Document:

Unassociated Document

    GANG
      LI

    

    January
      10, 2008

    

    Pelaria
      International Limited

    P.O.
      Box
      957

    Offshore
      Incorporations Centre

    Road
      Town, Tortola, British Virgin Islands

    

    Re:
      NFES
      Development Corp.

    

    Ladies
      and Gentlemen:

     

    The
      agreement will set forth the terms and conditions pursuant to which Gang LI
      (“Seller”) will sell to Pelaria International Limited, a British Virgin Island
      corporation (“Purchaser”), a total of 19,991,429 shares (the “Shares”) of common
      stock of NF Energy Saving Corporation of America, a Delaware corporation
      (“NFES”), as follows:

     

    1.  Seller
      will sell to Purchaser, and Purchaser will purchase from Seller, the Shares
      for
      a purchase price of $1,235,828.58. Payment shall be made contemporaneously
      with
      the execution of this Agreement by wire transfer of the purchase price in
      accordance with instruction from Seller.

     

    2.  Seller
      represents that:

     

    (a)  Seller
      owns the Shares free and clear of any liens or options, rights or other security
      or other interests in the Shares;

     

    (b)  Seller
      has the right to sell the Shares to Purchaser, and neither the execution of
      this
      Agreement nor the sale of the Shares pursuant to this Agreement violates any
      agreements to which Seller is a party or any law to which Seller is
      subject.

     

    3.  Seller
      makes no representation or warranty as to the business, financial condition
      or
      prospects of NFES.

     

    4.  Purchaser
      represents and warrants to Seller as follows:

     

    (a)  Purchaser
      understands that the offer and sale of the Shares is being made only by means
      of
      this Agreement, and no representations or warranties are being made except
      as
      set forth in this Agreement.

     

    (b)  Purchaser
      is not acquiring the Shares as a result of, and will not itself engage in,
      any
“directed selling efforts” (as defined in Regulation S of the Securities and
      Exchange Commission) in the United States in respect of the Shares which would
      include any activities undertaken for the purpose of, or that could reasonably
      be expected to have the effect of, conditioning the market in the United States
      for the resale of the Shares; provided, however, that Purchaser may sell or
      otherwise dispose of the Shares in a manner permitted by applicable
      law.

     

    (c)  Purchaser
      acknowledges and agrees that none of the Shares have been registered under
      the
      Securities Act, or under any state securities or “blue sky” laws of any state of
      the United States, and, unless so registered, may not be offered or sold in
      the
      United States or, directly or indirectly, to U.S. Persons, as that term is
      defined in Regulation S, except in accordance with the provisions of Regulation
      S, pursuant to an effective registration statement under the Securities Act,
      or
      pursuant to an exemption from, or in a transaction not subject to, the
      registration requirements of the Securities Act and in each case in accordance
      with applicable state and provincial securities laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)  Purchaser
      acknowledges and agrees that NFES will refuse to register any transfer of the
      Shares not made in accordance with the provisions of Regulation S, pursuant
      to
      an effective registration statement under the Securities Act or pursuant to
      an
      available exemption from the registration requirements of the Securities Act
      and
      in accordance with applicable state and provincial securities laws.

     

    (e)  Purchaser
      represents and warrants that no broker or finder was involved directly or
      indirectly in connection with his or her purchase of the Shares pursuant to
      this
      Agreement. Purchaser shall indemnify the Issuer and hold it harmless from and
      against any manner of loss, liability, damage or expense, including fees and
      expenses of counsel, resulting from a breach of Purchaser’s warranty contained
      in this Paragraph 3(e).

     

    (f)  Purchaser
      understands that it has no registration rights with respect to the
      Shares.

     

    (g)  Purchaser
      is not a citizen or resident of the United States.

     

    (h)  Purchaser
      is acquiring the Shares for investment only and not with a view to resale or
      distribution and, in particular, it has no intention to distribute either
      directly or indirectly any of the Shares in the United States or to U.S.
      Persons.

     

    (i)  Purchaser
      is acquiring the Shares as principal for Purchaser’s own account, for investment
      purposes only, and not with a view to, or for, resale, distribution or
      fractionalization thereof, in whole or in part, and no other person has a direct
      or indirect beneficial interest in such Shares.

     

    (j)  Purchaser
      is not an underwriter of, or dealer in, the common stock of NFES, nor is
      Purchaser participating, pursuant to a contractual agreement or otherwise,
      in
      the distribution of the Shares.

     

    (k)  Purchaser
      is not aware of any advertisement of any of the Shares.

