Document:

Exhibit 10.2

 

 

 

 

AMENDED
AND RESTATED

CREDIT
AGREEMENT

 

among 

 

CARBON
APPALACHIA ENTERPRISES, LLC,

and

 NYTIS
EXPLORATION (USA) INC.,

as Borrowers

 

 

 

THE LENDERS FROM TIME TO TIME PARTY HERETO

 

 

 

 

and

 

 

 

 

LEGACYTEXAS BANK,

as Administrative Agent and L/C Issuer

 

LEGACYTEXAS
BANK,

as Sole Lead Arranger and Sole Book Runner

 

 

EAST
WEST BANK,

as
Syndication Agent

DATED AS OF DECEMBER 31, 2018

 

 

 

 

     

     

    

 

TABLE
OF CONTENTS

   

	 	 	Page
	ARTICLE 1 DEFINITIONS	1
	Section 1.1	Definitions	1
	Section 1.2	Accounting Matters	31
	Section 1.3	ERISA Matters	31
	Section 1.4	Letter of Credit Amounts	31
	Section 1.5	Other Definitional Provisions	32
	Section 1.6	Interpretative Provision	32
	Section 1.7	Times of Day	32
	Section 1.8	Other Loan Documents	32
	Section 1.9	Divisions	32
	 	 	 
	ARTICLE 2 THE COMMITMENTS AND CREDIT
    EXTENSIONS	33
	Section 2.1	The Loans	33
	Section 2.2	Letters of Credit	34
	Section 2.3	Fees	42
	Section 2.4	Payments Generally; Administrative Agent's Clawback	42
	Section 2.5	Evidence of Debt	43
	Section 2.6	Cash Collateral	44
	Section 2.7	Interest; Payment Terms	45
	Section 2.8	Voluntary Termination or Reduction of Aggregate
    Revolving Credit Commitments; Prepayments	47
	Section 2.9	Borrowing Base	48
	Section 2.10	Joint and Several Liability	53
	 	 	 
	ARTICLE 3 TAXES, YIELD PROTECTION
    AND INDEMNITY	54
	Section 3.1	Increased Costs	54
	Section 3.2	Illegality	56
	Section 3.3	Inability to Determine Rates; Replacement Index
    Rate	56
	Section 3.4	Taxes	57
	Section 3.5	Compensation for Losses	61
	Section 3.6	Mitigation of Obligations; Replacement of Lenders	61
	Section 3.7	Survival	62
	 	 	 
	ARTICLE 4 SECURITY	62
	Section 4.1	Mortgaged Properties	62
	Section 4.2	Collateral	62
	Section 4.3	Setoff	63
	Section 4.4	Authorization to File Financing Statements	63
	 	 	 
	ARTICLE 5 CONDITIONS PRECEDENT	64
	Section 5.1	Extension of Credit on Closing Date	64
	Section 5.2	All Extensions of Credit	67
	 	 	 
	ARTICLE 6 REPRESENTATIONS AND WARRANTIES	68
	Section 6.1	Entity Existence	68
	Section 6.2	Financial Statements; Etc	68
	Section 6.3	Action; No Breach	68

  

    i

     

    

  

	Section 6.4	Operation of Business	68
	Section 6.5	Litigation and Judgments	69
	Section 6.6	Rights in Properties; Liens	69
	Section 6.7	Enforceability	70
	Section 6.8	Approvals	71
	Section 6.9	Taxes	71
	Section 6.10	Use of Proceeds; Margin Securities	71
	Section 6.11	ERISA	71
	Section 6.12	Disclosure	71
	Section 6.13	Subsidiaries	72
	Section 6.14	Agreements	72
	Section 6.15	Compliance with Laws	72
	Section 6.16	Inventory	72
	Section 6.17	Regulated Entities	72
	Section 6.18	Environmental Matters	72
	Section 6.19	Intellectual Property	73
	Section 6.20	Anti-Corruption Laws and Sanctions	73
	Section 6.21	Patriot Act	74
	Section 6.22	Insurance	74
	Section 6.23	Solvency	74
	Section 6.24	Security Documents	74
	Section 6.25	Businesses	74
	Section 6.26	Labor Matters	74
	Section 6.27	Gas Balancing Agreements and Advance Payment Contracts	74
	Section 6.28	Hedging Agreements and Transactions	74
	Section 6.29	Flood Matters	74
	Section 6.30	State Regulation	75
	 	 	 
	ARTICLE 7 AFFIRMATIVE COVENANTS	76
	Section 7.1	Reporting Requirements	76
	Section 7.2	Maintenance of Existence; Conduct of Business	79
	Section 7.3	Maintenance and Operation of Properties	79
	Section 7.4	Taxes and Claims	80
	Section 7.5	Insurance	80
	Section 7.6	Inspection Rights	81
	Section 7.7	Keeping Books and Records	81
	Section 7.8	Compliance with Laws	81
	Section 7.9	Compliance with Agreements	81
	Section 7.10	Further Assurances	81
	Section 7.11	ERISA	82
	Section 7.12	Depository Relationship	82
	Section 7.13	Additional Guarantors	82
	Section 7.14	Title Assurances	82
	Section 7.15	Commodity Hedging Transactions	83
	Section 7.16	Concerning Operator's Liens	83
	Section 7.17	Post-Closing Obligations	83
	 	 	 
	ARTICLE 8 NEGATIVE COVENANTS	84
	Section 8.1	Debt	84
	Section 8.2	Limitation on Liens	84
	Section 8.3	Mergers, Etc	87

  

    ii

     

    

  

	Section 8.4	Restricted Payments	87
	Section 8.5	Loans and Investments	88
	Section 8.6	Limitation on Issuance of Equity	89
	Section 8.7	Transactions With Affiliates	90
	Section 8.8	Disposition of Assets	90
	Section 8.9	Sale and Leaseback	90
	Section 8.10	Prepayment of Debt	90
	Section 8.11	Nature of Business	91
	Section 8.12	Environmental Protection	91
	Section 8.13	Accounting	91
	Section 8.14	Burdensome Agreements	91
	Section 8.15	Subsidiaries	91
	Section 8.16	Amendments of Constituent Documents and Material Agreements	91
	Section 8.17	Hedging Agreements and Transactions	92
	Section 8.18	Gas Balancing Agreements and Advance Payment Contracts	92
	Section 8.19	Certain Accounts Payable	92
	Section 8.20	Use of Proceeds	92
	Section 8.21	Joint Operating Agreements	93
	Section 8.22	Excluded Subsidiaries	93
	Section 8.23	State and FERC Regulation	93
	 	 	 
	ARTICLE 9 FINANCIAL COVENANTS	93
	Section 9.1	Leverage Ratio	93
	Section 9.2	Current Ratio	93
	 	 	 
	ARTICLE 10 DEFAULT	94
	Section 10.1	Events of Default	94
	Section 10.2	Remedies Upon Default	96
	Section 10.3	Application of Funds	96
	Section 10.4	Performance by Administrative Agent	97
	 	 	 
	ARTICLE 11 AGENCY	97
	Section 11.1	Appointment and Authority	97
	Section 11.2	Rights as a Lender	98
	Section 11.3	Exculpatory Provisions	98
	Section 11.4	Reliance by Administrative Agent	99
	Section 11.5	Delegation of Duties	99
	Section 11.6	Resignation of Administrative Agent	100
	Section 11.7	Non-Reliance on Administrative Agent and Other Lenders	101
	Section 11.8	Administrative Agent May File Proofs of Claim	102
	Section 11.9	Collateral and Guaranty Matters	102
	Section 11.10	Bank Product Agreements	103
	 	 	 
	ARTICLE 12 MISCELLANEOUS	103
	Section 12.1	Expenses	103
	Section 12.2	INDEMNIFICATION	104
	Section 12.3	Limitation of Liability	105
	Section 12.4	No Duty	105
	Section 12.5	Lenders Not Fiduciary	105
	Section 12.6	Equitable Relief	105
	Section 12.7	No Waiver; Cumulative Remedies	106

 

    iii

     

    

  

	Section 12.8	Successors and Assigns	106
	Section 12.9	Survival	110
	Section 12.10	Amendment	110
	Section 12.11	Notices	111
	Section 12.12	Governing Law; Venue; Service of Process	113
	Section 12.13	Counterparts	114
	Section 12.14	Severability	114
	Section 12.15	Headings	114
	Section 12.16	Construction	114
	Section 12.17	Independence of Covenants	114
	Section 12.18	WAIVER OF JURY TRIAL	114
	Section 12.19	Additional Interest Provision	115
	Section 12.20	Ceiling Election	115
	Section 12.21	USA Patriot Act Notice	116
	Section 12.22	Defaulting Lenders	116
	Section 12.23	Sharing of Payments by Lenders	118
	Section 12.24	Payments Set Aside	119
	Section 12.25	Confidentiality	119
	Section 12.26	Electronic Execution of Assignments and Certain Other Documents	120
	Section 12.27	Intercreditor Agreement	120
	Section 12.28	Flood Insurance	120
	Section 12.29	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	120
	Section 12.30	Amendment and Restatement	121
	Section 12.31	Assignment and Assumption from CEC to Borrower	121
	Section 12.32	NOTICE OF FINAL AGREEMENT	121

   

    iv

     

    

 

INDEX
TO SCHEDULES

 

	Schedule	 	Description
    of Schedule	 	Section
	2.1	 	Commitments
    and Applicable Percentages	 	2.1
	6.5	 	Litigation
    and Judgments	 	6.5
	6.13(a)	 	Subsidiaries	 	6.13(a)
	6.13(b)	 	Excluded Subsidiaries	 	6.13(b)
	6.28	 	Hedging Agreements and Hedging Transactions	 	6.28
	6.30(b)	 	Intrastate Pipelines	 	6.30(b)
	8.1	 	Existing
    Debt	 	8.1
	8.2	 	Existing Liens	 	8.2
	8.5	 	Existing Investments	 	8.5
	12.11	 	Notices	 	12.11

 

    v

     

    

 

INDEX
TO EXHIBITS

 

	Exhibit	 	Description
    of Exhibit	 	Section
	A	 	Assignment and Assumption	 	1.1
	B	 	Compliance Certificate	 	1.1
	C	 	Revolving Credit
    Borrowing Request	 	1.1
	D	 	Revolving Credit
    Note	 	1.1
	E	 	Term Loan Borrowing
    Request	 	1.1
	F	 	Term Loan Note	 	1.1
	G	 	Tax Forms	 	3.4(g)
	H	 	Borrowing Base Adjustment Letter	 	2.9(d)

 

    vi

     

    

 

AMENDED
AND RESTATED CREDIT AGREEMENT

 

THIS
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 31, 2018, is among CARBON APPALACHIA ENTERPRISES, a Delaware limited
liability company (“CAE”), NYTIS EXPLORATION (USA) INC., a Delaware corporation (“Nytis USA”,
and together with CAE, collectively, “Borrowers”, and each, individually, a “Borrower”),
the lenders from time to time party hereto (collectively, “Lenders” and individually, a “Lender”),
and LEGACYTEXAS BANK, a Texas state bank, as Administrative Agent and L/C Issuer.

 

RECITALS

 

	 	A.	CAE,
    Administrative Agent, and certain Lenders have previously entered into that certain Credit Agreement dated as of April 3,
    2017 (as amended, restated, supplemented or otherwise modified prior to the Closing Date, the “Existing Credit Agreement”).

 

	 	B.	In connection with
    the CAC Acquisition (hereinafter defined), the parties desire to amend and restate the Existing Credit Agreement to, among
    other amendments, increase the borrowing base, add additional lenders, consolidate the indebtedness and obligations under
    the Existing CEC Credit Agreement (as defined herein) with the indebtedness and obligations under this Agreement, add Nytis
    USA as a co-borrower under this Agreement, and establish a $15,000,000 term loan in favor of Borrowers.

 

	 	C.	Contemporaneously
    with the execution of this Agreement and pursuant to the terms of the Omnibus Assignment and Acceptance agreement, (1) the
    lenders under the Existing CEC Credit Agreement have assigned to the Lenders party hereto all of their right, title and interest
    in and to the Existing CEC Credit Agreement and the indebtedness outstanding thereunder, and (2) all of the mortgages and
    other collateral documents securing the obligations and indebtedness of CEC (as defined herein) under the Existing CEC Credit
    Agreement have been assigned to LegacyTexas Bank, as Administrative Agent for the Lenders party hereto.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows,
amending and restating in its entirety, as of the date above, the Existing Credit Agreement and giving effect to the assignments,
as necessary, by the lenders under the Existing CEC Credit Agreement to the Lenders of the loan balance and letter of credit exposure
under the Existing Credit Agreement, the parties hereto agree that the Existing Credit Agreement is amended and restated to read
in its entirety as follows:

 

ARTICLE
1

DEFINITIONS

 

Section
1.1 Definitions. As used in this Agreement, all exhibits, appendices and schedules hereto and in any note, certificate,
report or other Loan Documents made or delivered pursuant to this Agreement, the following terms will have the meanings given
such terms in this Section 1.1 or in the provision, section or recital referred to below:

 

“Account”
means an account, as defined in the UCC.

 

“Acquisition”
means the acquisition by any Obligated Party of (a) a majority of the Equity Interests of another Person, (b) all or
substantially all of the assets of another Person or (c) all or substantially all of a business unit or line of business
of another Person, in each case (i) whether or not involving a merger or consolidation with such other Person and (ii) whether
in one transaction or a series of related transactions.

 

    CREDIT AGREEMENT – Page 1 

     

    

 

“Acquisition
Documents” means the CAC Acquisition Agreement and all agreements, assignments, deeds, conveyances, certificates or
other documents and instruments now or hereafter executed and delivered by any Seller and/or CEC pursuant to the CAC Acquisition
Agreement or in connection with the transactions contemplated by the CAC Acquisition Agreement.

 

“Adjusted
LIBOR” means, with respect to any Portion for any Interest Period or day, as applicable, an interest rate per annum
equal to LIBOR for such Interest Period or day multiplied by the Statutory Reserve Rate; provided, however, if Adjusted
LIBOR shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

 

“Administrative
Agent” means LegacyTexas Bank, in its capacity as administrative agent under any of the Loan Documents, until the appointment
of a successor administrative agent pursuant to the terms of this Agreement and, thereafter, shall mean such successor administrative
agent.

 

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

 

“Advance
Payment Contract” means any take-or-pay or similar contract whereby any Borrower or any Subsidiary agrees to accept
a defined payment (whether at the time the contract is entered into or in the future) as payment-in-full for the purchase of present
or future production of Hydrocarbons from its Oil and Gas Properties (each, an “Advance Payment”) and to deliver
such Hydrocarbons at some future time without then or thereafter receiving full payment therefor at the prevailing market price
for such Hydrocarbons as of the date of delivery thereof.

 

“Affiliate”
means, as to any Person, any other Person (a) that directly or indirectly, through one or more intermediaries, Controls or
is Controlled by, or is under common Control with, such Person; (b) that directly or indirectly beneficially owns or holds
10% or more of any class of voting Equity Interests of such Person; or (c) 10% or more of the voting Equity Interests of
which is directly or indirectly beneficially owned or held by such Person; provided, however, in no event shall
any Lender be deemed an Affiliate of a Borrower or any Subsidiary or Affiliates.

 

“Agent
Parties” means, collectively, Administrative Agent and its Related Parties.

 

“Aggregate
Revolving Credit Commitments” means, at any time, the aggregate amount of the Revolving Credit Commitments of the Revolving
Credit Lenders at such time, which aggregate amount shall be the lesser of (a) the aggregate amount set forth on Schedule 2.1
and (b) the Borrowing Base in effect at such time.

 

“Aggregate
Revolving Credit Exposure” means, at any time, the aggregate Revolving Credit Exposures of all Revolving Credit Lenders
at such time.

 

“Agreement”
means this Amended and Restated Credit Agreement, together with all schedules, exhibits and appendices attached to or otherwise
identified herewith, in each case as amended, restated supplemented or otherwise modified from time to time.

 

“Anti-Corruption
Laws” means all Laws, rules, and regulations of any jurisdiction applicable to any Borrower or any of its Affiliates
from time to time concerning or relating to bribery or corruption.

 

    CREDIT AGREEMENT – Page 2 

     

    

 

“Applicable
Margin” means:

 

(a)
with respect to the Revolving Credit Loans, Letter of Credit Fees, Commitment Fees, and all other Obligations under the Loan Documents
(other than the Term Loans, as determined pursuant to clause (b) below), the applicable percentages per annum set
forth below based upon the Utilization applicable from time to time. The Applicable Margin determined under this clause (a)
shall immediately and automatically change when and as the Utilization changes.

 

	Pricing

Level	 	Utilization	 	Base Rate Portion	 	LIBOR Portion

and Letter

of Credit Fee	 	Commitment Fee
	1	 	< 25%	 	0.00%	 	2.75%	 	0.50%
	2	 	≥ 25% but < 50%	 	0.00%	 	3.00%	 	0.50%
	3	 	≥ 50% but < 75%	 	0.25%	 	3.25%	 	0.50%
	4	 	≥ 75% but < 90%	 	0.50%	 	3.50%	 	0.50%
	5	 	≥ 90%	 	0.75%	 	3.75%	 	0.50%

 

(b)
with respect to the Term Loans, six and one-quarter percent (6.25%) per annum.

 

“Applicable
Percentage” means, (a) in respect of the Aggregate Revolving Credit Commitment, with respect to any Revolving Credit
Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Revolving Credit Commitment represented
by the Revolving Credit Commitment of such Revolving Credit Lender at such time; provided that if the Aggregate Revolving
Credit Commitment has been terminated pursuant to the terms hereof, then the Applicable Percentage of each Revolving Credit Lender
with respect to the Aggregate Revolving Credit Commitment shall be determined based upon the Applicable Percentage of such Revolving
Credit Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the
terms hereof; and (b) in respect of the Term Loans, with respect to any Term Loan Lender at any time, the percentage (carried
out to the ninth decimal place) of the Outstanding Amount of the Term Loans made by such Term Loan Lender.

 

“Applicable
Rate” means (a) in the case of a Portion bearing interest based upon the Base Rate, the Base Rate plus the
Applicable Margin; and (b) in the case of a Portion bearing interest based upon LIBOR, Adjusted LIBOR plus the Applicable
Margin.

 

“Approved
Commodity Swap Counterparty” means (a) each Bank Product Provider, (b) BP Energy Company, a Delaware corporation,
or its Affiliates and (c) each other swap counterparty approved in writing from time to time by Administrative Agent; provided,
however, Administrative Agent may, by giving written notice to Borrowers (with respect to clauses (b) and (c)),
elect to revoke such swap counterparty’s status as an Approved Commodity Swap Counterparty for purposes of any Commodity
Hedging Transactions entered into following such notice if the Administrative Agent has any concerns about the long or short term
financial well-being or creditworthiness of such swap counterparty.

 

“Approved
Fund” means any Fund 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.

 

    CREDIT AGREEMENT – Page 3 

     

    

 

“Arranger”
means LegacyTexas Bank in its capacity as sole lead arranger and sole book runner.

 

“ASC
410” means the Accounting Standards Codification No. 410 (Asset Retirement and Environmental Obligations), as issued
by the Financial Accounting Standards Board, as amended.

 

“ASC
815” means the Accounting Standards Codification No. 815 (Derivatives and Hedging), as issued by the Financial
Accounting Standards Board, as amended.

 

“ASC
825” means the Accounting Standards Codification No. 825 (Financial Instruments), as issued by the Financial Accounting
Standards Board, as amended.

 

“Assignment
and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent
of any party whose consent is required by Section 12.8), and accepted by Administrative Agent, in substantially the
form of Exhibit A or any other form approved by Administrative Agent.

 

“Assumption
and Consolidation Agreement” means that certain Assumption, Consolidation, Ratification and Joinder Agreement dated
of even date herewith, by and among CEC, CAE, Nytis USA, and certain other parties thereto, as amended, restated, supplemented,
or otherwise modified from time to time.

 

“Bail-In
Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect
of any liability of an EEA Financial Institution.

 

“Bail-In
Legislation” means, 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 for such EEA Member Country from time to time which
is described in the EU Bail-In Legislation Schedule.

 

“Bank
Product Agreements” means those certain agreements entered into from time to time between any Obligated Party and a
Bank Product Provider in connection with any of the Bank Products, including without limitation, Hedging Agreements.

 

“Bank
Product Obligations” means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing
by any Obligated Party to any Bank Product Provider pursuant to or evidenced by the Bank Product Agreements and irrespective of
whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter
arising, and including all such amounts that an Obligated Party is obligated to reimburse to any Bank Product Provider as a result
of such Bank Product Provider purchasing participations or executing indemnities or reimbursement obligations with respect to
the Bank Products provided to any Obligated Party pursuant to Bank Product Agreements. For the avoidance of doubt, the Bank Product
Obligations arising under any Hedging Transaction shall be determined by the Hedge Termination Value thereof.

 

“Bank
Product Provider” means any Person that, at the time it enters into a Bank Product Agreement is a Lender or an Affiliate
of a Lender, in its capacity as a party to such Bank Product Agreement.

 

“Bank
Products” means any service provided to, facility extended to, or transaction entered into with any Obligated Party
by any Bank Product Provider consisting of (a) deposit accounts, (b) cash management services, including treasury, depository,
return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer,
interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic
funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements maintained with any
Bank Product Provider, (c) debit cards, stored value cards, and credit cards (including commercial credit cards (including
so-called “procurement cards” or “P-cards”)) and debit card and credit card processing services or (d) Hedging
Agreements.

 

    CREDIT AGREEMENT – Page 4 

     

    

 

“Base
Rate” means, for any day, a per annum interest rate equal to the highest of (a) the Prime Rate for such day; (b) the
sum of the Federal Funds Rate for such day plus 0.50%; and (c) Adjusted LIBOR for such day plus 1.00%.

 

“Base
Rate Portion” means each Portion bearing interest based on the Base Rate.

 

“Beneficial
Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership
Regulation.

 

“Beneficial
Ownership Regulation” means 31 C.F.R. § 1010.230.

 

“Board
of Governors” means the Board of Governors of the Federal Reserve System of the United States.

 

“Borrowers”
means the Persons identified as such in the introductory paragraph hereto, and their respective successors and assigns to the
extent permitted by Section 12.8.

 

“Borrowing”
means a Revolving Credit Borrowing or a Term Loan Borrowing, as the context may require.

 

“Borrowing
Base” means, as of any date, the loan amount that may be supported by the Oil and Gas Properties of the Borrowing Parties,
as determined by Administrative Agent and approved by the Required Revolving Credit Lenders, or all of the Revolving Credit Lenders,
as applicable, as set forth in Section 2.9.

 

“Borrowing
Base Adjustment Letter” means a borrowing base adjustment letter substantially in the form of Exhibit H attached
hereto.

 

“Borrowing
Base Deficiency” means the amount by which the Aggregate Revolving Credit Exposure exceeds the amount of the Borrowing
Base.

 

“Borrowing
Base Deficiency Notice” means a notice from Administrative Agent to Borrowers that a Borrowing Base Deficiency exists
because of a periodic or special redetermination made pursuant to Section 2.9(b) or Section 2.9(c)(i).

 

“Borrowing
Party” means each of the Borrowers and Subsidiaries.

 

“Borrowing
Request” means a Revolving Credit Borrowing Request or a Term Loan Borrowing Request, as applicable.

 

“BTU”
means a British thermal unit.

 

“Business
Day” means (a) for all purposes, a weekday, Monday through Friday, except a legal holiday or a day on which banking
institutions in Dallas, Texas are authorized or required by Law to be closed, and (b) for purposes of any LIBOR Portion,
a day that satisfies the requirements of clause (a) and that is a day on which commercial banks in the City of London,
England are open for business and dealing in offshore Dollars. Unless otherwise provided, the term “days” when used
herein means calendar days.

 

    CREDIT AGREEMENT – Page 5 

     

    

 

“CAC
Acquisition” means the acquisition by CEC of certain Property from Sellers, including without limitation, all of the
Equity Interests of Carbon Appalachian Company, LLC owned by Sellers, pursuant to the CAC Acquisition Agreement.

 

“CAC
Acquisition Agreement” means that certain Membership Interest Purchase Agreement, dated as of May 4, 2018, by and among
the Sellers, as sellers, and CEC, as buyer, and all modifications, supplements and amendments thereof.

 

“CAE”
has the meaning given to such term in the introductory paragraph.

 

“CAE
Parent” means Carbon Appalachia Group, LLC (f//k/a Carbon Tennessee Group, LLC), a Delaware limited liability company.

 

“Capitalized
Lease Obligation” means, with respect to any Person, the amount of Debt under a lease of Property by such Person that
would be shown as a liability on a balance sheet of such Person prepared for financial reporting purposes in accordance with GAAP.

 

“Cash
Collateralize” means to pledge and deposit with or deliver to Administrative Agent, for the benefit of one or more of
L/C Issuer or Revolving Credit Lenders, as collateral for L/C Obligations or obligations of Revolving Credit Lenders to fund participations
in respect of L/C Obligations, cash or deposit account balances or, if Administrative Agent and L/C Issuer shall agree in their
sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to Administrative
Agent and L/C Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include
the proceeds of such cash collateral and other credit support.

 

“CEC”
means Carbon Energy Corporation, a Delaware corporation.

 

“CEC
Seller Note” means the unsecured Debt of CEC in an amount equal to approximately $25,065,184.00 to Sellers, as evidenced
by certain promissory notes dated as of even date herewith, in connection with the CAC Acquisition, in form and content reasonably
satisfactory to Administrative Agent.

 

“Change
in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption 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) the making or issuance of any
request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided
that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) 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, implemented, adopted
or issued.

 

    CREDIT AGREEMENT – Page 6 

     

    

 

“Change
of Control” means an event or series of events by which:

 

(a)
CEC, shall cease for any reason to (i) own beneficially or of record Equity Interests representing at least 100% of the ordinary
voting power represented by the issued and outstanding Equity Interests of each of Nytis USA or Carbon Appalachian Company, LLC,
a Delaware limited liability company (in each case, determined on a fully diluted basis) or (ii) Control such entities;

 

(b)
Carbon Appalachian Company, LLC, a Delaware limited liability company, shall cease for any reason to (i) own beneficially
or of record Equity Interests representing at least 100% of the ordinary voting power represented by the issued and outstanding
Equity Interests of each of CAE Parent or Carbon Tennessee Mining Company, a Delaware limited liability company (in each case,
determined on a fully diluted basis) or (ii) Control such entities;

 

(c)
CAE Parent shall cease for any reason to (i) own beneficially or of record Equity Interests representing at least 100% of
the ordinary voting power represented by the issued and outstanding Equity Interests of CAE (in each case, determined on a fully
diluted basis) or (ii) Control such entity; or

 

(d)
Patrick McDonald ceases for any reason to be active in the day to day management of any Borrower and shall not be replaced within
180 days by another Person acceptable to Administrative Agent in its sole discretion.

 

“Closing
Date” means the first date all the conditions precedent in Section 5.1 are satisfied or waived in accordance
with Section 12.10.

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“Collateral”
means substantially all of the Property of the Borrowing Parties as described in the Security Documents, together with any other
Property and collateral described in the Security Documents, including, among other things, the Mortgaged Properties and any other
Property which may now or hereafter secure the Obligations or any part thereof.

 

“Commitment”
means a Revolving Credit Commitment or a Term Loan Commitment, as the context may require.

 

“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.

 

“Commodity
Hedging Transaction” means any swap transaction, cap, floor, collar, exchange transaction, forward transaction or other
exchange or protection transaction relating to Hydrocarbons or any option with respect to any such transaction, including derivative
financial instruments.

 

“Communications”
means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of a
Borrower pursuant to any Loan Document or the transactions contemplated therein which is distributed to Administrative Agent,
any Lender, or L/C Issuer by means of electronic communications pursuant to Section 12.11(d), including through the
Platform.

 

“Compliance
Certificate” means a certificate, substantially in the form of Exhibit B, or in any other form agreed to by Borrowers
and Administrative Agent, prepared by and certified by a Responsible Officer of each Borrower.

 

“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.

 

    CREDIT AGREEMENT – Page 7 

     

    

 

“Constituent
Documents” means (a) in the case of a corporation, its articles or certificate of incorporation or certificate
of formation, as applicable, and bylaws; (b) in the case of a general partnership, its partnership agreement; (c) in
the case of a limited partnership, its certificate of limited partnership or certificate of formation, as applicable, and partnership
agreement; (d) in the case of a trust, its trust agreement; (e) in the case of a joint venture, its joint venture agreement;
(f) in the case of a limited liability company, its articles of organization or certificate of formation, as applicable,
operating agreement, regulations and/or other organizational and governance documents and agreements; and (g) in the case
of any other entity, its organizational and governance documents and agreements.

 

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

 

“Crawford
Company” means Crawford Gas Gathering Company, LLC, an Indiana limited liability company.

 

“Credit
Extension” means each of (a) a Borrowing and (b) an L/C Credit Extension.

 

“Current
Ratio” means, with respect to the Borrowing Parties on a combined and consolidated basis as of any date of determination
thereof, the ratio of (a) the sum of current assets (but excluding the amount of any non-cash items as a result of the application
of ASC 410 and ASC 815) plus the Revolving Credit Availability on such date to (b) current liabilities (but excluding the
amount of any liabilities respecting any non-cash items as a result of the application of ASC 410 and ASC 815) excluding (i) the
current portion of the Obligations on such date and (ii) to the extent such liabilities are non-cash items, firm transportation
contract obligations resulting from a purchase accounting allocation in connection with previous Acquisitions by Carbon West Virginia
Company, LLC (a Subsidiary), determined in accordance with GAAP.

 

“Debt”
means, with respect to any Person as of any date of determination thereof, without duplication, (a) all obligations of such
Person for borrowed money; (b) all obligations of such Person evidenced by bonds, notes, debentures, or other similar instruments;
(c) all obligations of such Person to pay the deferred purchase price of Property or services, except trade accounts payable
of such Person arising in the ordinary course of business that are not past due by more than 90 days, unless such payables are
being contested in good faith by appropriate proceedings and adequate reserves for such items have been made in accordance with
GAAP; (d) all Capitalized Lease Obligations of such Person; (e) all debt or other obligations of others Guaranteed by
such Person; (f) all obligations secured by a Lien existing on Property owned by such Person, whether or not the obligations
secured thereby have been assumed by such Person or are non-recourse to the credit of such Person; (g) any other obligation
for borrowed money or other financial accommodations which in accordance with GAAP would be shown as a liability on the balance
sheet of such Person; (h) any repurchase obligation or liability of a Person with respect to Accounts, chattel paper or notes
receivable sold by such Person; (i) any liability under a sale and leaseback transaction that is not a Capitalized Lease
Obligation; (j) any obligation under Synthetic Leases; (k) any obligation arising with respect to any other transaction
that is the functional equivalent of borrowing but which does not constitute a liability on the balance sheets of a Person; (l) all
payment and reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers’
acceptances, surety or other bonds and similar instruments; (m) all liabilities of such Person in respect of unfunded vested
benefits under any Plan; (n) all net Hedge Obligations of such Person, valued at the Hedge Termination Value thereof; (o) the
undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly
received payment; and (p) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any Equity Interests in such Person or any other Person prior to the date that is 90 days after the Maturity Date,
valued, in the case of redeemable preferred stock interests, at the greater of its voluntary or involuntary liquidation preference
plus all accrued and unpaid dividends.

 

    CREDIT AGREEMENT – Page 8 

     

    

 

For
all purposes, the Debt of any Person shall include the Debt of any partnership or joint venture (other than a joint venture that
is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such
Debt is expressly made non-recourse to such Person.

 

“Debtor
Relief Laws” means Title 11 of the United States Code, as now or hereafter in effect, or any other applicable Law,
domestic or foreign, as now or hereafter in effect, relating to bankruptcy, insolvency, liquidation, receivership, reorganization,
assignment for the benefit of creditors, moratorium, arrangement or composition, extension or adjustment of debts, or similar
Laws affecting the rights of creditors.

 

“Default”
means an Event of Default or the occurrence of an event or condition which with notice or lapse of time or both would become an
Event of Default.

 

“Default
Interest Rate” means (a) when used with respect to Obligations (other than Obligations described in the following
clauses (b) and (c)), an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin,
if any, applicable to a Base Rate Portion plus (iii) 2.00% per annum; (b) when used with respect to a LIBOR Portion,
an interest rate equal to the interest rate (including any Applicable Margin) otherwise applicable to such Portion plus
2.00% per annum; and (c) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Margin plus
2.00% per annum; provided, however, in no event shall the Default Interest Rate exceed the Maximum Rate.

 

“Defaulting
Lender” means, subject to Section 12.22(b), any Lender that (a) has failed to (i) fund all or
any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender
notifies Administrative Agent and Borrowers in writing that such failure is the result of such Lender’s determination that
one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be
specifically identified in such writing) has not been satisfied, or (ii) pay to Administrative Agent or any other Lender
any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two
Business Days of the date when due, (b) has notified a Borrower, Administrative Agent, or L/C Issuer in writing that it does
not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing
or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based
on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable
default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within
three Business Days after written request by Administrative Agent or Borrowers to confirm in writing to Administrative Agent and
Borrowers that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease
to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Administrative
Agent and Borrowers), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding
under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee
for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including
the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii)
become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental
Authority so long as such ownership interest does not result in or provide such Lender 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 permit such Lender
(or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.
Any determination by Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a)
through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting
Lender (subject to Section 12.22(b)) upon delivery of written notice of such determination to Borrowers and each Lender,
which notice shall be promptly provided by the Administrative Agent.

 

    CREDIT AGREEMENT – Page 9 

     

    

 

“Disposition”
means any sale, lease, sub-lease, transfer, assignment, conveyance, release, loss or other disposition, or the entry into any
contract, including any Farmout, the performance of which would result in any of the foregoing, of any interest in Property (including
any Oil and Gas Property), or of any Equity Interest in a Subsidiary that owns Property (including, but not limited to, any Oil
and Gas Property), in any transaction or event or series of transactions or events, and “Dispose” has the 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 one year after the earlier of (a) the Maturity Date and (b) the date on which there are no Loans
or other obligations hereunder outstanding and all of the Commitments are terminated.

 

“Dollars”
and “$” mean lawful money of the United States of America.

 

“Easements”
means collectively, all of the right-of-way agreements, easements, surface use agreements, servitudes, permits, licenses and other
agreements relating to any Pipeline Assets now held or hereafter acquired by any Borrower or any Subsidiary.

 

“EBITDAX”
means, with respect to the Borrowing Parties on a combined and consolidated basis as of any applicable date of determination thereof
and for any Test Period, without duplication, an amount equal to (a) Net Income (excluding any non-cash revenue or expense associated
with Hedging Agreements resulting from ASC 815 and any non-cash charges attributable to the application of ASC 410), plus
without duplication (b) the sum of the following to the extent deducted in the calculation of Net Income: (i) interest
expense; (ii) income taxes; (iii) depreciation; (iv) depletion; (v) amortization; (vi) extraordinary losses determined in accordance
with GAAP; (vii) other non-recurring expenses reducing such Net Income which do not represent a cash item in such Test Period
or any future period; (viii) IDC and other exploration expenses deducted in determining Net Income under successful efforts accounting;
(ix) all other non-cash charges and credits to income including ceiling test impairments under full cost accounting; (x) fees
paid to the Lenders, L/C Issuer, and Administrative Agent under this Agreement; (xi) transaction-related costs and expenses with
respect to (A) this Agreement, (B) the Intercreditor Agreement, and (C) the CAC Acquisition Agreement; and (xii) losses
on the sale of assets, minus without duplication (c) the sum of the following to the extent included in the calculation
of Net Income: (i) income tax credits; (ii) extraordinary gains determined in accordance with GAAP; (iii) gains on the sale of
assets; and (iv) all non-recurring, non-cash items increasing Net Income.

 

“EEA
Financial Institution” means (a) any credit institution or investment firm 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 financial 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.

 

    CREDIT AGREEMENT – Page 10 

     

    

 

“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.

 

“Eligible
Assignee” means any Person that meets the requirements to be an assignee under Sections 12.8(b)(iii), 12.8(b)(v)
and 12.8(b)(vi) (subject to such consents, if any, as may be required under Section 12.8(b)(iii)).

 

“Environmental
Laws” means any and all federal, state, and local Laws, regulations, judicial decisions, orders, decrees, plans, rules,
permits, licenses, and other governmental restrictions and requirements pertaining to health, safety, or the environment, including,
without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601
et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq., the Occupational Safety
and Health Act, 29 U.S.C. § 651 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Clean
Water Act, 33 U.S.C. § 1251 et seq., and the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.

 

“Environmental
Liabilities” means, as to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs, and expenses (including, without limitation, all reasonable fees,
disbursements and expenses of counsel, expert and consulting fees and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand, by any Person, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute, including any Environmental Law, permit, order or agreement
with any Governmental Authority or other Person, arising from environmental, health or safety conditions or the Release or threatened
Release of a Hazardous Material into the environment, resulting from the past, present, or future operations of such Person or
its Affiliates.

 

“Equity
Interests” means any and all shares, interests, participations or other equivalents (however designated) of capital
stock or other equivalent ownership (or profit) interests in a Person, securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person, and any and all warrants, rights or options to purchase
any of the foregoing, whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests
are authorized or otherwise existing on any date of determination.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974.

 

“ERISA
Affiliate” means any corporation or trade or business which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as an Obligated Party or is under common control (within the meaning of
Section 414(c) of the Code and Sections 414(m) and (o) of the Code for purposes of the provisions relating to Section 412
of the Code) with an Obligated Party.

 

    CREDIT AGREEMENT – Page 11 

     

    

 

“ERISA
Event” means (a) a Reportable Event with respect to a Plan, (b) a withdrawal by any Obligated Party 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) or a cessation of operations which is treated as such a withdrawal under Section 4062(e)
of ERISA, (c) a complete or partial withdrawal by any Obligated Party or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization, (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC
to terminate a Plan or Multiemployer Plan, (e) the occurrence of an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan or Multiemployer Plan, (f) the imposition of any liability to the PBGC under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Obligated Party or any ERISA Affiliate, (g) the
failure of any Obligated Party or ERISA Affiliate to meet any funding obligations with respect to any Plan or Multiemployer Plan,
(h) a Plan becomes subject to the at-risk requirements in Section 303 of ERISA and Section 430 of the Code or (i)
a Multiemployer Plan becomes subject to the requirements for plans in endangered or critical status under Section 432 of the Code
or Section 305 of ERISA.

 

“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.

 

“Event
of Default” has the meaning set forth in Section 10.1.

 

“Excluded
Subsidiaries” means each of the entities listed in Schedule 6.13(b). For the avoidance of doubt, the Subsidiaries
of Excluded Subsidiaries shall also be considered as an Excluded Subsidiary for purposes of this Agreement or any other Loan Document.

 

“Excluded
Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion
of the Guarantee of such Guarantor of, or the grant by such Guarantor of a Lien to secure, such Swap 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 Guarantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after
giving effect to any “keepwell, support or other agreement” for the benefit of such Obligated Party and any and all
Guarantees of such Obligated Party’s Swap Obligations by any other Obligated Party) at the time the Guarantee of such Guarantor,
or a grant by such Guarantor of a Lien, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under
a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such Guarantee or Lien is or becomes excluded in accordance with the first sentence of this definition.

 

“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 or Commitment pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in such Loan or
Commitment (other than pursuant to an assignment request by Borrowers under Section 3.6(b)) or (ii) such Lender
changes its Lending Office, except in each case to the extent that, pursuant to Section 3.4, 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 3.4(g) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

    CREDIT AGREEMENT – Page 12 

     

    

 

“Existing
Credit Agreement” has the meaning specified in Recital A.

 

“Existing
Loan Documents” means the “Loan Documents” (as defined in the Existing Credit Agreement) as in effect prior
to the date hereof.

 

“Existing
CEC Credit Agreement” means that certain Credit Agreement dated October 3, 2016 between CEC, as borrower, and LegacyTexas
Bank, as administrative agent, and the lenders party thereto from time to time, as amended, restated or otherwise modified prior
to the Closing Date.

 

“Existing
CEC Loan Documents” means the “Loan Documents” (as defined in the Existing CEC Credit Agreement) as in effect
prior to the date hereof.

 

“Farmout”
means an arrangement pursuant to any agreement whereby the owner(s) of one or more oil, gas and/or mineral leases or other oil
and natural gas working interests with respect to any property from which production of Hydrocarbons is sought agrees to transfer
or assign an interest in such property to one or more Persons in exchange for (a) drilling or participating in (or agreeing to
drill or participate in) the cost of the drilling of one or more wells, or undertaking other exploration or development activities
or participating in the cost of such activities (or agreeing to do so), in an attempt to obtain production of Hydrocarbons from
such property, or (b) obtaining production of Hydrocarbons from such property or participating in the costs of obtaining such
production.

 

“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 and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“Federal
Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal
to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers on such day, as published by the Federal Reserve Bank of New York, on the Business Day next succeeding
such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if such rate is not so published for any day, the Federal Funds Rate for such day shall
be the average rate charged to Administrative Agent on such day on such transactions as determined by Administrative Agent.

 

“Fee
Letter” means the separate fee letter dated as of December 31, 2018, among Borrowers and Administrative Agent and any
other fee letter among Borrowers and Administrative Agent, Arranger and/or LegacyTexas Bank concerning fees to be paid by Borrowers
in connection with this Agreement, including any amendments, restatements, supplements or modifications thereof. By its execution
of this Agreement, each Lender acknowledges and agrees that Administrative Agent, Arranger and/or LegacyTexas Bank may elect to
treat as confidential and not share with Lenders any Fee Letters executed from time to time in connection with this Agreement.

 

“Flood
Insurance Regulations” means (a) the National Flood Insurance Act of 1968, (b) the Flood Disaster Protection Act of
1973, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001 et seq.), and (d) the Flood Insurance Reform Act
of 2004, in each case as now or hereafter in effect or any successor statute thereto and including any regulations promulgated
thereunder.

 

    CREDIT AGREEMENT – Page 13 

     

    

 

“Foreign
Lender” means (a) if each Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if any Borrower
is not a U.S. Person, a Lender that is resident or organized under the Laws of a jurisdiction other than that in which such Borrower
is resident for tax purposes.

 

“Fronting
Exposure” means, at any time there is a Revolving Credit Lender that is a Defaulting Lender, with respect to L/C Issuer,
such Defaulting Lender’s Applicable Percentage of the Outstanding Amount of the L/C Obligations other than L/C Obligations
as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Credit Lenders or
Cash Collateralized in accordance with the terms hereof.

 

“Fund”
means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing
in commercial loans and similar extensions of credit in the ordinary course of its activities.

 

“GAAP”
means generally accepted accounting principles, applied on a consistent basis, as set forth in opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in statements of the Financial Accounting Standards Board
and/or their respective successors and which are applicable in the circumstances as of the date in question. Accounting principles
are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all
material respects to those accounting principles applied in a preceding period.

 

“Gas
Balancing Agreement” means any agreement or arrangement whereby any Borrower or any Subsidiary, or any other party owning
an interest in any Hydrocarbons to be produced from Oil and Gas Properties in which any Borrower or any Subsidiary owns an interest,
has a right to take more than its proportionate share of production therefrom.

 

“Governmental
Authority” means the government of the United States of America or any other nation, or of any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank, tribal body
or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining
to government (including any supra-national bodies such as the European Union or the European Central Bank), and any group or
body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial
Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor
or similar authority to any of the foregoing).

 

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

 

“Guaranteed
Parties” means, collectively, the Administrative Agent, each Lender, L/C Issuer, each Bank Product Provider, and any
other Person the Obligations owing to which are, or are purported to be, Guaranteed under the terms of a Guaranty.

 

    CREDIT AGREEMENT – Page 14 

     

    

 

“Guarantors”
means (a) Nytis Exploration Company, LLC, a Delaware limited liability company, (b) Appalachia Gas Services Company, LLC, a Delaware
limited liability company, (c) Coalfield Pipeline Company, a Tennessee corporation, (d) Knox Energy, LLC, a Tennessee limited
liability company, (e) Carbon West Virginia Company, LLC, a Delaware limited liability company, (f) Cranberry Pipeline Corporation,
a Delaware corporation, (g) Carbon Tennessee Mining Company, LLC, (h) each of the Pledgors, and (i) each other Person who from
time to time Guarantees all or any part of the Obligations under the Loan Documents, and “Guarantor” means
any one of the Guarantors.

 

“Guaranty”
means each written guaranty of a Guarantor in favor of Administrative Agent, for the benefit of the Guaranteed Parties, in form
and substance satisfactory to Administrative Agent.

 

“Hazardous
Material” means any substance, product, waste, pollutant, material, chemical, contaminant, constituent, or other material
which is or becomes listed, regulated, or addressed under any Environmental Law, including, without limitation, asbestos, petroleum,
and polychlorinated biphenyls.

 

“Hedge
Obligations” means, at any time with respect to any Person, all indebtedness, liabilities, and obligations of such Person
under or in connection with any Hedging Agreement or Hedging Transaction, whether actual or contingent, due or to become due and
existing or arising from time to time.

 

“Hedge
Termination Value” means, in respect of any one or more Hedging Transactions, after taking into account the effect of
any legally enforceable netting agreement relating to such Hedging Transactions, (a) for any date on or after the date such
Hedging Transactions have been closed out and settlement amounts, early termination amounts or termination value(s) determined
in accordance therewith, such settlement amounts, early termination amounts or termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging
Transactions, as determined based upon one or more commercially reasonable mid-market or other readily available quotations provided
by any dealer which is a party to such Hedging Transactions or any other recognized dealer in such Hedging Transactions (which
may include a Lender or any Affiliate of a Lender).

 

“Hedging
Agreement” means any International Swap Dealers Association, Inc. Master Agreement, International Swaps and Derivatives
Association, Inc. Master Agreement or other agreement and all schedules and exhibits attached thereto and incorporated therein
that set forth the general terms upon which a Person may enter into one or more Hedging Transactions.

 

“Hedging
Transaction” means a Commodity Hedging Transaction, a Rate Management Transaction or any other transaction with respect
to any swap, forward, future or derivative transaction or option or similar transaction, whether exchange traded, “over-the-counter”
or otherwise, involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions.

 

“Honor
Date” has the meaning set forth in Section 2.2(c)(i).

 

“Hydrocarbons”
means oil, gas, coal seam gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate and all other liquid or
gaseous hydrocarbons produced or to be produced in conjunction therewith from a well bore and all products, by-products and other
substances derived therefrom or the processing thereof, including natural gas liquids, and all other minerals and substances produced
in conjunction with such substances, including, sulfur, geothermal steam, water, carbon dioxide, helium and any and all minerals,
ores or substances of value and the products and proceeds therefrom.

 

    CREDIT AGREEMENT – Page 15 

     

    

 

“IDC”
means Intangible Drilling and Development Costs, as defined in Section 263 of the Code (including, without limitation and
for the avoidance of doubt, intangible completion costs).

 

“Immaterial
Title Deficiencies” means, with respect to Oil and Gas Properties, defects or clouds on title, discrepancies in reported
net revenue or working interest ownership interests and other defects, discrepancies, Liens and similar matters which do not,
individually or in the aggregate, affect Oil and Gas Properties with a Recognized Value greater than five percent (5.00%) of the
Recognized Value of all such properties included in the Borrowing Base.

 

“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 Borrowers under any Loan Document and (b) to the extent not otherwise described in clause (a),
Other Taxes.

 

“Independent
Engineer” means Cawley, Gillespie & Associates, Inc. or any other third-party engineering firm acceptable to Administrative
Agent in its sole discretion.

 

“Information”
has the meaning set forth in Section 12.25.

 

“Initial
Reserve Report” means, collectively, the Reserve Reports for Nytis Exploration Company LLC and Carbon Appalachian Company,
LLC, each prepared by an Independent Engineer and updated by Borrowers’ own engineer, dated as of January 1, 2018, covering
all of the Oil and Gas Properties of the Borrowing Parties.

 

“Intellectual
Property” means all copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses and other
types of intellectual property, in whatever form, now owned or hereafter acquired.

 

“Intercreditor
Agreement” means that certain intercreditor agreement among Borrowers, one or more Approved Commodity Swap Counterparties
that are not Bank Product Providers, and Administrative Agent, as contractual collateral representative for itself, the Lenders,
the Bank Product Providers and such Approved Commodity Swap Counterparties, as amended and in effect from time to time.

 

“Interest
Period” means, with respect to any LIBOR Portion, the period commencing on the date such Portion becomes a LIBOR Portion
(whether by the making of a Loan or its continuation or conversion) and ending on the numerically corresponding day in the calendar
month that is one, two, or three months thereafter, as Borrowers may elect; provided, that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next
preceding Business Day, and (b) any Interest Period pertaining to a LIBOR Portion 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.

 

“Interest
Rate” means the rate equal to the lesser of (a) the Maximum Rate and (b) the Applicable Rate.

 

“Interstate
Commerce Act” means the body of Law commonly known as the Interstate Commerce Act, Chapter 104, 24 Stat. 379 (codified
as amended in scattered sections of 49 U.S.C.).

 

“Intrastate
Pipelines” has the meaning specified in Section 6.30(b).

 

    CREDIT AGREEMENT – Page 16 

     

    

 

“IRS”
means the Internal Revenue Service or any entity succeeding to all or any of its functions.

 

“ISP”
means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute
of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

 

“Issuer
Documents” means, with respect to any Letter of Credit, the Letter of Credit Application and any other document, agreement
and instrument entered into by L/C Issuer and a Borrower (or any Subsidiary of a Borrower) or in favor of L/C Issuer and relating
to such Letter of Credit.

 

“L/C
Advance” means, with respect to each Revolving Credit Lender, such Revolving Credit Lender’s funding of its participation
in any L/C Borrowing in accordance with its Applicable Percentage.

 

“L/C
Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed
by Borrowers on the date when made or refinanced as a Revolving Credit Borrowing.

 

“L/C
Credit Extension” means, with respect to any Letter of Credit, the issuance thereof, the extension of the expiry date
thereof, or the increase of the amount thereof.

 

“L/C
Issuer” means LegacyTexas Bank in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of
Letters of Credit hereunder.

 

“L/C
Obligations” means, as at any date of determination thereof, the aggregate amount available to be drawn under all outstanding
Letters of Credit, plus the aggregate amount of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of
computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined
in accordance with Section 1.4. 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 Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

“Laws”
means, collectively, all international, foreign, federal, state, provincial and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof
by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in
each case whether or not having the force of law.

