificate or Additional Lender Certificate and record the information contained therein  in the Register required to be maintained by the Administrative Agent pursuant to  Section 12.04(b)(iv).  No increase in the Aggregate Elected Commitment Amounts shall be  effective for purposes of this Agreement unless it has been recorded in the Register as provided in  this Section 2.06(c)(iv).  (v) Upon any increase in the Aggregate Elected Commitment Amounts  pursuant to this Section 2.06(c), (A) each Lender’s Maximum Credit Amount shall be  automatically deemed amended to the extent necessary so that each such Lender’s Applicable  Percentage equals the percentage of the Aggregate Elected Commitment Amounts represented by  such Lender’s Elected Commitment, in each case after giving effect to such increase, and (B)  Annex I to this Agreement shall be deemed amended to reflect the Elected Commitment of each  Lender (including any Additional Lender) as thereby increased, any changes in the Lenders’  Maximum Credit Amounts pursuant to the foregoing clause (A), and any resulting changes in the  Lenders’ Applicable Percentages.  (vi) The Borrower may from time to time terminate or reduce the  Aggregate Elected Commitment Amounts; provided that (A) each reduction of the Aggregate  Elected Commitment Amounts shall be in an amount that is an integral multiple of $100,000 and  not less than $5,000,000 and (B) the Borrower shall not reduce the Aggregate Elected Commitment  Amounts if, after giving effect to any concurrent prepayment of the Loans in accordance with  Section 3.04(c), the total Revolving Credit Exposures would exceed the Aggregate Elected  Commitment Amounts as reduced.  (vii) The Borrower shall notify the Administrative Agent of any election  to terminate or reduce the Aggregate Elected Commitment Amounts under Section 2.06(c)(vi) at  least three (3) Business Days prior to the effective date of such termination or reduction, specifying  such election and the effective date thereof.  Promptly following receipt of any notice, the  Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by  the Borrower pursuant to this Section 2.06(c)(vii) shall be irrevocable.  Any termination or  reduction of the Aggregate Elected Commitment Amounts shall be permanent and may not be  reinstated, except pursuant to Section 2.06(c)(i).  Each reduction of the Aggregate Elected  Commitment Amounts shall be made ratably among the Lenders in accordance with each Lender’s  Applicable Percentage.  

 

  53  (viii) Upon any redetermination or other adjustment in the Borrowing  Base pursuant to this Agreement that would otherwise result in the Borrowing Base becoming less  than the Aggregate Elected Commitment Amounts, the Aggregate Elected Commitment Amounts  shall be automatically reduced (ratably among the Lenders in accordance with each Lender’s  Applicable Percentage) so that they equal such redetermined Borrowing Base (and Annex I shall  be deemed amended to reflect such amendments to each Lender’s Elected Commitment and the  Aggregate Elected Commitment Amounts).  (ix) Contemporaneously with any increase in the Borrowing Base  pursuant to this Agreement, if (A) the Borrower elects to increase the Aggregate Elected  Commitment Amounts and (B) each Lender has consented to such increase in its Elected  Commitment, then the Aggregate Elected Commitment Amounts shall be increased (ratably  among the Lenders in accordance with each Lender’s Applicable Percentage) by the amount  requested by the Borrower (subject to the limitations set forth in Section 2.06(c)(ii)(A)) without  the requirement that any Lender deliver an Elected Commitment Increase Certificate or that the  Borrower pay any amounts under Section 5.02, and Annex I shall be deemed amended to reflect  such amendments to each Lender’s Commitment and the Aggregate Maximum Credit Amounts.  The Administrative Agent shall record the information regarding such increases in the Register  required to be maintained by the Administrative Agent pursuant to Section 12.04(b)(iv).  Section 2.07 Borrowing Base.  (a) Borrowing Base as of the Effective Date.  For the period from and including  the Effective Date to but excluding the next Redetermination Date, the amount of the Borrowing  Base shall be $200,000,000.  Notwithstanding the foregoing, the Borrowing Base may be subject  to further adjustments from time to time pursuant to Section 2.07(e), Section 2.07(f), or Section  8.12(c).  (b) Scheduled and Interim Redeterminations. The Borrowing Base shall be  redetermined semi-annually in accordance with this Section 2.07 (each such scheduled  redetermination, a “Scheduled Redetermination”), and, subject to Section 2.07(d), such  redetermined Borrowing Base shall become effective and applicable to the Borrower, the  Administrative Agent, the Issuing Bank and the Lenders on May 1st and November 1st of each  year (or, in each case, such date promptly thereafter as reasonably practicable), commencing  November 1, 2021.  In addition, (i) the Borrower may, by notifying the Administrative Agent  thereof, one time between successive Scheduled Redeterminations and (ii) the Administrative  Agent may, and shall at the direction of the Required Lenders, by notifying the Borrower thereof,  one time between successive Scheduled Redeterminations, each elect to cause the Borrowing Base  to be redetermined (an “Interim Redetermination”) in accordance with this Section 2.07.  (c) Scheduled and Interim Redetermination Procedure.  (i) Each Scheduled Redetermination and each Interim Redetermination  shall be effectuated as follows:  upon receipt by the Administrative Agent of (A) the Reserve  Report and the certificate required to be delivered by the Borrower to the Administrative Agent,  in the case of a Scheduled Redetermination, pursuant to Section 8.11(a) and (c), and, in the case  of an Interim Redetermination, pursuant to Section 8.11(b) and (c), and (B) such other reports,  

 

  54  data and supplemental information, including, without limitation, the information provided  pursuant to Section 8.11(c), as may, from time to time, be reasonably requested by the  Administrative Agent or the Majority Lenders (the Reserve Report, such certificate and such other  reports, data and supplemental information being the “Engineering Reports”), the Administrative  Agent shall evaluate the information contained in the Engineering Reports and shall, in good faith,  propose a new Borrowing Base (the “Proposed Borrowing Base”) based upon such information  and such other information (including, without limitation, other Debt, the status of title information  with respect to the proved Oil and Gas Properties as described in the Engineering Reports and the  existence of any other Debt, the Loan Parties’ other assets, liabilities, fixed charges, cash flow,  cash flow from midstream properties set forth in lease operating statements and other reports  provided by the Borrower to the Lenders under this Agreement, business, properties, prospects,  management and ownership, hedged and unhedged exposure to price, price and production  scenarios, interest rate and operating cost change) as the Administrative Agent deems appropriate  in its sole discretion and consistent with its normal oil and gas lending criteria as they exist at the  particular time.  (ii) The Administrative Agent shall notify the Borrower and the Lenders  of the Proposed Borrowing Base (the “Proposed Borrowing Base Notice”):  (A) in the case of a Scheduled Redetermination (1) if the  Administrative Agent shall have received the Engineering Reports required or requested to be  delivered by the Borrower in a timely and complete manner, then on or before April 15th and  October 15th of such year (or, in each case, such date promptly thereafter as reasonably  practicable) following the date of delivery or (2) if the Administrative Agent shall not have  received the Engineering Reports required or requested to be delivered by the Borrower in a timely  and complete manner, then promptly after the Administrative Agent has received complete  Engineering Reports from the Borrower and has had a reasonable opportunity to determine the  Proposed Borrowing Base in accordance with Section 2.07(c)(i); and  (B) in the case of an Interim Redetermination, promptly, and in  any event, within fifteen (15) days after the Administrative Agent has received the required or  requested Engineering Reports.  (iii) Any Proposed Borrowing Base that would increase the Borrowing  Base then in effect must be approved by all of the Lenders as provided in this Section 2.07(c)(iii);  and any Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in  effect must be approved or be deemed to have been approved by the Required Lenders as provided  in this Section 2.07(c)(iii).  All decisions regarding the Borrowing Base hereunder shall be made  by each Lender in good faith based upon such information as such Lender deems appropriate in  its sole discretion and consistent with such Lender’s normal oil and gas lending criteria as they  exist at the particular time.  Upon receipt of the Proposed Borrowing Base Notice, each Lender  shall have fifteen (15) days to agree with the Proposed Borrowing Base or disagree with the  Proposed Borrowing Base by proposing an alternate Borrowing Base.  If at the end of such fifteen  (15) days, any Lender has not communicated its approval or disapproval in writing to the  Administrative Agent, such silence shall be deemed to be (A) in the case of a Proposed Borrowing  Base that would increase the Borrowing Base then in effect, a disapproval of the Proposed  Borrowing Base or (B) in the case of a Proposed Borrowing Base that would decrease or maintain  

 

  55  the Borrowing Base then in effect, an approval of the Proposed Borrowing Base.  If, at the end of  such 15-day period, all of the Lenders, in the case of a Proposed Borrowing Base that would  increase the Borrowing Base then in effect, or the Required Lenders, in the case of a Proposed  Borrowing Base that would decrease or maintain the Borrowing Base then in effect, have approved  or deemed to have approved, as aforesaid, then the Proposed Borrowing Base shall become the  new Borrowing Base, effective on the date specified in Section 2.07(d).  If, however, at the end of  such 15-day period, all of the Lenders or the Required Lenders, as applicable, have not approved  or been deemed to have approved the Proposed Borrowing Base, then the Administrative Agent  shall poll the Lenders to ascertain the highest Borrowing Base then acceptable to (x) in the case of  a decrease or reaffirmation, a number of Lenders sufficient to constitute the Required Lenders or  (y) in the case of an increase, all of the Lenders, and such amount shall become the new Borrowing  Base, effective on the date specified in Section 2.07(d).   (d) Effectiveness of a Redetermined Borrowing Base. After a redetermined  Borrowing Base is approved or is deemed to have been approved by all of the Lenders or the  Required Lenders, as applicable, pursuant to Section 2.07(c)(iii), the Administrative Agent shall  notify the Borrower and the Lenders of the amount of the redetermined Borrowing Base (the “New  Borrowing Base Notice”), and such amount shall become the new Borrowing Base, effective and  applicable to the Borrower, the Administrative Agent, the Issuing Bank and the Lenders:  (i) in the case of a Scheduled Redetermination, (A) if the  Administrative Agent shall have received the Engineering Reports requested or required to be  delivered by the Borrower in a timely and complete manner, then on May 1st or November 1st year  (or, in each case, such date promptly thereafter as reasonably practicable), as applicable, following  such notice, or (B) if the Administrative Agent shall not have received the Engineering Reports  required to be delivered by the Borrower in a timely and complete manner, then on the Business  Day next succeeding delivery of such notice; and  (ii) in the case of an Interim Redetermination, on the Business Day next  succeeding delivery of such notice.  Such amount shall then become the Borrowing Base until the next Scheduled Redetermination  Date, the next Interim Redetermination Date or the next adjustment to the Borrowing Base under  Section 2.07(e), Section 2.07(f), or Section 8.12(c), whichever occurs first. Notwithstanding the  foregoing, no Scheduled Redetermination or Interim Redetermination shall become effective until  the New Borrowing Base Notice related thereto is received by the Borrower.  (e) Reduction of Borrowing Base Related to Dispositions of Oil and Gas  Properties and/or Liquidation of Hedge Agreements.  If (i) any Hedge Agreement in respect of  commodities (other than Other Hedge Agreements) to which the Borrower or any other Loan Party  is a party is Liquidated or (ii) the Borrower or any other Loan Party Disposes of any Borrowing  Base Property or Equity Interests in any other Loan Party owning Borrowing Base Properties  (including any designation of a Restricted Subsidiary as an Unrestricted Subsidiary pursuant to  Section 9.23(b)), and the Borrowing Base value assigned to the Liquidated portion of such Hedge  Agreement (after giving effect to any other Hedge Agreements (other than Other Hedge  Agreements) executed by the Borrower or any Guarantor contemporaneously with the Liquidation  of such Hedge Agreements or subsequent to the most recent Scheduled Redetermination Date) or  

 

  56  the fair market value of such Borrowing Base Property (or in the case of any Disposition of Equity  Interests (including any designation of a Restricted Subsidiary as an Unrestricted Subsidiary  pursuant to Section 9.23(b)) in any other Loan Party owning Borrowing Base Properties, the fair  market value of the Borrowing Base Properties owned by such Loan Party), as applicable, in each  case as determined by the Administrative Agent, when combined with the sum of (A) the fair  market value of all other Borrowing Base Properties Disposed of (including, in the case of any  Disposition of Equity Interests in any other Loan Party owning Borrowing Base Properties, the  fair market value of such Borrowing Base Properties owned by such Loan Party), in each case  since the most recent Scheduled Redetermination Date and (B) the Borrowing Base value of the  Liquidated portion of other Hedge Agreements (other than Other Hedge Agreements) Liquidated  since the most recent Scheduled Redetermination Date, exceeds five percent (5%) of the  Borrowing Base as then in effect (as determined by the Administrative Agent), individually or in  the aggregate, then the Borrowing Base then in effect shall be reduced by an amount equal to the  Borrowing Base value, if any, assigned to the Liquidated portion of such Hedge Agreement or  such Disposed Borrowing Base Property in the then effective Borrowing Base, as the case may be,  in each case as determined by the Administrative Agent and approved by the Required Lenders.   The Borrowing Base as so reduced shall become the new Borrowing Base immediately upon the  date of such Disposition or Liquidation, as the case may be, effective and applicable to the  Borrower, the Administrative Agent, the Issuing Bank and the Lenders on such date until the next  redetermination or adjustment thereof hereunder.  For purposes of this Section 2.07(e), until the  first Scheduled Redetermination Date occurs hereunder, the phrase “the most recent Scheduled  Redetermination Date” shall mean “the Effective Date”.  (f) Reduction of Borrowing Base Upon Incurrence of Permitted Additional  Debt.  If the Borrower incurs any Permitted Additional Debt in accordance with Section 9.02(h)  (other than any Permitted Additional Debt incurred to refinance then-outstanding Permitted  Additional Debt, but only to the extent that the aggregate principal amount of the new Permitted  Additional Debt incurred to refinance such outstanding Permitted Additional Debt does not result  in an increase in the principal amount thereof), the Borrowing Base then in effect shall be reduced  by an amount equal to the product of 0.25 multiplied by the stated principal amount of such  Permitted Additional Debt (for the avoidance of doubt, without regard to any original issue  discount).  The Borrowing Base as so reduced shall become the new Borrowing Base immediately  upon the date of such incurrence, effective and applicable to the Borrower, the Administrative  Agent, the Issuing Bank and the Lenders on such date until the next redetermination or adjustment  thereof hereunder.  Section 2.08 Letters of Credit.  (a) General. Subject to the terms and conditions set forth herein, the Borrower  may request the issuance of Letters of Credit as the applicant thereof for the support of its or any  other Loan Parties’ obligations, in a form reasonably acceptable to the Administrative Agent and  the Issuing Bank, at any time and from time to time during the period from and including the  Effective Date until the day which is five (5) Business Days prior to the Termination Date in an  amount not to exceed in the aggregate for all Letters of Credit, the LC Commitment; provided that  the Borrower may not request the issuance, amendment, renewal or extension of Letters of Credit  hereunder if a Borrowing Base Deficiency exists at such time or would exist as a result thereof  and; provided further that the Borrower may not request the issuance, amendment, renewal or  

 

  57  extension of Letters of Credit hereunder if (i) (A) the LC Exposure would exceed the LC  Commitment or (B) the aggregate face amount of all Letters of Credit issued by any single Issuing  Bank would exceed $20,000,000 (or, in the case of this clause (B), such higher amount as may be  agreed to by such Issuing Bank in its sole discretion) or (ii) the total Revolving Credit Exposures  would exceed the total Commitments.  (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an  outstanding Letter of Credit), the Borrower shall hand deliver or facsimile (or transmit by  electronic communication, if arrangements for doing so have been approved by the Issuing Bank)  to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of  issuance, amendment, renewal or extension, but in any event no less than three Business Days (or  such shorter time as the Issuing Bank and the Administrative Agent may each agree in a particular  instance in its sole discretion)) a notice:  (i) requesting the issuance of a Letter of Credit or identifying the Letter  of Credit to be amended, renewed or extended;  (ii) specifying the date of issuance, amendment, renewal or extension  (which shall be a Business Day);  (iii) specifying the date on which such Letter of Credit is to expire  (which shall comply with Section 2.08(c));  (iv) specifying the amount of such Letter of Credit;  (v) specifying the name and address of the beneficiary thereof and such  other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit;  and  (vi) specifying the amount of the then effective Borrowing Base and the  then effective Aggregate Elected Commitment Amounts and whether a Borrowing Base  Deficiency exists at such time, the current total Revolving Credit Exposures (without regard to the  requested Letter of Credit or the requested amendment, renewal or extension of an outstanding  Letter of Credit) and the pro forma total Revolving Credit Exposures (giving effect to the requested  Letter of Credit or the requested amendment, renewal or extension of an outstanding Letter of  Credit).    Each notice shall constitute a representation and warranty by the Borrower that after giving effect  to the requested issuance, amendment, renewal or extension, as applicable, (x) the LC Exposure  shall not exceed the LC Commitment and (y) the total Revolving Credit Exposures shall not exceed  the total Commitments. No letter of credit issued by the Issuing Bank (if the Issuing Bank is not  the Administrative Agent) shall be deemed to be a “Letter of Credit” issued under this Agreement  unless the Issuing Bank has requested and received written confirmation from the Administrative  Agent that the representations by Borrower contained in the foregoing clauses (x) and (y) are true  and correct.    

 

  58  In addition, as a condition to any such Letter of Credit issuance, the Borrower shall have entered  into a continuing agreement (or other letter of credit agreement) for the issuance of letters of credit  and/or shall submit a letter of credit application, in each case, as required by the Issuing Bank and  using the Issuing Bank’s standard form (each, a “Letter of Credit Agreement”). In the event of any  inconsistency between the terms and conditions of this Agreement and the terms and conditions  of any Letter of Credit Agreement, the terms and conditions of this Agreement shall control.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance,  amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to  represent and warrant that), after giving effect to the requested issuance, amendment, renewal or  extension, as applicable, (i) the LC Exposure shall not exceed the LC Commitment, (ii) no  Lender’s Revolving Credit Exposure shall exceed its Commitment and (iii) the total Revolving  Credit Exposures shall not exceed the total Commitments (i.e., the lesser of the Aggregate  Maximum Credit Amounts and the then effective Borrowing Base).  The Borrower may, at any  time and from time to time, reduce the LC Commitment with the consent of the Issuing Bank;  provided that the Borrower shall not reduce the LC Commitment if, after giving effect of such  reduction, the conditions set forth in clauses (i) through (iii) above shall not be satisfied.  The Issuing Bank shall not be under any obligation to issue any Letter of Credit if: (i) any order,  judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin  or restrain the Issuing Bank from issuing such Letter of Credit, or any law applicable to the Issuing  Bank shall prohibit, or require that the Issuing Bank refrain from, the issuance of letters of credit  generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect  to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank  is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon  the Issuing Bank any unreimbursed loss, cost or expense that was not applicable on the Effective  Date and that the Issuing Bank in good faith deems material to it; or (ii) the issuance of such Letter  of Credit would violate one or more policies of the Issuing Bank applicable to letters of credit  generally.  (c) Expiration Date. Each Letter of Credit shall expire (or be subject to  termination by notice from the Issuing Bank to the beneficiary thereof) at or prior to the close of  business on the earlier of (i) the date fifteen months after the date of the issuance of such Letter of  Credit (or, in the case of any renewal or extension of the expiration date thereof, fifteen months  after such renewal or extension) and (ii) the date that is five (5) Business Days prior to the Maturity  Date (or such later date as consented to by the Issuing Bank in its sole discretion and provided that  such Letter of Credit is cash collateralized or backstopped in such amounts and pursuant to such  arrangements as are satisfactory to the Issuing Bank in its sole discretion).  (d) Participations. By the issuance of a Letter of Credit (or an amendment to a  Letter of Credit increasing the amount thereof) and without any further action on the part of the  Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender  hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such  Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter  of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and  unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank,  such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not  

 

  59  reimbursed by the Borrower on the date due as provided in Section 2.08(e), or of any  reimbursement payment required to be refunded to the Borrower for any reason, including after  the Maturity Date. Each such payment shall be made without any offset, abatement, withholding  or reduction whatsoever. Each Lender acknowledges and agrees that its obligation to acquire  participations pursuant to this Section 2.08(d) in respect of Letters of Credit is absolute and  unconditional and shall not be affected by any circumstance whatsoever, including any  amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a  Default, the existence of a Borrowing Base Deficiency or reduction or termination of the  Commitments.  (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in  respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the  Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, Dallas,  Texas time, on the date that such LC Disbursement is made, if the Borrower shall have received  notice of such LC Disbursement prior to 10:00 a.m., Dallas, Texas time, on such date, or, if such  notice has not been received by the Borrower prior to such time on such date, then not later than  12:00 noon, Dallas, Texas time, on the Business Day immediately following the day that the  Borrower receives such notice, if such notice is not received prior to such time on the day of  receipt; provided that the Borrower shall, subject to the conditions to Borrowing set forth herein,  be deemed to have requested, and the Borrower does hereby request under such circumstances,  that such payment be financed with an ABR Borrowing in an equivalent amount and, to the extent  so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by  the resulting ABR Borrowing.  If the Borrower fails to make such payment when due, the  Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment  then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof.   Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its  Applicable Percentage of the payment then due from the Borrower, in the same manner as provided  in Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall apply, mutatis  mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly  pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt  by the Administrative Agent of any payment from the Borrower pursuant to this Section 2.08(e),  the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that  Lenders have made payments pursuant to this Section 2.08(e) to reimburse the Issuing Bank, then  to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender  pursuant to this Section 2.08(e) to reimburse the Issuing Bank for any LC Disbursement (other  than the funding of ABR Loans as contemplated above) shall not constitute a Loan and shall not  relieve the Borrower of its obligation to reimburse such LC Disbursement.  (f) Obligations Absolute. The Borrower’s obligation to reimburse LC  Disbursements as provided in Section 2.08(e) shall be absolute, unconditional and irrevocable, and  shall be performed strictly in accordance with the terms of this Agreement under any and all  circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter  of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein, (ii)  any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or  invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii)  payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other  document that does not comply with the terms of such Letter of Credit or any Letter of Credit  

 

  60  Agreement, or (iv) any other event or circumstance whatsoever, whether or not similar to any of  the foregoing, that might, but for the provisions of this Section 2.08(f), constitute a legal or  equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.   Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related  Parties shall have any liability or responsibility by reason of or in connection with the issuance or  transfer of any Letter of Credit or any payment or failure to make any payment thereunder  (irrespective of any of the circumstances referred to in the preceding sentence), or any error,  omission, interruption, loss or delay in transmission or delivery of any draft, notice or other  communication under or relating to any Letter of Credit (including any document required to make  a drawing thereunder), any error in interpretation of technical terms, any error in translation or any  consequence arising from causes beyond the control of the Issuing Bank; provided that the  foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the  extent of any direct damages (as opposed to special, indirect, consequential or punitive damages,  claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable  law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when  determining whether drafts and other documents presented under a Letter of Credit comply with  the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence, or  willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent  jurisdiction), the Issuing Bank shall be deemed to have exercised all requisite care in each such  determination.  In furtherance of the foregoing and without limiting the generality thereof, the  parties agree that, with respect to documents presented which appear on their face to be in  substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole  discretion, either accept and make payment upon such documents without responsibility for further  investigation, regardless of any notice or information to the contrary, or refuse to accept and make  payment upon such documents if such documents are not in strict compliance with the terms of  such Letter of Credit.  (g) Disbursement Procedures.  The Issuing Bank shall, within the time allowed  by applicable law or the specific terms of the Letter of Credit following its receipt thereof, examine  all documents purporting to represent a demand for payment under such Letter of Credit. The  Issuing Bank shall promptly after such examination notify the Administrative Agent and the  Borrower by telephone (confirmed by facsimile or electronic communication) of such demand for  payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder;  provided that any failure to give or delay in giving such notice shall not relieve the Borrower of  its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC  Disbursement.  (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,  unless the Borrower shall reimburse such LC Disbursement in full on the date such LC  Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and  including the date such LC Disbursement is made to but excluding the date that the reimbursement  is due and payable at the rate per annum then applicable to ABR Loans and such interest shall be  due and payable on the date when such reimbursement is payable; provided that if the Borrower  fails to reimburse such LC Disbursement when due pursuant to Section 2.08(e), then Section  3.02(c) shall apply.  Interest accrued pursuant to this Section 2.08(h) shall be for the account of  the Issuing Bank, except that interest accrued on and after the date of payment by any Lender  

 

  61  pursuant to Section 2.08(e) to reimburse the Issuing Bank shall be for the account of such Lender  to the extent of such payment.  (i) Replacement and Resignation of the Issuing Bank.   (i) The Issuing Bank may be replaced at any time by written agreement  among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor  Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the  Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all  unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 3.05(b). From  and after the effective date of any such replacement, (A) the successor Issuing Bank shall have all  the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of  Credit to be issued by it thereafter and (B) references herein to the term “Issuing Bank” shall be  deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all  previous Issuing Bank, as the context shall require. After the replacement of the Issuing Bank  hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the  rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit  issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit  or extend or otherwise amend any existing Letter of Credit.  (ii) Subject to the appointment and acceptance of a successor Issuing  Bank, the Issuing Bank may resign as the Issuing Bank at any time upon thirty days’ prior written  notice to the Administrative Agent, the Borrower and the Lenders, in which case, the resigning  Issuing Bank shall be replaced in accordance with Section 2.08(i)(i) above.  (j) Cash Collateralization. If (i) any Event of Default shall occur and be  continuing, on any Business Day that the Borrower receives notice from the Administrative Agent  or the Majority Lenders demanding that the Borrower cash collateralize the outstanding LC  Exposure, (ii) the Borrower is required to cash collateralize the excess attributable to an LC  Exposure in connection with any prepayment pursuant to Section 3.04(c), or (iii) the Borrower is  required to cash collateralize a Defaulting Lender’s LC Exposure pursuant to Section 4.03(d)(ii),  then the Borrower shall pledge and deposit in an account with the Administrative Agent in the  name of the Administrative Agent and for the benefit of the Lenders (as a first priority, perfected  security interest), at a location and pursuant to documentation in form and substance satisfactory  to the Administrative Agent, an amount in cash in dollars equal to 105% of such LC Exposure or  excess attributable to such LC Exposure, as the case may be, as of such date plus any accrued and  unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become  effective immediately, and such deposit shall become immediately due and payable, without  demand or other notice of any kind, upon the occurrence of any Event of Default described in  Section 10.01(h) or Section 10.01(i).  The Borrower hereby grants to the Administrative Agent an  exclusive first priority and continuing perfected security interest in and Lien on such account and  all cash, checks, drafts, certificates and instruments, if any, from time to time deposited or held in  such account, all deposits or wire transfers made thereto, any and all investments purchased with  funds deposited in such account, all interest, dividends, cash, instruments, financial assets and  other Property from time to time received, receivable or otherwise payable in respect of, or in  exchange for, any or all of the foregoing, and all proceeds, products, accessions, rents, profits,  income and benefits therefrom, and any substitutions and replacements therefor. The Borrower’s  

 

  62  obligation to deposit amounts pursuant to this Section 2.08(j) shall be absolute and unconditional,  without regard to whether any beneficiary of any Letter of Credit has attempted to draw down all  or a portion of such amount under the terms of a Letter of Credit, and, to the fullest extent permitted  by applicable law, shall not be subject to any defense or be affected by a right of set-off,  counterclaim or recoupment which the Borrower or any other Loan Party may now or hereafter  have against any such beneficiary, the Issuing Bank, the Administrative Agent, the Lenders or any  other Person for any reason whatsoever. Such deposit shall be held by the Administrative Agent  as collateral securing the payment and performance of the Borrower’s and the Guarantors’  obligations under this Agreement and the other Loan Documents. In addition, and without limiting  the foregoing or Section 2.08(c), if any LC Exposure remain outstanding after the expiration date  specified in Section 2.08(c), the Borrower shall immediately deposit into such account an amount  in cash equal to 105% of such LC Exposure as of such date plus any accrued and unpaid interest  thereon. The Administrative Agent shall have exclusive dominion and control, including the  exclusive right of withdrawal, over such account. Other than any interest earned on the investment  of such deposits, which investments shall be made at the option and sole discretion of the  Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such  account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC  Disbursements for which it has not been reimbursed, together with related fees, costs and  customary processing charges, and, to the extent not so applied, shall be held for the satisfaction  of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the  maturity of the Loans has been accelerated, be applied to satisfy other obligations of the Borrower  and the Guarantors under this Agreement and the other Loan Documents.  If the Borrower is  required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event  of Default or pursuant to Section 4.03(d)(ii) as a result of a Defaulting Lender, and the Borrower  is not otherwise required to cash collateralize the excess attributable to an LC Exposure in  connection with any prepayment pursuant to Section 3.04(c), then such amount (to the extent not  applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events  of Default have been cured or waived or the events giving rise to such cash collateralization  pursuant to Section 4.03(d)(ii) have been satisfied or resolved.  (k) Letters of Credit Issued for Account of Other Loan  Parties.  Notwithstanding that a Letter of Credit issued or outstanding hereunder supports any  obligations of, or is for the account of, a Loan Party, or states that a Loan Party is the “account  party,” “applicant,” “customer,” “instructing party,” or the like of or for such Letter of Credit, and  without derogating from any rights of the Issuing Bank (whether arising by contract, at law, in  equity or otherwise) against such Loan Party in respect of such Letter of Credit, the Borrower (i)  shall reimburse, indemnify and compensate the Issuing Bank hereunder for such Letter of Credit  (including to reimburse any and all drawings thereunder) as if such Letter of Credit had been issued  solely for the account of the Borrower and (ii) irrevocably waives any and all defenses that might  otherwise be available to it as a guarantor or surety of any or all of the obligations of such Loan  Party in respect of such Letter of Credit.  The Borrower hereby acknowledges that the issuance of  such Letters of Credit for other Loan Parties inures to the benefit of the Borrower, and that the  Borrower’s business derives substantial benefits from the businesses of such other Loan Parties.  

 

  63  ARTICLE III  PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES  Section 3.01 Repayment of Loans.  The Borrower hereby unconditionally promises to  pay to the Administrative Agent for the account of each Lender the then unpaid principal amount  of each Loan on the Termination Date.  Section 3.02 Interest.  (a) ABR Loans. The Loans comprising each ABR Borrowing shall bear interest  at the Alternate Base Rate plus the Applicable Margin, but in no event to exceed the Highest  Lawful Rate.  (b) Eurodollar Term Benchmark Loans and RFR Loans. The Loans comprising  each Eurodollar Term Benchmark Borrowing shall bear interest at the Adjusted LIBO Term SOFR  Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin, but in no  event to exceed the Highest Lawful Rate. Each RFR Loan shall bear interest at a rate per annum  equal to the Adjusted Daily Simple SOFR plus the Applicable Rate.  (c) Post-Default Rate.  Notwithstanding the foregoing, (i)(A) automatically, if  an Event of Default under Section 10.01(h) or Section 10.01(i) has occurred and is continuing, or  if any principal of or interest on any Loan or any fee or other amount payable by the Borrower or  any Guarantor hereunder or under any other Loan Document is not paid when due, whether at  stated maturity, upon acceleration or otherwise, and to the extent that such failure to pay constitutes  an Event of Default under Section 10.01(a) or Section 10.01(b), and (B) upon the election of the  Majority Lenders, if any Event of Default (other than an Event of Default under Section 10.01(a),  Section 10.01(b), Section 10.01(h) or Section 10.01(i)) has occurred and is continuing, then, in  each case of the foregoing clauses (A) and (B), (x) all Loans outstanding shall bear interest, after  as well as before judgment, at a rate per annum equal to two percent (2%) plus the rate that would  otherwise be applicable thereto pursuant to the foregoing provisions of this Section 3.02, and (y)  and such overdue amount, in the case of a failure to pay amounts when due, shall bear interest,  after as well as before judgment, at a rate per annum equal to two percent (2%) plus the rate  applicable to ABR Loans as provided in Section 3.02(a), but in no event to exceed the Highest  Lawful Rate and (ii) during any Borrowing Base Deficiency, Loans outstanding in an amount  equal to the positive difference between (x) the aggregate principal amount of Loans outstanding  and (y) the then-effective Borrowing Base shall bear interest, after as well as before judgment, at  a rate per annum equal to two percent (2%) plus the rate that would otherwise be applicable thereto  pursuant to the foregoing provisions of this Section 3.02, but in no event to exceed the Highest  Lawful Rate.  (d) Interest Payment Dates. Accrued interest on each Loan shall be payable in  arrears on each Interest Payment Date for such Loan and on the Termination Date; provided that  (i) interest accrued pursuant to Section 3.02(c) shall be payable on demand, (ii) in the event of any  repayment or prepayment of any Loan (other than an optional prepayment of an ABR Loan prior  to the Termination Date), accrued interest on the principal amount repaid or prepaid shall be  payable on the date of such repayment or prepayment, and (iii) in the event of any conversion of  

 

  64  any Eurodollar Term Benchmark Loan prior to the end of the current Interest Period therefor,  accrued interest on such Loan shall be payable on the effective date of such conversion.  (e) Interest Rate Computations. All interest hereunder shall be computed on the  basis of a year of 360 days, unless such computation would exceed the Highest Lawful Rate, in  which case interest shall be computed on the basis of a year of 365 days (or 366 days in a leap  year), except that interest computed by reference to the Alternate Base Rate at times when the  Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365  days (or 366 days in a leap year), and in each case shall be payable for the actual number of days  elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate,  Adjusted LIBO Term SOFR Rate or LIBO Rate , Term SOFR Rate, Adjusted Daily Simple SOFR  or Daily Simple SOFR shall be determined by the Administrative Agent, and such determination  shall be conclusive absent manifest error, and shall be binding upon the parties hereto.  Section 3.03 Alternate Rate of Interest.  (a)Subject to Section 3.03(b), if prior to the commencement of any Interest Period for a  Eurodollar Borrowing:  (a) Subject to clauses (b), (c), (d), (e) and (f) of this Section 3.03, if:  (i) the Administrative Agent determines (which determination shall be  conclusive absent manifest error) (A) prior to the commencement of any Interest Period for a Term  Benchmark Borrowing, that adequate and reasonable means do not exist for ascertaining the  Adjusted LIBO Term SOFR Rate or the LIBO Term SOFR Rate, as applicable  (including because  the LIBO Screen Term SOFR Reference Rate is not available or published on a current basis), for  such Interest Period, provided that no Benchmark Transition Event shall have occurred at such  time or (B) at any time, that adequate and reasonable means do not exist for ascertaining the  applicable Adjusted Daily Simple SOFR, Daily Simple SOFR; or  (ii) the Administrative Agent is advised by the Majority Lenders that  (A) prior to the commencement of any Interest Period for a Term Benchmark Borrowing, the  Adjusted LIBO Term SOFR Rate or the LIBO Rate, as applicable, for such Interest Period will  not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining  their Loans (or its Loan) included in such Borrowing for such Interest Period or (B) at any time,  Adjusted Daily Simple SOFR will not adequately and fairly reflect the cost to such Lenders (or  Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing;  then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by  telephone, facsimile or electronic communication as promptly as practicable thereafter and, until  (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving  rise to such notice no longer exist, (i with respect to the relevant Benchmark and (y) the Borrower  delivers a new Interest Election Request in accordance with the terms of Section 2.04 or a new  Borrowing Request in accordance with the terms of Section 2.03, (1) any Interest Election Request  that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a  Eurodollar Term Benchmark Borrowing shall be ineffective, and (ii) if any Borrowing Request  that requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.Term  