     

    (l)  No
      person
      has made to Purchaser any written or oral representations:

     

    (i)  that
      any
      person will resell or repurchase any of the Shares;

     

    (ii)  that
      any
      person will refund the purchase price of any of the Shares;

     

    (iii)  as
      to the
      future price or value of any of the Shares; or

     

    (iv)  that
      any
      of the Shares will be listed and posted for trading on any stock exchange or
      automated dealer quotation system or that application has been made to list
      and
      post any of the Shares of NFES on any stock exchange or automated dealer
      quotation system.

     

    (m)  Purchaser
      has such knowledge and experience in financial and business matters as to enable
      Purchaser to understand the nature and extent of the risks involved in
      purchasing the Shares. Purchaser is fully aware that such investments can and
      sometimes do result in the loss of the entire investment. Purchaser has engaged
      his or her own counsel and accountants to the extent that Purchaser deems it
      necessary.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.  The
      Agreement constitutes the entire agreement of the parties as to its subject
      matter, superseding any prior or contemporaneous agreements, understandings
      or
      letter of intent, and may not be amended nor may any right be waived except
      by
      an instrument which refers to this Agreement, states that it is an amendment
      or
      waiver and is signed by both parties in the case of an amendment or the party
      granting the waiver in the case of a waiver.

     

    Please
      confirm your agreement with the foregoing by signing this Agreement and
      returning it to Seller.

    

      
        	 	
                Very
                  truly yours,

              
	 	 
	 	
                /s/
                  Gang Li

              
	
                AGREED
                  TO this 10th
                  day of January, 2008.

              	
                Gang
                  LI

              

      

      

      
        	
                PELARIA
                  INTERNATIONAL LIMITED

              
	 	 
	 	 
	
                By:

              	
                /s/
                  Hong Li 

              
	
                Name: 

              	
                HONG
                  LI 

              
	
                Title: 

              	
                Director

              
	 	 
	
                By:

              	
                /s/
                  Gang Li

              
	
                Name: 

              	
                GANG
                  LI

              
	
                Title:
                  

              	
                Director

              
	 	 
	
                By:

              	
                /s/
                  Lihua Wang

              
	
                Name: 

              	
                LIHUA
                  WANG

              
	
                Title:
                  

              	
                DirectorExhbit
      10.13  

     

    Amended
      and Restated Credit
      Agreement

    

    Dated
      as of

    October
      1, 2007

    

    among

    

    EV
      Energy Partners, L.P.,

    as
      Parent

    

    EV
      Properties, L.P.,

    as
      Borrower,

     

    JPMorgan
      Chase Bank, N.A.,

    as
      Administrative Agent,

     

    BNP
      Paribas,

    and

    Wachovia
      Bank, National Association,

    

    as
      Co-Syndication Agents,

     

    Compass
      Bank

    and

    Union
      Bank of California, N.A.,

    

    as
      Co-Documentation Agents,

     

    and

    

    The
      Lenders Party Hereto

     

    Sole
      Lead Arranger and Sole Book Runner

     

    J.P.
      Morgan Securities Inc.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      	 	 	
              Page

            
	 	 
	
              
                ARTICLE
                  I DEFINITIONS AND ACCOUNTING MATTERS

              

            	
              1

            
	 	 	 
	
              Section
                1.01

            	
              Terms
                Defined Above

            	
              1

            
	
              Section
                1.02

            	
              Certain
                Defined Terms

            	
              1

            
	
              Section
                1.03

            	
              Types
                of Loans and Borrowings

            	
              21

            
	
              Section
                1.04

            	
              Terms
                Generally

            	
              21

            
	
              Section
                1.05

            	
              Accounting
                Terms and Determinations; GAAP

            	
              22

            
	 	
               

            
	
              
                ARTICLE
                  II THE CREDITS

              

            	
              22

            
	 	 	
               

            
	
              Section
                2.01

            	
              Commitments

            	
              22

            
	
              Section
                2.02

            	
              Loans
                and Borrowings

            	
              23

            
	
              Section
                2.03

            	
              Requests
                for Borrowings

            	
              24

            
	
              Section
                2.04

            	
              Interest
                Elections

            	
              25

            
	
              Section
                2.05

            	
              Funding
                of Borrowings

            	
              27

            
	
              Section
                2.06

            	
              Termination,
                Reduction and Increase of Aggregate Maximum Credit Amounts

            	
              27

            
	
              Section
                2.07

            	
              Borrowing
                Base

            	
              29

            
	