 

“Lease
Operating Statement” means a report, in form and substance reasonably satisfactory to Administrative Agent, prepared
by Borrowers covering each of the Proved Oil and Gas Properties of the Borrowing Parties included in the most recent redetermination
of the Borrowing Base and detailing on a monthly basis the Hydrocarbon production volumes, revenues, associated lease operating
expenses, taxes and other expenses for such Proved Oil and Gas Properties.

 

“LegacyTexas
Bank” means LegacyTexas Bank, a Texas state bank, and its successors and assigns.

 

“Lender”
and “Lenders” have the meanings set forth in the introductory paragraph hereto and shall include L/C Issuer,
as the context may require.

 

    CREDIT AGREEMENT – Page 17 

     

    

 

“Lending
Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative
Questionnaire, or such other office or offices as a Lender may from time to time notify Borrowers and Administrative Agent.

 

“Letter
of Credit” means any standby letter of credit issued hereunder providing for the payment of cash upon the honoring of
a presentation thereunder.

 

“Letter
of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the
form from time to time in use by L/C Issuer.

 

“Letter
of Credit Expiration Date” means the date that is seven days prior to the Revolving Credit Maturity Date (or, if such
day is not a Business Day, the next preceding Business Day).

 

“Letter
of Credit Fee” has the meaning set forth in Section 2.3(b).

 

“Letter
of Credit Sublimit” means an amount equal to $1,500,000. The Letter of Credit Sublimit is part of, and not in addition
to, the Aggregate Revolving Credit Commitments.

 

“Leverage
Ratio” means, as of any date of determination thereof, the ratio of (a) Net Debt as of such date to (b) EBITDAX of the
Borrowing Parties, on a combined and consolidated basis, for the Test Period most recently ended.

 

“LIBOR”
means:

 

(a)
for any interest calculation with respect to a LIBOR Portion, for any Interest Period:

 

(i)
the rate per annum for deposits for the same term in Dollars that appears on Thomson Reuters ICE Benchmark Administration LIBOR
Rates Page (or the successor thereto if the ICE Benchmark Administration is no longer making a LIBOR rate available) at approximately
11:00 a.m., London, England time, on the related LIBOR Determination Date; provided, however, if such rate
appearing on such page is less than zero, such rate shall be deemed to be zero for purposes of this Agreement; or

 

    CREDIT AGREEMENT – Page 18 

     

    

 

(ii)
if such rate does not appear on such screen or service, or such screen or service shall cease to be available, then LIBOR shall
be determined by Administrative Agent to be the offered rate on such other screen or service that displays an average interest
settlement rate for deposits in Dollars (for delivery on the first day of such Interest Period) in the London interbank market
for a term equivalent to such Interest Period as of 11:00 a.m. on the relevant LIBOR Determination Date; provided,
however, if such rate appearing on such screen or service is less than zero, such rate shall be deemed to be zero for purposes
of this Agreement; or

 

(iii)
if the rates referenced in the foregoing clauses (a)(i) and (a)(ii) are not available, then LIBOR for the relevant
Interest Period will be determined by such alternate method as is reasonably selected by Administrative Agent; and

 

(b)
for any interest calculation with respect to a Base Rate Portion:

 

(i)
the rate per annum for deposits in Dollars that appears on Thomson Reuters ICE Benchmark Administration LIBOR Rates Page (or the
successor thereto if the ICE Benchmark Administration is no longer making a LIBOR rate available) at approximately 11:00 a.m.,
London, England time, on the related LIBOR Determination Date for a term of one month commencing on the date of calculation; provided,
however, if such rate appearing on such page is less than zero, such rate shall be deemed to be zero for purposes of this
Agreement; or

 

(ii)
if such rate does not appear on such screen or service, or such screen or service shall cease to be available, then LIBOR shall
be determined by Administrative Agent to be the offered rate on such other screen or service that displays an average interest
settlement rate for deposits in Dollars (for delivery on such date of calculation) for a term of one month as of 11:00 a.m. on
the relevant LIBOR Determination Date; provided, however, if such rate appearing on such screen or service is less
than zero, such rate shall be deemed to be zero for purposes of this Agreement; or

 

(iii)
if the rates referenced in the foregoing clauses (b)(i) and (b)(ii) are not available, then LIBOR for a term of
one month will be determined by such alternate method as is reasonably selected by Administrative Agent.

 

“LIBOR
Determination Date” means a day that is two Business Days prior to the beginning of the relevant Interest Period
or prior to the applicable date of determination, as applicable.

 

“LIBOR
Portion” means each Portion bearing interest based on Adjusted LIBOR (other than any Portion bearing interest at the
Base Rate which is determined by reference to Adjusted LIBOR).

 

“Lien”
means, as to any Property of any Person, (a) any lien, mortgage, security interest, tax lien, pledge, charge, hypothecation, collateral
assignment, or other encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law, or otherwise, affecting such Property, (b) production payments
and the like payable out of such Property, and (c) the signing or filing of a financing statement which names the Person as debtor
or the signing of any security agreement, or the signing of any document authorizing a secured party to file any financing statement
which names such Person as debtor.

 

“Liquidity”
means, with respect to the Borrowing Parties, on a combined and consolidated basis, as of any date of determination thereof, the
sum of (i) unencumbered cash and cash equivalents on hand on such date, and (ii) the Revolving Credit Availability on such date;
provided, however, solely for the purpose of this calculation, cash and cash equivalents pledged in favor of the
Administrative Agent in connection with the Loan Documents shall not constitute as encumbered.

 

“Loan”
means an extension of credit by a Lender to Borrowers under Article 2 in the form of a Revolving Credit Loan or a
Term Loan.

 

“Loan
Documents” means this Agreement, each Guaranty, the Security Documents, the Notes, the Issuer Documents, and all other
promissory notes, security agreements, deeds of trust, assignments, letters of credit, guaranties, and other instruments, documents,
or agreements executed and delivered pursuant to or in connection with this Agreement or the Security Documents; provided
that the term “Loan Documents” shall not include any Bank Product Agreement or the Intercreditor Agreement.

 

“Loss”
has the meaning set forth in Section 7.5(c).

 

“Majority
Lenders” means, as of any date of determination, Lenders holding more than 50% of the Total Credit Exposure at such
time (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed
“held” by such Lender for purposes of this definition); provided that, if one Lender holds more than 51% but
less than 100% of the Total Credit Exposure at such time, subject to the last sentence of Section 12.10, Majority
Lenders shall be at least two Lenders. The Total Credit Exposure held or deemed held by, any Defaulting Lender shall be excluded
for purposes of making a determination of Majority Lenders.

 

    CREDIT AGREEMENT – Page 19 

     

    

 

“Majority
Revolving Credit Lenders” means, as of any date of determination, Revolving Credit Lenders holding more than 50% of
the Aggregate Revolving Credit Commitment at such time (with the aggregate amount of each Revolving Credit Lender’s risk
participation and funded participation in L/C Obligations being deemed “held” by such Revolving Credit Lender for
purposes of this definition); provided that, if one Revolving Credit Lender holds more than 51% but less than 100% of the
Aggregate Revolving Credit Commitment at such time, subject to the last sentence of Section 12.10, Majority Revolving
Credit Lenders shall be at least two Revolving Credit Lenders. The Aggregate Revolving Credit Commitment held or deemed held by,
any Defaulting Lender shall be excluded for purposes of making a determination of Majority Revolving Credit Lenders.

 

“Material
Adverse Event” means any act, event, condition, or circumstance which could materially and adversely affect (a) the
operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Borrowing
Parties, taken as a whole; (b) the ability of any Obligated Party to perform its obligations under any Loan Document to which
it is a party or the Intercreditor Agreement to the extent party thereto; or (c) the legality, validity, binding effect or
enforceability against any Obligated Party of any Loan Document to which it is a party or the Intercreditor Agreement to the extent
party thereto.

 

“Material
Gas Imbalance” means, with respect to all Gas Balancing Agreements to which any Borrower or any Subsidiary is a party
or by which any Oil and Gas Property of any Borrower or any Subsidiary is bound, net gas imbalance liabilities of Borrowers or
any Subsidiary, considered individually or in the aggregate, in excess of $500,000. Gas imbalances will be determined based on
Gas Balancing Agreements, with respect to wellhead imbalances, or gas purchase or transportation agreements, with respect to downstream
imbalances, if any, specifying the method of calculation thereof, or, alternatively, if no such Gas Balancing Agreements or gas
purchase or transportation agreements, as the case may be, are in existence, gas imbalances will be calculated by multiplying
(x) the volume of gas imbalance as of the date of calculation (expressed in thousand cubic feet) by (y) the heating
value in BTUs per thousand cubic feet, times the Henry Hub average daily spot price for the month immediately preceding
the date of calculation adjusted for location differential and transportation costs based upon the location where the Oil and
Gas Property giving rise to the imbalances are located.

 

“Maturity
Date” means the later to occur of (a) the Revolving Credit Maturity Date, and (b) the Term Loan Maturity Date.

 

“Maximum
Rate” means, at all times, the maximum rate of interest which may be charged, contracted for, taken, received or reserved
by Lenders in accordance with applicable Texas Law (or applicable United States federal Law to the extent that such Law permits
Lenders to charge, contract for, receive or reserve a greater amount of interest than under Texas Law). The Maximum Rate shall
be calculated in a manner that takes into account any and all fees, payments, and other charges in respect of the Loan Documents
that constitute interest under applicable Law. Each change in any interest rate provided for herein based upon the Maximum Rate
resulting from a change in the Maximum Rate shall take effect without notice to Borrowers at the time of such change in the Maximum
Rate.

 

“Minimum
Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account
balances provided to reduce or eliminate Fronting Exposure during the time that a Defaulting Lender exists, an amount equal to
105% of the Fronting Exposure of L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (b) with
respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.6(a)(i),
(a)(ii) or (a)(iii), an amount equal to 105% of the Outstanding Amount of all L/C Obligations, and (c) otherwise,
an amount determined by Administrative Agent and L/C Issuer in their sole discretion.

 

    CREDIT AGREEMENT – Page 20 

     

    

 

“Mortgaged
Properties” means all present and future Oil and Gas Properties of each Borrowing Party in which such Borrowing Party
has granted or does hereafter grant a mortgage or Lien to or for the benefit of Administrative Agent for the benefit of the Secured
Parties.

 

“Mortgages”
means, collectively, the mortgages or deeds of trust now or hereafter encumbering any Borrower’s or any Subsidiary’s
fee, easement or leasehold estates in the property described therein, including without limitations, the Pipeline Systems, in
favor of Administrative Agent, in form and substance satisfactory to Administrative Agent.

 

“Multiemployer
Plan” means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions are being made
or have been made by, or for which there is an obligation to make by or there is any liability, contingent or otherwise, with
respect to an Obligated Party or any ERISA Affiliate and which is covered by Title IV of ERISA.

 

“Net
Debt” means, on any date of determination, (a) all Debt of the Borrowing Parties, on a combined and consolidated basis,
as of such date, minus (b) all unencumbered cash and cash equivalents of the Borrowing Parties, on a combined and consolidated
basis, as of such date in accordance with GAAP in an aggregate amount not to exceed $3,000,000; provided, however, solely for
the purpose of this calculation, cash and cash equivalents pledged in favor of the Administrative Agent in connection with the
Loan Documents shall not constitute as encumbered.

 

“Net
Income” means, for any Person for any Test Period, the net income (or loss) of such Person and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP; provided that Net Income shall exclude (a) the net income
of any Subsidiary of such Person during such Test Period to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of such income is not permitted by operation of the terms of its Constituent Documents or any
agreement, instrument or Law applicable to such Subsidiary during such Test Period except that such Person’s equity in any
net loss of any such Subsidiary for such Test Period shall be included in determining Net Income, and (b) any income (or
loss) for such Test Period of any other Person if such other Person is not a Subsidiary, except that a Borrower’s equity
in the net income of any such Person for such Test Period shall be included in Net Income up to the aggregate amount of cash actually
distributed by such Person during such Test Period to such Borrower or a Subsidiary as a dividend or other distribution (and in
the case of a dividend or other distribution to a Subsidiary, such Subsidiary is not precluded from further distributing such
amount to the applicable Borrower as described in clause (a) of this proviso).

 

“Non-Consenting
Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval
of all or all affected Lenders in accordance with the terms of Section 12.10 and (b) 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.

 

“Notes”
means, collectively, the Revolving Credit Notes and the Term Loan Notes, and “Note” means any one of the Notes.

 

“Nytis”
means Nytis Exploration Company LLC, a Delaware limited liability company.

 

    CREDIT AGREEMENT – Page 21 

     

    

 

“Obligated
Party” means each of the Borrowers, the Guarantors and each other Person who is or becomes party to any agreement that
obligates such Person to pay or perform, or that Guarantees or secures payment or performance of, the Obligations under the Loan
Documents or any part thereof.

 

“Obligations”
means all obligations, indebtedness, and liabilities of each Borrower, each Guarantor and each other Obligated Party to Administrative
Agent, each Lender, any Affiliates of Administrative Agent or any Lender and any Bank Product Provider now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, arising under or pursuant to this Agreement, any Bank Product Agreements (but in the case of Bank Product Agreements
that are Hedging Agreements, limited to obligations and liabilities of the Borrowing Parties to Bank Product Providers in respect
of Hedging Transactions that are permitted by Section 8.17 and the Hedging Agreements under which they arise, to the extent
related thereto, including any related early termination or settlement amounts) or the other Loan Documents, and all interest
accruing thereon (whether a claim for post-filing or post-petition interest is allowed in any bankruptcy, insolvency, reorganization
or similar proceeding) and all attorneys’ fees and other expenses incurred in the enforcement or collection thereof; provided
that, as to any Guarantor, the “Obligations” shall exclude any Excluded Swap Obligations of such Guarantor.

 

“Oil
and Gas Properties” means (a) all present and future interests and estates existing under any oil, gas and/or mineral
leases including, without limitation, working interests, royalty interests, overriding royalty interests, production payments,
net profits interests and carried interests, (b) all present and future rights in mineral fee interests, including without
limitation, any reversionary interests relating thereto, (c) all rights, titles and interests created by or arising under
the terms of all present and future unitization, communitization or pooling arrangements (and all properties covered and units
created thereby) whether arising by contract or operation of law which now or hereafter include all or any part of the foregoing,
(d) all rights, titles and interest created by or arising under the terms of all present and future Farmouts including, without
limitation, any back-in interests related thereto, (e) all unsevered and unextracted Hydrocarbons in, under or attributable with
respect to any of the foregoing, and (f) all rights, remedies, powers and privileges with respect to any of the foregoing,
in each case, including, without limitation, all of the foregoing which are classified as proved developed producing, proved developed
non-producing, proved developed behind pipe, proved developed shut-in, proved undeveloped, probable and possible reserves and
any other reserve category recognized by the Society of Petroleum Evaluation Engineers or any successor thereto.

 

“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
or Loan Document).

 

“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 3.6).

 

“Outstanding
Amount” means (a) with respect to the Revolving Credit Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans occurring on such date,
(b) with respect to the Term Loans on any date, the aggregate outstanding principal amount thereof after giving effect to
any prepayments or repayments of the Term Loans occurring on such date, and (c) with respect to any L/C Obligations on any
date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements
by Borrowers of Unreimbursed Amounts.

 

    CREDIT AGREEMENT – Page 22 

     

    

 

“Participant”
means any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for
the primary benefit of, a natural Person, a Defaulting Lender, or Borrowers or any of Borrowers’ Affiliates or Subsidiaries
or any other Obligated Party) to which a participation is sold by any Lender 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 Loans owing to it).

 

“Participant
Register” means a register in the United States on which each Lender that sells a participation 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.

 

“Patriot
Act” means the Uniting and Strengthening America by Providing Appropriate Tools to Intercept and Obstruct Terrorism
Act of 2001 (Title III of Pub. L. 107-56, signed into law October 26, 2001).

 

“Payment
Date” means (a) in respect of each Base Rate Portion, the first day of each and every calendar quarter during the
term of this Agreement and the Maturity Date, and (b) in respect of each LIBOR Portion, the last day of each Interest Period
applicable to such LIBOR Portion (or the day that is three months after the first day of such Interest Period if such Interest
Period has a length of more than three months) and the Maturity Date.

 

“PBGC”
means the Pension Benefit Guaranty Corporation or any entity succeeding to all or any of its functions under ERISA.

 

“Permitted
Liens” means those Liens permitted by Section 8.2.

 

“Permitted
Refinancing” means Debt constituting a refinancing or extension of Debt permitted under Sections 8.1(b) and 8.1(c)
that (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the Debt being
refinanced or extended plus an amount equal to the fees and expenses reasonably incurred in connection with such refinancing or
extension, (b) is not entered into as part of a sale leaseback transaction, (c) is not secured by a Lien on any assets
other than the collateral securing the Debt being refinanced or extended, (d) the obligors of which are the same as the obligors
of the Debt being refinanced or extended and (e) is otherwise on terms no less favorable to the Obligated Parties, taken
as a whole, than those of the Debt being refinanced or extended.

 

“Permitted
Tax Distributions” means, with respect to any Person, any dividend or distribution to any holder of such Person’s
Equity Interests to permit such holders to pay federal income taxes and all relevant state and local income taxes at a rate equal
to the highest marginal applicable tax rate for the applicable tax year, however denominated (together with any interest, penalties,
additions to tax, or additional amounts with respect thereto) imposed as a result of taxable income attributed to such holder
as a partner, member or stockholder of such Person under federal, state, and local income tax Laws, determined on a basis that
combines those liabilities arising out of the net effect of the income, gains, deductions, losses, and credits of such Person
and attributable to it in proportion and to the extent in which such holders hold Equity Interests of such Person, provided,
however, the computation of tax distributions under this definition shall take into account the carryovers of items of
loss, deduction and expense previously allocated by a Borrower to holders of its Equity Interests, such that the excess, if any,
of the aggregate items of losses from the prior taxable year over aggregate items of income from the prior taxable year will be
deducted from the current taxable year’s income before applying the appropriate tax rate.

 

    CREDIT AGREEMENT – Page 23 

     

    

 

“Person”
means any individual, corporation, limited liability company, business trust, association, company, partnership, joint venture,
Governmental Authority, or other entity, and shall include such Person’s heirs, administrators, personal representatives,
executors, successors and assigns.

 

“Pipeline
Assets” means, collectively, all gathering, transportation and/or distribution systems, all tubes and pipelines used
for the transportation of Hydrocarbons, all related storage, processing or treatment facilities, and all distribution systems,
wherever located, whether now owned or hereafter acquired by any Borrower or any Subsidiary, together with all plants, equipment,
contracts, fixtures, facilities, metering stations, compressors, improvements, records and other property appertaining thereto.

 

“Pipeline
Systems” means, collectively, all of the Pipeline Assets and all real property and Easements related thereto.

 

“Plan”
means any employee benefit or other plan, other than a Multiemployer Plan, established or maintained by, or for which there is
an obligation to make contributions by or there is any liability, contingent or otherwise with respect to any Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA or subject to Section 412 of the Code.

 

“Platform”
means Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.

 

“Pledge
Agreement” means that certain Amended and Restated Pledge agreement dated as of even date herewith, executed by each
of the Pledgors, in favor of the Administrative Agent, on behalf of the Secured Parties, as amended, restated, amended and restated,
supplemented, or otherwise modified from time to time.

 

“Pledgors”
means (a) Carbon Appalachian Company, LLC, a Delaware limited liability company, (b) Carbon Appalachia Group, LLC, a Delaware
limited liability company, and (c) each other Person who from time to time pledges any assets to secure all or any part of the
Obligations under the Loan Documents pursuant to the Pledge Agreement, and “Pledgor” means any one of the Pledgors.

 

“Portion”
means any principal amount of any Loan bearing interest based upon the Base Rate or Adjusted LIBOR.

 

“Prime
Rate” means, for any day, a per annum interest rate equal to the highest quoted annual rate of interest which is published
from time to time in the “Money Rates” section of The Wall Street Journal as the prime rate (or, if such source
is not available, such alternate source as reasonably determined by Administrative Agent), as adjusted from time to time in Administrative
Agent’s reasonable discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs. Any
change in the rate will take effect on the effective date as indicated in The Wall Street Journal.

 

“Principal
Office” means the principal office of Administrative Agent, presently located at the address set forth on Schedule 12.11.

 

“Production
Report” means a report, in form and substance reasonably satisfactory to Administrative Agent, prepared by Borrowers
covering each of the Proved Oil and Gas Properties of the Borrowing Parties included in the most recent redetermination of the
Borrowing Base and detailing Hydrocarbon production volumes on a well-by-well basis for the most recently-completed month, which
report shall provide whether such Hydrocarbons were produced during such month or, as a result of accounting practices, were produced
in a previous month, in which case the report shall specify the month during which such Hydrocarbons were produced.

 

    CREDIT AGREEMENT – Page 24 

     

    

 

“Prohibited
Transaction” means any transaction set forth in Section 406 of ERISA or Section 4975 of the Code.

 

“Projected
Production” as of any time means the projected production of oil, natural gas, condensate or natural gas liquids including
gas processing plant products (measured by volume unit or BTU equivalent, not sales price), as applicable, for the term of the
contracts or a particular month, as applicable, from properties and interests owned by any Borrower or any Subsidiary which are
located in or offshore of the United States and which have attributable to them proved developed producing oil and gas reserves,
as such production has been most recently projected in the most recently delivered Reserve Report, after deducting projected production
from any properties or interests sold or under contract for sale that had been included in such analysis.

 

“Property”
of a Person means any and all property, whether real, personal, tangible, intangible or mixed, of such Person, or any other assets
owned, operated or leased by such Person, and, with respect to the Borrowing Parties, shall include the Mortgaged Properties.

 

“Proved
Oil and Gas Properties” means, collectively, (a) all Oil and Gas Properties which constitute proved developed producing
reserves, (b) all Oil and Gas Properties which constitute proved developed non-producing reserves, proved developed behind
pipe reserves or proved developed shut-in reserves, (c) all Oil and Gas Properties which constitute proved undeveloped reserves
and (d) all Oil and Gas Properties which constitute other categories of proved reserves recognized by the Society of Petroleum
Evaluation Engineers or any successor thereto.

 

“Rate
Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter
entered into by any Obligated Party which is a rate swap, basis swap, forward rate transaction, equity or equity index swap, equity
or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked
to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures, but excluding
Commodity Hedging Transactions.

 

“Recipient”
means Administrative Agent, L/C Issuer, or any Lender, as applicable.

 

“Recognized
Value” means the value, as determined by the Lenders, attributed to the Oil and Gas Properties of the Borrowing Parties
from the most recent determination of the Borrowing Base, based upon the discounted present value of the estimated net cash flow
to be realized from the production of Hydrocarbons from such Oil and Gas Properties and the other standards specified in Section 2.9(a).

 

“Register”
means a register for the recordation of the names and addresses of Lenders, and the Commitments of, and principal amounts of the
Loans owing to, each Lender pursuant to the terms hereof from time to time.

 

“Related
Indebtedness” means any and all indebtedness paid or payable by a Borrower to Administrative Agent or any Lender pursuant
to any Loan Document other than any Note.

 

    CREDIT AGREEMENT – Page 25 

     

    

 

“Related
Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees,
agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Release”
means, as to any Person, any release, spill, emission, leaking, pumping, injection, deposit, disposal, disbursement, leaching,
or migration of Hazardous Materials into the indoor or outdoor environment or into or out of property owned by such Person, including,
without limitation, the movement of Hazardous Materials through or in the air, soil, surface water, ground water, or Property.

 

“Remedial
Action” means all actions required to (a) clean up, remove, treat, or otherwise address Hazardous Materials in
the indoor or outdoor environment, (b) prevent the Release or threat of Release or minimize the further Release of Hazardous
Materials so that they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment,
or (c) perform pre-remedial studies and investigations and post-remedial monitoring and care.

 

“Removal
Effective Date” has the meaning set forth in Section 11.6(b).

 

“Reportable
Event” means any of the events set forth in Section 4043 of ERISA.

 

“Required
Lenders” means, as of any date of determination, Lenders holding more than 66-2/3% of the Total
Credit Exposure at such time (with the aggregate amount of each Lender’s risk participation and funded participation in
L/C Obligations being deemed “held” by such Lender for purposes of this definition); provided that, if one
Lender holds more than 66-2/3% but less than 100% of the Total Credit Exposure at such time, subject to
the last sentence of Section 12.10, Required Lenders shall be at least two Lenders. The Total Credit Exposure held
or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

“Required
Revolving Credit Lenders” means, as of any date of determination, Revolving Credit Lenders holding more than 66-2/3%
of the Aggregate Revolving Credit Commitment at such time (with the aggregate amount of each Revolving Credit Lender’s risk
participation and funded participation in L/C Obligations being deemed “held” by such Revolving Credit Lender for
purposes of this definition); provided that, if one Revolving Credit Lender holds more than 66-2/3%
but less than 100% of the Aggregate Revolving Credit Commitment at such time, subject to the last sentence of Section 12.10,
Required Revolving Credit Lenders shall be at least two Revolving Credit Lenders. The Aggregate Revolving Credit Commitment held
or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Credit
Lenders.

 

“Required
Reserve Value” means, at any time, 90% of the Recognized Value of all Proved Oil and Gas Properties evaluated in the
most recent Reserve Report.

 

“Reserve
Report” means a report, in form and substance satisfactory to Administrative Agent, evaluating the oil and gas reserves
attributable to all of the Oil and Gas Properties of the Borrowing Parties which shall, among other things, (a) identify
the wells covered thereby, (b) specify the applicable engineer’s opinions with respect to the total volume of reserves
(the “available reserves”) of Hydrocarbons (using, as applicable, the terms or categories “proved developed
producing reserves”, “proved developed non-producing reserves”, “proved developed behind pipe reserves”,
“proved developed shut-in reserves”, “proved undeveloped reserves”, “probable reserves” and
“possible reserves” and any other reserve category recognized by the Society of Petroleum Evaluation Engineers or
any successor thereto) which Borrowers have advised such engineer that the Borrowing Parties have the right to produce for their
own account, (c) set forth such engineer’s opinions with respect to the projected future cash proceeds from the available
reserves, discounted for present value at a rate acceptable to Administrative Agent, for each calendar year or portion thereof
after the date of such findings and data, (d) set forth such engineer’s opinions with respect to the projected future
rate of production of the available reserves, (e) contain such other information as requested by Administrative Agent with
respect to the projected rate of production, gross revenues, operating expenses, taxes, capital costs, net revenues and present
value of future net revenues attributable to such reserves and production therefrom, (f) contain a statement of the price
and escalation parameters, procedures and assumptions upon which such determinations were based, (g) contain a statement
of price differentials between the wellhead market price for the commodity sold and the quoted market price used in such report
during the previous 12-month period, and (h) contain summary lease operating statements for such Oil and Gas Properties for
the previous 12-month period.

 

    CREDIT AGREEMENT – Page 26 

     

    

 

“Resignation
Effective Date” has the meaning set forth in Section 11.6(a).

 

“Responsible
Officer” means the manager, chief executive officer, president, chief financial officer, or treasurer of an Obligated
Party or any Person designated by a Responsible Officer to act on behalf of a Responsible Officer; provided that such designated
Person may not designate any other Person to be a Responsible Officer. Any document delivered hereunder that is signed by a Responsible
Officer of an Obligated Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of
Obligated Party.

 

“Revolving
Credit Availability” means, as of any date of determination thereof, the difference between (a) the Aggregate Revolving
Credit Commitments on such date minus (b) the Aggregate Revolving Credit Exposure on such date.

 

“Revolving
Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case
of Revolving Credit Loans of a LIBOR Portion, having the same Interest Period, made by each of the Revolving Credit Lenders pursuant
to Section 2.1(a).

 

“Revolving
Credit Borrowing Request” means a writing, substantially in the form of Exhibit C, properly completed and
signed by a Responsible Officer of each Borrower, requesting a Revolving Credit Borrowing.

 

“Revolving
Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans
to Borrowers pursuant to Section 2.1(a) and (b) purchase participations in L/C Obligations pursuant to Section
2.2., in an aggregate principal amount at any one time outstanding not to exceed the lesser of (i) the amount set forth opposite
such Revolving Credit Lender’s name on Schedule 2.1 under the caption “Revolving Credit Commitment”
or opposite such caption in the Assignment and Assumption pursuant to which such Revolving Credit Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance with this Agreement, and (ii) such Revolving
Credit Lender’s Applicable Percentage of the Borrowing Base, as such amount may be adjusted from time to time in accordance
with this Agreement.

 

“Revolving
Credit Exposure” means, as to any Revolving Credit Lender at any time, the aggregate principal amount of its outstanding
Revolving Credit Loans at such time and such Revolving Credit Lender’s participation in L/C Obligations at such time.

 

“Revolving
Credit Lender” means, (a) at any time prior to the termination of the Aggregate Revolving Credit Commitment, any
Lender that has a Revolving Credit Commitment at such time, and (b) at any time after the termination of the Aggregate Revolving
Credit Commitment, any Lender that has Revolving Credit Exposure at such time.

  

    CREDIT AGREEMENT – Page 27 

     

    

 

“Revolving
Credit Loan” has the meaning set forth in Section 2.1(a).

 

“Revolving
Credit Maturity Date” means December 31, 2022, or such earlier date on which the Aggregate Revolving Credit Commitment
of the Revolving Credit Lenders terminate as provided in this Agreement; provided, however, that if such date is
not a Business Day, the Revolving Credit Maturity Date shall be the next succeeding Business Day.

 

“Revolving
Credit Note” means a promissory note made by Borrowers in favor of a Revolving Credit Lender evidencing Revolving Credit
Loans made by such Revolving Credit Lender, substantially in the form of Exhibit D.

 

“RICO”
means the Racketeer Influenced and Corrupt Organization Act of 1970.

 

“Sanctions”
means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department
of State.

 

“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 Agreement, Crimea, Cuba, Iran, North Korea, Sudan, and Syria).

 

“Sanctioned
Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by
the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) any Person operating,
organized, or resident in a Sanctioned Country, or (c) any Person controlled by any such Person.

 

“Secured
Parties” means, collectively, the Administrative Agent, each Lender, L/C Issuer, each Bank Product Provider, each Approved
Commodity Swap Counterparty party to the Intercreditor Agreement (with respect to the Mortgages) and any other Person the Obligations
owing to which are, or are purported to be, secured by the Collateral under the terms of the Security Documents.

 

“Security
Documents” means, collectively, each and every Mortgage, security agreement, Pledge agreement, mortgage, deed of trust,
control agreement or other collateral security agreement required by or delivered to Administrative Agent from time to time that
purport to create a Lien in favor of any of the Secured Parties to secure payment or performance of the Obligations or any portion
thereof.

 

“Sellers”
means, collectively, Old Ironsides Fund II-A Portfolio Holding Company, LLC and Old Ironsides Fund II-B Portfolio Holding Company,
LLC.

 

“Solvent”
means, with respect to any Person as of any date of determination thereof, that the fair value of the assets of such Person (at
fair valuation) is, on the date of determination, greater than the total amount of liabilities (including contingent and unliquidated
liabilities) of such Person as of such date; that the present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the probable liability of such Person on its debts as such debts
become absolute and matured; and that, as of such date, such Person will be able to pay all liabilities of such Person as such
liabilities mature, and such Person does not have unreasonably small capital with which to carry on its business. In computing
the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount which, in light
of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual
or matured liability discounted to present value at rates believed to be reasonable by such Person acting in good faith.

 

    CREDIT AGREEMENT – Page 28 

     

    

 

“State
Pipeline Regulatory Agencies” means the Tennessee Regulatory Authority, the Tennessee Department of Transportation pipeline
and Hazardous Materials Safety Division, the Tennessee Gas Pipeline Safety Division, the Kentucky Public Service Commission and
any other Governmental Authority with jurisdiction with respect to any Pipeline Systems, and “State Pipeline Regulatory
Agency” means any one of the foregoing.

 

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

 

“Subsidiary”
means (a) any corporation of which at least a majority of the outstanding shares of stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such corporation (irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or Controlled by a Borrower, one or more of such Borrower’s other Subsidiaries
or by such Borrower and one or more of such Subsidiaries, and (b) any other entity (i) of which at least a majority
of the ownership, equity or voting interest is at the time directly or indirectly owned or Controlled by one or more of a Borrower
and other Subsidiaries and (ii) which is treated as a subsidiary in accordance with GAAP. Unless otherwise specified herein,
any reference to a “Subsidiary” or “Subsidiaries” shall be deemed to be references to a Subsidiary or
Subsidiaries of a Borrower. Notwithstanding anything to the contrary contained herein, each of the Excluded Subsidiaries shall
not be a Subsidiary for purposes of this Agreement or any other Loan Document, including without limitations, for purposes of
any financial covenants set forth under Article IX or any reporting requirements under Section 7.1.

 

“Swap
Obligations” 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.

 

“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 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), assessments,
fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable
thereto.

 

“Term
Loan” has the meaning set forth in Section 2.1(b).

 

    CREDIT AGREEMENT – Page 29 

     

    

 

“Term
Loan Borrowing” means a borrowing consisting of simultaneous Term Loans made by each of the Term Loan Lenders pursuant
to Section 2.1(b).

 

“Term
Loan Borrowing Request” means a writing, substantially in the form of Exhibit E, properly completed and
signed by a Responsible Officer of each Borrower, requesting a Term Loan Borrowing.

 

“Term
Loan Commitment” means, as to each Term Loan Lender, its obligation to make a Term Loan on the Closing Date to Borrowers
pursuant to Section 2.1(b) in an aggregate principal amount at any one time outstanding not to exceed the amount set
forth opposite such Term Loan Lender’s name on Schedule 2.1 under the caption “Term Loan Commitment”.

 

“Term
Loan Lender” means any Lender that holds a Term Loan at such time.

 

“Term
Loan Maturity Date” means June 30, 2020; provided, however, that if such date is not a Business Day, the
Term Loan Maturity Date shall be the next succeeding Business Day.

 

“Term
Loan Note” means a promissory note of Borrower payable to the order of a Term Loan Lender evidencing the Term Loan made
by such Term Loan Lender, in substantially the form of Exhibit F.

 

“Test
Period” means, as of any date of determination thereof, the four consecutive fiscal quarters of Borrowers’ most
recently ended (in each case taken as one accounting period) for which financial statements have been or are required to be delivered
pursuant to this Agreement, commencing as of fiscal quarter ending March 31, 2019; provided, however, for purposes of the calculation
of EBITDAX (including Net Income and each other amount included in the determination of EBITDAX) for Test Period ending March
31, 2019, such amounts shall be calculated as if the CAC Acquisition had occurred on or prior to July 1, 2018, and shall be annualized
by taking the results of the fiscal quarter ending March 31, 2019, and multiplying them by 4; for the Test Period ending June
30, 2019, such amounts shall be annualized by taking the results of the two fiscal quarters ending June 30, 2019, and multiplying
them by 2; for the Test Period ending September 30, 2019, such amounts shall be annualized by taking the results of the three
fiscal quarters ending September 30, 2019, and multiplying them by 4/3.

 

“Threshold
Amount” means $250,000.

 

“Total
Credit Exposure” means, as of any date of determination thereof, the sum of the Aggregate Revolving Credit Commitment
plus the aggregate Outstanding Amount of all Term Loans at such time.

 

“Type”
means, with respect to a Portion, its character as a LIBOR Portion or a Base Rate Portion.

 

“UCC”
means Chapters 1 through 11 of the Texas Business and Commerce Code.

 

“Unfunded
Pension Liability” means the excess, if any, of (a) the funding target as defined under Section 430(d) of
the Code without regard to the special at-risk rules of Section 430(i) of the Code, over (b) the value of plan assets
as defined under Section 430(g)(3)(A) of the Code determined as of the last day of each calendar year, without regard to
the averaging which may be allowed under Section 430(g)(3)(B) of the Code and reduced for any prefunding balance or funding
standard carryover balance as defined and provided for in Section 430(f) of the Code.

 

“Unreimbursed
Amount” has the meaning set forth in Section 2.2(c)(i).

 

    CREDIT AGREEMENT – Page 30 

     

    

 

“U.S.
Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the
Code.

 

“U.S.
Tax Compliance Certificate” has the meaning specified in Section 3.4(g)(ii)(B)(3).

 

“Utilization”
means, as of any date of determination thereof, the percentage obtained by dividing the Aggregate Revolving Credit Exposure as
of such date by the Aggregate Revolving Credit Commitments as of such date.

 

“Withholding
Agent” means each of the Borrowers and Administrative Agent.

 

“Write-Down
and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of
such EEA Resolution Authority from time to 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.

 

Section
1.2 Accounting Matters.

 

(a)
Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and
all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement
shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the audited financial statements described in Section 6.2, except as otherwise
specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including
the computation of any financial covenant) contained herein, Debt of the Borrowing Parties shall be deemed to be carried at 100%
of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded.

 

(b)
Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set
forth herein, and either Borrowers or the Majority Lenders shall so request, Administrative Agent, Lenders and Borrowers shall
negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Majority Lenders); provided that, until so amended, (i) such ratio or requirement
shall continue to be computed in accordance with GAAP prior to such change therein and (ii) Borrowers shall provide to Administrative
Agent and Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change
in GAAP.

 

Section
1.3 ERISA Matters. If, after the date hereof, there shall occur, with respect to ERISA, the adoption of any applicable
Law, rule, or regulation, or any change therein, or any change in the interpretation, implementation or administration thereof
by the PBGC or any other Governmental Authority, then either Borrowers or Majority Lenders may request a modification to this
Agreement solely to preserve the original intent of this Agreement with respect to the provisions hereof applicable to ERISA,
and the parties to this Agreement shall negotiate in good faith to complete such modification.

 

Section
1.4 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be
deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect
to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of
such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such
time.

 

    CREDIT AGREEMENT – Page 31 

     

    

 

Section
1.5 Other Definitional Provisions. All definitions contained in this Agreement are equally applicable to the singular and
plural forms of the terms defined. The words “hereof”, “herein”, and “hereunder”
and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. Unless otherwise specified, all references in a Loan Document to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references
appear. Terms used herein that are defined in the UCC, unless otherwise defined herein, shall have the meanings specified in the
UCC. Any definition of or reference to any agreement, instrument or other document 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 herein or in any other Loan Document). Any reference to any Law shall
include all statutory and regulatory provisions consolidating, amending or replacing such Law and any reference to any Law or
regulation shall, unless otherwise specified, refer to such Law or regulation as amended, modified or supplemented from time to
time. Words denoting gender shall be construed to include the masculine, feminine and neuter, when such construction is appropriate;
and specific enumeration shall not exclude the general but shall be construed as cumulative; the word “or” is not
exclusive; the word “including” (in its various forms) means “including, without limitation”; in the computation
of periods of time, the word “from” means “from and including” and the words “to” and “until”
mean “to but excluding”; and all references to money refer to the legal currency of the United States of America.

 

Section
1.6 Interpretative Provision. For purposes of Section 10.1, a breach of a financial covenant contained in Article 9
shall be deemed to have occurred as of any date of determination thereof by Borrowers, the Majority Lenders or as of the last
date of any specified measurement period, regardless of when the financial statements or the Compliance Certificate reflecting
such breach are delivered to Administrative Agent.

 

Section
1.7 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to central time
(daylight or standard, as applicable).

 

Section
1.8 Other Loan Documents. The other Loan Documents, including the Security Documents, and the Intercreditor Agreement contain
representations, warranties, covenants, defaults and other provisions that are in addition to and not limited by, or a limitation
of, similar provisions of this Agreement. Such provisions in such other Loan Documents and the Intercreditor Agreement may be
different or more expansive than similar provisions of this Agreement and neither such differences nor such more expansive provisions
shall be construed as a conflict.

 

Section
1.9 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 on the first date of its existence by the holders of its Equity Interests at such time.

 

    CREDIT AGREEMENT – Page 32 

     

    

 

ARTICLE
2

THE COMMITMENTS AND CREDIT EXTENSIONS

 

Section
2.1 The Loans.

 

(a)
Revolving Credit Borrowings. Subject to the terms and conditions of this Agreement, each Revolving Credit Lender severally
agrees to make one or more revolving credit loans (each such loan, a “Revolving Credit Loan”) to Borrowers
from time to time from the Closing Date until the Revolving Credit Maturity Date in an aggregate principal amount for such Revolving
Credit Lender at any time outstanding up to but not exceeding the amount of the Revolving Credit Commitment of such Revolving
Credit Lender, provided that the Aggregate Revolving Credit Exposure shall not exceed the Aggregate Revolving Credit Commitments.
Subject to the foregoing limitations, and the other terms and provisions of this Agreement, Borrowers may borrow, repay, and reborrow
Revolving Credit Loans hereunder.

 

(b)
Term Loan Borrowings. Subject to the terms and conditions of this Agreement, each Term Loan Lender severally agrees to
make, on the Closing Date, a single Term Loan (each such loan, a “Term Loan”) to Borrowers in an amount equal
to the Term Loan Commitment of such Term Loan Lender. The Term Loan Commitment of each Term Loan Lender shall automatically terminate
immediately after the Term Loan Borrowings occur on the Closing Date. Borrower may not borrow, repay, and reborrow the Term Loans.

 

(c)
Borrowing Procedure. Each Borrowing, each conversion of a Portion from one Type to the other, and each continuation of
a LIBOR Portion shall be made upon Borrowers’ irrevocable notice to Administrative Agent, which may be given by telephone.
Each such notice must be received by Administrative Agent not later than 11:00 a.m. (i) three Business Days prior
to the requested date of any Borrowing of, conversion to, or continuation of a LIBOR Portion or of any conversion of a LIBOR Portion
to a Base Rate Portion, and (ii) on the requested date of any Borrowing of a Base Rate Portion. Each telephonic notice by
a Borrower pursuant to this Section 2.1(c) must be confirmed promptly by delivery to Administrative Agent of a written
Borrowing Request, appropriately completed and signed by a Responsible Officer of each Borrower. Each Borrowing of, conversion
to, or continuation of a LIBOR Portion shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Except as provided in Section 2.2(c), each Borrowing of or conversion to a Base Rate Portion shall be in a principal
amount of $250,000 or a whole multiple of $50,000 in excess thereof; provided that with respect to a Revolving Credit Borrowing
of a Base Rate Portion may be in an amount equal to the Revolving Credit Availability. Each Borrowing Request (whether telephonic
or written) shall specify (A) whether such Borrowing is a Revolving Credit Borrowing or a Term Loan Borrowing, (B) whether
Borrowers are requesting a Borrowing, a conversion of Portions from one Type to the other, or a continuation of LIBOR Portions,
(C) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day),
(D) the principal amount of Portions to be borrowed, converted or continued, (E) the Type of Portions to be borrowed
or to which existing Portions are to be converted, and (F) if applicable, the duration of the Interest Period with respect
thereto. If Borrowers fail to specify a Type of Portion in a Borrowing Request or if Borrowers fail to give a timely notice requesting
a conversion or continuation, then the applicable Portions shall be made as, or converted to, Base Rate Portions. Any such automatic
conversion to Base Rate Portions shall be effective as of the last day of the Interest Period then in effect with respect to the
applicable LIBOR Portions. If Borrowers request a Borrowing of, conversion to, or continuation of a LIBOR Portion in any such
Borrowing Request but fails to specify an Interest Period, Borrowers will be deemed to have specified an Interest Period of one month.

 

    CREDIT AGREEMENT – Page 33 

     

    

 

(d)
Funding. Following receipt of a Borrowing Request, Administrative Agent shall promptly notify each Lender of the amount
of its Applicable Percentage of the applicable Borrowing, and with respect to a Revolving Credit Borrowing Request, if no timely
notice of a conversion or continuation is provided by Borrowers, Administrative Agent shall notify each Revolving Credit Lender
of the details of any automatic conversion to Base Rate Portions as described in Section 2.1(c). In the case of any
Borrowing, each Lender shall make the amount of its Loan available to Administrative Agent in immediately available funds at Administrative
Agent’s Principal Office not later than 1:00 p.m. on the Business Day specified in the applicable Borrowing Request.
Upon satisfaction of the applicable conditions set forth in Section 5.2 (and, if such Borrowing is the initial Credit
Extension, Section 5.1), Administrative Agent shall make all funds so received available to Borrowers in like funds
as received by Administrative Agent either by (i) crediting the account of a Borrower on the books of LegacyTexas Bank with
the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) Administrative Agent by Borrowers; provided, however, if, on the date the Borrowing Request
with respect to such Borrowing is given by Borrowers, there are L/C Borrowings outstanding, then the proceeds of such Borrowing,
first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to
Borrowers as provided above.

 

(e)
Continuations and Conversions. Except as otherwise provided herein, a LIBOR Portion may be continued or converted only
on the last day of an Interest Period for such LIBOR Portion. During the existence of a Default, (i) no Loans may be requested
as, converted to, or continued as LIBOR Portions without the consent of the Majority Lenders and (ii) unless repaid, each
LIBOR Portion shall be converted to a Base Rate Portion at the end of the Interest Period applicable thereto.

 

(f)
Notifications. Administrative Agent shall promptly notify Borrowers and Lenders of the interest rate applicable to any
Interest Period for LIBOR Portions upon determination of such interest rate.

 

(g)
Interest Periods. After giving effect to all Borrowings, all conversions of Portions from one Type to the other, and all
continuations of Portions as the same Type, there shall not be more than five Interest Periods in effect with respect to LIBOR
Portions.

 

Section
2.2 Letters of Credit.

 

(a)
The Letter of Credit Commitment.

 

(i)
Subject to the terms and conditions set forth herein, (A) L/C Issuer agrees, in reliance upon the agreements of Lenders set
forth in this Section 2.2, (1) from time to time on any Business Day during the period from the Closing Date
until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of any Borrower or any Subsidiary, and
to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to
honor drawings under the Letters of Credit; and (B) Revolving Credit Lenders severally agree to participate in Letters of
Credit issued for the account of any Borrower or any Subsidiary and any drawings thereunder; provided that after giving
effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Aggregate Revolving Credit Exposure shall
not exceed the Aggregate Revolving Credit Commitments, (y) the Revolving Credit Exposure of any Revolving Credit Lender shall
not exceed such Lender’s Revolving Credit Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not
exceed the Letter of Credit Sublimit. Each request by Borrowers for the issuance or amendment of a Letter of Credit shall be deemed
to be a representation by Borrowers that the L/C Credit Extension so requested complies with the conditions set forth in the proviso
to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, Borrowers’ ability
to obtain Letters of Credit shall be fully revolving, and accordingly Borrowers may, during the foregoing period, obtain Letters
of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

 

    CREDIT AGREEMENT – Page 34 

     

    

 

(ii)
L/C Issuer shall not issue any Letter of Credit, if:

 

(A)
the expiry date of the requested Letter of Credit would occur more than 12 months after the date of issuance (or, if issued in
favor of the Texas Railroad Commission, 15 months following the date of issuance), unless Required Lenders have approved such
expiry date; or

 

(B)
the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all Revolving
Credit Lenders have approved such expiry date.

 

(iii)
L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

 

(A)
any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain L/C
Issuer from issuing the Letter of Credit, or any Law applicable to L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over L/C Issuer shall prohibit, or request that L/C Issuer
refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon L/C Issuer
with respect to the Letter of Credit any restriction, reserve or capital requirement (for which L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon L/C Issuer any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which L/C Issuer in good faith deems material to it;

 

(B)
the issuance of the Letter of Credit would violate one or more policies of L/C Issuer applicable to letters of credit generally;

 

(C)
except as otherwise agreed by Administrative Agent and L/C Issuer, the Letter of Credit is in an initial stated amount less than
$25,000;

 

(D)
the Letter of Credit is to be denominated in a currency other than Dollars;

 

(E)
any Revolving Credit Lender is at that time a Defaulting Lender, unless L/C Issuer has entered into arrangements, including the
delivery of Cash Collateral, satisfactory to L/C Issuer (in its sole discretion) with Borrowers or such Revolving Credit Lender
to eliminate L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 12.22(a)(iv))
with respect to such Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit
and all other L/C Obligations as to which L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion;
or

 

    CREDIT AGREEMENT – Page 35 

     

    

 

(F)
the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.

 

(iv)
L/C Issuer shall not amend any Letter of Credit if L/C Issuer would not be permitted at such time to issue the Letter of Credit
in its amended form under the terms hereof.

 

(v)
L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) L/C Issuer would have no obligation at such
time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit
does not accept the proposed amendment to the Letter of Credit.

 

(vi)
L/C Issuer shall act on behalf of Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and L/C Issuer shall have all of the benefits and immunities (A) provided to Administrative Agent in
Article 11 with respect to any acts taken or omissions suffered by L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term
“Administrative Agent” as used in Article 11 included L/C Issuer with respect to such acts or omissions,
and (B) as additionally provided herein with respect to L/C Issuer.

 

(b)
Procedures for Issuance and Amendment of Letters of Credit.

 

(i)
Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Borrowers delivered to L/C Issuer (with
a copy to Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible
Officer of each Borrower. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier,
by electronic transmission using the system provided by L/C Issuer, by personal delivery, or by any other means acceptable to
L/C Issuer. Such Letter of Credit Application must be received by L/C Issuer and Administrative Agent not later than 11:00 a.m.
at least two Business Days (or such later date and time as Administrative Agent and L/C Issuer may agree in a particular instance
in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory
to L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents
to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented
by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and
(H) such other matters as L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail satisfactory to L/C Issuer (1) the Letter of Credit
to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed
amendment; and (4) such other matters as L/C Issuer may require. Additionally, Borrowers shall furnish to L/C Issuer and
Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment,
including any Issuer Documents, as L/C Issuer or Administrative Agent may require.

 

    CREDIT AGREEMENT – Page 36 

     

    

 

(ii)
Promptly after receipt of any Letter of Credit Application, L/C Issuer will confirm with Administrative Agent (by telephone or
in writing) that Administrative Agent has received a copy of such Letter of Credit Application from Borrowers and, if not, L/C
Issuer will provide Administrative Agent with a copy thereof. Unless L/C Issuer has received written notice from any Revolving
Credit Lender, Administrative Agent or any Obligated Party, at least one Business Day prior to the requested date of issuance
or amendment of the applicable Letter of Credit that one or more applicable conditions contained in Article 5 shall
not then be satisfied, then, subject to the terms and conditions hereof, L/C Issuer shall, on the requested date, issue a Letter
of Credit for the account of a Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may
be, in each case in accordance with L/C Issuer’s usual and customary business practices. Immediately upon the issuance of
each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Credit
Lender’s Applicable Percentage times the amount of such Letter of Credit.