 

  65  Benchmark Borrowing shall instead be deemed to be an Interest Election Request or a Borrowing  Request, as applicable, for (x) an RFR Borrowing so long as the Adjusted Daily Simple SOFR is  not also the subject of Section 3.03(a)(i) or (ii) above or (y) an ABR Borrowing if the Adjusted  Daily Simple SOFR also is the subject of Section 3.03(a)(i) or (ii) above and (2) any Borrowing  Request that requests an RFR Borrowing shall instead be deemed to be a Borrowing Request, as  applicable, for an ABR Borrowing; provided that if the circumstances giving rise to such notice  affect only one Type of Borrowings, then all other Types of Borrowings shall be permitted.   Furthermore, if any Term Benchmark Loan or RFR Loan is outstanding on the date of the  Borrower’s receipt of the notice from the Administrative Agent referred to in this Section 3.03(a)  with respect to a Relevant Rate applicable to such Term Benchmark Loan or RFR Loan, then until  (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving  rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Borrower  delivers a new Interest Election Request in accordance with the terms of Section 2.04 or a new  Borrowing Request in accordance with the terms of Section 2.03, (1) any Term Benchmark Loan  shall on the last day of the Interest Period applicable to such Loan (or the next succeeding Business  Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall  constitute, (x) an RFR Borrowing so long as the Adjusted Daily Simple SOFR is not also the  subject of Section 3.03(a)(i) or (ii) above or (y) an ABR Loan if the Adjusted Daily Simple SOFR  also is the subject of Section 3.03(a)(i) or (ii) above, on such day, and (2) any RFR Loan shall on  and from such day be converted by the Administrative Agent to, and shall constitute an ABR Loan.  (b) Benchmark Replacement.  Notwithstanding anything to the contrary herein or in  any other Loan Document (and any Hedge Agreement shall be deemed not to be a “Loan Document” for  purposes of this Section 3.03), if a Benchmark Transition Event or an Early Opt-in Election, as applicable,  and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any  setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance  with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement  Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under  any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without  any amendment to, or further action or consent of any other party to, this Agreement or any other Loan  Document and (y) if a Benchmark Replacement is determined in accordance with clause (32) of the  definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark  Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in  respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business  Day after the date notice of such Benchmark Replacement is provided to the Lenders without any  amendment to, or further action or consent of any other party to, this Agreement or any other Loan  Document so long as the Administrative Agent has not received, by such time, written notice of objection  to such Benchmark Replacement from Lenders comprising the Majority Lenders.  (ii) Notwithstanding anything to the contrary herein or in any other  Loan Document and subject to the proviso below in this Section 3.03(b)(ii), if a Term SOFR  Transition Event and its related Benchmark Replacement Date have occurred prior to the  Reference Time in respect of any setting of the then-current Benchmark, then the applicable  Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or  under any Loan Document in respect of such Benchmark setting and subsequent Benchmark  settings, without any amendment to, or further action or consent of any other party to, this  Agreement or any other Loan Document; provided that this Section 3.03(b)(ii) shall not be  

 

  66  effective unless the Administrative Agent has delivered to the Lenders and the Borrower a Term  SOFR Notice.  For the avoidance of doubt, the Administrative Agent shall not be required to  deliver a Term SOFR Notice after a Term SOFR Termination Event and may do so in its sole  discretion.  (c) (iii)In connection with the implementation of a Benchmark Replacement,  Notwithstanding anything to the contrary herein or in any other Loan Document, the Administrative  Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and,  notwithstanding anything to the contrary herein or in any other Loan Document, any amendments  implementing such Benchmark Replacement Conforming Changes will become effective without any  further action or consent of any other party to this Agreement or any other Loan Document.  (d) (iv)The Administrative Agent will promptly notify the Borrower and the Lenders  of (Ai) any occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early  Opt-in Election, as applicable, and its related Benchmark Replacement Date, (B(ii) the implementation  of any Benchmark Replacement, (Ciii) the effectiveness of any Benchmark Replacement Conforming  Changes, (Div) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (vf) below  and (Ev) the commencement or conclusion of any Benchmark Unavailability Period.  Any determination,  decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group  of Lenders) pursuant to this Section 3.03, including any determination with respect to a tenor, rate or  adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to  take or refrain from taking any action or any selection, will be conclusive and binding absent manifest  error and may be made in its or their sole discretion and without consent from any other party to this  Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this  Section 3.03.  (e) (v)Notwithstanding anything to the contrary herein or in any other Loan Document,  at any time (including in connection with the implementation of a Benchmark Replacement), (Ai) if the  then-current Benchmark is a term rate (including the Term SOFR or LIBO Rate) and either (1A) any  tenor for such Benchmark is not displayed on a screen or other information service that publishes such  rate from time to time as selected by the Administrative Agent in its reasonable discretion or (2B) the  regulatory supervisor for the administrator of such Benchmark has provided a public statement or  publication of information announcing that any tenor for such Benchmark is or will be no longer  representative, then the Administrative Agent may modify the definition of “Interest Period” for any  Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (Bii)  if a tenor that was removed pursuant to clause (i) above either (1A) is subsequently displayed on a screen  or information service for a Benchmark (including a Benchmark Replacement) or (2B) is not, or is no  longer, subject to an announcement that it is or will no longer be representative for a Benchmark  (including a Benchmark Replacement), then the Administrative Agent may modify the definition of  “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed  tenor.  (f) (vi)Upon the Borrower’s receipt of notice of the commencement of a Benchmark  Unavailability Period, the Borrower may revoke any request for a Eurodollar Term Benchmark  Borrowing or RFR Borrowing of, conversion to or continuation of Eurodollar Term Benchmark Loans  to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the  Borrower will be deemed to have converted any such request for a Term Benchmark Borrowing into a  

 

  67  request for a Borrowing of or conversion to ABR Loans.  During any Benchmark Unavailability Period  or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of  the Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as  applicable, will not be used in any determination of Alternate Base Ratethe Alternate Base Rate.   Furthermore, if any Term Benchmark Loan or RFR Loan is outstanding on the date of the Borrower’s  receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a Relevant  Rate applicable to such Term Benchmark Loan or RFR Loan, then until such time as a Benchmark  Replacement is implemented pursuant to this Section 3.03, (1) any Term Benchmark Loan shall on the  last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day  is not a Business Day), be converted by the Administrative Agent to, and shall constitute an ABR Loan  on such day and (2) any RFR Loan shall on and from such day be converted by the Administrative Agent  to, and shall constitute an ABR Loan.  Section 3.04 Prepayments.  (a) Optional Prepayments. The Borrower shall have the right at any time and  from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance  with Section 3.04(b).  (b) Notice and Terms of Optional Prepayment. The Borrower shall notify the  Administrative Agent by telephone (confirmed by facsimile or electronic communication) of any  prepayment hereunder (i) in the case of prepayment of a Eurodollar (A) a Term Benchmark  Borrowing, not later than 10:00 a.m., Dallas, Texas time, three Business Days before the date of  prepayment or (B) a RFR Borrowing, not later than 10:00 a.m., Dallas, Texas time, five Business  Days before the date of prepayment and (ii) in the case of prepayment of an ABR Borrowing, not  later than 11:00 a.m., Dallas, Texas time, on the date of prepayment.  Each such notice shall be  confirmed promptly by hand delivery or email to the Administrative Agent of a written notice of  prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the  principal amount of each Borrowing or portion thereof to be prepaid; provided that if a notice of  prepayment is given in connection with a conditional notice of termination of the Aggregate  Maximum Credit Amounts as contemplated by Section 2.06(b), then such notice of prepayment  may be revoked if such notice of termination is revoked in accordance with Section 2.06(b).   Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent  shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall  be in an amount that would be permitted in the case of an advance of a Borrowing of the same  Type as provided in Section 2.02.  Each prepayment of a Borrowing shall be applied ratably to the  Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest  to the extent required by Section 3.02 and any payments to the extent required by Section 5.02.  (c) Mandatory Prepayments.  (i) If, after giving effect to any termination or reduction of the  Aggregate Maximum Credit Amounts pursuant to Section 2.06(b) or any reduction in the  Aggregate Elected Commitment Amounts pursuant to Section 2.06(c), the total Revolving Credit  Exposures exceeds the total Commitments, then the Borrower shall (A) prepay the Borrowings on  the date of such termination or reduction in an aggregate principal amount equal to such excess,  

 

  68  and (B) if any excess remains after prepaying all of the Borrowings as a result of an LC Exposure,  cash collateralize such excess as provided in Section 2.08(j).  (ii) Upon any redetermination or adjustment to the amount of the  Borrowing Base in accordance with Section 2.07 (other than pursuant to Section 2.07(e) or Section  2.07(f)) or Section 8.12(c), if the total Revolving Credit Exposures exceeds the redetermined or  adjusted Borrowing Base, then after receiving a New Borrowing Base Notice in accordance with  Section 2.07(d) or a notice of adjustment pursuant to Section 8.12(c), as the case may be (the date  of receipt of any such notice, the “Deficiency Notification Date”), the Borrower shall (i) at its  option take one of the following actions: (A) prepay the Borrowings in an aggregate principal  amount equal to such Borrowing Base Deficiency (and to the extent that any excess remains after  prepaying all of the Borrowings as a result of an LC Exposure, cash collateralize such excess as  provided in Section 2.08(j)) within thirty (30) days following the Deficiency Notification Date;  (B) prepay the Borrowings in six consecutive equal monthly installments, the first installment  being due and payable on the 30th day after the Deficiency Notification Date and each subsequent  installment being due and payable on the same day in each of the subsequent calendar months,  with each payment being equal to one-sixth (1/6th) of such Borrowing Base Deficiency, so that  the Borrowing Base Deficiency is reduced to zero within six months of the Deficiency Notification  Date; (C) grant, within thirty (30) days following the Deficiency Notification Date, to the  Administrative Agent as security for the Obligations a first-priority Lien on additional Oil and Gas  Properties not evaluated in the most recently delivered Reserve Report (and not already subject to  a Lien of the Security Instruments) pursuant to Security Instruments reasonably acceptable to the  Administrative Agent with sufficient Borrowing Base value (as determined by the Required  Lenders) to cure the Borrowing Base Deficiency; or (D) deliver, within 10 days after the  Deficiency Notification Date, written notice to the Administrative Agent indicating the Borrower’s  election to combine the options provided in clauses (A), (B) and/or (C) above, and also indicating  the amount to be prepaid and the amount to be provided as additional Collateral, and (ii) make  such payment and deliver such additional Collateral within the time required under clauses (A),  (B) and/or (C) above; provided that, notwithstanding the options set forth above, in all cases, the  Borrowing Base Deficiency must be eliminated on or prior to the Termination Date.  The Borrower  shall provide to the Administrative Agent, within ten (10) days following its receipt of the New  Borrowing Base Notice in accordance with Section 2.07(d) or the date the adjustment occurs  pursuant to Section 8.12(c), as applicable, an irrevocable written notice indicating which of the  options specified in clauses (A), (B), (C) or (D) the Borrower elects to take in order to eliminate  the Borrowing Base Deficiency.  Such notice shall be irrevocable and, in the event the Borrower  fails to provide such written notice to the Administrative Agent within the ten (10) day period  referred to above, the Borrower shall be deemed to have irrevocably elected the option set forth in  clause (A) above.  The failure of the Borrower to comply with any of the options elected (including  any deemed election) pursuant to the provisions of this Section 3.04(c)(ii) and specified in such  notice (or relating to such deemed election) shall constitute an Event of Default.  (iii) Upon any adjustment to the Borrowing Base pursuant to Section  2.07(e) or Section 2.07(f) (each such adjustment, a “Specified Adjustment”), if the total Revolving  Credit Exposures exceeds the Borrowing Base as adjusted, then the Borrower shall (A) prepay the  Borrowings in an aggregate principal amount equal to (1) if a Borrowing Base Deficiency existed  immediately prior to the occurrence of such Specified Adjustment, the positive difference, if any,  between (x) the aggregate amount of such Borrowing Base Deficiency immediately after giving  

 

  69  effect to such Specified Adjustment minus (y) the aggregate amount of such Borrowing Base  Deficiency immediately prior to such Specified Adjustment or (2) if no Borrowing Base  Deficiency existed immediately prior to such Specified Adjustment, the aggregate amount of such  Borrowing Base Deficiency (the applicable amount from clause (1) or (2), the “Specified  Borrowing Base Deficiency”), and (B) if any Specified Borrowing Base Deficiency remains after  prepaying all of the Borrowings as a result of an LC Exposure, cash collateralize such excess as  provided in Section 2.08(j).  The Borrower shall be obligated to make such prepayment and/or  cash collateralize such excess within one Business Day after the date the adjustment occurs;  provided that all payments required to be made pursuant to this Section 3.04(c)(iii) must be made  on or prior to the Termination Date.  For the avoidance of doubt, nothing in this Section 3.04(c)(iii)  shall prejudice the Borrower’s right to utilize the options described in Section 3.04(c)(ii) with  respect to any portion of a Borrowing Base Deficiency existing prior to the occurrence of a  Specified Adjustment.  (iv) Each prepayment of Borrowings pursuant to this Section 3.04(c)  shall be applied, (A) first, ratably to any ABR Borrowings then outstanding, and, (B) second, to  any Eurodollar RFR Borrowings then outstanding, and if more than one Eurodollar RFR  Borrowing is then outstanding, to each such Eurodollar RFR Borrowing in order of priority  beginning with the Eurodollar RFR Borrowing with the least number of days remaining prior to  the Interest Payment Date applicable thereto and ending with the RFR Borrowing with the most  number of days remaining prior to the Interest Payment Date applicable thereto and (C) third, to  any Term Benchmark Borrowings then outstanding, and if more than one Term Benchmark  Borrowing is then outstanding, to each such Term Benchmark Borrowing in order of priority  beginning with the Term Benchmark Borrowing with the least number of days remaining in the  Interest Period applicable thereto and ending with the Eurodollar Term Benchmark Borrowing  with the most number of days remaining in the Interest Period applicable thereto.  (v) Each prepayment of Borrowings pursuant to this Section 3.04(c)  shall be applied ratably to the Loans included in the prepaid Borrowings. Prepayments pursuant to  this Section 3.04(c) shall be accompanied by accrued interest to the extent required by Section  3.02.  (vi) Consolidated Cash Balance.  If, as of the end of any Friday (or, if  such day is not a Business Day, then as of the end of the next Business Day), (A) there are any  outstanding Borrowings and (B) the Consolidated Cash Balance exceeds the Consolidated Cash  Balance Threshold (the amount of such excess, “Excess Cash”, and each such date, an “Excess  Cash Measurement Date”), then the Borrower shall, on the next succeeding Business Day, (1)  prepay the Borrowings in an aggregate principal amount equal to the Excess Cash, and (2) if, after  prepaying all of the Borrowings, there is any LC Exposure and Excess Cash, pay to the  Administrative Agent on behalf of the Lenders an amount equal to the remaining amount of Excess  Cash to be held as cash collateral as provided in Section 2.08(j);  provided that all payments  required to be made pursuant to this Section 3.04(c)(vi) must be made on or prior to the  Termination Date.  To the extent that there are funds on deposit in, or credited to, any deposit  account or other account maintained with the Administrative Agent (or any Affiliate thereof) or  any Lender (or any Affiliate thereof) on any date that the Borrower is required to prepay Loans  (and/or cash collateralize LC Exposure, as applicable) pursuant to this Section 3.04(c)(vi), the  Borrower hereby irrevocably authorizes and instructs the Administrative Agent or such Lender to  

 

  70  apply such funds to the prepayment of Loans (and/or cash collateralization of LC Exposure, as  applicable).  The provisions of Section 3.04(c)(iv) and Section 3.04(c)(v) shall apply, mutatis  mutandis, to any prepayment required pursuant to this Section 3.04(c)(vi).  (d) No Premium or Penalty. Prepayments permitted or required under this  Section 3.04 shall be without premium or penalty, except as required under Section 5.02.  Section 3.05 Fees.  (a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent  for the account of each Lender a commitment fee, which shall accrue at the applicable  Commitment Fee Rate on the average daily amount of the unused amount of the Commitment of  such Lender during the period from and including the Effective Date to but excluding the  Termination Date. Accrued commitment fees shall be payable in arrears on the last day of March,  June, September and December of each year and on the Termination Date, commencing on the  first such date to occur after the date hereof. All commitment fees shall be computed on the basis  of a year of 360 days, unless such computation would exceed the Highest Lawful Rate, in which  case such commitment fees shall be computed on the basis of a year of 365 days (or 366 days in a  leap year), and shall be payable for the actual number of days elapsed (including the first day but  excluding the last day).  (b) Letter of Credit Fees. The Borrower agrees to pay (i) to the Administrative  Agent for the account of each Lender, a participation fee with respect to its participations in Letters  of Credit, which shall accrue at the same Applicable Margin used to determine the interest rate  applicable to Eurodollar Term Benchmark Loans on the average daily amount of such Lender’s  LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements)  during the period from and including the Effective Date to but excluding the later of the date on  which such Lender’s Commitment terminates and the date on which such Lender ceases to have  any LC Exposure, (ii) to the Issuing Bank, a fronting fee set forth in the applicable Letter of Credit  Fee Letter, on the average daily amount of the LC Exposure with respect to Letters of Credit issued  by it (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the  period from and including the Effective Date to but excluding the later of the date of termination  of the Commitments and the date on which there ceases to be any LC Exposure, provided that in  no event shall such fee be less than $500 during any quarter, and (iii) to the Issuing Bank, for its  own account, its standard fees with respect to the issuance, amendment, renewal or extension of  any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees  accrued through and including the last day of March, June, September and December of each year  shall be payable on the third Business Day following such last day, commencing on the first such  date to occur after the Effective Date; provided that all such fees shall be payable on the  Termination Date and any such fees accruing after the Termination Date shall be payable on  demand. During the continuation of an Event of Default, the fees payable pursuant to this Section  3.05(b) shall increase by 2.00% per annum over the then-applicable rate. Any other fees payable  to the Issuing Bank pursuant to this Section 3.05(b) shall be payable within 10 days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days, unless  such computation would exceed the Highest Lawful Rate, in which case such fees shall be  computed on the basis of a year of 365 days (or 366 days in a leap year), and shall be payable for  the actual number of days elapsed (including the first day but excluding the last day).  

 

  71  (c) Borrowing Base Increase Fees. Any increase in the Borrowing Base may be  subject to a Borrowing Base increase fee in an amount to be agreed by the Lenders and the  Borrower, payable on the effective date of any such increase and the Borrower agrees to pay such  Borrowing  Base increase fee (if any).  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, fees or reimbursement of LC  Disbursements, or of amounts payable under Section 5.01, Section 5.02, Section 5.03 or otherwise)  prior to 12:00 noon, Dallas, Texas time, on the date when due, in immediately available funds,  without defense, deduction, recoupment, set-off or counterclaim. Fees, once paid, shall be fully  earned and shall not be refundable under any circumstances absent manifest error. 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 payments to be made directly to the Issuing Bank as expressly provided  herein and except that payments pursuant to Section 5.01, Section 5.02, Section 5.03 and Section  12.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall  distribute any such payments received by it for the account of any other Person to the appropriate  recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that  is not a Business Day, the date for payment shall be extended to the next succeeding Business Day,  and, in the case of any payment accruing interest, interest thereon shall be payable for the period  of such extension. All payments hereunder shall be made in dollars.  (b) Application of Insufficient Payments. If at any time insufficient funds are  received by and available to the Administrative Agent to pay fully all amounts of principal,  unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied  (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled  thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second,  towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably  among the parties entitled thereto in accordance with the amounts of principal and unreimbursed  LC Disbursements then due to such parties.  (c) Sharing of Payments by Lenders. If any Lender shall, by exercising any  right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or  interest on any of its Loans or participations in LC Disbursements resulting in such Lender  receiving payment of a greater proportion of the aggregate amount of its Loans and participations  in LC Disbursements and accrued interest thereon than the proportion received by any other  Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value)  participations in the Loans and participations in LC Disbursements of other Lenders to the extent  necessary so that the benefit of all such payments shall be shared by the Lenders ratably in  accordance with the aggregate amount of principal of and accrued interest on their respective  Loans and participations in LC Disbursements; provided that (i) if any such participations are  

 

  72  purchased and all or any portion of the payment giving rise thereto is recovered, such participations  shall be rescinded and the purchase price restored to the extent of such recovery, without interest,  and (ii) the provisions of this Section 4.01(c) shall not be construed to apply to any payment made  by the Borrower pursuant to and in accordance with the express terms of this Agreement or any  payment obtained by a Lender as consideration for the assignment of or sale of a participation in  any of its Loans or participations in LC Disbursements to any assignee or participant, other than  to the Borrower or any other Loan Party or Affiliate thereof (as to which the provisions of this  Section 4.01(c) shall apply). The Borrower consents to the foregoing and agrees, to the extent it  may effectively do so under applicable law, that any Lender acquiring a participation pursuant to  the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim  with respect to such participation as fully as if such Lender were a direct creditor of the Borrower  in the amount of such participation.  Section 4.02 Presumption of Payment by the Borrower.  Unless the Administrative Agent  shall have received notice from the Borrower prior to the date on which any payment is due to the  Administrative Agent for the account of the Lenders or the Issuing Bank that the Borrower will  not make such payment, the Administrative Agent may assume that the Borrower has made such  payment on such date in accordance herewith and may, in reliance upon such assumption,  distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event,  if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank,  as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the  amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and  including the date such amount is distributed to it to but excluding the date of payment to the  Administrative Agent, at the greater of the NYFRB Rate and a rate determined by the  Administrative Agent in accordance with banking industry rules on interbank compensation.  Section 4.03 Defaulting Lenders.  Notwithstanding any provision of this Agreement to  the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply  for so long as such Lender is a Defaulting Lender:  (a) fees shall cease to accrue on the unfunded portion of the Commitment of  such Defaulting Lender pursuant to Section 3.05(a).  (b) any payment of principal, interest, fees or other amounts received by the  Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory,  at maturity, pursuant to Section 10.02(c) or otherwise) or received by the Administrative Agent  from a Defaulting Lender pursuant to Section 12.08 shall be applied at such time or times as may  be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing  by such Defaulting Lender to the Administrative Agent hereunder; second, to the Issuing Bank to  cash collateralize LC Exposure with respect to such Defaulting Lender in accordance with this  Section 4.03; third, as the Borrower may request (so long as no Default, Event of Default or  Borrowing Base Deficiency exists), to the funding of any Loan in respect of which such Defaulting  Lender has failed to fund its portion thereof as required by this Agreement, as determined by the  Administrative Agent; fourth, if so determined by the Administrative Agent and the Borrower, to  be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s  potential future funding obligations with respect to Loans under this Agreement and (y) cash  collateralize future LC Exposure with respect to such Defaulting Lender with respect to future  

 

  73  Letters of Credit issued under this Agreement, in accordance with this Section 4.03; fifth, to the  payment of any amounts owing to the Lenders or the Issuing Bank as a result of any judgment of  a court of competent jurisdiction obtained by any Lender or the Issuing Bank against such  Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this  Agreement or under any other Loan Document; seventh, so long as no Default or Event of Default  exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court  of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of  such Defaulting Lender's breach of its obligations under this Agreement or under any other Loan  Document; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent  jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans  or LC Disbursements in respect of which such Defaulting Lender has not fully funded its  appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a  time when the conditions set forth in Section 6.02 were satisfied or waived, such payment shall be  applied solely to pay the Loans of, and LC Disbursements owed to, all Non-Defaulting Lenders  on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements  owed to, such Defaulting Lender until such time as all Loans and funded and unfunded  participations in the Borrower’s obligations corresponding to such Defaulting Lender’s LC  Exposure are held by the Lenders pro rata in accordance with the Commitments without giving  effect to clause (d) below.  Any payments, prepayments or other amounts paid or payable to a  Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to  post cash collateral pursuant to this Section 4.03 shall be deemed paid to and redirected by such  Defaulting Lender, and each Lender irrevocably consents hereto.  (c) The Commitment, the Maximum Credit Amount and the Revolving Credit  Exposure of such Defaulting Lender shall not be included in determining whether the Majority  Lenders or the Required Lenders have taken or may take any action hereunder (including any  consent to any amendment, waiver or other modification pursuant to Section 12.02); provided that  (1) this clause (c) shall not apply to the vote of a Defaulting Lender in the case of an amendment,  waiver or other modification requiring the consent of such Lender or each Lender affected thereby  and (2) any redetermination or affirmation of the Borrowing Base shall occur without the  participation of a Defaulting Lender, but the Commitment (i.e., the Applicable Percentage of the  Borrowing Base of a Defaulting Lender) may not be increased without the consent of such  Defaulting Lender; provided that, subject to Section 12.19, no such reallocation will constitute a  waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Bank or any  Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non- Defaulting Lender.  (d) if any LC Exposure exists at the time such Lender becomes a Defaulting  Lender then:  (i) all or any part of the LC Exposure of such Defaulting Lender shall  be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable  Percentages but only to the extent that such reallocation does not, as to any Non-Defaulting Lender,  cause such Non-Defaulting Lender’s Revolving Credit Exposure to exceed its Commitment;  provided that, subject to Section 12.19, no such reallocation will constitute a waiver or release of  any claim the Borrower, the Administrative Agent, the Issuing Bank or any Lender may have  against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender;  

 

  74  (ii) if the reallocation described in clause (i) above cannot, or can only  partially, be effected, then the Borrower shall within one Business Day following notice by the  Administrative Agent, cash collateralize for the benefit of the Issuing Bank only the Borrower’s  obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any  partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in  Section 2.08(j) for so long as such LC Exposure is outstanding;  (iii) if the Borrower cash collateralizes any portion of such Defaulting  Lender’s LC Exposure pursuant to clause (ii) above, then the Borrower shall not be required to  pay any fees to such Defaulting Lender pursuant to Section 3.05(b) with respect to such Defaulting  Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash  collateralized;  (iv) if the LC Exposure of the Non-Defaulting Lenders is reallocated  pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 3.05(a) and  Section 3.05(b) shall be adjusted in accordance with such Non-Defaulting Lenders’ Applicable  Percentages; and  (v) if all or any portion of such Defaulting Lender’s LC Exposure is  neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without  prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all  commitment fees that otherwise would have been payable to such Defaulting Lender (solely with  respect to the portion of such Defaulting Lender’s Commitment that was utilized by such LC  Exposure) and letter of credit fees payable under Section 3.05(b) with respect to such Defaulting  Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC  Exposure is reallocated and/or cash collateralized; and  (e) so long as such Lender is a Defaulting Lender, the Issuing Bank shall not  be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related  exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the  Commitments of the Non-Defaulting Lenders and/or cash collateral will be provided by the  Borrower in accordance with Section 4.03(a), and LC Exposure related to any newly issued or  increased Letter of Credit shall be allocated among Non-Defaulting Lenders in a manner consistent  with Section 4.03(d)(i) (and such Defaulting Lender shall not participate therein).  If (i) a Bankruptcy Event or a Bail-In Action with respect to a Lender Parent shall occur following  the date hereof and for so long as such event shall continue or (ii) the Issuing Bank has a good  faith belief that any Lender has defaulted in fulfilling its obligations under one or more other  agreements in which such Lender commits to extend credit, the Issuing Bank shall not be required  to issue, amend or increase any Letter of Credit, unless or the Issuing Bank shall have entered into  arrangements with the Borrower or such Lender, satisfactory to the Issuing Bank, as the case may  be, to defease any risk to it in respect of such Lender hereunder.  In the event that each of the Administrative Agent, the Borrower, and the Issuing Bank agrees that  a Defaulting Lender has adequately remedied all matters that caused such Lender to be a  Defaulting Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the inclusion  of such Lender’s Commitment and on such date such Lender shall purchase at par such of the  

 

  75  Loans of the other Lenders and/or participations in Letters of Credit of the other Lenders as the  Administrative Agent shall determine may be necessary in order for such Lender to hold such  Loans and/or participations in Letters of Credit in accordance with its Applicable Percentage.  Section 4.04 Disposition of Proceeds.  The Security Instruments contain an assignment  by the Borrower and/or the Guarantors unto and in favor of the Administrative Agent for the  benefit of the Secured Parties of all of the Borrower’s and/or each Guarantor’s interest in and to  production and all proceeds attributable thereto which may be produced from or allocated to the  Mortgaged Property. The Security Instruments further provide in general for the application of  such proceeds to the satisfaction of the Obligations and other obligations described therein and  secured thereby. Notwithstanding the assignment contained in such Security Instruments, until the  occurrence of an Event of Default, (a) the Administrative Agent and the Secured Parties 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 Secured Parties, but the  Secured Parties will instead permit such proceeds to be paid to the Loan Parties and (b) the Secured  Parties hereby authorize the Administrative Agent to take such actions as may be necessary to  cause such proceeds to be paid to the Loan Parties.  ARTICLE V  INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY  Section 5.01 Increased Costs.  (a) Eurodollar Changes in Law. If any Change in Law shall:  (i) impose, modify or deem applicable any reserve, special deposit,  liquidity or similar requirement (including any compulsory loan requirement, insurance charge or  other assessment) 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 Term SOFR Rate) or  the Issuing Bank;  (ii) impose on any Lender or the Issuing Bank or the London applicable  offshore interbank market any other condition, cost or expense (other than Taxes) affecting this  Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or  (iii) subject any Recipient to any Taxes (other than (A) Indemnified  Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C)  Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other  obligations, or its deposits, reserves, other liabilities or capital attributable thereto;  and the result of any of the foregoing shall be to increase the cost to such Lender or such other  Recipient of making, continuing, converting or maintaining any Loan (or of maintaining its  obligation to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or such  other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the  amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient  hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender,  the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts  

 

  76  as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for  such additional costs incurred or reduction suffered.  (b) Capital Requirements. If any Lender or the Issuing Bank determines that  any Change in Law regarding capital or liquidity requirements has or would have the effect of  reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such  Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or  the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of  Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or  such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change  in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of  such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy and  liquidity), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the  case may be, such additional amount or amounts as will compensate such Lender or the Issuing  Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.  (c) Certificates. A certificate of a Lender or the Issuing Bank setting forth in  reasonable detail the amount or amounts necessary to compensate such Lender or the Issuing Bank  or its holding company, as the case may be, as specified in Section 5.01(a) or (b) shall be delivered  to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender  or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within  ten (10) days after receipt thereof.  (d) Effect of Failure or Delay in Requesting Compensation. Failure or delay on  the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section 5.01  shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such  compensation; provided that the Borrower shall not be required to compensate a Lender or the  Issuing Bank pursuant to this Section 5.01 for any increased costs or reductions incurred more than  180 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the  Borrower of the Change in Law giving rise to such increased costs or reductions and of such  Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided, further, that if  the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180- day period referred to above shall be extended to include the period of retroactive effect thereof.  Section 5.02 Break Funding Payments.  In With respect to Term Benchmark Loans, in  the event of (a) the payment of any principal of any Eurodollar Term Benchmark Loan other than  on the last day of an Interest Period applicable thereto (including as a result of an Event of Default  or an optional or mandatory prepayment of Loans), (b) the conversion of any Eurodollar Term  Benchmark Loan other than on the last day of the Interest Period applicable thereto, (c) the failure  to borrow, convert, continue or prepay any Eurodollar Term Benchmark Loan on the date specified  in any notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Term Benchmark  Loan other than on the last day of the Interest Period applicable thereto as a result of a request by  the Borrower pursuant to Section 5.04, then, in any such event, the Borrower shall compensate  each Lender for the loss, cost and expense attributable to such event. 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  

 

  77  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 (i) the amount of interest which would accrue on such  principal amount for such period at the interest rate which such Lender would bid were it to bid,  at the commencement of such period, for dollar deposits of a comparable amount and period from  other banks in the eurodollar market.With respect to RFR Loans, in the event of (i) the payment  of any principal of any RFR Loan other than on the Interest Payment Date applicable thereto  (including as a result of an Event of Default or an optional or mandatory prepayment of Loans),  (ii) the failure to borrow or prepay any RFR Loan on the date specified in any notice delivered  pursuant hereto or (iii) the assignment of any RFR Loan other than on the Interest Payment Date  applicable thereto as a result of a request by the Borrower pursuant to Section 5.04, then, in any  such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable  to such event.  A certificate of any Lender setting forth in reasonable detail 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) Payments Free of Taxes. Any and all payments by or on account of any  obligation of the Borrower or any Guarantor under any Loan Document shall be made without  deduction or withholding for any Taxes, except as required by applicable law.  If any applicable  law (as determined in the good faith discretion of an applicable withholding agent) requires the  deduction or withholding of any Tax from any such payment by a withholding agent, then the  applicable withholding agent shall be entitled to make such deduction or withholding and shall  timely pay the full amount deducted or withheld to the relevant Governmental Authority in  accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by  the Borrower or such Guarantor shall be increased as necessary so that after such deduction or  withholding has been made (including such deductions and withholdings applicable to additional  sums payable under this Section 5.03) the applicable Recipient receives an amount equal to the  sum it would have received had no such deduction or withholding been made.  (b) Payment of Other Taxes by the Borrower. The Borrower and each  Guarantor shall timely pay to the relevant Governmental Authority in accordance with applicable  law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.  (c) Indemnification by the Borrower.  The Borrower and each Guarantor shall  jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the  full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or  attributable to amounts payable under this Section 5.03) payable or paid by such Recipient or  required to be withheld or deducted from a payment to such Recipient and any penalties, interest  and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified  Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A  certificate as to the amount of such payment or liability delivered to the Borrower by a Lender  

 

  78  (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on  behalf of a Lender, shall be conclusive absent manifest error.  (d) Evidence of Payments. As soon as practicable after any payment of Taxes  by the Borrower or any Guarantor to a Governmental Authority pursuant to this Section 5.03, the  Borrower or such Guarantor shall deliver to the Administrative Agent the original or a certified  copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the  return reporting such payment or other evidence of such payment reasonably satisfactory to the  Administrative Agent.  (e) Status of Lenders.   (i) Any Lender that is entitled to an exemption from or reduction of  withholding Tax with respect to payments made under any Loan Document shall deliver to the  Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower  or the Administrative Agent, such properly completed and executed documentation reasonably  requested by the Borrower or the Administrative Agent as will permit such payments to be made  without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably  requested by the Borrower or the Administrative Agent, shall deliver such other documentation  prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent  as will enable the Borrower or the Administrative Agent to determine whether or not such Lender  is subject to backup withholding or information reporting requirements.  Notwithstanding anything  to the contrary in the preceding two sentences, the completion, execution and submission of such  documentation (other than such documentation set forth in Section 5.03(e)(ii)(A), Section  5.03(e)(ii)(B) and Section 5.03(e)(ii)(D) below) shall not be required if in the Lender’s reasonable  judgment such completion, execution or submission would subject such Lender to any material  unreimbursed cost or expense or would materially prejudice the legal or commercial position of  such Lender.  (ii) Without limiting the generality of the foregoing:  (A) any Lender that is a U.S. Person shall deliver to the Borrower  and the Administrative Agent on or prior to the date on which such Lender becomes a Lender  under this Agreement (and from time to time thereafter upon the reasonable request of the  Borrower or the Administrative Agent), executed copies of IRS Form W-9 (or any successor form)  certifying that such Lender is exempt from U.S. Federal backup withholding Tax;  (B) any Foreign Lender shall, to the extent it is legally entitled  to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall  be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a  Lender under this Agreement (and from time to time thereafter upon the reasonable request of the  Borrower or the Administrative Agent), whichever of the following is applicable:  (1) in the case of a Foreign Lender claiming the benefits  of an income Tax treaty to which the United States is a party (x) with respect to payments of  interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN- E (or any successor form) establishing an exemption from, or reduction of, U.S. Federal  

 

  79  withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any  other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN- E establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the  “business profits” or “other income” article of such tax treaty;  (2) in the case of a Foreign Lender claiming that its  extension of credit will generate U.S. effectively connected income, executed copies of IRS Form  W-8ECI (or any successor form);  (3) in the case of a Foreign Lender claiming the benefits  of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate  substantially in the form of Exhibit G-1 to the effect that such Foreign Lender is not a “bank”  within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the  Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign  corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”)  and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor form);  or  (4) to the extent a Foreign Lender is not the beneficial  owner, executed copies of IRS Form W-8IMY (or any successor form), accompanied by IRS Form  W-8ECI (or any successor form), IRS Form W-8BEN or IRS Form W-8BEN-E (or any successor  form), a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3,  IRS Form W-9 (or any successor form), and/or other certification documents from each beneficial  owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct  or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such  Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit  G-4 on behalf of each such direct and indirect partner;  (C) any Foreign Lender shall, to the extent it is legally entitled  to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall  be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a  Lender under this Agreement (and from time to time thereafter upon the reasonable request of the  Borrower or the Administrative Agent), executed copies of any other form prescribed by  applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding  Tax, duly completed, together with such supplementary documentation as may be prescribed by  applicable law to permit the Borrower or the Administrative Agent to determine the withholding  or deduction required to be made; and  (D) if a payment made to a Lender under any Loan Document  would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail  to comply with the applicable reporting requirements of FATCA (including those contained in  Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower  and the Administrative Agent at the time or times prescribed by law and at such time or times  reasonably requested by the Borrower or the Administrative Agent such documentation prescribed  by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such  additional documentation reasonably requested by the Borrower or the Administrative Agent as  may be necessary for the Borrower and the Administrative Agent to comply with their obligations  

 

  80  under FATCA and to determine that such Lender has complied with such Lender’s obligations  under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for  purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the  date of this Agreement.  Each Lender agrees that if any form or certification it previously delivered expires or  becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly  notify the Borrower and the Administrative Agent in writing of its legal inability to do so.  (f) Indemnification by the Lenders. Each Lender shall severally indemnify the  Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes  attributable to such Lender (but only to the extent that the Borrower or any Guarantor has not  already indemnified the Administrative Agent for such Indemnified Taxes and without limiting  the obligation of the Borrower and each Guarantor to do so), (ii) any Taxes attributable to such  Lender’s failure to comply with the provisions of Section 12.04(c) relating to the maintenance of  a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that  are payable or paid by the Administrative Agent in connection with any Loan Document, and any  reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were  correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as  to the amount of such payment or liability delivered to any Lender by the Administrative Agent  shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative  Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan  Document or otherwise payable by the Administrative Agent to the Lender from any other source  against any amount due to the Administrative Agent under this Section 5.03(f).  (g) Treatment of Certain Refunds.  If any party determines, in its sole discretion  exercised in good faith, that it has received a refund of any Taxes as to which it has been  indemnified pursuant to this Section 5.03 (including by the payment of additional amounts  pursuant to this Section 5.03), it shall pay to the indemnifying party an amount equal to such refund  (but only to the extent of indemnity payments made under this Section 5.03 with respect to the  Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such  indemnified party and without interest (other than any interest paid by the relevant Governmental  Authority with respect to such refund).  Such indemnifying party, upon the request of such  indemnified party, shall repay to such indemnified party the amount paid over pursuant to this  Section 5.03(g) (plus any penalties, interest or other charges imposed by the relevant  Governmental Authority) in the event that such indemnified party is required to repay such refund  to such Governmental Authority.  Notwithstanding anything to the contrary in this Section 5.03(g),  in no event will the indemnified party be required to pay any amount to an indemnifying party  pursuant to this Section 5.03(g) the payment of which would place the indemnified party in a less  favorable net after-Tax position than the indemnified party would have been in if the Tax subject  to indemnification and giving rise to such refund had not been deducted, withheld or otherwise  imposed and the indemnification payments or additional amounts with respect to such Tax had  never been paid.  This Section 5.03(g) shall not be construed to require any indemnified party to  make available its Tax returns (or any other information relating to its Taxes that it deems  confidential) to the indemnifying party or any other Person.  