              Section
                2.08

            	
              Letters
                of Credit

            	
              32

            
	 	
               

            
	
              
                ARTICLE
                  III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS;
                  FEES

              

            	
              37

            
	 	 	
               

            
	
              Section
                3.01

            	
              Repayment
                of Loans

            	
              37

            
	
              Section
                3.02

            	
              Interest

            	
              37

            
	
              Section
                3.03

            	
              Alternate
                Rate of Interest

            	
              38

            
	
              Section
                3.04

            	
              Prepayments

            	
              38

            
	
              Section
                3.05

            	
              Fees

            	
              40

            
	 	
               

            
	
              
                ARTICLE
                  IV PAYMENTS; PRO RATA TREATMENT; SHARING OF
                  SET-OFFS.

              

            	
              41

            
	 	 	
               

            
	
              Section
                4.01

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

            	
              41

            
	
              Section
                4.02

            	
              Presumption
                of Payment by the Borrower

            	
              42

            
	
              Section
                4.03

            	
              Certain
                Deductions by the Administrative Agent

            	
              42

            
	 	
               

            
	
              
                ARTICLE
                  V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES;
                  ILLEGALITY

              

            	
              43

            
	 	 	
               

            
	
              Section
                5.01

            	
              Increased
                Costs

            	
              43

            
	
              Section
                5.02

            	
              Break
                Funding Payments

            	
              44

            
	
              Section
                5.03

            	
              Taxes

            	
              44

            
	
              Section
                5.04

            	
              Designation
                of Different Lending Office

            	
              45

            
	
              Section
                5.05

            	
              Illegality

            	
              45

            
	 	
               

            
	
              
                ARTICLE
                  VI CONDITIONS PRECEDENT

              

            	
              46

            
	 	 	
               

            
	
              Section
                6.01

            	
              Effective
                Date

            	
              46

            
	
              Section
                6.02

            	
              Each
                Credit Event

            	
              48

            
	
              Section
                6.03

            	
              Acquisition

            	
              49

            
	 	
               

            
	
              
                ARTICLE
                  VII REPRESENTATIONS AND WARRANTIES

              

            	
              50

            
	 	 	
               

            
	
              Section
                7.01

            	
              Organization;
                Powers

            	
              50

            

    

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    
      	
              Section
                7.02

            	
              Authority;
                Enforceability

            	
              51

            
	
              Section
                7.03

            	
              Approvals;
                No Conflicts

            	
              51

            
	
              Section
                7.04

            	
              Financial
                Position; No Material Adverse Change

            	
              51

            
	
              Section
                7.05

            	
              Litigation

            	
              52

            
	
              Section
                7.06

            	
              Environmental
                Matters

            	
              52

            
	
              Section
                7.07

            	
              Compliance
                with the Laws and Agreements; No Defaults

            	
              53

            
	
              Section
                7.08

            	
              Investment
                Company Act

            	
              54

            
	
              Section
                7.09

            	
              Taxes

            	
              54

            
	
              Section
                7.10

            	
              ERISA

            	
              54

            
	
              Section
                7.11

            	
              Disclosure;
                No Material Misstatements

            	
              55

            
	
              Section
                7.12

            	
              Insurance

            	
              55

            
	
              Section
                7.13

            	
              Restriction
                on Liens

            	
              56

            
	
              Section
                7.14

            	
              Subsidiaries

            	
              56

            
	
              Section
                7.15

            	
              Location
                of Business and Offices

            	
              56

            
	
              Section
                7.16

            	
              Properties;
                Titles, Etc

            	
              56

            
	
              Section
                7.17

            	
              Maintenance
                of Properties

            	
              57

            
	
              Section
                7.18

            	
              Gas
                Imbalances, Prepayments

            	
              58

            
	
              Section
                7.19

            	
              Marketing
                of Production

            	
              58

            
	
              Section
                7.20

            	
              Swap
                Agreements

            	
              58

            
	
              Section
                7.21

            	
              Use
                of Loans and Letters of Credit

            	
              58

            
	
              Section
                7.22

            	
              Solvency

            	
              59

            
	 	 
	
              ARTICLE
                VIII AFFIRMATIVE COVENANTS

            	
              59

            
	 	 	 
	
              Section
                8.01

            	
              Financial
                Statements; Other Information

            	
              59

            
	
              Section
                8.02

            	
              Notices
                of Material Events

            	
              62

            
	
              Section
                8.03

            	
              Existence;
                Conduct of Business

            	
              63

            
	