 

(iii)
Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto
or to the beneficiary thereof, L/C Issuer will also deliver to Borrowers and Administrative Agent a true and complete copy of
such Letter of Credit or amendment.

 

(c)
Drawings and Reimbursements; Funding of Participations.

 

(i)
Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, L/C Issuer shall
notify Borrowers and Administrative Agent thereof. Not later than 11:00 a.m. on the Business Day following the date of any
payment by L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), Borrowers shall reimburse
L/C Issuer through Administrative Agent in an amount equal to the amount of such drawing. If Borrowers fail to so reimburse L/C
Issuer by such time, Administrative Agent shall promptly notify each Revolving Credit Lender of the Honor Date, the amount of
the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Revolving Credit Lender’s
Applicable Percentage thereof. In such event, Borrowers shall be deemed to have requested a Revolving Credit Borrowing to be disbursed
on the Honor Date in an amount equal to the Unreimbursed Amount, subject to the amount of the unutilized portion of Revolving
Credit Availability and the conditions set forth in Section 5.2 (other than the delivery of a Revolving Credit Borrowing
Request). Any notice given by L/C Issuer or Administrative Agent pursuant to this Section 2.2(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect
the conclusiveness or binding effect of such notice.

 

    CREDIT AGREEMENT – Page 37 

     

    

 

(ii)
Each Revolving Credit Lender shall upon any notice pursuant to Section 2.2(c)(i) make funds available (and Administrative
Agent may apply Cash Collateral provided for this purpose) for the account of L/C Issuer at Administrative Agent’s Principal
Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business
Day specified in such notice by Administrative Agent, whereupon, subject to the provisions of Section 2.2(c)(iii),
each Revolving Credit Lender that so makes funds available shall be deemed to have made a Revolving Credit Loan (or, if the conditions
set forth in Section 5.2 are not satisfied, an L/C Borrowing as further described in clause (iii) below) to Borrowers
in such amount. Administrative Agent shall remit the funds so received to L/C Issuer.

 

(iii)
With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing because the conditions set
forth in Section 5.2 cannot be satisfied or for any other reason, Borrowers shall be deemed to have incurred from
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the Default Interest Rate. In such event, each Revolving
Credit Lender’s payment to Administrative Agent for the account of L/C Issuer pursuant to Section 2.2(c)(ii)
shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving
Credit Lender in satisfaction of its participation obligation under this Section 2.2.

 

(iv)
Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.2(c)
to reimburse L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Revolving Credit Lender’s
Applicable Percentage of such amount shall be solely for the account of L/C Issuer.

 

(v)
Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse L/C Issuer for amounts
drawn under Letters of Credit, as contemplated by this Section 2.2(c), shall be absolute and unconditional and shall
not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such
Revolving Credit Lender may have against L/C Issuer, a Borrower or any other Person for any reason whatsoever; (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Credit Lender’s obligation to make Revolving Credit Loans (but not
its obligation to fund its pro rata share of L/C Advances) pursuant to this Section 2.2(c) is subject to the conditions
set forth in Section 5.2 (other than delivery by Borrowers of a Revolving Credit Borrowing Request). No such making
of an L/C Advance shall relieve or otherwise impair the obligation of Borrowers to reimburse L/C Issuer for the amount of any
payment made by L/C Issuer under any Letter of Credit, together with interest as provided herein.

 

    CREDIT AGREEMENT – Page 38 

     

    

 

(vi)
If any Revolving Credit Lender fails to make available to Administrative Agent for the account of L/C Issuer any amount required
to be paid by such Revolving Credit Lender pursuant to the foregoing provisions of this Section 2.2(c) by the time
specified in Section 2.2(c)(ii), then, without limiting the other provisions of this Agreement, L/C Issuer shall be
entitled to recover from such Revolving Credit Lender (acting through Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on which such payment is immediately available to L/C
Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by L/C Issuer in accordance with
banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by L/C
Issuer in connection with the foregoing. If such Revolving Credit Lender pays such amount (with interest and fees as aforesaid),
the amount so paid shall constitute such Revolving Credit Lender’s Revolving Credit Loan included in the relevant Revolving
Credit Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of L/C Issuer submitted
to any Revolving Credit Lender (through Administrative Agent) with respect to any amounts owing under this clause (vi)
shall be conclusive absent manifest error.

 

(d)
Repayment of Participations.

 

(i)
At any time after L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such
Revolving Credit Lender’s L/C Advance in respect of such payment in accordance with Section 2.2(c), if Administrative
Agent receives for the account of L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether
directly from Borrowers or otherwise, including proceeds of Cash Collateral applied thereto by Administrative Agent), Administrative
Agent will distribute to such Revolving Credit Lender its Applicable Percentage thereof in the same funds as those received by
Administrative Agent.

 

(ii)
If any payment received by Administrative Agent for the account of L/C Issuer pursuant to Section 2.2(c)(i) is required
to be returned under any of the circumstances described in Section 12.24 (including pursuant to any settlement entered
into by L/C Issuer in its discretion), each Revolving Credit Lender shall pay to Administrative Agent for the account of L/C Issuer
its Applicable Percentage thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Revolving Credit Lender, at a rate per annum equal to the Federal Funds Rate from time to
time in effect. The obligations of Revolving Credit Lenders under this clause (ii) shall survive the payment in full of
the Obligations and the termination of this Agreement.

 

(e)
Obligations Absolute. The obligation of each Borrower to reimburse L/C Issuer for each drawing under each Letter of Credit
and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, including the following:

 

(i)
any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

 

(ii)
the existence of any claim, counterclaim, setoff, defense or other right that any Borrower or any Subsidiary may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee
may be acting), L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby
or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)
any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

    CREDIT AGREEMENT – Page 39 

     

    

 

(iv)
waiver by L/C Issuer of any requirement that exists for L/C Issuer’s protection and not the protection of a Borrower or
any waiver by L/C Issuer which does not in fact materially prejudice a Borrower;

 

(v)
honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a
draft;

 

(vi)
any payment made by L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration
date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized
by the UCC or the ISP, as applicable;

 

(vii)
any payment by L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit; or any payment made by L/C Issuer under such Letter of Credit to any Person purporting
to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative
of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding
under any Debtor Relief Law; or

 

(viii)
any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge of, any Borrower or any Subsidiary.

 

Borrowers
shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with Borrowers’ instructions or other irregularity, Borrowers will promptly notify L/C Issuer.
Borrowers shall be conclusively deemed to have waived any such claim against L/C Issuer and its correspondents unless such notice
is given as aforesaid.

 

(f)
Role of L/C Issuer. Each of the Revolving Credit Lenders and Borrowers agrees that, in paying any drawing under a Letter
of Credit, L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents
expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document. None of L/C Issuer, Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of L/C Issuer shall be liable to any Revolving Credit
Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of Majority Revolving
Credit Lenders; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer
Document. Borrowers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use
of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude Borrowers’
pursuing such rights and remedies as they may have against the beneficiary or transferee at law or under any other agreement.
None of L/C Issuer, Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee
of L/C Issuer shall be liable or responsible for any of the matters described in Section 2.2(e); provided,
however, that anything in such clauses to the contrary notwithstanding, Borrowers may have a claim against L/C Issuer,
and L/C Issuer may be liable to Borrowers, to the extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by Borrowers which Borrowers prove were caused by L/C Issuer’s willful misconduct or gross negligence
or L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and L/C Issuer shall not be responsible for the validity
or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank
Financial Telecommunication message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

 

    CREDIT AGREEMENT – Page 40 

     

    

 

(g)
Applicability of ISP; Limitation of Liability. Unless otherwise expressly agreed by L/C Issuer and Borrowers when a Letter
of Credit is issued, the rules of the ISP shall apply to such Letter of Credit. Notwithstanding the foregoing, L/C Issuer shall
not be responsible to Borrowers for, and L/C Issuer’s rights and remedies against Borrowers shall not be impaired by, any
action or inaction of L/C Issuer required or permitted under any Law, order, or practice that is required or permitted to be applied
to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where L/C Issuer or the beneficiary
is located, the practice stated in the ISP or in the decisions, opinions, practice statements, or official commentary of the ICC
Banking Commission, the Bankers Association for Finance and Trade – International Financial Services Association (BAFT-IFSA),
or the Institute of International Banking Law & Practice, whether or not any Letter of Credit or other Issuer Document
chooses such Law or practice.

 

(h)
Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. At any time there is more than one Lender, Borrowers
shall pay directly to L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, at the rate per annum
separately agreed between Borrowers and L/C Issuer, computed on the daily amount available to be drawn under such Letter of Credit
and payable on a quarterly basis in arrears. Such fronting fee shall be due and payable on the first Business Day of each April,
July, October and January so long as such Letter of Credit remains outstanding. For purposes of computing the daily amount available
to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.4.
In addition, Borrowers shall pay directly to L/C Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of L/C Issuer relating to letters of credit as from time to time
in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

 

(i)
Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document,
the terms hereof shall control.

 

(j)
Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in
support of any obligations of, or is for the account of, a Subsidiary, each Borrower shall be obligated to reimburse L/C Issuer
hereunder for any and all drawings under such Letter of Credit. Each Borrower hereby acknowledges that the issuance of Letters
of Credit for the account of Subsidiaries inures to the benefit of such Borrower, and that such Borrower’s business derives
substantial benefits from the businesses of such Subsidiaries.

 

    CREDIT AGREEMENT – Page 41 

     

    

 

Section
2.3 Fees.

 

(a)
Fees. Borrowers jointly and severally agree to pay to Administrative Agent and Arranger, for the account of Administrative
Agent, Arranger and each Lender, as applicable, fees, in the amounts and on the dates set forth in any Fee Letter.

 

(b)
Letter of Credit Fees. Borrowers jointly and severally agree to pay to Administrative Agent for the account of each Revolving
Credit Lender in accordance, subject to Section 12.22, with its Applicable Percentage a Letter of Credit fee (the
“Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Margin for LIBOR Portions times the
daily amount available to be drawn under such Letter of Credit; provided, however, each such Letter of Credit Fee
shall be no less than $1,000. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section 1.4. Letter of Credit Fees for each
Letter of Credit shall be (i) due and payable in arrears on the first Business Day of each April, July, October and January
so long as such Letter of Credit remains outstanding and (ii) computed on a quarterly basis in arrears. If there is any change
in the Applicable Margin for LIBOR Portions during any quarter, the daily amount available to be drawn under each Letter of Credit
shall be computed and multiplied by the Applicable Margin for LIBOR Portions separately for each period during such quarter that
such Applicable Margin for LIBOR Portions was in effect. Notwithstanding anything to the contrary contained herein while any Event
of Default exists, all Letter of Credit Fees shall accrue at the Default Interest Rate.

 

(c)
Commitment Fees. Borrowers jointly and severally agree to pay to Administrative Agent for the account of each Revolving
Credit Lender in accordance, subject to Section 12.22, with its Applicable Percentage a commitment fee on the daily
unused amount of the Revolving Credit Commitment of such Revolving Credit Lender for the period from and including the date of
this Agreement to and including the Revolving Credit Maturity Date (including at any time during which one or more of the conditions
in Article 5 is not met), at a rate equal to the Applicable Margin. For the purpose of calculating the commitment
fee hereunder, the Revolving Credit Commitment of each Revolving Credit Lender shall be deemed utilized by the amount of all outstanding
Revolving Credit Loans and L/C Obligations, owing to such Revolving Credit Lender whether directly or by participation. Accrued
commitment fees shall be payable quarterly in arrears on the first day of each April, July, October, and January during the term
of this Agreement and on the Revolving Credit Maturity Date.

 

Section
2.4 Payments Generally; Administrative Agent’s Clawback.

 

(a)
General. All payments of principal, interest, and other amounts to be made by Borrowers under this Agreement and the other
Loan Documents shall be made to Administrative Agent for the account of Administrative Agent or L/C Issuer or the pro rata accounts
of the applicable Lenders, as applicable, at the Principal Office in Dollars and immediately available funds, without setoff,
deduction, or counterclaim, and free and clear of all Taxes at the time and in the manner provided herein. Payments by check or
draft shall not constitute payment in immediately available funds until the required amount is actually received by Administrative
Agent in full. Payments in immediately available funds received by Administrative Agent in the place designated for payment on
a Business Day prior to 11:00 a.m. at such place of payment shall be credited prior to the close of business on the Business
Day received, while payments received by Administrative Agent on a day other than a Business Day or after 11:00 a.m. on a
Business Day shall not be credited until the next succeeding Business Day. If any payment of principal or interest on the Notes
shall become due and payable on a day other than a Business Day, then such payment shall be made on the next succeeding Business
Day. Any such extension of time for payment shall be included in computing interest which has accrued and shall be payable in
connection with such payment. Administrative Agent is hereby authorized upon notice to Borrowers to charge the account of a Borrower
maintained with Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder.

 

    CREDIT AGREEMENT – Page 42 

     

    

 

(b)
Funding by Lenders; Presumption by Administrative Agent. Unless Administrative Agent shall have received notice from a
Lender, that such Lender will not make available to Administrative Agent such Lender’s share of a Borrowing, Administrative
Agent may assume that such Lender has made such share available on such date in accordance with this Agreement and may, in reliance
upon such assumption, make available to Borrowers a corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to Administrative Agent, then the applicable Lender and Borrowers severally agree
to pay to 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 Borrowers to but excluding the date of payment to Administrative Agent, at (i) in
the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by Administrative
Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by
Borrowers, the interest rate applicable to the applicable Borrowing. If Borrowers and such Lender shall pay such interest to Administrative
Agent for the same or an overlapping period, Administrative Agent shall promptly remit to Borrowers the amount of such interest
paid by Borrowers for such period. If such Lender pays its share of the applicable Borrowing to Administrative Agent, then the
amount so paid shall constitute such Lender’s Loan. Any payment by Borrowers shall be without prejudice to any claim Borrowers
may have against a Lender that shall have failed to make such payment to Administrative Agent.

 

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

 

Section
2.5 Evidence of Debt.

 

(a)
The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by Administrative
Agent in the ordinary course of business; provided that such Lender or Administrative Agent may, in addition, request that
such Loans be evidenced by the Notes. The Credit Extensions made by L/C Issuer shall be evidenced by one or more accounts or records
maintained by L/C Issuer and by Administrative Agent in the ordinary course of business. The accounts or records maintained by
Administrative Agent, L/C Issuer, and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions
made to Borrowers and, with respect to Letters of Credit issued for the account of a Subsidiary, such Subsidiary and the interest
and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation
of Borrowers hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts
and records maintained by L/C Issuer or any Lender and the accounts and records of Administrative Agent in respect of such matters,
the accounts and records of Administrative Agent shall control in the absence of manifest error.

 

    CREDIT AGREEMENT – Page 43 

     

    

 

(b)
In addition to the accounts and records referred to in Section 2.5(a) above, each Revolving Credit Lender and Administrative
Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Revolving
Credit Lender of participations in Letters of Credit. In the event of any conflict between the accounts and records maintained
by Administrative Agent and the accounts and records of any Revolving Credit Lender in respect of such matters, the accounts and
records of Administrative Agent shall control in the absence of manifest error.

 

Section
2.6 Cash Collateral.

 

(a)
Certain Credit Support Events. If (i) L/C Issuer has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation
for any reason remains outstanding, (iii) Borrowers shall be required to provide Cash Collateral pursuant to Section 10.2,
or (iv) there shall exist a Revolving Credit Lender that is a Defaulting Lender, Borrowers shall immediately (in the case
of clause (iii) above) or within one Business Day (in all other cases) following any request by Administrative
Agent or L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined,
in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 12.22(a)(iv)
and any Cash Collateral provided by the Defaulting Lender).

 

(b)
Grant of Security Interest. Each Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender,
hereby grants to (and subjects to the control of) Administrative Agent, for the benefit of Administrative Agent, L/C Issuer and
Lenders, and agrees to maintain, a first priority security interest in all such Cash Collateral and all other Property so provided
as Collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral
may be applied pursuant to Section 2.6(c). If at any time Administrative Agent determines that Cash Collateral is
subject to any right or claim of any Person other than Administrative Agent or L/C Issuer as herein provided, or that the total
amount of such Cash Collateral is less than the Minimum Collateral Amount, Borrowers will, promptly upon demand by Administrative
Agent, pay or provide to Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.
All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in one or more blocked,
non-interest bearing deposit accounts at LegacyTexas Bank. Borrowers shall pay on demand therefor from time to time all customary
account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash
Collateral.

 

(c)
Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of
this Section 2.6 or Sections 2.2, 10.2 or 12.22 in respect of Letters of Credit shall be
held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as
to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the
Cash Collateral was so provided, prior to any other application of such Property as may otherwise be provided for herein.

 

    CREDIT AGREEMENT – Page 44 

     

    

 

(d)
Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations
shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving
rise thereto, including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee
following compliance with Section 12.8(b)(vii)) or (ii) the determination by Administrative Agent and L/C Issuer
that there exists excess Cash Collateral; provided, however, (x) any such release shall be without prejudice
to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the
Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral
and L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure
or other obligations.

 

Section
2.7 Interest; Payment Terms.

 

(a)
Revolving Credit Loans – Payment of Principal and Interest; Revolving Nature. The unpaid principal amount of each
Portion of the Revolving Credit Loans shall, subject to the following sentence and Section 2.7(g), bear interest at
the applicable Interest Rate. If at any time such rate of interest would exceed the Maximum Rate but for the provisions thereof
limiting interest to the Maximum Rate, then any subsequent reduction shall not reduce the rate of interest on the Revolving Credit
Loans below the Maximum Rate until the aggregate amount of interest accrued on the Revolving Credit Loans equals the aggregate
amount of interest which would have accrued on the Revolving Credit Loans if the interest rate had not been limited by the Maximum
Rate. All accrued but unpaid interest on the principal balance of the Revolving Credit Loans shall be payable on each Payment
Date and on the Revolving Credit Maturity Date, provided that interest accruing at the Default Interest Rate pursuant to
Section 2.7(g) shall be payable on demand. The then Outstanding Amount of the Revolving Credit Loans and all accrued
but unpaid interest thereon shall be due and payable on the Revolving Credit Maturity Date. The unpaid principal balance of the
Revolving Credit Loans at any time shall be the total amount advanced hereunder by Revolving Credit Lenders less the amount of
principal payments made thereon by or for Borrowers, which balance may be endorsed on the Revolving Credit Notes from time to
time by Revolving Credit Lenders or otherwise noted in Revolving Credit Lenders’ and/or Administrative Agent’s records,
which notations shall be, absent manifest error, conclusive evidence of the amounts owing hereunder from time to time.

 

(b)
Term Loan – Payment of Principal and Interest. The unpaid principal amount of the Term Loans shall, subject to the
following sentence and Section 2.7(g), bear interest at the applicable Interest Rate. If at any time such rate of
interest shall exceed the Maximum Rate but for the provisions thereof limiting interest to the Maximum Rate, then any subsequent
reduction shall not reduce the rate of interest on the Term Loans below the Maximum Rate until the aggregate amount of interest
accrued on the Term Loans equals the aggregate amount of interest which would have accrued on the Term Loans if the Interest Rate
had not been limited by the Maximum Rate. All accrued but unpaid interest on the principal balance of the Term Loans shall be
payable by Borrowers on each Payment Date and on the Term Loan Maturity Date, provided that interest accruing at the Default
Interest Rate pursuant to Section 2.7(g) shall be payable on demand. In addition, the principal balance of the Term
Loans shall be due and payable (i) in equal monthly installments, each in the amount of $833,333, on the first day of each
and every calendar month during the term hereof, commencing on February 1, 2019 and each calendar month thereafter and (ii) in
one final installment on the Term Loan Maturity Date in the amount of the then Outstanding Amount of the Term Loans and all accrued
but unpaid interest thereon.

 

    CREDIT AGREEMENT – Page 45 

     

    

 

(c)
Application. Except as expressly provided herein or in the Intercreditor Agreement to the contrary, all payments on the
Obligations under the Loan Documents shall be applied in the following order of priority: (i) the payment or reimbursement
of any expenses, costs or obligations (other than the Outstanding Amount thereof and interest thereon) for which Borrowers shall
be obligated or Administrative Agent, L/C Issuer, or any Lender shall be entitled pursuant to the provisions of this Agreement,
the Notes or the other Loan Documents; (ii) the payment of accrued but unpaid interest thereon; and (iii) the payment
of all or any portion of the principal balance thereof then outstanding hereunder as directed by Borrowers; provided that any
prepayment of the Term Loans shall be applied to installments due thereon in the inverse order of maturity. If an Event of Default
exists under this Agreement, the Notes or under any of the other Loan Documents, any such payment shall be applied as provided
in Section 10.3 below.

 

(d)
Computation Period. Interest on the Loans and all other amounts payable by Borrowers hereunder on a per annum basis shall
be computed on the basis of a 360-day year and the actual number of days elapsed (including the first day but excluding the last
day) unless such calculation would result in a usurious rate, in which case interest shall be calculated on the basis of a 365-day
year or 366-day year, as the case may be. In computing the number of days during which interest accrues, the day on which funds
are initially advanced shall be included regardless of the time of day such advance is made, and the day on which funds are repaid
shall be included unless repayment is credited prior to the close of business on the Business Day received. Each determination
by Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

(e)
Unconditional Payment. Each Borrower is and shall be obligated to pay all principal, interest and any and all other amounts
which become payable under any of the Loan Documents absolutely and unconditionally and without any abatement, postponement, diminution
or deduction whatsoever and without any reduction for counterclaim or setoff whatsoever. If at any time any payment received by
Administrative Agent hereunder shall be deemed by a court of competent jurisdiction to have been a voidable preference or fraudulent
conveyance under any Debtor Relief Law, then the obligation to make such payment shall survive any cancellation or satisfaction
of the Obligations under the Loan Documents and shall not be discharged or satisfied with any prior payment thereof or cancellation
of such Obligations, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof,
and such payment shall be immediately due and payable upon demand.

 

(f)
Partial or Incomplete Payments. Remittances in payment of any part of the Obligations under the Loan Documents other than
in the required amount in immediately available funds at the place where such Obligations are payable shall not, regardless of
any receipt or credit issued therefor, constitute payment until the required amount is actually received by Administrative Agent
in full in accordance herewith and shall be made and accepted subject to the condition that any check or draft may be handled
for collection in accordance with the practice of the collecting bank or banks. Acceptance by Administrative Agent of any payment
in an amount less than the full amount then due shall be deemed an acceptance on account only, and the failure to pay the entire
amount then due shall be and continue to be an Event of Default.

 

    CREDIT AGREEMENT – Page 46 

     

    

 

(g)
Default Interest Rate. For so long as any Event of Default exists, regardless of whether or not there has been an acceleration
of the Loans, and at all times after the maturity of the Loans (whether by acceleration or otherwise), and in addition to all
other rights and remedies of Administrative Agent or Lenders hereunder, (i) interest shall accrue on the Outstanding Amount
of the Loans at the Default Interest Rate, (ii) interest shall accrue on any past due amount (other than the Outstanding
Amount of the Loans) at the Default Interest Rate and (iii) upon the request of the Majority Lenders, interest shall accrue on
the principal amount of all other outstanding Obligations at the Default Interest Rate, and such accrued interest shall be immediately
due and payable. Each Borrower acknowledges that it would be extremely difficult or impracticable to determine Administrative
Agent’s or Lenders’ actual damages resulting from any late payment or Event of Default, and such accrued interest
are reasonable estimates of those damages and do not constitute a penalty.

 

Section
2.8 Voluntary Termination or Reduction of Aggregate Revolving Credit Commitments; Prepayments.

 

(a)
Voluntary Termination or Reduction of Aggregate Revolving Credit Commitments. Borrowers may, upon written notice to Administrative
Agent, terminate the Aggregate Revolving Credit Commitments, or from time to time permanently reduce the Aggregate Revolving Credit
Commitments; provided that (i) any such notice shall be received by Administrative Agent not later than 11:00 a.m.
three Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate
amount of $1,000,000 or any whole multiple of $500,000 in excess thereof, and (iii) Borrowers shall not terminate or reduce
the Aggregate Revolving Credit Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Aggregate
Revolving Credit Exposure would exceed the Aggregate Revolving Credit Commitments. Administrative Agent will promptly notify Revolving
Credit Lenders of any such notice of termination or reduction of the Aggregate Revolving Credit Commitments. Any reduction of
the Aggregate Revolving Credit Commitments shall be applied to the Revolving Credit Commitment of each Revolving Credit Lender
according to its Applicable Percentage. All fees accrued until the effective date of any termination or reduction of the Aggregate
Revolving Credit Commitments shall be paid on the effective date of such termination or reduction and all commitment fees shall
thereafter be computed on the basis of the Revolving Credit Commitments, as so reduced.

 

(b)
Voluntary Prepayments. Subject to the conditions set forth below, Borrowers shall have the right, at any time and from
time to time upon at least three Business Days’ prior written notice to Administrative Agent, to prepay the principal of
the Loans in full or in part. If there is a prepayment of all or any portion of the principal of the Loans on or before the Revolving
Credit Maturity Date or Term Loan Maturity Date, as applicable, for such Loans, whether voluntary or because of acceleration or
otherwise, such prepayment shall also include any and all accrued but unpaid interest on the amount of principal being so prepaid
through and including the date of prepayment, plus any other sums which have become due to Lenders under the other Loan Documents
on or before the date of prepayment, but which have not been fully paid.

 

(c)
Mandatory Prepayments of Loans.

 

(i)
Except as provided in Section 2.9(e) hereof, if at any time the Aggregate Revolving Credit Exposure exceeds the Aggregate
Revolving Credit Commitment, then Borrowers shall immediately prepay the entire amount of such excess to Administrative Agent,
for the ratable account of the Revolving Credit Lenders, and/or Cash Collateralize the L/C Obligations in an aggregate amount
equal to such excess; provided, however, that Borrowers shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 2.8(c)(i) unless after the prepayment in full of the Revolving Credit Loans the Aggregate
Revolving Credit Exposure exceeds the Aggregate Revolving Credit Amount. Each prepayment required by this Section 2.8(c)(i)
shall be applied, first, to any Base Rate Portions then outstanding, and, second, to any LIBOR Portions then outstanding,
and if more than one LIBOR Portion is then outstanding, to such LIBOR Portions in such order as Borrowers may direct or, if Borrowers
fail to so direct, as Administrative Agent shall elect.

 

    CREDIT AGREEMENT – Page 47 

     

    

 

(ii)
If a Borrowing Base Deficiency exists solely because of the reduction of the Borrowing Base pursuant to Section 2.9(c)(ii),
Borrowers shall, on the date of such occurrence, make a single lump sum payment in an amount sufficient to reduce the Aggregate
Revolving Credit Exposure to or below the Borrowing Base then in effect.

 

Section
2.9 Borrowing Base.

 

(a)
Borrowing Base Standards. The Borrowing Base shall represent the approval in their sole discretion of the Required Revolving
Credit Lenders or all Revolving Credit Lenders, as applicable, of Administrative Agent’s determination of the loan amount
that may be supported by the Required Revolving Credit Lenders’ or all Revolving Credit Lenders’, as applicable, evaluation
of the Proved Oil and Gas Properties of the Borrowing Parties. The determination of the Borrowing Base will be made in accordance
with then-current practices, economic and pricing parameters, methodology, assumptions, and customary procedures and standards
established by each Revolving Credit Lender from time to time for its petroleum industry customers including without limitation
(i) an analysis of such reserve and production data with respect to all of the Proved Oil and Gas Properties of the Borrowing
Parties, including the Mortgaged Properties, as is provided to the Lenders in accordance herewith, (ii) an analysis of the
assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Borrowing Parties, (iii) Borrowers’
and their Subsidiaries’ Hedging Transactions and the status (or lack thereof) of any provider of Hedging Transactions as
an “Approved Commodity Swap Counterparty,” and (iv) such other credit factors consistently applied as each Lender
customarily considers in evaluating similar oil and gas credit facilities. Borrowers and the Revolving Credit Lenders acknowledge
that due to the uncertainties of the oil and gas extraction process, the Oil and Gas Properties of the Borrowing Parties are not
subject to evaluation with a high degree of accuracy and are subject to potential rapid deterioration in value, the determination
of the loan amount will be less than the total present value of the Proved Oil and Gas Properties of the Borrowing Parties, which
each Borrower acknowledges to be essential for the adequate protection of the Revolving Credit Lenders. Without limiting the foregoing,
the Revolving Credit Lenders may exclude from the Borrowing Base any oil and gas reserves or portion of production therefrom or
any income from any other property, at any time, because title information is not satisfactory, such oil and gas reserves are
not Mortgaged Properties in violation of this Agreement or such oil and gas reserves are not in “pay” status. The
Borrowing Base shall initially be $75,000,000 on the Closing Date.

 

(b)
Periodic Determinations of Borrowing Base.

 

(i)
The Borrowing Base shall be redetermined as of May 1 and November 1 of each year, commencing May 1, 2019. On or before April
1 of each year, Borrowers shall furnish Administrative Agent a Reserve Report as of the preceding January 1 prepared by an Independent
Engineer covering all of the Proved Oil and Gas Properties of the Borrowing Parties, including the Mortgaged Properties. On or
before October 1 of each year, Borrowers shall furnish Administrative Agent a Reserve Report as of the preceding July 1 prepared
by Borrowers’ own engineer and certified by a Responsible Officer of each Borrower covering all of the Proved Oil and Gas
Properties of the Borrowing Parties, including the Mortgaged Properties. Upon receipt of each such Reserve Report, Administrative
Agent shall make a determination of the Borrowing Base which shall become effective upon approval by the Required Revolving Credit
Lenders or all Revolving Credit Lenders in accordance with the procedures set forth in Section 2.9(d) and subsequent
written notification from Administrative Agent to Borrowers, and which, subject to the other provisions of this Agreement, shall
be the Borrowing Base until the effective date of the next redetermination as provided in this Section 2.9.

 

    CREDIT AGREEMENT – Page 48 

     

    

 

(ii)
In the event that Borrowers do not furnish to Administrative Agent a Reserve Report by the dates specified in Section 2.9(b)(i),
then Administrative Agent and the Required Revolving Credit Lenders or all Revolving Credit Lenders, as applicable, may nonetheless
redetermine the Borrowing Base and redesignate the Borrowing Base from time to time thereafter in their sole discretion until
Administrative Agent receives the relevant Reserve Report, whereupon Administrative Agent and the Required Revolving Credit Lenders
or all Revolving Credit Lenders, as applicable, shall redetermine the Borrowing Base as otherwise specified in this Section
2.9.

 

(c)
Special Determinations of Borrowing Base.

 

(i)
Special determinations of the Borrowing Base may be requested (A) by Borrowers not more than two times per calendar year, or (B)
by Administrative Agent at any time during the term hereof. If any special determination is requested by Borrowers, Borrowers
shall provide, if requested by Administrative Agent, an updated Reserve Report prepared by Borrowers’ own engineer brought
forward from the most recent Reserve Report furnished by Borrowers to Administrative Agent. If any special determination is requested
by Administrative Agent, Borrowers will provide Administrative Agent with engineering data for the oil and gas reserves updated
from the most recent Reserve Report furnished to Administrative Agent, as soon as is reasonably possible following the request.
The determination whether to increase or decrease the Borrowing Base shall be made in accordance with the standards set forth
in Section 2.9(a) and the procedures set forth in Section 2.9(d). In the event of any special determination
of the Borrowing Base pursuant to this Section 2.9(c), Administrative Agent in the exercise of its discretion may suspend
the next regularly scheduled determination of the Borrowing Base.

 

(ii)
In addition to the special determinations described in Section 2.9(c)(i), Administrative Agent may, by notifying Borrowers
thereof, elect to cause an interim redetermination of the Borrowing Base any time (A) any Borrower or any Subsidiary Disposes
of, whether in one Disposition or a series of Dispositions, Oil and Gas Properties, and the Borrowing Base value of all such Dispositions
exceeds 5% of the Borrowing Base then in effect, (B) any Commodity Hedging Transaction which has been taken into account
in connection with the then current Borrowing Base is terminated and the Hedge Termination Value thereof determined in accordance
therewith exceeds 5% of such Borrowing Base or (C) a Person loses its status as an Approved Commodity Swap Counterparty if the
then current Borrowing Base includes credit for Hedging Transactions with such Person. Any redetermination of the Borrowing Base
pursuant to this Section 2.9(c)(ii) shall be made in accordance with the standards set forth in Section 2.9(a)
and the procedures set forth in Section 2.9(d) and shall not be considered a special determination requested by Administrative
Agent within the meaning of Section 2.9(c)(i). Borrowers shall, if requested by Administrative Agent, deliver an updated
Reserve Report prepared by Borrowers’ own engineer brought forward from the most recent Reserve Report furnished by Borrowers
to Administrative Agent.

 

    CREDIT AGREEMENT – Page 49 

     

    

 

(d)
General Procedures With Respect to Determination of Borrowing Base. The Borrowing Base shall be determined as of May 1
and November 1 of each year, commencing May 1, 2019, until the Revolving Credit Maturity Date. Administrative Agent
shall propose a redetermined Borrowing Base on or about 30 days following receipt by Administrative Agent and the Lenders of a
Reserve Report and other applicable information. After having received notice of such proposal from Administrative Agent, the
Required Revolving Credit Lenders (or all Revolving Credit Lenders in the event of a proposed increase of the Borrowing Base)
shall have 15 days to agree or disagree with such proposal. Solely as it relates to a reaffirmation or proposed decrease of the
Borrowing Base, if at the end of such 15-day period, the Required Revolving Credit Lenders shall not have communicated their approval
or disapproval, such silence shall be deemed an approval, and Administrative Agent’s proposal shall be the new Borrowing
Base. For the avoidance of doubt, as it relates to proposed increases of the Borrowing Base, silence from a Revolving Credit Lender
shall be deemed as disapproval. If the Required Revolving Credit Lenders (or all Revolving Credit Lenders, in the event of a proposed
increase of the Borrowing Base) cannot agree on the amount of the Borrowing Base within 7 days after Administrative Agent has
been notified of their disapproval, then Administrative Agent shall propose a new redetermined Borrowing Base within 15 days after
the end of such 7-day period and the foregoing process shall be repeated. This process shall be repeated until the Required Revolving
Credit Lenders (or all Revolving Credit Lenders, in the event of a proposed increase of the Borrowing Base) agree on a new Borrowing
Base. Upon the final redetermination of the Borrowing Base, Administrative Agent, the Revolving Credit Lenders approving same
and Borrowers shall execute a Borrowing Base Adjustment Letter.

 

(e)
Borrowing Base Deficiency.

 

(i)
If a Borrowing Base Deficiency exists because of a periodic or special determination made pursuant to Section 2.9(b)
or Section 2.9(c)(i), then Administrative Agent shall send a Borrowing Base Deficiency Notice to Borrowers, and Borrowers
shall within 30 days following receipt of such Borrowing Base Deficiency Notice elect whether to:

 

(A)
prepay an amount which would, if prepaid immediately, reduce the Aggregate Revolving Credit Exposure to the amount of the Borrowing
Base,

 

(B)
execute one or more Mortgages (or cause a Subsidiary to execute one or more Mortgages) covering such other Oil and Gas Properties
not previously taken into account in the determination of the Borrowing Base as are acceptable to Administrative Agent and the
Required Revolving Credit Lenders having present values which, in the opinion of Administrative Agent and the Required Revolving
Credit Lenders, based upon Administrative Agent’s and the Required Revolving Credit Lenders’ evaluation of the engineering
data provided them, taken in the aggregate are sufficient to increase the Borrowing Base to an amount at least equal to the Aggregate
Revolving Credit Exposure, or

 

(C)
do any combination of the foregoing as is acceptable to Administrative Agent;

 

provided,
if Borrowers fail to make an election within 30 days after Borrowers’ receipt of the Borrowing Base Deficiency Notice, then
Borrowers shall be deemed to have selected the prepayment option specified in clause (A) above.

 

    CREDIT AGREEMENT – Page 50 

     

    

 

(ii)
Borrowers shall make such prepayments or deliver or shall cause to be delivered Mortgages of additional Oil and Gas Properties
in accordance with its election (or deemed election) pursuant to Section 2.9(e)(i) as follows:

 

(A)
Prepayment Elections. If Borrowers elect (or are deemed to have elected) to prepay an amount in accordance with Section 2.9(e)(i)(A)
above, then Borrowers may make such prepayment in one installment within 90 days after Borrowers’ receipt of the Borrowing
Base Deficiency Notice or, provided no Default has occurred and is continuing, in 6 equal consecutive monthly installments beginning
within 30 days after Borrowers’ receipt of the Borrowing Base Deficiency Notice and continuing on the same day of each month
thereafter.

 

(B)
Elections to Mortgage Additional Oil and Gas Properties. If Borrowers elect to mortgage additional Oil and Gas Properties
in accordance with Section 2.9(e)(i)(B) above, then (1) such properties shall be acceptable to Administrative
Agent and the Required Revolving Credit Lenders with values determined by Administrative Agent and the Required Lenders in accordance
with this Section 2.9 and (2) the applicable Borrower or Subsidiary shall execute, acknowledge and deliver to Administrative
Agent one or more Mortgages within 30 days after Borrowers’ receipt of the Borrowing Base Deficiency Notice (or such longer
time as Administrative Agent may agree in its sole discretion); provided, however (x) if none of the additional
Oil and Gas Properties offered by Borrowers are acceptable to Administrative Agent and the Required Revolving Credit Lenders,
Borrowers shall be deemed to have elected the prepayment option specified in Section 2.9(e)(i)(A) (and Borrowers shall
make such prepayment in accordance with Section 2.9(e)(ii)(A)); and (y) if the aggregate present values of additional
Oil and Gas Properties which are acceptable to Administrative Agent and the Required Revolving Credit Lenders are insufficient
to eliminate the Borrowing Base Deficiency, then Borrowers shall be deemed to have selected the option specified in Section 2.9(e)(i)(C)
(and Borrowers shall make prepayment and deliver one or more Mortgages as provided in Section 2.9(e)(ii)(C)).
Together with such Mortgages, Borrowers shall deliver or cause to be delivered to Administrative Agent title opinions and/or other
title information and data acceptable to Administrative Agent such that Borrowers are in compliance with Section 7.14.

 

(C)
Combination Elections. If Borrowers elect (or are deemed to have elected) to eliminate the Borrowing Base Deficiency by
a combination of prepayment and mortgaging of additional Oil and Gas Properties in accordance with Section 2.9(e)(i)(C),
then (1) within 30 days after Borrowers’ receipt of the Borrowing Base Deficiency Notice (or such longer time as Administrative
Agent may agree in its sole discretion), Borrowers shall (or shall cause a Subsidiary to) execute, acknowledge and deliver to
Administrative Agent one or more Mortgages covering such additional Oil and Gas Properties and (2) Borrowers shall pay Administrative
Agent the amount by which the Borrowing Base Deficiency exceeds the present values of such additional Oil and Gas Properties in
one installment within 30 days after Borrowers’ receipt of the Borrowing Base Deficiency Notice or, provided no Default
has occurred and is continuing, in six (6) equal consecutive monthly installments beginning within thirty (30) days after Borrowers’
receipt of the Borrowing Base Deficiency Notice and continuing on the same day of each month thereafter until paid.

 

    CREDIT AGREEMENT – Page 51 

     

    

 

(iii)
Applicable Margin Increase. During any time in which a Borrowing Base Deficiency exists, each of the Applicable Margins
will be automatically increased by a rate equal to 2.00% per annum.

 

(f)
Borrowing Base Increase Fee. A fee shall be paid to Administrative Agent for the account of the Revolving Credit Lenders
for each incremental increase in the new Borrowing Base over the previously existing Borrowing Base; provided that, such fee shall
not be subject to “double-counting” should a future Borrowing Base be reduced, then subsequently increased to an amount
at or below the highest previously determined or redetermined Borrowing Base. The amount of each such fee shall be a percentage
of such increase as reasonably determined by Administrative Agent in accordance with then current market conditions. There shall
be no obligation imposed upon Borrowers to accept an increase of the Borrowing Base proposed by the Revolving Credit Lenders.
However, if Borrowers accept the increase in the Borrowing Base, the fee determined by Administrative Agent shall be due and payable
immediately and without regard as to whether Borrowers ever borrow the increased amount available under such new Borrowing Base.

 

(g)
Mortgage of Additional Properties. Borrowers may from time to time upon written notice to Administrative Agent propose
to add Oil and Gas Properties of any Borrower or any Subsidiary as Mortgaged Properties to be included in the Borrowing Base.
Any such proposal shall be accompanied by a Reserve Report, which may be prepared by Borrowers’ own engineer, applicable
to such properties that conforms with the requirements of this Agreement and evidence sufficient to establish that such Borrower
or such Subsidiary, as applicable, has title to such Oil and Gas Properties. Any such addition shall become effective at such
time as (i) Administrative Agent, with the approval of all of the Revolving Credit Lenders, has made a determination of the
amount by which the Borrowing Base would be increased as the result of such addition, (ii) the conditions set out in this
Section 2.9(g), to the extent they are applicable to such additional Oil and Gas Properties, have been satisfied, (iii) Mortgages
duly executed and acknowledged by such Borrower or such Subsidiary, as applicable, have been delivered to Administrative Agent,
and (iv) arrangements satisfactory to Administrative Agent have been made with respect to payment of recording fees and taxes,
as applicable. In determining the increase in the Borrowing Base pursuant to this Section, Administrative Agent and the Revolving
Credit Lenders shall apply the parameters and other credit factors set forth in this Section 2.9. A proposal by Borrowers
pursuant to this Section 2.9(g) shall constitute a request for a special determination of the Borrowing Base for purposes
of Section 2.9(c)(i).

 

    CREDIT AGREEMENT – Page 52 

     

    

 

Section
2.10 Joint and Several Liability.

 

(a)
Each Borrower agrees that it is jointly and severally liable to Administrative Agent and the Lenders for the payment of all Obligations
arising under this Agreement and the other Loan Documents, and that such liability is independent of the obligations of the other
Borrower. Each obligation, promise, covenant, representation and warranty in this Agreement or any other Loan Document shall be
deemed to have been made by, and be binding upon, each Borrower, unless this Agreement expressly provides otherwise. The Administrative
Agent may bring an action against any Borrower, whether an action is brought against any other Borrower.

 

(b)
Each Borrower agrees that any release which may be given by Administrative Agent or any Lender to any other Borrower or any Guarantor
will not release such Borrower from its obligations under this Agreement or any other Loan Document.

 

(c)
Each Borrower waives any right to assert against Administrative Agent or any Lender any defense, setoff, counterclaim, or claims
which such Borrower may have against any other Borrower or any other party liable to Administrative Agent or any Lender for the
obligations of Borrowers under this Agreement or under any other Loan Document.

 

(d)
Each Borrower waives any defense by reason of any other Borrower’s or any other Person’s defense, disability, or release
from liability. Each of Administrative Agent and the Lenders can exercise its rights against each Borrower even if any other Borrower
or any other Person no longer is liable because of a statute of limitations or for other reasons.

 

(e)
Each Borrower agrees that it is solely responsible for keeping itself informed as to the financial condition of the other Borrower
and of all circumstances which bear upon the risk of nonpayment. Each Borrower waives any right it may have to require Administrative
Agent or any Lender to disclose to such Borrower any information which Administrative Agent or any Lender may now or hereafter
acquire concerning the financial condition of any other Borrower.

 

(f)
Each Borrower waives all rights to notices of default or nonperformance by the other Borrowers under this Agreement or any other
Loan Document. Each Borrower further waives all rights to notices of the existence or the creation of new indebtedness by any
other Borrower and all rights to any other notices to any party liable on any of the credit extended under this Agreement.

 

(g)
Each Borrower agrees that the value of the consideration received and to be received by each Borrower is reasonably worth at least
as much as the liability and obligation of each Borrower hereunder. Borrowers represent and warrant to Administrative Agent and
the Lenders that each Borrower will derive benefit, directly and indirectly, from (i) the collective administration and availability
of credit under this Agreement and (ii) their combined ability to bargain with other Persons including without limitation
their ability to receive the credit extensions under this Agreement and the other Loan Documents, which would not have been available
to an individual Borrower acting alone. Each Borrower has determined that it is in its best interest to procure the credit facilities
contemplated hereunder with the credit support of the other Borrower as contemplated by this Agreement and the other Loan Documents.
The Borrowers agree that Administrative Agent and the Lenders will not be required to inquire as to the disposition by any Borrower
of funds disbursed in accordance with the terms of this Agreement.

 

    CREDIT AGREEMENT – Page 53 

     

    

 

(h)
As long as the Obligations or any part thereof are outstanding or any Letter of Credit shall remain outstanding or any Lender
has any Commitment hereunder, each Borrower (i) waives any right of subrogation, reimbursement, indemnification and contribution
(contractual, statutory or otherwise), including without limitation, any claim or right of subrogation under the Bankruptcy Code
(Title 11, United States Code) or any successor statute, which such Borrower may now or hereafter have against the other
Borrower with respect to the indebtedness incurred under this Agreement; (ii) waives any right to enforce any remedy which
Administrative Agent or any Lender now has or may hereafter have against the other Borrower; and (iii) waives any benefit
of, and any right to participate in, any Collateral now or hereafter held by Administrative Agent or any Lender.

 

(i)
Each Borrower waives any right to require Administrative Agent or any Lender to (i) proceed against the other Borrowers or any
other Person, (ii) proceed against or exhaust any security, or (iii) pursue any other remedy. Further, each Borrower consents
to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of Borrowers under
this Agreement or which, but for this provision, might operate as a discharge of Borrowers.

 

(j)
Each Borrower hereby irrevocably appoints CAE as its agent for all purposes relevant to this Agreement and each of the other Loan
Documents, including (i) the giving and receipt of notices and (ii) the execution and delivery of all documents, instruments
and certificates contemplated herein and all modifications hereto. Any acknowledgment, consent, direction, certification or other
action which might otherwise be valid or effective only if given or taken by all Borrowers, or by each Borrower acting singly,
shall be valid and effective if given or taken only by CAE, whether or not any such other Borrower joins therein. Any notice,
demand, consent, acknowledgment, direction, certification or other communication delivered to CAE in accordance with the terms
of this Agreement shall be deemed to have been delivered to each other Borrower.

 

(k)
This Agreement is a primary and original obligation of each Borrower and each Borrower shall be liable for all existing and future
Obligations of the other Borrowers as fully as if such Obligations were directly incurred by such Borrower.

 

(l)
Each Borrower further agrees that its obligations hereunder and under the other Loan Documents shall not be impaired in any manner
whatsoever by any action or proceeding under any Debtor Relief Laws granted to any other Borrower.

 

(m)
This Section 2.10 is intended only to define the relative rights of Borrowers and nothing set forth in this Section
2.10 is intended to or shall impair the obligations of Borrowers, jointly and severally, to pay any amounts as and when the
same shall become due and payable in accordance with the terms of this Agreement or any other Loan Document.

 

ARTICLE
3

TAXES, YIELD PROTECTION AND INDEMNITY

 

Section
3.1 Increased Costs.

 

(a)
Increased Costs Generally. If any Change in Law shall:

 

(i)
impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against
assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement
reflected in Adjusted LIBOR);

 

    CREDIT AGREEMENT – Page 54 

     

    

 

(ii)
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; or

 

(iii)
impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement
or Loans made by such Lender;

 

and
the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting
to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such
Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation
to participate in or to issue any Letter of Credit) or to reduce the amount of any sum received or receivable by such Lender or
other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or other Recipient,
Borrowers will pay to such Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate
such Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

 

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

 

(c)
Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such
Lender or its holding company, as the case may be, as specified in Sections 3.1(a) or 3.1(b) and delivered
to Borrowers, shall be conclusive absent manifest error. Borrowers shall pay such Lender the amount shown as due on any such certificate
within 30 days after receipt thereof.

 

(d)
Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 3.1
shall not constitute a waiver of such Lender’s right to demand such compensation; provided that Borrowers shall
not be required to compensate a Lender pursuant to this Section 3.1 for any increased costs incurred or reductions
suffered more than 9 months prior to the date that such Lender notifies Borrowers of the Change in Law giving rise to such increased
costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving
rise to such increased costs or reductions is retroactive, then the 9-month period referred to above shall be extended to include
the period of retroactive effect thereof).

 

    CREDIT AGREEMENT – Page 55 

     

    

 

Section
3.2 Illegality. If any Lender determines that any Law or regulation has made it unlawful, or that any Governmental Authority
has asserted that it is unlawful, for any Lender or its Lending Office to make, maintain or fund Loans whose interest is determined
by reference to LIBOR, or to determine or charge interest rates based upon LIBOR, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market,
then, on notice thereof by such Lender to Borrowers through Administrative Agent, (a) any obligation of such Lender to make
or continue LIBOR Portions or to convert Base Rate Portions to LIBOR Portions shall be suspended, and (b) if such notice
asserts the illegality of such Lender making or maintaining Base Rate Portions the interest rate on which is determined by reference
to the LIBOR component of the Base Rate, the interest rate on which Base Rate Portions of such Lender shall, if necessary to avoid
such illegality, be determined by Administrative Agent without reference to the LIBOR component of the Base Rate, in each case
until such Lender notifies Administrative Agent and Borrowers that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, (i) Borrowers shall, upon demand from such Lender (with a copy to Administrative Agent),
prepay or, if applicable, convert all LIBOR Portions of such Lender to Base Rate Portions (the interest rate on which Base Rate
Loans of such Lender shall, if necessary to avoid such illegality, be determined by Administrative Agent without reference to
the LIBOR component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue
to maintain such LIBOR Portions to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Portions
and (ii) if such notice asserts the illegality of such Lender determining or charging interest rates based upon LIBOR, Administrative
Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the LIBOR
component thereof until Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender
to determine or charge interest rates based upon the LIBOR. Upon any such prepayment or conversion, Borrowers shall also pay accrued
interest on the amount so prepaid or converted.

 

Section
3.3 Inability to Determine Rates; Replacement Index Rate.