 

  81  (h) Survival.  Each party’s obligations under this Section 5.03 shall survive the  resignation or replacement of the Administrative Agent or any assignment of rights by, or the  replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or  discharge of all obligations under any Loan Document.  (i) Defined Terms.  For purposes of this Section 5.03, the term “Lender”  includes the Issuing Bank and the term “applicable law” includes FATCA.  Section 5.04 Mitigation Obligations; Replacement of Lenders.  (a) Mitigation Obligations. If any Lender requests compensation under Section  5.01, or if the Borrower is required to pay any Indemnified Taxes or additional amounts 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.  (b) Replacement of Lenders.  If (i) any Lender requests compensation under  Section 5.01, (ii) the Borrower or any Guarantor is required to pay any Indemnified Taxes or  additional amounts to any Lender or any Governmental Authority for the account of any Lender  or indemnify any Lender pursuant to Section 5.03, (iii) any Lender becomes a Defaulting Lender  or (iv) any Lender is a Non-Consenting Lender, then in any such case, 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 (other than its existing rights to payments  pursuant to Section 5.01 or Section 5.03) and obligations under this Agreement and the other Loan  Documents to an assignee that shall assume such obligations (which assignee may be another  Lender, if a Lender accepts such assignment); provided that (A) the Borrower shall have received  the prior written consent of the Administrative Agent and the Issuing Bank, which consent shall  not unreasonably be withheld, (B) such Lender shall have received payment of an amount equal  to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest  thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent  of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all  other amounts), (C) 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 and (D) in the case of any assignment  resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have  consented to the applicable amendment, waiver or consent.  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.  Each party hereto agrees that (i) an assignment required pursuant to this Section  5.04(b) may be effected pursuant to an Assignment and Assumption executed by the Borrower,  

 

  82  the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating  an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to  which the Administrative Agent and such parties are participants), and (ii) the Lender required to  make such assignment need not be a party thereto in order for such assignment to be effective and  shall be deemed to have consented to an be bound by the terms thereof; provided that, following  the effectiveness of any such assignment, the other parties to such assignment agree to execute and  deliver such documents necessary to evidence such assignment as reasonably requested by the  applicable Lender; provided that any such documents shall be without recourse to or warranty by  the parties thereto.  Section 5.05 Illegality.  Notwithstanding any other provision of this Agreement, in the  event that it becomes unlawful for any Lender or its applicable lending office to honor its  obligation to make or maintain Eurodollar Term Benchmark Loans either generally or having a  particular Interest Period hereunder, then (a) such Lender shall promptly notify the Borrower and  the Administrative Agent thereof and such Lender’s obligation to make such Eurodollar Term  Benchmark Loans (or, if applicable, RFR Loans) shall be suspended (the “Affected Loans”) until  such time as such Lender may again make and maintain such Eurodollar Term Benchmark Loans  and/or RFR Loans and (b) all Affected Loans which would otherwise be made by such Lender  shall be made instead as ABR Loans (and, if such Lender so requests by notice to the Borrower  and the Administrative Agent, all Affected Loans of such Lender then outstanding shall be  automatically converted into ABR Loans on the date specified by such Lender in such notice) and,  to the extent that Affected Loans are so made as (or converted into) ABR Loans, all payments of  principal which would otherwise be applied to such Lender’s Affected Loans shall be applied  instead to its ABR Loans.  ARTICLE VI  CONDITIONS PRECEDENT  Section 6.01 Effective Date.  The obligations of the Lenders to make Loans and of the  Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which  each of the following conditions is satisfied (or waived in accordance with Section 12.02):  (a) The Administrative Agent, the Arrangers and the Lenders shall have  received all commitment, arrangement, upfront and agency fees and all other fees and amounts  due and payable on or prior to the Effective Date, and to the extent invoiced at least two (2)  Business Days prior to the Effective Date, reimbursement or payment of all out-of-pocket expenses  required to be reimbursed or paid by the Borrower hereunder (including, without limitation, the  reasonable fees and expenses of Vinson & Elkins, L.L.P., counsel to the Administrative Agent).  (b) The Administrative Agent shall have received a certificate of a Responsible  Officer of the Borrower and each Guarantor, each setting forth (i) resolutions of the members,  board of directors, board of managers 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, or of the manager, managing member, general partner  or such other Person having authority to bind the Borrower or such Guarantor, (A) who are  authorized to sign the Loan Documents to which the Borrower or such Guarantor is a party and  

 

  83  (B) 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,  by-laws, the limited liability company agreement, operating agreement, partnership agreement,  certificate of formation or other applicable organizational documents of the Borrower and such  Guarantor (in each case, together with all amendments thereto, if any), 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 in the jurisdiction of organization of each Loan Party with respect to the existence,  qualification and good standing of such Loan Party.  (d) The Administrative Agent shall have received from each party hereto  counterparts (in such number as may be reasonably requested by the Administrative Agent) of this  Agreement signed on behalf of such party.  (e) The Administrative Agent shall have received duly executed Notes payable  to each Lender requesting a Note at least two (2) Business Days prior to the Effective Date in a  principal amount equal to its Maximum Credit Amount dated as of the date hereof.  (f) The Administrative Agent shall have received from each party thereto duly  executed counterparts (in such number as may be reasonably requested by the Administrative  Agent) of the Security Instruments, including the Pledge and Security Agreement described on  Exhibit E.  In connection with the execution and delivery of the Security Instruments, the  Administrative Agent shall:  (i) be reasonably satisfied that the Security Instruments create first  priority (and upon filing in the proper offices of the appropriate jurisdictions, perfected) Liens  (provided that Excepted Liens identified in clauses (a) through (d) and clause (f) of the definition  thereof may exist, but subject to the provisos at the end of such definition) on at least 90% of the  total value of the proved Oil and Gas Properties evaluated in the Initial Reserve Report; and  (ii) have received certificates, together with undated, blank stock  powers for such certificates, representing all of the issued and outstanding certificated Equity  Interests in the Borrower, Intermediate HoldCo (if applicable) and each Domestic Subsidiary  constituting Collateral.  (g) The Administrative Agent shall have received a customary opinion of (i)  Gibson, Dunn & Crutcher LLP, special counsel to the Borrower and (ii) Day Carter Murphy LLP,  local California counsel to the Borrower, each in form and substance reasonably satisfactory to the  Administrative Agent.  (h) The Administrative Agent shall have received a certificate of insurance  coverage of the Borrower evidencing that the Loan Parties are carrying insurance in accordance  with Section 7.12.  

 

  84  (i) The Administrative Agent shall have received title information reasonably  satisfactory to the Administrative Agent setting forth the status of title to at least 90% of the total  value of the proved Oil and Gas Properties evaluated in the Initial Reserve Report.  (j) The Administrative Agent shall have received a certificate from a Financial  Officer of the Parent with respect to solvency of the Loan Parties on a consolidated basis as of the  Effective Date after giving effect to the Transactions, in form and substance reasonably  satisfactory to the Administrative Agent.  (k) The Administrative Agent shall have received a certificate of a Responsible  Officer of the Borrower certifying (i) that the Loan Parties have received all consents and approvals  required by Section 7.03 and (ii) that, as of the Effective Date, (a) no Default shall have occurred  and be continuing and (b) the representations and warranties of the Borrower and the Guarantors  set forth in this Agreement and in the other Loan Documents are true and correct in all material  respects (except to the extent any such representations and warranties are limited by materiality,  in which case, they shall be true and correct in all respects), except to the extent any such  representations and warranties are expressly limited to an earlier date, in which case, on and as of  the Effective Date, such representations and warranties shall continue to be true and correct in all  material respects (except to the extent any such representations and warranties are limited by  materiality, in which case, they shall continue to be true and correct in all respects) as of such  specified earlier date.  (l) The Administrative Agent shall have received (i) the Financial Statements  referred to in Section 7.04(a) and the pro forma unaudited consolidated balance sheet referred to  in Section 7.04(b) and (ii) the Initial Reserve Report accompanied by a certificate covering the  matters described in Section 8.11(c).  (m) The Administrative Agent shall have received appropriate UCC search  certificates reflecting no prior Liens encumbering the Properties of the Loan Parties (other than  those being assigned or released on or prior to the Effective Date or Liens permitted by Section  9.03) for each of the following jurisdictions: Delaware and any other jurisdiction reasonably  requested by the Administrative Agent.  The Administrative Agent shall have received evidence  reasonably satisfactory to it that all Liens on the Property of the Loan Parties (other than Liens  permitted by Section 9.03) have been (or will be concurrently with the initial Borrowing on the  Effective Date) released or terminated, and that duly executed recordable releases and terminations  in forms reasonably acceptable to the Administrative Agent with respect thereto have been  obtained by the Loan Parties.  (n) The Administrative Agent shall have received evidence reasonably  satisfactory to it that (i) all loans and other amounts owing under the Existing Credit Agreement  have been (or contemporaneously with the Effective Date are being) repaid in full and all  commitments thereunder have been terminated or cancelled, (ii) all Liens on the Properties of the  Loan Parties associated with the Existing Credit Agreement have been released or terminated,  subject only to the filing of applicable terminations, releases or assignments and (iii) no Loan Party  shall have any outstanding Debt other than Debt permitted by Section 9.02.  

 

  85  (o) The Administrative Agent shall be reasonably satisfied with the  environmental condition of, the Loan Parties’ properties.  (p) The Administrative Agent and the Lenders shall have received, at least five  (5) Business Days prior to the Effective Date to the extent requested at least ten (10) business days  prior to the Effective Date, and be reasonably satisfied in form and substance with, (i) all  documentation and other information required by bank regulatory authorities under applicable  “know-your-customer” and anti-money laundering rules and regulations, including but not  restricted to the USA PATRIOT Act and (ii) a Beneficial Ownership Certification in relation to  any Borrower that qualifies as a “legal entity customer” under the Beneficial Ownership  Regulation.  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 and of the Issuing Bank to issue Letters of Credit hereunder shall not  become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section  12.02) at or prior to 2:00 p.m., Dallas, Texas time, on August 31st, 2021 (and, in the event such  conditions are not so satisfied, extended or waived, the Commitments shall terminate at such time).   For purposes of determining compliance with the conditions specified in this Section 6.01, each  Lender that has signed this Agreement 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 Effective Date specifying its  objection thereto.  Section 6.02 Each Credit Event.  The obligation of each Lender to make a Loan on the  occasion of any Borrowing (including the initial funding), and of the Issuing Bank to issue, amend,  renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:  (a) At the time of and immediately after giving effect to such Borrowing or the  issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall  have occurred and be continuing.  (b) The representations and warranties of the Borrower and the Guarantors set  forth in this Agreement and in the other Loan Documents shall be true and correct in all material  respects (except to the extent any such representations and warranties are limited by materiality,  in which case, they shall be true and correct in all respects) on and as of the date of such Borrowing  or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable,  except to the extent any such representations and warranties are expressly limited to an earlier  date, in which case, on and as of the date of such Borrowing or the date of issuance, amendment,  renewal or extension of such Letter of Credit, as applicable, such representations and warranties  shall continue to be true and correct in all material respects (except to the extent any such  representations and warranties are limited by materiality, in which case, they shall be true and  correct in all respects) as of such specified earlier date.  

 

  86  (c) The receipt by the Administrative Agent of a Borrowing Request in  accordance with Section 2.03 or a request for a Letter of Credit in accordance with Section 2.08(b),  as applicable.  (d) At the time of and immediately after giving effect to such Borrowing and  the use of proceeds thereof on the date of such Borrowing or the issuance, amendment, renewal or  extension of such Letter of Credit, as applicable, the Consolidated Cash Balance shall not exceed  the Consolidated Cash Balance Threshold.  Each request for a Borrowing and each request for the issuance, amendment, renewal or  extension of any Letter of Credit shall be deemed to constitute a representation and warranty by  the Borrower on the date thereof as to the matters specified in Section 6.02(a), Section 6.02(b),   and Section 6.02(d).  ARTICLE VII  REPRESENTATIONS AND WARRANTIES  The Borrower represents and warrants to the Lenders that:  Section 7.01 Organization; Powers.  Each of the Loan Parties is duly organized, validly  existing and in good standing under the laws of the jurisdiction of its organization, has all requisite  power and authority, and has all material governmental licenses, authorizations, consents and  approvals necessary, to own its assets and to carry on its business as now conducted, and is  qualified to do business in, and is in good standing in, every jurisdiction where such qualification  is required, except where failure to have such power, authority, licenses, authorizations, consents,  approvals and qualifications could not reasonably be expected to have a Material Adverse Effect.  Section 7.02 Authority; Enforceability.  The Transactions are within the Borrower’s and  each Guarantor’s corporate or equivalent powers and have been duly authorized by all necessary  corporate or equivalent action (including, without limitation, any action required to be taken by  any other Person, whether interested or disinterested, in order to ensure the due authorization of  the Transactions).  Each Loan Document to which the Borrower and each Guarantor is a party has  been duly executed and delivered by the Borrower and such Guarantor and constitutes a legal,  valid and binding obligation of the Borrower and such Guarantor, as applicable, enforceable in  accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,  moratorium or other laws affecting creditors’ rights generally and subject to general principles of  equity, regardless of whether considered in a proceeding in equity or at law.  Section 7.03 Approvals; No Conflicts.  The Transactions (a) do not require any consent  or approval of, registration or filing with, or any other action by, any Governmental Authority or  any other third Person (including holders of its Equity Interests or any class of directors, managers  or supervisors, as applicable, whether interested or disinterested, of the Borrower or any other  Person), nor is any such consent, approval, registration, filing or other action necessary for the  validity or enforceability of any Loan Document or the consummation of the Transactions, except  such as have been obtained or made and are in full force and effect other than (i) the recording and  filing of the Security Instruments as required by this Agreement and (ii) those third party approvals  or consents which, if not made or obtained would not cause a Default hereunder, could not  

 

  87  reasonably be expected to have a Material Adverse Effect or do not have an adverse effect on the  enforceability of the Loan Documents; (b) will not violate (i) any applicable material provision of  law or regulation or (ii) the charter, bylaws or other organizational documents of the Borrower or  any other 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 the Borrower or any  other Loan Party or any of their respective material Properties, or give rise to a right thereunder to  require any payment to be made by the Borrower or any other Loan Party and (d) will not result in  the creation or imposition of any Lien on any material Property of the Borrower or any other Loan  Party (other than the Liens created by the Loan Documents).  Section 7.04 Financial Condition; No Material Adverse Change.  (a) The Borrower has heretofore furnished to the Lenders (i) the Parent’s  consolidated balance sheet and statements of income, partners’ equity and cash flows as of and for  the fiscal year ended December 31, 2020, reported on by KPMG, independent public accountants  and (ii) the Parent’s unaudited consolidated balance sheets and statements of income, partners’  equity and cash flows as of and for the fiscal quarter ended March 31, 2021. Such financial  statements present fairly, in all material respects, the financial position and results of operations  and cash flows of the Loan Parties as of such date and for such period in accordance with GAAP.  (b) The Borrower has heretofore furnished to the Lenders a pro forma unaudited  consolidated balance sheet of the Loan Parties as of the Effective Date, after giving effect to the  Transactions contemplated to occur on the Effective Date, certified by a Responsible Officer as  having been prepared in good faith based upon reasonable assumptions.  (c) Since December 31, 2020, 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 Parent, the Borrower nor any other Loan Party has on the date  hereof any material Debt (including Disqualified Capital Stock) or any material contingent  liabilities, off-balance sheet liabilities or partnerships, material liabilities for Taxes, unusual  forward or long-term commitments or material 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 or any  other Loan Party (i) not fully covered by insurance (except for normal deductibles) that, if  adversely determined, could reasonably be expected, individually or in the aggregate, to result in  a Material Adverse Effect or (ii) that involve any Loan Document or the Transactions.  (b) Since the Effective Date, 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 could  reasonably be expected to result in, a Material Adverse Effect.  

 

  88  Section 7.06 Environmental Matters.  Except for such matters that, individually or in the  aggregate, could not reasonably be expected to have a Material Adverse Effect:  (a) the Loan Parties and each of their respective Properties and operations  thereon are, and within all applicable statute of limitation periods have been, in compliance with  all applicable Environmental Laws;  (b) the Loan Parties have obtained all Environmental Permits required for their  respective operations and each of their Properties, with all such Environmental Permits being  currently in full force and effect, and no Loan Party has received any written notice or otherwise  has knowledge that any such existing Environmental Permit will be revoked or that any application  for any new Environmental Permit or renewal of any existing Environmental Permit will be  protested or denied;  (c) there are no claims, demands, suits, orders, inquiries, or proceedings  concerning any violation of, or any liability (including as a potentially responsible party) under,  any applicable Environmental Laws that is pending or, to the Borrower’s knowledge, threatened  against the Borrower, any other Loan Party or any Unrestricted Subsidiary or any of their  respective Properties or as a result of any operations at such Properties;  (d) none of the Properties of the Borrower, any other Loan Party or any  Unrestricted Subsidiary contain or have contained any:  (i) underground storage tanks; (ii)  asbestos-containing materials; (iii) landfills or dumps; (iv) hazardous waste management units as  defined pursuant to RCRA or any comparable state law; or (v) sites on or nominated for the  National Priority List promulgated pursuant to CERCLA or any state remedial priority list  promulgated or published pursuant to any comparable state law;  (e) there has been no Release or, to the Borrower’s knowledge, threatened  Release, of Hazardous Materials at, on, under or from the of the Borrower’s, any other Loan Party’s  or any Unrestricted Subsidiary’s Properties, there are no investigations, remediations, abatements,  removals, or monitorings of Hazardous Materials required under applicable Environmental Laws  at such Properties and, to the Borrower’s knowledge, none of such Properties are adversely  affected by any Release or threatened Release of a Hazardous Material originating or emanating  from any other real property;  (f) none of the Borrower, any other Loan Party or any Unrestricted Subsidiary  has received any written notice asserting an alleged liability or obligation under any applicable  Environmental Laws with respect to the investigation, remediation, abatement, removal, or  monitoring of any Hazardous Materials at, under, or Released or threatened to be Released from  any real properties offsite Properties of the Borrower, any other Loan Party or any Unrestricted  Subsidiary and, to the Borrower’s knowledge, there are no conditions or circumstances that could  reasonably be expected to result in the receipt of such written notice;  (g) there has been no exposure of any Person or Property to any Hazardous  Materials as a result of or in connection with the operations and businesses of any of the of the  Borrower, any other Loan Party or any Unrestricted Subsidiary Properties that could reasonably  be expected to form the basis for a claim for damages or compensation, and there are no conditions  

 

  89  or circumstances that would reasonably be expected to result in the receipt of notice regarding  such exposure; and  (h) the Loan Parties have provided to the Lenders complete and correct copies  of all environmental site assessment reports, investigations, studies, analyses, and correspondence  on environmental matters (including matters relating to any alleged non-compliance with or  liability under Environmental Laws) that are in the Loan Parties’ or any Unrestricted Subsidiary’s  possession or control and relating to their respective Properties or operations thereon.  Section 7.07 Compliance with the Laws and Agreements; No Defaults.  (a) The Parent, the Borrower and each Loan Party is in compliance with all  Governmental Requirements applicable to it or its Property and all agreements and other  instruments binding upon it or its Property, and possesses all licenses, permits, franchises,  exemptions, approvals and other governmental authorizations necessary for the ownership of its  Property and the conduct of its business, except where the failure to do so, individually or in the  aggregate, could not reasonably be expected to result in a Material Adverse Effect.  (b) Neither the Borrower nor any other Loan Party is in default nor has any  event or circumstance occurred which, but for the expiration of any applicable grace period or the  giving of notice, or both, would constitute a default or would require the Borrower or any other  Loan Party to Redeem or make any offer to Redeem under any indenture, note, credit agreement  or instrument pursuant to which any Material Debt is outstanding or by which the Borrower or any  other Loan Party or any of their Properties is bound.  (c) No Default has occurred and is continuing.  Section 7.08 Investment Company Act.  Neither the Borrower nor any other Loan Party  is an “investment company” or a company “controlled” by an “investment company,” within the  meaning of, or subject to regulation under, the Investment Company Act of 1940, as amended.  Section 7.09 Taxes.  Each of the Loan Parties has timely filed or caused to be filed all  Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes  required to have been paid by it, except (a) Taxes that are being contested in good faith by  appropriate proceedings and for which the Borrower or such Loan Party, 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 or result in the  seizure or levy of any Property of the Loan Parties. The charges, accruals and reserves on the books  of the Loan Parties in respect of Taxes and other governmental charges are, in the reasonable  opinion of the Borrower, adequate. No Tax Lien has been filed and, to the knowledge of the  Borrower, no claim is being asserted with respect to any such Tax or other such governmental  charge which could reasonably be expected to have a Material Adverse Effect.  The Parent is  taxable as a corporation for U.S. federal, state or local income tax purposes. The Borrower is  treated as a disregarded entity of the Parent for U.S. federal, state and local income tax purposes  Section 7.10 ERISA.  None of the Borrower, any other Loan Party or any Unrestricted  Subsidiary 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 Plan or Multiemployer  

 

  90  Plan.  Except as could not reasonably be expected to constitute a Material Adverse Effect, no  ERISA Event has occurred.  None of the Borrower, any other Loan Party or any Unrestricted  Subsidiary is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset  Regulations), and neither the execution, delivery nor performance of the transactions contemplated  under this Agreement, including the making of any Loan and the issuance of any Letter of Credit  hereunder, will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or  Section 4975 of the Code.  Section 7.11 Disclosure; No Material Misstatements.  (a) The Borrower has disclosed or made available to the Administrative Agent  and the Lenders all agreements, instruments and corporate or other restrictions to which the Loan  Parties are 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 written reports, financial  statements, certificates or other written information furnished by or on behalf of the Parent, the  Borrower or any other Loan Party 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 materially 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. There are no material statements or  conclusions in any Reserve Report which are based upon or include materially 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  of the Loan Parties and production and cost estimates contained in each Reserve Report are  necessarily based upon professional opinions, estimates and projections and that the Loan Parties  do not warrant that such opinions, estimates and projections will ultimately prove to have been  accurate.   (b) As of the Effective Date, the information included in the Beneficial  Ownership Certification is true and correct in all respects.   Section 7.12 Insurance.  The Borrower has, and has caused all of the other Loan Parties  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 Loan Parties.  Such insurance policies contain an endorsement  naming the Administrative Agent and the Lenders as additional insureds in respect of such liability  insurance policies and naming the Administrative Agent as loss payee with respect to Property  loss insurance.  Section 7.13 Restriction on Liens.  Neither the Borrower nor any other Loan Party is a  party to any agreement or arrangement (other than Debt creating Liens permitted by Section  9.03(c), but then only on the Property securing such Debt), or subject to any order, judgment, writ  

 

  91  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 Obligations and the Loan  Documents, or restricts any other Loan Party from paying dividends or making any other  distributions in respect of its Equity Interests to the Borrower or any other Loan Party, or restricts  any other Loan Party from making loans or advances or transferring any Property (other than the  Property securing Debt permitted by Section 9.03(c)) to the Borrower or any other Loan Party, or  which requires the consent of or notice to other Persons in connection therewith.  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 Parent has no subsidiaries and such Schedule 7.14 sets forth a  list of, and identifies, all Restricted Subsidiaries and Unrestricted Subsidiaries. The Borrower has  no Foreign Subsidiaries. As of the Effective Date, the Parent has no Subsidiaries other than the  Borrower and the Borrower has no Unrestricted Subsidiaries.    Section 7.15 Location of Business and Offices.  The Borrower’s jurisdiction of  organization is Delaware, and the name of the Borrower as listed in the public records of its  jurisdiction of organization is Berry Petroleum Company, LLC (or, in each case, as set forth in a  notice delivered to the Administrative Agent pursuant to Section 8.01(k) in accordance with  Section 12.01). The Borrower’s principal place of business and chief executive office is located at  the address specified in Section 12.01 (or as set forth in a notice delivered pursuant to Section  8.01(k) and Section 12.01(c)). Each Loan Party’s jurisdiction of organization, name as listed in the  public records of its jurisdiction of organization, and the location of its principal place of business  and chief executive office is stated on Schedule 7.15 (or as set forth in a notice delivered pursuant  to Section 8.01(k)).  Section 7.16 Properties; Titles, Etc.  (a) Each of the Loan Parties has good and defensible title to their respective Oil  and Gas Properties evaluated in the most recently delivered Reserve Report and good title to all  its material personal Properties, in each case, free and clear of all Liens except Liens permitted by  Section 9.03. After giving full effect to the Excepted Liens and permitted Dispositions, the  Borrower or the Loan Party 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 Loan  Party to bear the costs and expenses relating to the maintenance, development and operations of  each such Property in an amount in excess of the working interest of each Property set forth in the  most recently delivered Reserve Report that is not offset by a corresponding proportionate increase  in the Borrower’s or such Loan Party’s net revenue interest in such Property.  (b) All material leases and agreements necessary for the conduct of the business  of the Loan Parties are valid and subsisting, in full force and effect, and there exists no default or  event or circumstance which with the giving of notice or the passage of time or both would give  rise to a default under any such lease or leases, which could reasonably be expected to have a  Material Adverse Effect.  

 

  92  (c) The rights and Properties presently owned, leased or licensed by the Loan  Parties including, without limitation, all easements and rights of way, include all rights and  Properties necessary to permit the Loan Parties to conduct their business in all material respects in  the same manner as its business has been conducted prior to the date hereof.  (d) All of the Properties of the Loan Parties which are reasonably necessary for  the operation of their businesses are in good working condition and are maintained in accordance  with prudent industry standards, ordinary wear and tear excepted.  (e) Each of the Loan Parties 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 Loan Party does not infringe upon the rights of any other Person,  except for any such infringements that, individually or in the aggregate, could not reasonably be  expected to result in a Material Adverse Effect. The Loan Parties either own or have valid licenses  or other rights to use all databases, geological data, geophysical data, engineering data, seismic  data, maps, interpretations and other technical information used in their businesses as presently  conducted, subject to the limitations contained in the agreements governing the use of the same,  which limitations are customary for companies engaged in the business of the exploration and  production of Hydrocarbons, with such exceptions as could not reasonably be expected to have a  Material Adverse Effect.  Section 7.17 Maintenance of Properties.  Except for such acts or failures to act as could  not be reasonably expected to have a Material Adverse Effect, the Oil and Gas Properties (and  Properties unitized therewith) of the Loan Parties have been maintained, operated and developed  in a good and workmanlike manner and in conformity with all Governmental Requirements and  in conformity with the provisions of all leases, subleases or other contracts comprising a part of  the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas  Properties of the Loan Parties. 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 Loan Parties is subject to having allowable production reduced below the full and regular  allowable (including the maximum permissible tolerance) because of any overproduction (whether  or not the same was permissible at the time) and (ii) none of the wells comprising a part of the Oil  and Gas Properties (or Properties unitized therewith) of the Borrower or any other Loan Party 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 Loan Party. All pipelines, wells, gas processing  plants, platforms and other material improvements, fixtures and equipment owned in whole or in  part by the Loan Parties that are necessary to conduct normal operations are being maintained in a  state adequate to conduct normal operations, and with respect to such of the foregoing which are  operated by the Loan Parties, in a manner consistent with customary industry practices (other than  those the failure of which to maintain in accordance with this Section 7.17 could not reasonably  be expected to have a Material Adverse Effect).  Section 7.18 Gas Imbalances, Prepayments.  Except as set forth on Schedule 7.18 or on  the most recent certificate delivered pursuant to Section 8.11(c), on a net basis there are no gas  imbalances, take or pay or other prepayments which would require the Loan Parties to deliver  

 

  93  Hydrocarbons produced from their Oil and Gas Properties at some future time without then or  thereafter receiving full payment therefor exceeding one half bcf of gas (on an mcf equivalent  basis) in the aggregate.  Section 7.19 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 the other Loan Parties 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 Loan Parties’ Hydrocarbons (including,  without limitation, calls on or other rights to purchase, production, whether or not the same are  currently being exercised) that (a) pertain to the sale of production at a fixed price and (b) have a  maturity or expiry date of longer than six (6) months.  Section 7.20 Hedge Agreements and Qualified ECP Counterparty.  Schedule 7.20, as of  the date hereof, and after the date hereof, each report required to be delivered by the Borrower  pursuant to Section 8.01(e), as of the date of (or as of the date(s) otherwise set forth in) such report,  sets forth, a true and complete list of all Hedge Agreements (other than Other Hedge Agreements)  of the Borrower and each Loan Party, the material terms thereof (including the type, term, effective  date, termination date and notional amounts or volumes), the estimated net mark to market value  thereof, all credit support agreements relating thereto other than the Loan Documents (including  any margin required or supplied) and the counterparty to each such agreement.  The Borrower is a  Qualified ECP Counterparty.  Section 7.21 Use of Loans and Letters of Credit.  The proceeds of the Loans and the  Letters of Credit shall be used (a) to refinance in full all obligations outstanding under the Existing  Credit Agreement, (b) for working capital for exploration and production operations and for other  general corporate purposes of the Loan Parties, including the acquisition of Oil and Gas Properties  and (c) to pay fees and expenses associated with the Transactions.  The Loan Parties are not  engaged principally, or as one of 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 Federal Reserve Board).  No part of the proceeds of  any Loan or Letter of Credit will be used for any purpose which violates the provisions of  Regulations T, U or X of the Federal Reserve Board.  Section 7.22 Solvency.  After giving effect to the Transactions and the other transactions  contemplated hereby, (a) the aggregate assets (after giving effect to amounts that could reasonably  be expected to be received by reason of indemnity, offset, insurance or any similar arrangement),  at a fair valuation, of the Borrower and the Guarantors (including the Parent), taken as a whole,  exceed the aggregate Debt of the Borrower and the Guarantors (including the Parent) on a  consolidated basis, (b) each of the Borrower and the Guarantors (including the Parent) has not  incurred and does not intend to incur, and does not believe that it will incur, Debt beyond its ability  to pay such Debt (after taking into account the timing and amounts of cash reasonably expected to  be received by each of the Borrower and the Guarantors (including the Parent) and the amounts to  be payable on or in respect of its liabilities, and giving effect to amounts that could reasonably be  

 

  94  expected to be received by reason of indemnity, offset, insurance or any similar arrangement), as  such Debt becomes absolute and matures and (c) each of the Borrower and the Guarantors  (including the Parent) does not have (and does not have reason to believe that it will have  thereafter) unreasonably small capital for the conduct of its business.  Section 7.23 International Operations.  No Loan Party owns, and has not acquired or  made any other expenditure (whether such expenditure is capital, operating or otherwise) in or  related to, any Oil and Gas Properties located outside of the geographical boundaries of the United  States of America.  Section 7.24 USA PATRIOT; AML Laws; Anti-Corruption Laws and Sanctions.  The  Parent has implemented and maintains in effect policies and procedures designed to ensure  compliance by the Loan Parties and any Unrestricted Subsidiaries and their respective directors,  officers, employees and agents with the USA PATRIOT Act, Anti-Corruption Laws, applicable  AML Laws and applicable Sanctions.  The Loan Parties, any Unrestricted Subsidiaries and their  respective officers and directors, and to the knowledge of the Parent, its employees and agents, are  in compliance with the USA PATRIOT Act, Anti-Corruption Laws, applicable AML Laws and  applicable Sanctions in all material respects.  None of (a) the Parent, any other Loan Party, any  Unrestricted Subsidiary or any of their respective directors, officers or employees, or (b) to the  knowledge of the Parent, any agent of the Parent, any other Loan Party or any Unrestricted  Subsidiary that will act in any capacity in connection with or benefit from the credit facility  established hereby, (i) is a Sanctioned Person or (ii) is in violation of AML Laws, or Anti- Corruption Laws.  No Borrowing or Letter of Credit, use of proceeds or other transaction  contemplated by this Agreement will cause a violation of AML Laws, Anti-Corruption Laws or  applicable Sanctions.  None of the Loan Parties, nor any other Guarantor or Unrestricted  Subsidiary, or, to the knowledge of the Parent, any other Affiliate, has engaged in or intends to  engage in any dealings or transactions with, or for the benefit of, any Sanctioned Person or with  or in any Sanctioned Country.  Section 7.25 Accounts.  As of the Effective Date, Schedule 7.25 lists all Deposit  Accounts, Commodity Accounts and Securities Accounts maintained by or for the benefit of the  Borrower or any other Loan Party.  Section 7.26 Affected Financial Institution.  Neither the Borrower nor any other Loan  Party is an Affected Financial Institution.  ARTICLE VIII  AFFIRMATIVE COVENANTS  Until the Commitments have expired or been terminated and the principal of and interest  on each Loan and all fees payable hereunder and all other amounts payable under the Loan  Documents shall have been paid in full and all Letters of Credit shall have expired or terminated,  or arrangements otherwise satisfactory to the applicable Issuing Bank in respect thereof have been  made, in each case, without any pending draw, and all LC Disbursements shall have been  reimbursed, the Borrower covenants and agrees with the Lenders that:  

 

  95  Section 8.01 Financial Statements; Other Information.  The Borrower will furnish to the  Administrative Agent (for provision to 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 Parent, commencing with the fiscal year ending December 31, 2021, the Parent’s audited  consolidated balance sheet and related statements of operations, partners’ equity and cash flows as  of the end of and for such year, setting forth in each case in comparative form the figures for the  previous fiscal year, all reported on by KPMG 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, other than with respect to, or  resulting from, (x) the occurrence of the Maturity Date within one year from the date such opinion  is delivered or (y) any potential inability to satisfy the Leverage Ratio or the current ratio in Section  9.01(b) on a future date or in a future period) to the effect that such consolidated financial  statements present fairly in all material respects the financial condition and results of operations  of the Loan Parties on a consolidated basis in accordance with GAAP consistently applied.  If the  Borrower has designated any of its Subsidiaries as Unrestricted Subsidiaries, then, concurrently  with the financial information required by this clause (a), the Borrower shall provide a reasonably  detailed presentation of the consolidated financial position and results of operations of the Loan  Parties as of the end of and for such fiscal year which financial presentation shall exclude the  financial position and results of operations of the Unrestricted Subsidiaries and be certified by the  chief executive officer or the chief financial officer of the Parent as fairly presenting in all material  respects such consolidated financial position and results of operations as of the end of and for such  year.  (b) Quarterly Financial Statements.  As soon as available, but in any event in  accordance with then applicable law and not later than 60 days after the end of each fiscal quarter  of each fiscal year of the Parent, commencing with the fiscal quarter ending September 30, 2021,  the Parent’s consolidated balance sheet and related statements of operations, partners’ equity and  cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal  year, setting forth in each case in comparative form the figures for the corresponding period or  periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified  by one of its Financial Officers as presenting fairly in all material respects the financial condition  and results of operations of the Loan Parties on a consolidated basis in accordance with GAAP  consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.   If the Borrower has designated any of its Subsidiaries as Unrestricted Subsidiaries, then,  concurrently with the financial information required by this clause (b), the Borrower shall provide  a reasonably detailed presentation of the consolidated financial position and results of operations  of the Loan Parties as of the end of and for such fiscal quarter which financial presentation shall  exclude the financial position and results of operations of the Unrestricted Subsidiaries and be  certified by the chief executive officer or the chief financial officer of the Parent as fairly  presenting in all material respects such consolidated financial condition and results of operations  as of the end of and for such fiscal quarter.  (c) Certificate of Financial Officer -- Compliance.  Concurrently with any  delivery of financial statements under Section 8.01(a) or Section 8.01(b), a certificate of a  Financial Officer of the Parent in substantially the form of Exhibit D hereto (i) certifying as to  

 

  96  whether a Default has occurred and, if a Default has occurred, specifying the details thereof and  any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed  calculations demonstrating compliance with Section 9.01, and (iii) stating whether any change in  GAAP or in the application thereof has occurred since the date of the audited financial statements  most recently delivered pursuant to Section 8.01(a).  (d) Annual Budget.  Concurrently with the delivery of each Reserve Report  pursuant to Section 8.11, a business and financial plan for the Loan Parties, in form reasonably  acceptable to the Administrative Agent, including an annual operating, capital and cash flow  budget for such fiscal year and detailed on a quarterly basis.  (e) Certificate of Financial Officer – Hedge Agreements. Concurrently with the  delivery of any Reserve Report pursuant to Section 8.11 hereunder, a certificate of a Financial  Officer, in form reasonably satisfactory to the Administrative Agent, setting forth as of a recent  date, a true and complete list of all Hedge Agreements of the Borrower and each Loan Party, the  material terms thereof (including the type, term, effective date, termination date and notional  amounts or volumes), the estimated net mark-to-market value therefor, any new credit support  agreements relating thereto (other than the Loan Documents) not listed on Schedule 7.20, any  margin required or supplied under any credit support document (other than the Loan Documents),  and the counterparty to each such agreement.  (f) Certificate of Insurer - Insurance Coverage. Concurrently with any delivery  of financial statements under Section 8.01(a), a certificate of insurance coverage from each insurer  with respect to the insurance required by Section 8.06, in form reasonably satisfactory to the  Administrative Agent, and, if requested by the Administrative Agent or any Lender, all copies of  the applicable policies.  (g) 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 or any other Loan Party with the SEC, or with any national  securities exchange, or distributed by the Borrower or any other Loan Party to its shareholders  generally, as the case may be.  (h) Notices Under Material Instruments. Promptly after the furnishing thereof,  copies of any default notice furnished to or by any Person pursuant to the terms of any preferred  stock designation, indenture, loan or credit or other similar agreement (including, without  limitation, any Permitted Additional Debt Document), other than this Agreement and not otherwise  required to be furnished to the Lenders pursuant to any other provision of this Section 8.01.  (i) Notice of Dispositions of Oil and Gas Properties and Liquidation of Hedge  Agreements. In the event the Borrower or any other Loan Party intends to Dispose of any Oil and  Gas Properties (other than Hydrocarbons in the ordinary course of business) or any Equity Interests  in any other Loan Party, in each case, to the extent that (a) such Oil and Gas Properties have a fair  market value in excess of $15,000,000 or (b) the Disposition of such Oil and Gas Properties would  reasonably be expected to result in a redetermination of the Borrowing Base pursuant to Section  2.07(e), then, in either case, at least five (5) Business Days’ prior written notice of such  Disposition, the price thereof and the anticipated date of closing and any other details thereof  

 

  97  requested by the Administrative Agent or any Lender. In the event that the Borrower or any other  Loan Party receives any notice of early termination of any Hedge Agreement to which it is a party  from any of its counterparties, or any Hedge Agreement to which the Borrower or any other Loan  Party is a party is Liquidated, in each case to the extent that (a) the Hedge Termination Value of  such Hedge Agreement as of such date of early termination or date of Liquidation is in excess of  $15,000,000 or (b) such Liquidation would reasonably be expected to result in a redetermination  of the Borrowing Base pursuant to Section 2.07(e), in either case, prompt written notice of the  receipt of such early termination notice or such Liquidation, (and in the case of a voluntary  Liquidation of any Hedge Agreement, no less than three (3) Business Days’ prior written notice  thereof), as the case may be, together with a reasonably detailed description or explanation thereof  and any other details thereof reasonably requested by the Administrative Agent or any Lender.  (j) Notice of Casualty Events. Prompt written notice, and in any event within  ten Business Days of the occurrence of any Casualty Event having a fair market value in excess of  $10,000,000 or the commencement of any action or proceeding that could reasonably be expected  to result in a Casualty Event having a fair market value in excess of $10,000,000.  (k) Information Regarding the Borrower and Guarantors. Prompt written notice  (and in any event within ten (10) days after) of any change (i) in the Borrower’s or any Guarantor’s  legal name, (ii) in the location of the Borrower’s or any Guarantor’s chief executive office or  principal place of business, (iii) in the Borrower’s or Guarantor’s entity type, or (iv) in the  Borrower’s or any Guarantor’s jurisdiction of organization.  (l) Production Report and Lease Operating Statements. Concurrently with the  delivery of any Reserve Report pursuant to Section 8.11 hereunder, a report setting forth, for each  calendar month during the then current fiscal year to date through and including the last day of the  fiscal quarter for which financial statements are being delivered, the volume of production and  sales attributable to production (and the prices at which such sales were made and the revenues  derived from such sales) for each such calendar month from the Oil and Gas Properties, and setting  forth the related ad valorem, severance and production taxes and lease operating expenses  attributable thereto and incurred for each such calendar month.  (m) Notice of Debt Incurrence.  Written notice at least three (3) Business Days  prior to the incurrence of any Permitted Additional Debt, the amount thereof, the intended use of  proceeds thereof, the anticipated date of closing and available drafts of the offering memorandum  (if any) and any other material documents relating to such Permitted Additional Debt.  (n) Other Requested Information. Promptly following any request therefor,  such other information regarding the operations, business affairs and financial condition of the  Borrower, any other Loan Party or any Unrestricted Subsidiary (including any Plan and any reports  or other information required to be filed with respect thereto under the Code or 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.  Documents required to be delivered pursuant to Section 8.01(a), (b), (g) or (h) (to the extent any  such documents are included in materials otherwise filed with the SEC) may be delivered  electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which  

 

  98  such materials are publicly available as posted on the Electronic Data Gathering, Analysis and  Retrieval system (EDGAR); or (ii) on which such documents are posted on the Parent’s behalf on  an Internet or intranet website, if any, to which each Lender and the Administrative Agent have  access (whether a commercial, third-party website or whether made available by the  Administrative Agent); provided that (A) upon written request by the Administrative Agent (or  any Lender through the Administrative Agent) to the Borrower, the Borrower shall deliver paper  copies of such documents to the Administrative Agent or such Lender until a written request to  cease delivering paper copies is given by the Administrative Agent or such Lender and (B) the  Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail)  of the posting of any such documents and provide to the Administrative Agent by electronic mail  electronic versions (i.e., soft copies) of such documents.  The Administrative Agent shall have no  obligation to request the delivery of or to maintain paper copies of the documents referred to above,  and in any event shall have no responsibility to monitor compliance by the Borrower with any such  request by a Lender for delivery, and each Lender shall be solely responsible for timely accessing  posted documents or requesting delivery of paper copies of such document to it and maintaining  its copies of such documents.  Section 8.02 Notices of Material Events.  The Borrower will furnish to the  Administrative Agent (for provision to 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, any other Loan Party or any Unrestricted 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, if adversely determined, could reasonably be expected to result in a Material  Adverse Effect; and  (c) any other development that results in, or could reasonably be expected to  result in, a Material Adverse Effect.   Each notice delivered under this Section 8.02 shall be accompanied by a statement of a Responsible  Officer setting forth the details of the event or development requiring such notice and any action  taken or proposed to be taken with respect thereto.  Section 8.03 Existence; Conduct of Business.  The Borrower will, and will cause each  Loan Party 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 are 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 9.11.  

 

  99  Section 8.04 Payment of Obligations.  The Borrower will, and will cause each of the  other Loan Parties to, pay its material Tax liabilities 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 Loan Party has set aside on its books adequate  reserves with respect thereto in accordance with GAAP and (c) the failure to make payment  pending such contest could not reasonably be expected to result in a Material Adverse Effect or  result in the seizure or levy of any Property of the Borrower or any other Loan Party.  Section 8.05 Operation and Maintenance of Properties.  The Borrower, at its own  expense, will, and will cause each Loan Party 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 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) except due to a Casualty Event, keep and maintain all Property material to  the conduct of its business in good working order and condition, ordinary wear and tear excepted,  and preserve, maintain and keep in good repair, working order and efficiency (ordinary wear and  tear excepted) all of its material Oil and Gas Properties and other material Properties, including,  without limitation, all material equipment, machinery and facilities; and  (c) except where the failure to comply could not reasonably be expected to have  a Material Adverse Effect, promptly perform or make reasonable and customary efforts to cause  to be performed, in accordance with customary 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 Properties.   With respect to the Oil and Gas Properties referred to in this Section 8.05 that are operated  by any Person other than the Borrower or any other Loan Party, the Borrower or such Loan Party,  as applicable, shall use commercially reasonable efforts to cause the operator of such Oil and Gas  Properties to comply with this Section 8.05 with respect to the Oil and Gas Properties operated by  it.  Section 8.06 Insurance.  The Borrower will, and will cause each Loan Party to, maintain,  with financially sound and reputable insurance companies, insurance in such amounts and against  such risks as are customarily maintained by companies engaged in the same or similar businesses  operating in the same or similar locations. The loss payable clauses or provisions in said insurance  policy or policies insuring any of the Collateral shall be endorsed in favor of and made payable to  the Administrative Agent as its interests may appear and such policies shall contain an  endorsement naming the Administrative Agent and the Lenders as “additional insureds” and  

 

  100  provide that the insurer will endeavor to give at least 30 days prior notice of any cancellation to  the Administrative Agent.  Section 8.07 Books and Records; Inspection Rights.  The Borrower will, and will cause  each Loan Party to, keep proper books of record and account in which full, true and correct entries  in conformity with GAAP are made of all dealings and transactions in relation to its business and  activities. At any reasonable time and from time to time, upon reasonable notice, the Borrower  shall permit the Administrative Agent and shall cause each Loan Party to permit the Administrative  Agent to, examine and copy the books and records of such Loan Party, to visit and inspect the  Property of such Loan Party, and to discuss the business operations and Property of such Loan  Party with the officers and directors thereof; provided that, so long as no Event of Default shall  have occurred and be continuing, the Loan Parties shall not be responsible for the costs of more  than one inspection visit per calendar year. Notwithstanding the foregoing, no Loan Party will be  required to disclose, discuss, permit the inspection, examination or making copies or abstracts of,  or discussion of, any document, information or other matter (i) in respect of which disclosure to  the Administrative Agent or any Lender (or their respective agents and contractors) is prohibited  by applicable law or confidentiality restrictions imposed by agreements with third parties or (ii)  that is subject to attorney-client or similar privilege or constitutes attorney work product.  Section 8.08 Compliance with Laws.  The Borrower will, and will cause each Loan Party  to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable  to it or its Property, except (other than with respect to Anti-Corruption Laws, applicable AML  Laws and applicable Sanctions) where the failure to do so, individually or in the aggregate, could  not reasonably be expected to result in a Material Adverse Effect.  The Borrower will maintain in  effect and enforce policies and procedures designed to ensure compliance by the Loan Parties and  their respective directors, officers, employees and agents with Anti-Corruption Laws, applicable  AML Laws and applicable Sanctions.  Section 8.09 Environmental Matters.   (a) The Borrower shall, without cost or expense to the Administrative Agent,  the Issuing Bank or the Lenders: (i) comply, and shall cause its Properties and operations and each  Loan Party and each Unrestricted Subsidiary and each Loan Party’s and each Unrestricted  Subsidiary’s Properties and operations to comply, with all applicable Environmental Laws, the  breach of which could be reasonably expected to have a Material Adverse Effect; (ii) not Release  or threaten to Release, and shall cause each Loan Party and each Unrestricted Subsidiary not to  Release or threaten to Release, any Hazardous Material on, under, about or from any of the Loan  Parties’ or any of the Unrestricted Subsidiaries’ Properties or any other property offsite the  Property to the extent caused by the Loan Parties’ operations except in compliance with applicable  Environmental Laws, the Release or threatened Release of which could reasonably be expected to  have a Material Adverse Effect; (iii) timely obtain or file, and shall cause each Loan Party and  each Unrestricted Subsidiary to timely obtain or file, all Environmental Permits, if any, required  under applicable Environmental Laws to be obtained or filed in connection with the operation or  use of the Loan Parties’ and each Unrestricted 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 Loan Party and each Unrestricted  Subsidiary to promptly commence and diligently prosecute to completion, any assessment,  

 

  101  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 Release or threatened  Release of any Hazardous Material on, under, about or from any of the Loan Parties’ or any of the  Unrestricted Subsidiaries’ Properties, which failure to commence and diligently prosecute to  completion could reasonably be expected to have a Material Adverse Effect; (v) conduct, and cause  the other Loan Parties and each Unrestricted Subsidiary to conduct, their respective operations and  businesses in a manner that will not expose any Property or Person to Hazardous Materials that  could reasonably be expected to form the basis for a claim for damages or compensation (to the  extent not fully covered by insurance (other than normal deductibles)) that could reasonably be  expected to exceed $20,000,000 individually or in the aggregate; and (vi) establish and implement,  and shall cause each Loan Party and each Unrestricted Subsidiary to establish and implement, such  procedures as may be necessary to continuously determine and assure that the Loan Parties’  obligations under this Section 8.09(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 thereof, 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 Person against the Borrower, any other Loan Party or any Unrestricted Subsidiary  or their respective Properties of which the Borrower has knowledge in connection with any  Environmental Laws if the Borrower could reasonably anticipate 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 8.10 Further Assurances.   (a) The Borrower at its sole expense will, and will cause each Loan Party to,  promptly execute and deliver to the Administrative Agent all such other documents, agreements  and instruments reasonably requested by the Administrative Agent to comply with, cure any  defects or accomplish the conditions precedent, covenants and agreements of the Borrower or any  other Loan Party, as the case may be, in the Loan Documents, including the Notes, or to further  evidence and more fully describe the collateral intended as security for the Obligations, 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.  The Borrower acknowledges and agrees that any  

 

  102  financing statement may describe the Collateral as “all assets” of the applicable Borrower or  Guarantor or words of similar effect as may be required by the Administrative Agent.  Section 8.11 Reserve Reports.   (a) On or before April 1st and October 1st of each year, commencing October  1, 2021, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report  evaluating the Oil and Gas Properties of the Loan Parties as of the immediately preceding  January 1st and July 1st, respectively. The Reserve Report as of January 1 of each year shall be  prepared by one or more Approved Petroleum Engineers, and the July 1 Reserve Report of each  year shall be prepared by or under the supervision of the chief engineer of the Borrower who shall  certify such Reserve Report to be true and accurate in all material respects and to have been  prepared in accordance with the procedures used in the immediately preceding January 1 Reserve  Report (or, in the case of the October 1, 2021 Reserve Report, the Initial Reserve Report).  (b) In the event of an Interim Redetermination, the Borrower shall furnish to  the Administrative Agent and the Lenders a Reserve Report prepared by or under the supervision  of the chief engineer of the Borrower who shall certify such Reserve Report to be true and accurate  and to have been prepared in accordance with the procedures used in the immediately preceding  January 1 Reserve Report in all material respects. For any Interim Redetermination requested by  the Administrative Agent or the Borrower pursuant to Section 2.07(c), the Borrower shall provide  such Reserve Report with an “as of” date as required by the Administrative Agent as soon as  possible, but in any event no later than thirty (30) days following the receipt of such request.  (c) With the delivery of each Reserve Report, the Borrower shall provide to the  Administrative Agent and the Lenders a certificate from a Responsible Officer certifying that in  all material respects: (i) the information contained in the Reserve Report and any other information  delivered in connection therewith is true and correct in all material respects, (ii) the Loan Parties  own good and defensible title to the Oil and Gas Properties evaluated in such Reserve Report and  such Properties are free of all Liens except for Liens permitted by Section 9.03, (iii) except as set  forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other  prepayments in excess of the volume specified in Section 7.18 with respect to its Oil and Gas  Properties evaluated in such Reserve Report which would require the Borrower or any other Loan  Party to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at  some future time without then or thereafter receiving full payment therefor, (iv) none of their Oil  and Gas Properties have been sold (other than Hydrocarbons sold in the ordinary course of  business) since the date of the last Borrowing Base determination except as set forth on an exhibit  to the certificate, which certificate shall list all of its Oil and Gas Properties sold (other than  Hydrocarbons sold in the ordinary course of business) and in such detail as required by the  Administrative Agent, and (v) attached thereto is a schedule of the Oil and Gas Properties  evaluated by such Reserve Report that are Mortgaged Properties and demonstrating that the total  value of such Mortgaged Properties as a percentage of the total value of the total proved Oil and  Gas Properties evaluated in such Reserve Report is in compliance with Section 8.13(a).  

 

  103  Section 8.12 Title Information.  (a) On or before the delivery to the Administrative Agent and the Lenders of  each Reserve Report required by Section 8.11(a), the Borrower will deliver title information in  form and substance acceptable to the Administrative Agent covering enough of the Oil and Gas  Properties evaluated by such Reserve Report that were not included in the immediately preceding  Reserve Report, so that the Administrative Agent shall have received together with title  information previously delivered to the Administrative Agent, title information reasonably  satisfactory to the Administrative Agent on at least 90% of the total value of the proved Oil and  Gas Properties evaluated by such Reserve Report.  (b) If the Borrower has provided title information for additional Properties  under Section 8.12(a), the Borrower shall, within sixty (60) days of notice from the Administrative  Agent that title defects or exceptions exist with respect to such additional Properties, either (i) cure  any such title defects or exceptions (including defects or exceptions as to priority) which are not  permitted by Section 9.03 raised by such information, (ii) substitute acceptable Mortgaged  Properties with no title defects or exceptions (provided that Excepted Liens of the type described  in clauses (a) through (d) and clause (f) of the definition thereof may exist, but subject to the  provisos at the end of such definition) having an equivalent value or (iii) deliver title information  in form and substance reasonably acceptable to the Administrative Agent so that the  Administrative Agent shall have received, together with title information previously delivered to  the Administrative Agent, title information reasonably satisfactory to the Administrative Agent on  at least 90% of the total value of the proved Oil and Gas Properties evaluated by such Reserve  Report.  (c) If the Borrower is unable to cure any title defect requested by the  Administrative Agent or the Lenders to be cured within the 60-day period or the Borrower does  not comply with the requirements to provide reasonably acceptable title information covering 90%  of the total value of the proved Oil and Gas Properties evaluated in the most recent Reserve Report,  such default shall not be a Default, but instead the Administrative Agent and/or the Required  Lenders shall have the right to exercise the following remedy in their sole discretion from time to  time, and any failure to so exercise this remedy at any time shall not be a waiver as to future  exercise of the remedy by the Administrative Agent or the Lenders.  To the extent that the  Administrative Agent or the Required Lenders are not reasonably satisfied with title to any  Mortgaged Property after the 60-day period has elapsed, such unacceptable Mortgaged Property  shall not count towards the 90% requirement, and the Administrative Agent may send a notice to  the Borrower and the Lenders that the then outstanding Borrowing Base shall be reduced by an  amount as determined by the Required Lenders to cause the Borrower to be in compliance with  the requirement to provide reasonably acceptable title information on 90% of the total value of the  proved Oil and Gas Properties. This new Borrowing Base shall become effective immediately after  receipt of such notice.  Section 8.13 Additional Collateral; Additional Guarantors.   (a) In connection with each redetermination of the Borrowing Base, the  Borrower shall review the Reserve Report and the list of current Mortgaged Properties (as  described in Section 8.11(c)(v)) to ascertain whether the Mortgaged Properties represent at least  

 

  104  90% of the total value of the proved Oil and Gas Properties evaluated in the most recently  completed Reserve Report after giving effect to exploration and production activities, acquisitions,  Dispositions and production.  In the event that the Mortgaged Properties do not represent at least  90% of such value, then the Borrower shall, and shall cause the other Loan Parties to, grant, within  sixty (60) days of delivery of the certificate required under Section 8.11(c), to the Administrative  Agent as security for the Obligations a first-priority Lien (provided that Excepted Liens of the type  described in clauses (a) through (d) and clause (f) of the definition thereof may exist, but subject  to the provisos at the end of such definition) on additional Oil and Gas Properties not already  subject to a Lien of the Security Instruments such that after giving effect thereto, the Mortgaged  Properties will represent at least 90% of such value. All such Liens will be created and perfected  by and in accordance with the provisions of deeds of trust, mortgages, security agreements and  financing statements or other Security Instruments, all in form and substance reasonably  satisfactory to the Administrative Agent and in sufficient executed (and acknowledged where  necessary or appropriate) counterparts for recording purposes. In order to comply with the  foregoing, if any other Loan Party places a Lien on its Oil and Gas Properties pursuant to this  Section 8.13(a) and such Loan Party is not a Guarantor, then it shall become a Guarantor and  comply with Section 8.13(b).   (b) If (i) the Parent creates or acquires Intermediate Holdco or the Borrower or  any other Subsidiary creates or acquires any other Restricted Subsidiary that has not been  designated an Unrestricted Subsidiary pursuant to Section 9.23(b), or if an Unrestricted Subsidiary  is designated as a Restricted Subsidiary pursuant to Section 9.23(c) then, no later than thirty (30)  days after the date of creation, acquisition or designation thereof, as the case may be (or such later  date as the Administrative Agent may agree in its sole discretion):  (A) cause such Person to  become a Guarantor by executing and delivering to the Administrative Agent a duly executed copy  of or, or supplement to, the Guaranty Agreement and the Pledge and Security Agreement (or such  other document as the Administrative Agent shall deem appropriate for such purpose), (B) pledge  all of the Equity Interests of such Person (including, without limitation, delivery of original stock  certificates evidencing the Equity Interests of such Loan Party (if any), together with an  appropriate undated stock power for each certificate duly executed in blank by the registered owner  thereof, if applicable) and (C) execute and deliver such other additional closing documents,  certificates and legal opinions as shall reasonably be requested by the Administrative Agent.  Section 8.14 ERISA Event.  The Borrower will promptly furnish and will cause the other  Loan Parties and Unrestricted Subsidiaries to promptly furnish to the Administrative Agent upon  becoming aware of the occurrence of any ERISA Event specifying the nature thereof, what action  the Borrower, such other Loan Party or such Unrestricted Subsidiary or the ERISA Affiliate is  taking or proposes to take with respect thereto.  Section 8.15 Marketing Activities.  The Borrower will not, and will not permit any of the  other Loan Parties to, engage in marketing activities for any Hydrocarbons or enter into any  contracts related thereto other than (a) 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, (b) 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 Loan Parties that the Borrower or any other Loan  Party has the right to market pursuant to joint operating agreements, unitization agreements or  

 

  105  other similar contracts that are usual and customary in the oil and gas business and (c) other  contracts for the purchase and/or sale of Hydrocarbons of third parties (i) which have generally  offsetting provisions (i.e., corresponding pricing mechanics, delivery dates and points and  volumes) such that no “position” is taken and (ii) for which appropriate credit support has been  taken to alleviate the material credit risks of the counterparty thereto.  Section 8.16 Accounts.   (a) The Borrower shall, and shall cause each Guarantor to, cause each of its  Deposit Accounts, Commodity Accounts and Securities Accounts at all times to be subject to a  Control Agreement; provided that (a) no such Control Agreement shall be required for any  Excluded Account and (b) with respect to Deposit Accounts, Commodity Accounts and Securities  Accounts maintained by the Borrower and the Guarantors as of the Effective Date, the Borrower  and the Guarantors shall have until the date that is forty-five (45) days after the Effective Date (as  such date may be extended by the Administrative Agent in its reasonable discretion) (such 45-day  period after the Effective Date with any such extensions, the “Transition Period”) to deliver  Control Agreements covering such accounts (such date, the “Control Agreement Delivery Date”).  (b) From and after the Control Agreement Delivery Date, the Borrower shall,  and shall cause each Loan Party to, maintain, other than Excluded Accounts, (i) all Deposit  Accounts and Commodity Accounts with the Administrative Agent or an Affiliate thereof (subject  to exceptions for Deposit Accounts and Commodity Accounts held with other Lenders and  Affiliates thereof; provided that (A) the Administrative Agent shall have received notice from the  Borrower that such Deposit Account or Commodity Account has been opened with a Lender or  Affiliate thereof and (B) such exceptions shall only apply to this Section 8.16(b) and shall remain  subject at all times to Section 8.16(a)) and (ii) all Securities Accounts with a Lender or an Affiliate  thereof.  Section 8.17 Minimum Hedging.  Commencing from and after March 31, 2022, the  Borrower shall maintain Hedge Agreements (other than three-way collars) with one or more  Approved Counterparties hedging minimum notional volumes of (i) at least 75% of the reasonably  projected production of crude oil from Oil and Gas Properties classified as “proved developed  producing” in the Reserve Report most recently delivered to the Administrative Agent, for each  full calendar month during the period from and including the first full calendar month following  each Minimum Hedging Requirement Date (as hereinafter defined) through and including the 24th  full calendar month following each such Minimum Hedging Requirement Date and (ii) at least  50% of the reasonably projected production of crude oil from Oil and Gas Properties classified as  “proved developed producing” in the Reserve Report most recently delivered to the Administrative  Agent, for each full calendar month during the period from and including the 25th full calendar  month following each such Minimum Hedging Requirement Date through and including the 36th  full calendar month following each such Minimum Hedging Requirement Date; provided that,  notwithstanding the foregoing, until the Minimum Hedging Requirement Date occurring on  October 1, 2022, Borrower shall not be required to maintain any Hedge Agreements pursuant to  this Section 8.17 for any full calendar month from and after January 1, 2025; provided further, that  in the case of each of the foregoing clauses (i) and (ii), the notional volumes hedged under such  Hedge Agreements shall be deemed reduced by the notional volumes of any short puts or other  similar derivatives having the effect of exposing the Borrower or any other Loan Party to  

 

  106  commodity price risk below the “floor” created by such Hedge Agreements of the Loan Parties for  each applicable calendar month. On or prior to the date each Reserve Report (other than the Initial  Reserve Report) is required to be delivered by the Borrower pursuant to Section 8.11(a) (each, a  “Minimum Hedging Requirement Date”), the Borrower shall deliver evidence in form and  substance satisfactory to the Administrative Agent that it has entered into Hedge Agreements to  be in compliance with this Section 8.17 as of such Minimum Hedging Requirement Date.  Section 8.18 Consolidated Cash Balance Information.  On each Excess Cash  Measurement Date (or on the Business Day immediately following such Excess Cash  Measurement Date), the Borrower shall provide to the Administrative Agent a certificate of a  Financial Officer in substantially the form of Exhibit H, certifying as to the amount of the  Consolidated Cash Balance and the amount of Excess Cash, if any, as of such Excess Cash  Measurement Date, and attaching thereto, summary and balance statements, in a form reasonably  acceptable to the Administrative Agent, for each Deposit Account, Commodity Account,  Securities Account, or other account in which any Consolidated Cash Balance is held credited or  carried.  Section 8.19 Post-Closing Required Hedging.  No later than September 25, 2021 (or such  later date as the Administrative Agent may agree in its reasonable discretion), the Administrative  Agent shall have received satisfactory evidence that the Loan Parties have entered into Hedge  Agreements (other than three-way collars) with one or more Approved Counterparties hedging  minimum notional volumes of (i) at least 75% of the reasonably projected production of crude oil  from Oil and Gas Properties classified as “proved developed producing” in the Initial Reserve  Report for each full calendar month during the period from and including the Effective Date  through and including the 24th full calendar month following the Effective Date and (ii) at least  50% of the reasonably projected production of crude oil from Oil and Gas Properties classified as  “proved developed producing” in the Initial Reserve Report, for each full calendar month during  the period from and including the 25th full calendar month following the Effective Date through  and including the 36th full calendar month following the Effective Date, in the case of each of  clauses (i) and (ii), at prices acceptable to the Administrative Agent.  Section 8.20 Unrestricted Subsidiaries.  The Borrower:  (a) will cause the management, business and affairs of each of the Loan Parties  to be conducted in such a manner (including, without limitation, by keeping separate books of  account, furnishing separate financial statements of Unrestricted Subsidiaries to creditors and  potential creditors thereof and by not permitting Properties of the Loan Parties to be commingled)  so that each Unrestricted Subsidiary that is a corporation will be treated as a corporate entity  separate and distinct from the Loan Parties;  (b) will not, and will not permit any of the Loan Parties to, incur, assume,  guarantee or be or become liable for any Debt of any of the Unrestricted Subsidiaries except  pursuant to Investments permitted by Section 9.05(n); and  (c) will not permit any Unrestricted Subsidiary to hold any Equity Interest in,  or any Debt of, any Loan Party.  