 

(a)
Inability to Determine Rates. Subject to Section 3.3(b), if (i) Administrative Agent or the Majority Lenders
determine that for any reason in connection with any request for a LIBOR Portion or a conversion to or continuation thereof that
(A) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and
Interest Period of such LIBOR Portion, (B) adequate and reasonable means do not exist for determining LIBOR for any requested
Interest Period with respect to a proposed LIBOR Portion or in connection with an existing or proposed Base Rate Portion, or (C) LIBOR
for any requested Interest Period with respect to a proposed LIBOR Portion does not adequately and fairly reflect the cost to
such Lenders of funding such LIBOR Portion, or (ii) by reason of any Change in Law any Lender would become subject to restrictions
on the amount of a category of liabilities or assets which it may hold and notifies Administrative Agent of same, Administrative
Agent will promptly so notify Borrowers and each Lender. Thereafter, (x) the obligation of Lenders to make or maintain LIBOR
Portions shall be suspended, and (y) in the event of a determination described in the preceding sentence with respect to
the LIBOR component of the Base Rate, the utilization of the LIBOR component in determining the Base Rate shall be suspended,
in each case until Administrative Agent (upon the instruction of the Majority Lenders) revokes such notice. Upon receipt of such
notice, Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Portions or, failing
that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Portions in the amount specified
therein.

 

    CREDIT AGREEMENT – Page 56 

     

    

 

(b)
Replacement Index Rate. Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, in the
event that LIBOR is “phased out” and no longer generally used by financial institutions similar to Administrative
Agent (as opposed to temporarily unavailable), Administrative Agent shall use the offered quotation rate to first class banks
for deposits in the London interbank market, or the rate available from another replacement index widely adopted by financial
institutions located in the United States and similar to Administrative Agent, as determined by Administrative Agent in its reasonable
discretion (such rate, the “Replacement Index Rate”), to be used for purposes of calculating the interest rate
for non-Base Rate Portions and Letter of Credit Fees and in all other instances under the Loan Documents that reference LIBOR;
provided that, if such Replacement Index Rate shall be less than zero, such rate shall be deemed to be zero for purpose
of this Agreement. In such event, Administrative Agent shall promptly notify Borrowers and Lenders. Until the Replacement Index
Rate shall be determined in accordance with this clause (b), the obligation of Lenders to make or maintain LIBOR Portions
shall be suspended, and Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Portions
or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Portions in the amount
specified therein, without incurring liability for breakage costs or any other premium or penalty. Further, in such event, Lenders
and Borrowers shall enter into an amendment to this Agreement to reflect such Replacement Index Rate and such other related changes
to this Agreement as may be applicable.

 

Section
3.4 Taxes.

 

(a)
Defined Terms. For purposes of this Section, the term “applicable Law” includes FATCA.

 

(b)
Payment Free of Taxes. Any and all payments by or on account of any obligation of any Borrower 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 Borrowers 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 3.4) the applicable Recipient receives an amount equal to the sum it would have received had no such
deduction or withholding been made.

 

(c)
Payment of Other Taxes by Borrowers. Borrowers shall timely pay to the relevant Governmental Authority in accordance with
applicable Law, or at the option of Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(d)
Indemnification by Borrowers. Borrowers shall jointly and severally indemnify each Recipient, within 30 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 3.4) payable or paid by such Recipient or required to be withheld or deducted from
a payment to such Recipient and any 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 setting forth in reasonable
detail the amount and derivation of such payment or liability delivered to Borrowers by a Lender (with a copy to Administrative
Agent), or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

    CREDIT AGREEMENT – Page 57 

     

    

 

(e)
Indemnification by Lenders. Each Lender shall severally indemnify Administrative Agent, within 10 days after demand therefor,
for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that Borrowers have not already indemnified
Administrative Agent for such Indemnified Taxes and without limiting the obligation of Borrowers to do so), (ii) any Taxes
attributable to such Lender’s failure to comply with the provisions of Section 12.8 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 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 Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes 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 Administrative Agent to such Lender from any other source against any amount due
to Administrative Agent under this Section 3.4(e).

 

(f)
Evidence of Payments. As soon as practicable after any payment of Taxes by a Borrower to a Governmental Authority pursuant
to this Section 3.4, Borrowers shall deliver to 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 Administrative Agent.

 

(g)
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 Borrowers and Administrative Agent, at the time or times reasonably requested by Borrowers or Administrative
Agent, such properly completed and executed documentation reasonably requested by Borrowers or 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 Borrowers or Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested
by Borrowers or Administrative Agent as will enable Borrowers or 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 3.4(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in such 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, in the event that each Borrower is a U.S. Person,

 

(A)
any Lender that is a U.S. Person shall deliver to Borrowers and 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 Borrowers or Administrative
Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

    CREDIT AGREEMENT – Page 58 

     

    

 

(B)
any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and 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 Borrowers or 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-E (or IRS Form W-8BEN, as applicable)
establishing an exemption from, or reduction of, U.S. federal 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-E (or IRS
Form W-8BEN, as applicable) 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)
executed copies of IRS Form W-8ECI;

 

(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 a 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-E (or IRS
Form W-8BEN, as applicable); or

 

(4)
to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI,
IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3, IRS
Form W-9, 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 Borrowers and 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 Borrowers or 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 Borrowers
or Administrative Agent to determine the withholding or deduction required to be made; and

 

    CREDIT AGREEMENT – Page 59 

     

    

 

(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 Borrowers and Administrative Agent at the time or times prescribed
by Law and at such time or times reasonably requested by Borrowers or 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 Borrowers or Administrative Agent as may be necessary for Borrowers and Administrative Agent to comply with their obligations
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 Borrowers and Administrative Agent in writing of its legal inability
to do so.

 

(h)
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 3.4 (including by the payment of
additional amounts pursuant to this Section 3.4), 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 3.4 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 3.4(h)
(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 3.4(h),
in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 3.4(h)
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 3.4(h)
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.

 

(i)
Survival. Each party’s obligations under this Section 3.4 shall survive the resignation or replacement
of 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.

 

    CREDIT AGREEMENT – Page 60 

     

    

 

Section
3.5 Compensation for Losses. Upon demand of any Lender (with a copy to Administrative Agent) from time to time, Borrowers
shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result
of:

 

(a)
any continuation, conversion, payment or prepayment of any LIBOR Portion on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)
any failure by Borrowers (for a reason other than the failure of such Lender to lend a LIBOR Portion) to prepay, borrow, continue
or convert any LIBOR Portion on the date or in the amount notified by Borrowers; or

 

(c)
any assignment of a LIBOR Portion on a day other than the last day of the Interest Period therefor as a result of a request by
Borrowers pursuant to Section 3.6(b);

 

including
any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to
maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained as a result of any of the
actions described in Section 3.5 hereunder. Borrowers shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

 

For
purposes of calculating amounts payable by Borrowers to the Lenders under this Section 3.5, each Lender shall be deemed
to have funded each LIBOR Portion made by it at Adjusted LIBOR for such Loan by a matching deposit or other borrowing in the London
interbank eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Portion was in fact
so funded.

 

Section
3.6 Mitigation of Obligations; Replacement of Lenders.

 

(a)
Designation of a Different Lending Office. If any Lender requests compensation under Section 3.1, or requires
Borrowers to pay any Indemnified Taxes or additional amounts to such Lender or any Governmental Authority for the account of such
Lender pursuant to Section 3.4, then such Lender shall (at the request of Borrowers) 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 3.1 or Section 3.4, 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. Each Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

(b)
Replacement of Lenders. If any Lender requests compensation under Section 3.1, or if Borrowers are 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 3.4 and, in each case, such Lender has declined or is unable to designate a different Lending Office in
accordance with Section 3.6(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then Borrowers
may, at their sole expense and effort, upon notice to such Lender and Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 12.8),
all of its interests, rights (other than its existing rights to payments pursuant to Section 3.1 or Section 3.4)
and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided that:

 

(i)
Borrowers shall have paid to Administrative Agent the assignment fee (if any) specified in Section 12.8;

 

    CREDIT AGREEMENT – Page 61 

     

    

 

(ii)
such Lender shall have received payment of an amount equal to the Outstanding Amount of its Loans, and L/C Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts
under Section 3.5) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or
Borrowers (in the case of all other amounts);

 

(iii)
in the case of any such assignment resulting from a claim for compensation under Section 3.1 or payments required
to be made pursuant to Section 3.4, such assignment will result in a reduction in such compensation or payments thereafter;

 

(iv)
such assignment does not conflict with applicable Law; and

 

(v)
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 or delegation if, prior thereto, as a result of a waiver by such Lender
or otherwise, the circumstances entitling Borrowers to require such assignment and delegation cease to apply.

 

Section
3.7 Survival. All of Borrowers’ obligations under this Article 3 shall survive termination of the Commitments,
repayment of all other Obligations hereunder, and resignation of Administrative Agent.

 

ARTICLE
4

SECURITY

 

Section
4.1 Mortgaged Properties. To secure full and complete payment and performance of the Obligations, each Borrower shall,
and shall cause each of its Subsidiaries to, grant a first priority Lien (subject to Permitted Liens) against all of the Borrowing
Parties’ Pipeline Systems, and the Oil and Gas Properties of such Borrower and its Subsidiaries to the extent set forth
below pursuant to terms of one or more Mortgages. Borrowers covenant that the Recognized Value of all Oil and Gas Properties subject
to Mortgages shall at all times be not less than the Required Reserve Value. Within 30 days (or such longer time as Administrative
Agent may agree in its sole discretion) after Administrative Agent advises Borrowers of the failure to so achieve the Required
Reserve Value and the percentage shortfall thereof, Borrowers shall cause the Recognized Value of all Mortgaged Properties to
be not less than the Required Reserve Value by executing, or causing a Subsidiary to execute, Mortgages covering additional Proved
Oil and Gas Properties sufficient to cover such shortfall.

 

Section
4.2 Collateral. To secure full and complete payment and performance of the Obligations, each Borrower shall, and shall
cause its Subsidiaries to, execute and deliver or cause to be executed and delivered all of the Security Documents required by
Administrative Agent covering the Collateral, subject, with respect to Oil and Gas Properties, to the limitations set forth in
Section 4.1. Each Borrower shall execute and cause to be executed such further documents and instruments, including without
limitation, UCC financing statements, as Administrative Agent, in its reasonable discretion, deems necessary or desirable to create,
evidence, preserve, and perfect its Liens in the Collateral and maintain the priority thereof as required by the Loan Documents.

 

    CREDIT AGREEMENT – Page 62 

     

    

 

Section
4.3 Setoff. If an Event of Default exists and subject to the Intercreditor Agreement, Administrative Agent and each Lender
shall have the right to set off against the Obligations under the Loan Documents, at any time, any and all deposits (general or
special, time or demand, provisional or final) or other sums at any time credited by or owing from Administrative Agent or such
Lender to a Borrower whether or not the Obligations under the Loan Documents are then due; provided that in the event that
any Defaulting Lender shall exercise any such right of setoff: (a) all amounts so set off shall be paid over immediately
to Administrative Agent for further application in accordance with the provisions of Section 12.22 and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of Administrative
Agent and Lenders; and (b) such Defaulting Lender shall provide promptly to Administrative Agent a statement describing in
reasonable detail the Obligations under the Loan Documents owing to such Defaulting Lender as to which it exercised such right
of setoff. To the extent that a Borrower has accounts, which in the style thereof as reflected in Administrative Agent’s
records are designated as royalty, joint interest owner or operator accounts, the foregoing right of setoff shall only extend
to funds in such accounts which do not belong to, or otherwise arise from payments to such Borrower for the account of, third-party
royalty, joint interest owners, or operators, and any funds in such accounts improperly setoff shall be returned to such Borrower
upon presentation by such Borrower of reasonable proof that such funds were being held for the account of such other Persons.
Each Lender or Administrative Agent making such an offset and application shall give Borrowers and other Lenders written notice
of such offset and application promptly after effecting it. Subject to the Intercreditor Agreement, each amount set off shall
be paid to Administrative Agent for application to the Obligations under the Loan Documents in the order set forth in Section 10.3.
Subject to the limitations set forth in this Section 4.3, as further security for the Obligations, each Borrower hereby
grants to Administrative Agent and each Lender a security interest in all money, instruments, and other Property of such Borrower
now or hereafter held by Administrative Agent or such Lender, including, without limitation, Property held in safekeeping. In
addition to Administrative Agent’s and each Lender’s right of setoff and as further security for the Obligations,
subject to the limitations set forth in this Section 4.3, Each Borrower hereby grants to Administrative Agent and
each Lender a security interest in all deposits (general or special, time or demand, provisional or final) and other accounts
of such Borrower now or hereafter on deposit with or held by Administrative Agent or such Lender and all other sums at any time
credited by or owing from Administrative Agent or such Lender to such Borrower. The rights and remedies of Administrative Agent
and each Lender hereunder are in addition to other rights and remedies (including, without limitation, other rights of setoff)
which Administrative Agent or such Lender may have. Each Lender agrees to notify Borrowers and the Administrative Agent within
ten (10) days after such setoff and application, provided that the failure to give such notice shall not affect the validity
of such set-off and application or any other rights and remedies of Administrative Agent and each Lender hereunder.

 

Section
4.4 Authorization to File Financing Statements. Each of Borrowers and each other Obligated Party that has granted a security
interest in connection herewith authorizes Administrative Agent to complete and file, from time to time, financing statements
naming such Borrower or such other Obligated Party, as applicable, as debtor.

 

    CREDIT AGREEMENT – Page 63 

     

    

 

ARTICLE
5

CONDITIONS PRECEDENT

 

Section
5.1 Extension of Credit on Closing Date. The obligation of Lenders to make the Credit Extension hereunder on Closing Date
is subject to the condition precedent that Administrative Agent shall have received all of the following, each dated (unless otherwise
indicated or otherwise specified by Administrative Agent) the Closing Date, in form and substance satisfactory to Administrative
Agent:

 

(a)
Amended and Restated Credit Agreement. Executed counterparts of this Agreement, sufficient in number for distribution to
Administrative Agent, each Lender and Borrowers;

 

(b)
Resolutions. Resolutions of the governing body of each Borrower and each other Obligated Party certified by the secretary
or an assistant secretary (or a Responsible Officer or other custodian of records) of such Person which authorize the execution,
delivery, and performance by such Person of this Agreement, the other Loan Documents to which such Person is or is to be a party
and the Intercreditor Agreement to the extent party thereto;

 

(c)
Incumbency Certificate. A certificate of incumbency certified by a Responsible Officer of each Obligated Party certifying
the names of the individuals or other Persons authorized on behalf of such Person to sign this Agreement, each of the other Loan
Documents to which such Person is or is to be a party (including the certificates contemplated herein), and the Intercreditor
Agreement to the extent party thereto, together with specimen signatures of such individual Persons;

 

(d)
Certificate Regarding Consents and Approvals. A certificate of a Responsible Officer of each Obligated Party either (i)
attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by
such Obligated Party and the validity against such Obligated Party of the Loan Documents to which it is a party and the Intercreditor
Agreement to the extent party thereto, and such consents, licenses and approvals shall be in full force and effect, or (ii) stating
that no such consents, licenses or approvals are so required;

 

(e)
Closing Certificate. A certificate signed by a Responsible Officer of each Borrower certifying that the conditions specified
in Sections 5.2(b), 5.2(c) and 5.2(d) have been satisfied;

 

(f)
Constituent Documents. The Constituent Documents and all amendments thereto for each Borrower and each other Obligated
Party that is not a natural Person, with the formation documents included in the Constituent Documents being certified as of a
date acceptable to Administrative Agent by the appropriate government officials of the state of incorporation or organization
of each Borrower and each other Obligated Party, and all such Constituent Documents being accompanied by certificates that such
copies are complete and correct, given by an authorized representative acceptable to Administrative Agent;

 

(g)
Governmental Certificates. Certificates of the appropriate government officials of the state of incorporation or organization
of each Obligated Party as to the existence and good standing of such Person, in each case, dated within 30 days prior to the
Closing Date; provided that any such certificate(s) due from the Texas Comptroller of Public Accounts may be satisfied
with a printout of an electronic search of such office’s records which shows that such Person’s status with respect
to its right to transact business in Texas is “active”;

 

    CREDIT AGREEMENT – Page 64 

     

    

 

(h)
Notes. The Notes executed by Borrowers in favor of each Lender requesting Notes;

 

(i)
Security Documents. The Security Documents executed by Borrowers and the other Obligated Parties, or amendments, amendments
and restatements or confirmations thereof, as applicable, in connection with the amendment and restatement of the Existing Credit
Agreement by this Agreement;

 

(j)
Financing Statements. UCC financing statements reflecting Borrowers and the other Obligated Parties, as debtors, and Administrative
Agent, as secured party, which are required to grant a Lien which secures the Obligations and covering such Collateral as Administrative
Agent may request;

 

(k)
Stock Certificates and Stock Powers. With respect to each Subsidiary or Excluded Subsidiary that is a corporation, all
certificates evidencing the Equity Interests of such Subsidiary or Excluded Subsidiary, as applicable, accompanied by undated
and duly executed stock powers or instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory
to Administrative Agent;

 

(l)
Guaranty. An Amended and Restated Guaranty, executed by each Guarantor;

 

(m)
Pledge Agreement. The Pledge Agreement, executed by each of the Pledgors;

 

(n)
Insurance Matters. Copies of insurance certificates describing all insurance policies required by Section 7.5,
together with loss payable and lender endorsements in favor of Administrative Agent with respect to all insurance policies covering
Collateral;

 

(o)
CAC Acquisition. (i) A true and correct copy of each CAC Acquisition Document, (ii) evidence that all conditions precedent
to the closing of the transactions described in the CAC Acquisition Agreement, except the funding of the Credit Extension on Closing
Date to enable Borrowers to distribute to CEC to fund in part its obligations under the CAC Acquisition Agreement, shall have
been completed in a manner satisfactory to Administrative Agent, (iii) evidence that any indebtedness owed by Sellers which is
secured by a Lien on any property described in the CAC Acquisition Agreement has been or concurrently with the Closing Date is
being paid in full and such Liens have been or concurrently with the Closing Date are being released pursuant to lien releases
satisfactory to Administrative Agent, and (iv) evidence that pursuant to the Acquisition Documents, concurrent with the consummation
of the CAC Acquisition, CEC shall have acquired all of the Equity Interests of Carbon Appalachian Company, LLC previously owned
by Sellers;

 

(p)
CEC Seller Note. True and correct copies of all agreements, documents or instruments related to the CEC Seller Note, all
in form and substance satisfactory to the Administrative Agent;

 

(q)
Lien Searches. The results of UCC Lien searches showing all financing statements and other documents or instruments on
file against each Borrower and each other Obligated Party in the appropriate filing offices, such search to be as of a date no
more than 30 days prior to the Closing Date, and reflecting no Liens against any of the intended Collateral other than Liens being
released or assigned to Administrative Agent concurrently with the initial Credit Extension;

 

    CREDIT AGREEMENT – Page 65 

     

    

 

(r)
Opinion of Counsel. A favorable opinion of Welborn Sullivan Meck & Tooley, P.C., legal counsel to Borrowers and Guarantors,
as to such matters as Administrative Agent may reasonably request;

 

(s)
Attorneys’ Fees and Expenses. Evidence that the costs and expenses (including reasonable attorneys’ fees) referred
to in Section 12.1, to the extent invoiced, shall have been paid in full by Borrowers;

 

(t)
Title Assurances. (i) Title opinions and/or other title information and data acceptable to Administrative Agent covering
Oil and Gas Properties that in the aggregate represent not less than 85% of the Recognized Value of all Oil and Gas Properties
evaluated in the Initial Reserve Report, reflecting title to the Oil and Gas Properties of the Borrowing Parties in such Oil and
Gas Properties which is acceptable to Administrative Agent, and (ii) flood certificates, to the extent applicable, and title opinions
and/or other title information and data acceptable to Administrative Agent regarding the Pipeline Systems;

 

(u)
Environmental Reports. Such environmental reports, if any, regarding the Oil and Gas Properties of the Borrowing Parties
as Administrative Agent may reasonably request;

 

(v)
Initial Reserve Report. A true and correct copy of the Initial Reserve Report;

 

(w)
Management and Operating Agreements. True and correct copies of any management services agreements, operating agreement
and/or all other related agreements as requested by Administrative Agent;

 

(x)
Assumption of Existing Indebtedness; Assignment of Commitments, Liens and Security Interests. Evidence that (i) all obligations
and liabilities of CEC under the Existing CEC Credit Agreement and the Existing CEC Loan Documents have been or concurrently with
the Closing Date are being assumed in full, jointly and severally, by Borrowers, (ii) all rights, title, and interests of the
lenders under the Existing CEC Credit Agreement have been or concurrently with the Closing Date are being assigned to the Lenders
under this Agreement, and (iii) all Liens and security interests securing obligations under the Existing CEC Credit Agreement
have been or concurrently with the Closing Date are being assigned to Administrative Agent, on behalf of the Secured Parties,
all of which shall be pursuant to agreements and instruments satisfactory to Administrative Agent;

 

(y)
Intercreditor Agreement. An Amended and Restated Intercreditor Agreement, duly executed by the parties thereto;

 

(z)
Minimum Revolving Credit Availability. Evidence satisfactory to Administrative Agent that as of the Closing Date, the Revolving
Credit Availability is greater than or equal to $5,000,000;

 

(aa)
Beneficial Ownership Certification. To the extent that any Borrower qualifies as a “legal entity customer”
under the Beneficial Ownership Regulation, a Beneficial Ownership Certification in relation to such Borrower; and

 

    CREDIT AGREEMENT – Page 66 

     

    

 

(bb)
Closing Fees. Evidence that any other fees due on or before the Closing Date have been paid, including without limitation,
all fees as set forth in any Fee Letter.

 

For
purposes of determining compliance with the conditions set forth in this Section 5.1, each Lender that has signed
this Agreement shall be deemed to have consented to, approved or accepted or be satisfied with, each document or other matter
required thereunder to be consented to or approved by or be acceptable or satisfactory to a Lender unless Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

Section
5.2 All Extensions of Credit. The obligation of Lenders to make any Credit Extension hereunder (including the initial Credit
Extension) is subject to the following additional conditions precedent:

 

(a)
Request for Credit Extension. Administrative Agent shall have received in accordance with this Agreement, as the case may
be, a Revolving Credit Borrowing Request, Term Loan Borrowing Request, or a Letter of Credit Application, as applicable, pursuant
to Administrative Agent’s requirements and executed by a Responsible Officer of each Borrower;

 

(b)
No Default. No Default shall have occurred and be continuing, or would result from or after giving effect to such Credit
Extension;

 

(c)
No Material Adverse Event. No Material Adverse Event shall have occurred and no circumstance shall exist that could reasonably
be expected to result in a Material Adverse Event;

 

(d)
Representations and Warranties. All of the representations and warranties contained in Article 6 and in the
other Loan Documents shall be true and correct in all material respects on and as of the date of such Credit Extension with the
same force and effect as if such representations and warranties had been made on and as of such date, except to the extent that
such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all
material respects as of such earlier date, and except that for purposes of this Section 5.2, the representations and warranties
contained in Section 6.2 shall be deemed to refer to the most recent statements furnished pursuant to Sections 7.1(a)
and 7.1(b), respectively;

 

(e)
Additional Documentation. Administrative Agent shall have received such additional approvals, opinions, or documents as
Administrative Agent or its legal counsel may reasonably request; and

 

(f)
Revolving Credit Availability. With respect to any request for a Credit Extension of a Revolving Credit Loan, after giving
effect to the Credit Extension so requested, the Aggregate Revolving Credit Exposure shall not exceed the Aggregate Revolving
Credit Commitments in effect as of the date of such Credit Extension.

 

Each
Credit Extension hereunder shall be deemed to be a representation and warranty by each Borrower that the conditions specified
in this Section 5.2 have been satisfied on and as of the date of the applicable Credit Extension.

 

    CREDIT AGREEMENT – Page 67 

     

    

 

ARTICLE
6

REPRESENTATIONS AND WARRANTIES

 

To
induce Administrative Agent and Lenders to enter into this Agreement, and to make Credit Extensions hereunder, each Borrower represents
and warrants to Administrative Agent and Lenders that:

 

Section
6.1 Entity Existence. Each Borrowing Party (a) is duly incorporated or organized, as the case may be, validly existing,
and in good standing under the Laws of the jurisdiction of its incorporation or organization; (b) has all requisite power
and authority to own its assets and carry on its business as now being or as proposed to be conducted; and (c) is qualified
to do business in all jurisdictions in which the nature of its business makes such qualification necessary and where failure to
so qualify could reasonably be expected to result in a Material Adverse Event. Each Obligated Party has the power and authority
to execute, deliver, and perform its obligations under this Agreement, the other Loan Documents to which it is or may become a
party and the Intercreditor Agreement to the extent party thereto.

 

Section
6.2 Financial Statements; Etc. Each Borrower has delivered to Administrative Agent audited financial statements of such
Borrower and its Subsidiaries as at and for the fiscal year ended December 31, 2017 and unaudited financial statements of such
Borrower and its Subsidiaries as at and for the 3-month period ended June 30, 2018. Such financial statements are accurate and
complete in all material respects, have been prepared in accordance with GAAP, and fairly and accurately present in all material
respects, on a consolidated basis, the financial condition of such Borrower and its Subsidiaries as of the respective dates indicated
therein and the results of operations for the respective periods indicated therein. None of the Borrowing Parties has any material
contingent liabilities, liabilities for taxes, unusual forward or long-term commitments, unrealized or anticipated losses from
any unfavorable commitments except as referred to or reflected in such financial statements. No Material Adverse Event has occurred
since the effective date of the financial statements referred to in this Section 6.2. All projections delivered by
Borrowers to Administrative Agent and Lenders have been prepared in good faith, with care and diligence and using assumptions
that are reasonable under the circumstances at the time such projections were prepared and delivered to Administrative Agent and
Lenders and all cost, volume and pricing assumptions are disclosed in the projections. Other than the Debt listed on Schedule 8.1
and Debt otherwise permitted by Section 8.1, none of the Borrowing Parties has any Debt.

 

Section
6.3 Action; No Breach. The execution, delivery, and performance by each Obligated Party of this Agreement, the other Loan
Documents to which such Person is or may become a party and the Intercreditor Agreement to the extent party thereto and compliance
with the terms and provisions hereof and thereof have been duly authorized by all requisite action on the part of such Person
and do not and will not (a) violate or conflict with, or result in a breach of, or require any consent under (i) the
Constituent Documents of such Person, (ii) any applicable Law, rule, or regulation or any order, writ, injunction, or decree
of any Governmental Authority or arbitrator, or (iii) any agreement or instrument to which such Person is a party or by which
it or any of its Properties is bound or subject which could result in a Material Adverse Event, or (b) constitute a default
under any such agreement or instrument which could result in a Material Adverse Event, or result in the creation or imposition
of any Lien upon any of the revenues or assets of such Person.

 

Section
6.4 Operation of Business. Each Borrowing Party possesses all licenses, permits, consents, authorizations, franchises,
patents, copyrights, trademarks, and trade names, or rights thereto, necessary to conduct its respective businesses substantially
as now conducted and as presently proposed to be conducted, and none of the Borrowing Parties is in violation of any valid rights
of others with respect to any of the foregoing which could reasonably be expected to result in a Material Adverse Event.

 

    CREDIT AGREEMENT – Page 68 

     

    

 

Section
6.5 Litigation and Judgments. Except as specifically disclosed in Schedule 6.5 as of the date hereof, there
is no action, suit, investigation, or proceeding before or by any Governmental Authority or arbitrator pending, or to the knowledge
of any Borrower, threatened against or affecting any Obligated Party that could, if adversely determined, result in a Material
Adverse Event. There are no outstanding judgments against any Obligated Party that could result in an Event of Default.

 

Section
6.6 Rights in Properties; Liens.

 

(a)
Each Borrowing Party has good and indefeasible title to or valid leasehold interests in its respective Properties, including the
Properties reflected in the financial statements described in Section 6.2 but excluding the Oil and Gas Properties
owned by the Borrowing Parties, and none of such Properties is subject to any Lien, except Permitted Liens.

 

(b)
The most recently delivered Reserve Report sets forth a complete and accurate list of all Oil and Gas Properties owned by each
Borrowing Party as of such date, showing as of the date thereof the lessor, lessee, lease date, recording information and legal
description for each oil, gas and/or mineral lease in which any Borrowing Party has an interest, which leases shall be grouped
by the applicable well or unit. Each Borrowing Party has good and defensible title in and to such Oil and Gas Properties. Such
Oil and Gas Properties are free and clear of all Liens, other than Liens created or permitted by the Loan Documents, and Liens
set forth on Schedule 8.2. Except in the ordinary course of business and consistent with historical practice, no Person
other than such Person has any ownership interests, whether legal or beneficial, in such Person’s purported interests in
such Oil and Gas Properties.

 

(c)
The Mortgaged Properties are described in and covered by the Reserve Reports which have previously been delivered to and relied
upon by Administrative Agent and the Lenders in connection with this Agreement. Borrowers have provided Administrative Agent with
title information and title data acceptable to Administrative Agent reflecting title to the Oil and Gas Properties of the Borrowing
Parties in accordance with Section 7.14. Each of the Borrowing Parties owns (or, contemporaneously with the closing of
any Acquisitions being financed through and closed substantially contemporaneously with the initial Credit Extension, will own)
at least the net interest and production attributable to the wells and units evaluated in each Reserve Report delivered to Administrative
Agent, except such as may result, after the delivery of such Reserve Report, from customary provisions of operating agreements
requiring or allowing for the acquisition of the interests of any non-consenting parties so long as Borrowers promptly notify
Administrative Agent thereof. The ownership of such Properties shall not in the aggregate obligate any Borrower or any Subsidiary
to bear costs and expenses relating to the maintenance, development and operations of such Properties in an amount in excess of
the working interests of such Properties as shown in each such Reserve Report, except such as may result, after the delivery of
such Reserve Report, from customary provisions of operating agreements requiring or allowing the parties thereto to pay the share
of costs of a non-consenting party so long as Borrowers promptly notify Administrative Agent of such changes. No Borrowing Party
has conveyed or transferred to any other Person a beneficial interest in the Oil and Gas Properties owned by it of record, whether
pursuant to unrecorded assignments or transfers or accounting mechanisms, except to the extent disclosed or taken into account
in the most recent Reserve Report. Each of the Borrowing Parties has paid all royalties payable under the oil and gas leases concerning
which it is an operator, except to those contested in accordance with the terms of the applicable joint operating agreement, held
in suspense or otherwise contested in good faith and by appropriate proceedings and reserves for the payment of which are being
maintained in accordance with GAAP.

 

    CREDIT AGREEMENT – Page 69 

     

    

 

(d)
The Pipeline Systems are covered by recorded Easements or deeds in favor of the applicable Borrowing Party (or its predecessors
in interest) and its respective successors and assigns, except where the failure of the Pipeline Systems to be so covered, individually
or in the aggregate, (i) does not materially interfere with the ordinary conduct of the businesses of the Borrowing Parties in
substantially the manner as such businesses were operated immediately prior to the Closing Date, (ii) does not materially detract
from the value or the use of the portion of the Pipeline Systems which are not covered and (iii) could not reasonably be expected
to result in a Material Adverse Event.

 

(e)
The Easements establish a contiguous and continuous right-of-way for each separate system of tubes and pipelines comprising the
Pipeline Systems and grant the applicable Borrowing Party (or its predecessors in interest) and its respective successors and
assigns, the right to construct, operate and maintain the Pipeline Systems in, over, under or across the land covered thereby
in the same way that a prudent owner and operator in the midstream pipeline business would construct, operate and maintain similar
assets.

 

(f)
There has been no and there is not presently any occurrence of any (i) breach or event of default on the part of any Borrower
or any Subsidiary with respect to any Easement, (ii) to the best knowledge of any Borrower, breach or event of default on the
part of any other party to any Easement, and (iii) event that, with the giving of notice or lapse of time or both, would constitute
such breach or event of default on the part of any Borrower or any Subsidiary with respect to any Easement or, to the best knowledge
of any Borrower, on the part of any other party thereto, in each case, to the extent such breach or default, individually or in
the aggregate, (A) materially interferes with the ordinary conduct of the businesses of the Borrowing Parties in substantially
the manner as such businesses were operated immediately prior to the Closing Date, (B) materially detracts from the value or the
use of the portion of the Pipeline Systems covered thereby and (C) could reasonably be expected to result in a Material Adverse
Event.

 

(g)
(i) the Easements are in full force and effect in all material respects and are valid and enforceable against the parties thereto
in accordance with their terms (subject to the effect of any applicable Debtor Relief Laws and subject to, as to enforceability,
general principles of equity) and (ii) all rental and other payments due thereunder by the Borrowing Parties and their predecessors
in interest, have been duly paid in accordance with the terms of the Easements, except to the extent that the failure to do so,
individually or in the aggregate, (A) does not materially interfere with the ordinary conduct of the businesses of the Borrowing
Parties in substantially the manner as such businesses were operated immediately prior to the Closing Date, (B) does not materially
detract from the value or the use of the portion of the Pipeline Systems covered thereby and (C) could not reasonably be expected
to result in a Material Adverse Event.

 

(h)
The applicable portions of the Pipeline Systems are located with the confines of the descriptions contained in the Easements and
do not encroach upon any adjoining property in any one or more material respects.

 

Section
6.7 Enforceability. This Agreement constitutes, and the other Loan Documents to which any Borrower or any other Obligated
Party is a party and the Intercreditor Agreement to the extent any Borrower or any other Obligated Party is party thereto, when
delivered, shall constitute legal, valid, and binding obligations of such Person, enforceable against such Person in accordance
with their respective terms, except as limited by Debtor Relief Laws and by general principles of equity, whether applied by a
court of law or equity.

 

    CREDIT AGREEMENT – Page 70 

     

    

 

Section
6.8 Approvals. Except for the applicable authorization, approval, or consent contemplated by and obtained for this Agreement,
the other Loan Documents or the Acquisition Agreement, no authorization, approval, or consent of, and no filing or registration
with, any Governmental Authority or third party is or will be necessary for the execution, delivery, or performance by any Borrower
or any other Obligated Party of this Agreement, the other Loan Documents to which such Person is or may become a party or the
Intercreditor Agreement to the extent such Person is party thereto or the validity or enforceability thereof.

 

Section
6.9 Taxes. Except to the extent that a failure to do so could not be reasonably expected to result in a Material Adverse
Event, each of the Borrowing Parties has filed all tax returns (federal, state, and local) required to be filed, including all
income, franchise, employment, Property, and sales tax returns, and has paid all of their respective liabilities for taxes, assessments,
governmental charges, and other levies that are due and payable, other than taxes the payment of which is being contested in good
faith and by appropriate proceedings and reserves for the payment of which are being maintained in accordance with GAAP. No Borrower
knows of any pending investigation of any Borrower or any Subsidiary by any taxing authority or of any pending but unassessed
tax liability of any Borrower or any Subsidiary. No Borrowing Party is party to any tax sharing agreement.

 

Section
6.10 Use of Proceeds; Margin Securities. The proceeds of the Revolving Credit Borrowings shall be used by Borrowers for
working capital in the ordinary course of business, for the acquisition, drilling and development of the Oil and Gas Properties
of the Borrowing Parties, to fund a portion of the CAC Acquisition as permitted by Section 8.4(d) and (e), and for
other general company or corporate purposes, as applicable. The proceeds of the Term Loans will be used by Borrower to partially
finance the CAC Acquisition and the related transactions contemplated thereby. No Borrowing Party is engaged principally, or as
one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T, U, or X of the Board of Governors), and no part of the proceeds of any Loan will be used to purchase
or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock.

 

Section
6.11 ERISA. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the
knowledge of any Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. No application
for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect
to any Plan. There are no pending or, to the knowledge of any Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan. There has been no Prohibited Transaction or violation of the fiduciary responsibility
rules with respect to any Plan. No ERISA Event has occurred or is reasonably expected to occur. No Plan has any Unfunded Pension
Liability. No Obligated Party or ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA). No Obligated Party
or ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving
of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect
to a Multiemployer Plan. No Obligated Party or ERISA Affiliate has engaged in a transaction that could be subject to Section 4069
or 4212(c) of ERISA.

 

Section
6.12 Disclosure. No statement, information, report, representation, or warranty made by any Borrower or any other Obligated
Party in this Agreement, in any other Loan Document or the Intercreditor Agreement or furnished to Administrative Agent or any
Lender in connection with this Agreement or any of the transactions contemplated hereby contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements herein or therein not misleading. There is no fact known
to any Borrower which is a Material Adverse Event, or which might in the future be reasonably expected to result in a Material
Adverse Event that has not been disclosed in writing to Administrative Agent and each Lender.

 

    CREDIT AGREEMENT – Page 71 

     

    

 

Section
6.13 Subsidiaries.

 

(a)
No Borrower has any Subsidiaries other than those listed on Schedule 6.13(a) (and, if subsequent to the Closing Date,
such additional Subsidiaries as have been formed or acquired in compliance with Section 7.13), and Schedule 6.13(a)
sets forth the jurisdiction of incorporation or organization of each such Subsidiary and the percentage of the applicable
Borrower’s ownership interest in such Subsidiary. All of the outstanding Equity Interests in each Subsidiary described on
Schedule 6.13(a) have been validly issued, are fully paid, and are nonassessable. Other than (i) in connection
with its equity incentive plans or (ii) as disclosed in its financial statements, there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments of any nature relating to any Equity Interests of any Borrower or any
Subsidiary.

 

(b)
All Excluded Subsidiaries are listed on Schedule 6.13(b), and sets forth the jurisdiction of incorporation or organization
of each such Excluded Subsidiary, the percentage of the applicable Borrower’s ownership interest in such Excluded Subsidiary,
and the amount of investment of such Borrower in such Excluded Subsidiary.

 

Section
6.14 Agreements. No Borrowing Party is a party to any indenture, loan, or credit agreement, or to any lease or other agreement
or instrument, or subject to any charter or corporate or other organizational restriction, in each case which could reasonably
be expected to result in a Material Adverse Event. No Borrowing Party is in default in any respect in the performance, observance,
or fulfillment of any of the obligations, covenants, or conditions contained in any agreement or instrument material to its business
to which it is a party which could reasonably be expected to result in a Material Adverse Event.

 

Section
6.15 Compliance with Laws. No Borrowing Party is in violation in any material respect of any Law, rule, regulation, order,
or decree of any Governmental Authority or arbitrator.

 

Section
6.16 Inventory. All inventory (including Hydrocarbons) of the Borrowing Parties has been and will hereafter be produced
in material compliance with all applicable Laws, rules, regulations, and governmental standards, including, without limitation,
the minimum wage and overtime provisions of the Fair Labor Standards Act (29 U.S.C. §§ 201-219).

 

Section
6.17 Regulated Entities. No Borrowing Party is (a) an “investment company” or a company “controlled”
by an “investment company” within the meaning of the Investment Company Act of 1940, (b) a “utility” under
the Laws of the State of Texas or any other jurisdiction wherein such Person is required to qualify to do business or (c) subject
to regulation under any other federal or state statute, rule or regulation limiting its ability to incur Debt, pledge its assets
or perform its obligations under the Loan Documents or the Intercreditor Agreement.

 

Section
6.18 Environmental Matters. Except (i) as could not reasonably be expected to result in a Material Adverse Event or
(ii) as set forth on Schedule 6.18:

 

(a)
The Borrowing Parties and all of their respective Properties, assets, and operations are in compliance with all Environmental
Laws. No Borrower is aware of, nor has any Borrower received notice of, any past, present, or future conditions, events, activities,
practices, or incidents which may interfere with or prevent the compliance or continued compliance by the Borrowing Parties with
all Environmental Laws;

 

    CREDIT AGREEMENT – Page 72 

     

    

 

(b)
Each of the Borrowing Parties has obtained all permits, licenses, and authorizations that are required under applicable Environmental
Laws, and all such permits are in good standing and the Borrowing Parties are in compliance with all of the terms and conditions
of such permits;

 

(c)
No Hazardous Materials exist on, about, or within or have been used, generated, stored, transported, disposed of on, or Released
from any of the Properties or assets of any Borrower or any Subsidiary. The use which the Borrowing Parties make and intend to
make of their respective Properties and assets will not result in the use, generation, storage, transportation, accumulation,
disposal, or Release of any Hazardous Material on, in, or from any of their Properties or assets;

 

(d)
No Borrowing Party or any of their respective currently or previously owned or leased Properties or operations is subject to any
outstanding or threatened order from or agreement with any Governmental Authority or other Person or subject to any judicial or
docketed administrative proceeding with respect to (i) failure to comply with Environmental Laws, (ii) Remedial Action,
or (iii) any Environmental Liabilities arising from a Release or threatened Release;

 

(e)
There are no conditions or circumstances associated with the currently or previously owned or leased Properties or operations
of any Borrower or any Subsidiary that could reasonably be expected to give rise to any Environmental Liabilities;

 

(f)
No Borrowing Party is a treatment, storage, or disposal facility requiring a permit under the Resource Conservation and Recovery
Act, 42 U.S.C. § 6901 et seq., regulations thereunder or any comparable provision of state Law. The Borrowing Parties
are in compliance with all applicable financial responsibility requirements of all Environmental Laws;

 

(g)
None of Borrowers or any of their Subsidiaries has filed or failed to file any notice required under applicable Environmental
Law reporting a Release; and

 

(h)
No Lien arising under any Environmental Law has attached to any Property or revenues of any Borrower or any Subsidiary.

 

Section
6.19 Intellectual Property. The the Borrowing Parties own, or are licensed to use, all Intellectual Property necessary
to conduct their business as currently conducted except for such Intellectual Property the failure of which to own or license
could not result in a Material Adverse Event.

 

Section
6.20 Anti-Corruption Laws and Sanctions. Each Borrower has implemented and maintains in effect policies and procedures
designed to ensure compliance by such Borrower, its Subsidiaries and their respective directors, officers, employees and agents
with Anti-Corruption Laws and applicable Sanctions, and each Borrower, its Subsidiaries and their respective officers and employees,
and to the knowledge of each Borrower, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions
in all material respects. None of (a) any Borrower or any Subsidiary or (b) to the knowledge of any Borrower, any of their respective
directors, officers, employees, or agents, is a Sanctioned Person. No Credit Extension or use of proceeds of any Credit Extension
will violate Anti-Corruption Laws or applicable Sanctions.

 

    CREDIT AGREEMENT – Page 73 

     

    

 

 

Section 6.21
Patriot Act. The Obligated Parties, each of their Subsidiaries, and each of their Affiliates are in compliance with (a) the
Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B Chapter V, as amended), and all other enabling legislation or executive order relating thereto, (b) the Patriot
Act, and (c) all other federal or state Laws relating to "know your customer" and anti-money laundering rules and
regulations. No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official
or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977.

 

Section
6.22 Insurance. The Properties of the Borrowing Parties are insured with financially sound and reputable insurance companies
not Affiliates of a Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried in conformity
with prudent industry practice by companies in the oil and gas industry owning similar Properties in localities where such Borrower
or the applicable Subsidiary operates.

 

Section
6.23 Solvency. Each of Borrowers and the other Obligated Parties is Solvent and has not entered into any transaction with
the intent to hinder, delay or defraud a creditor.

 

Section
6.24 Security Documents. The provisions of the Security Documents are effective to create in favor of Administrative Agent
for the benefit of the Secured Parties a legal, valid and enforceable Lien (subject to Permitted Liens) on all right, title and
interest of the respective Obligated Parties party thereto in the Collateral. Except for filings completed in connection with
the Closing Date and as otherwise contemplated hereby and by the Security Documents, no filing or other action will be necessary
to perfect such Liens in Collateral.

 

Section
6.25 Businesses. Each Borrower is presently engaged directly or through its Subsidiaries in the business of oil and gas
acquisition, exploration, development, and production.

 

Section
6.26 Labor Matters. There are no labor controversies pending, or to the best knowledge of Borrowers, threatened against
any Borrower or any Subsidiary which could reasonably be expected to result in a Material Adverse Event.

 

Section
6.27 Gas Balancing Agreements and Advance Payment Contracts. As of the Closing Date, (a) there is no Material Gas
Imbalance, and (b) the aggregate amount of all Advance Payments received by the Borrowing Parties under Advance Payment Contracts
which have not been satisfied by delivery of production does not exceed $500,000.

 

Section
6.28 Hedging Agreements and Transactions. Schedule 6.28 sets forth a complete and correct list of all Hedging Agreements
and Hedging Transactions entered into by any Borrower or any Subsidiary in effect or to be in effect on the Closing Date and on
the date of each update thereof required hereunder, the material terms thereof (including the type, term, effective date, termination
date and notional amounts or volumes), the Hedge Termination Value thereof, and the counterparty thereto.

 

Section
6.29 Flood Matters. No "Building" (as defined in the applicable Flood Insurance Regulation) or "Manufactured
(Mobile) Home" (as defined in the applicable Flood Insurance Regulation) is located on any Mortgaged Property within an area
having special flood hazards and in which flood insurance is available under the Flood Insurance Regulations, and no "Building"
or "Manufactured (Mobile) Home" is encumbered by the Mortgages.

 

    CREDIT AGREEMENT – Page 74 

     

    

 

Section
6.30 State Regulation.

 

(a)
No portion of the Pipeline Systems is comprised of any interstate common carrier pipeline operations subject to rate regulation
by the FERC under the Natural Gas Act or the Interstate Commerce Act and the Energy Policy Act.

 

(b)
The intrastate common carrier pipeline operations of the Pipeline Systems (the "Intrastate Pipelines"), if any,
are subject to regulation by the State Pipeline Regulatory Agencies. Each Borrowing Party that owns pipelines and conducts pipeline
operations has followed prudent practice in the hydrocarbon transportation, processing and distribution industries, as applicable,
regarding the setting of rates for services provided and the implementation of such rates. There is no reason to believe that
the current or past rates charged by each Borrowing Party for products sold or services rendered by the Intrastate Pipelines provide
more than an allowable return on investment or are unduly discriminatory or that the Intrastate Pipelines have otherwise operated
in an unlawful manner. Except as set forth on Schedule 6.30(b), no Borrowing Party that owns any interest in any of
the Intrastate Pipelines has been or is the subject of a complaint, investigation or other proceeding by any Governmental Authority
regarding their respective rates or practices with respect to the Intrastate Pipelines. There is no reason to believe that any
complaint, investigation or other proceeding set forth on Schedule 6.30(b), individually or in the aggregate, could
result, if adversely determined to the position or interest of any Borrower or any Subsidiary, in a Material Adverse Event.

 

(c)
Each of the Borrowing Parties is in compliance, in all material respects, with all rules, regulations and orders of all State
Pipeline Regulatory Agencies applicable to the Pipeline Systems.

 

(d)
As of the Closing Date, no Borrowing Party is liable for any refunds or interest thereon as a result of an order from any Governmental
Authority with jurisdiction over the Pipeline Systems.

 

(e)
Without limiting the generality of Section 6.8, no certificate, license, permit, consent, authorization or order (to the
extent not otherwise obtained) is required by any Borrower or any Subsidiary from any Governmental Authority to construct, own,
operate and maintain the Pipeline Systems, or to transport, process and/or distribute Hydrocarbons under existing contracts and
agreements as the Pipeline Systems are presently owned, operated and maintained.

 

    CREDIT AGREEMENT – Page 75 

     

    

 

ARTICLE
7

AFFIRMATIVE COVENANTS

 

Each
Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding (other than contingent indemnification
obligations) or any Letter of Credit shall remain outstanding (unless arrangements satisfactory to the L/C Issuer have been made)
or any Lender has any Commitment hereunder:

 

Section
7.1 Reporting Requirements. Borrowers will furnish to Administrative Agent (with copies for each Lender):

 

(a)
Borrowers' Annual Financial Statements.