 

  107  ARTICLE IX  NEGATIVE COVENANTS  Until the Commitments have expired or terminated and the principal of and interest on each  Loan and all fees payable hereunder and all other amounts payable under the Loan Documents  have been paid in full and all Letters of Credit have expired or terminated, or arrangements  otherwise satisfactory to the applicable Issuing Bank in respect thereof have been made, in each  case, without any pending draw, and all LC Disbursements shall have been reimbursed, the  Borrower covenants and agrees with the Lenders that:  Section 9.01 Financial Covenants.  (a) Ratio of Total Debt to EBITDAX.  The Parent will not permit, as of the last  day of any fiscal quarter, commencing with the fiscal quarter ending September 30, 2021, the ratio  of (A) Total Debt as of such day to (B) EBITDAX for the period of four fiscal quarters ending on  such day (the “Leverage Ratio”) to be greater than 3.00 to 1.00.  (b) Current Ratio. The Parent will not permit, as of the last day of any fiscal  quarter, commencing with the fiscal quarter ending September 30, 2021, its ratio of (i) consolidated  current assets (including the unused amount of the total Commitments then available to be  borrowed, but excluding (x) non-cash assets under FASB ASC 815 and (y) any assets of any  Unrestricted Subsidiary) to (ii) consolidated current liabilities (excluding (x) non-cash obligations  under FASB ASC 410 and 815, (y) current maturities under this Agreement and (z) any liabilities  of any Unrestricted Subsidiary) to be less than 1.00 to 1.00.  Section 9.02 Debt.  The Borrower will not, and will not permit any other Loan Party to,  incur, create, assume or suffer to exist any Debt, except:  (a) the Obligations arising under the Loan Documents or any guarantee of or  suretyship arrangement for the Obligations arising under the Loan Documents;  (b) Debt incurred to finance the acquisition, construction or improvement of  any fixed or capital assets (whether or not constituting purchase money Debt), including  obligations in respect of Capital Leases or Synthetic Leases and any Debt assumed in connection  with the acquisition of any such assets or secured by a Lien on any such assets prior to the  acquisition thereof, and extensions, renewals and replacements of any such Debt that do not  increase the outstanding principal amount thereof; provided that (i) such Debt is incurred prior to  or within 120 days after such acquisition or the completion of such construction or improvement  and (ii) the aggregate principal amount of Debt permitted by this Section 9.02(b) shall not exceed,  at the time of the incurrence thereof 2% of Consolidated Net Tangible Assets at any time  outstanding;  (c) Debt consisting of obligations under performance bonds, bid bonds, appeal  bonds and sureties or bonds and similar obligations provided to any Governmental Authority or  other Person and assuring payment of contingent liabilities of a Loan Party (i) in connection with  the operation of its Oil and Gas Properties, including with respect to plugging, facility removal  and abandonment of its Oil and Gas Properties, or (ii) otherwise in the ordinary course of business;  

 

  108  (d) intercompany Debt between the Borrower and any Guarantor  or between  Guarantors to the extent permitted by Section 9.05(g); provided that (1) such Debt is not held,  assigned, transferred, negotiated or pledged to any Person other than the Borrower or one of the  Guarantors and (2) any such Debt owed by either the Borrower or a Guarantor shall be  subordinated to the Obligations on terms set forth in the Guaranty Agreement;  (e) endorsements of negotiable instruments for collection in the ordinary course  of business;   (f) Indebtedness owed to insurance companies for premiums on policies  required by the Loan Documents.  (g) Debt (i) consisting of liabilities incurred in the ordinary course of business  under workers’ compensation claims required by Governmental Authority or by third parties in  the ordinary course of business, and (ii) in respect of health, disability or other employee benefits  or property, casualty or liability insurance, in each case of the foregoing clauses (i) and (ii), (A)  pursuant to customary reimbursement or indemnification obligations to such Person, and  (B) which Debt is incurred in the ordinary course of business;  (h) (A) the Existing Permitted Additional Debt existing on the Effective Date  and (B) other unsecured senior notes or unsecured senior subordinated notes of the Borrower, and  any guarantees thereof in an aggregate principal amount for the foregoing clause (A) and (B)  not  to exceed $700,000,000 at any time outstanding; provided that (i) immediately after giving effect  to the incurrence of any such Debt and the use of proceeds thereof, on a pro forma basis, the  Leverage Ratio shall not exceed 2.50 to 1.00 (as the Leverage Ratio is recomputed on such date  using (A) Total Debt outstanding on such date and (B) EBITDAX for the four fiscal quarters  ending on the last day of the fiscal quarter immediately preceding such date for which financial  statements are available); provided that this Section 9.02(h)(i) shall not apply to the incurrence of  any Debt that constitutes a refinancing of other Debt incurred pursuant to this Section 9.02(h) to  the extent that the aggregate principal amount of such refinancing Debt does not exceed the sum  of (x) the original principal amount of the refinanced Debt and (y) an amount necessary to pay any  fees and expenses, including make-whole payments and premiums, related to such refinancing);  (ii) both before and immediately after giving effect to the incurrence of such Debt and the use of  proceeds thereof, no Default or Event of Default has occurred and is continuing or would result  therefrom; (iii) such Debt does not have any scheduled principal amortization; (iv) such Debt does  not have a scheduled maturity date or a date of mandatory Redemption in full sooner than the date  which is 91 days after the Maturity Date; (v) such Debt does not have any mandatory Redemption,  tender or sinking fund provisions (other than (A) customary change of control tender offer  provisions and (B) customary asset sale tender offer provisions; provided that the terms of such  Debt do not restrict the payment of any Borrowing Base Deficiency); (vi) no Loan Party or other  Person guarantees such Debt unless such Loan Party or other Person has guaranteed the  Obligations pursuant to this Agreement or the Guaranty Agreement; (vii) the terms of such Debt  and any guarantees thereof:  (A) are not more restrictive, taken as a whole, on the Loan Parties  than the terms of this Agreement and the other Loan Documents (other than with respect to any  applicable redemption or prepayment premiums, call protections, funding discounts, fees, interest,  and other economic terms), (B) are prevailing market terms for issuers of similar size and credit  quality given the then prevailing market conditions as reasonably determined by the Borrower and  

 

  109  (C) do not require the maintenance or achievement of any financial performance standards or ratios  other than as a condition to taking specified actions; (viii) if such Debt is senior subordinated Debt,  such Debt is expressly subordinate to the payment in full of all of the Obligations on terms and  conditions reasonably satisfactory to the Administrative Agent; (ix) the Borrower shall have  complied with Section 8.01(m); and (x) the Borrowing Base shall be reduced to the extent required  by Section 2.07(f);   (i) other unsecured Debt not otherwise permitted under the preceding  provisions of this Section 9.02; provided that the aggregate principal amount thereof shall not  exceed $15,000,000 at any time;  (j) Debt of any Person that becomes a Loan Party after the date  hereof; provided that (i) such Debt exists at the time such Person becomes a Loan Party and is not  created in contemplation of or in connection with such Person becoming a Loan Party, (ii) the  aggregate principal amount of Debt permitted by this Section 9.02(j) shall not exceed an amount  equal to (measured at the time such Person becomes a Loan Party) two percent (2%) of  Consolidated Net Tangible Assets at any time outstanding, and (iii) such Debt does not consist of  indebtedness for borrowed money (including bonds, debentures, indentures, term loans, and credit  facilities);  (k) without duplication, guarantees of Debt otherwise permitted under this  Section 9.02;  (l) 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 or in respect of cash management services provided by a bank or other financial  institution, each in the ordinary course of business, provided that such Debt is extinguished within  five (5) Business Days of incurrence;   (m) Debt existing on the Effective Date and set forth in Schedule 9.02 including  extensions, replacements and refinancings thereof which do not increase the principal amount  (excluding increases resulting from the rolling into such refinanced, extended or replaced principal  of any accrued, unpaid interest and any expenses or premium incurred in connection with any such  extension, replacement or refinancing and including prepayment and make whole premiums) of  such Debt as of the date of such extension or refinancing;  (n) Until May 31, 2022, Debt under the Existing Letters of Credit; and  (o) During the Transition Period, Debt which is unsecured (other than as  secured by Liens permitted pursuant to Section 9.03(i)) and outstanding under corporate credit  cards and amounts for which the Loan Parties have issued checks or have initiated wires or ACH  transfers, in each case, to pay expenditures of any Loan Party incurred in the ordinary course of  business before or during the Transition Period.  Section 9.03 Liens.  The Borrower will not, and will not permit any other Loan Party to,  create, incur, assume or permit to exist any Lien on any of its Properties (now owned or hereafter  acquired), except:  

 

  110  (a) Liens securing the payment of any Obligations;  (b) (i) Excepted Liens and (ii) Liens existing on the Effective Date and set forth  on Schedule 9.03 and continuations thereof which do not encumber more Property than such Liens  existing on the Effective Date;   (c) Liens securing Debt permitted by Section 9.02(b) but only on the Property  purchased or improved with such Debt or under lease and proceeds thereof;   (d) Liens on Property other than Oil and Gas Properties; provided that the  aggregate principal or face amount of all Debt or other obligations secured under this Section  9.03(d) shall not exceed $2,500,000 at any time;  (e) (x) Customary contractual rights of set-off and netting arrangements set  forth in Hedge Agreements and (y) Liens on cash or Cash Equivalents which does not exceed  $5,000,000 in the aggregate at any given time for the posting of collateral or margin to secure the  obligations of any Loan Party under any Other Hedge Agreements;  (f) any Lien existing on any Property (other than Oil and Gas Properties  consisting of proved reserves) of any Person prior to the acquisition thereof by a Loan Party or  existing on any Property of any Person that becomes a Loan Party after the date hereof prior to the  time such Person becomes, or is designated as, a Loan Party; provided that (i) such Lien secures  Debt that would otherwise be permitted by Section 9.02(j), (ii) such Lien is not an “all assets” or  blanket Lien and is not created in contemplation of or in connection with such acquisition or such  Person becoming a Restricted Subsidiary, as the case may be, (iii) such Lien shall not apply to any  other Property of a Loan Party or any other Restricted Subsidiary and (iv) such Lien shall secure  only those obligations which it secures on the date of such acquisition or the date such Person  becomes a Restricted Subsidiary, as the case may be;  (g) Liens granted by any Loan Party on its rights under any insurance policy in  the ordinary course of business, but only to the extent that such Lien is granted to the insurers  under such insurance policies or any insurance premium finance company to secure payment of  the premiums and other amounts owed to the insurers or such premium finance company with  respect to such insurance policy;  (h) Liens on cash and Cash Equivalents securing Debt permitted pursuant to  Section 9.02(n) in an aggregate amount not to exceed $7,385,546.70;  (i) Liens on Equity Interests of any Unrestricted Subsidiary (other than  Designated Basic NewCo) securing the payment of Debt of such Unrestricted Subsidiary that is  otherwise Non-Recourse to the Loan Parties; and  (j) During the Transition Period, Liens on cash and Cash Equivalents in the  Wells Fargo Accounts in an aggregate amount not to exceed $10,000,000 securing amounts  outstanding on corporate credit cards and amounts for which the Loan Parties have issued checks  or have initiated wires or ACH transfers, in each case, to pay expenditures of any Loan Party  incurred in the ordinary course of business before or during the Transition Period.  

 

  111  Section 9.04 Restricted Payments.  The Borrower will not, and will not permit any other  Loan Party to, declare or make, or agree to pay or make, directly or indirectly, any Restricted  Payment, return any capital to its Equity Interest holders or make any distribution of its Property  to its Equity Interest holders, except:  (a) the Borrower, the Parent and Intermediate HoldCo may declare and pay  dividends with respect to its Equity Interests payable solely in additional shares of its Equity  Interests (other than Disqualified Capital Stock);   (b) Subsidiaries may declare and pay dividends with respect to their Equity  Interests to the Borrower or any other Guarantor;   (c) the Borrower may declare and pay dividends ratably with respect to its  Equity Interests to Intermediate HoldCo, the Parent or any other Guarantor;  (d) Intermediate HoldCo may declare and pay dividends ratably with respect to  its Equity Interests to the Parent or any other Guarantor;  (e) the Borrower (and Intermediate Holdco, if applicable) may make cash  distributions to the Parent, and the Parent may make Restricted Payments to the holders of its  Equity Interests:  (X) within 60 days after the declaration or announcement of such Restricted  Payment (or, if no such declaration or announcement is made, on the date of making  such Restricted Payment) in an aggregate amount not to exceed 100% of Free Cash  Flow for the fiscal quarter most recently ended prior to the date of such declaration  or announcement (or, if no such declaration or announcement is made, on the date  of making such Restricted Payments), so long as both immediately before, and  immediately after giving effect to, any such Restricted Payment, (i) no Default or  Event of Default exists or would exist, (ii) the unused portion of the Commitments  is greater than 20% of the total Commitments, (iii) the Leverage Ratio is less than  or equal to 2.00 to 1.00 (on a pro forma basis as the Leverage Ratio is recomputed  on the date of such declaration or announcement (or, if no such declaration or  announcement is made, on the date of making such Restricted Payments) using (A)  Total Debt outstanding on such date and (B) EBITDAX for the four fiscal quarters  ending on the last day of the fiscal quarter immediately preceding such date for  which financial statements are available) and (iv) the Administrative Agent shall  have received a certificate of a Financial Officer, setting forth reasonably detailed  calculations of Free Cash Flow for the immediately preceding fiscal quarter for  which financial statements have been delivered pursuant to Section 8.01(a) or  Section 8.01(b), as applicable, which shall be in substantially the form of Exhibit I  hereto; and  (Y) within 60 days after the declaration or announcement of such Restricted  Payments (or, if no such declaration or announcement is made, on the date of  making such Restricted Payments), so long as both immediately before, and  immediately after giving effect to, any such distribution, (i) no Default or Event of  

 

  112  Default exists or would exist, (ii) the unused portion of the Commitments is greater  than 75% of the total Commitments, and (iii) the Leverage Ratio is less than or  equal to 1.50 to 1.00 (as calculated on the date of such declaration or announcement  (or, if no such declaration or announcement is made, on the date of making such  Restricted Payments) using (A) Total Debt outstanding on such date and (B)  EBITDAX as of the most recent fiscal quarter end for which financial statements  have been delivered to the Administrative Agent pursuant to Section 8.01(a) or  Section 8.01(b), as applicable, for the quarter ending (1) March 31, 2022, multiplied  by four, (2) June 30, 2022, multiplied by two, (3) September 30, 2022, multiplied  by one and one-third, and (4) thereafter, EBITDAX for the four fiscal quarters  ending on the last day of the fiscal quarter immediately preceding such date);  (f) the Parent, the Borrower and its Restricted Subsidiaries may redeem,  acquire, retire or repurchase, for cash, shares of Equity Interests (other than Disqualified Capital  Stock) of the Parent, the Borrower held by any present or former officer, manager, director or  employee of the Parent, the Borrower or any of its Restricted Subsidiaries upon the death,  disability, retirement or termination of employment of any such Person or otherwise make  Restricted Payments to such employees, directors, officers or managers in accordance with any  equity option or equity appreciation rights plan, any management, director and/or employee equity  ownership, benefit or incentive plan or agreement, equity subscription plan, employment  termination agreement or any other employment agreements or equity holders’ agreement, so long  as all such Restricted Payments do not exceed $1,000,000 in the aggregate in any fiscal year;   (g) Transfers made by and among the Parent, the Intermediate Holdco (if  applicable) and the other Loan Parties pursuant to the operation of a consolidated cash management  system in the ordinary course of business;  (h) so long as no Default or Event of Default shall have occurred and be  continuing, the Borrower (and Intermediate Holdco, if applicable) may make Restricted Payments  to the Intermediate Holdco and Parent, as the case may be, for the purpose of paying ordinary  course expenses of the Intermediate Holdco, if applicable, or the Parent related to their respective  activities permitted pursuant to Section 9.22 (including, without limitation, fees and expenses  reasonably necessary for public company reporting, stock exchange compliance, board  compensation and capital markets activities, including legal, accounting and tax advisory fees and  expenses)  (i) redemptions, purchases or other acquisitions of (A) Equity Interests issued  by to existing or former employees of a Loan Party in connection with satisfying federal or state  income tax obligations incurred in connection with the issuance or exercise of Equity Interests or  (B) Equity Interests in satisfaction of the exercise price for stock options in which the amounts  paid by a Loan Party consist of either Equity Interests of the Parent or nominal amounts for  fractional shares; and  (j) the Loan Parties may make (or make payments to Intermediate Holdco, if  applicable, for the purpose of making) cash payments in lieu of issuing fractional shares.  

 

  113  Section 9.05 Investments, Loans and Advances.  The Borrower and the Parent will not,  and will not permit any other Loan Party to, make or permit to remain outstanding any Investments  in or to any Person, except that the foregoing restriction shall not apply to:  (a) Investments made prior to the Effective Date that are disclosed on Schedule  9.05;  (b) accounts receivable arising in the ordinary course of business;  (c) Investments in cash or direct obligations of the United States or any agency  thereof, or obligations guaranteed by the United States or any agency thereof, in each case  maturing within one year from the date of creation thereof;  (d) commercial paper maturing within one year from the date of creation  thereof rated in the highest grade by S&P or Moody’s;  (e) deposits maturing within one year from the date of creation thereof with,  including certificates of deposit issued by, any Lender or any office located in the United States of  any other bank or trust company which is organized under the laws of the United States or any  state thereof, has capital, surplus and undivided profits aggregating at least $100,000,000 (as of  the date of such bank or trust company’s most recent financial reports) and has a short term deposit  rating of no lower than A2 or P2, as such rating is set forth from time to time, by S&P or Moody’s,  respectively;  (f) deposits in money market funds investing exclusively in Investments  described in Section 9.05(c), Section 9.05(d) or Section 9.05(e);  (g) Investments (i) made by the Borrower or any other Loan Party in any Person  that, prior to the making of such Investment is a Loan Party or (ii) made by any Loan Party in or  to the Borrower or any other Loan Party that, prior to such Investment, is a Loan Party;  (h) Investments (other than in Unrestricted Subsidiaries) so long as both before,  and immediately after giving effect to, any such Investment no Default or Event of Default exists  or would exist (i) (X) the consideration for which consists solely of Equity Interests (other than  Disqualified Capital Stock) of a Loan Party or warrants, options or other rights to purchase or  acquire such Equity Interests of a Loan Party (other than Disqualified Capital Stock) or (Y) with  up to 100% of the net cash proceeds from a substantially concurrent (within 60 days) sale of Equity  Interests (other than Disqualified Capital Stock) of a Loan Party or (ii) (A) the unused portion of  the Commitments is equal to or greater than 20% of the total Commitments and (B) the Leverage  Ratio is less than or equal to 2.00 to 1.00 (on a pro forma basis as the Leverage Ratio is recomputed  on such date using (1) Total Debt outstanding on such date and (2) EBITDAX for the four fiscal  quarters ending on the last day of the fiscal quarter immediately preceding such date for which  financial statements are available);  (i) subject to the limits in Section 9.06, Investments in direct ownership  interests in additional Oil and Gas Properties and gathering systems related thereto or related to  farm-out, farm-in, joint operating, joint venture or area of mutual interest agreements, gathering  systems, pipelines or other similar arrangements which are usual and customary in the oil and gas  

 

  114  exploration and production business located within the geographic boundaries of the United States  of America;  (j) loans or advances to employees, officers, or directors in the ordinary course  of business of the Borrower, in each case only as permitted by applicable law, including Section  402 of the Sarbanes Oxley Act of 2002, but in any event not to exceed $500,000 in the aggregate  at any time outstanding;  (k) Investments in stock, obligations or securities received in settlement of  debts arising from Investments permitted under this Section 9.05 owing to the Borrower or any  other Loan Party as a result of a bankruptcy or other insolvency proceeding of the obligor in respect  of such debts or upon the enforcement of any Lien in favor of the Borrower or any other Loan  Party;   (l) Investments in the form of trade credit to customers of a Loan Party arising  in the ordinary course of business and represented by accounts from such customers;  (m) other Investments (other than Investments in Unrestricted Subsidiaries) not  to exceed two percent (2%) of Consolidated Net Tangible Assets in the aggregate at any time  outstanding, measured at the time of incurrence thereof and without giving effect to subsequent  changes in value;   (n) other Investments not to exceed $2,000,000 in the aggregate at any time  outstanding (calculated using the original amount of each such Investment without giving effect  to subsequent changes in value); provided that any such Investment in Unrestricted Subsidiaries,  shall only be permitted so long as both before, and immediately after giving effect to, any such  Investment (i) no Default or Event of Default exists or would exist, (ii) the unused portion of the  Commitments is equal to or greater than 20% of the total Commitments and (iii) the Leverage  Ratio is less than or equal to 2.00 to 1.00 (on a pro forma basis as the Leverage Ratio is recomputed  on such date using (A) Total Debt outstanding on such date and (B) EBITDAX for the four fiscal  quarters ending on the last day of the fiscal quarter immediately preceding such date for which  financial statements are available);  (o) Investments received by the Loan Parties in connection with Dispositions  permitted by Section 9.12;  (p) guarantees of Debt permitted by Section 9.02;  (q) Hedge Agreements to the extent permitted under Section 9.18;   (r) (i) a one-time direct or indirect Investment in Designated Basic NewCo  made on or before December 31, 2021 in an aggregate amount not to exceed the purchase price  for the acquisition of Designated Basic NewCo, (ii) other direct or indirect Investments in  Designated Basic NewCo made on or before December 31, 2021 not to exceed $15,000,000.00 in  an aggregate amount at any time outstanding; provided that, in each case of clauses (i) and (ii)  above, any such Investment in Designated Basic NewCo shall only be permitted so long as both  before, and immediately after giving effect to, the making of such Investment (A) the Loan Parties  shall have Liquidity at least equal to the greater of (1) $200,000,000.00 and (2) the then-effective  

 

  115  Borrowing Base and (B) the Leverage Ratio is less than or equal to 2.25 to 1.00 (on a pro forma  basis as the Leverage Ratio is recomputed on such date using (1) Total Debt outstanding on such  date and (2) EBITDAX for the four fiscal quarters ending on the last day of the fiscal quarter  immediately preceding such date for which financial statements are available), (iii) other  Investments in Designated Basic NewCo to be used for working capital purposes made on or after  January 1, 2022 and on or before June 30, 2022 not to exceed $10,000,000.00 in an aggregate  amount at any time outstanding and (iv) other Investments in Designated Basic NewCo to be used  for working capital purposes made after June 30, 2022 not to exceed $5,000,000 in an aggregate  amount at any time outstanding, provided that, in each case of clauses (iii) and (iv), both before,  and immediately after giving effect to any such Investment, (1) no Default or Event of Default  exists or would exist and (2) no Borrowing Base Deficiency exists or would result therefrom;  (s) advances to suppliers or contractors in the ordinary course of business in  accordance with agreements customary in the oil and gas industry for oil and gas development  activities.   Section 9.06 Nature of Business; International Operations.  The Borrower will not, and  will not permit any other Loan Party to, allow any material change to be made in the character of  its business as an independent oil and gas exploration and production company.  The Borrower  will not, and will not permit any other Loan Party to, (a) acquire or make any other expenditure  (whether such expenditure is capital, operating or otherwise) in or related to, any Oil and Gas  Properties not located within the geographical boundaries of the United States of America or (b)  form or acquire any Foreign Subsidiaries.  Section 9.07 Limitation on Leases.  The Borrower will not, and will not permit any other  Loan Party to, create, incur, assume or suffer to exist any obligation for the payment of rent or hire  of Property of any kind whatsoever (real or personal but excluding Capital Leases, leases of  Hydrocarbon Interests and leases of drilling rigs), under leases or lease agreements which would  cause the aggregate amount of all payments made by the Borrower and the Loan Parties pursuant  to all such leases or lease agreements, including, without limitation, any residual payments at the  end of any lease, to exceed $5,000,000 in any period of twelve consecutive calendar months during  the life of such leases.  Section 9.08 Proceeds of Loans; OFAC.  The Borrower will not permit the proceeds of  the Loans or Letters of Credit to be used for any purpose other than those permitted by Section  7.21.  Neither the Borrower nor any Person acting on behalf of the Borrower has taken or will take  any action which might cause any of the Loan Documents to violate Regulations T, U or X or any  other regulation of the Federal Reserve 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 (for provision to 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 Federal Reserve Board, as the case may be.  The Borrower  will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall  procure that the other Loan Parties and the Unrestricted Subsidiaries and its or their respective  directors, officers, employees, Affiliates and agents shall not use, directly or indirectly, the  proceeds of any Borrowing or Letter of Credit, or lend, contribute, or otherwise make available  

 

  116  such proceeds to any other Loan Party, any Unrestricted Subsidiary, any other Affiliate, joint  venture partner or other Person (A) in furtherance of an offer, payment, promise to pay, or  authorization of the payment or giving of money, or anything else of value, to any Person in  violation of any Anti-Corruption Laws or AML Laws, (B) for the purpose of funding, financing  or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any  Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions,  or (C) in any manner that would result in the violation of any applicable to any party hereto.  Section 9.09 ERISA Compliance.  The Borrower will not, and will not permit any other  Loan Party or Unrestricted Subsidiary to, at any time, contribute to any Plan or Multiemployer  Plan.  Section 9.10 Sale or Discount of Receivables.  Except for receivables obtained by the  Borrower or any other Loan Party out of the ordinary course of business or the settlement of joint  interest billing accounts in the ordinary course of business or discounts granted to settle collection  of accounts receivable or the sale of defaulted accounts arising in the ordinary course of business  in connection with the compromise or collection thereof and not in connection with any financing  transaction, the Borrower will not, and will not permit any other Loan Party to, discount or sell  (with or without recourse) any of its notes receivable or accounts receivable.  Section 9.11 Mergers, Etc.  The Borrower will not, and will not permit any other Loan  Party to, merge into or with or consolidate with any other Person, or permit any other Person to  merge into or consolidate with it, or Dispose of (whether in one transaction or in a series of  transactions) all or substantially all of its Property to any other Person (whether now owned or  hereafter acquired) (any such transaction, a “consolidation”), or liquidate or dissolve; provided  that, so long as no Default or Event of Default has occurred and is then continuing or would result  therefrom, (a) any other Loan Party may participate in a consolidation with the Borrower or the  Parent (provided that the Borrower or the Parent shall be the survivor) or any other Guarantor  (provided that the Guarantor shall be the survivor) and (b) any other Loan Party (other than the  Borrower and the Parent) may dissolve so long as such Loan Party does not own or hold any  Borrowing Base Properties. Each of the Borrower and the Parent will not change its organizational  form, or enter into any transaction which has the effect of changing the Borrower’s or the Parent’s  organizational form.  Section 9.12 Sale of Properties.  The Borrower will not, and will not permit any other  Loan Party to, Dispose of any Property except for:  (a) the Disposition of cash and Cash Equivalents in the ordinary course of  business and not prohibited by this Agreement and the sale of Hydrocarbons or geologic or seismic  data and related assets in the ordinary course of business;   (b) Dispositions (including asset swaps) in the ordinary course of business of  undeveloped acreage to which no proved reserves are attributed in the most recently delivered  Reserve Report and assignments in connection with such Dispositions;   

 

  117  (c) the Disposition of equipment that is no longer necessary or useful for the  business of the Borrower or such Loan Party or is replaced by equipment of at least comparable  value and use;   (d) the Disposition of any Oil and Gas Property or any interest therein or of the  Equity Interests of any other Loan Party owning Oil and Gas Properties (including any designation  of a Restricted Subsidiary as an Unrestricted Subsidiary pursuant to Section 9.23(b)); provided  that (i) 85% of the consideration received in respect of such Disposition shall be cash or Cash  Equivalents (including, for a Disposition constituting a Casualty Event, insurance proceeds), (ii)  the consideration received in respect of such Disposition (other than a Disposition constituting a  Casualty Event) shall be equal to or greater than the fair market value of the Oil and Gas Property,  interest therein or Loan Party subject of such Disposition (as reasonably determined by the board  of directors (or equivalent body) of the Borrower and, if requested by the Administrative Agent,  the Borrower shall deliver a certificate of a Responsible Officer of the Borrower certifying to that  effect), (iii) the Borrowing Base shall be reduced, effective immediately upon such Disposition,  by an amount and to the extent required by Section 2.07(e) and (iv) if any such Disposition is of a  Loan Party owning Oil and Gas Properties, such Disposition shall include all the Equity Interests  of such Loan Party;  (e) any transfer of Property (including Equity Interests of Subsidiaries) of the  Borrower or any other Loan Party to the Borrower or another Loan Party, in each case so long as  immediately after giving effect to such transfer, the Borrower and the other Loan Parties are in  compliance with Section 8.13 without giving effect to any grace periods specified in Section 8.13;   (f) the Liquidation of Hedge Agreements; provided that the Borrowing Base  shall be automatically adjusted in accordance with Section 2.07(e) to the extent required thereby;  (g) sales, transfers and dispositions or the compromise or settlement of  accounts receivable in connection with the compromise, settlement or collection thereof in the  ordinary course of business (and not as part of a bulk sale or receivables financing);  (h) licenses, sublicenses, leases or subleases granted to third parties in the  ordinary course of business not interfering with the business of the Loan Parties and not affecting  any Oil and Gas Properties;  (i) farmouts of undeveloped acreage in the ordinary course of business and  assignments in connection with such farmouts or the abandonment, farmout, exchange or other  disposition of Oil and Gas Properties not constituting proven reserves;  (j) so long as no Borrowing Base Deficiency exists or would result therefrom;  sales and other Dispositions of Properties not regulated by Section 9.12(a) through (i) having a fair  market value not to exceed $5,000,000 during any 12-month period.  Section 9.13 Environmental Matters.  The Borrower will not, and will not permit any  other Loan Party or Unrestricted 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 a Release  or threatened Release of Hazardous Materials, exposure to any Hazardous Materials, or to any  Remedial Work under any Environmental Laws, assuming disclosure to the applicable  

 

  118  Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to  such Property where such violations, Release or threatened Release, exposure, or Remedial Work  could reasonably be expected to have a Material Adverse Effect.  Section 9.14 Transactions with Affiliates.  The Borrower will not, and will not permit  any other Loan Party to, enter into any transaction, including, without limitation, any purchase,  sale, lease or exchange of Property or the rendering of any service, with any Affiliate (other than  transactions between the Borrower and any Guarantor and transactions between Guarantors) unless  such transactions are otherwise permitted under this Agreement and are upon fair and reasonable  terms no less favorable to it than it would obtain in a comparable arm’s length transaction with a  Person not an Affiliate, provided, however, that the restrictions in this Section 9.14 shall not apply  to Restricted Payments permitted under Section 9.04 or Investments permitted under Section 9.05.  Section 9.15 Loan Parties.  The Borrower will not, and will not permit any other Loan  Party to, create or acquire any additional Loan Party or designate an  Unrestricted Subsidiary as a  Restricted Subsidiary, unless the Borrower gives written notice to the Administrative Agent of  such creation or acquisition and complies with Section 8.13(a). The Borrower shall not, and shall  not permit any other Loan Party to, Dispose of any Equity Interests in any other Loan Party except  in compliance with Section 9.12. Neither the Borrower nor any other Loan Party shall have any  Foreign Subsidiaries.  Section 9.16 Negative Pledge Agreements; Dividend Restrictions.  The Borrower will  not, and will not permit any other Loan Party to, create, incur, assume or suffer to exist any  contract, agreement or understanding (other than this Agreement, the Security Instruments, and  Debt creating Liens permitted by Section 9.03(c) but only with respect to the Property subject of  such Debt) which in any way prohibits or restricts (or which requires the consent of or notice to  other Persons in connection therewith): (a) the granting, conveying, creation or imposition of any  Lien on any of its Property in favor of the Administrative Agent and the Lenders, (b) any other  Loan Party from paying dividends or making distributions in respect of its Equity Interests to the  Borrower or any Guarantor, (c) paying any Debt owed to the Borrower or any other Loan Party,  (d) making loans or advances to, or other Investments in, the Borrower or any other Loan Party,  or (e) transferring any of its Property to the Borrower or any other Loan Party, provided that the  foregoing shall not apply to (a) customary restrictions imposed on the granting, conveying,  creation or imposition of any Lien found in any lease, license or similar contract as they affect any  Property or Lien subject to such lease, license or contract, (b) customary prohibitions on  assignment of rights contained in software license agreements, (c) customary provisions restricting  subletting or assignment of any lease governing a leasehold interest (other than any Oil and Gas  Property) of any Loan Party and (d) prohibitions or restrictions in governing documents of any  joint venture in which a Loan Party owns a minority interest or such joint venture is not otherwise  a Subsidiary of a Loan Party, in respect of the transfer of, or the making of dividends or  distributions with respect to, Equity Interests in any such joint venture, or with respect to the  transfer of or other encumbrance with respect to Property of or Equity Interests in such joint  venture.  Section 9.17 Gas Imbalances, Take-or-Pay or Other Prepayments.  The Borrower will  not, and will not permit any other Loan Party to, allow gas imbalances, take-or-pay or other  prepayments with respect to the Oil and Gas Properties of the Borrower or any other Loan Party,  

 

  119  other than those imbalances which (i) occur in the normal course of business, (ii) do not exceed  2% of the value of the proved producing reserves of the Loan Parties, or (iii) take-or-pay  obligations not in excess of $5,000,000 in the aggregate.  Section 9.18 Hedge Agreements.    (a) The Borrower will not, and will not permit any other Loan Party to, (1) enter  into any Hedge Agreements for speculative purposes or (2) enter into any Hedge Agreements with  any Person other than (i) (A) Hedge Agreements in respect of commodities, (B) with an Approved  Counterparty, (C) with a tenor not to exceed 48 months, and (D) the notional volumes for which  (when aggregated with other commodity Hedge Agreements then in effect other than basis  differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed,  as of the date such Hedge Agreement is executed, 90% of the reasonably projected production  from Oil and Gas Properties of the Loan Parties classified as “proved developed producing” in the  Initial Reserve Report or thereafter the Reserve Report most recently delivered pursuant to Section  8.11, for each month following the date such Hedge Agreement is entered into, in each case, for  crude oil, provided that the volume limitations above shall not apply to (X) short puts or (Y) long  put options contracts that are not related to corresponding calls, collars, or swaps, (ii) Hedge  Agreements in respect of interest rates with an Approved Counterparty effectively converting  interest rates from floating to fixed, the notional amounts of which (when aggregated with all other  Hedge Agreements of the Borrower and the other Loan Parties then in effect effectively converting  interest rates from floating to fixed) do not exceed, as of the date such Hedge Agreement is entered  into, 75% of the then outstanding principal amount of the Borrower’s Debt for borrowed money  which bears interest at a floating rate and (iii) Other Hedge Agreements with an Approved  Counterparty.  In no event shall any Hedge Agreement contain any requirement, agreement or  covenant for the Borrower or any other Loan Party to post collateral or margin to secure their  obligations under such Hedge Agreement or to cover market exposures; provided, however, that  (1) the foregoing shall not prohibit or be deemed to prohibit the Secured Hedge Obligations from  being secured by the Security Instruments and (2) the foregoing shall not prohibit or be deemed to  prohibit the Borrower or any other Loan Party to post collateral or margin in connection with  Section 9.03(e)(y).  (b) If, on the last day of any calendar month, the aggregate notional volumes of  all Hedge Agreements in respect of commodities pursuant to Section 9.18(a)(i) to which the  Borrower or any other Loan Party is a party and for which settlement payments were calculated in  such calendar month exceeds 90% of the actual production of Hydrocarbons (for crude oil) from  the proved developed producing Oil and Gas Properties of the Loan Parties in such calendar month  (other than (X) short puts or (Y) long puts, floors, and basis differential swaps on volumes hedged  by other Hedge Agreements), then the Borrower shall, or shall cause each other Loan Party to,  Liquidate existing Hedge Agreements pursuant to Section 9.18(a)(i) within fifteen (15) Business  Days after the end of such calendar month, such that, after giving effect to such Liquidation, future  hedging notional volumes will not exceed 100% of reasonably projected production of  Hydrocarbons (for crude oil) from the proved developed producing Oil and Gas Properties of the  Loan Parties for the then-current month and any succeeding calendar months.   