 

(i)
As soon as available, and in any event within 90 days after the last day of the fiscal year ending December 31, 2018, a copy of
the annual audited report for each of (A) Carbon Appalachian Company, LLC and its Subsidiaries, and (B) CEC and its Subsidiaries,
each for such fiscal year containing, on a consolidated basis, balance sheets and statements of income, retained earnings, and
cash flow as of the end of such fiscal year and for the 12-month period then ended, in each case setting forth in comparative
form the figures for the preceding fiscal year, all in reasonable detail and audited by and accompanied by a report of an independent
certified public accountants of recognized standing reasonably acceptable to Administrative Agent, to the effect that such report
has been prepared in accordance with GAAP and containing no material qualifications or limitations on scope, and such other information
reasonably requested by the Administrative Agent; and

 

(ii)
As soon as available, and in any event within 90 days after the last day of each fiscal year of Borrowers, beginning with the
fiscal year ending December 31, 2019, a copy of the annual audited report of each Borrower and its Subsidiaries for such fiscal
year containing, on a consolidated basis, along with a combined report for the Borrowing Parties collectively, balance sheets
and statements of income, retained earnings, and cash flow as of the end of such fiscal year and for the 12-month period then
ended, in each case setting forth in comparative form the figures for the preceding fiscal year (other than for the fiscal year
ending December 31, 2019), all in reasonable detail and audited by and accompanied by a report of an independent certified public
accountants of recognized standing reasonably acceptable to Administrative Agent, to the effect that such report has been prepared
in accordance with GAAP and containing no material qualifications or limitations on scope;

 

(b)
Borrowers' Quarterly Financial Statements. As soon as available, and in any event within 60 days after the last day of
each fiscal quarter of Borrowers, commencing with the fiscal quarter ending March 31, 2019, a copy of an unaudited financial report
of each Borrower and its Subsidiaries as of the end of such fiscal quarter and for the portion of the fiscal year then ended,
containing, on a consolidated basis, along with a combined report for the Borrowing Parties collectively, balance sheets and statements
of income, retained earnings, and cash flow, in each case setting forth in comparative form the figures for the corresponding
period of the preceding fiscal year, all in reasonable detail certified by a Responsible Officer of each Borrower to have been
prepared in accordance with GAAP and to fairly and accurately present in all material respects (subject to year-end audit adjustments)
the financial condition and results of operations of the Borrowing Parties, on a combined and consolidated basis, as of the dates
and for the periods indicated therein;

 

(c)
Compliance Certificate. Concurrently with the delivery of each of the financial statements referred to in Sections 7.1(a)
and 7.1(b), a Compliance Certificate executed by a Responsible Officer of each Borrower (i) stating that to the
best of the knowledge of such Responsible Officers executing the same, no Default has occurred and is continuing, or if a Default
has occurred and is continuing, a statement as to the nature thereof and the action which is proposed to be taken with respect
thereto, (ii) showing in reasonable detail the calculations demonstrating compliance with the covenants set forth in Article 9,
(iii) containing an update to Schedule 6.13(b); provided, however, only if since the date of the last delivery
of such Schedule 6.13(b) (A) a new Excluded Subsidiary has been created by any Borrower or any Subsidiary, (B) any Borrower
shall have invested more than $2,000,000 in any Excluded Subsidiary, or (C) any other changes shall have occurred to such Schedule
6.13(b), (iv) containing an update to Schedule 6.28 and (v) containing such other certifications set forth therein.
For any financial statements delivered electronically by a Responsible Officer in satisfaction of the reporting requirements set
forth in Sections 7.1(a) or 7.1(b) that are not accompanied by the required Compliance Certificate, that Responsible
Officer shall nevertheless be deemed to have certified the factual matters described in this Section 7.1(c) with respect
to such financial statements; provided, however, such deemed certification shall not excuse or be construed as a
waiver of Borrowers' obligation to deliver the required Compliance Certificate;

 

    CREDIT AGREEMENT – Page 76 

     

    

 

(d)
Management Letters. Promptly upon receipt thereof, a copy of any management letter or written report (except standard or
customary correspondence) submitted to any Borrower or any Subsidiary by independent certified public accountants with respect
to the business, financial condition, operations or Properties of any Borrower or any Subsidiary;

 

(e)
Notice of Litigation. Promptly after the commencement thereof, notice of all actions, suits, and proceedings before any
Governmental Authority or arbitrator not previously disclosed in writing to the Administrative Agent affecting any Borrower or
any Subsidiary (including, without limitation, any form of material notice, summons, citation, proceeding or order received from
any State Pipeline Regulatory Agency or any other Governmental Authority concerning the regulation of any material portion of
the Pipeline Systems) which, if determined adversely to such Borrower or such Subsidiary, could be a Material Adverse Event;

 

(f)
Notice of Default. As soon as possible and in any event within 5 Business Days after the occurrence of any Default, a written
notice setting forth the details of such Default and the action that Borrowers have taken and propose to take with respect thereto;

 

(g)
ERISA Reports. Promptly after the filing or receipt thereof, copies of all reports, including annual reports, and notices
which any Borrower or any ERISA Affiliate files with or receives from the PBGC, the IRS, or the U.S. Department of Labor under
ERISA; as soon as possible and in any event within 5 Business Days after any Borrower or any ERISA Affiliate knows or has reason
to know that any ERISA Event or Prohibited Transaction has occurred with respect to any Plan, a certificate of the chief financial
officer of such Borrower setting forth the details as to such ERISA Event or Prohibited Transaction and the action that such Borrower
proposes to take with respect thereto; annually, copies of the notice described in Section 101(f) of ERISA that any Borrower
or ERISA Affiliate receives with respect to a Plan or Multiemployer Plan;

 

(h)
Reports to Other Creditors. Promptly after the furnishing thereof, copies of any material statement or report furnished
to any other party pursuant to the terms of any indenture, loan, or credit or similar agreement and not otherwise required to
be furnished to Administrative Agent pursuant to any other clause of this Section 7.1;

 

(i)
Acquisitions and Dispositions of Oil and Gas Properties. Concurrently with each Reserve Report delivered under Section
7.1(k) below, a list and description showing the lessor, lessee, lease date, recording information and legal description for
each oil, gas and/or mineral lease (which leases shall be grouped by the applicable well or unit) and a sufficient description
of any other Oil and Gas Property in which any Borrower or any Subsidiary acquired an interest or Disposed of since the delivery
to Administrative Agent of the immediately previous Reserve Report;

 

(j)
Notice of Material Adverse Event. As soon as possible and in any event within 5 Business Days after the occurrence thereof,
written notice of any event or circumstance that could reasonably be expected to result in a Material Adverse Event;

 

    CREDIT AGREEMENT – Page 77 

     

    

 

(k)
Reserve Reports. (i) On or before April 1 of each year, a Reserve Report prepared by an Independent Engineer, (ii)
on or before October 1 of each year, a Reserve Report prepared by Borrowers' own engineers and certified by a Responsible Officer
of each Borrower or prepared by an Independent Engineer, and (iii) with each Reserve Report, an update to Schedule 6.28;

 

(l)
Lease Operating Statements. Together with each Reserve Report delivered under Section 7.1(k) above, a Lease Operating
Statement;

 

(m)
Updated Schedules. Within 30 days after each request from Administrative Agent, updates to Schedules 6.13(b) and
6.28 of this Agreement and updates to the schedules to such other Loan Documents as may be requested by Administrative
Agent, upon which delivery Borrowers shall be deemed to have made all applicable representations and warranties with respect thereto
contained in the applicable Loan Documents;

 

(n)
Material Gas Imbalance; Advance Payments. Promptly upon the occurrence thereof, notice to Administrative Agent of any Material
Gas Imbalance or Advance Payments in violation of Section 8.18 hereof;

 

(o)
Tax Returns. Within 30 days after each filing thereof by each Obligated Party with any Governmental Authority, if requested
by Administrative Agent, complete copies of the federal and state income tax returns so filed;

 

(p)
Accounts Aging Report. Concurrently with the delivery of each of the financial statements referred to in Sections 7.1(a)
and 7.1(b), a report setting forth all accounts receivable and accounts payable of each Borrower and their Subsidiaries
as of the date of such delivery, such report to show the age of such accounts and such other information as Administrative Agent
shall reasonably request;

 

(q)
Change in Insurance. Within 10 Business Days after any material change in insurance coverage by any Borrower or any Subsidiary
from that previously disclosed to Administrative Agent, a report describing such change, and, within 30 days after each request
by Administrative Agent, certificates of insurance from the insurance companies insuring the Borrowing Parties, describing such
insurance coverage;

 

(r)
Purchasers of Production. Within 10 Business Days after receipt of each request from Administrative Agent, a report setting
forth the identities and addresses of all Persons remitting proceeds from the sale of Hydrocarbon production from or attributable
to Collateral to any Person who has executed a Mortgage;

 

(s)
Operating Budget. As soon as available, but in any event within 90 days after the last day of each fiscal year of CAE,
an annual Borrower-prepared operating budget for the fiscal year in which such budget is due, including at a minimum an income
statement, balance sheet, cash flow statement and capital expenditure plan of Borrowers;

 

(t)
Production Reports. Within 15 days after request by Administrative Agent, a Production Report;

 

(u)
CEC Seller Note. As soon as possible and in any event within 5 Business Days after the occurrence of any default, amendment
or modification of the CEC Seller Note, a written notice setting forth the details of such default, amendment or modification;
and

 

    CREDIT AGREEMENT – Page 78 

     

    

 

(v)
General Information. Promptly, such other information concerning (i) any Borrower, any of their Subsidiaries, any other
Obligated Party, or (ii) any Borrower's, any Subsidiary or any other Obligated Party's Oil and Gas Properties or Pipeline Systems,
as Administrative Agent, or any Lender through Administrative Agent, may from time to time reasonably request.

 

No
reporting requirement in this Section 7.1 shall be construed as waiving or eliminating any covenants or restrictions set
forth elsewhere in this Agreement or in the other Loan Documents. All representations and warranties set forth in the Loan Documents
with respect to any financial information concerning any Borrower or any Guarantor shall apply to all financial information delivered
to Administrative Agent by such Borrower, such Guarantor, or any Person purporting to be a Responsible Officer of such Borrower
or such Guarantor or other representative of such Borrower or such Guarantor regardless of the method of such transmission to
Administrative Agent or whether or not signed by such Borrower, such Guarantor, or such Responsible Officer or other representative,
as applicable.

 

Section
7.2 Maintenance of Existence; Conduct of Business. Each Borrower shall, and shall cause each of its Subsidiaries to, preserve
and maintain its existence and all of its leases, privileges, licenses, permits, franchises, qualifications, and rights that,
in its reasonable business judgment, are necessary or desirable in the ordinary conduct of its business, except to the extent
a failure to so preserve and maintain could not reasonably be expected to result in a Material Adverse Event. Each Borrower shall,
and shall cause each of its Subsidiaries to, conduct its business in an orderly manner in accordance with prudent industry practice
by companies in the oil and gas industry owning similar properties in localities where such Borrower or the applicable Subsidiary
operates.

 

Section
7.3 Maintenance and Operation of Properties.

 

(a)
Each Obligated Party shall at all times maintain, develop and operate its Oil and Gas Properties in a good and workmanlike manner
in accordance with prudent industry practice by companies in the oil and gas industry owning similar properties in localities
where such Borrower or the applicable Subsidiary operates and will observe and comply in all material respects with all of the
terms and provisions of all oil and gas leases relating to such Oil and Gas Properties so long as such oil and gas leases are
capable of producing Hydrocarbons in commercial quantities, to the extent that the failure to so observe and comply could reasonably
be expected to result in a Material Adverse Event.

 

(b)
Each Obligated Party shall use commercially reasonable efforts to remain as the named operator for each oil or gas well in which
it now or hereafter owns an interest if (i) any such party is the operator thereof on the date hereof or becomes the operator
thereof subsequent hereto and (ii) such well is now or hereafter becomes Collateral.

 

(c)
Each Obligated Party shall at all times maintain, preserve and keep all operating equipment used or useful with respect to its
Oil and Gas Properties in proper repair, working order and condition, and make all necessary or appropriate repairs, renewals,
replacements, additions and improvements thereto as would a reasonably prudent operator of similar properties in localities where
such Borrower or the applicable Subsidiary operates.

 

(d)
Each Obligated Party shall comply in all material respects with all Laws and agreements applicable to or relating to its Oil and
Gas Properties or the production and sale of Hydrocarbons therefrom and all applicable proration and conservation Laws of the
jurisdictions in which such Properties are located, to the extent that the failure to so comply with such Laws or agreements could
reasonably be expected to result in a Material Adverse Event.

 

    CREDIT AGREEMENT – Page 79 

     

    

 

(e)
With respect to the Oil and Gas Properties referred to in this Section 7.3 that are operated by operators other than
an Obligated Party or any Affiliate of an Obligated Party, no Obligated Party shall be obligated itself to perform any undertakings
contemplated by the covenants and agreements contained in this Section 7.3 which are performable only by such operators
and are beyond its control, but the Obligated Parties shall use commercially reasonable efforts to cause such operators to perform
such undertakings.

 

(f)
No Obligated Party will amend, alter or change in any respect which could reasonably be expected to be materially adverse to its
interests or that of Lenders any agreements relating to the operations or business arrangements of such Obligated Party or the
compression, gathering, sale or transportation of oil and gas from the Oil and Gas Properties included in the most recent determination
of the Borrowing Base without the prior written consent of Administrative Agent, which consent shall not be unreasonably withheld.

 

Section
7.4 Taxes and Claims. Each Borrower shall, and shall cause each of its Subsidiaries to, pay or discharge at or before maturity
or before becoming delinquent (a) all Taxes, levies, assessments, and governmental charges imposed on it or its income or
profits or any of its Property, and (b) all lawful claims for labor, material, and supplies, which, if unpaid, could become
a Lien upon any of its Property; provided, however, that none of the Borrowers or any of their Subsidiaries shall
be required to pay or discharge any Tax, levy, assessment, or governmental charge which is being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves in accordance with GAAP have been established.

 

Section
7.5 Insurance.

 

(a)
Each Borrower shall, and shall cause each of its Subsidiaries, and shall use its commercially reasonable efforts to cause each
of the other operators of the Oil and Gas Properties of the Borrowing Parties to, maintain insurance with financially sound and
reputable insurance companies in such amounts and covering such risks as is customarily carried in conformity with prudent industry
practice by companies in the oil and gas industry owning similar Properties in the same general areas in which the Borrowing Parties
operate, provided that in any event each Borrower will maintain and cause each of its Subsidiaries to maintain workmen's
compensation insurance, property insurance, and comprehensive general liability insurance reasonably satisfactory to Administrative
Agent. Each insurance policy of Borrowers or their Subsidiaries covering Collateral shall name Administrative Agent as loss payee
and each insurance policy covering liabilities shall name Administrative Agent as additional insured, and each such insurance
policy shall provide that such policy will not be cancelled or reduced without 30 days prior written notice to Administrative
Agent.

 

(b)
Subject to the Intercreditor Agreement and subject to Section 7.5(c) below, all proceeds of insurance shall be paid over
to Administrative Agent for application to the Obligations under the Loan Documents, unless Majority Lenders otherwise agree in
writing in their sole discretion.

 

(c)
So long as no Default or Borrowing Base Deficiency is continuing, a Borrower or a Subsidiary may apply the net proceeds of a casualty
or condemnation (each a "Loss") to the repair, restoration, or replacement of the assets suffering such Loss,
so long as (i) such repair, restoration, or replacement is completed within 180 days after the date of such Loss (or such
longer period of time agreed to in writing by Majority Lenders), and (ii) such Loss did not cause an Event of Default. If
(x) an Event of Default occurs pursuant to which the Obligations under the Loan Documents are accelerated in accordance with Section 10.2
or (y) such repair, restoration, or replacement is not completed within 180 days of the date of such Loss (or such longer
period of time agreed to in writing by Majority Lenders), then in each case Administrative Agent may immediately and without notice
to any Person apply all of such net proceeds to such Obligations, regardless of any other prior agreement regarding the disposition
of such net proceeds.

 

    CREDIT AGREEMENT – Page 80 

     

    

 

(d)
If at any time the representations made in Section 6.30 are untrue and any Building or Manufactured (Mobile) Home (as defined
in applicable Flood Insurance Regulations) is included in the Collateral and is or has become located in an area designated as
a "flood hazard area" under applicable Flood Insurance Regulations, each Borrower shall, and shall cause each of its
Subsidiaries to, (i) provide Administrative Agent with a description of such Building or Manufactured (Mobile) Home, including
the address and legal description thereof and such other information as may be requested by Administrative Agent to obtain a flood
determination or otherwise satisfy its obligations under applicable Flood Insurance Regulations, (ii) obtain flood insurance in
such amounts as required by applicable Flood Insurance Regulations and (iii) provide evidence in form and substance satisfactory
to Administrative Agent of such flood insurance to Administrative Agent.

 

Section
7.6 Inspection Rights. At any reasonable time and from time to time during normal business hours, each Borrower shall,
and shall, upon at least 1 Business Day's advance written request from Administrative Agent or any Lender, cause each of its Subsidiaries
to, permit representatives of Administrative Agent or any Lender (a) to examine, inspect, review, evaluate and make physical
verifications and appraisals of the Mortgaged Properties and other Collateral in any manner and through any medium that Administrative
Agent or such Lender considers advisable, (b) to examine, copy, and make extracts from its books and records, (c) to
visit and inspect its Properties, and (d) to discuss its business, operations, and financial condition with its officers,
employees, and independent certified public accountants, in each instance, at Borrowers' expense.

 

Section
7.7 Keeping Books and Records. Each Borrower shall, and shall cause each of its Subsidiaries to, maintain proper books
of record and account in which full, true, and correct entries in conformity with GAAP shall be made of all dealings and transactions
in relation to its business and activities.

 

Section
7.8 Compliance with Laws. Each Borrower shall, and shall cause each of its Subsidiaries to, (a) comply in all material
respects with all applicable Laws and decrees of any Governmental Authority or arbitrator, (b) maintain at all times all consents
or approvals required from the United States or any state of the United States (or other applicable Governmental Authorities)
necessary to grant to Administrative Agent a Lien on the Oil and Gas Properties of the Borrowing Parties, and (c) maintain in
effect and enforce policies and procedures designed to ensure compliance by Borrowers, their respective Subsidiaries and their
respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

 

Section
7.9 Compliance with Agreements. Each Borrower shall, and shall cause each of its Subsidiaries to, comply in all material
respects with all agreements, contracts, and instruments binding on it or affecting its Properties or business, except to the
extent a failure to so comply could not reasonably be expected to result in a Material Adverse Event.

 

Section
7.10 Further Assurances. Each Borrower shall, and shall cause each of its Subsidiaries and each other Obligated Party to,
execute and deliver such further agreements and instruments and take such further action as may be reasonably requested by Administrative
Agent or any Lender to carry out the provisions and purposes of this Agreement, the other Loan Documents and the Intercreditor
Agreement and to create, preserve, and perfect the Liens of Administrative Agent in the Collateral.

 

    CREDIT AGREEMENT – Page 81 

     

    

 

Section
7.11 ERISA. Each Borrower shall, and shall cause each of its Subsidiaries to, comply with all minimum funding requirements,
and all other material requirements, of ERISA, if applicable, so as not to give rise to any liability thereunder.

 

Section
7.12 Depository Relationship. (a) Each Borrower shall, and shall cause each of its Subsidiaries to, use and maintain LegacyTexas
Bank as its principal depository bank, including for the maintenance of business, cash management, operating and administrative
deposit accounts; and (b) each Borrower shall, and shall cause each of its Subsidiaries to, cause any deposit account or securities
account established or maintained after the Closing Date (other than those established or maintained with LegacyTexas Bank) to
be subject to a control agreement in favor of Administrative Agent.

 

Section
7.13 Additional Guarantors. Borrowers shall notify Administrative Agent at the time that any Person becomes a Subsidiary,
and promptly thereafter (and in any event within 30 days) the applicable Borrower shall (a) execute and deliver, or cause to be
executed and delivered, to Administrative Agent all Security Documents, stock certificates, stock powers and other agreements
and instruments as may be reasonably requested by Administrative Agent to ensure that Administrative Agent has a perfected security
interest in all Equity Interests held by any Obligated Party in such Subsidiary, and (b) cause such Person to (i) become
a Guarantor by executing and delivering to Administrative Agent a Guaranty (or a joinder to any existing Guaranty), (ii) execute
and deliver all Security Documents requested by Administrative Agent pledging to Administrative Agent for the benefit of the Secured
Parties all of its Property (subject to (A) Permitted Liens and (B) such exceptions as are provided in the Security
Documents then in effect and (C) as Administrative Agent may permit), and subject, with respect to Oil and Gas Properties,
to the limitations set forth in clause (iii) below and take all actions required by Administrative Agent to grant to the
Administrative Agent for the benefit of Secured Parties a perfected first priority Lien on such property, including the filing
of UCC financing statements in such jurisdictions as may be requested by Administrative Agent, (iii) with respect to each Oil
and Gas Property owned by such Subsidiary, execute, acknowledge and deliver a Mortgage or Mortgages and evidence of the proper
recordation of each such Mortgage in the appropriate filing office, in each case, sufficient to cause the Recognized Value of
the Mortgaged Properties to be not less than the Required Reserve Value, (iv) deliver to Administrative Agent title opinions and/or
other title information and data acceptable to Administrative Agent such that Administrative Agent shall have received, together
with the title information previously delivered to Administrative Agent, acceptable title information sufficient to meet the requirements
of Section 7.14; and (v) deliver to Administrative Agent such other documents and instruments as Administrative
Agent may require, including appropriate favorable opinions of counsel to such Person in form, content and scope reasonably satisfactory
to Administrative Agent.

 

Section
7.14 Title Assurances. Without limitation of any other requirements contained in this Agreement and the other Loan Documents,
Borrowers shall, (a) upon request by Administrative Agent, deliver to Administrative Agent title opinions and/or other title
information and data acceptable to Administrative Agent regarding the Oil and Gas Properties of the Borrowing Parties that in
the aggregate represent not less than 85% of the Recognized Value of Oil and Gas Properties evaluated in the most recent Reserve
Report; and (b) promptly, but in any event within 30 days after notice by Administrative Agent of any defect, material in
the opinion of Administrative Agent, in the title of the mortgagor under any Mortgage to any Oil and Gas Property covered thereby,
clear such title defect, and in the event any such title defects are not cured in a timely manner, pay all related costs and fees
incurred by Administrative Agent and Lenders in attempting to do so. A failure of Borrowers to clear any such title defect shall
not be an Event of Default, but instead Administrative Agent and the Majority Lenders may elect to redetermine the Borrowing Base,
and if such election is made, Borrowers may not make any special determinations of the Borrowing Base under Section 2.9(c)(i)
until after the next scheduled redetermination.

 

    CREDIT AGREEMENT – Page 82 

     

    

 

Section
7.15 Commodity Hedging Transactions.

 

(a)
Borrowers shall, (i) within 10 Business Days following the Closing Date, enter into Commodity Hedging Transactions (A) for quantities
of gaseous and liquid Hydrocarbons equal to at least 70% of the monthly Projected Production of oil and natural gas from the proved,
developed producing Oil and Gas Properties of the Borrowing Parties based on the Initial Reserve Report, (B) fixing a price for
a term of 30 months, and (C) which are otherwise in compliance with Section 8.17 and on terms acceptable to Administrative
Agent in its sole discretion, and (ii) for all time thereafter, maintain Commodity Hedging Transactions (A) for quantities of
gaseous and liquid Hydrocarbons equal to at least 70% of the monthly Projected Production of oil and natural gas from the proved,
developed producing Oil and Gas Properties of the Borrowing Parties, to be tested quarterly, based on the most recently delivered
Reserve Report, (B) fixing a price for a term of 30 months from each measurement date, and (C) which are otherwise in compliance
with Section 8.17 and on terms acceptable to Administrative Agent in its sole discretion.

 

(b)
The Borrowing Parties shall maintain a commodity price risk management policy, which policy shall be reasonably acceptable to
Administrative Agent.

 

Section
7.16 Concerning Operator's Liens. Upon request of Administrative Agent, each Borrower shall cause each Affiliated operator
of its Oil and Gas Properties to fully subordinate to the Liens securing the Obligations any and all Liens granted to or held
by such operator under any present or future joint operating agreement covering any of the Oil and Gas Properties of any Borrower
or any Subsidiary, in a manner satisfactory to Administrative Agent and pursuant to documentation in form and substance satisfactory
to Administrative Agent.

 

Section
7.17 Post-Closing Obligations.

 

(a)
Within fourteen (14) days after the Closing Date (or such later date as agreed to in writing by the Administrative Agent in its
sole discretion), Borrower shall deliver to Administrative Agent certain Mortgages and legal descriptions to Mortgages, in form
and substance satisfactory to the Administrative Agent, sufficient to cause the Recognized Value of the Mortgaged Properties to
be not less than the Required Reserve Value; and

 

(b)
Within thirty (30) days after the Closing Date (or such later date as agreed to in writing by the Administrative Agent in its
sole discretion), Borrower shall deliver to Administrative Agent certificates of the appropriate government officials of the State
of Tennessee, evidencing the existence and good standing of Carbon Appalachian Company, LLC and CAE.

 

    CREDIT AGREEMENT – Page 83 

     

    

 

ARTICLE
8

NEGATIVE COVENANTS

 

Each
Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding (other than contingent indemnification
obligations) or any Letter of Credit outstanding (unless arrangements satisfactory to the L/C Issuer have been made) or any Lender
has any Commitment hereunder:

 

Section
8.1 Debt. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly, incur, create, assume,
or permit to exist any Debt, except:

 

(a)
the Obligations under the Loan Documents and Obligations existing or arising under Bank Product Agreements other than Hedging
Agreements and Hedging Transactions;

 

(b)
existing Debt described on Schedule 8.1 and Permitted Refinancings thereof;

 

(c)
purchase money Debt and Capitalized Lease Obligations not to exceed $500,000 in the aggregate at any time outstanding and Permitted
Refinancings thereof;

 

(d)
Hedge Obligations existing or arising under Hedging Agreements and Hedging Transactions permitted by Section 8.17;

 

(e)
Debt associated with bonds or other surety obligations required by Governmental Authorities in connection with the operation of
the businesses of the Borrowing Parties;

 

(f)
Debt arising in the ordinary course of business with respect to customary indemnification and reimbursement obligations under
asset purchase and sale agreements, division and transfer orders, joint operating agreements (including funds held in suspense),
pooling, unitization or communitization agreements, gathering agreements, processing agreements, Farmout agreements and other
agreements customary in the industry pertaining to the exploration for, development, disposition or operation of, or the production
or sale of Hydrocarbons produced from, Oil and Gas Properties;

 

(g)
Endorsements for collection or deposit in the ordinary course of business;

 

(h)
Debt related to the financing of insurance policy premiums not to exceed $500,000 in the aggregate at any time outstanding; and

 

(i)
other Debt not to exceed $500,000 in the aggregate at any time outstanding.

 

Section
8.2 Limitation on Liens. No Borrower shall, nor shall any Borrower permit any Subsidiary to, incur, create, assume, or
permit to exist any Lien upon any of its Property, assets, or revenues, whether now owned or hereafter acquired, except:

 

(a)
existing Liens disclosed on Schedule 8.2 and Permitted Refinancings thereof;

 

(b)
Liens in favor of Administrative Agent for the benefit of the Secured Parties, so long as, with respect to Liens for the benefit
of Approved Commodity Swap Counterparties other than Bank Product Providers, such Liens are permitted by and subject to the Intercreditor
Agreement;

 

(c)
encumbrances consisting of minor easements, zoning restrictions, or other restrictions on the use of real property that are customary
in the oil and gas industry and do not (individually or in the aggregate) materially affect the value of the assets encumbered
thereby or materially impair the ability of any Borrower or its Subsidiaries to use or operate such assets in their respective
businesses, and none of which is violated in any material respect by existing or proposed structures or land use or operation;

 

(d)
Immaterial Title Deficiencies;

  

    CREDIT AGREEMENT – Page 84 

     

    

 

(e)
Liens for Taxes, assessments, or other governmental charges which are not delinquent or which are being contested in good faith
and for which adequate reserves in accordance with GAAP have been established;

 

(f)
any interest or title of, or Liens created by, a lessor under any leases or subleases or occupancy agreement, other than oil and
gas leases or other such instruments pertaining to Oil and Gas Properties, entered into in each case by any Borrower or any Subsidiary,
as tenant, in the ordinary course of business;

 

(g)
Liens of mechanics, materialmen, warehousemen, carriers, or other similar statutory Liens securing obligations that are not yet
due or are being contested in good faith and for which adequate reserves in accordance with GAAP have been established and are
incurred in the ordinary course of business;

 

(h)
Liens resulting from good faith deposits to secure payments of workmen's compensation or other social security programs (other
than Liens imposed by ERISA) or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, contracts
(other than for payment of Debt), or leases made in the ordinary course of business;

 

(i)
purchase money Liens on specific Property to secure Debt used to acquire such Property and Liens securing Capitalized Lease Obligations
with respect to specific leased Property, in each case to the extent permitted in Section 8.1(c);

 

(j)
so long as no default has occurred by any Obligated Party in the payment or performance of such agreements, contracts, agreements,
lease provisions, defects and irregularities which (i) were in effect when such Property, assets or revenues were acquired,
(ii) were not created in contemplation of such acquisition, (iii) were not such as to materially interfere with the operation,
value or use of the Properties covered by such Lien, (iv) are ordinary and customary to the oil, gas and other mineral exploration,
development, processing or extraction business, (v) do not otherwise cause any other express representation or warranty of
any Obligated Party in any of the Loan Documents to be untrue in any material respect, and (vi) do not operate to reduce
any Obligated Party's net revenue interest in production for the affected Oil and Gas Properties (if any) below such interests
reflected in the most recent Reserve Report, or increase the working interest for the affected Oil and Gas Properties (if any)
as reflected or warranted in the most recent Reserve Report without a corresponding increase in the corresponding net revenue
interest;

 

(k)
contractual Liens for the benefit of operators of the Oil and Gas Properties of any Borrower and its Subsidiaries, but only to
the extent that such operators are not Obligated Parties or Affiliates of Obligated Parties (unless such Obligated Parties or
Affiliates have subordinated such Liens to the Liens securing the Obligations in a manner satisfactory to Administrative Agent
and pursuant to documentation in form and substance reasonably satisfactory to Administrative Agent), and are not asserting a
claim or right to exercise their rights under such contractual Liens, except for such claims and rights of operators which a Borrower
or the applicable Subsidiary is contesting in good faith and for which adequate reserves are maintained in accordance with GAAP;

 

(l)
to the extent applicable, the statutory Lien to secure payment of proceeds of production established by § 9.343 of the UCC
and similar Laws of other jurisdictions;

 

    CREDIT AGREEMENT – Page 85 

     

    

 

(m)
royalties, overriding royalties, reversionary interests, production payments, net profits interests, calls on production, preferential
purchase rights and similar lease burdens which (i) are customarily granted in the ordinary course of business in the oil and
gas industry, (ii) are deducted in the calculation of discounted present value in the most recent Reserve Report delivered to
Administrative Agent hereunder, (iii) with respect to each Oil and Gas Property, do not operate to reduce any Obligated Party's
net revenue interest in production for such Oil and Gas Property (if any) below such interests reflected in the most recent Reserve
Report or increase the working interest for such Oil and Gas Property (if any) as reflected or warranted in the most recent Reserve
Report without a corresponding increase in the corresponding net revenue interest, and (iv) do not materially impair the use or
value of such Oil and Gas Property subject to such Lien;

 

(n)
contractual Liens under sale contracts, farm-in agreements, Farmout agreements, area of mutual interest, joint operating agreements,
or other arrangements for the exploration, development, production, transportation, gathering, processing or sale of Hydrocarbons,
and other agreements which are usual and customary in the oil and gas business which (i) would not (when considered cumulatively
with the matters discussed in Section 8.2(m)) materially impair the use or value of such Oil and Gas Property subject to
such Lien, (ii) are ordinary and customary to the oil, gas and other mineral exploration, development, processing or extraction
business, (iii) do not otherwise cause any other express representation or warranty of any Obligated Party in any of the
Loan Documents to be untrue in any material respect, and (iv) do not operate to reduce any Obligated Party's net revenue
interest in production for the affected Oil and Gas Properties (if any) below such interests reflected in the most recent Reserve
Report, or increase the working interest for the affected Oil and Gas Properties (if any) as reflected or warranted in the most
recent Reserve Report without a corresponding increase in the corresponding net revenue interest;

 

(o)
Gas Balancing Agreements; provided that the amount of all gas imbalances and the amount of all production which has been
paid for but not delivered shall have been disclosed or otherwise taken into account in the Reserve Reports delivered to Administrative
Agent hereunder;

 

(p)
Liens to secure plugging and abandonment obligations;

 

(q)
Liens granted by any Obligated Party on its rights under any insurance policy, 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; and

 

(r)
Other Liens securing Debt not to exceed $150,000 in the aggregate at any time outstanding;

 

provided,
however, that Liens described in clauses (a), (e), (g), (h), (j) and (o) above
shall continue to be permitted only for so long as (A) the appropriate Obligated Party shall cause any proceeding instituted contesting
such Lien to stay the sale or forfeiture of any portion of Property on account of such Lien and (B) a proper reserve, if applicable,
continues to be maintained in accordance with GAAP; and provided further, that no intention to subordinate the first
priority Liens granted in favor of Administrative Agent to secure the Obligations is hereby implied or expressed or is to be inferred
by the permitted existence of such Liens.

 

    CREDIT AGREEMENT – Page 86 

     

    

 

Section
8.3 Mergers, Etc. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly, become a
party to a merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets of any Person or any
Equity Interests or other evidence of beneficial ownership of any Person, or wind-up, dissolve, or liquidate, except that (a)
any Subsidiary may merge or consolidate with a Borrower so long as such Borrower is the surviving entity; (b) any Subsidiary may
merge or consolidate with another Subsidiary so long as the Subsidiary surviving the merger or consolidation (i) is a Guarantor,
or (ii) within 10 Business Days of such merger or consolidation, becomes a Guarantor pursuant to Section 7.13; and (c) as
otherwise permitted under Section 8.5.

 

Section
8.4 Restricted Payments. No Borrower shall, directly or indirectly, declare or pay any dividends or make any other payment
or distribution (in cash, Property, or obligations) on account of their respective Equity Interests, or redeem, purchase, retire,
call, or otherwise acquire any of their respective Equity Interests, nor permit any Subsidiary to purchase or otherwise acquire
any Equity Interest of a Borrower or another Subsidiary of a Borrower, or set apart any money for a sinking or other analogous
fund for any dividend or other distribution on its Equity Interests or for any redemption, purchase, retirement, or other acquisition
of any of its Equity Interests, or incur any obligation (contingent or otherwise) to do any of the foregoing, except that:

 

(a)
Subsidiaries shall be permitted to make payments and distributions to a Borrower or any Guarantor;

 

(b)
annually, Borrowers may make Permitted Tax Distributions, provided that no Default or Borrowing Base Deficiency exists
or will exist after giving effect to such distribution;

 

(c)
provided that (i) no Default or Event of Default exists or will exist after giving effect to such distribution and (ii)
after giving pro forma effect thereto, (A) the Leverage Ratio is not greater than 2.50 to 1.00 and (B) Utilization is less than
eighty-five percent (85.0%), in each case as evidenced by a certificate from a Responsible Officer of each Borrower delivered
to Administrative Agent five (5) Business Days' prior to the date of any such distribution, and provided further that Administrative
Agent has not delivered any written objection to Borrowers' pro forma calculations, a Borrower may:

 

(i)
declare and pay dividends with respect to its Equity Interests to any holder thereof; and

 

(ii)
quarterly, commencing as of January 1, 2019 through and including December 31, 2021, directly or indirectly, declare and pay dividends
with respect to its Equity Interests to CEC in an aggregate amount not to exceed the scheduled interest payments required to be
paid by CEC under the CEC Seller Note for such quarter; and

 

(iii)
monthly, commencing as of February 1, 2022 through and including the stated maturity date set forth in the CEC Seller Note, directly
or indirectly, declare and pay dividends with respect to its Equity Interests to CEC in an aggregate amount not to exceed the
scheduled principal and interest payments required to be paid by CEC under the CEC Seller Note for such month;

 

(d)
any Borrower may, directly or indirectly, make a one-time distribution with respect to its Equity Interests to CEC in an aggregate
amount not to exceed $33,000,000 on the Closing Date to fund, in part, the CAC Acquisition; and

 

(e)
provided that (i) no Default or Event of Default exists or will exist after giving effect to such distribution and (ii)
after giving pro forma effect thereto, Revolving Credit Availability is greater than or equal to $5,000,000, within sixty (60)
days after the Closing Date, any Borrower may, directly or indirectly, make one or more distributions with respect to its Equity
Interests to CEC in an aggregate amount not to exceed $2,000,000 to prepay a portion of the indebtedness under the CEC Seller
Note.

 

    CREDIT AGREEMENT – Page 87 

     

    

 

Section
8.5 Loans and Investments. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly,
to make, hold or maintain, any advance, loan, extension of credit, or capital contribution to or investment in, or purchase any
stock, bonds, notes, debentures, or other securities of, any Person, except:

 

(a)
existing investments described on Schedule 8.5 (including existing investments in Excluded Subsidiaries);

 

(b)
readily marketable direct obligations of the United States of America or any agency thereof with maturities of one year or
less from the date of acquisition;

 

(c)
fully insured certificates of deposit with maturities of one year or less from the date of acquisition issued by either (i) any
commercial bank operating in the United States of America having capital and surplus in excess of $50,000,000.00 or (ii) any
Lender;

 

(d)
commercial paper of a domestic issuer if at the time of purchase such paper is rated in one of the two highest rating categories
of Standard and Poor's Corporation or Moody's Investors Service;

 

(e)
investments resulting in an Acquisition where:

 

(i)
the business, division or assets acquired are for use, or the Person acquired is engaged in, one of the businesses described in
Section 6.25;

 

(ii)
immediately before and after giving effect to such Acquisition, no Default shall exist;

 

(iii)
the business, division or Person acquired shall not have a negative EBITDAX after giving effect to reasonable pro forma adjustments
which are approved by Administrative Agent;

 

(iv)
no less than 10 Business Days prior to such Acquisition, Administrative Agent shall have received (A) drafts of each material
document, instrument and agreement to be executed in connection with such Acquisition, (B) an acquisition summary with respect
to the Person and/or business or division to be acquired, such summary to include a reasonably detailed description thereof (including
financial information) and operating results (including financial statements for the most recent 12-month period for which they
are available and as otherwise applicable), the terms and conditions, including economic terms, of the proposed Acquisition and
Borrowers' calculation of pro forma EBITDAX relating thereto, (C) a certificate of Borrowers executed on its behalf by a
Responsible Officer of each Borrower, certifying that both before and after giving effect to such Acquisition, Borrowers are in
pro forma compliance with all financial covenants set forth in Article 9; and (D) Administrative Agent shall
have approved Borrowers' computation of pro forma EBITDAX;

 

    CREDIT AGREEMENT – Page 88 

     

    

 

(v)
to the extent applicable, the provisions of Section 7.13 have been satisfied, thereby causing Administrative Agent
to have a perfected first priority Lien (subject to Permitted Liens) on all assets, including Equity Interests, that are acquired
in the Acquisition; and

 

(vi)
after giving effect to such Acquisition, the sum of unrestricted cash of Borrowers plus Revolving Credit Availability shall be
at least $500,000;

 

(f)
investments in Subsidiaries that are Guarantors;

 

(g)
investments consisting of direct ownership interests in Oil and Gas Properties or wells, gas gathering systems or other field
facilities, seismic data and surveys, in each case related to such Oil and Gas Properties, or related to Farmouts or farm-ins,
participation agreements, joint operating agreements, joint venture or area of mutual interest agreements or other similar arrangements
which are usual and customary in the oil and gas industry located within the geographic boundaries of the United States of America;
provided that (i) no such investment includes an investment in any Equity Interest in a Person, (ii) any Debt incurred or assumed
or Lien granted or permitted to exist pursuant to such investments is otherwise permitted under Section 8.1 and Section
8.2, respectively, and (iii) such investments are taken into account in computing the working interests and net revenue interests
set forth in the most recent Reserve Report;

 

(h)
investments consisting of Hedging Transactions permitted under Section 8.17;

 

(i)
advances or extensions of credit in the form of accounts receivable incurred in the ordinary course of business and upon terms
common in the industry for such accounts receivable which are not more than 90 days past due;

 

(j)
advances to employees for the payment of expenses in the ordinary course of business

 

(k)
investments received in satisfaction or partial satisfaction of Investments described in clause (i) above from financially troubled
account debtors to the extent reasonably necessary in order to prevent or limit loss, provided that all such Investments under
this clause (k) shall not exceed $100,000 in the aggregate outstanding at any one time;

 

(l)
additional investments in the Excluded Subsidiaries, so long as (i) no Default or Event of Default exists or will exist after
giving effect to such additional investments and (ii) after giving pro forma effect thereto, (A) the Leverage Ratio is not greater
than 2.75 to 1.00 and (B) Utilization is less than eighty-five percent (85.0%), in each case as evidenced by a certificate from
a Responsible Officer of each Borrower delivered to Administrative Agent five (5) Business Days' prior to the date of any such
additional investments, and provided that Administrative Agent has not delivered any written objection to Borrowers' pro
forma calculations; and

 

(m)
other Investments not otherwise permitted by the foregoing clauses in an amount not to exceed $250,000 in the aggregate outstanding
at any one time.

 

Section
8.6 Limitation on Issuance of Equity. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly,
issue or Dispose of any of its Equity Interests other than (i) to a Borrower or another Subsidiary and only if such Equity Interests
are pledged to the Administrative Agent consistent with the Security Documents, or (ii) issuance of Equity Interests in connection
with distributions permitted by Section 8.4(c).

 

    CREDIT AGREEMENT – Page 89 

     

    

 

Section
8.7 Transactions With Affiliates. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly,
enter into any transaction, including, without limitation, the purchase, sale, or exchange of Property, the rendering of any service
or the payment of any management, advisory or similar fees, with any Affiliate of such Borrower or such Subsidiary, except in
the ordinary course of and pursuant to the reasonable requirements of such Borrower's or such Subsidiary's business, pursuant
to a transaction which is otherwise not prohibited under this Agreement, and upon fair and reasonable terms no less favorable
to such Borrower or such Subsidiary than would be obtained in a comparable arm's-length transaction with a Person not an Affiliate
of such Borrower or such Subsidiary.

 

Section
8.8 Disposition of Assets. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly,
make any Disposition, except:

 

(a)
Dispositions of inventory (including Hydrocarbons) in the ordinary course of business;

 

(b)
Dispositions, for fair value, of worn-out and obsolete equipment not necessary or useful to the conduct of business;

 

(c)
Dispositions consisting of any compulsory pooling or unitization ordered by a Governmental Authority with jurisdiction over any
Borrower's or any of its Subsidiaries' Oil and Gas Properties;

 

(d)
Dispositions of unproved Oil and Gas Properties;

 

(e)
Dispositions to another Borrowing Party;

 

(f)
subject to Section 2.9(c)(ii) and provided no Default has occurred and is continuing or would result therefrom, Dispositions
of proved developed Oil and Gas Properties; provided that (i) all of the consideration received in respect of any
such Disposition shall be cash, (ii) the consideration received shall be equal to or greater than the fair market value thereof
(as reasonably determined by a Responsible Officer of the applicable Borrower, and if requested by Administrative Agent, such
Borrower shall deliver a certificate of a Responsible Officer of such Borrower certifying to that effect), (iii) to the extent
required pursuant to Section 2.9(c)(ii), the Borrowing Base shall be automatically reduced in accordance therewith and
the Borrowers shall make any prepayments required under Section 2.8(c), and (iv) the net cash proceeds from such Disposition
shall be sufficient to cover any resulting Borrowing Base Deficiency; and

 

(g)
other Dispositions not to exceed $1,000,000 in the aggregate in any fiscal year.

 

Section
8.9 Sale and Leaseback. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly, enter
into any arrangement with any Person pursuant to which it leases from such Person real or personal Property that has been or is
to be sold or transferred, directly or indirectly, by it to such Person.

 

Section
8.10 Prepayment of Debt. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly, make
any optional or voluntary payment, prepayment, repurchase or redemption of any Debt, except (a) the Obligations under the
Loan Documents, (b) Debt secured by a Permitted Lien if the asset securing such Debt has been sold or otherwise disposed
of in a transaction permitted hereunder, (c) a Permitted Refinancing of Debt permitted under Sections 8.1(b) and 8.1(c),
(d) prepayments of other Debt so long as the amounts prepaid do not exceed $250,000 in the aggregate during any period between
determinations of the Borrowing Base, and (e) prepayment of intercompany Debt to Obligated Parties.

 

    CREDIT AGREEMENT – Page 90 

     

    

 

Section
8.11 Nature of Business. No Borrower shall, nor shall any Borrower permit any Subsidiary to, engage in any business other
than their businesses involving oil and gas exploration and production, transportation and marketing of Hydrocarbons. Borrowers
shall not, and shall not permit any Subsidiary to, make any material change in its credit collection policies if such change would
materially impair the collectability of any Account, nor will it rescind, cancel or modify any Account except in the ordinary
course of business.

 

Section
8.12 Environmental Protection. No Borrower shall, nor shall any Borrower permit any Subsidiary to, directly or indirectly
(a) use (or permit any tenant to use) any of their respective Properties or assets for the handling, processing, storage,
transportation, or disposal of any Hazardous Material in material violation of Environmental Laws, (b) generate any Hazardous
Material in material violation of Environmental Laws, (c) conduct any activity that is likely to cause a Release or threatened
Release of any Hazardous Material, or (d) otherwise conduct any activity or use any of their respective Properties or assets
in any manner that is likely to violate in any material respect any Environmental Law or create any material Environmental Liabilities
for which any Borrower or any Subsidiary would be responsible.

 

Section
8.13 Accounting. No Borrower shall, nor shall any Borrower permit any Subsidiary to, change its fiscal year or make any
change (a) in accounting treatment or reporting practices, except as required by GAAP and disclosed to Administrative Agent
and Lenders, or (b) in tax reporting treatment, except as required by Law and disclosed to Administrative Agent and Lenders.

 

Section
8.14 Burdensome Agreements. No Borrower shall, nor shall any Borrower permit any Subsidiary or any other Obligated Party
to, enter into or permit to exist any arrangement or agreement, other than pursuant to this Agreement or any Loan Document, which
(a) directly or indirectly prohibits a Borrower, any of its Subsidiaries, or any other Obligated Party from creating or incurring
a Lien on any of its Property, revenues, or assets, whether now owned or hereafter acquired, (b) directly or indirectly prohibits
any of its Subsidiaries, or any other Obligated Party to make any payments, directly or indirectly, to such Borrower by way of
dividends, distributions, advances, repayments of loans, repayments of expenses, accruals, or otherwise or (c) in any way
would be contravened by such Person's performance of its obligations hereunder or under the other Loan Documents; provided,
that the foregoing shall not prohibit any (i) provisions restricting subletting or assignment of any lease, (ii) provisions in
any assignment, lease, easement, permit, license, deed or other agreement or instrument restricting or prohibiting assignment
of such agreement or instrument or rights created, or property conveyed or assigned, thereunder, including, without limitation,
preferential purchase rights and consent requirements, and (iii) customary restrictions and conditions contained in any agreement
relating to the sale of any property permitted under this Agreement pending the consummation of such sale.

 

Section
8.15 Subsidiaries. No Borrower shall, directly or indirectly, form or acquire any Subsidiary unless such Borrower complies
with the requirements of Section 7.13.

 

Section
8.16 Amendments of Constituent Documents and Material Agreements. No Borrower shall, nor shall any Borrower permit any
Subsidiary to, (i) amend or restate any of their respective Constituent Documents without prior consent of the Administrative
Agent, except as would not be reasonably expected to be materially adverse to the Lenders, and (ii) amend or restate any agreement
or contract of which such Obligated Party is a party that could reasonably result in a Material Adverse Event.

 

    CREDIT AGREEMENT – Page 91 

     

    

 

Section
8.17 Hedging Agreements and Transactions.

 

(a)
No Borrower shall, nor shall any Borrower permit any Subsidiary to, enter into any Hedging Transactions (other than, with respect
to clause (a)(i) below, puts and floors), except:

 

(i)
Commodity Hedging Transactions entered into with the purpose and effect of fixing prices on oil and gas expected to be produced
by the Obligated Parties, provided that at all times (A) no such contract fixes a price for a term of more than 36 months;
and (B) the aggregate monthly production covered by all such contracts (as determined, in the case of contracts that are not settled
on a monthly basis, by a monthly proration acceptable to Administrative Agent) for any single month does not in the aggregate
exceed 90% of the Obligated Parties' aggregate Projected Production anticipated to be sold in the ordinary course of the Obligated
Parties' business for such month; and

 

(ii)
Rate Management Transactions entered into by a Borrower and its Subsidiaries with the purpose and effect of fixing interest rates
on a principal amount of indebtedness of such Borrower and its Subsidiaries that is accruing interest at a variable rate; provided
that (A) the term does not extend past the Maturity Date, (B) the aggregate notional amount of such contracts never exceeds
75% of the anticipated outstanding principal balance of the indebtedness to be hedged by such contracts or an average of such
principal balances calculated by using a generally accepted method of matching interest swap contracts to declining principal
balances, and (C) the floating rate index of each such contract generally matches the index used to determine the floating rates
of interest on the corresponding indebtedness to be hedged by such contract.

 

(b)
No Hedging Transactions or Rate Management Transactions entered into by a Borrowing Party shall (i) require any Obligated Party
to put up money, assets, or other security (other than Letters of Credit or Collateral under the Loan Documents) against the event
of its nonperformance prior to actual default by such Obligated Party in performing its obligations thereunder, or (ii) be with
any party that is not an Approved Commodity Swap Counterparty.

 

Section
8.18 Gas Balancing Agreements and Advance Payment Contracts. No Borrower shall, nor shall any Borrower permit any Subsidiary
to, directly or indirectly, incur, become or remain liable for, at any time (a) any Material Gas Imbalance, or (b) Advance
Payments under Advance Payment Contracts which are to be satisfied by delivery of production in excess of $500,000 in the aggregate.

 

Section
8.19 Certain Accounts Payable. For each well whose reserves or projected cash flow are from time to time included in any
Reserve Report, there shall be no accounts payable outstanding more than 90 days after the due date under or in connection with
an authorization for expenditure that are associated with such well, other than those that are being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP have been established.

 

Section
8.20 Use of Proceeds. No Borrower will request any Credit Extension, or use, nor permit any Subsidiary and its or their
respective directors, officers, employees and agents to use, the proceeds of any Credit Extension, (a) directly or indirectly,
to purchase or carry margin stock (within the meaning of Regulations T, U, or X of the Board of Governors), (b) 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, (c) for the purpose of funding, financing or facilitating any activities, business
or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (d) in any manner that would result in
the violation of any Sanctions applicable to any party hereto.

 

    CREDIT AGREEMENT – Page 92 

     

    

 

Section
8.21 Joint Operating Agreements. No Borrower shall, nor shall any Borrower permit any Subsidiary to, amend, restate, supplement
or otherwise modify, or elect a new operator under, any joint operating agreement covering any of the Oil and Gas Properties of
such Borrower or any of its Subsidiaries in a manner materially adverse to such Borrower or such Subsidiary without the prior
written consent of Administrative Agent.

 

Section
8.22 Excluded Subsidiaries. No Borrower shall permit any Excluded Subsidiary to (i) (other than Crawford Company) directly
or indirectly, incur, create, assume, or permit to exist (A) any Debt, or (B) any Lien upon any of its Property, assets, or revenues,
whether now owned or hereafter acquired, except for those permitted by the Administrative Agent in its sole discretion, or (ii)
own any Oil and Gas Properties included in the determination of the Borrowing Base.

 

Section
8.23 State and FERC Regulation. Except in the ordinary course of business (to the extent that Administrative Agent receives
notice within five (5) Business Days thereof), no Borrower shall, nor shall any Borrower permit any Subsidiary to, take any action
which could cause any Borrower's or any Subsidiary's business that is not already so regulated or treated to be (a) regulated
as a "utility", "public utility" or a "gas utility" by any State Pipeline Regulatory Agency; (b)
deemed to be providing any service that would require the prior approval of any State Pipeline Regulatory Agency in order to discontinue
or abandon such service; (c) within the meaning of the regulations of any State Pipeline Regulatory Agency be deemed to be
charging a "residential rate" or "commercial rate"; or (d) subject to FERC jurisdiction.

 

ARTICLE
9

FINANCIAL COVENANTS

 

Each
Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding or any Letter of Credit shall
remain outstanding or any Lender has any Commitment hereunder:

 

Section
9.1 Leverage Ratio. Borrowers shall not permit, as of the last day of any Test Period, commencing with the Test Period
ending March 31, 2019, the Leverage Ratio for the Borrowing Parties, on a combined and consolidated basis, to be greater than
3.50 to 1.00.