 

  120  Section 9.19  Amendments to Material Agreements; Amendment to Fiscal Year.  (a) The Borrower will not, and will not permit any other Loan Party to, amend,  modify or supplement (or enter into any agreement that has the effect of amending, modifying or  supplementing) any of its organizational documents in any manner that would be materially  adverse to the Lenders in their capacities as such.  (b) The Borrower will not, and will not permit any other Loan Party, change its  fiscal year to end on a day other than December 31 or change the method of determining its fiscal  year.  Section 9.20 New Accounts.  Without the prior written consent of the Administrative  Agent, the Borrower will not, and will not permit any other Loan Party to, open or otherwise  establish, any Deposit Account, Commodity Account or Securities Account other than (a) Deposit  Accounts, Commodity Accounts and Securities Accounts in which the Administrative Agent has  been granted a first-priority Lien and is subject to a Control Agreement and (b) Excluded Accounts.  Section 9.21 Repayment of Permitted Additional Debt; Amendment to Terms of  Permitted Additional Debt.  (a) The Borrower will not, and will not permit any other Loan Party to, call,  make or offer to make any optional or voluntary Redemption of or otherwise optionally or  voluntarily Redeem (whether in whole or in part) any Permitted Additional Debt, except that:  (i) so long as no Default, Event of Default or Borrowing Base  Deficiency has occurred and is continuing or would result therefrom, the Borrower may Redeem  any Permitted Additional Debt with (A) the net cash proceeds of any newly issued Permitted  Additional Debt to the extent permitted to be incurred pursuant to Section 9.02(h) or (B) the  Borrower may Redeem any Permitted Additional Debt with up to 100% of the direct or indirect  net cash proceeds from a substantially concurrent (within 60 days) sale of Equity Interests (other  than Disqualified Capital Stock) of any Loan Party; and  (ii) from and after the first anniversary of the Effective Date, the  Borrower may Redeem any Permitted Additional Debt in cash so long as both before, and  immediately after giving effect to, any such Redemption, (A) no Default or Event of Default exists  or would exist, (B) the unused portion of the Commitments is equal to or greater than 20% of the  total Commitments and (C) the Leverage Ratio is less than or equal to 2.00 to 1.00 (on a pro forma  basis as the Leverage Ratio is recomputed on such date using (1) Total Debt outstanding on such  date and (2) EBITDAX for the four fiscal quarters ending on the last day of the fiscal quarter  immediately preceding such date for which financial statements are available).  (b) The Borrower will not, and will not permit any other Loan Party to, amend,  modify, waive or otherwise change, consent or agree to any amendment, modification, waiver or  other change to, any of the terms of any Permitted Additional Debt or any Permitted Additional  Debt Document if:  (i) the effect thereof would be to shorten its maturity or average life or increase  the amount of any payment of principal thereof or increase the rate or shorten any period for  payment of interest thereon; provided that the foregoing shall not prohibit the execution of  supplemental indentures associated with the incurrence of additional Permitted Additional Debt to  

 

  121  the extent permitted by Section 9.02(h), or the execution of supplemental indentures to add  guarantors if required by the terms of any Permitted Additional Debt, provided such Person  complies with Section 8.13(b); or (ii) the effect thereof would be to cause the Borrower to violate  the terms of Section 9.02(h).  (c) With respect to any Permitted Additional Debt that is subordinated to the  Obligations or any other Debt, the Borrower will not, and will not permit any other Loan Party to,  designate any such Debt (other than obligations of the Borrower and the other Loan Parties  pursuant to the Loan Documents) as “Specified Senior Indebtedness” or “Specified Guarantor  Senior Indebtedness” or give any such other Debt any other similar designation for the purposes  of such Permitted Additional Debt Document related to such Permitted Additional Debt that is  subordinated to the Obligations or any other Debt.  Section 9.22 Restrictions on Activities of Parent and Intermediate Holdco.  Notwithstanding any other provision set forth herein, the Parent shall not, nor shall the Parent  permit the Intermediate Holdco (if applicable) to:  (a) own or otherwise acquire or invest in any Oil and Gas Properties or any  other assets other than (i)(A) in the case of the Parent, the Equity Interests of the Borrower or  Intermediate Holdco, if applicable and (B) in the case of the Intermediate Holdco, if applicable,  the Equity Interests of the Borrower, (ii) cash and Cash Equivalents and (iii) assets (other than Oil  and Gas Properties) incidental to the management and advisory services provided to the Loan  Parties in the ordinary course of their respective businesses (including legal, accounting, tax and  other management and advisory services).  (b) create or suffer to exist any Lien upon any property or assets now owned or  hereafter acquired, leased or licensed by it other than (i) Liens securing the Obligations pursuant  to the Security Instruments to which the Parent or Intermediate Holdco is a party, (ii) Liens for  Taxes, assessments, or other governmental charges or levies not yet delinquent or that are being  contested in good faith by appropriate proceedings and for which adequate reserves have been  established in compliance with GAAP, and (iii) 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; or  (c) fail to hold itself out to the public as a legal entity separate and distinct from  all other Persons.  For the avoidance of doubt, neither the Parent, nor shall the Parent permit the Intermediate  Holdco (if applicable) to own any Equity Interests in any Unrestricted Subsidiary.  Section 9.23 Designation and Conversion of Restricted and Unrestricted Subsidiaries;  Debt of Unrestricted Subsidiaries.  (a) Subject to clause (b) of this Section 9.23, any Person that becomes a  Subsidiary of the Borrower or any Restricted Subsidiary shall be classified as a Restricted  Subsidiary.  

 

  122  (b) The Borrower may designate by written notification thereof to the  Administrative Agent, any Restricted Subsidiary (other than the Intermediate Holdco), including  a newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary if (i) prior, and after  giving effect, to such designation, no Default or Event of Default or Borrowing Base Deficiency  would exist, (ii) such designation is deemed to be an Investment in an Unrestricted Subsidiary in  an amount equal to the fair market value as of the date of such designation of the Borrower’s direct  and indirect ownership interest in such Subsidiary and such Investment would be permitted to be  made at the time of such designation under Section 9.05(n) and (iii) such designation is deemed to  be a disposition pursuant to Section 9.12.  Except as provided in clause (c) of this Section 9.23, no  Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary.  (c) The Borrower may designate any Unrestricted Subsidiary to be a Restricted  Subsidiary if after giving effect to such designation, (i) the representations and warranties of the  Loan Parties contained in each of the Loan Documents are true and correct in all material respects  (except that such materiality qualifier shall not be applicable to any representation or warranty that  already is qualified or modified by materiality in the text thereof) on and as of the date of such  redesignation, except (x) to the extent any such representations and warranties are expressly  limited to an earlier date, in which case, on and as of the date hereof, such representations and  warranties shall continue to be true and correct as of such specified earlier date, (ii) no Default or  Event of Default would exist, and (iii) the Borrower complies with the requirements of Section  8.13, Section 8.20 and Section 9.15.  Any such designation shall be treated as a cash dividend in  an amount equal to the lesser of the fair market value of the Borrower’s direct and indirect  ownership interest in such Restricted Subsidiary or the amount of the Borrower’s cash investment  previously made for purposes of the limitation on Investments under Section 9.05(n).  ARTICLE X  EVENTS OF DEFAULT; REMEDIES  Section 10.01 Events of Default.  One or more of the following events shall constitute an  “Event of Default”:  (a) the Borrower shall fail to pay any principal of any Loan or any  reimbursement obligation in respect of any LC Disbursement when and as the same shall become  due and payable, whether at the due date thereof or at a date fixed for prepayment thereof, by  acceleration or otherwise;  (b) the Borrower shall fail to pay any interest on any Loan or any fee or any  other amount (other than an amount referred to in Section 10.01(a)) payable under this Agreement  or any other 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  Parent, the Borrower or any other Loan Party, in or in connection with this Agreement, any other  Loan Document, or any amendment or modification hereof or thereof or waiver hereunder or  thereunder, or in any report, certificate, financial statement or other document furnished pursuant  to or in connection with this Agreement, any other Loan Document, or any amendment or  modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been  

 

  123  incorrect in any material respect when made or deemed made (without duplication of any  materiality qualifier set forth therein);  (d) the Parent, the Borrower or any other Loan Party shall fail to observe or  perform any covenant, condition or agreement contained in Section 8.01(k), Section 8.02, Section  8.03 (solely with respect to the Borrower’s legal existence), Section 8.13, Section 8.16, Section  8.17, Section 8.18, Section 8.19 or Section 8.20 or in Article IX;  (e) the Parent, the Borrower or any other Loan Party 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 Parent, the Borrower or such Loan Party  otherwise becoming aware of such default;  (f) the Borrower or any other Loan Party shall fail to make any payment  (whether of principal or interest) in respect of any Material Debt, when and as the same shall  become due and payable, and such failure continues after the expiration of the applicable grace or  notice period;  (g) any event or condition occurs that results in any Material Debt becoming  due prior to its scheduled maturity or that enables or permits (with or without the giving of notice,  the lapse of time or both) the holder or holders of any Material Debt or any trustee or agent on its  or their behalf to cause any Material Debt 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; provided that  this Section 10.01(g) shall not apply to secured Debt that becomes due solely as a result of the  voluntary sale or transfer of the property or assets securing such Debt, if such sale or transfer is  permitted hereunder and under the documents providing for such Debt.  (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 Parent, the  Borrower or any other Loan Party or its debts, or of a substantial part of its assets, under any  Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in  effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar  official for the Parent, the Borrower or any other Loan Party or for a substantial part of its assets,  and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an  order or decree approving or ordering any of the foregoing shall be entered;  (i) the Parent, the Borrower or any other Loan Party shall (i) voluntarily  commence any proceeding or file any petition seeking liquidation, reorganization or other relief  under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or  hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate  manner, any proceeding or petition described in Section 10.01(h), (iii) apply for or consent to the  appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the  Borrower or any other Loan Party or for a substantial part of its assets, (iv) file an answer admitting  the material allegations of a petition filed against it in any such proceeding, (v) make a general  

 

  124  assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of  the foregoing; or the holders of Equity Interests of the Borrower shall make any request or take  any action for the purpose of calling a meeting of such holders of the Borrower to consider a  resolution to dissolve and wind-up the Borrower’s affairs;  (j) the Parent, the Borrower or any other Loan Party shall become unable,  admit in writing its inability or fail generally to pay its debts as they become due;  (k) one or more judgments for the payment of money in an aggregate amount  in excess of $20,000,000 (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), shall be rendered against the  Borrower, any other 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 the Borrower or any other 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, (i) cease to be in full force and effect and valid, binding  and enforceable in accordance with their terms against the Borrower or a Guarantor (including the  Parent) party thereto or shall be repudiated by any of them, or the Parent, the Borrower, any other  Loan Party or any of their Affiliates shall so state in writing or (ii) cease to create a valid and  perfected Lien of the priority required thereby on any of the collateral purported to be covered  thereby (other than as a result of the action or inaction of the Administrative Agent or any Lender),  or the Parent, the Borrower, any other Loan Party or any of their Affiliates shall so state in writing;  or  (m) a Change in Control shall occur.  Section 10.02 Remedies.  (a) In the case of an Event of Default other than one described  in Section 10.01(h) or Section 10.01(i), at any time thereafter during the continuance of such Event  of Default, the Majority Lenders (or the Administrative Agent at the direction of the Majority  Lenders) may, by notice to the Borrower, take either or both of the following actions, at the same  or different times:  (i) terminate the Commitments, and thereupon the Commitments shall  terminate immediately, and (ii) declare the Notes and the Loans then outstanding to be due and  payable in whole (or in part, in which case any principal not so declared to be due and payable  may thereafter be declared to be due and payable), and thereupon the principal of the Loans so  declared to be due and payable, together with accrued interest thereon and all fees and other  obligations of the Borrower and the Guarantors accrued hereunder and under the Notes and the  other Loan Documents (including, without limitation, the payment of cash collateral to secure the  LC Exposure as provided in Section 2.08(j)), shall become due and payable immediately, without  presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice  of any kind, all of which are hereby waived by the Borrower and each Guarantor; and in case of  an Event of Default described in Section 10.01(h) or Section 10.01(i), the Commitments shall  automatically terminate and 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 (including,  

 

  125  without limitation, the payment of cash collateral to secure the LC Exposure as provided in Section  2.08(j)), shall automatically become due and payable, without presentment, demand, protest or  other notice of any kind, all of which are hereby waived by the Borrower and each Guarantor.  (b) In the case of the occurrence of an Event of Default, the Administrative  Agent and the Lenders will have all other rights and remedies available at law and equity.  (c) All proceeds realized from the liquidation or other disposition of Collateral  or otherwise received after maturity of the Loans or the Notes, whether by acceleration or  otherwise, shall be applied:  (i) first, to payment or reimbursement of that portion of the Obligations  constituting fees, expenses and indemnities payable to the Administrative Agent in its capacity as  such;  (ii) second, pro rata to payment or reimbursement of that portion of the  Obligations constituting fees, expenses and indemnities payable to the Lenders;  (iii) third, pro rata to payment of accrued interest on the Loans;  (iv) fourth, pro rata to payment of (A) principal outstanding on the  Loans; (B) reimbursement obligations in respect of Letters of Credit pursuant to Section 2.08(e)  (and cash collateralization of LC Exposure hereunder); (C) Secured Hedge Obligations owing to  Secured Hedge Parties; and (D) Secured Cash Management Obligations owing to Secured Cash  Management Providers;  (v) fifth, pro rata to any other Obligations; and  (vi) sixth, any excess, after all of the Obligations shall have been  indefeasibly paid in full in cash, shall be paid to the Borrower or as otherwise required by any  Governmental Requirement.  provided that, for the avoidance of doubt, Excluded Hedge Obligations with respect to any  Guarantor shall not be paid with amounts received from such Guarantor or its assets, but  appropriate adjustments shall be made with respect to payments from the Borrower and any other  Guarantors to preserve the allocation to Obligations otherwise set forth above in this Section  10.02(c).  Section 10.03 Equity Right to Cure.  (a) Notwithstanding anything to the contrary contained in Section 10.01, in the event of any  Event of Default under the covenant set forth in Section 9.01 and until the expiration of the tenth  (10th) Business Day after the date on which financial statements are required to be delivered  pursuant to Section 8.01(a) or (b) and the corresponding Compliance Certificate is required to be  delivered pursuant to Section 8.01(c) with respect to the applicable fiscal quarter hereunder, the  Parent may (in accordance with applicable law) sell or issue common Equity Interests of the Parent  to any Person that is not a Loan Party (to the extent such transaction would not result in a Change  in Control) or otherwise obtain cash capital contributions on account of common Equity Interests  

 

  126  and, in either case, apply the proceeds of such issuance of Equity Interests to, as applicable,  increase EBITDAX (such application, a “Covenant Cure Payment”); provided that (i) the proceeds  of such issuance of Equity Interests or cash capital contribution, as applicable, is actually received  by the Parent no later than ten (10) Business Days after the date on which financial statements are  required to be delivered pursuant to Section 8.01(a) or (b) and the corresponding Compliance  Certificate is required to be delivered pursuant to Section 8.01(c) with respect to such fiscal quarter  hereunder and (ii) the amount of the Covenant Cure Payment shall not exceed the amount  necessary to bring the Borrower into compliance with Section 9.01, if any.  Subject to the terms  set forth above and the terms in Section 10.03(b) and (c) below, upon (A) application of the  proceeds of such issuance of Equity Interests or cash capital contribution, as applicable, as  provided above within the ten (10) Business Day period described above in such amounts  sufficient to cure the Events of Default under the covenant set forth in Section 9.01, and  (B) delivery of an updated Compliance Certificate executed by a Responsible Officer to the  Administrative Agent reflecting compliance with the covenant set forth in Section 9.01, as  applicable, such Events of Default shall be deemed cured and no longer in existence. For the  avoidance of doubt, the amount of any Covenant Cure Payment made in accordance with the terms  of this Section 10.03 shall be deemed to increase EBITDAX by a like amount for purposes of  calculating the Leverage Ratio for the relevant fiscal quarter.  (b) The parties hereby acknowledge and agree that this Section 10.03 may not be relied on  for purposes of calculating any financial ratios or other conditions or compliances other than the  financial covenant set forth in Section 9.01 and shall not result in any adjustment to any amounts  (including, for the avoidance of doubt, any decrease to Debt with the proceeds of such issuance of  Equity Interests or other cash capital contribution, as applicable) other than the amount of  EBITDAX referred to in Section 10.01(a) above for purposes of determining the Borrower’s  compliance with Section 9.01. To the extent a Covenant Cure Payment is applied to increase  EBITDAX, such Covenant Cure Payment shall only be taken into account in connection with the  calculations of the covenant contained in Section 9.01 as of a particular fiscal quarter end and any  subsequent calculations of such covenants which contain such particular fiscal quarter as part of  its trailing twelve month period or trailing four quarter period.  (c) In each period of four consecutive fiscal quarters, there shall be at least two (2) fiscal  quarters in which no cure set forth in this Section 10.03 is made. Furthermore, the Parent may not  utilize more than five cures provided in this Section 10.03 during the duration of this Agreement.    ARTICLE XI  THE ADMINISTRATIVE AGENT  Section 11.01 Appointment; Powers.  Each of the Lenders and the Issuing Bank hereby  irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative  Agent to take such actions as agent 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. The provisions of this Article XI are solely  for the benefit of the Administrative Agent, the Lenders and the Issuing Bank, and neither the  Borrower nor any Guarantor (including the Parent) shall have rights as a third party beneficiary of  any of such provisions.  

 

  127  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 Parent,  the Borrower or any of their Affiliates 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 Loan Parties or any other obligor or  guarantor, or (vii) any failure by the Parent, 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 such other number or percentage of the Lenders  as shall be necessary under the circumstances as provided in Section 12.02) specifying the action  to be taken and (b) be indemnified to its satisfaction by the Lenders against any and all liability  and expenses which may be incurred by it by reason of taking or continuing to take any such action.  

 

  128  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. The Administrative Agent shall not be  liable for any action taken or not taken by it with the consent or at the request of the Majority  Lenders (or such other number or percentage of the Lenders as shall be necessary under the  circumstances as provided in Section 12.02), and otherwise the Administrative Agent shall not be  liable for any action taken or not taken by it hereunder or under any other Loan Document or under  any other document or instrument referred to or provided for herein or therein or in connection  herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own  gross negligence or willful misconduct.  Section 11.04 Reliance by Administrative Agent.  The Administrative Agent shall be  entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,  certificate, consent, statement, instrument, document or other writing believed by it to be genuine  and to have been signed or sent by the proper Person. The Administrative Agent also may rely  upon any statement made to it orally or by telephone and believed by it to be made by the proper  Person, and shall not incur any liability for relying thereon and each of the Parent, the Borrower,  the Lenders and the Issuing Bank hereby waives the right to dispute the Administrative Agent’s  record of such statement, except in the case of gross negligence or willful misconduct by the  Administrative Agent. The Administrative Agent may consult with legal counsel (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.  (a) Subject to the appointment and acceptance of a successor Administrative  Agent as provided in this Section 11.06, the Administrative Agent may resign at any time by  notifying the Lenders, the Issuing Bank and the Borrower.  Upon any such resignation, the  

 

  129  Majority Lenders shall have the right, in consultation with the Borrower, to appoint a successor  Administrative Agent.  If no successor Administrative Agent shall have been so appointed by the  Majority Lenders and shall have accepted such appointment within 30 days after the retiring  Administrative Agent gives notice of its resignation as the retiring Administrative Agent, then the  retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a  successor Administrative Agent. Upon the acceptance of its appointment as Administrative Agent  hereunder by a successor Administrative Agent, such successor Administrative Agent shall  succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring  Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties  and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent  shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower  and such successor Administrative Agent. After the Administrative Agent’s resignation hereunder,  the provisions of this Article XI and Section 12.03 shall continue in effect for the benefit of such  retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any  actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.  (b) Notwithstanding Section 11.06(a), in the event no successor Administrative  Agent shall have been so appointed and shall have accepted such appointment within 30 days after  the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative  Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Bank and  the Borrower, whereupon, on the date of effectiveness of such resignation stated in such notice, (i)  the retiring Administrative Agent shall be discharged from its duties and obligations hereunder  and under the other Loan Documents; provided that, solely for purposes of maintaining any  security interest granted to the Administrative Agent under any Security Instrument for the benefit  of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such  security interest as collateral agent for the benefit of the Secured Parties, and continue to be entitled  to the rights set forth in such Security Instrument, and, in the case of any Collateral in the  possession of the Administrative Agent, shall continue to hold such Collateral, in each case until  such time as a successor Administrative Agent is appointed and accepts such appointment in  accordance with this Section 11.06 (it being understood and agreed that the retiring Administrative  Agent shall have no duty or obligation to take any further action under any Security Instrument,  including any action required to maintain the perfection of any such security interest), and (ii) the  Majority Lenders shall succeed to and become vested with all the rights, powers, privileges and  duties of the retiring Administrative Agent; provided that (A) all payments required to be made  hereunder or under any other Loan Document to the Administrative Agent for the account of any  Person other than the Administrative Agent shall be made directly to such Person and (B) all  notices and other communications required or contemplated to be given or made to the  Administrative Agent shall directly be given or made to each Lender and the Issuing Bank.   Following the effectiveness of the Administrative Agent’s resignation from its capacity as such,  the provisions of this Article XI and Section 12.03, as well as any exculpatory, reimbursement and  indemnification provisions set forth in any other Loan Document, shall continue in effect for the  benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties  in respect of any actions taken or omitted to be taken by any of them while the retiring  Administrative Agent was acting as Administrative Agent and in respect of the matters referred to  in the proviso under clause (i) above.  

 

  130  Section 11.07 Administrative Agent Individually.  With respect to its Commitment,  Loans, LC Commitment and Letters of Credit, the Person serving as the Administrative Agent  shall have and may exercise the same rights and powers hereunder and is subject to the same  obligations and liabilities as and to the extent set forth herein for any other Lender or the Issuing  Bank, as the case may be. The terms “Issuing Bank”, “Lenders”, “Majority Lenders”, “Required  Lenders” and any similar terms shall, unless the context clearly otherwise indicates, include the  Administrative Agent in its individual capacity as a Lender, the Issuing Bank or as one of Majority  Lenders or the Required Lenders, as applicable. The Person serving as the Administrative Agent  and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial  advisor or in any other advisory capacity for and generally engage in any kind of banking, trust or  other business with, the Parent, the Borrower, any other Loan Party or any Affiliate of any of the  foregoing as if such Person was not acting as the Administrative Agent and without any duty to  account therefor to the Lenders or the Issuing Bank.  Section 11.08 No Reliance.  Each Lender acknowledges that it has, independently and  without reliance upon the Administrative Agent or any other Lender and based on such documents  and information as it has deemed appropriate, made its own credit analysis and decision to enter  into this Agreement and each other Loan Document to which it is a party. Each Lender also  acknowledges that it will, independently and without reliance upon the Administrative Agent, 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 Administrative Agent shall not be required to  keep itself informed as to the performance or observance by Loan Parties of this Agreement, the  Loan Documents or any other document referred to or provided for herein or to inspect the  Properties or books of the Loan Parties. Except for notices, reports and other documents and  information expressly required to be furnished to the Lenders by the Administrative Agent  hereunder, neither the Agents nor 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 Parent, the Borrower (or any of its Affiliates) which may come into the possession  of the Administrative Agent or any of its Affiliates. In this regard, each Lender acknowledges that  Vinson & Elkins, L.L.P. is acting in this transaction as special counsel to the Administrative Agent  only, except to the extent otherwise expressly stated in any legal opinion or any Loan Document.  Each other party hereto will consult with its own legal counsel to the extent that it deems necessary  in connection with the Loan Documents and the matters contemplated therein.  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 Loan Parties, 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 Obligations 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  

 

  131  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;  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 Obligations 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 Withholding Tax.  To the extent required by any applicable law, the  Administrative Agent may withhold from any payment to any Lender an amount equivalent to any  applicable withholding Tax. Without limiting the provisions of Section 5.03(a) or Section 5.03(c),  each Lender and the Issuing Bank shall, and does hereby, indemnify the Administrative Agent,  and shall make payable in respect thereof within 30 days after demand therefor, against any and  all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges  and disbursements of any counsel for the Administrative Agent) incurred by or asserted against  the Administrative Agent by the Internal Revenue Service or any other Governmental Authority  as a result of the failure of the Administrative Agent to properly withhold Tax from amounts paid  to or for the account of any Lender for any reason (including, without limitation, because the  appropriate form was not delivered or not property executed, or because such Lender failed to  notify the Administrative Agent of a change in circumstance that rendered the exemption from, or  reduction of withholding tax ineffective). A certificate as to the amount of such payment or liability  delivered to any Lender or the Issuing Bank by the Administrative Agent shall be conclusive absent  manifest error. Each Lender and the Issuing Bank hereby authorizes the Administrative Agent to  set off and apply any and all amounts at any time owing to such Lender or the Issuing Bank under  this Agreement or any other Loan Document against any amount due the Administrative Agent  under this Section 11.10. The agreements in this Section 11.10 shall survive the resignation and/or  replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a  Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all  other Obligations.  

 

  132  Section 11.11 Authority of Administrative Agent to Release Collateral and Liens.  (a) Each Lender and the Issuing Bank hereby authorizes the Administrative  Agent to take the following actions and the Administrative Agent hereby agrees to take such  actions at the request of the Borrower:  (i) to release any Lien on any property granted to or held by  Administrative Agent under any Loan Document (x) on the “Release Date” (as such term is defined  in the Pledge and Security Agreement), (y) that is permitted to be Disposed of or released pursuant  to the terms of the Loan Documents or (z) if approved, authorized or ratified in writing by the  Majority Lenders (or, if approval, authorization or ratification by all Lenders is required under  Section 12.02(b), then by all Lenders);  (ii) to release any Guarantor from its obligations under the Guaranty  Agreement and the Pledge and Security Agreement (or, with respect to the Parent, Article XIII)  and the other Loan Documents if such Person ceases to be a Guarantor as a result of a transaction  permitted under the Loan Documents; and  (iii) 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  necessary or useful to accomplish or evidence the foregoing.  (b) Upon the request of the Administrative Agent at any time, the Majority  Lenders will confirm in writing the Administrative Agent’s authority to release particular types or  items of Collateral pursuant to this Section 11.11.  (c) Except as otherwise provided in Section 12.08 with respect to rights of  setoff, and notwithstanding any other provision contained in any of the Loan Documents to the  contrary, no Person other than the Administrative Agent has any right to realize upon any of the  Collateral individually, to enforce any Liens on Collateral, or to enforce the Pledge and Security  Agreement or the Guaranty Agreement, and all powers, rights and remedies under the Security  Instruments may be exercised solely by Administrative Agent on behalf of the Persons secured or  otherwise benefitted thereby.  (d) By accepting the benefit of the Liens granted pursuant to the Security  Instruments, each Person secured by such Liens that is not a party hereto agrees to the terms of  this Section 11.11.  Section 11.12 The Arrangers.  No Arranger nor any Syndication Agent shall have any  duties, responsibilities or liabilities under this Agreement and the other Loan Documents other  than its duties, responsibilities and liabilities in its capacity as a Lender hereunder.  Section 11.13 Credit Bidding. The Secured Parties hereby irrevocably authorize the  Administrative Agent, at the direction of the Majority Lenders, to credit bid all or any portion of  the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all  of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner  purchase (either directly or through one or more acquisition vehicles) all or any portion of the  Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including  

 

  133  under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other  jurisdictions to which a Loan Party is subject, or (b) at any other sale, foreclosure or acceptance of  collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative  Agent (whether by judicial action or otherwise) in accordance with any applicable law.  In  connection with any such credit bid and purchase, the Obligations owed to the Secured Parties  shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the  Majority Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated  claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon  the liquidation of such claims in an amount proportional to the liquidated portion of the contingent  claim amount used in allocating the contingent interests) for the asset or assets so purchased (or  for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in  connection with such purchase).  In connection with any such bid, (i) the Administrative Agent  shall be authorized to form one or more acquisition vehicles and to assign any successful credit  bid to such acquisition vehicle or vehicles, (ii) each of the Secured Parties’ ratable interests in the  Obligations which were credit bid shall be deemed without any further action under this  Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the  Administrative Agent shall be authorized to adopt documents providing for the governance of the  acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect  to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests  thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide  for, control by the vote of the Majority Lenders or their permitted assignees under the terms of this  Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the  case may be, irrespective of the termination of this Agreement and without giving effect to the  limitations on actions by the Majority Lenders contained in Section 12.02), (iv) the Administrative  Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the  Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests,  whether as equity, partnership interests, limited partnership interests or membership interests, in  any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without  the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the  extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral  for any reason (as a result of another bid being higher or better, because the amount of Obligations  assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition  vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties  pro rata with their original interest in such Obligations and the equity interests and/or debt  instruments issued by any acquisition vehicle on account of such Obligations shall automatically  be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further  action.  Notwithstanding that the ratable portion of the Obligations of each Secured Party are  deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each  Secured Party shall execute such documents and provide such information regarding the Secured  Party (and/or any designee of the Secured Party which will receive interests in or debt instruments  issued by such acquisition vehicle) as the Administrative Agent may reasonably request in  connection with the formation of any acquisition vehicle, the formulation or submission of any  credit bid or the consummation of the transactions contemplated by such credit bid.  

 

  134  Section 11.14 Certain ERISA Matters.  (a) Each Lender (x) represents and warrants, as of the date such Person became  a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party  hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the  Administrative Agent and each Arranger and their respective Affiliates, and not, for the avoidance  of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the  following is and will be true: (i) such Lender is not using “plan assets” (within the meaning of the  Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of  Credit or the Commitments, (ii) the transaction exemption set forth in one or more PTEs, such as  PTE 84-14 (a class exemption for certain transactions determined by independent qualified  professional asset managers), PTE 95-60 (a class exemption for certain transactions involving  insurance company general accounts), PTE 90-1 (a class exemption for certain transactions  involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain  transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for  certain transactions determined by in-house asset managers), is applicable with respect to such  Lender’s entrance into, participation in, administration of and performance of the Loans, the  Letters of Credit, the Commitments and this Agreement, (iii) (A) such Lender is an investment  fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE  84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of  such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit,  the Commitments and this Agreement, (C) the entrance into, participation in, administration of  and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies  the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best  knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied  with respect to such Lender’s entrance into, participation in, administration of and performance of  the Loans, the Letters of Credit, the Commitments and this Agreement, or (iv) such other  representation, warranty and covenant as may be agreed in writing between the Administrative  Agent, in its sole discretion, and such Lender.  (b) In addition, unless Section 11.14(a)(i) is true with respect to a Lender or  such Lender has provided another representation, warranty and covenant as provided in Section  11.14(a)(iv), such Lender further (x) represents and warrants, as of the date such Person became a  Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto  to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative  Agent and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or  for the benefit of the Borrower or any other Loan Party, that none of the Administrative Agent,  any other Agent or any Arranger or any of their respective Affiliates is a fiduciary with respect to  the Collateral or the assets of such Lender (including in connection with the reservation or exercise  of any rights by the Administrative Agent under this Agreement, any Loan Document or any  documents related to hereto or thereto).  (c) The Administrative Agent, each other Agent and each Arranger hereby  informs the Lenders that each such Person is not undertaking to provide investment advice or to  give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and  that such Person has a financial interest in the transactions contemplated hereby in that such Person  or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the  

 

  135  Letters of Credit, the Commitments, this Agreement and any other Loan Documents (ii) may  recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount  less than the amount being paid for an interest in the Loans, the Letters of Credit or the  Commitments by such Lender or (iii) may receive fees or other payments in connection with the  transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees,  commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees,  agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees,  letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees,  processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination  fees or fees similar to the foregoing.  Section 11.15 Erroneous Payments.  (a) Each Lender hereby agrees that (x) if the Administrative Agent  notifies such Lender that the Administrative Agent has determined in its sole discretion that any  funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as  a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and  collectively, a “Payment”) were erroneously transmitted to such Lender (whether or not known to  such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall  promptly, but in no event later than one Business Day thereafter, return to the Administrative  Agent the amount of any such Payment (or portion thereof) as to which such a demand was made  in same day funds, together with interest thereon in respect of each day from and including the  date such Payment (or portion thereof) was received by such Lender to the date such amount is  repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the  Administrative Agent in accordance with banking industry rules on interbank compensation from  time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not  assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or  right of set-off or recoupment with respect to any demand, claim or counterclaim by the  Administrative Agent for the return of any Payments received, including without limitation any  defense based on “discharge for value” or any similar doctrine.  A notice of the Administrative  Agent to any Lender under this Section 11.15(a) shall be conclusive, absent manifest error.  (b) Each Lender hereby further agrees that if it receives a Payment from the  Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different  date from, that specified in a notice of payment sent by the Administrative Agent (or any of its  Affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or  accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been  made with respect to such Payment.  Each Lender agrees that, in each such case, or if it otherwise  becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall  promptly notify the Administrative Agent of such occurrence and, upon demand from the  Administrative Agent, it shall promptly, but in no event later than one Business Day thereafter,  return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which  such a demand was made in same day funds, together with interest thereon in respect of each day  from and including the date such Payment (or portion thereof) was received by such Lender to the  date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a  rate determined by the Administrative Agent in accordance with banking industry rules on  interbank compensation from time to time in effect.  

 

  136  (c) The Borrower hereby agrees that (x) in the event an erroneous Payment (or  portion thereof) are not recovered from any Lender that has received such Payment (or portion  thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such  Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay,  discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party,  except, in each case, to the extent such erroneous Payment (or any portion thereof) is, and solely  with respect to the amount of such erroneous Payment that is, comprised of funds of the Borrower  or any other Loan Party.  (d) Each party’s obligations under this Section 11.15 shall survive the  resignation or replacement of the Administrative Agent or any transfer of rights or obligations by,  or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction  or discharge of all Obligations under any Loan Document.  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 facsimile or electronic  communication, as follows:  (i) if to the Borrower, to it at:  Berry Petroleum Company, LLC  16000 N. Dallas Pkwy., Suite 500  Dallas, TX 75248    (ii) if to the Administrative Agent or Swingline Lender, to it at:  JPMorgan Loan ServicesChase Bank, N.A.  10 S. Dearborn St., Floor L2  Suite IL1-0480   Chicago, IL 60603-2300  Attention: Michael StevensTiara Smith  Email: michael.r.stevens@chase.comtiara.n.smith@jpmorgan.com  Telephone No.: (312) 732-6468732-4925    with a copy copy(s) to:  2200 Ross Ave., Floor 03  Dallas, TX 75201  Attn: Michele Jones   Email: michele.jones@jpmorgan.com    JPMorgan Chase Bank, N.A.  

 

  137  10 S. Dearborn St., Floor L2  Suite IL1-0480   Chicago, IL 60603-2300  Attention: Commercial Banking Group  Fax No.: (844) 490-5663  Email: jpm.agency.cri@jpmorgan.com   jpm.agency.servicing.1@jpmorgan.com     Agency Withholding Tax Inquiries:  Email: agency.tax.reporting@jpmorgan.com     Agency Compliance/Financials/Intralinks:  Email: covenant.compliane@jpmchase.com    (iii) if to the Issuing Bank, to it at:  8181 Communications Pkwy  Bldg B, Floor 06   Plano, TX 75024  Contact Name: Kavita Ujjni  JPMorgan Chase Bank, N.A.  10 S. Dearborn St., Floor L2  Suite IL1-0480  Chicago, IL, 60603-2300  Email: kavita.x.ujjni@jpmorgan.com  For letter of credit commission fees and other inquires:  Chicago Attention: LC Agency Activity Team  Tel: 800-364-1969  Fax No.: 856-294-5267  Email: chicago.lc.agency.activity.team@jpmchase.com   With a copy to:  JPMorgan Chase Bank, N.A.  10 S. Dearborn St., Floor L2  Suite IL1-0480   Chicago, IL 60603-2300  Attention: Loan & Agency Services Group  Attention: Tiara Smith  Email: tiara.n.smith@jpmorgan.com  Telephone No.: (312) 732-4925    (iv) if to any other Lender, to it at its address (or facsimile number) set  forth in its Administrative Questionnaire.  