 

Section
9.2 Current Ratio. Borrowers shall not permit, as of the last day of any fiscal quarter of CAE, commencing with the fiscal
quarter ending March 31, 2019, the Current Ratio for the Borrowing Parties, on a combined and consolidated basis, to be less than
1.00 to 1.00.

 

    CREDIT AGREEMENT – Page 93 

     

    

 

ARTICLE
10

DEFAULT

 

Section
10.1 Events of Default. Each of the following shall be deemed an "Event of Default":

 

(a)
Borrowers shall fail to pay the Obligations under the Loan Documents or any part thereof shall not be paid when due or declared
due and, other than with respect to payments of principal, such failure shall continue unremedied for three (3) Business
Days after such payment became due;

 

(b)
any Borrower shall breach any provision of Sections 7.1, 7.2, 7.5, 7.6, 7.13, or 7.15
or Article 8 or Article 9 of this Agreement and in the case of a breach of Section 7.1(i),
(k), or (l), such breach shall continue unremedied for three (3) Business Days;

 

(c)
any representation or warranty made or deemed made by a Borrower or any other Obligated Party (or any of their respective officers)
in any Loan Document or the Intercreditor Agreement or in any certificate, report, notice, or financial statement furnished at
any time in connection with this Agreement shall be false, misleading, or erroneous in any material respect (without duplication
of any materiality qualifier contained therein) when made or deemed to have been made;

 

(d)
any Borrower, any Subsidiary, or any other Obligated Party shall fail to perform, observe, or comply with any covenant, agreement,
or term contained in this Agreement or any other Loan Document (other than as covered by Sections 10.1(a) and 10.1(b))
or the Intercreditor Agreement, and such failure continues for more than 30 consecutive days following the earlier of (i) the
date of Borrowers' receipt of written notice thereof or (ii) the date any Borrower knew or should have known of such failure;

 

(e)
any Borrower, any Subsidiary, or any other Obligated Party shall commence a voluntary proceeding seeking liquidation, reorganization,
or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar Law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or a substantial
part of its Property or shall consent to any such relief or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it or shall make a general assignment for the benefit of creditors or
shall generally fail to pay its debts as they become due or shall take any corporate action to authorize any of the foregoing;

 

(f)
an involuntary proceeding shall be commenced against any Borrower, any Subsidiary, or any other Obligated Party seeking liquidation,
reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency, or other similar Law now or
hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official for it
or a substantial part of its Property, and such involuntary proceeding shall remain undismissed and unstayed for a period of 60
days;

 

(g)
any Borrower, any Subsidiary, or any other Obligated Party shall fail to pay when due any principal of or interest on any Debt
(other than the Obligations under the Loan Documents and Hedging Agreements with Bank Product Providers) in the amount of the
Threshold Amount or more beyond any applicable grace or cure period, or the maturity of any such Debt shall have been accelerated,
or any such Debt shall have been required to be prepaid, repurchased, defeased or redeemed prior to the stated maturity thereof
or any cash collateral in respect thereof to be demanded, or any event shall have occurred that permits (or, with the giving of
notice or lapse of time or both, would permit) any holder or holders of such Debt or any Person acting on behalf of such holder
or holders to accelerate the maturity thereof or require any such prepayment, repurchase, defeasance or redemption or any cash
collateral in respect thereof to be demanded;

 

(h)
there shall occur an Early Termination Date (as defined in a Hedging Agreement) under any Hedging Agreement to which any Obligated
Party is a party, and the Hedge Termination Value, if any, owed by a Borrower or another Obligated Party as a result thereof exceeds
the Threshold Amount;

 

    CREDIT AGREEMENT – Page 94 

     

    

 

(i)
this Agreement, any other Loan Document or the Intercreditor Agreement shall cease to be in full force and effect or shall be
declared null and void or the validity or enforceability thereof shall be contested or challenged by any Borrower, any Subsidiary,
any other Obligated Party or any of their respective equity holders, or any Borrower or any other Obligated Party shall deny that
it has any further liability or obligation under any of the Loan Documents or the Intercreditor Agreement, or any Lien created
by the Loan Documents shall for any reason cease to be a valid, first priority perfected Lien (subject to Permitted Liens) upon
any of the Collateral purported to be covered thereby;

 

(j)
any of the following events shall occur or exist with respect to any Borrower or any ERISA Affiliate: (i) any ERISA Event
occurs with respect to a Plan or Multiemployer Plan, or (ii) any Prohibited Transaction involving any Plan; and in each case
above, such event or condition, together with all other events or conditions, if any, have subjected or could in the reasonable
opinion of Administrative Agent subject a Borrower or any ERISA Affiliate to any tax, penalty, or other liability to a Plan, a
Multiemployer Plan, the PBGC, the IRS, the U. S. Department of Labor, or otherwise (or any combination thereof) which in the aggregate
exceed or could reasonably be expected to result in a Material Adverse Event;

 

(k)
a Change of Control shall occur;

 

(l)
any Borrower, any Subsidiary, or any other Obligated Party, or any of their Properties, revenues, or assets, shall become subject
to an order of forfeiture, seizure, or divestiture (whether under RICO or otherwise) and the same shall not have been discharged
within 30 days from the date of entry thereof;

 

(m)
any Borrower, any Subsidiary, or any other Obligated Party shall fail to discharge within a period of 60 days after the commencement
thereof any attachment, sequestration, or similar proceeding or proceedings involving an aggregate amount in excess of the Threshold
Amount against any of its assets or Properties;

 

(n)
a final judgment or judgments for the payment of money in excess of the Threshold Amount in the aggregate shall be rendered by
a court or courts against any Borrower, any Subsidiary, or any other Obligated Party and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 60 days from the
date of entry thereof and such Borrower, such Subsidiary, or such Obligated Party shall not, within such period of 60 days, or
such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof
to be stayed during such appeal;

 

(o)
any failure to cure a Borrowing Base Deficiency in accordance with Section 2.9(e) shall have occurred; and

 

(p)
any Security Document shall cease to create valid perfected first priority Liens (subject to Permitted Liens) on the Collateral
purported to be covered thereby.

 

    CREDIT AGREEMENT – Page 95 

     

    

 

Section
10.2 Remedies Upon Default. If any Event of Default shall occur and be continuing, then Administrative Agent may, with
the consent of Majority Lenders, or shall, at the direction of Majority Lenders, without notice do any or all of the following:
(a) terminate the Commitments (except with respect to funding obligations for outstanding Letters of Credit), (b) terminate
the obligations of L/C Issuer to make L/C Credit Extensions, (c) require that Borrowers Cash Collateralize the L/C Obligations
(in an amount equal to the Minimum Collateral Amount with respect thereto), or (d) declare the Obligations under the Loan
Documents or any part thereof to be immediately due and payable, and the same shall thereupon become immediately due and payable,
without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent
to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by each Borrower; provided,
however, that upon the occurrence of an Event of Default under Section 10.1(e) or 10.1(f), the Commitments
shall automatically terminate (except for funding obligations with respect to outstanding Letters of Credit), the obligations
of L/C Issuer to make L/C Credit Extensions shall automatically terminate, the obligation of Borrowers to Cash Collateralize the
L/C Obligations as aforesaid shall automatically become effective, and the Obligations under the Loan Documents shall become immediately
due and payable, in each case without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent
to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived
by each Borrower. In addition to the foregoing, if any Event of Default shall occur and be continuing, Administrative Agent may,
with the consent of Majority Lenders, or shall, at the direction of Majority Lenders, exercise all rights and remedies available
to it, Lenders and L/C Issuer in law or in equity, under the Loan Documents, or otherwise.

 

Section
10.3 Application of Funds. After the exercise of remedies provided for in Section 10.2 (or after the Loans
have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by
Administrative Agent in the following order, subject to the Intercreditor Agreement:

 

First,
to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges
and disbursements of counsel to Administrative Agent) payable to Administrative Agent in its capacity as such;

 

Second,
to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest,
and Letter of Credit Fees) payable to Lenders and L/C Issuer (including fees, charges and disbursements of counsel to the respective
Lenders and L/C Issuer) arising under the Loan Documents, ratably among them in proportion to the respective amounts described
in this clause Second payable to them;

 

Third,
to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans,
L/C Borrowings and other Obligations arising under the Loan Documents, ratably among Lenders and L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;

 

Fourth,
to payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings and constituting unpaid
Bank Product Obligations, ratably among Lenders and Bank Product Providers in proportion to the respective amounts described in
this clause Fourth held by them;

 

Fifth,
to Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of
the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by Borrowers pursuant to Sections
2.2 and 2.6;

 

Sixth,
to payment of that remaining portion of the Obligations, ratably among the Lenders and Bank Product Providers in proportion to
the respective amounts described in this clause Sixth held by them; and

 

Last,
the balance, if any, after all of the Obligations have been indefeasibly paid in full, to Borrowers or as otherwise required by
Law.

 

    CREDIT AGREEMENT – Page 96 

     

    

 

Notwithstanding
the foregoing, Bank Product Obligations shall be excluded from the application described above if Administrative Agent has not
received written notice thereof, together with supporting documentation as Administrative Agent may request from the applicable
Bank Product Provider, provided that no such notice shall be required for any Bank Product Agreement for which Administrative
Agent or any Affiliate of Administrative Agent is the applicable Bank Product Provider. Each Bank Product Provider that is not
a party to this Agreement that has given notice contemplated by the preceding sentence shall, by such notice, be deemed to have
acknowledged and accepted the appointment of Administrative Agent pursuant to the terms of Article 11 hereof for itself
and its Affiliates as if a "Lender" party hereto.

 

Section
10.4 Performance by Administrative Agent. If any Borrower shall fail to perform any covenant or agreement contained in
any of the Loan Documents or the Intercreditor Agreement, then Administrative Agent may perform or attempt to perform such covenant
or agreement on behalf of such Borrower. In such event, Borrowers shall, at the request of Administrative Agent, promptly pay
to Administrative Agent any amount expended by Administrative Agent in connection with such performance or attempted performance,
together with interest thereon at the Default Interest Rate from and including the date of such expenditure to but excluding the
date such expenditure is paid in full. Notwithstanding the foregoing, it is expressly agreed that Administrative Agent shall not
have any liability or responsibility for the performance of any covenant, agreement, or other obligation of any Borrower under
this Agreement, any other Loan Document or the Intercreditor Agreement.

 

ARTICLE
11

AGENCY

 

Section
11.1 Appointment and Authority.

 

(a)
Each of the Lenders and L/C Issuer hereby irrevocably appoints LegacyTexas Bank to act on its behalf as Administrative Agent hereunder
and under the other Loan Documents and the Intercreditor Agreement and authorizes Administrative Agent to take such actions on
its behalf and to exercise such powers as are delegated to Administrative Agent by the terms hereof or thereof, together with
such actions and powers as are reasonably incidental thereto, and each of the Lenders and L/C Issuer hereby approves the terms
and conditions of the Intercreditor Agreement and authorizes Administrative Agent to enter into the Intercreditor Agreement and
amendments thereto from time to time. The provisions of this Article 11 are solely for the benefit of Administrative
Agent, Lenders, and L/C Issuer, and none of Borrowers or any other Obligated Party shall have rights as a third-party beneficiary
of any of such provisions. It is understood and agreed that the use of the term "agent" herein or in any other Loan
Documents or in the Intercreditor Agreement (or any other similar term) with reference to Administrative Agent is not intended
to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead
such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between
contracting parties.

 

    CREDIT AGREEMENT – Page 97 

     

    

 

(b)
Administrative Agent shall also act as the "collateral agent" under the Loan Documents and the Intercreditor Agreement,
and each of the Lenders (including, for itself and its Affiliates, in their capacities as potential Bank Product Providers) and
L/C Issuer hereby irrevocably appoints and authorizes Administrative Agent to act as the agent of such Lender and L/C Issuer for
purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Obligated Parties to secure
any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, Administrative
Agent, as "collateral agent" and any co-agents, sub-agents and attorneys-in-fact appointed by Administrative Agent pursuant
to Section 11.5 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under
the Security Documents, or for exercising any rights and remedies thereunder at the direction of Administrative Agent, shall be
entitled to the benefits of all provisions of this Article 11 and Article 12 (including Section 12.1(b)),
as though such co-agents, sub-agents and attorneys-in-fact were the "collateral agent" under the Loan Documents and
the Intercreditor Agreement as if set forth in full herein with respect thereto.

 

Section
11.2 Rights as a Lender. The Person serving as Administrative Agent hereunder shall have the same rights and powers in
its capacity as a Lender as any other Lender and may exercise the same as though it were not Administrative Agent, and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as Administrative Agent hereunder in its individual capacity. Such Person 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 business with, any Borrower or any Subsidiary or other Affiliate thereof as if such Person were not Administrative
Agent hereunder and without any duty to account therefor to Lenders.

 

Section
11.3 Exculpatory Provisions.

 

(a)
Administrative Agent shall not have any duties or obligations except those expressly set forth herein, in the other Loan Documents
and in the Intercreditor Agreement, and its duties hereunder shall be administrative in nature. Without limiting the generality
of the foregoing, Administrative Agent:

 

(i)
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(ii)
shall not have any 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 or the Intercreditor Agreement that Administrative Agent is
required to exercise as directed in writing by Majority Lenders (or such other number or percentage of Lenders as shall be expressly
provided for herein or in the other Loan Documents) or is required to exercise as directed in writing by any other party to the
Intercreditor Agreement, as applicable; provided that Administrative Agent shall not be required to take any action that,
in its opinion or upon the advice of its counsel, may expose Administrative Agent to liability or that is contrary to any Loan
Document, the Intercreditor Agreement or applicable Law, including for the avoidance of doubt any action that may be in violation
of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of
a Defaulting Lender in violation of any Debtor Relief Law;

 

(iii)
shall not, except as expressly set forth herein and in the other Loan Documents and the Intercreditor Agreement, have any duty
to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower or any of their Affiliates
that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity; and

 

    CREDIT AGREEMENT – Page 98 

     

    

 

(iv)
shall be fully justified in failing or refusing to take any action hereunder or under any other Loan Document or the Intercreditor
Agreement unless it shall first be indemnified to its satisfaction by Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such action.

 

(b)
Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of
Majority Lenders (or such other number or percentage of Lenders as shall be necessary, or as Administrative Agent shall believe
in good faith shall be necessary, under the circumstances as provided in Sections 10.2 and 11.9), or (ii) in
the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and
nonappealable judgment. SUCH LIMITATION OF LIABILITY SHALL APPLY REGARDLESS OF WHETHER THE LIABILITY ARISES FROM THE SOLE,
CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF ADMINISTRATIVE AGENT. Administrative Agent shall be deemed not to have
knowledge of any Default unless and until notice describing such Default is given to Administrative Agent in writing by a Borrower,
a Lender or L/C Issuer.

 

(c)
Neither Administrative Agent nor any Related Party thereof shall 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, any other Loan Document or the
Intercreditor Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder
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 therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness
or genuineness of this Agreement, any other Loan Document, the Intercreditor Agreement or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article 5 or elsewhere herein, other than to confirm receipt
of items expressly required to be delivered to Administrative Agent.

 

Section
11.4 Reliance by Administrative Agent. 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 (including any electronic
message, internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person. Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Credit Extension that by its terms must be fulfilled to
the satisfaction of a Lender or L/C Issuer, Administrative Agent may presume that such condition is satisfactory to such Lender
or L/C Issuer unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such
Loan. Administrative Agent may consult with legal counsel (who may be counsel for a 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.

 

Section
11.5 Delegation of Duties. Administrative Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document or the Intercreditor Agreement by or through any one or more sub agents appointed by
Administrative Agent. Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights
and powers by or through their respective Related Parties. The exculpatory provisions of this Article 11 shall apply
to any such sub agent and to the Related Parties of Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of this facility as well as activities as Administrative Agent. Administrative Agent
shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction
determines in a final and non-appealable judgment that Administrative Agent acted with gross negligence or willful misconduct
in the selection of such sub agents.

 

    CREDIT AGREEMENT – Page 99 

     

    

 

Section
11.6 Resignation of Administrative Agent.

 

(a)
Administrative Agent may at any time give notice of its resignation to Lenders, L/C Issuer, and Borrowers. Upon receipt of any
such notice of resignation, Majority Lenders shall have the right, in consultation with Borrowers (so long as no Event of Default
has occurred and is continuing), to appoint a successor, which shall be a bank with an office in Dallas, Texas, or an Affiliate
of any such bank with an office in Dallas, Texas. If no such successor shall have been so appointed by Majority Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such
earlier day as shall be agreed by Majority Lenders) (such date, the "Resignation Effective Date"), then the retiring
Administrative Agent may (but shall not be obligated to), on behalf of Lenders and L/C Issuer, appoint a successor Administrative
Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become
effective in accordance with such notice on the Resignation Effective Date. After the Resignation Effective Date, the provisions
of this Article 11 relating to or indemnifying or releasing Administrative Agent shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement, the other Loan Documents
and the Intercreditor Agreement.

 

(b)
If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof,
Majority Lenders may, to the extent permitted by applicable Law, by notice in writing to Borrowers and such Person remove such
Person as Administrative Agent and, in consultation with Borrowers, appoint a successor. If no such successor shall have been
so appointed by Majority Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed
by Majority Lenders) (such date, the "Removal Effective Date"), then such removal shall nonetheless become effective
in accordance with such notice on the Removal Effective Date.

 

(c)
With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed
Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and the
Intercreditor Agreement (except that in the case of any Collateral held by Administrative Agent on behalf of Secured Parties under
any of the Loan Documents or the Intercreditor Agreement, the retiring or removed Administrative Agent shall continue to hold
such Collateral until such time as a successor Administrative Agent is appointed or a different Person is appointed to serve as
collateral agent pursuant to the terms of the Intercreditor Agreement) and (ii) except for any indemnity, fee or expense
payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be
made by, to or through Administrative Agent shall instead be made by or to each Lender or L/C Issuer, as applicable, directly,
until such time, if any, as Majority Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity
payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan Documents or the Intercreditor Agreement. The fees payable
by Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed
between Borrowers and such successor. After the retiring or removed Administrative Agent's resignation or removal hereunder and
under the other Loan Documents and the Intercreditor Agreement, the provisions of this Article 11, Section 12.1,
and Section 12.2 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub
agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring
or removed Administrative Agent was acting as Administrative Agent.

 

    CREDIT AGREEMENT – Page 100 

     

    

 

(d)
Any resignation by LegacyTexas Bank as Administrative Agent pursuant to this Section shall also constitute its resignation as
L/C Issuer. If LegacyTexas Bank resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of L/C
Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and
all L/C Obligations with respect thereto, including the right to require Revolving Credit Lenders to make Revolving Credit Loans
or fund risk participations in Unreimbursed Amounts pursuant to Section 2.2(c). Upon the appointment by Borrowers
of a successor L/C Issuer hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (i) such
successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer,
(ii) the retiring L/C Issuer shall be discharged from all of its duties and obligations hereunder or under the other Loan
Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or make other arrangements satisfactory to LegacyTexas Bank to effectively assume
the obligations of LegacyTexas Bank with respect to such Letters of Credit.

 

Section
11.7 Non-Reliance on Administrative Agent and Other Lenders. Each of the Lenders and L/C Issuer expressly acknowledges
that neither Administrative Agent nor any other Lender nor any Related Party thereto has made any representation or warranty to
such Person and that no act by Administrative Agent or any other Lender hereafter taken, including any review of the affairs of
Borrowers, shall be deemed to constitute any representation or warranty by Administrative Agent or any Lender to any other Lender.
Each of the Lenders and L/C Issuer acknowledges that it has, independently and without reliance upon Administrative Agent or any
other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each of the Lenders and L/C Issuer also acknowledges that it will,
independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties 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, the Intercreditor Agreement or any related agreement
or any document furnished hereunder or thereunder. Except for notices, reports and other documents expressly required to be furnished
to the Lenders by Administrative Agent hereunder, Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise),
or creditworthiness of Borrowers or the value of the Collateral or other Properties of Borrowers or any other Person which may
come into the possession of Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

    CREDIT AGREEMENT – Page 101 

     

    

 

Section
11.8 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law
or any other judicial proceeding relating to any Obligated Party, 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 Administrative
Agent shall have made any demand on a Borrower) shall be entitled and empowered (but not obligated) 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, L/C Obligations
and all other Obligations under the Loan Documents that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of Lenders, L/C Issuer, and Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of Lenders, L/C Issuer, and Administrative Agent and their respective agents
and counsel and all other amounts due Lenders, L/C Issuer, and Administrative Agent under Section 12.1 or Section 12.2)
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 and L/C Issuer to make such payments to Administrative Agent and, in the event that Administrative
Agent shall consent to the making of such payments directly to Lenders and L/C Issuer, as applicable, to pay to Administrative
Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents
and counsel, and any other amounts due Administrative Agent under Section 12.1 or Section 12.2.

 

Section
11.9 Collateral and Guaranty Matters.

 

(a)
The Secured Parties irrevocably authorize Administrative Agent, at its option and in its discretion:

 

(i)
to release any Lien on any Property granted to or held by Administrative Agent under any Loan Document (x) upon termination
of the Commitments and payment in full of all Obligations (other than (A) contingent indemnification obligations and (B) obligations
and liabilities under Bank Product Agreements as to which arrangements satisfactory to the applicable Bank Product Provider shall
have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements
satisfactory to Administrative Agent and L/C Issuer shall have been made), (y) that is Disposed of or to be Disposed of as
part of or in connection with any Disposition permitted under the Loan Documents, or (z) if approved, authorized or ratified
in writing by Majority Lenders, Required Lenders or all Lenders, as applicable, under Section 12.10;

 

(ii)
to subordinate any Lien on any Property granted to or held by Administrative Agent under any Loan Document to the holder of any
Lien on such Property that is permitted by Section 8.2;

 

(iii)
to release any Guarantor from its obligations under the applicable Guaranty if such Person ceases to be a Subsidiary as a result
of a transaction permitted under the Loan Documents; and

 

(iv)
to take any other action with respect to the Collateral that is permitted or required under the Intercreditor Agreement.

 

    CREDIT AGREEMENT – Page 102 

     

    

 

Upon
request by Administrative Agent at any time, Majority Lenders will confirm in writing Administrative Agent's authority to release
or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the
Guaranty pursuant to this Section 11.9.

 

(b)
Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding
the existence, value or collectability of the Collateral, the existence, priority or perfection of Administrative Agent's Lien
thereon, or any certificate prepared by any Obligated Party in connection therewith, nor shall Administrative Agent be responsible
or liable to Lenders for any failure to monitor or maintain any portion of the Collateral.

 

Section
11.10 Bank Product Agreements. No Bank Product Provider who obtains the benefits of Section 10.3, any Guaranty or
any Collateral by virtue of the provisions hereof or of any Guaranty or any Security Document shall have any right to notice of
any action or to consent to, direct or object to any action hereunder, under any other Loan Document or the Intercreditor Agreement
or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent
to any amendment, wavier or modification of the provisions hereof or of the Guaranty or any Security Document) other than in its
capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents and the Intercreditor Agreement.
Notwithstanding any other provision of this Article 11 to the contrary, Administrative Agent shall not be required
to verify the payment of, or that other satisfactory arrangements have been made with respect to, Bank Product Obligations unless
Administrative Agent has received written notice of such Bank Product Obligations, together with such supporting documentation
as Administrative Agent may request, from the applicable Bank Product Provider. Administrative Agent shall not be required to
verify the payment of, or that other satisfactory arrangements have been made with respect to, Bank Product Obligations arising
under Bank Product Agreements upon termination of the Commitments and payment in full of all Obligations under the Loan Documents
(other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (other than Letters
of Credit as to which other arrangements satisfactory to Administrative Agent and L/C Issuer shall have been made).

 

ARTICLE
12

MISCELLANEOUS

 

Section
12.1 Expenses.

 

(a)
Borrowers hereby jointly and severally agree to pay on demand: (i) all reasonable out-of-pocket and documented costs and
expenses of Administrative Agent, L/C Issuer, and their Related Parties in connection with the preparation, negotiation, execution,
and delivery of this Agreement, the other Loan Documents, the Intercreditor Agreement and any and all amendments, modifications,
renewals, extensions, supplements, waivers, consents and ratifications thereof and thereto, including, without limitation, the
reasonable fees and expenses of legal counsel, advisors, consultants, and auditors for Administrative Agent, L/C Issuer, and their
Related Parties, and all title due diligence and review expenses, Oil and Gas Properties evaluation and engineering expenses,
expenses associated with the investigation of any matters relating to the transactions contemplated hereby and the satisfaction
of the conditions set forth herein, the giving of oral or written opinions or advice incident to this transaction, and the consummation
of the transactions contemplated hereby; (ii) all documented out-of-pocket costs and expenses of Administrative Agent, L/C
Issuer, and each Lender in connection with any Default and the enforcement of this Agreement, any other Loan Document or the Intercreditor
Agreement, including, without limitation, court costs and the fees and expenses of legal counsel, advisors, consultants, engineers,
experts and auditors for Administrative Agent, L/C Issuer, and each Lender; (iii) all costs and expenses incurred by L/C
Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder;
(iv) all transfer, stamp, documentary, or other similar taxes, assessments, or charges levied by any Governmental Authority
in respect of this Agreement, any of the other Loan Documents or the Intercreditor Agreement; (v) all costs, expenses, assessments,
and other charges incurred in connection with any filing, registration, recording, or perfection of any Lien contemplated by this
Agreement, any other Loan Document or the Intercreditor Agreement; and (vi) all other documented out-of-pocket costs and
expenses incurred by Administrative Agent, L/C Issuer, and any Lender in connection with this Agreement, any other Loan Document
or the Intercreditor Agreement, any litigation, dispute, suit, proceeding or action, the enforcement of its rights and remedies,
and the protection of its interests in bankruptcy, insolvency or other legal proceedings, including, without limitation, all documented
out-of-pocket costs, expenses, and other charges incurred in connection with evaluating, observing, collecting, examining, auditing,
appraising, selling, liquidating, or otherwise disposing of the Collateral or other assets of the Obligated Parties. Borrowers
shall be responsible for all expenses described in this clause (a) whether or not any Credit Extension is ever made.
Any amount to be paid under this Section 12.1 shall be a demand obligation owing by Borrowers and if not paid within
30 days of demand shall bear interest, to the extent not prohibited by and not in violation of applicable Law, from the date of
expenditure until paid at a rate per annum equal to the Default Interest Rate. The obligations of Borrowers under this Section 12.1
shall survive payment of the Notes and other Obligations hereunder and the assignment of any right hereunder.

 

    CREDIT AGREEMENT – Page 103 

     

    

 

(b)
To the extent that Borrowers for any reason fail to indefeasibly pay any amount required under Section 12.1(a) or
Section 12.2 to be paid by them to Administrative Agent or L/C Issuer (or any sub-agent thereof) or any Related Party
of Administrative Agent or L/C Issuer (or any sub-agent thereof), each Lender severally agrees to pay to Administrative Agent
or L/C Issuer (or any such sub-agent) or such Related Party, as the case may be, such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is sought based each Lender's share of the Total Credit
Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender);
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 Administrative Agent or L/C Issuer (or any such sub-agent) or against any Related Party
of Administrative Agent or L/C Issuer (or any sub-agent thereof) acting for Administrative Agent or L/C Issuer (or any such sub-agent)
in connection with such capacity. EACH LENDER ACKNOWLEDGES THAT SUCH PAYMENTS MAY BE IN RESPECT OF LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR RELATED EXPENSES ARISING OUT OF OR RESULTING FROM THE SOLE, CONTRIBUTORY, COMPARATIVE, CONCURRENT OR ORDINARY NEGLIGENCE
OF THE PERSON (OR THE REPRESENTATIVES OF THE PERSON) TO WHOM SUCH PAYMENTS ARE TO BE MADE.

 

Section
12.2 INDEMNIFICATION. EACH BORROWER SHALL INDEMNIFY ADMINISTRATIVE AGENT, L/C ISSUER, EACH LENDER AND EACH RELATED PARTY
THEREOF (EACH, AN "INDEMNIFIED PARTY") FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING THE DOCUMENTED OUT-OF-POCKET FEES, CHARGES
AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNIFIED PARTY) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY
ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE
LOAN DOCUMENTS OR THE INTERCREDITOR AGREEMENT, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS OR THE INTERCREDITOR
AGREEMENT, (C) ANY BREACH BY ANY BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY
OF THE LOAN DOCUMENTS OR THE INTERCREDITOR AGREEMENT, (D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR
CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF A BORROWER OR ANY
OF ITS SUBSIDIARIES OR ANY OTHER OBLIGATED PARTY, (E) ANY LOAN OR LETTER OF CREDIT UNDER THIS AGREEMENT OR USE OR PROPOSED USE
OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY L/C ISSUER 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 (F) ANY INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
RELATING TO ANY OF THE FOREGOING. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH INDEMNIFIED PARTY SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND
ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING THE DOCUMENTED OUT-OF-POCKET
FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNIFIED PARTY) ARISING OUT OF OR RESULTING FROM THE SOLE, CONTRIBUTORY,
COMPARATIVE, CONCURRENT OR ORDINARY NEGLIGENCE OF SUCH PERSON (OR THE REPRESENTATIVES OF SUCH PERSON), provided that
such indemnity shall not, as to any Indemnified Party, be available to the extent that such losses, liabilities, claims, damages,
penalties, judgments, disbursements, costs and expenses are determined by a court of competent jurisdiction by final and non-appealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Party. Any amount to be paid under
this Section 12.2 shall be a demand obligation owing by Borrowers and if not paid within 10 days of demand shall bear
interest, to the extent not prohibited by and not in violation of applicable Law, from the date of expenditure until paid at a
rate per annum equal to the Default Interest Rate. The obligations of Borrowers under this Section 12.2 are joint
and several and shall survive payment of the Notes and other Obligations hereunder and the assignment of any right hereunder.

 

    CREDIT AGREEMENT – Page 104 

     

    

 

Section
12.3 Limitation of Liability. No party hereto or any Related Party of any party hereto, shall assert, and each such Person
hereby waives, any claim against any other party hereto and their Related Parties for any special, indirect, consequential or
punitive damages in connection with, arising out of, or in any way related to, this Agreement, any of the other Loan Documents
or the Intercreditor Agreement, or any of the transactions contemplated by this Agreement, any of the other Loan Documents or
the Intercreditor Agreement.

 

Section
12.4 No Duty. All attorneys, accountants, appraisers, and other professional Persons and consultants retained by Administrative
Agent, any Lender or L/C Issuer shall have the right to act exclusively in the interest of Administrative Agent or such Lender
or L/C Issuer and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or
nature whatsoever to any Borrower or any of a Borrower's equity holders, Affiliates, officers, employees, attorneys, agents, or
any other Person.

 

Section
12.5 Lenders Not Fiduciary. The relationship between Borrowers and Administrative Agent, Arranger, each Lender, and L/C
Issuer is solely that of debtor and creditor, and none of Administrative Agent, Arranger, any Lender, or L/C Issuer has any fiduciary
or other special relationship with any Borrower, and no term or condition of any of the Loan Documents or the Intercreditor Agreement
shall be construed so as to deem the relationship between Borrowers and Administrative Agent, Arranger each Lender, and L/C Issuer
to be other than that of debtor and creditor.

 

Section
12.6 Equitable Relief. Each Borrower recognizes that in the event Borrowers fail to pay, perform, observe, or discharge
any or all of the Obligations, any remedy at law may prove to be inadequate relief to Administrative Agent or Lenders or L/C Issuer.
Each Borrower therefore agrees that Administrative Agent, any Lender, or L/C Issuer, if Administrative Agent or such Lender, or
L/C Issuer, so requests, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.

 

    CREDIT AGREEMENT – Page 105 

     

    

 

Section
12.7 No Waiver; Cumulative Remedies.

 

(a)
No failure on the part of an Obligated Party, Administrative Agent, any Lender, or L/C Issuer to exercise, and no delay in exercising,
and no course of dealing with respect to, any right, remedy, power, or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. The rights and remedies provided
for in this Agreement, the other Loan Documents and the Intercreditor Agreement are cumulative and not exclusive of any rights
and remedies provided by Law.

 

(b)
Notwithstanding anything to the contrary contained herein, in any other Loan Document or the Intercreditor Agreement, the authority
to enforce rights and remedies hereunder and under the other Loan Documents and the Intercreditor Agreement against the Obligated
Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement
shall be instituted and maintained exclusively by, Administrative Agent in accordance with Section 10.2 for the benefit
of all the Lenders; provided, however, that the foregoing shall not prohibit (i) Administrative Agent from
exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent)
hereunder and under the other Loan Documents and the Intercreditor Agreement, (ii) any Lender from exercising setoff rights in
accordance with Section 4.3 (subject to the terms of Section 12.23), or (iii) any Lender from filing
proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Obligated
Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as
Administrative Agent hereunder and under the other Loan Documents, then (A) the Majority Lenders shall have the rights otherwise
ascribed to Administrative Agent pursuant to Section 10.2 and (B) in addition to the matters set forth in clauses (ii)
and (iii) of the preceding proviso and subject to Section 12.23, any Lender may, with the consent of the
Majority Lenders, enforce any rights and remedies available to it and as authorized by the Majority Lenders.

 

Section
12.8 Successors and Assigns.

 

(a)
Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or transfer any
of its rights, duties, or obligations under this Agreement, the other Loan Documents or the Intercreditor Agreement without the
prior written consent of Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights
or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 12.8(b), (ii) by
way of participation in accordance with the provisions of Section 12.8(d), or (iii) by way of pledge or assignment
of a security interest subject to the restrictions of Section 12.8(e) (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon
any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent
provided in Section 12.8(d) and, to the extent expressly contemplated hereby, the Related Parties of each of Administrative
Agent and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

    CREDIT AGREEMENT – Page 106 

     

    

 

(b)
Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that
any such assignment shall be subject to the following conditions:

 

(i)
Minimum Amounts.

 

(A)
In the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and/or the Loans at the time
owing to it or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that
equal at least the amount specified in Section 12.8(b)(i)(B) in the aggregate or in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)
in any case not described in Section 12.8(b)(i)(A), the aggregate amount of the Commitment (which for this purpose
includes Loans outstanding hereunder) or, if the Commitment is not then in effect, the Outstanding Amount of the Loans of the
assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as
of the Trade Date) shall not be less than $5,000,000, unless each of Administrative Agent and, so long as no Event of Default
has occurred and is continuing, Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed).

 

(ii)
Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement with respect to the Loans or the Commitment assigned.

 

(iii)
Required Consents. No consent shall be required for any assignment except to the extent required by Section 12.8(b)(i)(B)
and, in addition: (A) the consent of Borrowers (such consent not to be unreasonably withheld or delayed) shall be required
unless (x) an Event of Default has occurred and is continuing at the time of such assignment, or (y) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that Borrowers shall be deemed to have consented
to any such assignment unless Borrowers shall object thereto by written notice to Administrative Agent within 5 Business Days
after having received notice thereof; (B) the consent of Administrative Agent (such consent not to be unreasonably withheld
or delayed) shall be required for assignments in respect of (1) any Revolving Credit Commitment or Revolving Credit Loans if such
assignment is to a Person that is not a Lender with a Revolving Credit Commitment, an Affiliate of such Lender or an Approved
Fund with respect to such Lender, or (2) any Term Loan to a Person who is not a Lender, an Affiliate of a Lender or an Approved
Fund with respect to such Lender, and (C) the consent of L/C Issuer (such consent not to be unreasonably withheld or delayed)
shall be required for assignments in respect of any Commitment or Loans if such assignment is to a Person that is not a Lender
with a Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender.

 

    CREDIT AGREEMENT – Page 107 

     

    

 

(iv)
Assignment and Assumption. The parties to each assignment shall execute and deliver to Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500; provided that Administrative Agent may, in its
sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not
a Lender, shall deliver to Administrative Agent an Administrative Questionnaire.

 

(v)
No Assignment to Certain Persons. No such assignment shall be made to (A) any Borrower, any Affiliate or Subsidiary
of a Borrower or any other Obligated Party or (B) any Defaulting Lender or any of its Affiliates, or any Person who, upon
becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).

 

(vi)
No Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment
vehicle or trust for, or owned and operated for the primary benefit of, a natural Person).

 

(vii)
Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder,
no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties
to such assignment shall make such additional payments to Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other
compensating actions, including funding, with the consent of Borrowers and Administrative Agent, the applicable pro rata share
of Loans previously requested but not funded by such Defaulting Lender, to each of which the applicable assignee and assignor
hereby irrevocably consent), to: (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender
to Administrative Agent or any Lender hereunder (and interest accrued thereon) and (B) acquire (and fund as appropriate)
its full pro rata share of all Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event
that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without
compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender
for all purposes of this Agreement until such compliance occurs.

 

Subject
to acceptance and recording thereof by Administrative Agent pursuant to Section 12.8(c), from and after the effective
date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement 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 12.1 and Section 12.2 with respect to facts and circumstances occurring prior
to the effective date of such assignment; provided that, except to the extent otherwise expressly agreed by the affected
parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising
from that Lenders' having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection 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 12.8(d). Upon the consummation of any assignment
pursuant to this Section 12.8(b), if requested by the transferor or transferee Lender, the transferor Lender, Administrative
Agent and Borrowers shall make appropriate arrangements so that replacement Notes are issued to such transferor Lender (if applicable)
and new Notes or, as appropriate, replacement Notes, are issued to the assignee.

 

    CREDIT AGREEMENT – Page 108 

     

    

 

(c)
Register. Administrative Agent, acting solely for this purpose as an agent of Borrowers, shall maintain at one of its offices
in Dallas, Texas a copy of each Assignment and Assumption delivered to it and a Register. The entries in the Register shall be
conclusive absent manifest error, and Borrowers, Administrative Agent and Lenders shall 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. The Register shall be available
for inspection by Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)
Participations. Any Lender may at any time, without the consent of, or notice to, any Borrower, but subject to the prior
written consent of Administrative Agent, sell participations to a Participant 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 Loans owing to it); provided
that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations, and (iii) Borrowers, Administrative Agent,
and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations
under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 12.1(b)
without regard to the existence of any participation.

 

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 Section 12.10 which requires the consent of all Lenders
and affects such Participant. Each Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.1,
3.4 and 3.5 (subject to the requirements and limitations therein, including the requirements under Section 3.4(g)
(it being understood that the documentation required under Section 3.4(g) shall be delivered to the participating
Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.8(b);
provided that such Participant (A) agrees to be subject to the provisions of Section 3.6 as if it were
an assignee under Section 12.8(b); and (B) shall not be entitled to receive any greater payment under Sections 3.1
or 3.4, 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 Borrowers' request and expense, to use reasonable
efforts to cooperate with Borrowers to effectuate the provisions of Section 3.6 with respect to any Participant. To
the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 4.3 as though it were
a Lender; provided that such Participant agrees to pay to Administrative Agent any amount set-off for application to the
Obligations under the Loan Documents as required pursuant to Section 4.3; provided further that such Participant
agrees to be subject to Section 12.23 as though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary agent of Borrowers, maintain a Participant Register; provided that no Lender
shall have any obligation to disclose all or any portion of the Participant Register to any Person (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) 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, Administrative Agent (in its capacity as Administrative
Agent) shall have no responsibility for maintaining a Participant Register.

 

    CREDIT AGREEMENT – Page 109 

     

    

 

(e)
Certain Pledges. 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; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party hereto.

 

(f)
Dissemination of Information. Each of Borrowers and the other Obligated Parties authorizes Administrative Agent and each
Lender to disclose to any actual or prospective purchaser, assignee or other recipient of a Lender's Commitment, any and all information
in Administrative Agent's or such Lender's possession concerning Borrowers, the other Obligated Parties and their respective Affiliates.

 

Section
12.9 Survival. All representations and warranties made in this Agreement, any other Loan Document or the Intercreditor
Agreement or in any document, statement, or certificate furnished in connection with this Agreement shall survive the execution
and delivery of this Agreement, the other Loan Documents and the Intercreditor Agreement, and no investigation by Administrative
Agent or any Lender or any closing shall affect the representations and warranties or the right of Administrative Agent or any
Lender to rely upon them. Without prejudice to the survival of any other obligation of Borrowers hereunder, the obligations of
Borrowers under Sections 12.1 and 12.2 shall survive repayment of the Obligations and termination of the Commitments.

 

Section
12.10 Amendment. The provisions of this Agreement and the other Loan Documents to which any Borrower is a party (other
than the Issuer Documents) may be amended or waived only by an instrument in writing signed by Majority Lenders (or by Administrative
Agent with the consent of Majority Lenders) and such Borrower and acknowledged by Administrative Agent; provided, however,
that no such amendment or waiver shall:

 

(a)
waive any condition set forth in Section 5.1, without the written consent of each Lender;

 

(b)
extend or increase any Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 10.2)
without the written consent of such Lender;

 

(c)
postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayment) of principal,
interest, fees or other amounts due to Lenders (or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;

 

    CREDIT AGREEMENT – Page 110 

     

    

 

(d)
reduce the principal of, or the rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder
or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however,
that only the consent of Majority Lenders shall be necessary to adjust the Default Interest Rate or to waive any obligation of
Borrowers to pay interest at such rate;

 

(e)
change any provision of this Section 12.10 or the definition of "Majority Lenders", "Majority Revolving
Credit Lenders", "Required Lenders", or "Required Revolving Credit Lenders", or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each Lender;

 

(f)
change Section 10.3 in a manner that would alter the pro rata sharing of payments required thereby without the written
consent of each Lender;

 

(g)
release any material Guaranty or all or substantially all of the Collateral (in each case, except as provided herein) without
the written consent of each Lender; or

 

(h)
increase the Borrowing Base or modify the provisions of Section 2.9(d) without the written consent of each Revolving Credit
Lender;

 

and,
provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by L/C Issuer in addition
to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating
to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed
by Administrative Agent in addition to Lenders required above, affect the rights or duties of Administrative Agent under this
Agreement or any other Loan Document; (iii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto; and (iv) Borrowers and Administrative Agent may amend this Agreement or any other Loan Document
without the consent of 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.

 

Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender
may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment
of any Defaulting Lender may not be increased or extended without the consent of such Lender; and (y) any waiver, amendment
or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately
adversely relative to other affected Lenders shall require the consent of such Defaulting Lender. For the avoidance of doubt,
a Defaulting Lender shall not have the right to approve or disapprove any decrease or reaffirmation of the Borrowing Base.

 

Section
12.11 Notices.

 

(a)
Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone
(and except as provided in Section 12.11(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
as set forth on Schedule 12.11. 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 electronic communications, to the extent provided
in Section 12.11(b) shall be effective as provided in Section 12.11(b).

 

    CREDIT AGREEMENT – Page 111 

     

    

 

(b)
Electronic Communications.

 

(i)
Notices and other communications to Lenders hereunder may be delivered or furnished by electronic communication (including e-mail
and internet or intranet websites) pursuant to procedures approved by Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender pursuant to Article 2 if such Lender has notified Administrative Agent that
it is incapable of receiving notices under Article 2 by electronic communication. Administrative Agent or Borrowers
may, in their 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.

 

(ii)
Unless Administrative Agent otherwise prescribes, (A) 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 (B) 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 (A), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (A) and (B) above, if such
facsimile, email or other electronic 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 such recipient.

 

(c)
Change of Address, etc. Any party hereto may change its address or facsimile number for notices and other communications
hereunder by notice to the other parties hereto, Schedule 12.11 shall be deemed to be amended by each such change,
and Administrative Agent is authorized, in its discretion, from time to time to reflect each such change in an amended Schedule 12.11
provided by Administrative Agent to each party hereto.

 

(d)
Platform.

 

(i)
Each Borrower agrees that Administrative Agent may, but shall not be obligated to, make the Communications available to the Lenders
or L/C Issuer by posting the Communications on the Platform.

 

(ii)
The Platform is provided "as is" and "as available." The Agent Parties (as defined below) do not warrant the
adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind,
express, implied or statutory, including, without limitation, 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 any Agent Party in connection
with the Communications or the Platform. In no event shall the Agent Parties have any liability to any Borrower, any Lender or
any other Person for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential
damages, losses or expenses (whether in tort, contract or otherwise) arising out of any Borrower's or Administrative Agent's transmission
of communications through the Platform.

 

    CREDIT AGREEMENT – Page 112 

     

    

 

(iii)
Each of Borrowers and the other Obligated Parties (by its, his or her execution of a Loan Document) hereby authorizes Administrative
Agent, each Lender, and their respective counsel and agents to communicate and transfer documents and other information (including
confidential information) concerning this transaction or such Borrower or any other Obligated Party and the business affairs of
such Borrower and such other Obligated Parties via the internet or other electronic communication without regard to the lack of
security of such communications.

 

Section
12.12 Governing Law; Venue; Service of Process.

 

(a)
Governing Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether
in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except,
as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed
by, and construed in accordance with, the Law of the State of Texas (without reference to applicable rules of conflicts of Laws),
except to the extent the Laws of any jurisdiction where Collateral is located require application of such Laws with respect to
such Collateral.

 

(b)
Jurisdiction. Each Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or
proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against Administrative
Agent, any Lender, L/C Issuer, or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document
or the transactions relating hereto or thereto in any forum other than the courts of the State of Texas sitting in Dallas County,
and of the United States District Court of the Northern District of Texas, and any appellate court from any thereof, and each
of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in
respect of any such action, litigation or proceeding may be heard and determined in such Texas State court or, to the fullest
extent permitted by applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such
action, litigation 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 Administrative
Agent, any Lender or L/C Issuer may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan
Document against any Borrower or its Properties in the courts of any jurisdiction.

 

(c)
Waiver of Venue. Each Borrower irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law,
any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating
to this Agreement or any other Loan Document in any court referred to in Section 12.12(b). Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

 

(d)
Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in
Section 12.11. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner
permitted by applicable Law.

 

    CREDIT AGREEMENT – Page 113 

     

    

 

Section
12.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Except as provided in Section 5.1, this Agreement
shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g. "pdf" or "tif")
shall be effective as delivery of a manually executed counterpart of this Agreement.

 

Section
12.14 Severability. Any provision of this Agreement or any other Loan Document held by a court of competent jurisdiction
to be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal. Furthermore, in lieu of such invalid or unenforceable provision, such
court shall substitute as a part of this Agreement or the other Loan Documents a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

 

Section
12.15 Headings. The headings, captions, and arrangements used in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement.

 

Section
12.16 Construction. Borrowers, Administrative Agent and each Lender acknowledge that each of them has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review this Agreement, the other Loan Documents and the
Intercreditor Agreement with its legal counsel and that this Agreement, the other Loan Documents and the Intercreditor Agreement
shall be construed as if jointly drafted by Borrowers, Administrative Agent, each Lender and each other Person party thereto.

 

Section
12.17 Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action
or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise
within the limitations of, another covenant shall not avoid the occurrence of a Default if such action is taken or such condition
exists.

 

Section
12.18 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY 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 ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON 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 AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.18.

 

    CREDIT AGREEMENT – Page 114 

     

    

 

Section
12.19 Additional Interest Provision. It is expressly stipulated and agreed to be the intent of Borrowers, Administrative
Agent and each Lender at all times to comply strictly with the applicable Law governing the maximum rate or amount of interest
payable on the indebtedness evidenced by any Note, any other Loan Document, and the Related Indebtedness (or applicable United
States federal Law to the extent that it permits any Lender to contract for, charge, take, reserve or receive a greater amount
of interest than under applicable Law). If the applicable Law is ever judicially interpreted so as to render usurious any amount
(a) contracted for, charged, taken, reserved or received pursuant to any Note, any of the other Loan Documents or any other
communication or writing by or between any Borrower and any Lender related to the transaction or transactions that are the subject
matter of the Loan Documents, (b) contracted for, charged, taken, reserved or received by reason of Administrative Agent's
or any Lender's exercise of the option to accelerate the maturity of any Note and/or the Related Indebtedness, or (c) Borrowers
will have paid or Administrative Agent or any Lender will have received by reason of any voluntary prepayment by Borrowers of
any Note and/or the Related Indebtedness, then it is Borrowers', Administrative Agent's and Lenders' express intent that all amounts
charged in excess of the Maximum Rate shall be automatically canceled, ab initio, and all amounts in excess of the Maximum Rate
theretofore collected by Administrative Agent or any Lender shall be credited on the principal balance of any Note and/or the
Related Indebtedness (or, if any Note and all Related Indebtedness have been or would thereby be paid in full, refunded to Borrowers),
and the provisions of any Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable
Law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however,
if any Note or Related Indebtedness has been paid in full before the end of the stated term thereof, then Borrowers, Administrative
Agent and each Lender agree that Administrative Agent or any Lender, as applicable, shall, with reasonable promptness after Administrative
Agent or such Lender discovers or is advised by a Borrower that interest was received in an amount in excess of the Maximum Rate,
either refund such excess interest to Borrowers and/or credit such excess interest against such Note and/or any Related Indebtedness
then owing by Borrowers to Administrative Agent or such Lender. Each Borrower hereby agrees that as a condition precedent to any
claim seeking usury penalties against Administrative Agent or any Lender, Borrowers will provide written notice to Administrative
Agent or such Lender, advising Administrative Agent or such Lender in reasonable detail of the nature and amount of the violation,
and Administrative Agent or such Lender shall have 60 days after receipt of such notice in which to correct such usury violation,
if any, by either refunding such excess interest to Borrowers or crediting such excess interest against the Note to which the
alleged violation relates and/or the Related Indebtedness then owing by Borrowers to Administrative Agent or such Lender. All
sums contracted for, charged, taken, reserved or received by Administrative Agent or any Lender for the use, forbearance or detention
of any debt evidenced by any Note and/or the Related Indebtedness shall, to the extent permitted by applicable Law, be amortized
or spread, using the actuarial method, throughout the stated term of such Note and/or the Related Indebtedness (including any
and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of any Note and/or
the Related Indebtedness does not exceed the Maximum Rate from time to time in effect and applicable to such Note and/or the Related
Indebtedness for so long as debt is outstanding. In no event shall the provisions of Chapter 346 of the Texas Finance Code
(which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to the Notes and/or any of the
Related Indebtedness. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, it is not
the intention of Administrative Agent or any Lender to accelerate the maturity of any interest that has not accrued at the time
of such acceleration or to collect unearned interest at the time of such acceleration.