 

  138  Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall  be deemed to have been given when received; notices sent by facsimile shall be deemed to have  been given when sent (except that, if not given during normal business hours for the recipient,  shall be deemed to have been given at the opening of business on the next business day for the  recipient).  Notices delivered through Approved Electronic Platforms, to the extent provided in  Section 12.01(b), shall be effective as provided in Section 12.01(b).  (b) Notices and other communications to the Lenders and the Issuing Bank  hereunder may be delivered or furnished by using Approved Electronic Platforms pursuant to  procedures approved by the Administrative Agent; provided that the foregoing shall not apply to  notices pursuant to Article II, Article III, Article IV and Article V unless otherwise agreed by the  Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may,  in its discretion, agree to accept notices and other communications to it hereunder by electronic  communications pursuant to procedures approved by it; provided that approval of such procedures  may be limited to particular notices or communications.  (c) Unless the Administrative Agent otherwise prescribes, (i) notices and other  communications sent to an e-mail address shall be deemed received upon the sender’s receipt of  an acknowledgement from the intended recipient (such as by the “return receipt requested”  function, as available, return e-mail or other written acknowledgement), and (ii) notices or  communications posted to an Internet or intranet website shall be deemed received upon the  deemed receipt by the intended recipient, at its e-mail address as described in the foregoing  clause (i), of notification that such notice or communication is available and identifying the  website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or  other communication is not sent during the normal business hours of the recipient, such notice or  communication shall be deemed to have been sent at the opening of business on the next business  day for the recipient.  (d) Any party hereto may change its address, facsimile number or email address  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.  (e) Posting of Communications.  (i) The Borrower agrees that the Administrative Agent may, but shall  not be obligated to, make any Communications available to the Lenders and the Issuing Bank by  posting the Communications on any Approved Electronic Platform.  (ii) Although the Approved Electronic Platform and its primary web  portal are secured with generally-applicable security procedures and policies implemented or  modified by the Administrative Agent from time to time (including, as of the Effective Date, a  user ID/password authorization system) and the Approved Electronic Platform is secured through  a per-deal authorization method whereby each user may access the Approved Electronic Platform  only on a deal-by-deal basis, each of the Lenders, the Issuing Bank and the Borrower  acknowledges and agrees that the distribution of material through an electronic medium is not  necessarily secure, that the Administrative Agent is not responsible for approving or vetting the  

 

  139  representatives or contacts of any Lender that are added to the Approved Electronic Platform, and  that there may be confidentiality and other risks associated with such distribution. Each of the  Lenders, the Issuing Bank and the Borrower hereby approves distribution of the Communications  through the Approved Electronic Platform and understands and assumes the risks of such  distribution.  (iii) THE APPROVED ELECTRONIC PLATFORM AND THE  COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. THE  APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY  OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE  APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR  ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE  COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR  STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR  A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR  FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE  APPLICABLE PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE  APPROVED ELECTRONIC PLATFORM.  IN NO EVENT SHALL THE ADMINISTRATIVE  AGENT, ANY OTHER AGENT, ANY ARRANGER OR ANY OF THEIR RESPECTIVE  RELATED PARTIES (COLLECTIVELY, “APPLICABLE PARTIES”) HAVE ANY  LIABILITY TO ANY OTHER LOAN PARTY, ANY LENDER, ANY ISSUING BANK OR  ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT  OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR  EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY  OTHER LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF  COMMUNICATIONS THROUGH THE INTERNET OR THE APPROVED ELECTRONIC  PLATFORM.  (iv) Each Lender and the Issuing Bank agrees that notice to it (as  provided in the next sentence) specifying that Communications have been posted to the Approved  Electronic Platform shall constitute effective delivery of the Communications to such Lender for  purposes of the Loan Documents.  Each Lender and Issuing Bank agrees (i) to notify the  Administrative Agent in writing (which could be in the form of electronic communication) from  time to time of such Lender’s or Issuing Bank’s (as applicable) email address to which the  foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be  sent to such email address.  (v) Each of the Lenders, the Issuing Bank and the Borrower agrees that  the Administrative Agent may, but (except as may be required by applicable law) shall not be  obligated to, store the Communications on the Approved Electronic Platform in accordance with  the Administrative Agent’s generally applicable document retention procedures and policies.  (vi) Nothing herein shall prejudice the right of the Administrative Agent,  any Lender or the Issuing Bank to give any notice or other communication pursuant to any Loan  Document in any other manner specified in such Loan Document  Section 12.02 Waivers; Amendments.   

 

  140  (a) No failure on the part of the Administrative Agent, the Issuing Bank or any  Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right,  power or privilege, or any abandonment or discontinuance of steps to enforce such right, power or  privilege, under any of the Loan Documents shall operate as a waiver thereof, nor shall any single  or partial exercise of any right, power or privilege under any of the Loan Documents preclude any  other or further exercise thereof or the exercise of any other right, power or privilege. The rights  and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under  the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they  would otherwise have. No waiver of any provision of this Agreement or any other Loan Document  or consent to any departure by the Borrower therefrom shall in any event be effective unless the  same shall be permitted by Section 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 or issuance of a Letter of Credit shall not be construed as a  waiver of any Default, regardless of whether the Administrative Agent, any other Agent, any  Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.  (b) Subject to Section 3.03(b) and Section 3.03(c), neither this Agreement nor  any provision hereof nor any Security Instrument nor any provision thereof may be waived,  amended or modified except pursuant to an agreement or agreements in writing entered into by  the Borrower and the Majority Lenders or by the Borrower and the Administrative Agent with the  consent of the Majority Lenders; provided that no such agreement shall (i) increase the  Commitment, Elected Commitment or the Maximum Credit Amount of any Lender without the  written consent of such Lender, (ii) increase the Borrowing Base without the written consent of  each Lender, decrease or maintain the Borrowing Base without the consent of the Required  Lenders; provided that (1) if there are two Lenders party to this Agreement, affirmations or  decreases in the Borrowing Base will require approval of all Lenders in their sole discretion, or  modify Section 2.07 in any manner which results in an increase in the Borrowing Base without the  consent of each Lender (other than any Defaulting Lender) and (2) a Scheduled Redetermination  may be postponed by the Required Lenders and an automatic reduction of the Borrowing Base  may be waived by the Required Lenders, (iii) reduce the principal amount of any Loan or LC  Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, or  reduce any other Obligations hereunder or under any other Loan Document, without the written  consent of each Lender affected thereby, (iv) postpone the scheduled date of payment or  prepayment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or  any fees payable hereunder, or any other Obligations hereunder or under any other Loan  Document, or reduce the amount of, waive or excuse any such payment, or postpone or extend the  Termination Date without the written consent of each Lender affected thereby, (v) change Section  4.01(b) or Section 4.01(c) in a manner that would alter the pro rata sharing of payments required  thereby, without the written consent of each Lender, (vi) waive or amend Section 6.01, Section  8.13, Section 10.02(c), or Section 12.14 or change the definition of the term “Subsidiary” without  the written consent of each Lender (other than any Defaulting Lender), (vii) release the Parent or  any other Guarantor from its obligations under the Guaranty or the Pledge and Security Agreement,  as applicable (except as set forth therein), release all or substantially all of the collateral (other than  as provided in Section 11.10), reduce the percentage set forth in Section 8.12(a) to less than 90%,  without the written consent of each Lender (other than any Defaulting Lender), or (viii) change  any of the provisions of this Section 12.02(b) or the definitions of “Required Lenders” or “Majority  Lenders” or any other provision hereof specifying the number or percentage of Lenders required  

 

  141  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 (other than any Defaulting Lender); provided, further, that no such  agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent,  any other Agent or the Issuing Bank hereunder or under any other Loan Document without the  prior written consent of the Administrative Agent, such other Agent or the Issuing Bank, as the  case may be. Notwithstanding the foregoing, (A) 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, (B) the Borrower and the Administrative Agent may amend this Agreement or any  other Loan Document without the consent of the Lenders in order to correct, amend or cure any  ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any  Loan Document, and (C) the Administrative Agent and the Borrower (or other applicable Loan  Party) may enter into any amendment, modification or waiver of this Agreement or any other Loan  Document or enter into any agreement or instrument to effect the granting, perfection, protection,  expansion or enhancement of any security interest in any Collateral or Property to become  Collateral to secure the Obligations for the benefit of the Lenders or as required by any  Governmental Requirement to give effect to, protect or otherwise enhance the rights or benefits of  any Lender under the Loan Documents without the consent of any Lender.  Section 12.03 Expenses, Indemnity; Damage Waiver.  (a) The Borrower shall pay (i) all  reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its  Affiliates, including, without limitation, the reasonable and documented fees, charges and  disbursements of one firm of primary legal counsel and one firm of local counsel in each  appropriate jurisdiction and other outside consultants for the Administrative Agent, the reasonable  and documented travel, photocopy, mailing, courier, telephone and other similar expenses, and the  cost of environmental invasive and non-invasive assessments and 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 Administrative Agent or any Lender in connection with any filing, registration, recording or  perfection of any security interest contemplated by this Agreement or any Security Instrument or  any other document referred to therein, (iii) all reasonable and documented out-of-pocket expenses  incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension  of any Letter of Credit or any demand for payment thereunder, (iv) all out-of-pocket expenses  incurred by the Administrative Agent, the Issuing Bank or any Lender, including the reasonable  and documented fees, charges and disbursements of one firm of primary legal counsel and one  firm of local counsel in each appropriate jurisdiction for the Administrative Agent, the Issuing  Bank and the Lenders (and in the case of an actual or perceived conflict of interest, of another firm  of counsel for such affected parties), 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 or Letters of Credit issued hereunder,  

 

  142  including, without limitation, all such out-of-pocket expenses incurred during any workout,  restructuring or negotiations in respect of such Loans or Letters of Credit.  (b) THE PARENT AND THE BORROWER SHALL EACH INDEMNIFY  THE ADMINISTRATIVE AGENT, EACH OTHER AGENT, EACH ARRANGER, THE  ISSUING BANK, AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE  FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”)  AGAINST, AND DEFEND AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY  AND ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED  EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ONE FIRM  OF PRIMARY LEGAL COUNSEL AND ONE FIRM OF LOCAL COUNSEL IN EACH  APPROPRIATE JURISDICTION FOR ALL INDEMNITEES COLLECTIVELY (AND, IN THE  CASE OF AN ACTUAL OR PERCEIVED CONFLICT OF INTEREST, OF ANOTHER FIRM  OF COUNSEL FOR SUCH AFFECTED INDEMNITEES), INCURRED BY OR ASSERTED  AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A  RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER  LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED  HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE  PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS  HEREUNDER OR THEREUNDER, THE CONSUMMATION OF THE TRANSACTIONS  CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, OR ANY ACTION  TAKEN IN CONNECTION WITH THIS AGREEMENT, INCLUDING, BUT NOT LIMITED  TO, THE PAYMENT OF PRINCIPAL, INTEREST AND FEES, (ii) THE FAILURE OF THE  LOAN PARTIES TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT,  INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT,  (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY  WARRANTY OR COVENANT OF THE PARENT, THE BORROWER OR ANY  GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY  INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION  THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS  THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY THE  ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT  IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT  STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE  PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING  THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF  THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER  ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF  THE LOAN PARTIES BY THE LOAN PARTIES, (vii) ANY ASSERTION THAT THE  LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT  TO THE SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE  TO THE LOAN PARTIES OR ANY OF THEIR PROPERTIES OR OPERATIONS,  INCLUDING THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED  RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR  TREATMENT OF HAZARDOUS MATERIALS ON OR AT ANY OF THEIR PROPERTIES,  (ix) THE BREACH OR NON-COMPLIANCE BY THE LOAN PARTIES WITH ANY  ENVIRONMENTAL LAW APPLICABLE TO THE LOAN PARTIES, (x) THE PAST  

 

  143  OWNERSHIP BY THE LOAN PARTIES OF ANY OF THEIR PROPERTIES OR PAST  ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY  PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi) THE  PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION,  THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR  ARRANGEMENT FOR DISPOSAL OF HAZARDOUS MATERIALS ON OR AT ANY OF  THE PROPERTIES OWNED OR OPERATED BY THE LOAN PARTIES OR ANY ACTUAL  OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM  ANY PROPERTY OWNED OR OPERATED BY THE PARENT, THE LOAN PARTIES, (xii)  ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE LOAN PARTIES,  OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN  CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR  PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING  TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY  OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY  THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE  NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR  CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN  AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL  TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF  TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT  LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE  INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY  INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,  DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT  OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO  HAVE RESULTED FROM (A) THE GROSS NEGLIGENCE, BAD FAITH OR WILLFUL  MISCONDUCT OF SUCH INDEMNITEE OR (B) A DISPUTE SOLELY BETWEEN OR  AMONG INDEMNITEES AND NOT INVOLVING ANY ACT OR OMISSION OF THE LOAN  PARTIES OR ANY OF THEIR RESPECTIVE AFFILIATES (OTHER THAN ANY CLAIMS  AGAINST AN INDEMNITEE IN ITS CAPACITY OR FULFILLING ITS ROLE AS AN  AGENT OR ARRANGER WITH RESPECT TO THIS AGREEMENT).  (c) To the extent that the Parent or the Borrower, as applicable, fails to pay any  amount required to be paid by the Parent or the Borrower, as applicable, to the Administrative  Agent, any Arranger, the Issuing Bank, or any of the Related Parties of any of the foregoing  Persons, under Section 12.03(a), Section 12.03(b) or Section 12.03(d), each Lender severally  agrees to pay to the Administrative Agent, such Arranger, the Issuing Bank, or such Related Party,  as the case may be, such Lender’s Applicable Percentage of such amount (as such Applicable  Percentage is in effect on the date such payment is sought under this Section 12.03, or, if such  payment is sought after the date upon which the Commitments shall have terminated and the Loans  shall have been paid in full, such Applicable Percentage immediately prior to such date); provided  that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as  the case may be, was incurred by or asserted against the Administrative Agent, such Arranger, the  Issuing Bank in its capacity as such.  The agreements in this Section 12.03 shall survive the  termination of this Agreement and the payment of the Loans and all other amounts payable  hereunder.  

 

  144  (d) To the extent permitted by applicable law (i) no party hereto shall assert,  and hereby waives, any claim against any party for any damages arising from the use by others of  information or other materials obtained through telecommunications, electronic or other  information transmission systems (including the Internet), and (ii) no party hereto shall assert, and  each such party hereby waives, any claim against any other party hereto, on any theory of liability,  for special, indirect, consequential or punitive damages (as opposed to direct or actual damages)  arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or  any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter  of Credit or the use of the proceeds thereof; provided that nothing in this Section 12.03(d)(ii) shall  relieve the Parent or the Borrower of any obligation it may have to indemnify an Indemnitee  against special, indirect, consequential or punitive damages asserted against such Indemnitee by a  third party.  (e) All amounts due under this Section 12.03 shall be payable not later than ten  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 (including any Affiliate of the Issuing Bank that issues any Letter of  Credit), except that (i) neither the Parent nor the Borrower may 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 (including any Affiliate of the Issuing Bank that issues any Letter of  Credit), 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, the Issuing Bank  and the Lenders) any legal or equitable right, remedy or claim under or by reason of this  Agreement.  (b) (i) Subject to the conditions set forth in Section 12.04(b)(ii), any Lender  may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights  and obligations under this Agreement (including all or a portion of its Commitment, participations  in Letters of Credit and the Loans at the time owing to it) with the prior written consent (such  consent not to be unreasonably withheld or delayed) of:  (A) the Borrower; provided that no consent of the Borrower shall  be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an  Event of Default has occurred and is continuing, any other assignee; provided, further, that the  Borrower shall be deemed to have consented to any such assignment unless it shall have objected  thereto by written notice to the Administrative Agent within ten (10) Business Days after having  received notice thereof;   (B) the Administrative Agent; provided that no consent of the  Administrative Agent shall be required for an assignment to an assignee that is a Lender  immediately prior to giving effect to such assignment; and  

 

  145  (C) the Issuing Bank.  (ii) Assignments shall be subject to the following additional conditions:  (A) except in the case of an assignment to a Lender or an  Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s  Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject  to each such assignment (determined as of the date the Assignment and Assumption with respect  to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000  unless each of the Borrower and the Administrative Agent otherwise consent; provided that no  such consent of the Borrower shall be required if an Event of Default has occurred and is  continuing;  (B) each partial assignment shall be made as an assignment of a  proportionate part of all the assigning Lender’s rights and obligations under this Agreement;  provided that this Section 12.04(b)(ii)(B) shall not be construed to prohibit the assignment of a  proportionate part of all the assigning Lender’s rights and obligations in respect of its  Commitments or Loans;  (C) the parties to each assignment shall execute and deliver to  the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an  agreement incorporating an Assignment and Assumption by reference pursuant to an Approved  Electronic Platform as to which the Administrative Agent and the parties to the Assignment and  Assumption are participants, together with a processing and recordation fee of $3,500; and  (D) the assignee, if it shall not be a Lender, shall deliver to the  Administrative Agent an Administrative Questionnaire in which the assignee designates one or  more Credit Contacts to whom all syndicate-level information (which may contain material non- public information about the Loan Parties and their related parties or their respective securities)  will be made available and who may receive such information in accordance with the assignee’s  compliance procedures and applicable laws, including Federal and state securities laws.; and  (E) the Applicable Percentage of the Maximum Credit Amount  and of the Elected Commitment assigned are equal.  For the purposes of this Section 12.04(b), the term “Approved Fund” and “Ineligible  Institution” have the following meanings:  “Approved Fund” means any Person (other than a natural person) that is engaged  in making, purchasing, holding or investing in bank loans and similar extensions of credit  in the ordinary course of its business and that is administered or managed by (a) a Lender,  (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or  manages a Lender.  “Ineligible Institution” means (a) a natural person or company or investment  vehicle operating for the primary benefit of a natural person, (b) a Defaulting Lender or its  Lender Parent or (c) the Parent, the Borrower or any of their Affiliates.  

 

  146  (iii) Subject to acceptance and recording thereof pursuant to Section  12.04(b)(iv), 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(b) 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 a non-fiduciary  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 Maximum Credit Amount and Elected Commitment of, and principal amount  (and stated interest) of the Loans and LC Disbursements owing to, each Lender pursuant to the  terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive  (absent manifest error), and the Borrower, the Administrative Agent, the Issuing Bank and the  Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof  as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender,  at any reasonable time and from time to time upon reasonable prior notice. In connection with any  changes to the Register, if necessary, the Administrative Agent will reflect the revisions on Annex  I and forward a copy of such revised Annex I to the Borrower, the Issuing Bank, and each Lender.  (v) Upon its receipt of (x) a duly completed Assignment and  Assumption executed by an assigning Lender and an assignee or (y) to the extent applicable, an  agreement incorporating an Assignment and Assumption by reference pursuant to an Approved  Electronic Platform as to which the Administrative Agent and the parties to the Assignment and  Assumption are participants, the assignee’s completed Administrative Questionnaire (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; provided that if either the assigning Lender or the assignee shall  have failed to make any payment required to be made by it pursuant to Section 2.08(d), Section  2.08(e), Section 2.05(b), Section 4.02 or Section 12.03, the Administrative Agent shall have no  obligation to accept such Assignment and Assumption and record the information therein in the  Register unless and until such payment shall have been made in full, together with all accrued  interest thereon. 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) Any Lender may, without the consent of, or notice to, the Borrower, the  Administrative Agent or the Issuing Bank, sell participations to one or more banks or other entities  (a “Participant”), other than an Ineligible Institution, in all or a portion of such Lender’s rights  and/or obligations under this Agreement (including all or a portion of its Commitment and/or the  

 

  147  Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain  unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the  performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank  and the other Lenders shall continue to deal solely and directly with such Lender in connection  with such Lender’s rights and obligations under this Agreement. Any agreement or instrument  pursuant to which a Lender sells such a participation shall provide that such Lender shall retain  the sole right to enforce this Agreement and to approve any amendment, modification or waiver  of any provision of this Agreement; provided that such agreement or instrument may provide that  such Lender will not, without the consent of the Participant, agree to any amendment, modification  or waiver described in the proviso to Section 12.02(b) that affects such Participant.  The Borrower  agrees that each Participant shall be entitled to the benefits of Section 5.01, Section 5.02 and  Section 5.03 (subject to the requirements and limitations therein, including the requirements under  Section 5.03(e) (it being understood that the documentation required under Section 5.03(e) shall  be delivered to the participating Lender and the information)) to the same extent as if it were a  Lender and had acquired its interest by assignment pursuant to Section 12.04(b); provided that  such Participant (A) agrees to be subject to the provisions of Section 5.04 as if it were an assignee  under Section 12.04(b) and (B) shall not be entitled to receive any greater payment under Section  5.01 or Section 5.03, with respect to any participation, than its participating Lender would have  been entitled to receive, except to the extent such entitlement to receive a greater payment results  from a Change in Law that occurs after the Participant acquired the applicable participation. Each  Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable  efforts to cooperate with the Borrower to effectuate the provisions of Section 5.04(b) with respect  to any Participant.  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 that such Participant agrees to be  subject to Section 4.01(c) as though it were a Lender.  Each Lender that sells a participation shall,  acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on  which it enters the name and address of each Participant and the principal amounts (and stated  interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents  (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or  any portion of the Participant Register (including the identity of any Participant or any information  relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other  obligations under any Loan Document) to any Person except to the extent that such disclosure is  necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in  registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries  in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat  each Person whose name is recorded in the Participant Register as the owner of such participation  for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance  of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no  responsibility for maintaining a Participant Register.  (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 any  pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank having  jurisdiction over such Lender, 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.  

 

  148  Section 12.05 Survival; Revival; Reinstatement.  (a) All covenants, agreements,  representations and warranties made by the Borrower herein and in the other Loan Documents and  in the certificates or other instruments delivered in connection with or pursuant to this Agreement  or any other Loan Document shall be considered to have been relied upon by the other parties  hereto and shall survive the execution and delivery of this Agreement and the making of any Loans  and issuance of any Letters of Credit, regardless of any investigation made by any such other party  or on its behalf and notwithstanding that the Administrative Agent, any other Agent, the Issuing  Bank, or any Lender may have had notice or knowledge of any Default or incorrect representation  or warranty at the time any credit is extended hereunder, and shall continue in full force and effect  as long as the principal of or any accrued interest on any Loan or any fee or any other amount  payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and  so long as the Commitments have not expired or terminated. The provisions of Section 5.01,  Section 5.02, Section 5.03, 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, the expiration or termination of the Letters of Credit and the Commitments or the  termination of this Agreement, any other Loan Document or any provision hereof or thereof.  (b) To the extent that any payments on the Obligations or proceeds of any  Collateral are subsequently invalidated, declared to be fraudulent or preferential, set aside or  required to be repaid to a trustee, debtor in possession, receiver or other Person under any  bankruptcy law, common law or equitable cause, then to such extent, the Obligations so satisfied  shall be revived and continue as if such payment or proceeds had not been received and the  Administrative Agent’s and the Lenders’ Liens, security interests, rights, powers and remedies  under this Agreement and each Loan Document shall continue in full force and effect. In such  event, each Loan Document shall be automatically reinstated and the Borrower shall take such  action as may be reasonably requested by the Administrative Agent and the Lenders to effect such  reinstatement.  Section 12.06 Counterparts; Integration; Effectiveness; Electronic Execution.  (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.  This Agreement, the other Loan Documents and any separate letter  agreements with respect to (i) fees payable to the Administrative Agent and (ii) the reductions of  the LC Commitment of the Issuing Bank 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.  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.  

 

  149  (b) Delivery of an executed counterpart of a signature page of (x) this  Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval,  consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant  to Section 12.01), certificate, request, statement, disclosure or authorization related to this  Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby  (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed  pdf. or any other electronic means that reproduces an image of an actual executed signature page  shall be effective as delivery of a manually executed counterpart of this Agreement, such other  Loan Document or such Ancillary Document, as applicable.  The words “execution,” “signed,”  “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan  Document and/or any Ancillary Document shall be deemed to include Electronic Signatures,  deliveries or the keeping of records in any electronic form (including deliveries by telecopy,  emailed pdf. or any other electronic means that reproduces an image of an actual executed  signature page), each of which shall be of the same legal effect, validity or enforceability as a  manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping  system, as the case may be; provided that nothing herein shall require the Administrative Agent to  accept Electronic Signatures in any form or format without its prior written consent and pursuant  to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the  Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and  each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or  on behalf of the Borrower or any other Loan Party without further verification thereof and without  any obligation to review the appearance or form of any such Electronic signature and (ii) upon the  request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly  followed by a manually executed counterpart.  Without limiting the generality of the foregoing,  the Borrower and each Loan Party hereby (i) agrees that, for all purposes, including without  limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy  proceedings or litigation among the Administrative Agent, the Lenders, the Borrower and the Loan  Parties, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means  that reproduces an image of an actual executed signature page and/or any electronic images of this  Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal  effect, validity and enforceability as any paper original, (ii) the Administrative Agent and each of  the Lenders may, at its option, create one or more copies of this Agreement, any other Loan  Document and/or any Ancillary Document in the form of an imaged electronic record in any  format, which shall be deemed created in the ordinary course of such Person’s business, and  destroy the original paper document (and all such electronic records shall be considered an original  for all purposes and shall have the same legal effect, validity and enforceability as a paper record),  (iii) waives any argument, defense or right to contest the legal effect, validity or enforceability of  this Agreement, any other Loan Document and/or any Ancillary Document based solely on the  lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary  Document, respectively, including with respect to any signature pages thereto and (iv) waives any  claim against any Indemnitee for any losses, claims (including intraparty claims), demands,  damages or liabilities of any kind arising solely from the Administrative Agent’s and/or any  Lender’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed  pdf. or any other electronic means that reproduces an image of an actual executed signature page,  including any losses, claims (including intraparty claims), demands, damages or liabilities of any  kind arising as a result of the failure of the Borrower and/or any other Loan Party to use any  

 

  150  available security measures in connection with the execution, delivery or transmission of any  Electronic Signature.  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, the Issuing Bank and each of their respective 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 limitation, obligations under  Hedge Agreements) at any time owing, by such Lender, the Issuing Bank or any such Affiliate, to  or for the credit or the account of the Borrower or any other Loan Party against any and all of the  obligations of the Borrower or any other Loan Party now or hereafter existing under this  Agreement or any other Loan Document to such Lender or such Issuing Bank or their respective  Affiliates, irrespective of whether or not such Lender, the Issuing Bank or Affiliate shall have  made any demand under this Agreement or any other Loan Document and although such  obligations of the Borrower may be contingent or unmatured or are owed to a branch office or  Affiliate of such Lender or the Issuing Bank different from the branch office or Affiliate holding  such deposit or obligated on such indebtedness; provided that in the event that any Defaulting  Lender shall exercise any such right of setoff, (x) all amounts so setoff shall be paid over  immediately to the Administrative Agent for further application in accordance with the provisions  of Section 4.03 and, pending such payment, shall be segregated by such Defaulting Lender from  its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing  Bank, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative  Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender  as to which it exercised such right of setoff.  The rights of each Lender, the Issuing Bank and their  respective Affiliates under this Section 12.08 are in addition to other rights and remedies (including  other rights of setoff) that such Lender, the Issuing Bank or their respective Affiliates may have.   Each Lender and the Issuing Bank agrees to notify the Borrower and the Administrative Agent  promptly after any such setoff and application; provided that the failure to give such notice shall  not affect the validity of such setoff and application. 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. Each Lender agrees to notify the Borrower and the  Administrative Agent promptly after any such setoff and application; provided that the failure to  give such notice shall not affect the validity of such setoff and application.  Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF  PROCESS; WAIVER OF JURY TRIAL.  (a) This Agreement and the Notes shall be construed in  accordance with and governed by the law of the State of New York.  (b) EACH OF THE LENDERS AND THE ADMINISTRATIVE AGENT  HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT,  

 

  151  NOTWITHSTANDING THE GOVERNING LAW PROVISIONS OF ANY APPLICABLE  LOAN DOCUMENT, ANY CLAIMS BROUGHT AGAINST THE ADMINISTRATIVE  AGENT BY ANY SECURED PARTY RELATING TO THIS AGREEMENT, ANY OTHER  LOAN DOCUMENT, THE COLLATERAL OR THE CONSUMMATION OR  ADMINISTRATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY  SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF  THE STATE OF NEW YORK.  (c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND  UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE  EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE  SOUTHERN DISTRICT OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN  (OR IF SUCH COURT LACKS SUBJECT MATTER JURISDICTION, THE SUPREME  COURT OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN),  AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR  PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER  LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, OR  FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE  PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT  ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY (AND ANY  SUCH CLAIMS, CROSS-CLAIMS OR THIRD PARTY CLAIMS BROUGHT AGAINST THE  ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES MAY ONLY) BE  HEARD AND DETERMINED IN SUCH FEDERAL (TO THE EXTENT PERMITTED BY  LAW) OR NEW YORK STATE COURT.  EACH OF THE PARTIES HERETO AGREES THAT  A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE  CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE  JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS  AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT  THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY  OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS  AGREEMENT AGAINST THE BORROWER OR ANY OTHER ANY OTHER LOAN PARTY  OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.  (d) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND  UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND  EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE  TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT  OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY  COURT REFERRED TO IN SECTION 12.09(C).  EACH OF THE PARTIES HERETO  HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,  THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH  ACTION OR PROCEEDING IN ANY SUCH COURT.  (e) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS  TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION  12.01.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO  

 

  152  THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY  LAW.  (f) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST  EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL  BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF  OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED  HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH  PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY  OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT  SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO  ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE  OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT  BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS  SECTION 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, the Issuing Bank and  the Lenders agrees to maintain the confidentiality of the Information (as defined below), except  that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and  agents, including accountants, legal counsel and other advisors (it being understood that the  Persons to whom such disclosure is made will be informed of the confidential nature of such  Information and instructed to keep such Information confidential), (b) to the extent requested by  any Governmental Authority (including any self-regulatory authority, such as the National  Association of Insurance Commissioners), (c) to the extent required by applicable laws or  regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement  or any other Loan Document, (e) in connection with the exercise of any remedies hereunder or  under any other Loan Document or any suit, action or proceeding relating to this Agreement or  any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an  agreement containing provisions substantially the same as those of this Section 12.11, to (i) any  assignee of any of its rights or obligations under this Agreement or (ii) any actual counterparty (or  its advisors) to any Hedge Agreement relating to the Borrower and its obligations, (g) on a  confidential basis to (1) any rating agency in connection with rating any Loan Party or the credit  facilities provided for herein or (2) the CUSIP Service Bureau or any similar agency in connection  with the issuance and monitoring of identification numbers with respect to the credit facilities  provided for herein, (h) with the consent of the Borrower or (i) to the extent such Information (i)  becomes publicly available other than as a result of a breach of this Section 12.11 or (ii) becomes  available to the Administrative Agent, the Issuing Bank, any Lender or any Affiliate (unless such  Person knows such Information is subject to a confidentiality restriction) of the foregoing Persons  on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section  12.11, “Information” means all information received from the Loan Parties relating to the Loan  Parties’ businesses, other than any such information that is available to the Administrative Agent,  the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Loan Parties  and other than information pertaining to this Agreement routinely provided by arrangers to data  

 

  153  service providers, including league table providers, that serve the lending industry.  Any Person  required to maintain the confidentiality of Information as provided in this Section 12.11 shall be  considered to have complied with its obligation to do so if such Person has exercised the same  degree of care to maintain the confidentiality of such Information as such Person would accord to  its own confidential information.  Section 12.12 Interest Rate Limitation.  It is the intention of the parties hereto that each  Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions  contemplated hereby would be usurious as to any Lender under laws applicable to it (including the  laws of the United States of America and the State of New York or any other jurisdiction whose  laws may be mandatorily applicable to such Lender notwithstanding the other provisions of this  Agreement), then, in that event, notwithstanding anything to the contrary in any of the Loan  Documents or any agreement entered into in connection with or as security for the Notes, it is  agreed as follows:  (i) the aggregate of all consideration which constitutes interest under law  applicable to any Lender that is contracted for, taken, reserved, charged or received by such Lender  under any of the Loan Documents or agreements or otherwise in connection with the Notes shall  under no circumstances exceed the maximum amount allowed by such applicable law, and any  excess shall be canceled automatically and if theretofore paid shall be credited by such Lender on  the principal amount of the Obligations (or, to the extent that the principal amount of the  Obligations shall have been or would thereby be paid in full, refunded by such Lender to the  Borrower); and (ii) in the event that the maturity of the Notes is accelerated by reason of an election  of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in  the event of any required or permitted prepayment, then such consideration that constitutes interest  under law applicable to any Lender may never include more than the maximum amount allowed  by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise  shall be canceled automatically by such Lender as of the date of such acceleration or prepayment  and, if theretofore paid, shall be credited by such Lender on the principal amount of the Obligations  (or, to the extent that the principal amount of the Obligations shall have been or would thereby be  paid in full, refunded by such Lender to the Borrower). All sums paid or agreed to be paid to any  Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted  by law applicable to such Lender, be amortized, prorated, allocated and spread throughout the  stated term of the Loans evidenced by the Notes until payment in full so that the rate or amount of  interest on account of any Loans hereunder does not exceed the maximum amount allowed by such  applicable law. If at any time and from time to time (i) the amount of interest payable to any Lender  on any date shall be computed at the Highest Lawful Rate applicable to such Lender pursuant to  this Section 12.12 and (ii) in respect of any subsequent interest computation period the amount of  interest otherwise payable to such Lender would be less than the amount of interest payable to  such Lender computed at the Highest Lawful Rate applicable to such Lender, then the amount of  interest payable to such Lender in respect of such subsequent interest computation period shall  continue to be computed at the Highest Lawful Rate applicable to such Lender until the total  amount of interest payable to such Lender shall equal the total amount of interest which would  have been payable to such Lender if the total amount of interest had been computed without giving  effect to this Section 12.12.   Section 12.13 EXCULPATION PROVISIONS.  EACH OF THE PARTIES HERETO  SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE  OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND  

 

  154  KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN  DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY  INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS  AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY  INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE  NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE  OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN  ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND  THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND  THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY  INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER  PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO  AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR  ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND  THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE  OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT  “CONSPICUOUS.”  Section 12.14 Collateral Matters; Secured Hedge Agreements; Secured Cash Management  Agreements.  The benefit of the Security Instruments and of the provisions of this Agreement  relating to any Collateral securing the Obligations shall also extend to and be available to Secured  Hedging Parties and Secured Cash Management Providers on a pro rata basis (but subject to the  terms of the Loan Documents, including, without limitation, provisions thereof relating to the  application and priority of payments to the Persons entitled thereto) in respect of Secured Hedge  Obligations and Secured Cash Management Obligations.  Except as provided in Section 12.02(b),  no Secured Hedge Party or Secured Cash Management Provider shall have any voting rights under  any Loan Document as a result of the existence of any Secured Hedge Obligation or Secured Cash  Management Obligation owed to it.  Except with respect to the exercise of setoff rights in  accordance with Section 12.08 or with respect to a Secured Party’s right to file a proof of claim in  an insolvency proceeding, no Secured Party shall have any right individually to realize upon any  of the Collateral or to enforce any guarantee of the Obligations, it being understood and agreed  that all powers, rights and remedies under the Loan Documents may be exercised solely by the  Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof.  Section 12.15 No Third Party Beneficiaries.  This Agreement, the other Loan Documents,  and the agreement of the Lenders to make Loans and the Issuing Bank to issue, amend, renew or  extend Letters of Credit hereunder are solely for the benefit of the Borrower, and no other Person  (including, without limitation, any other Loan Party 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,  the Issuing Bank or any Lender for any reason whatsoever. There are no third party beneficiaries  other than to the extent contemplated by the last sentence of Section 12.04(a).  Section 12.16 USA PATRIOT Act Notice.  Each Lender hereby notifies the Borrower that  pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record  information that identifies the Borrower and the Guarantors, which information includes the name  