 

Section
12.20 Ceiling Election. To the extent that any Lender is relying on Chapter 303 of the Texas Finance Code to determine
the Maximum Rate payable on any Note and/or any other portion of the Obligations under the Loan Documents, such Lender will utilize
the weekly ceiling from time to time in effect as provided in such Chapter 303. To the extent United States federal Law permits
any Lender to contract for, charge, take, receive or reserve a greater amount of interest than under Texas Law, such Lender will
rely on United States federal Law instead of such Chapter 303 for the purpose of determining the Maximum Rate. Additionally,
to the extent permitted by applicable Law now or hereafter in effect, any Lender may, at its option and from time to time, utilize
any other method of establishing the Maximum Rate under such Chapter 303 or under other applicable Law by giving notice, if required,
to Borrowers as provided by applicable Law now or hereafter in effect.

 

    CREDIT AGREEMENT – Page 115 

     

    

 

Section
12.21 USA Patriot Act Notice. Administrative Agent and each Lender hereby notify Borrowers that pursuant to the requirements
of the Patriot Act, it is required to obtain, verify and record information that identifies each Borrower and each other Obligated
Party, which information includes the name and address of each Borrower and each other Obligated Party and other information that
will allow Administrative Agent and such Lender to identify each Borrower and each other Obligated Party in accordance with the
Patriot Act.

 

Section
12.22 Defaulting Lenders.

 

(a)
Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender,
then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(i)
Waivers and Amendments. Such Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect
to this Agreement shall be restricted as set forth in the definitions of "Majority Lenders", "Majority
Revolving Credit Lenders", "Required Lenders", "Required Revolving Credit Lenders",
and in Section 12.10.

 

(ii)
Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by Administrative Agent
for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article 10 or
otherwise) or received by Administrative Agent from a Defaulting Lender shall be applied at such time or times as may be determined
by Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to Administrative
Agent hereunder; second, with respect to a Defaulting Lender that is a Revolving Credit Lender, to the payment on a pro
rata basis of any amounts owing by such Defaulting Lender to L/C Issuer hereunder; third, with respect to a Defaulting
Lender that is a Revolving Credit Lender, to Cash Collateralize L/C Issuer's Fronting Exposure, if any, with respect to such Defaulting
Lender in accordance with Section 2.6; fourth, with respect to a Defaulting Lender that is a Revolving Credit
Lender, as Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Revolving Credit Loan
in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined
by Administrative Agent; fifth, with respect to a Defaulting Lender that is a Revolving Credit Lender, if so determined
by Administrative Agent and Borrowers, 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 Revolving Credit Loans under this Agreement and (y) Cash
Collateralize L/C Issuer's future Fronting Exposure, if any, with respect to such Defaulting Lender with respect to future Letters
of Credit issued under this Agreement, in accordance with Section 2.6; sixth, to the payment of any amounts
owing to Lenders or L/C Issuer as a result of any judgment of a court of competent jurisdiction obtained by any Lender or L/C
Issuer against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement;
seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to Borrowers as a result
of any judgment of a court of competent jurisdiction obtained by a Borrower against such Defaulting Lender as a result of such
Defaulting Lender's breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise
directed by a court of competent jurisdiction; provided that, if (A) such payment is a payment of the principal amount
of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (B) such
Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.2
were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting
Lender until such time as all Loans and funded and unfunded participations in L/C Obligations are held by Lenders pro rata in
accordance with the Aggregate Revolving Credit Commitments without giving effect to Section 12.22(a)(iv). 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 12.22(a)(ii) shall be deemed paid to and redirected by
such Defaulting Lender, and each Lender irrevocably consents hereto.

 

    CREDIT AGREEMENT – Page 116 

     

    

 

(iii)
Certain Fees.

 

(A)
No Defaulting Lender shall be entitled to receive any fee payable under Section 2.3(b) for any period during which
that Lender is a Defaulting Lender (and Borrowers shall not be required to pay any such fee that otherwise would have been required
to have been paid to that Defaulting Lender).

 

(B)
Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting
Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided
Cash Collateral pursuant to Section 2.6.

 

(C)
With respect to any fee payable under Section 2.3(b) or Letter of Credit Fee not required to be paid to any Defaulting
Lender pursuant to clause (A) or (B) above, Borrowers shall (x) pay to each Non-Defaulting Lender that
portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender's participation in
L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to Section 12.22(a)(iv) below, (y) pay
to L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer's
Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

 

(iv)
Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender's participation
in L/C Obligations shall be reallocated among the Non-Defaulting Lenders who are Revolving Credit Lenders in accordance with their
respective Applicable Percentages (calculated without regard to such Defaulting Lender's Revolving Credit Commitment) but only
to the extent that such reallocation does not cause the Revolving Credit Exposure of any Non-Defaulting Lender to exceed such
Non-Defaulting Lender's Revolving Credit Commitment. No reallocation hereunder shall constitute a waiver or release of any claim
of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim
of a Non-Defaulting Lender as a result of such Non-Defaulting Lender's increased exposure following such reallocation.

 

    CREDIT AGREEMENT – Page 117 

     

    

 

(v)
Cash Collateral. If the reallocation described in Section 12.22(a)(iv) above cannot, or can only partially, be effected,
Borrowers shall, without prejudice to any right or remedy available to them hereunder or under applicable Law, Cash Collateralize
L/C Issuer's Fronting Exposure in accordance with the procedures set forth in Section 2.6.

 

(b)
Defaulting Lender Cure. If Borrowers, Administrative Agent, and L/C Issuer agree in writing that a Lender is no longer
a Defaulting Lender, Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such
notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that
Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other
actions as Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters
of Credit to be held on a pro rata basis by Lenders in accordance with their Applicable Percentages (without giving effect to
Section 12.22(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments
will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrowers while that Lender was a
Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties,
no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising
from that Lender's having been a Defaulting Lender.

 

Section
12.23 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of the Loans made by it or other obligations hereunder, resulting
in such Lender's receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater
than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall:

 

(a)
notify Administrative Agent of such fact; and

 

(b)
purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments shall be shared by Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided
that:

 

(i)
if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)
the provisions of this Section 12.23 shall not be construed to apply to: (A) any payment made by or on behalf
of Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising
from the existence of a Defaulting Lender); or (B) any payment obtained by a Lender as consideration for the assignment of
or sale of a participation in any of its Loans or subparticipations in L/C Obligations to any assignee or participant, other than
an assignment to a Borrower or any Affiliate thereof (as to which the provisions of this Section 12.23 shall apply).

 

Each
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 such Borrower rights of setoff and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

 

    CREDIT AGREEMENT – Page 118 

     

    

 

Section
12.24 Payments Set Aside. To the extent that any payment by or on behalf of a Borrower is made to Administrative Agent,
L/C Issuer or any Lender, or Administrative Agent, L/C Issuer or any Lender exercises its right of setoff, and such payment or
the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by Administrative Agent, L/C Issuer or such Lender in its discretion)
to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise,
then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each
Lender and L/C Issuer severally agrees to pay to Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by Administrative Agent, plus interest thereon from the date of such demand to the date
such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of Lenders
and L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and
the termination of this Agreement.

 

Section
12.25 Confidentiality. Each of Administrative Agent, L/C Issuer, and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related
Parties (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 required or requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of
Insurance Commissioners) or any Governmental Authority, quasi-Governmental Authority or legislative committee, (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, any other Loan Document or the Intercreditor Agreement, (e) in connection with the exercise of any remedies
hereunder, under any other Loan Document or the Intercreditor Agreement or any suit, action or proceeding relating to this Agreement,
any other Loan Document or the Intercreditor Agreement or the enforcement of rights hereunder or thereunder, (f) subject
to its being under a duty of confidentiality no less restrictive than this Section 12.25, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement,
(ii) any actual or prospective counterparty (or its Related Parties) to any Hedging Agreement relating to a Borrower and
its obligations, (iii) any actual or prospective purchaser of a Lender or its holding company, (iv) any rating agency
or any similar organization in connection with the rating of a Borrower or any other Obligated Party or (v) the CUSIP Service
Bureau or any similar organization, (g) with the consent of Borrowers, or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 12.25 or (ii) becomes available to Administrative
Agent, L/C Issuer, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than a Borrower
or a Subsidiary which is not actually known by Administrative Agent, L/C Issuer, any Lender or any of their respective Affiliates
to be bound by a contractual, legal or fiduciary obligation of confidentiality to any Borrower or any Subsidiary with respect
to such information. In addition, Administrative Agent and the Lenders may disclose the existence of this Agreement and information
about this Agreement to market data collectors, similar service providers to the lending industry and service providers to Administrative
Agent and the Lenders in connection with the administration of this Agreement, the other Loan Documents, and the Commitments.
For purposes of this Section 12.25, "Information" means all information received from any Borrower
or any Subsidiary relating to any Borrower or any Subsidiary or any of their respective businesses, other than any such information
that is available to Administrative Agent, L/C Issuer, or any Lender on a nonconfidential basis prior to disclosure by a Borrower
or a Subsidiary. Any Person required to maintain the confidentiality of Information as provided in this Section 12.25
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.

 

    CREDIT AGREEMENT – Page 119 

     

    

 

Section
12.26 Electronic Execution of Assignments and Certain Other Documents. The words "execute," "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption or in any amendment or other
modification hereof (including waivers and consents) shall be deemed to include electronic signatures, the electronic matching
of assignment terms and contract formations on electronic platforms approved by Administrative Agent, or the keeping of records
in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature
or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and
Records Act, or any other similar state Laws based on the Uniform Electronic Transactions Act.

 

Section
12.27 Intercreditor Agreement. In the event of a conflict between the provisions of any of the Loan Documents and the provisions
of the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.

 

Section
12.28 Flood Insurance. Notwithstanding any provision in this Agreement, any Security Document or any other Loan Document
to the contrary, in no event is any Building (as defined in the applicable Flood Insurance Regulations) included in the definition
of "Mortgaged Property," or "Collateral" or "Property" and no Building or Manufactured (Mobile)
Home (as defined in the applicable Flood Insurance Regulations) is hereby encumbered by any Security Document or other Loan Document.

 

Section
12.29 Acknowledgement and Consent to Bail-In of EEA 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 Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability
is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA 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 an EEA Resolution Authority to any such liabilities arising hereunder
which may be payable to it by any Lender that is an EEA 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 EEA Financial Institution,
its parent undertaking, 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 any EEA
Resolution Authority.

 

    CREDIT AGREEMENT – Page 120 

     

    

 

Section
12.30 Amendment and Restatement. The parties hereto agree that this Agreement is an amendment and restatement of, and an
extension of, and amendment to, the Existing Credit Agreement. This Agreement does not in any way constitute a novation of the
Existing Credit Agreement, but is an amendment and restatement of same. It is understood and agreed that, except to the extent
released by the Administrative Agent as contemplated herein, the Liens securing the Obligations under and as defined in the Existing
Credit Agreement and the rights, duties, liabilities and obligations of the CAE under the Existing Credit Agreement and the Existing
Loan Documents to which it is a party shall not be extinguished but shall be carried forward and shall secure such obligations
and liabilities as amended, renewed, extended and restated by this Agreement. Upon the effectiveness of this Agreement, (a) each
Lender's participation in each Letter of Credit shall be automatically adjusted to equal its Applicable Percentage (after giving
effect to this amendment and restatement), and (b) such other adjustments shall be made as the Administrative Agent shall specify
so that each Lender's Revolving Credit Exposure equals its Applicable Percentage (after giving effect to this amendment and restatement)
of the Aggregate Revolving Credit Exposures of all of the Lenders.

 

Section
12.31 Assignment and Assumption from CEC to Borrowers. Concurrently with the amendment and restatement of the Existing
Credit Agreement, and pursuant to the Assumption and Consolidation Agreement, CEC has irrevocably assigned, transferred and conveyed
all of its rights, duties, liabilities and obligations under the Existing CEC Credit Agreement and the Existing CEC Loan Documents
to which it is a party to the Borrowers, and each of the Borrowers has jointly, severally and irrevocably accepted such assignment
from CEC and assumed all of the rights, duties, liabilities and obligations of CEC under the Existing CEC Credit Agreement and
the Existing CEC Loan Documents, in each case as amended and restated by this Agreement and the other Loan Documents (and to the
extent not superseded) in connection with the transactions contemplated hereby.

 

Section
12.32 NOTICE OF FINAL AGREEMENT. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE INTERCREDITOR AGREEMENT REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[Remainder
of Page Intentionally Left Blank; Signature Pages Follow]

 

    CREDIT AGREEMENT – Page 121 

     

    

 

EXECUTED
to be effective as of the date first written above.

 

	 	BORROWERS:
	 	 
	 	CARBON APPALACHIA ENTERPRISES, LLC
	 	 	 
	 	By:	 
	 	 	Patrick R. McDonald
	 	 	President
	 	 	 
	 	NYTIS EXPLORATION (USA) INC.
	 	 	 
	 	By:	 
	 	 	Patrick R. McDonald
	 	 	President

 

 

    CREDIT AGREEMENT - Signature Page [Borrowers]

     

    

 

	 	ADMINISTRATIVE
    AGENT:
	 	 
	 	LEGACYTEXAS
    BANK
	 	 
	 	By:	 
	 	 	Chris
    Parada
	 	 	Managing
    Director – Head of Energy Finance
	 	 	 
	 	LENDERS:
	 	 
	 	LEGACYTEXAS
    BANK
	 	 
	 	By:	
	 	 	Chris
    Parada
	 	 	Managing
    Director – Head of Energy Finance

 

 

    CREDIT AGREEMENT - Signature Page [Administrative Agent and Lenders] 

     

    

 

	 	LENDERS:
	 	 
	 	EAST
    WEST BANK
	 	 
	 	By:	      
	 	Name:	  
	 	Title:	 

 

 

    CREDIT AGREEMENT - Signature Page [Administrative Agent and Lenders]

     

    

 

	 	LENDERS:
	 	 
	 	SIMMONS
    BANK, AN ARKANSAS STATE CHARTERED BANK
	 	 
	 	By:	          
	 	Name:	 
	 	Title:	 

 

 

    CREDIT AGREEMENT - Signature Page [Administrative Agent and Lenders]

     

    

 

Form
of Revolving Credit Note

 

	 	____________,
    20___

 

FOR
VALUE RECEIVED, Carbon Appalachia Enterprises, LLC, a Delaware limited liability company, and Nytis Exploration (USA) Inc., a
Delaware corporation (each a "Borrower", and collectively, "Borrowers"), hereby jointly and
severally promise to pay to the order of _______________________________ ("Lender"), in accordance with
the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Revolving Credit Loan or so much
thereof as may be advanced by Lender (in its capacity as Revolving Credit Lender) from time to time to or for the benefit or account
of Borrowers under that certain Amended and Restated Credit Agreement, dated as of December 31, 2018 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the "Credit Agreement;" the terms defined therein
being used herein as therein defined), among Borrowers, the lenders from time to time party thereto, and LegacyTexas Bank, as
Administrative Agent (in such capacity, "Administrative Agent") and L/C Issuer.

 

Borrowers
jointly and severally promise to pay interest on the unpaid principal amount of this Note from the date hereof until the Revolving
Credit Loans made by Lender are paid in full, at such interest rates and at such times as provided in the Credit Agreement. All
payments of principal and interest shall be made to Administrative Agent for the account of Lender in Dollars in immediately available
funds at Administrative Agent's Principal Office. If any amount is not paid in full when due hereunder, then such unpaid amount
shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Credit Agreement.

 

This
Note is one of the Revolving Credit Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be
prepaid in whole or in part subject to the terms and conditions provided therein. This Note is also entitled to the benefits of
the Guaranties. Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement,
all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided
in the Credit Agreement. The Revolving Credit Loans made by Lender shall be evidenced by an account maintained by Lender in the
ordinary course of business. Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of
its Revolving Credit Loans and payments with respect thereto.

 

Each
Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest,
demand, dishonor and non-payment of this Note.

 

THIS
NOTE, AND ANY CLAIM, CONTROVERSY, OR DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

[Remainder
of Page Intentionally Left Blank

Signature Page Follows]

 

    Form of Revolving Credit Note – Page 1 

     

    

 

IN
WITNESS WHEREOF, each Borrower, intending to be legally bound hereby, has duly executed this Note as of the day and year first
written above.

 

	 	BORROWERS:
	 	 	 
	 	CARBON APPALACHIA ENTERPRISES, LLC
	 	 	 	 
	 	By:	 	 
	 	 	Name:	
	 	 	Title:	 
	 	 	 	 
	 	NYTIS EXPLORATION (USA) INC.
	 	 	 	 
	 	By:		 
	 	 	Name:	     
	 	 	Title:	 

 

 

    Form of Revolving Credit Note – Page 2

     

    

 

Form
of Term Loan Note

 

        ____________,
20___

 

FOR
VALUE RECEIVED, Carbon Appalachia Enterprises, LLC, a Delaware limited liability company, and Nytis Exploration (USA) Inc., a
Delaware corporation (each a "Borrower", and collectively, "Borrowers"), hereby jointly and
severally promise to pay to the order of _______________________________ ("Lender"), the principal sum
of _____________________ DOLLARS ($____________) advanced by Lender (in its capacity as a Term Loan Lender) to or for the benefit
or account of Borrowers pursuant to the terms of that certain Amended and Restated Credit Agreement, dated as of December 31,
2018 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Credit Agreement;"
the terms defined therein being used herein as therein defined), among Borrowers, the lenders from time to time party thereto,
and LegacyTexas Bank, as Administrative Agent (in such capacity, "Administrative Agent") and L/C Issuer.

 

Borrowers
jointly and severally promise to pay interest on the unpaid principal amount of this Term Loan Note from the date hereof until
the Term Loans made by Lender are paid in full, at such interest rates and at such times as provided in the Credit Agreement.
All payments of principal and interest shall be made to Administrative Agent for the account of Lender in Dollars in immediately
available funds at Administrative Agent's Principal Office. If any amount is not paid in full when due hereunder, then such unpaid
amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as
well as after judgment) computed at the per annum rate set forth in the Credit Agreement.

 

This
Note is one of the Term Loan Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid
in whole or in part subject to the terms and conditions provided therein. This Note is also entitled to the benefits of the Guaranties.
Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit
Agreement. The Term Loans made by Lender shall be evidenced by an account maintained by Lender in the ordinary course of business.
Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Term Loans and payments
with respect thereto.

 

Each
Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest,
demand, dishonor and non-payment of this Note.

 

THIS
NOTE, AND ANY CLAIM, CONTROVERSY, OR DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

[Remainder
of Page Intentionally Left Blank

Signature Page Follows]

 

    Form of Term Note – Page 1 

     

    

 

IN
WITNESS WHEREOF, each Borrower, intending to be legally bound hereby, has duly executed this Note as of the day and year first
written above.

 

	 	BORROWERS:
	 	 	 
	 	CARBON APPALACHIA ENTERPRISES, LLC
	 	 	 	 
	 	By:	     
	 	 	Name:	
	 	 	Title:	      
	 	 	 	 
	 	NYTIS EXPLORATION (USA) INC.
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 

 

Form
of Term Note – Page 2ex_132550.htm

 

 Exhibit 10.23

 

SHARE EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION

 

BY AND BETWEEN

 

MID-HEAVEN SINCERITY INTERNATIONAL RESOURCES INVESTMENT CO., LTD 

 

SMARTHEAT INC.

 

AND

 

THE STOCKHOLDERS OF 

 

MID-HEAVEN SINCERITY INTERNATIONAL RESOURCES INVESTMENT CO., LTD

 

 

DATED DECEMBER 31, 2018

 

 

 

 

 

 

 

SHARE EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION

 

This SHARE EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”) is entered on December 31, 2018, by and among Mid-Heaven Sincerity International Resources Investment Co., Ltd, a company incorporated under the laws of the British Virgin Islands (“Mid-Heaven”), Smartheat Inc., a Nevada corporation (“Purchaser”), and each of the shareholders of Mid-Heaven listed on Schedule 2.1 hereto (the “Mid-Heaven Shareholders”).

 

RECITALS

 

WHEREAS, Mid-Heaven is a BVI company that is engaged, through its subsidiaries, in the manufacture and sale of Boric Acid and Lithium Carbonate;

 

WHEREAS, Purchaser, Mid-Heaven and the Mid-Heaven Shareholders have agreed to the acquisition by Purchaser of all of the issued and outstanding capital stock of Mid-Heaven pursuant to a voluntary share exchange transaction (the “Share Exchange”) between Purchaser and Mid-Heaven upon the terms and subject to the conditions set forth herein;

 

WHEREAS, in furtherance thereof, the Board of Directors of Purchaser has approved the Share Exchange in accordance with the applicable provisions of the NRS and upon the terms and subject to the conditions set forth herein;

 

WHEREAS, in furtherance thereof, the Board of Directors and shareholders of Mid-Heaven have each approved the Share Exchange in accordance with the applicable provisions of the laws of the BVI and upon the terms and subject to the conditions set forth herein;

 

WHEREAS, notwithstanding the fact that the Purchaser cannot issue its Common Stock to the Majority Shareholders until the number of shares of its authorized Common Stock is increased it is the intent of the Parties for the acquisition to take place on December 31, 2018 and for the Mid-Haven Shareholders to exercise such control over the Purchaser had certificates been issued to the Mid-Haven Shareholders on the Closing Date, and

 

WHEREAS, for United States federal income tax purposes, the parties intend that the Share Exchange shall constitute a tax-free reorganization within the meaning of Sections 368 and 1032 of the Code.

 

NOW, THEREFORE, in consideration of the premises, and the mutual covenants and agreements contained herein, the parties do hereby agree as follows:

 

ARTICLE I. DEFINITIONS

 

(a)     “Affiliate” shall mean, as to any Person, any other Person controlled by, under the control of, or under common control with, such Person. As used in this definition, “control” shall mean possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or

 

 

 

 

other ownership interests, by contract or otherwise), provided that, in any event, any Person which owns or holds directly or indirectly five per cent (5%) or more of the voting securities or five per cent (5%) or more of the partnership or other equity interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such other Person.

 

(b)     “Agreement” means this Share Exchange Agreement and Plan of Reorganization.

 

(c)     “Applicable Law” or “Applicable Laws” means any and all laws, ordinances, constitutions, regulations, statutes, treaties, rules, codes, licenses, certificates, franchises, permits, principles of common law, requirements and Orders adopted, enacted, implemented, promulgated, issued, entered or deemed applicable by or under the authority of any Governmental Body having jurisdiction over a specified Person or any of such Person’s properties or assets.

 

(d)     “BVI” shall mean the British Virgin Islands.

 

(e)     “Best Efforts” means the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to achieve that result as expeditiously as possible, provided, however, that a Person required to use Best Efforts under this Agreement will not be thereby required to take actions that would result in a Material Adverse Effect in the benefits to such Person of this Agreement and the Share Exchange.

 

(f)     “Breach” means any breach of, or any inaccuracy in, any representation or warranty or any breach of, or failure to perform or comply with, any covenant or obligation, in or of this Agreement or any other Contract.

 

(g)     “Business” means the manufacture and sale of Boric Acid and Lithium Carbonate as presently conducted by Qing Hai.

 

(h)     “Business Day” means any day other than (a) Saturday or Sunday or (b) any other day on which major money center banks in New York, New York are permitted or required to be closed.

 

(i)     “Closing” shall mean the completion of the Share Exchange and the consummation of the transactions set forth herein.

 

(j)     “Closing Date” shall mean December 31, 2018.

 

(k)     “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(l)     “Confidential Information” means any information pertaining to the business, operations, marketing, customers, financing, forecasts and plans of any Party provided to or learned by any other Party during the course of negotiation of the Share Exchange. Any such information shall be treated as Confidential Information irrespective of whether such information has been marked “confidential” or in a similar manner.

 

2

 

 

(m)     “Consent” means any approval, consent, license, permits, ratification, waiver or other authorization.

 

(n)     “Contract” means any agreement, contract, lease, license, consensual obligation, promise, undertaking, understanding, commitment, arrangement, instrument or document (whether written or oral and whether express or implied), whether or not legally binding.

 

(o)     “Distribution Compliance Period” shall have the meaning set forth in Section 3.1(e).

 

(p)     “Employee Benefit Plan” has the meaning set forth in ERISA Section 3(3).

 

(q)     “Encumbrance” means and includes:

 

(i)     with respect to any personal property, any security or other property interest or right, claim, lien, pledge, option, charge, security interest, contingent or conditional sale, or other title claim or retention agreement or lease or use agreement in the nature thereof, interest or other right or claim of third parties, whether voluntarily incurred or arising by operation of law, and including any agreement to grant or submit to any of the foregoing in the future; and

 

(ii)     with respect to any Real Property (whether and including owned real estate or Real Estate subject to a Real Property Lease), any mortgage, lien, easement, interest, right-of-way, condemnation or eminent domain proceeding, encroachment, any building, use or other form of restriction, encumbrance or other claim (including adverse or prescriptive) or right of Third Parties (including Governmental Bodies), any lease or sublease, boundary dispute, and agreements with respect to any real property including: purchase, sale, right of first refusal, option, construction, building or property service, maintenance, property management, conditional or contingent sale, use or occupancy, franchise or concession, whether voluntarily incurred or arising by operation of law, and including any agreement to grant or submit to any of the foregoing in the future.

 

(r)     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations issued by the Department of Labor pursuant to ERISA or any successor law.

 

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

 

(t)     “GAAP” means at any particular time generally accepted accounting principles in the United States, consistently applied on a going concern basis, using consistent audit scope and materiality standards.

 

3

 

 

(u)     “Governing Documents” means with respect to any particular entity, the articles or certificate of incorporation and the bylaws (or equivalent documents for entities of foreign jurisdictions); all equity holders’ agreements, voting agreements, voting trust agreements, joint venture agreements, registration rights agreements or other agreements or documents relating to the organization, management or operation of any Person or relating to the rights, duties and obligations of the equity holders of any Person; and any amendment or supplement to any of the foregoing.

 

(v)     “Governmental Authorization” means any Consent, license, registration or permit issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Applicable Law.

 

(w)     “Governmental Body” means: (i) nation, state, county, city, town, borough, village, district, tribe or other jurisdiction; (ii) federal, state, local, municipal, foreign, tribal or other government; (iii) governmental or quasi-governmental authority of any nature (including any agency, branch, department, board, commission, court, tribunal or other entity exercising governmental or quasi-governmental powers); (iv) multinational organization or body; (v) body exercising, or entitled or purporting to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; or (vi) official of any of the foregoing.

 

(x)     “Improvements” means all buildings, structures, fixtures and improvements located on Land, including those under construction.

 

(y)     “IRS” means the United States Internal Revenue Service and, to the extent relevant, the United States Department of the Treasury.

 

(z)     “Knowledge” means actual knowledge without independent investigation.

 

(aa)     “Land” means all parcels and tracts of land in which any Person has an ownership or leasehold interest.

 

(bb)     “Material Adverse Effect” or “Material Adverse Change” means, in connection with any Person, any event, change or effect that is materially adverse, individually or in the aggregate, to the condition (financial or otherwise), properties, assets, liabilities, revenues, income, business, operations, results of operations or prospects of such Person, taken as a whole.

 

(cc)     “NRS” shall mean the Nevada Revised Statutes, as amended.

 

(dd)     “Order” means any writ, directive, order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Body or arbitrator.

 

(ee)     “Ordinary Course of Business” means an action taken by a Person if that action: (i) is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person; (ii) does not

 

4

 

 

require authorization by the board of directors or shareholders of such Person (or by any Person or group of Persons exercising similar authority) and does not require any other separate or special authorization of any nature; and (iii) is similar in nature, scope and magnitude to actions customarily taken, without any separate or special authorization, in the ordinary course of the normal, day-to-day operations of other Persons that are in the same line of business as such Person.

 

(ff)     “Party” or “Parties” means Mid-Heaven and/or Purchaser.

 

(gg)     “Person” shall mean an individual, company, partnership, limited liability company, limited liability partnership, joint venture, trust or unincorporated organization, joint stock company or other similar organization, government or any political subdivision thereof, or any other legal entity.

 

(hh)      “Mid-Heaven” has the meaning set forth in the preamble to this Agreement.

 

(ii)     “Mid-Heaven Balance Sheet” has the meaning set forth in Section 4.6(a).

 

(jj)     “Mid-Heaven Board” has the meaning set forth in Section 4.4.

 

(kk)     “Mid-Heaven Employee Plans” has the meaning set forth in Section 4.16(a).

 

(ll)     “Mid-Heaven Shareholders” has the meaning set forth in the preamble to this Agreement.   

 

(mm)     “Mid-Heaven Tax Affiliate” shall mean any Affiliate of Mid-Heaven to which Mid-Heaven would be required to consolidate and report in returns under the Code.

 

(nn)     “Qing Hai” has the meaning set forth in Section 4.6.

 

(oo)     “Qing Hai Financial Information” has the meaning set forth in Section 4.6.

 

(pp)     “Qing Hai Intellectual Property” has the meaning set forth in Section 4.12(a).

 

(qq)     “Proceeding” means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

 

(rr)     “Purchaser” has the meaning set forth in the Preamble.

 

5

 

 

(ss)     “Purchaser Balance Sheet” has the meaning set forth in Section 5.1(f)(ii).

 

(tt)     “Purchaser Business” means Purchaser’s business in selling existing inventory in PHEs, PHE Units and Heat Pumps and servicing existing clients.

 

(uu)     “Purchaser Common Stock” means the common stock, par value $.001 per share, of Purchaser.

 

(vv)     “Purchaser Contracts” has the meaning set forth in Section 5.1(o).

 

(ww)      “Purchaser Employee Plans” has the meaning set forth in Section 5.1(r)(i).

 

(xx)     “Purchaser Financial Information” has the meaning set forth in Section 5.1(f).

 

(aaa)     “Purchaser Intellectual Property” has the meaning set forth in Section 5.1(m).

 

(bbb)     “Purchaser SEC Reports” has the meaning set forth in Section 5.1(n).

 

(ccc)     “Real Property” means any Land and Improvements and all privileges, rights, easements, and appurtenances belonging to or for the benefit of any Land, including all easements appurtenant to and for the benefit of any Land (a “Dominant Parcel”) for, and as the primary means of access between, the Dominant Parcel and a public way, or for any other use upon which lawful use of the Dominant Parcel for the purposes for which it is presently being used is dependent, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.

 

(eee)     “Real Property Lease” means any lease, rental agreement or rights to use land pertaining to the occupancy of any improved space on any Land.

 

(fff)     “Representative” means with respect to a particular Person, any director, officer, manager, employee, agent, consultant, advisor, accountant, financial advisor, legal counsel or other Representative of that Person.

 

(hhh)     “SEC” means the United States Securities and Exchange Commission.

 

(iii)     “Securities Act” means the Securities Act of 1933, as amended.

 

(jjj)     “Security Interest” means any mortgage, pledge, security interest, Encumbrance, charge, claim, or other lien, other than: (a) mechanic’s, materialmen’s and similar

 

6

 

 

liens; (b) liens for Taxes not yet due and payable or for Taxes that the taxpayer is contesting in good faith through appropriate Proceedings; (c) liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation; (d) liens arising in connection with sales of foreign receivables; (e) liens on goods in transit incurred pursuant to documentary letters of credit; (f) purchase money liens and liens securing rental payments under capital lease arrangements; and (g) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

 

(kkk)     “Share Exchange” has the meaning set forth in the preamble to this Agreement.

 

(lll)     “Shares” has the meaning set forth in Section 2.1.

 

(mmm) “Subsidiary” means with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred), are held by the Owner or one or more of its Subsidiaries.

 

(nnn)     “Tangible Personal Property” means all machinery, equipment, tools, furniture, office equipment, computer hardware, supplies, materials, vehicles and other items of tangible personal property of every kind owned or leased by a Party (wherever located and whether or not carried on a Party’s books), together with any express or implied warranty by the manufacturers or sellers or lessors of any item or component part thereof and all maintenance records and other documents relating thereto.

 

(ooo)     “Tax” or “Taxes” means, with respect to any Person, (i) all income taxes (including any tax on or based upon net income, gross income, gross receipts, income as specially defined, earnings, profits or selected items of income, earnings or profits) and all gross receipts, sales, use, ad valorem, transfer, franchise, license, withholding, payroll, employment, excise, severance, stamp, occupation, commercial rent, premium, property or windfall profit taxes, alternative or add-on minimum taxes, customs duties and other taxes, fees, assessments or charges of any kind whatsoever, together with all interest and penalties, additions to tax and other additional amounts imposed by any taxing authority (domestic or foreign) on such person (if any), (ii) all value added taxes and (iii) any liability for the payment of any amount of the type described in clauses (i) or (ii) above as a result of (A) being a “transferee” (within the meaning of Section 6901 of the Code or any Applicable Law) of another person, (B) being a member of an affiliated, combined or consolidated group or (C) a contractual arrangement or otherwise.

 

(ppp)     “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

(qqq)     “Third Party” means a Person that is not a Party to this Agreement.

 

7

 

 

ARTICLE II. THE SHARE EXCHANGE

 

2.1     The Share Exchange. Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the NRS, at the Closing, the Parties shall cause the Share Exchange to be consummated by taking all appropriate actions to ensure that the shareholders of Mid-Heaven listed on Schedule 2.1 deliver all of the issued and outstanding shares of capital stock of Mid-Heaven to Purchaser, duly executed and endorsed in blank (or accompanied by duly executed stock powers duly endorsed in blank), in proper form for transfer in exchange for the issuance of an aggregate of 186,588,264 shares of Purchaser Common Stock (the “Shares”) to the three shareholders of Mid-Heaven listed on Schedule 2.1.

 

2.2     Tax Free Reorganization. The Parties each hereby agree to use their Best Efforts and to cooperate with each other to cause the Share Exchange to be a tax-free reorganization within the meaning of Sections 368 and 1032 of the Code.

 

2.3     Closing. The Closing will occur via e-mail and facsimile on December 31, 2018 at 8:00 a.m. EST or such later date and time to be agreed upon by the parties (the “Closing Date”), following satisfaction or waiver of the conditions set forth in Article VIII.

 

2.4     Reorganization.

 

(a)     As of the Closing, Mr. Weiguo, Mr. Wang, Xin Li, and Mr. Qingtai Kong shall resign from the board of directors of the Purchaser and Mr. Mao Zhang, Mr. Jimin Zhang, Mr. Xing Hai Li, and Mr. Liguo Zhang shall be appointed as the directors of the Purchaser until their respective successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with Purchaser’s Articles of Incorporation and Bylaws.

 

(b)     The nominees of Mid-Heaven shall, as of the Closing, be appointed as the officers of the Purchaser until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Purchaser’s Articles of Incorporation and Bylaws. As of the Closing, Mr. Kenneth Scipta, Ms. Hunajun Ai and Mr. Yingkai Wang shall resign from all positions they hold as officers of Purchaser. Mr. Mao Zhang shall be appointed Chairman of the Board, Mr. Jimin Zhang shall be appointed Chief Executive Officer and Secretary and Mr. Xu Dong Wang shall be appointed Chief Financial Officer and Treasurer of the Purchaser.

 

(c)     If at any time after the Closing, any party shall consider that any further deeds, assignments, conveyances, agreements, documents, instruments or assurances in law or any other things are necessary or desirable to vest, perfect, confirm or record in the Purchaser the title to any property, rights, privileges, powers and franchises of Mid-Heaven by reason of, or as a result of, the Share Exchange, or otherwise to carry out the provisions of this Agreement, the remaining parties, as applicable, shall execute and deliver, upon request, any instruments or assurances, and do all other things necessary or proper to vest, perfect, confirm or record title to such property, rights, privileges, powers and franchises in the Purchaser, and otherwise to carry out the provisions of this Agreement.

 

8

 

 

ARTICLE III. COMPLIANCE WITH APPLICABLE SECURITIES LAWS

 

3.1     Covenants, Representations and Warranties of the Mid-Heaven Shareholders.

 

(a)     The three shareholders of Mid-Heaven listed on Schedule 2.1 acknowledge and agree that they are acquiring the Shares for investment purposes and will not offer, sell or otherwise transfer, pledge or hypothecate any of the Shares issued to them (other than pursuant to an effective Registration Statement under the Securities Act) directly or indirectly unless:

 

(i)     the sale is to Purchaser;

 

(ii)     the Shares are sold in a transaction that does not require registration under the Securities Act, or any applicable United States state laws and regulations governing the offer and sale of securities, and the vendor has furnished to Purchaser an opinion of counsel to that effect or such other written opinion as may be reasonably required by Purchaser.

 

(b)     The three shareholders of Mid-Heaven acknowledge and agree that the certificates representing the Shares shall bear a restrictive legend, substantially in the following form:

 

“The securities represented by this stock certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or applicable state securities laws, and shall not be sold, pledged, hypothecated, donated, or otherwise transferred (whether or not for consideration) by the holder except upon the issuance to the Company of a favorable opinion of its counsel or the submission to the Company of such other evidence as may be satisfactory to counsel for the Company, to the effect that any such transfer shall not be in violation of the Securities Act or applicable state securities laws.”

 

(c)     The three shareholders of Mid-Heaven represent and warrant that they:

 

(i)     are not aware of any advertisement of any of the shares being issued hereunder; and

 

(d)     acknowledge and agree that Purchaser will refuse to register any transfer of the shares not made pursuant to an effective registration statement under the Securities Act or

 

9

 

 

pursuant to an available exemption from the registration requirements of the Securities Act and in accordance with applicable state and provincial securities laws.

 

(e)     acknowledge and agree to Purchaser making a notation on its records or giving instructions to the registrar and transfer agent of Purchaser in order to implement the restrictions on transfer set forth and described herein.

 

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF MID-HEAVEN

 

As a material inducement for Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby, Mid-Heaven makes the following representations and warranties as of the date hereof and as of the Closing Date, each of which is relied upon by Purchaser regardless of any investigation made or information obtained by Purchaser (unless and to the extent specifically and expressly waived in writing by Purchaser on or before the Closing Date):

 

4.1     Organization and Good Standing.

 

(a)     Mid-Heaven is a corporation duly organized, validly existing and in good standing under the laws of the BVI and all of the subsidiaries of Mid-Haven (the “Subsidiaries”) are duly organized, validly existing and in good standing under the laws of the Peoples Republic China. Each Subsidiary is duly qualified to do business in the People’s Republic of China and is in good standing under the laws of each jurisdiction in which either the ownership or use of the properties owned or used by it, requires such qualification and the failure to be so qualified would have a Material Adverse Effect on Mid-Heaven.

 

(b)     Schedule 4.1 sets forth all of the Subsidiaries and ownership thereof. Mid-Heaven does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, association, or other entity other than as set forth therein.

 

4.2     Corporate Documents. Schedule 2.1 consists of a true and correct copy of a shareholder list setting forth all shareholders of Mid-Heaven.

 

4.3     Capitalization of Mid-Heaven. The entire authorized capital stock of Mid-Heaven and its Subsidiaries are set forth in Schedule 4.3. All of Mid-Heaven’s and its Subsidiaries issued and outstanding shares, and registered capital, as the case may be have been duly authorized, are validly issued, fully paid and nonassessable, and are held by the Mid-Heaven Shareholders listed on the shareholder list attached as Schedule 2.1 and as set forth for the Subsidiaries as set forth in Schedule 4.3.

 

4.4     Authorization of Transaction. Mid-Heaven has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly and validly authorized by all necessary action on the part of Mid-Heaven in accordance with Applicable Laws and Mid-Heaven’s Governing Documents. This Agreement

 

10

 

 

constitutes the valid and legally binding obligation of Mid-Heaven, enforceable in accordance with its terms and conditions. The Board of Directors of Mid-Heaven (the “Mid-Heaven Board”) has duly and validly authorized the execution and delivery of this Agreement and approved the consummation of the transactions contemplated hereby, and has taken all corporate actions required to be taken by the Mid-Heaven Board for the consummation of the Share Exchange.

 

4.5     Noncontravention. Neither the execution and delivery of this Agreement, nor consummation of the Share Exchange, by Mid-Heaven will:

 

(a)     violate any Applicable Law, Order, stipulation, charge or other restriction of any Governmental Body to which Mid-Heaven is subject or any provision of its Governing Documents; or

 

(b)     conflict with, result in a Breach of, constitute a default under, result in the acceleration of, create in any Person the right to accelerate, terminate, modify or cancel, or require any notice under any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest or other arrangement to which Mid-Heaven is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets), except where the violation, conflict, Breach, default, acceleration, termination, modification, cancellation, failure to give notice, or Security Interest would not have a Material Adverse Effect on the financial condition of Mid-Heaven or on the ability of the Parties to consummate the Share Exchange.

 

4.6     Qing Hai Financial Information. Mid-Haven has provided the Purchaser with the following pro forma financial information for Qing Hai Mid-Heaven Boron & Lithium Technology Co., Ltd, its operating subsidiary (“Qing Hai”) (the “Qing Hai Financial Information”):

 

(a)     balance sheets and statements of income, stockholders’ equity and cash flow as of and for the years ended December 31, 2016 (the “December 2016 Balance Sheet” and December 31, 2017 (the “Qing Hai 2017 Balance Sheet” together with the December 2016 Balance Sheet, the “Balance Sheets”)).

 

4.7     Events Subsequent to Qing Hai Balance Sheet. Since the date of the Qing Hai 2017 Balance Sheet (the “Balance Sheet Date”), there has not been, occurred or arisen, with respect to Mid-Heaven or Qing Hai any of the following except as disclosed in Schedule 4.7:

 

(a)     any change or amendment in its Governing Documents;

 

(b)     any reclassification, split up or other change in, or amendment of or modification to, the rights of the holders of any of its capital stock;

 

(c)     any direct or indirect redemption, purchase or acquisition by any Person of any of its capital stock or of any interest in or right to acquire any such stock;

 

11

 

 

(d)     any issuance, sale, or other disposition of any capital stock, or any grant of any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any capital stock;

 

(e)     any declaration, set aside, or payment of any dividend or any distribution with respect to its capital stock (whether in cash or in kind) or any redemption, purchase, or other acquisition of any of its capital stock;

 

(f)     the organization of any Subsidiary or the acquisition of any shares of capital stock by any Person or any equity or ownership interest in any business;

 

(g)     any damage, destruction or loss of any of the its properties or assets whether or not covered by insurance;

 

(h)     any material sale, lease, transfer, or assignment of any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business;

 

(i)     the execution of, or any other commitment to any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) outside the Ordinary Course of Business;   

 

(j)     any acceleration, termination, modification, or cancellation of any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) involving more than $10,000 to which it is a party or by which it is bound;

 

(k)     any Security Interest or Encumbrance imposed upon any of its assets, tangible or intangible;

 

(l)     any grant of any license or sublicense of any rights under or with respect to any material Mid-Heaven Intellectual Property;

 

(m)     any sale, assignment or transfer (including transfers to any employees, Affiliates or shareholders) of any material Wing Hai Intellectual Property;

 

(n)     any capital expenditure (or series of related capital expenditures) involving more than $250,000 and outside the Ordinary Course of Business;

 

(o)     any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital investments, loans, and acquisitions) involving more than $250,000 and outside the Ordinary Course of Business;

 

(p)     any issuance of any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation involving more than $250,000;

 

12

 

 

(q)     any delay or postponement of the payment of accounts payable or other liabilities, other than those being contested in good faith;

 

(r)     any cancellation, compromise, waiver, or release of any right or claim (or series of related rights and claims) involving more than $25,000 and outside the Ordinary Course of Business;

 

(s)     any loan to, or any entrance into any other transaction with, any of its directors, officers, and employees;

 

(t)     the adoption, amendment, modification, or termination of any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken away any such action with respect to any other Employee Benefit Plan);

 

(u)     any employment contract or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

 

(v)     any increase in the base compensation of any of its directors, officers, and employees that is greater than Twenty-Five Thousand Dollars ($25,000) per annum;

 

(w)     any charitable or other capital contribution in excess of $2,500;

 

(x)     any taking of other action or entrance into any other transaction other than in the Ordinary Course of Business, or entrance into any transaction with any insider of Mid-Heaven, except as disclosed in this Agreement and the Disclosure Schedules;

 

(y)     any other event or occurrence that may have or could reasonably be expected to have a Material Adverse Effect on Mid-Heaven; or

 

(z)     any agreement or commitment, whether in writing or otherwise, to do any of the foregoing.

 

4.8     Tax Matters.

 

(a)     Mid-Heaven and each of its Subsidiaries:

 

(i)     have timely paid or caused to be paid all material Taxes required to be paid by it or them though the date hereof and as of the Closing Date (including any Taxes shown due on any Tax Return);

 

(ii)     have filed or caused to be filed in a timely and proper manner (within any applicable extension periods) all Tax Returns required to be filed by it or them with the appropriate Governmental Body in all jurisdictions in which such Tax Returns are required to be filed; and all tax returns filed on behalf of Mid-Heaven and each of its Subsidiaries were complete and correct in all material respects; and

 

13

 

 

(iii)     have not requested or caused to be requested any extension of time within which to file any Tax Return, which Tax Return has not since been filed.

 

(b)      

 

(i)     have not been notified by any Governmental Body that any material issues have been raised (and no such issues are currently pending) by any Governmental Body in connection with any Tax Return filed by or on behalf of Mid-Heaven; there are no pending Tax audits and no waivers of statutes of limitations have been given or requested with respect to Mid-Heaven or the Subsidiaries; no Tax liens have been filed against Mid-Heaven or the Subsidiaries or unresolved deficiencies or additions to Taxes have been proposed, asserted or assessed against Mid-Heaven.

 

(ii)      Full and adequate accrual has been made (A) on the Qing Hai Balance Sheet, and the books and records of Qing Hai for all income taxes currently due and all accrued Taxes not yet due and payable by Mid-Heaven for all periods ending on or prior to the Balance Sheet Date, and (B) on the books and records of Qing Hai for all Taxes payable by Qing Hai for all periods beginning after the Balance Sheet Date.

 

(iii)     Mid-Heaven and each of its Subsidiaries has not incurred any liability for Taxes from and after the Balance Sheet Date other than Taxes incurred in the Ordinary Course of Business and consistent with past practices.

 

(ii)     Mid-Heaven and each of its Subsidiaries has complied in all material respects with all Applicable Laws relating to the collection or withholding of Taxes (such as Taxes or withholding of Taxes from the wages of employees).

 

(iii)     Mid-Heaven and each of its Subsidiaries does not have any liability in respect of any Tax sharing agreement with any Person.

 

(iv)     Mid-Heaven and each of its Subsidiaries has not incurred any liability to make any payments either alone or in conjunction with any other payments that would constitute a “parachute payment” within the meaning of Section 280G of the Code (or any corresponding provision of state local or foreign Applicable Law related to Taxes).

 

(v)     No claim has been made within the last three years by any taxing authority in a jurisdiction in which Mid-Heaven or each of its Subsidiaries does not file Tax Returns that Mid-Heaven or each of its Subsidiaries is or may be subject to taxation by that jurisdiction.

 

(vi)     The consummation of the Share Exchange will not trigger the realization or recognition of intercompany gain or income to Mid-Heaven or any Mid-Heaven Tax Affiliate under the Federal consolidated return regulations with respect to Federal, state or local taxes.

 

(vii)     Mid-Heaven is not currently, nor has it been at any time during the

 

14

 

 

previous five years, a “U.S. real property holding corporation” and, therefore, the Shares are not “U.S. real property interests,” as such terms are defined in Section 897 of the Code.

 

4.9     Title to Assets. Mid-Heaven and each of its Subsidiaries have good and marketable title to, or a valid leasehold interest in, the properties and assets owned or leased and used by it or them to operate the Business in the manner presently operated , as reflected in the Qing Hai Financial Information.

 

4.10     Leased Real Property. Mid-Heaven and Subsidiaries have provided Purchaser with a complete and accurate list of all leasehold interests and all rights to use any Real Property.

 

4.11     Condition of Facilities.

 

(a)     Use of the Real Property of Mid-Heaven and its Subsidiaries for the various purposes for which they are presently being used is permitted as of right under all Applicable Laws related to zoning and is not subject to “permitted nonconforming” use or structure classifications. All Improvements are in compliance with all Applicable Laws, including those pertaining to zoning, building and the disabled, are in good repair and in good condition, ordinary wear and tear excepted, and are free from latent and patent defects. No part of any Improvement encroaches on any real property not included in the Real Property of Mid-Heaven or any of its Subsidiaries and there are no buildings, structures, fixtures or other Improvements primarily situated on adjoining property which encroach on any part of the Land.

 

(b)     Each item of Tangible Personal Property is in good repair and good operating condition, ordinary wear and tear excepted, is suitable for immediate use in the Ordinary Course of Business and is free from latent and patent defects. No item of Tangible Personal Property is in need of repair or replacement other than as part of routine maintenance in the Ordinary Course of Business. All Tangible Personal Property used in the Business is in the possession of Mid-Heaven and/or each of its Subsidiaries.

 

4.12     Mid-Heaven Intellectual Property.

 

(a)     Mid-Heaven and each of its Subsidiaries own, or license or otherwise possess legal enforceable rights to use all: (i) trademarks and service marks (registered or unregistered), trade dress, trade names and other names and slogans embodying business goodwill or indications of origin, all applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (ii) material patentable inventions, technology, computer programs and software (including password unprotected interpretive code or source code, object code, development documentation, programming tools, drawings, specifications and data) and all applications and patents in any jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions, continuations-in-part, renewals or extensions; (iii) trade secrets, including confidential and other non-public information (iv) copyrights in writings, designs, software programs, mask works or other works, applications or registrations in any jurisdiction for the foregoing and all moral rights related thereto; (v) databases and all database rights; and (vi) Internet web sites, domain names and applications and registrations pertaining thereto (collectively, “Mid-Heaven Intellectual Property”) that are

 

15

 

 

used in the Business except for any such failures to own, be licensed or possess that would not be reasonably likely to have a Material Adverse Effect.

 

(b)     Except as may be evidenced by patents issued after the date hereof, there are no conflicts with or infringements of any material Mid-Heaven Intellectual Property by any third party and the conduct of the Business as currently conducted does not conflict with or infringe any proprietary right of a third party.

 

(c)     Mid-Heaven owns or has the right to use all software currently used in and material to the Business.

 

4.13     Affiliate Transactions. No officer, director or employee of Mid-Heaven or any of its Subsidiaries or any member of the immediate family of any such officer, director or employee, or any entity in which any of such persons owns any beneficial interest (other than any publicly held corporation whose stock is traded on a national securities exchange or in the over-the-counter market and less than one percent of the stock of which is beneficially owned by any of such persons), has any agreement with Mid-Heaven or any Subsidiary or any interest in any of their property of any nature, used in or pertaining to the Business (other than the ownership of capital stock of the corporation as disclosed in Section 4.3). None of the foregoing Persons has any direct or indirect interest in any competitor, supplier or customer of Mid-Heaven or in any Person from whom or to whom Mid-Heaven leases any property or transacts business of any nature.

 

4.14     Powers of Attorney. There are no outstanding powers of attorney executed on behalf of Mid-Heaven or any of its Subsidiaries.

 

4.15     Litigation.

 

(a)     There is no pending or, to the Knowledge of Mid-Heaven, threatened Proceeding:

 

(i)      by or against Mid-Heaven or its Subsidiaries or that otherwise relates to or may affect the Business that, if adversely determined, would have a Material Adverse Effect; or

 

(ii)     that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Share Exchange.

 

(iii)   to the Knowledge of Mid-Heaven, no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Proceeding. Mid-Heaven has delivered to Purchaser copies, if any, of all pleadings, correspondence and other documents relating to each Proceeding.

 

(b)     To the Knowledge of Mid-Heaven:

 

(i)     there is no material Order to which Mid-Heaven or the Business is

 

16

 

 

subject; and

 

(ii)     no officer, director, agent or employee of Mid-Heaven or any Subsidiary is subject to any Order that prohibits such officer, director, agent or employee from engaging in or continuing any conduct, activity or practice relating to the Business.

 

(c)     Mid-Heaven and each of its Subsidiaries has been and is in compliance with all of the terms and requirements of each Order to which it or the Business is or has been subject;

 

(d)     No event has occurred or circumstance exists that is reasonably likely to constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which Mid-Heaven, each of its Subsidiaries or the Business is subject; and

 

(e)     Neither Mid-Heaven nor any Subsidiary have received any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible or potential violation of, or failure to comply with, any term or requirement of any Order to which Mid-Heaven or the Business is subject.

 

4.16     Employee Benefits.

 

(a)     Mid-Haven has delivered to Purchaser all material (i) Employee Benefit Plans of Mid-Heaven and Subsidiaries, (ii) bonus, stock option, stock purchase, stock appreciation right, incentive, deferred compensation, supplemental retirement, severance, and fringe benefit plans, programs, policies or arrangements, and (iii) employment or consulting agreements, for the benefit of, or relating to, any current or former employee (or any beneficiary thereof) of Mid-Heaven and each Subsidiary, in the case of a plan described in (i) or (ii) above, that is currently maintained by Mid-Heaven or any Subsidiary or with respect to which Mid-Heaven or any Subsidiary has an obligation to contribute, and in the case of an agreement described in (iii) above, that is currently in effect (the “Mid-Heaven Employee Plans”).

 

(b)     There is no Proceeding pending or, to Mid-Heaven’s knowledge, threatened against the assets of any Mid-Heaven Employee Plan or, with respect to any Mid-Heaven Employee Plan, against Mid-Heaven, other than Proceedings that would not reasonably be expected to result in a Material Adverse Effect, and to Mid-Heaven’s Knowledge there is no Proceeding pending or threatened in writing against any fiduciary of any Mid-Heaven Employee Plan other than Proceedings that would not reasonably be expected to result in a Material Adverse Effect.

 

(c)     Each of the Mid-Heaven Employee Plans has been operated and administered in all material respects in accordance with its terms and applicable law.

 

(d)     No director, officer, or employee of Mid-Heaven will become entitled to retirement, severance or similar benefits or to enhanced or accelerated benefits (including any acceleration of vesting or lapsing of restrictions with respect to equity-based awards) under any

 

17

 

 

Mid-Heaven Employee Plan solely as a result of consummation of the Share Exchange.

 

4.17     Insurance. Mid-Heaven has delivered to Purchaser an accurate and complete description of all policies of insurance of any kind or nature, including, but not limited to, fire, liability, workmen’s compensation and other forms of insurance owned or held by or covering Mid-Heaven and each Subsidiary or all or any portion of their respective property and assets.

 

4.18     Employees. To the Knowledge of Mid-Heaven, no officer, director, agent, employee, consultant or contractor of Mid-Heaven or any Subsidiary is bound by any Contract that purports to limit the ability of such officer, director, agent, employee, consultant or contractor (i) to engage in or continue or perform any conduct, activity, duties or practice relating to the Business or (ii) to assign to Mid-Heaven or to any other Person any rights to any invention, improvement, or discovery. No former or current employee of Mid-Heaven is a party to, or is otherwise bound by, any Contract that in any way adversely affected, affects, or will affect the ability of Mid-Heaven or Purchaser to conduct the Business as heretofore carried on by Mid-Heaven and it Subsidiaries.

 

4.19     Labor Relations. Neither Mid-Heaven nor any Subsidiary are a party to any collective bargaining or similar agreement other than as all workers receive in the Peoples Republic of China. To the Knowledge of Mid-Heaven, there are no strikes, work stoppages, unfair labor practice charges or grievances pending or threatened against Mid-Heaven or any Subsidiary by any employee of Mid-Heaven or any other Person or entity.

 

4.20     Legal Compliance. To the Knowledge of Mid-Heaven, Mid-Heaven and each Subsidiary are in material compliance with all Applicable Laws (including rules and regulations thereunder) of any Governmental Bodies having jurisdiction over Mid-Heaven and each Subsidiary, including any requirements relating to antitrust, consumer protection, currency exchange, equal opportunity, health, occupational safety, pension and securities matters.

 

4.21     Brokers’ Fees. Mid-Heaven has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the Share Exchange for which Mid-Heaven could become liable or obligated.

 

4.22     Undisclosed Liabilities. To the Knowledge of Mid-Heaven, Mid-Heaven and the Subsidiaries do not have any liability (and to the Knowledge of Mid-Heaven, there is no basis for any present or future Proceeding, charge, complaint, claim, or demand against any of them giving rise to any liability), except for

 

(a)     liabilities reflected or reserved against in the Qing Hai Balance Sheet;

 

(b)     liabilities which have arisen in the Ordinary Course of Business since the date of the Qing Hai Balance Sheet; or

 

(c)     as otherwise disclosed to Purchaser.

 

4.23     Disclosure. The representations and warranties of Mid-Heaven contained in this

 

18

 

 

Agreement do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not misleading.

 

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

As a material inducement for Mid-Heaven to enter into this Agreement and to consummate the transactions contemplated hereby, Purchaser hereby makes the following representations and warranties as of the date hereof and as of the Closing Date, each of which is relied upon by Mid-Heaven regardless of any investigation made or information obtained by Mid-Heaven (unless and to the extent specifically and expressly waived in writing by Mid-Heaven on or before the Closing Date):

 

5.1     Representations of Purchaser Concerning the Transaction.

 

(a)     Organization and Good Standing.

 

(i)     Purchaser is a corporation duly organized, validly existing and in good standing under the laws of State of Nevada. Purchaser is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification and the failure to be so qualified would have a Material Adverse Effect on Purchaser.

 

(ii)     Each subsidiary of the Purchaser is a corporation duly organized, validly existing and in good standing under the laws of State of Nevada. Each such subsidiary is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification and the failure to be so qualified would have a Material Adverse Effect on Purchaser.

 

(b)     Authorization of Transaction. Purchaser has the corporate power to execute, deliver and perform this Agreement, the Related Agreements, and, subject to the satisfaction of the conditions precedent set forth herein, has taken all action required by law, its Governing Documents or otherwise, to authorize the execution and delivery of this Agreement and such related documents. The execution and delivery of this Agreement has been approved by the Board of Directors of Purchaser. This Agreement is a valid obligation of Purchaser and is legally binding in accordance with its terms.

 

(c)     Capitalization of Purchaser. The entire authorized capital stock of Purchaser consists of 75,000,000 shares of common stock having a par value of $.001 per share, of which 75,000,000 shares are issued and outstanding. All issued and outstanding shares of Purchaser Common Stock have been duly authorized, are validly issued, fully paid and nonassessable. There are no outstanding or authorized options, warrants, rights, contracts, calls, puts, rights to subscribe, conversion rights or other agreements or commitments to which Purchaser is a party or which are binding upon Purchaser providing for the issuance, disposition or acquisition of any of its capital stock, nor any outstanding or authorized stock appreciation,

 

19

 

 

phantom stock or similar rights with respect to Purchaser.

 

(d)     Noncontravention. Neither the execution and delivery of this Agreement, nor consummation of the Share Exchange, will:

 

(i)     violate any Applicable Law, Order, stipulation, charge or other restriction of any Governmental Body to which Purchaser is subject or any provision of its Governing Documents; or

 

(ii)     conflict with, result in a Breach of, constitute a default under, result in the acceleration of, create in any Person the right to accelerate, terminate, modify or cancel, or require any notice under any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest, or other arrangement to which Purchaser is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets), except where the violation, conflict, Breach, default, acceleration, termination, modification, cancellation, failure to give notice, or Security Interest would not have a Material Adverse Effect on the financial condition of Purchaser or on the ability of the Parties to consummate the Share Exchange.

 

(e)     Affiliate Transactions. No officer, director or employee of Purchaser or any member of the immediate family of any such officer, director or employee, or any entity in which any of such persons owns any beneficial interest (other than any publicly-held corporation whose stock is traded on a national securities exchange or in the over-the-counter market and less than one percent of the stock of which is beneficially owned by any of such Persons), has any agreement with Purchaser or any interest in any of their property of any nature, used in or pertaining to the Purchaser Business. None of the foregoing Persons has any direct or indirect interest in any competitor, supplier or customer of Purchaser or in any Person from whom or to whom Purchaser leases any property or transacts business of any nature.

 

(f)     Purchaser Financial Information. The Purchaser’s Financial Information is set forth in its reports with the Securities and Exchange Commission (collectively, the “Purchaser Financial Information”):

 

(i)     audited balance sheet and statements of income, changes in stockholders’ equity and cash flow as of and for the fiscal years ended December 31, 20116 and December 31, 2017, for Purchaser and unaudited quarterly balance sheets for the years ended 2016, 2017 and 2018; and

 

The audited balance sheet dated as of December 31, 2017, of Purchaser shall be referred to as the “Purchaser Balance Sheet.” Purchaser Financial Information presents fairly the financial condition of Purchaser as of such dates and the results of operations of Purchaser for such periods, in accordance with GAAP and are consistent with the books and records of Purchaser (which books and records are correct and complete).

 

(g)     Events Subsequent to Purchaser Balance Sheet. Since the date of the

 

20

 

 

Purchaser Balance Sheet, there has not been, except as disclosed in its reports with the Securities and Exchange Commission occurred or arisen, with respect to Purchaser:

 

(i)     any change or amendment in its Governing Documents,;

 

(ii)     any reclassification, split-up or other change in, or amendment of or modification to, the rights of the holders of any of its capital stock,;

 

(iii)     any direct or indirect redemption, purchase or acquisition by any Person of any of its capital stock or of any interest in or right to acquire any such stock;

 

(iii)     any issuance, sale, or other disposition of any capital stock, or any grant of any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any capital stock;

 

(iv)     any declaration, set aside, or payment of any dividend or any distribution with respect to its capital stock (whether in cash or in kind) or any redemption, purchase, or other acquisition of any of its capital stock;

 

(v)     the organization of any Subsidiary or the acquisition of any shares of capital stock by any Person or any equity or ownership interest in any business, other than the organization of a wholly owned Subsidiary for the express purpose of effecting the name change of the Purchaser through a parent-Subsidiary merger under the NRS;

 

(vi)     any damage, destruction or loss of any of its properties or assets whether or not covered by insurance;

 

(vii)     any sale, lease, transfer or assignment of any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business;

 

(viii)     the execution of, or any other commitment to any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) outside the Ordinary Course of Business;

 

(ix)     any acceleration, termination, modification, or cancellation of any agreement, contract, lease or license (or series of related agreements, contracts, leases, and licenses) involving more than $10,000 to which it is a party or by which it is bound;

 

(x)     any Security Interest or Encumbrance imposed upon any of its assets, tangible or intangible;

 

(xi)     any grant of any license or sublicense of any rights under or with respect to any Purchaser Intellectual Property;

 

(xii)     any sale, assignment or transfer (including transfers to any employees, affiliates or shareholders) of any Purchaser Intellectual Property;

 

21

 

 

(xiii)     any capital expenditure (or series of related capital expenditures) involving more than $10,000 and outside the Ordinary Course of Business;

 

(xiv)     any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital investments, loans and acquisitions) involving more than $10,000 and outside the Ordinary Course of Business;

 

(xv)     any issuance of any note, bond or other debt security, or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation involving more than $25,000;

 

(xvi)     any delay or postponement of the payment of accounts payable or other liabilities;

 

(xvii)     any cancellation, compromise, waiver or release of any right or claim (or series of related rights and claims) involving more than $25,000 and outside the Ordinary Course of Business;

 

(xviii)     any loan to, or any entrance into any other transaction with, any of its directors, officers and employees either involving more than $500 individually or $2,500 in the aggregate;

 

(xix)     the adoption, amendment, modification or termination of any bonus, profit-sharing, incentive, severance, or other plan, contract or commitment for the benefit of any of its directors, officers and employees (or taken away any such action with respect to any other Employee Benefit Plan);

 

(xx)     any employment contract or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

 

(xxi)     any increase in the base compensation of any of its directors, officers and employees;

 

(xxii)     any charitable or other capital contribution in excess of $2,500;

 

(xxiii)     any taking of other action or entrance into any other transaction other than in the Ordinary Course of Business, or entrance into any transaction with any insider of Purchaser, except as disclosed in this Agreement and the Disclosure Schedules;

 

(xxiv)     any other event or occurrence that may have or could reasonably be expected to have an Material Adverse Effect on Purchaser (whether or not similar to any of the foregoing); or

 

(xxv)     any agreement or commitment, whether in writing or otherwise, to do any of the foregoing.

 

22

 

 

(h)     Tax Matters.

 

(i)     Purchaser:

 

(A) has timely paid or caused to be paid all Taxes required to be paid by it though the date hereof and as of the Closing Date (including any Taxes shown due on any Tax Return);

 

(B) has filed or caused to be filed in a timely and proper manner (within any applicable extension periods) all Tax Returns required to be filed by it with the appropriate Governmental Body in all jurisdictions in which such Tax Returns are required to be filed; and all tax returns filed on behalf of Purchaser and each Purchaser Tax Affiliate were completed and correct in all material respects; and

 

(C) has not requested or caused to be requested any extension of time within which to file any Tax Return, which Tax Return has not since been filed.

 

(ii)     Purchaser has previously delivered true, correct and complete copies of all Federal Tax Returns filed by or on behalf of Purchaser through the date hereof for the periods ending after December 31, 2017.

 

(iii)

 

(A) Purchaser has not been notified by the IRS or any other Governmental Body that any issues have been raised (and no such issues are currently pending) by the IRS or any other Governmental Body in connection with any Tax Return filed by or on behalf of Purchaser or any Purchaser Tax Affiliate; there are no pending Tax audits and no waivers of statutes of limitations have been given or requested with respect to Purchaser or any Purchaser Tax Affiliate (for years that it was a Purchaser Tax Affiliate); no Tax liens have been filed against Purchaser or unresolved deficiencies or additions to Taxes have been proposed, asserted or assessed against Purchaser or any Purchaser Tax Affiliate (for the years that it was a Purchaser Tax Affiliate).

 

(B) Full and adequate accrual has been made (i) on the Purchaser Balance Sheet, and the books and records of Purchaser for all income Taxes currently due and all accrued Taxes not yet due and payable by Purchaser for all periods ending on or prior to the Purchaser Balance Sheet Date, and (ii) on the books and records of Purchaser and for all Taxes payable by Purchaser for all periods beginning after the Purchaser Balance Sheet Date.

 

(C) Purchaser has not incurred any liability for Taxes from and after the Purchaser Balance Sheet Date other than Taxes incurred in the Ordinary Course of Business and consistent with past practices.

 

(D) Purchaser has not (i) made an election (or had an election made on its behalf by another person) to be treated as a “consenting corporation” under Section 341(f)

 

23

 

 

of the Code or (ii) a “personal holding company” within the meaning of Section 542 of the Code.

 

(E) Purchaser has complied in all material respects with all Applicable Laws relating to the collection or withholding of Taxes (such as Taxes or withholding of Taxes from the wages of employees).

 

(F) Purchaser has no liability in respect of any Tax sharing agreement with any Person and all Tax sharing agreements to which Purchaser has been bound have been terminated.

 

(G) Purchaser has not incurred any Liability to make any payments either alone or in conjunction with any other payments that:

 

(1)     shall be non-deductible under, or would otherwise constitute a “parachute payment” within the meaning of Section 280G of the Code (or any corresponding provision of state local or foreign income Tax Law); or

 

(2)     are or may be subject to the imposition of an excise Tax under Section 4999 of the Code.

 

(H) Purchaser has not agreed to (nor has any other Person agreed to on its behalf) and is not required to make any adjustments or changes on, before or after the Closing Date, to its accounting methods pursuant to Section 481 of the Code, and the Internal Revenue Service has not proposed any such adjustments or changes in the accounting methods of Purchaser.

 

(I) No claim has been made within the last three years by any taxing authority in a jurisdiction in which Purchaser does not file Tax Returns that Purchaser is or may be subject to taxation by that jurisdiction.

 

(J) The consummation of the Share Exchange will not trigger the realization or recognition of intercompany gain or income to Purchaser under the Federal consolidated return regulations with respect to Federal, state or local Taxes.

 

(K) Purchaser is not currently, nor has it been at any time during the previous five years, a “U.S. real property holding corporation” and, therefore, the Purchaser Common Stock is not “U.S. real property interests,” as such terms are defined in Section 897 of the Code.

 

(i)     Title to Assets. Purchaser has good and marketable title to, or a valid leasehold interest in, the properties and assets owned or leased and used by it to operate the Purchaser Business in the manner presently operated by Purchaser, as reflected in Purchaser Financial Information.

 

(j)     Real Property. Purchaser does not own or hold an ownership interest in any Real Property.

 

24

 

 

(k)     Leased Real Property. Except as set forth in its reports with the Securities and Exchange Commission, Purchaser does not own or a leasehold interest in any Real Property.

 

(l)     Condition of Facilities.

 

(i)     Use of the Real Property of Purchaser for the various purposes for which it is presently being used is permitted as of right under all Applicable Laws related to zoning and is not subject to “permitted nonconforming” use or structure classifications. All Improvements are in compliance with all Applicable Laws, including those pertaining to zoning, building and the disabled, are in good repair and in good condition, ordinary wear and tear excepted, and are free from latent and patent defects. To the Knowledge of Purchaser, no part of any Improvement encroaches on any real property not included in the Real Property of Purchaser, and there are no buildings, structures, fixtures or other Improvements primarily situated on adjoining property which encroach on any part of the Land.

 

(ii)     Each item of Tangible Personal Property is in good repair and good operating condition, ordinary wear and tear excepted, is suitable for immediate use in the Ordinary Course of Business and is free from latent and patent defects. No item of Tangible Personal Property is in need of repair or replacement other than as part of routine maintenance in the Ordinary Course of Business. All Tangible Personal Property used in the Purchaser Business is in the possession of Purchaser.

 

(m)     Purchaser Intellectual Property.

 

(i)     Purchaser owns, or is licensed or otherwise possesses legal enforceable rights to use all: (i) trademarks and service marks (registered or unregistered), trade dress, trade names and other names and slogans embodying business goodwill or indications of origin, all applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (ii) patentable inventions, technology, computer programs and software (including password unprotected interpretive code or source code, object code, development documentation, programming tools, drawings, specifications and data) and all applications and patents in any jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions, continuations-in-part, renewals or extensions; (iii) trade secrets, including confidential and other non-public information (iv) copyrights in writings, designs, software programs, mask works or other works, applications or registrations in any jurisdiction for the foregoing and all moral rights related thereto; (v) databases and all database rights; and (vi) Internet Web sites, domain names and applications and registrations pertaining thereto (collectively, “Purchaser Intellectual Property”) that are used in the Purchaser Business except for any such failures to own, be licensed or possess that would not be reasonably likely to have a Material Adverse Effect.

 

(ii)     Purchaser owns or has the right to use all software currently used in and material to the Purchaser Business.

 

(n)     SEC Reports and Financial Statements. Since inception, Purchaser has

 

25

 

 

filed with the SEC all reports and other filings required to be filed by Purchaser in accordance with the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder (the “Purchaser SEC Reports”). As of their respective dates, Purchaser SEC Reports complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the respective rules and regulations promulgated thereunder applicable to such Purchaser SEC Reports and, except to the extent that information contained in any Purchaser SEC Report has been revised or superseded by a later Purchaser SEC Report filed and publicly available prior to the date of this Agreement, none of the Purchaser SEC Reports contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of Purchaser included in Purchaser SEC Reports were prepared from and are in accordance with the accounting books and other financial records of Purchaser, were prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by the rules of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and presented fairly the consolidated financial position of Purchaser and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the Purchaser SEC Reports, Purchaser has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) other than liabilities or obligations incurred in the Ordinary Course of Business. The Purchaser SEC Reports accurately disclose (i) the terms and provisions of all stock option plans, (ii) transactions with Affiliates, and (iii) all material contracts required to be disclosed pursuant to Item 601(b)(10) of Regulation S-K promulgated by the SEC.

 

(o)     Contracts. The SEC Reports contain is a true, complete and accurate list of all written or oral contracts, understandings, agreements and other arrangements (including a brief description of all such oral arrangements) executed by an officer or duly authorized employee of Purchaser or to which Purchaser is a party either:

 

(i)     involving more than $10,000, or

 

(ii)     in the nature of a collective bargaining agreement, employment agreement, or severance agreement with any of its directors, officers and employees.

 

Purchaser has delivered or will, prior to Closing, deliver to Mid-Heaven a correct and complete copy of each Contract (redacted copies for names are acceptable) listed in Schedule 5.1(o) (the “Purchaser Contracts”). Except as disclosed in Schedule 5.1(o): (i) Purchaser has fully complied with all material terms of Purchaser Contracts; (ii) to the Knowledge of Purchaser, other parties to Purchaser Contracts have fully complied with the terms of Purchaser Contracts; and (iii) there are no disputes or complaints with respect to nor has Purchaser received any notices (whether oral or in writing) that any other party to Purchaser Contracts is terminating, intends to terminate or is considering terminating, any of Purchaser Contracts listed or required to be listed in Schedule 5.1(o).

 

(p)     Powers of Attorney. There are no outstanding powers of attorney executed

 

26

 

 

on behalf of Purchaser.

 

(q)     Litigation.

 

(i)     There is no pending or, to Purchaser’s Knowledge, threatened Proceeding:

 

(A)     by or against Purchaser or that otherwise relates to or may affect the Purchaser Business which, if adversely determined, would have a Material Adverse Effect; or

 

(B)     that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Share Exchange.

 

To the Knowledge of Purchaser, no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Proceeding.

 

(ii)

 

(A)     there is no material Order to which Purchaser or the Purchaser Business is subject; and

 

(B)     to the Knowledge of Purchaser, no officer, director, agent or employee of Purchaser is subject to any Order that prohibits such officer, director, agent or employee from engaging in or continuing any conduct, activity or practice relating to the Purchaser Business.

 

(iii)

 

(A)     Purchaser has been and is in compliance with all of the terms and requirements of each Order to which it or the Purchaser Business is or has been subject;

 

(B)     No event has occurred or circumstance exists that is reasonably likely to constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which Purchaser or the Purchaser Business is subject; and

 

(C)     Purchaser has not received any notice, or received but subsequently resolved to the satisfaction of the Governmental Body or other Person whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible or potential violation of, or failure to comply with, any term or requirement of any Order to which Purchaser or the Purchaser Business is subject.

 

(r)     Employee Benefits.

 

27

 

 

(i)     Purchaser has no (A) Employee Benefit Plans, (B) bonus, stock option, stock purchase, stock appreciation right, incentive, deferred compensation, supplemental retirement, severance, and fringe benefit plans, programs, policies or arrangements, and (C) employment or consulting agreements, for the benefit of, or relating to, any current or former employee (or any beneficiary thereof) of Purchaser, in the case of a plan described in (A) or (B) above, that is currently maintained by Purchaser or with respect to which Purchaser has an obligation to contribute, and in the case of an agreement described in (C) above, that is currently in effect (the “Purchaser Employee Plans”).

 

(ii)     No director, officer, or employee of Purchaser will become entitled to retirement, severance or similar benefits or to enhanced or accelerated benefits (including any acceleration of vesting or lapsing of restrictions with respect to equity-based awards) under any Purchaser Employee Plan solely as a result of consummation of the Share Exchange.

 

(s)     Insurance. Purchaser has provided  an accurate and complete description of all policies of insurance of any kind or nature, including, but not limited to, fire, liability, workmen’s compensation and other forms of insurance owned or held by or covering Purchaser or all or any portion of its property and assets.

 

(t)     Employees. To the Knowledge of Purchaser, no officer, director, agent, employee, consultant or contractor of Purchaser is bound by any Contract that purports to limit the ability of such officer, director, agent, employee, consultant or contractor (i) to engage in or continue or perform any conduct, activity, duties or practice relating to the Purchaser Business or (ii) to assign to Purchaser or to any other Person any rights to any invention, improvement or discovery. No former or current employee of Purchaser is a party to, or is otherwise bound by, any Contract that in any way adversely affected, affects, or will affect the ability of Purchaser to conduct the Purchaser Business.

 

(u)     Labor Relations. Purchaser is not a party to any collective bargaining or similar agreement. To the Knowledge of Purchaser, there are no strikes, work stoppages, unfair labor practice charges or grievances pending or threatened against Purchaser by any employee of Purchaser or any other person or entity.

 

(v)     Legal Compliance. To the Knowledge of Purchaser, Purchaser is in material compliance with all Applicable Laws of any Governmental Bodies having jurisdiction over Purchaser, including any requirements relating to antitrust, consumer protection, currency exchange, equal opportunity, health, occupational safety, pension and securities matters.

 

(w)     Brokers’ Fees. Purchaser has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the Share Exchange for which Purchaser could become liable or obligated.

 

(x)     Undisclosed Liabilities. Purchaser has no liability (and to the Knowledge of Purchaser, there is no basis for any present or future Proceeding, charge, complaint, claim or demand against any of them giving rise to any liability), except for:

 

28

 

 

(i)     liabilities reflected or reserved against in the Purchaser Balance Sheet; or

 

(ii)     liabilities which have arisen in the Ordinary Course of Business since the date of the Purchaser Balance Sheet.

 

(y)     Disclosure. The representations and warranties of Purchaser contained in this Agreement do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not misleading.

 

ARTICLE VI. ACCESS TO INFORMATION AND DOCUMENTS

 

6.1     Access to Information. Between the date hereof and the Closing Date, each Party will give to the other and its counsel, accountants and other Representatives full access to all the properties, documents, contracts, personnel files and other records and shall furnish copies of such documents and with such information with respect to its affairs as may from time to time be reasonably requested. Each Party will disclose to the other and make available to such Party and its Representatives all books, contracts, accounts, personnel records, letters of intent, papers, records, communications with regulatory authorities and other documents relating to the business and operations of Mid-Heaven or Purchaser, as the case may be. In addition, Mid-Heaven shall make available to Purchaser all such banking, investment and financial information as shall be necessary to allow for the efficient integration of Mid-Heaven’s banking, investment and financial arrangements with those of Purchaser at the Closing. Access of Purchaser pursuant to the foregoing shall be granted at a reasonable time and upon reasonable notice.

 

6.2     Effect of Access.

 

(a)     Nothing contained in this Article VI shall be deemed to create any duty or responsibility on the part of either Party to investigate or evaluate the value, validity or enforceability of any Contract or other asset included in the assets of the other Party.

 

(b)     With respect to matters as to which any Party has made express representations or warranties herein, the Parties shall be entitled to rely upon such express representations and warranties irrespective of any investigations made by such Parties, except to the extent that such investigations result in actual knowledge of the inaccuracy or falsehood of particular representations and warranties.

 

ARTICLE VII. COVENANTS

 

7.1     Preservation of Business.

 

(a)     Prior to the Closing or the termination of this Agreement, Mid-Heaven will use its Best Efforts to preserve the Business, to keep available to Purchaser the services of

 

29

 

 

the present employees of Mid-Heaven, and to preserve for Purchaser the goodwill of the suppliers, customers and others having business relations with Mid-Heaven. Mid-Heaven shall conduct its Business only in the Ordinary Course of Business, including, without limitation, its policies and practices relating to the collection of accounts receivable and the payment of accounts payable and other liabilities, and not introduce any new methods of management, operations or accounting, without Purchaser’s prior written consent (which shall not be unreasonably withheld); maintain its assets in as good working order and condition as at present, ordinary wear and tear excepted; perform all material obligations under material agreements and leases relating to or affecting it, and keep in full force and effect present insurance policies.

 

(b)     Prior to the Closing or the termination of this Agreement, Purchaser will use its Best Efforts to preserve the Purchaser Business, to keep available to Purchaser the services of the present employees of Purchaser, and to preserve for Purchaser the goodwill of the suppliers, customers and others having business relations with Purchaser. Purchaser shall conduct the Purchaser Business only in the Ordinary Course of Business as it has previously been conducted, including, without limitation, its policies and practices relating to the collection of accounts receivable and the payment of accounts payable and other liabilities, and not introduce any new methods of management, operations or accounting, without the prior written consent of Mid-Heaven (which shall not be unreasonably withheld); maintain its assets in as good working order and condition as at present, ordinary wear and tear excepted; perform all material obligations under material agreements and leases relating to or affecting it, and keep in full force and effect present insurance policies.

 

7.2     Current Information.

 

(a)     During the period from the date of this Agreement to the Closing, each Party hereto shall promptly notify each other Party of any (i) significant change in its Ordinary Course of Business, (ii) Proceeding (or communications indicating that the same may be contemplated), or the institution or threat or settlement of Proceedings, in each case involving the Parties the outcome of which, if adversely determined, could reasonably be expected to have a Material Adverse Effect on the Party, taken as a whole or (iii) event which such Party reasonably believes could be expected to have a Material Adverse Effect on the ability of any party hereto to consummate the Share Exchange.

 

(b)     During the period from the date of this Agreement to the Closing, Purchaser shall promptly notify Mid-Heaven of any correspondence received from the SEC and shall deliver a copy of such correspondence to Mid-Heaven within one (1) Business Day of receipt.

 

7.3     Material Transactions. Prior to the Closing, no Party will (other than (i) as contemplated by the terms of this Agreement, (ii) with respect to transactions for which there is a binding commitment existing prior to the date hereof disclosed in the Disclosure Schedules, and (iii) transactions described on Schedule 7.3 which do not vary materially from the terms set forth on such Schedule 7.3, or in the Ordinary Course of Business without first obtaining the written consent of the other Parties):

 

30

 

 

(a)     declare or pay any dividend or make any other distribution to shareholders, whether in cash, stock or other property;

 

(b)     amend its Governing Documents or enter into any agreement to merge or consolidate with, or sell a significant portion of its assets to, any other Person;

 

(c)     except pursuant to options, warrants, conversion rights or other contractual rights, issue any shares of its capital stock or any options, warrants or other rights to subscribe for or purchase such common or other capital stock or any securities convertible into or exchangeable for any such common or other capital stock;

 

(d)     directly redeem, purchase or otherwise acquire any of its common or other capital stock;

 

(e)     effect a reclassification, recapitalization, split-up, exchange of shares, readjustment or other similar change in or to any capital stock or otherwise reorganize or recapitalize;

 

(f)     enter into any employment contract which is not terminable upon notice of ninety (90) days or less, at will, and without penalty except as provided herein or grant any increase (other than ordinary and normal increases consistent with past practices) in the compensation payable or to become payable to officers or salaried employees, grant any stock options or, except as required by law, adopt or make any change in any bonus, insurance, pension or other Employee Benefit Plan, agreement, payment or agreement under, to, for or with any of such officers or employees;

 

(g)     make any payment or distribution to the trustee under any bonus, pension, profit sharing or retirement plan or incur any obligation to make any such payment or contribution which is not in accordance with such Party’s usual past practice, or make any payment or contributions or incur any obligation pursuant to or in respect of any other plan or contract or arrangement providing for bonuses, options, executive incentive compensation, pensions, deferred compensation, retirement payments, profit sharing or the like, establish or enter into any such plan, contract or arrangement, or terminate or modify any plan;

 

(h)     prepay any debt in excess of Twenty-Five Thousand Dollars ($25,000), borrow or agree to borrow any amount of funds except in the Ordinary Course of Business or, directly or indirectly, guarantee or agree to guarantee obligations of others, or fail to pay any monetary obligation in a timely manner prior to delinquency;

 

(i)     enter into any agreement, contract or commitment having a term in excess of three (3) months or involving payments or obligations in excess of Twenty-Five Thousand Dollars ($25,000) in the aggregate, except in the Ordinary Course of Business;

 

(j)     amend or modify any material Contract;

 

(k)     agree to increase the compensation or benefits of any employee (except

 

31

 

 

for normal annual salary increases in accordance with past practices);

 

(l)     place on any of its assets or properties any pledge, charge or other Encumbrance, except as otherwise authorized hereunder, or enter into any transaction or make any contract or commitment relating to its properties, assets and business, other than in the Ordinary Course of Business or as otherwise disclosed herein;

 

(m)     guarantee the obligation of any person, firm or corporation, except in the Ordinary Course of Business;

 

(n)     make any loan or advance in excess of Twenty-Five Thousand Dollars ($25,000) or cancel or accelerate any material indebtedness owing to it or any claims which it may possess or waive any material rights of substantial value;

 

(o)     sell or otherwise dispose of any Real Property or any material amount of any tangible or intangible personal property other than leasehold interests in closed facilities, except in the Ordinary Course of Business;

 

(p)     commit any act or fail to do any act which will cause a Breach of any Contract and which will have a Material Adverse Effect on its business, financial condition or earnings;

 

(q)     violate any Applicable Law which violation might have a Material Adverse Effect on such Party;

 

(r)     purchase any real or personal property or make any other capital expenditure where the amount paid or committed is in excess of Twenty-Five Thousand Dollars ($25,000) per expenditure;

 

(s)     except in the Ordinary Course of Business, enter into any agreement or transaction with any of such Party’s Affiliates; or

 

(t)     engage in any transaction or take any action that would render untrue in any material respect any of the representations and warranties of such Party contained in this Agreement, as if such representations and warranties were given as of the date of such transaction or action.

 

7.4     Public Disclosures. Purchaser and Mid-Heaven will consult with each other before issuing any press release or otherwise making any public statement with respect to the transactions contemplated by this Agreement, and shall not issue any such press release or make any such public statement prior to such consultation except as may be required by Applicable Law. The Parties, may upon mutual agreement, issue a joint press release, mutually acceptable to Mid-Heaven and Purchaser, promptly upon execution and delivery of this Agreement.

 

7.5     Confidentiality. Purchaser and Mid-Heaven shall hold, and shall use their best efforts to cause their respective auditors, attorneys, financial advisors, bankers and other

 

32

 

 

consultants and advisors to hold, in strict confidence, unless compelled to disclose by judicial or administrative process or by other requirements of law, all Confidential Information, and each Party shall not release or disclose such Confidential Information to any other Person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors in connection with the transactions contemplated by this Agreement.

 

7.6     Mid-Haven Shareholder’s Rights. From the Closing to the time that the Purchaser increases the number of authorized shares so that the Mid-Haven Shareholders are issued the shares of Purchaser’s Common Stock as contemplated herein (the “Authorization Date”), the Mid-Haven Shareholders (i) shall approve any action taken by the Board of Directors of the Purchaser, prior to any such action taking effect and (ii) shall be able to propose any legal action to be considered by the Board of Directors of the Purchaser. After the Closing, no action on behalf of the stockholders of the Purchaser shall be recognized or be effected by the Purchaser without the written consent of the Mid-Haven Shareholder. To facilitate the foregoing, the Mid-Haven Shareholder, by executing this Agreement, The stockholder(s) hereby appoint(s) Mao Zhang, as proxy, with the power to appoint his substitute, and hereby authorizes him to represent and to vote on behalf of the Mid-Haven Shareholders for the purposes of considering and acting upon such business as may properly come before the Board of Directors of the Purchaser and to facilitate the purposes of Section 7.6 of this Agreement from the Closing Date until termination on the Authorization Date.

 

7.7     After the Closing, Purchaser shall increase its authorized shares of Common Stock to 500,000,000 shares.

 

ARTICLE VIII. CONDITIONS TO CLOSING

 

8.1     Mutual Conditions. The respective obligations of each party to effect the Share Exchange shall be subject to the satisfaction, at or prior to the Closing Date, of the following conditions, any of which may be waived in writing by Purchaser and Mid-Heaven:

 

(a)     Neither the Purchaser nor Mid-Heaven shall be subject to any Order by a court of competent jurisdiction which (i) prevents or materially delays the consummation of the Share Exchange or (ii) would impose any material limitation on the ability of Purchaser effectively to exercise full rights of ownership of the shares of Mid-Heaven or any material portion of the assets or Business, taken as a whole;

 

(b)     No statute, rule or regulation, shall have been enacted by any Governmental Body that makes the consummation of the Share Exchange illegal; and

 

(c)     Purchaser and Mid-Heaven shall have received all Consents of Third Parties that are required of such Third Parties prior to the consummation of the Share Exchange, in form and substance acceptable to Purchaser or Mid-Heaven, as the case may be, except where the failure to obtain such consent, approval or authorization would not have a Material Adverse Effect.

 

33

 

 

8.2     Conditions to the Obligations of Purchaser. The obligations of Purchaser under this Agreement are subject to the satisfaction, at or before the Closing, of each of the following conditions:

 

(a)     The representations and warranties of Mid-Heaven contained herein that are qualified as to materiality shall be true in all respects on and as of the Closing Date with the same force and effect as though made on and as of such date, and each of the representations and warranties of Mid-Heaven that are not so qualified shall be true in all material respects;

 

(b)     Mid-Heaven shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions required by this Agreement to be performed or complied with by Mid-Heaven at or prior to the Closing;

 

(c)     There shall not be threatened, instituted or pending any Proceeding by or before any court or Governmental Body requesting or looking toward an Order that (i) restrains or prohibits the consummation of the Share Exchange, (ii) could have a Material Adverse Effect on Purchaser’s ability to exercise control over or manage Mid-Heaven after the Closing or (iii) could have a Material Adverse Effect on Mid-Heaven; and

 

(d)     On the Closing Date, there shall be no effective Order issued by a court of competent jurisdiction restraining or prohibiting the consummation of the Share Exchange;

 

8.3     Conditions to the Obligations of Mid-Heaven. The obligations of Mid-Heaven under this Agreement are subject to the satisfaction, at or before the Closing, of each of the following conditions:

 

(a)     The representations and warranties of Purchaser contained herein that are qualified as to materiality shall be true in all respects on and as of the Closing Date (except for the representations and warranties made as of a specific date which shall be true in all material respects as of such date) with the same force and effect as though made on and as of such date, and each of the representations and warranties of Purchaser that are not so qualified shall be true in all material respects;

 

(b)     Purchaser shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions required by this Agreement to be so performed or complied with by Purchaser at or prior to the Closing;

 

(c)     There shall not be threatened, instituted or pending any Proceeding by or before any court or Governmental Body requesting or looking toward an Order, that (i) restrains or prohibits the consummation of the Share Exchange or (ii) could have a Material Adverse Effect on Purchaser;

 

(d)     On the Closing Date, there shall be no effective Order issued by a court of competent jurisdiction restraining or prohibiting the consummation of the Share Exchange;

 

34

 

 

(e)     All Consents of all Third Parties and Governmental Bodies shall have been obtained that are necessary, in the opinion of counsel to Mid-Heaven, in connection with (i) the execution and delivery by Purchaser of this Agreement to which either of them is a party, and (ii) the consummation by Purchaser of the transactions contemplated hereby or thereby, and copies of all such Consents shall have been delivered to Mid-Heaven;

 

(f)     Purchaser shall have delivered to Mid-Heaven the resignations of Mr. Kenneth Scipta, Ms. Hunajun Ai and Mr. Yingkai Wang from all positions they hold as officers of Purchaser and Mr. Weiguo, Mr. Wang, Xin Li, and Mr. Qingtai Kong from the board of directors of the Purchaser;

 

(g)     Purchaser shall have delivered to Mid-Heaven evidence of the expansion of Purchaser’s Board of Directors to two (2) members and evidence of the appointment of two (2) new directors nominated by Mid-Heaven;

 

(h)     Purchaser shall deliver to each of the three shareholders of Mid-Heaven Shareholders irrevocable instructions to the Purchaser’s transfer agent to issue certificates evidencing ownership of the Shares as set forth in Schedule 2.1

 

(i)     The Mid-Heaven Shareholders shall have given all necessary approvals and consents required under NRS;

 

(j)     The Share Exchange shall qualify as a tax-free transaction to each of Purchaser, Mid-Heaven and Mid-Heaven Shareholders; and

 

(k)     As of the Closing Date, Purchaser shall not have any debts or liabilities and shall not have any liens recorded against its properties or assets.

 

ARTICLE IX. SURVIVAL OF REPRESENTATIONS

 

9.1     Survival of Representations. All representations and warranties made by any Party to this Agreement or pursuant hereto, as modified by any Disclosure Schedule, exhibit, certificate or other document executed and delivered pursuant hereto shall survive the Closing and any investigation made by or on behalf of any party hereto for a period of one (1) year following the Closing Date. All statements contained herein or in any schedule, exhibit, certificate or other document executed and delivered pursuant hereto shall be deemed representations and warranties for purposes of Sections 9.1, 8.2(a), and 8.3(a). The right to any remedy based upon such representations and warranties shall not be affected by any investigation conducted with respect to, or any knowledge acquired at any time, whether before or after execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of any such representation or warranty.

 

35

 

 

ARTICLE X. TERMINATION, AMENDMENT AND WAIVER

 

10.1     Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a)     by mutual written consent of Purchaser and Mid-Heaven;

 

(b)     by Purchaser or Mid-Heaven:

 

(i)     if the Share Exchange shall not have been consummated on or before December 31, 2018 unless the failure to consummate the Share Exchange is the result of a willful and material Breach of this Agreement by the Party seeking to terminate this Agreement;

 

(ii)     if any court of competent jurisdiction or other Governmental Body shall have issued an Order or taken any other action permanently enjoining, restraining or otherwise prohibiting the Share Exchange and such order, decree, ruling or other action shall have become final and non-appealable;

 

(iii)     in the event of a Breach by the other Party of any material representation, warranty, covenant or other agreement contained in this Agreement which cannot be or has not been cured within ten (10) days after the giving of written notice to the breaching Party of such Breach (provided that the terminating Party is not then in Breach of any material representation, warranty, covenant or other agreement contained in this Agreement);

 

(iv)     in the event that (i) all of the conditions to the obligation of such Party to effect the Share Exchange set forth in Section 8.1 shall have been satisfied and (ii) any condition to the obligation of such Party to effect the Share Exchange set forth in Section 8.2 (in the case of Purchaser) or Section 8.3 (in the case of Mid-Heaven) is not capable of being satisfied prior to the end of the period referred to in Section 10.1(b)(i); or

 

(v)     if there shall have occurred prior to the Closing changes in Applicable Law that, in the aggregate, shall have a Material Adverse Effect on either Party.

 

10.2     Effect of Termination. In the event of termination of this Agreement as provided in Section 10.1, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of any Party except to the extent that such termination results from the willful and material Breach by a Party of any of its representations, warranties, covenants or other agreements set forth in this Agreement, in which case the terminating Party shall have the right to pursue any remedies available to it at law or in equity.

 

10.3     Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.

 

10.4     Extension; Waiver. At any time prior to the Closing, the Parties may (i) extend the time for the performance of any of the obligations or other acts of the other Parties, (ii) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (iii) waive compliance with any of the

 

36

 

 

agreements or conditions contained in this Agreement. Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party.

 

10.5     Procedure for Termination, Amendment Extension or Waiver. A termination of this Agreement pursuant to Section 10.1, an amendment of this Agreement pursuant to Section 10.3, or an extension or waiver pursuant to Section 10.4 shall, in order to be effective, require in the case of Purchaser or Mid-Heaven, action by its Board of Directors or the duly authorized designee of the Board of Directors.

 

ARTICLE XI. MISCELLANEOUS

 

11.1     Notices. Any communications required or desired to be given hereunder shall be deemed to have been properly given if sent by hand delivery or by facsimile and overnight courier or overnight courier to the parties hereto at the following addresses, or at such other address as either party may advise the other in writing from time to time:

 

If to Purchaser:

 

SMARTHEAT INC.

A-1, 10, Street 7

Shenyang Economic and Technological Development Zone

Shenyang, China

Tel: (86) 24-2519-7699

 

 

with a copy to :

 

Newman & Morrison LLP

1872 Pleasantville Road, Suite 177

Briarcliff Manor, NY 10510

Attention: Robert Newman, Esq.

Tel: (914) 762-4265 (which copy shall not constitute notice)

 

If to Mid-Heaven:

 

MID-HEAVEN SINCERITY INTERNATIONAL RESOURCES INVESTMENT CO., LTD 

60 East Ren-Min Road

Da-Chai-Dan Town

Xai Xi County, Qing Hai Prvice

China

Phone +86-0977-82812

 

All such communications shall be deemed to have been delivered on the date of hand delivery or on the next Business Day following the deposit of such communications with the overnight courier. The address for notice may be changed by delivering a notice of such

 

37

 

 

change of address in the manner proscribed herein.

 

11.2     Further Assurances. Each Party hereby agrees to perform any further acts and to execute and deliver any documents which may be reasonably necessary to carry out the provisions of this Agreement.

 

11.3     Governing Law. This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of Nevada, applied without giving effect to any conflicts-of-law principles.

 

11.4     Commissions. Each of the Parties hereto represents and warrants that no broker or finder is entitled to any brokerage or finder’s fee or other commission in connection with the Share Exchange. Each of the Parties hereto shall pay or discharge, and shall indemnify and hold the other harmless from and against, all claims or liabilities for brokerage commissions or finder’s fees incurred by reason of any action taken by it.

 

11.5     Captions. The captions or headings in this Agreement are made for convenience and general reference only and shall not be construed to describe, define or limit the scope or intent of the provisions of this Agreement.

 

11.6     Integration of Exhibits and Schedules. All Exhibits and Disclosure Schedules to this Agreement are integral parts of this Agreement as if fully set forth herein.

 

11.7     Entire Agreement. This Agreement, including all Exhibits and Disclosure Schedules attached hereto and thereto contain the entire agreement of the parties and supersede any and all prior or contemporaneous agreements between the parties, written or oral, with respect to the transactions contemplated hereby. Such agreement may not be changed or terminated orally, but may only be changed by an agreement in writing signed by the party or parties against whom enforcement of any waiver, change, modification, extension, discharge or termination is sought.

 

11.8     Expenses. Except as expressly provided otherwise, each party hereto will bear its own costs and expenses (including fees and expenses of auditors, attorneys, financial advisors, bankers, brokers and other consultants and advisors) incurred in connection with this Agreement, and the transactions contemplated hereby and thereby.

 

11.9     Counterparts. This Agreement may be executed in several counterparts, each of which, when so executed, shall be deemed to be an original, and such counterparts shall together constitute and be one and the same instrument.

 

11.10     Binding Effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No Party may assign any right or obligation hereunder without the prior written consent of the other Parties.

 

11.11     No Rule of Construction. The Parties agree that, because all Parties participated

 

38

 

 

in negotiating and drafting this Agreement, no rule of construction shall apply to this Agreement which construes ambiguous language in favor of or against any Party by reason of that Party’s role in drafting this Agreement.

 

 

 

 

 

39

 

 

 

SIGNATURE PAGE OF PURCHASER AND MID-HEAVEN SINCERITY INTERNATIONAL RESOURCES INVESTMENT CO., LTD TO

SHARE EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION

 

IN WITNESS WHEREOF, Smartheat Inc. and Mid-Heaven Sincerity International Resources Investment Co., Ltd have caused this Share Exchange Agreement and Plan of Reorganization to be executed by their respective duly authorized officers, all as of the day and year first above written.

 

 

SMARTHEAT INC.

 

By:      /s/ Kenneth Scipta                      

Name: Kenneth Scipta

Title:   Chief Executive Officer

 

 

MID-HEAVEN SINCERITY INTERNATIONAL RESOURCES INVESTMENT CO., LTD 

 

By:      /s/ Mao Zhang                            

Name: Mao Zhang

Title:   Chief Executive Officer

 

 

 

 

 

SIGNATURE PAGES OF MID-HEAVEN SINCERITY INTERNATIONAL RESOURCES INVESTMENT CO., LTD SHAREHOLDERS TO

SHARE EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION

 

IN WITNESS WHEREOF, the shareholders of Mid-Heaven Sincerity International Resources Investment Co., Ltd have executed this Share Exchange Agreement and Plan of Reorganization as of the day and year first above written.

	
			 

			MID-HEAVEN SINCERITY INTERNATIONAL RESOURCES INVESTMENT CO., LTD 

			 

			 

			 

			By: /s/ Mao Zhang                                  

			Name: Mao Zhang 

			76.06% of Shares

			 

			 

			 

			By: /s/ Jian Zhang                                          

			Name: Jian Zhang

			20.91% of Shares

			 

			 

			 

			By: /s/ Ying Zhao                                    

			Name: Ms. Ying Zhao

			3.03% of Shares

			 

				
			 

			

 

 

 

 

 

Schedule 2.1

Mid-Heaven Shareholders 

 

	
			Mr. Zhang, Mao

				 	
			76.06%

				 	
			141,919,034

			
	
			Mr. Zhang, Jian

				 	
			20.91%

				 	
			39,015,606

			
	
			Ms. Zhao, Ying

				 	
			3.03%

				 	
			5,653,624

			

 

 

Schedule 4.1

 

 

 

 

 

Schedule 4.3

 

 

SCHEDULE 4.7

 

Qing Hai is a newly formed entity from a mining business that existed since 2008. All of the information was presented on a pro forma basis at this time. Qing Hai is in the process of a major capital expansion of its buildings and manufacturing plant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}]]