 

  155  and address of the Borrower and the Guarantors and other information that will allow such Lender  to identify the Borrower and the Guarantors in accordance with the USA PATRIOT Act.  Section 12.17 No Fiduciary Duty; etc.  (a) The Borrower acknowledges and agrees, and acknowledges the other Loan  Parties’ understanding, that no Credit Party will have any obligations except those obligations  expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely  in the capacity of an arm’s length contractual counterparty to the Borrower with respect to the  Loan Documents and the transactions contemplated herein and therein and not as a financial  advisor or a fiduciary to, or an agent of, the Borrower or any other person.  The Borrower agrees  that it will not assert any claim against any Credit Party based on an alleged breach of fiduciary  duty by such Credit Party in connection with this Agreement and the transactions contemplated  hereby.  Additionally, the Borrower acknowledges and agrees that no Credit Party is advising the  Borrower as to any legal, tax, investment, accounting, regulatory or any other matters in any  jurisdiction.  The Borrower shall consult with its own advisors concerning such matters and shall  be responsible for making its own independent investigation and appraisal of the transactions  contemplated herein or in the other Loan Documents, and the Credit Parties shall have no  responsibility or liability to the Borrower with respect thereto.  (b) The Borrower further acknowledges and agrees, and acknowledges the  other Loan Parties’ understanding, that each Credit Party, together with its Affiliates, is a full  service securities or banking firm engaged in securities trading and brokerage activities as well as  providing investment banking and other financial services.  In the ordinary course of business, any  Credit Party may provide investment banking and other financial services to, and/or acquire, hold  or sell, for its own accounts and the accounts of customers, equity, debt and other securities and  financial instruments (including bank loans and other obligations) of, the Borrower and other  companies with which the Borrower may have commercial or other relationships.  With respect to  any securities and/or financial instruments so held by any Credit Party or any of its customers, all  rights in respect of such securities and financial instruments, including any voting rights, will be  exercised by the holder of the rights, in its sole discretion.  (c) In addition, the Borrower acknowledges and agrees, and acknowledges the  other Loan Parties’ understanding, that each Credit Party and its affiliates may be providing debt  financing, equity capital or other services (including financial advisory services) to other  companies in respect of which the Borrower may have conflicting interests regarding the  transactions described herein and otherwise.  No Credit Party will use confidential information  obtained from the Borrower by virtue of the transactions contemplated by the Loan Documents or  its other relationships with the Borrower in connection with the performance by such Credit Party  of services for other companies, and no Credit Party will furnish any such information to other  companies.  The Borrower also acknowledges that no Credit Party has any obligation to use in  connection with the transactions contemplated by the Loan Documents, or to furnish to the  Borrower, confidential information obtained from other companies.  Section 12.18 Flood Insurance Provisions.  Notwithstanding any provision in this  Agreement or any other Loan Document to the contrary, in no event is any Building (as defined in  the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the  

 

  156  applicable Flood Insurance Regulation) included in the definition of “Mortgaged Property” and  no Building or Manufactured (Mobile) Home is hereby encumbered by this Agreement or any  other Loan Document. As used herein, “Flood Insurance Regulations” means (a) the National  Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (b) the  Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto,  (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the  same may be amended or recodified from time to time and (d) the Flood Insurance Reform Act of  2004 and any regulations promulgated thereunder.  Section 12.19 Acknowledgement and Consent to Bail-In of Affected Financial  Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other  agreement, arrangement or understanding among any such parties, each party hereto acknowledges  that any liability of any Affected Financial Institution arising under any Loan Document may be  subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and  agrees and consents to, and acknowledges and agrees to be bound by:  (a) the application of any Write-Down and Conversion Powers by the  applicable Resolution Authority to any such liabilities arising hereunder which may be payable to  it by any party hereto that is an Affected Financial Institution; and  (b) the effects of any Bail-In Action on any such liability, including, if applicable:  (i) a reduction in full or in part or cancellation of any such liability;  (ii) a conversion of all, or a portion of, such liability into shares or other  instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge  institution that may be issued to it or otherwise conferred on it, and that such shares or other  instruments of ownership will be accepted by it in lieu of any rights with respect to any such  liability under this Agreement or any other Loan Document; or  (iii) the variation of the terms of such liability in connection with the  exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.  Section 12.20 Acknowledgement Regarding Any Supported QFCs.  To the extent that the  Loan Documents provide support, through a guarantee or otherwise, for any Hedge Agreement or  any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each  such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the  resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit  Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act  (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in  respect of such Supported QFC and QFC Credit Support (with the provisions below applicable  notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be  governed by the laws of the State of New York and/or of the United States or any other state of  the United States):  In the event a Covered Entity that is party to a Supported QFC (each, a  “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the  transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and  obligation in or under such Supported QFC and such QFC Credit Support, and any rights in  

 

  157  property securing such Supported QFC or such QFC Credit Support) from such Covered Party will  be effective to the same extent as the transfer would be effective under the U.S. Special Resolution  Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and  rights in property) were governed by the laws of the United States or a state of the United States.  In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a  proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents  that might otherwise apply to such Supported QFC or any QFC Credit Support that may be  exercised against such Covered Party are permitted to be exercised to no greater extent than such  Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC  and the Loan Documents were governed by the laws of the United States or a state of the United  States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of  the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered  Party with respect to a Supported QFC or any QFC Credit Support.  Section 12.21 Material Non-Public Information.  (a) EACH LENDER ACKNOWLEDGES THAT INFORMATION AS  DEFINED IN SECTION 12.11 FURNISHED TO IT PURSUANT TO THIS AGREEMENT  MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE  BORROWER AND ITS 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.  (b) 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 WILL  BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON- PUBLIC INFORMATION ABOUT THE LOAN PARTIES 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.  Section 12.22 Keepwell.  Each Qualified ECP Guarantor hereby jointly and severally  absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as  may be needed from time to time by each other Loan Party to honor all of its obligations under the  Loan Guaranty in respect of Swap Obligations (provided, however, that each Qualified ECP  Guarantor shall only be liable under this Section 12.22 for the maximum amount of such liability  that can be hereby incurred without rendering its obligations under this Section 12.22, or otherwise  under the Loan Guaranty, voidable under applicable law relating to fraudulent conveyance or  fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP  Guarantor under this Section 12.22 shall remain in full force and effect until the guarantees in  respect of Swap Obligations under each Hedge Agreement have been discharged or otherwise  

 

  158  released or terminated in accordance with the terms of this Agreement and the Guaranty  Agreement. Each Qualified ECP Guarantor intends that this Section 12.22 constitute, and this  Section 12.22 shall be deemed to constitute, a “keepwell, support, or other agreement” for the  benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity  Exchange Act  ARTICLE XIII  PARENT GUARANTY  Section 13.01  Parent Guaranty.  (a) The Parent hereby absolutely, unconditionally and irrevocably guarantees  (on a joint and several basis with the other Guarantors) the punctual payment and performance,  when due, whether at stated maturity, by acceleration or otherwise, of all Obligations (collectively,  the “Guaranteed Obligations”); provided, however, that as used herein “Guaranteed Obligations”  shall not include the Excluded Hedge Obligations. Without limiting the generality of the foregoing,  the Parent’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations  and would be owed by the Borrower or any other Loan Party to the Administrative Agent, the  Issuing Bank or any Lender under the Loan Documents and by the Borrower or any other Loan  Party to any Secured Hedge Party, Secured Cash Management Provider, or any other Secured Party  but for the fact that they are unenforceable or not allowable due to insolvency or the existence of  a bankruptcy, reorganization or similar proceeding involving the Borrower or any other Loan  Party. The Parent shall make all payments hereunder without setoff or counterclaim and free and  clear of and without deduction for any Taxes to the extent such Taxes would be payable by or on  account of any obligation of the Borrower or any other Loan Party in accordance with this  Agreement. The obligations of the Parent under this Article XIII constitute a guaranty of payment  when due and not of collection, and the Parent specifically agrees that it shall not be necessary or  required that the Administrative Agent or any Secured Party exercise any right, assert any claim  or demand or enforce any remedy whatsoever against any other Loan Party or any other Person  before or as a condition to the obligations of the Parent hereunder.  (b) Anything contained herein to the contrary notwithstanding, the obligations  of the Parent under this Article XIII on any date shall be limited to a maximum aggregate amount  equal to the largest amount that would not, on such date, render its obligations hereunder subject  to avoidance as a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code of  the United States or any applicable provisions of comparable laws relating to bankruptcy,  insolvency, or reorganization, or relief of debtors (collectively, the “Fraudulent Transfer Laws”),  but only to the extent that any Fraudulent Transfer Law has been found in a final non-appealable  judgment of a court of competent jurisdiction to be applicable to such obligations as of such date,  in each case:  (i) after giving effect to all liabilities of the Parent, contingent or  otherwise, that are relevant under the Fraudulent Transfer Laws, but specifically excluding:  (A) any liabilities of the Parent in respect of intercompany  indebtedness to the Borrower or other Loan Party to the extent that such indebtedness would be  discharged in an amount equal to the amount paid by the Parent hereunder; and  

 

  159  (B) any liabilities of the Parent with respect to the Guaranteed  Obligations; and  (ii) after giving effect as assets to the value (as determined under the  applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation,  reimbursement, indemnification or contribution of the Parent pursuant to applicable law or  pursuant to the terms of any agreement.  Section 13.02 Guaranty Absolute. The Parent guarantees that the Guaranteed Obligations  will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law,  regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the  rights of any Secured Party with respect thereto. The obligations of the Parent under this Article  XIII are independent of the Guaranteed Obligations, and a separate action or actions may be  brought and prosecuted against the Parent to enforce the provisions of this Article XIII, irrespective  of whether any action is brought against the Borrower, any other Guarantor or any other Person or  whether the Borrower, any other Guarantor or any other Person is joined in any such action or  actions. The liability of the Parent under this Article XIII shall be irrevocable, absolute and  unconditional irrespective of, and the Parent hereby irrevocably waives, to the extent not  prohibited by applicable law, any defenses it may now or hereafter have (other than a defense of  payment or performance) in any way relating to, any or all of the following:  (a) any lack of validity or enforceability of any Loan Document or any  agreement or instrument relating thereto or any part of the Guaranteed Obligations being  irrecoverable;  (b) any change in the time, manner or place of payment of, or in any other term  of, all or any of the Guaranteed Obligations, or any other amendment, waiver of, any consent to or  departure from any Loan Document, agreement or instrument relating to Secured Hedge  Obligations with a Secured Hedge Party or agreement relating to Secured Cash Management  Obligations with a Secured Cash Management Provider, including, without limitation, any  increase in the Guaranteed Obligations resulting from the extension of additional credit to the  Borrower or otherwise;  (c) any taking, exchange, release or non-perfection of any lien on any collateral,  or any taking, release or amendment or waiver of or consent to departure from any other guaranty,  for all or any of the Guaranteed Obligations;  (d) any manner of application of collateral, or proceeds thereof, to all or any of  the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or  any of the Guaranteed Obligations or any other obligations of any other Person under the Loan  Documents or any other assets of the Borrower or any other Guarantor;  (e) any change, restructuring or termination of the corporate, limited liability  company, or partnership structure or existence of the Borrower or any other Guarantor;  (f) any failure of any Secured Party to disclose to the Borrower or any other  Guarantor any information relating to the business, condition (financial or otherwise), operations,  properties or prospects of any Person now or in the future known to the Administrative Agent, the  

 

  160  Issuing Bank, any Lender or any other Secured Party (and the Parent hereby irrevocably waives  any duty on the part of any Secured Party to disclose such information);  (g) any signature of any officer of the Borrower or any other Guarantor being  mechanically reproduced in facsimile or otherwise; or  (h) any other circumstance or any existence of or reliance on any representation  by any Secured Party that might otherwise constitute a defense available to, or a discharge of, the  Borrower, any other Guarantor or any other guarantor, surety or other Person other than payment  in full, in cash, of the Guaranteed Obligations.  Section 13.03 Continuation and Reinstatement, Etc. The Parent agrees that, to the extent  that payments of any of the Guaranteed Obligations are made, or any Secured Party receives any  proceeds of collateral, and such payments or proceeds or any part thereof are subsequently  invalidated, declared to be fraudulent or preferential, set aside, or otherwise required to be repaid,  then to the extent of such repayment the Guaranteed Obligations shall be reinstated and continued  in full force and effect as of the date such initial payment or collection of proceeds occurred. THE  LIABILITIES OF THE PARENT AS SET FORTH IN THIS SECTION 13.03 SHALL SURVIVE  THE TERMINATION OF THIS AGREEMENT.  Section 13.04 Waivers and Acknowledgments.  (a) The Parent, to the extent not prohibited by applicable law, hereby waives  promptness, diligence, presentment, notice of acceptance and any other notice with respect to any  of the Guaranteed Obligations and this Agreement and any requirement that any Secured Party  protect, secure, perfect or insure any Lien or any property or exhaust any right or take any action  against the Borrower or any other Person or any collateral.  (b) The Parent, to the extent not prohibited by applicable law, hereby  irrevocably waives any right to revoke the provisions of this Article XIII, and acknowledges that  the obligations under this Article XIII are continuing in nature and applies to all Guaranteed  Obligations, whether existing now or in the future.  (c) The Parent acknowledges that it will receive substantial direct or indirect  benefits from (i) the financing arrangements involving the Borrower or any other Guarantor  contemplated by the Loan Documents, (ii) the Secured Hedge Obligations provided to the  Borrower or any other Guarantor, and (iii) the Secured Cash Management Obligations provided to  the Borrower or any other Guarantor, and that the waivers set forth in this Article XIII are  knowingly made in contemplation of such benefits.  Section 13.05 Subrogation and Subordination.  (a) The Parent will not exercise any rights that it may now have or hereafter  acquire against the Borrower or any other Person to the extent that such rights arise from the  existence, payment, performance or enforcement of the Parent’s obligations under this Article XIII  or any other Loan Document, including, without limitation, any right of subrogation,  reimbursement, exoneration, contribution or indemnification and any right to participate in any  claim or remedy of any Secured Party against the Borrower or any other Person, whether or not  

 

  161  such claim, remedy or right arises in equity or under contract, statute or common law, including,  without limitation, the right to take or receive from the Borrower or any other Person, directly or  indirectly, in cash or other property or by set-off or in any other manner, payment or security on  account of such claim, remedy or right, unless and until the Obligations are paid in full. If any  amount shall be paid to the Parent in violation of the preceding sentence at any time prior to or in  connection with the payment in full of the Obligations, such amount shall be held in trust for the  benefit of the Secured Parties and shall forthwith be paid to the Administrative Agent to be credited  and applied to the Guaranteed Obligations and any and all other amounts payable by the Parent  under this Article XIII, whether matured or unmatured, in accordance with the terms of the Loan  Documents.  (b)  The Parent agrees that, until after the Obligations are paid in full, all  Subordinated Guarantor Obligations (as hereinafter defined) are and shall be subordinate and  inferior in rank, preference and priority (in liquidation, dissolution, bankruptcy, reorganization, or  otherwise) to all obligations of the Parent in respect of the Guaranteed Obligations hereunder, and  the Parent shall, if requested by the Administrative Agent, execute a subordination agreement  reasonably satisfactory to the Administrative Agent to more fully set out the terms of such  subordination, it being understood that unless an Event of Default has occurred and is continuing  (or would otherwise result from the making of any such payment or prepayment), payments and  prepayments in respect of such Subordinated Guarantor Obligations may be made from time to  time. The Parent agrees that none of the Subordinated Guarantor Obligations shall be secured by  a Lien or security interest on any assets of the Parent, including any ownership interests in any  subsidiary of the Parent (including the Borrower) or on any other assets of the Parent or any  subsidiary (including the Borrower). “Subordinated Guarantor Obligations” means any and all  obligations and liabilities of either (i) the Borrower or any other Guarantor owing to the Parent, or  (ii) the Parent owing to the Borrower or any other Guarantor, direct or contingent, due or to become  due, now existing or hereafter arising, including, without limitation, all future advances, with  interest, attorneys’ fees, expenses of collection and costs.  Section 13.06 Representations and Warranties. The Parent hereby represents and warrants  to the Secured Parties as follows:  (a) There are no conditions precedent to the effectiveness of the obligations of  the Parent under this Article XIII. The Parent benefits from executing this Agreement and the  undertaking its obligations hereunder, including without limitation, those set forth in this Article  XIII.  (b) The Parent has, independently and without reliance upon the Administrative  Agent, any Lender or any other Secured Party, and based on such documents and information as  it has deemed appropriate, made its own credit analysis and decision to enter into the obligations  hereunder, and the Parent has established adequate means of obtaining from the Borrower and  each other relevant Person on a continuing basis information pertaining to, and is now and on a  continuing basis will be sufficiently familiar with, the business, condition (financial and  otherwise), operations, properties and prospects of the Borrower and each other relevant Person.  Section 13.07 Right of Set-Off. Subject to Section 11.11, upon the occurrence and during  the continuance of any Event of Default, any Lender or the Administrative Agent, the Issuing Bank  

 

  162  and any other Secured Party is hereby authorized at any time, to the fullest extent permitted by  law, to set-off and apply any deposits (general or special, time or demand, provisional or final) and  other indebtedness owing by such Secured Party to the account of the Parent against any and all  of the obligations of the Parent under this Article XIII, irrespective of whether or not such Secured  Party shall have made any demand under this Agreement and although such obligations may be  contingent and unmatured or are owed to another branch or office of a Secured Party different  from the branch or office holding such deposit or obligated on such indebtedness. Such Secured  Party shall promptly notify the Parent after any such set-off and application is made, provided that  the failure to give such notice shall not affect the validity of such set-off and application. The rights  of the Secured Parties under this Section 13.07 are in addition to other rights and remedies  (including, without limitation, other rights of set-off) which any Secured Party may have.  Section 13.08 Continuing Guaranty: Assignments. The obligations of the Parent under this  Article XIII are a continuing guaranty and shall (a) remain in full force and effect until the  Obligations are paid in full, (b) be binding upon the Parent and its successors and assigns, (c) inure  to the benefit of and be enforceable by the Administrative Agent, each Lender and the Issuing  Bank and their respective successors, and, in the case of transfers and assignments made in  accordance with this Agreement, transferees and assigns, and (d) inure to the benefit of and be  enforceable by each Secured Party and each of its successors, transferees and assigns to the extent  such successor, transferee or assign also falls within the definition of Secured Party. Without  limiting the generality of the foregoing clause (c), subject to Section 12.04, any Lender may assign  or otherwise transfer all or any portion of its rights and obligations under the this Agreement  (including, without limitation, all or any portion of its Commitment, the Borrowings owing to it  and the Note or Notes held by it) to any other Person, and such other Person shall thereupon  become vested with all the benefits in respect thereof granted to such Lender herein or otherwise,  subject, however, in all respects to the provisions of this Agreement. The Parent acknowledges  that upon any Person becoming a Lender, the Administrative Agent or the Issuing Bank in  accordance with this Agreement, such Person shall be entitled to the benefits of this Agreement,  including, without limitation, such benefits under this Article XIII.   [SIGNATURES BEGIN NEXT PAGE]    

 

  [EXHIBIT B TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  EXHIBIT B  FORM OF BORROWING REQUEST  [________________], 20[__]  Berry Petroleum Company, LLC (the “Borrower”), pursuant to Section 2.03 of the Credit  Agreement, dated as of August 26, 2021 (together with all amendments, restatements, supplements  or other modifications thereto, the “Credit Agreement”; unless otherwise defined herein, each  capitalized term used herein that is defined in the Credit Agreement shall have the meaning  ascribed such term in the Credit Agreement), among the Borrower, Berry Corporation (bry),  JPMorgan Chase Bank, N.A., as administrative agent and an issuing bank, and the other lenders  from time to time party thereto, hereby requests a Borrowing as follows:  (i) Aggregate amount of the requested Borrowing is $[__________];  (ii) Date of such Borrowing is [__________], 20[__];  (iii) Requested Borrowing is to be [an ABR Borrowing] [a Term Benchmark  Borrowing] [a RFR Borrowing];  (iv) In the case of a Term Benchmark Borrowing, the initial Interest Period applicable  thereto is [__________];  (v) Amount of Borrowing Base in effect on the date hereof is $[__________];  (vi) Among of the Aggregate Elected Commitment Amounts in effect on the date hereof  is $[__________];  (vii) Total Revolving Credit Exposures on the date hereof (i.e., outstanding principal  amount of Loans and total LC Exposure) is $[__________];  (viii) Pro forma total Revolving Credit Exposures (giving effect to the requested  Borrowing) is $[__________]; and  (ix) [the Consolidated Cash Balance (without regard to the requested Borrowing) is  $[__________] and the pro forma Consolidated Cash Balance (giving effect to the requested  Borrowing) is $[__________]; and]  (x) Location and number of the Borrower’s account to which funds are to be disbursed,  which shall comply with the requirements of Section 2.05 of the Credit Agreement, is as follows:  [    ]  [    ]  [    ]  [    ]  [    ]    

 

  [EXHIBIT B TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  The undersigned certifies that he/she is the [  ] of the Borrower, and that as such he is authorized  to execute this certificate on behalf of the Borrower. The undersigned further certifies, represents  and warrants on behalf of the Borrower that the Borrower is entitled to receive the requested  Borrowing under the terms and conditions of the Credit Agreement.  BERRY PETROLEUM COMPANY, LLC        By:         Name:  Title:  

 

  [EXHIBIT C TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  EXHIBIT C  FORM OF INTEREST ELECTION REQUEST  [________________], 20[__]  Berry Petroleum Company, LLC (the “Borrower”), pursuant to Section 2.04 of the Credit  Agreement, dated as of August 26, 2021 (together with all amendments, restatements, supplements  or other modifications thereto, the “Credit Agreement”; unless otherwise defined herein, each  capitalized term used herein that is defined in the Credit Agreement shall have the meaning  ascribed such term in the Credit Agreement), among the Borrower, Berry Corporation (bry),  JPMorgan Chase Bank, N.A., as administrative agent and an issuing bank, and the lenders from  time to time party thereto, hereby makes an Interest Election Request as follows:  (i) The Borrowing to which this Interest Election Request applies, and if different  options are being elected with respect to different portions thereof, the portions thereof to be  allocated to each resulting Borrowing (in which case the information specified pursuant to (iii) and  (iv) below shall be specified for each resulting Borrowing) are [__________];  (ii) The effective date of the election made pursuant to this Interest Election Request is  [__________], 20[__]; [and]  (iii) The resulting Borrowing is to be [an ABR Borrowing] [a Term Benchmark  Borrowing] [a RFR Borrowing][; and]  [(iv) [If the resulting Borrowing is a Term Benchmark Borrowing,  the Interest Period  applicable to the resulting Borrowing after giving effect to such election is [__________]].  The undersigned certifies that he/she is the [     ] of the Borrower, and that as such he/she  is authorized to execute this certificate on behalf of the Borrower. The undersigned further  certifies, represents and warrants on behalf of the Borrower that the Borrower is entitled to receive  the requested continuation or conversion under the terms and conditions of the Credit Agreement.  BERRY PETROLEUM COMPANY, LLC        By:         Name:  Title:    

 

  [EXHIBIT K TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  EXHIBIT K  FORM OF ELECTED COMMITMENT INCREASE CERTIFICATE  [__________], 20[    ]  To: JPMORGAN CHASE BANK, N.A.,  as Administrative Agent  Berry Petroleum Company, LLC (the “Borrower”), JPMorgan Chase Bank, N.A., as the  Administrative Agent, and the lenders party thereto have heretofore entered into that certain Credit  Agreement dated as of August 26, 2021 (as amended, restated, amended and restated,  supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized  terms not otherwise defined herein shall have the meaning given to such terms in the Credit  Agreement.  This Elected Commitment Increase Certificate is being delivered pursuant to  Section 2.06(c)(ii)(G) of the Credit Agreement.  Please be advised that the undersigned has agreed (a) to increase its Elected Commitment  under the Credit Agreement effective [__________], 20[__] (the “Increase Effective Date”) from  $[__________] to $[__________] and (b) that it shall continue to be a party in all respects to the  Credit Agreement and the other Loan Documents to which it is a party.  With reference to Section 2.06(c)(ii)(C) of the Credit Agreement, the Borrower hereby  confirms that [Check Applicable Box]:  [  ] There are, or if the Increase Effective Date is after the date hereof, there will be, no  Term Benchmark Borrowings outstanding on the Increase Effective Date.  [  ] There are, or if the Increase Effective Date is after the date hereof, there will be,  Term Benchmark Borrowings outstanding on the Increase Effective Date and the  Borrower will pay any compensation required by Section 5.02 of the Credit  Agreement on the Increase Effective Date.    Very truly yours,  BERRY PETROLEUM COMPANY, LLC        By:         Name:  Title:     

 

  [EXHIBIT K TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  Accepted and Agreed:  JPMORGAN CHASE BANK, N.A.,  as Administrative Agent  By: ______________________________  Name: ______________________________  Title: ______________________________  Accepted and Agreed:  [Name of Increasing Lender]  By: ______________________________  Title: ______________________________      

 

  [EXHIBIT L TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  EXHIBIT L  FORM OF ADDITIONAL LENDER CERTIFICATE  [               ], 20[    ]  To: JPMORGAN CHASE BANK, N.A.,  as Administrative Agent  Berry Petroleum Company, LLC (the “Borrower”), JPMorgan Chase Bank, N.A., as the  Administrative Agent, and the lenders party thereto have heretofore entered into that certain Credit  Agreement dated as of August 26, 2021 (as amended, restated, amended and restated,  supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized  terms not otherwise defined herein shall have the meaning given to such terms in the Credit  Agreement.  This Additional Lender Certificate is being delivered pursuant to Section 2.06(c)(ii)(H) of  the Credit Agreement.  Please be advised that the undersigned has agreed (a) to become a Lender under the Credit  Agreement effective [__________], 20[___] (the “Additional Lender Effective Date”) with a  Maximum Credit Amount of $[__________] and an Elected Commitment of $[_________] and  (b) that it shall be a party in all respects to the Credit Agreement and the other Loan Documents to  which it is a party.  This Additional Lender Certificate is being delivered to the Administrative Agent together  with (i) if requested by the Additional Lender, an executed Note payable to such Additional Lender  (or its registered assigns) in a principal amount equal to its Maximum Credit Amount, (ii) if the  Additional Lender is a Foreign Lender, any documentation required to be delivered by such  Additional Lender pursuant to Section 5.03(e) of the Credit Agreement, duly completed and  executed by the Additional Lender, and (iii) an Administrative Questionnaire in the form supplied  by the Administrative Agent, duly completed by the Additional Lender.  With reference to Section 2.06(c)(ii)(C) of the Credit Agreement, the Borrower hereby  confirms that [Check Applicable Box]:  [  ] There are, or if the Additional Lender Effective Date is after the date hereof, there  will be, no Term Benchmark Borrowings outstanding on the Additional Lender  Effective Date.  [  ] There are, or if the Additional Lender Effective Date is after the date hereof, there  will be, Term Benchmark Borrowings outstanding on the Additional Lender  Effective Date and the Borrower will pay any compensation required by Section  5.02 of the Credit Agreement on the Additional Lender Effective Date.       

 

  [EXHIBIT L TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]    Very truly yours,  BERRY PETROLEUM COMPANY, LLC        By:         Name:  Title:  

 

  [ANNEX I TO THIRD AMENDMENT TO CREDIT AGREEMENT – BERRY PETROLEUM COMPANY, LLC]  ANNEX I    LIST OF MAXIMUM CREDIT AMOUNTS AND ELECTED COMMITMENTS  NAME OF LENDER APPLICABLE  PERCENTAGE  ELECTED  COMMITMENT  MAXIMUM CREDIT  AMOUNT  JPMorgan Chase Bank, N.A. 18.500000000% $37,000,000.00  $92,500,000.00   KeyBank National Association 16.500000000% $33,000,000.00  $82,500,000.00   BOKF, NA 16.500000000% $33,000,000.00  $82,500,000.00   Valley Republic Bank 15.000000000% $30,000,000.00  $75,000,000.00   Capital One, National  Association 12.500000000% $25,000,000.00  $62,500,000.00   Cathay Bank 10.000000000% $20,000,000.00  $50,000,000.00   Goldman Sachs Lending Partners  LLC 10.000000000% $20,000,000.00  $50,000,000.00   Macquarie Investments US Inc 1.000000000% $2,000,000.00  $5,000,000.00   TOTAL 100.000000000% $200,000,000.00 $500,000,000.00Document

 Exhibit 10.1
Execution Version

AMENDMENT NO. 3 TO CREDIT AGREEMENT

This AMENDMENT NO. 3 TO CREDIT AGREEMENT (this “Amendment”) dated as of May 31, 2022, is entered into by and among RIMINI STREET, INC., a Delaware corporation (“Borrower”), the Lenders party hereto and CAPITAL ONE, NATIONAL ASSOCIATION, as Agent (in such capacity, the “Agent”). 

RECITALS:  
WHEREAS, Borrower, the Lenders party thereto from time to time and the Agent entered into a Credit Agreement, dated as of July 2, 2021 (as amended by Amendment No. 1 to Credit Agreement dated as of July 20, 2021, among, inter alia, Borrower, the Lenders party thereto and Agent, as amended by Amendment No. 2 to Credit Agreement dated as of January 14, 2022, among, inter alia, Borrower, the Lenders party thereto and Agent, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement, as amended hereby;
WHEREAS, Borrower, the Lenders party hereto (constituting Required Lenders) and Agent, desire to amend the Credit Agreement, in accordance with Section 10.1 of the Credit Agreement, as set forth herein subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1.    AMENDMENTS TO THE CREDIT AGREEMENT 
Effective as of the Amendment No. 3 Effective Date (as defined below), each of the parties hereto agrees that Section 6.8(b) of the Credit Agreement shall be amended and restated in its entirety as follows:
“(b) the Borrower may purchase, redeem, retire or otherwise acquire for value any of its Stock from (A) Adams Street Partners and GP Investment Acquisition Corp., (B) current or former directors, officers, employees, members of management, managers or consultants of the Borrower or any subsidiary (or their respective immediate family members) (and/or make payments on promissory notes issued by Borrower pursuant to Section 6.5(r)) and (C) any other holder of any of its Stock; provided all of the following conditions are satisfied:
(i)    no Default or Event of Default has occurred and is continuing or would arise as a result of such Restricted Payment; and
(ii)    the aggregate Restricted Payments permitted under this paragraph (b) (x) in any Fiscal Year of the Borrower shall not exceed the greater of $12,500,000 and 25.0% of LTM Consolidated EBITDA and (y) during the term of this Agreement shall not exceed the greater of $50,000,000 and 100.0% of LTM Consolidated EBITDA; provided, that, for the avoidance of doubt, to the extent constituting a Restricted Payment under this Section 6.8(b), the Borrower may enter into and consummate any transaction permitted pursuant to Section 6.4;”
SECTION 2.    REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders party hereto to enter into this Amendment, Borrower represents and warrants to the Agent and the Lenders, on the Amendment No. 3 Effective Date, that the following statements are true and correct:

 

2.1    Due Authorization. The execution, delivery and performance of this Amendment have been duly authorized by all necessary action on the part of Borrower.
2.2    Binding Obligation. This Amendment has been duly executed and delivered by the Borrower and is the legally valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.
2.3    No Default.  Both immediately prior to and after the Amendment No. 3 Effective Date, no Default or Event of Default exists under the Loan Documents.
2.4    Representations and Warranties. Both immediately prior to and after the Amendment No. 3 Effective Date, all representations and warranties by any Credit Party contained in the Credit Agreement or in any other Loan Document are true or correct in all material respects (without duplication of any materiality qualifier contained therein) as of such date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties are true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date).
SECTION 3.    CONDITIONS PRECEDENT
3.1    Conditions Precedent to Effectiveness of the Amendment.  The Amendment provided for hereby shall become effective as of the date (the “Amendment No. 3 Effective Date”) on which the following conditions have been satisfied:
(a)    The Agent shall have received counterparts of this Amendment executed by the Borrower, the Lenders party hereto and the Agent.
(b)    The Agent shall have received payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of Paul Hastings LLP) incurred in connection with the preparation, negotiation and execution of this Amendment and other matters relating to the Credit Agreement to the extent invoiced and to the extent provided for, and in accordance with, Section 10.5 of the Credit Agreement.
The Agent and each Lender, by delivering its signature page to this Amendment, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be approved by the Agent or Lenders, as applicable on the Amendment No. 3 Effective Date.
SECTION 4.    MISCELLANEOUS
4.1    Reference to and Effect on the Credit Agreement and the Other Loan Documents. 
(a)    On and after the Amendment No. 3 Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment.  This Amendment is hereby designated as a Loan Document for all purposes of the Loan Documents.
2

 

(b)    Except as expressly set forth herein, no other amendments, changes or modifications to the Credit Agreement and each other Loan Document are intended or implied, and in all other respects the Credit Agreement and each other Loan Document are and shall continue to be in full force and effect and are hereby in all respects specifically ratified, restated and confirmed by all parties hereto as of the Amendment No. 3 Effective Date and Borrower shall not be entitled to any other further amendment by virtue of the provisions of this Amendment or with respect to the subject matter of this Amendment. To the extent of conflict between the terms of this Amendment and the other Loan Documents, the terms of this Amendment shall control. The Credit Agreement and this Amendment shall be read and construed as one agreement.
(c)    The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender, Agent or Agent under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.
4.2    Binding Effect. The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
4.3    Governing Law. The laws of the State of New York shall govern all matters arising out of, in connection with or relating to this Amendment, including its validity, interpretation, construction, performance and enforcement (including any claims sounding in contract or tort law arising out of the subject matter hereof and any determinations with respect to post-judgment interest).
4.4    Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Amendment by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
4.5    Headings. The captions and headings of this Amendment are for convenience of reference only and shall not affect the interpretation of this Amendment.
[remainder intentionally left blank]

3

IN WITNESS THEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written
																		
	 		RIMINI STREET, INC., as Borrower
		
	 		 	 		
			By:	/s/ Seth A. Ravin		
	 		 	Name: Seth A. Ravin		
	 		 	Title: Chairman and Chief Executive Officer		

[Credit Agreement Amendment No. 3]

 

																		
	 		CAPITAL ONE, NATIONAL ASSOCIATION, as Agent and a Lender
		
	 		 	 		
			By:	/s/ Matthew Giamalis		
	 		 	Name: Matthew Giamalis		
	 		 	Title: Duly Authorized Signatory		

[Credit Agreement Amendment No. 3]

																		
	 		FIFTH THIRD BANK, NATIONAL
ASSOCIATION, as a Lender
		
	 		 	 		
			By:	/s/ Nick Meece		
	 		 	Name: Nick Meece		
	 		 	Title: Associate		

[Credit Agreement Amendment No. 3]

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