              Section
                8.04

            	
              Payment
                of Obligations

            	
              63

            
	
              Section
                8.05

            	
              Performance
                of Obligations under Loan Documents

            	
              63

            
	
              Section
                8.06

            	
              Operation
                and Maintenance of Properties

            	
              63

            
	
              Section
                8.07

            	
              Insurance

            	
              64

            
	
              Section
                8.08

            	
              Books
                and Records; Inspection Rights

            	
              64

            
	
              Section
                8.09

            	
              Compliance
                with Laws

            	
              64

            
	
              Section
                8.10

            	
              Environmental
                Matters

            	
              64

            
	
              Section
                8.11

            	
              Further
                Assurances

            	
              65

            
	
              Section
                8.12

            	
              Reserve
                Reports

            	
              66

            
	
              Section
                8.13

            	
              Title
                Information

            	
              67

            
	
              Section
                8.14

            	
              Additional
                Collateral; Additional Guarantors

            	
              68

            
	
              Section
                8.15

            	
              ERISA
                Compliance

            	
              68

            
	
              Section
                8.16

            	
              Marketing
                Activities

            	
              69

            
	
              Section
                8.17

            	
              Clean-Down

            	
              69

            
	 	 
	
              ARTICLE
                IX NEGATIVE COVENANTS

            	
              69

            
	 	 	 
	
              Section
                9.01

            	
              Financial
                Covenants

            	
              70

            
	
              Section
                9.02

            	
              Debt

            	
              70

            
	
              Section
                9.03

            	
              Liens

            	
              71

            
	
              Section
                9.04

            	
              Dividends,
                Distributions and Redemptions

            	
              71

            
	
              Section
                9.05

            	
              Investments,
                Loans and Advances

            	
              72

            
	
              Section
                9.06

            	
              Nature
                of Business; International Operations

            	
              73

            
	
              Section
                9.07

            	
              Limitation
                on Leases

            	
              73

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    

      
        	
                Section
                  9.08

              	
                Proceeds
                  of Loans

              	
                74

              
	
                Section
                  9.09

              	
                ERISA
                  Compliance

              	
                74

              
	
                Section
                  9.10

              	
                Sale
                  or Discount of Receivables

              	
                75

              
	
                Section
                  9.11

              	
                Mergers,
                  Etc

              	
                75

              
	
                Section
                  9.12

              	
                Sale
                  of Properties

              	
                75

              
	
                Section
                  9.13

              	
                Environmental
                  Matters

              	
                76

              
	
                Section
                  9.14

              	
                Transactions
                  with Affiliates

              	
                76

              
	
                Section
                  9.15

              	
                Subsidiaries

              	
                76

              
	
                Section
                  9.16

              	
                Negative
                  Pledge Agreements; Dividend Restrictions

              	
                76

              
	
                Section
                  9.17

              	
                Gas
                  Imbalances, Take-or-Pay or Other Prepayments

              	
                77

              
	
                Section
                  9.18

              	
                Swap
                  Agreements

              	
                77

              
	
                Section
                  9.19

              	
                Tax
                  Status as Partnership

              	
                78

              
	
                Section
                  9.20

              	
                Acquisition
                  Documents

              	
                78

              
	 	 
	
                ARTICLE
                  X EVENTS OF DEFAULT; REMEDIES

              	
                78

              
	 	 	 
	
                Section
                  10.01

              	
                Events
                  of Default

              	
                78

              
	
                Section
                  10.02

              	
                Remedies

              	
                80

              
	
                Section
                  10.03

              	
                Disposition
                  of Proceeds

              	
                81

              
	 	 
	
                ARTICLE
                  XI THE ADMINISTRATIVE AGENT

              	
                81

              
	 	 	 
	
                Section
                  11.01

              	
                Appointment;
                  Powers

              	
                81

              
	
                Section
                  11.02

              	
                Duties
                  and Obligations of Administrative Agent

              	
                81

              
	
                Section
                  11.03

              	
                Action
                  by Agent

              	
                82

              
	
                Section
                  11.04

              	
                Reliance
                  by Agent

              	
                83

              
	
                Section
                  11.05

              	
                Subagents

              	
                83

              
	
                Section
                  11.06

              	
                Resignation
                  or Removal of Agents

              	
                83

              
	
                Section
                  11.07

              	
                Agents
                  and Lenders

              	
                84

              
	
                Section
                  11.08

              	
                No
                  Reliance

              	
                84

              
	
                Section
                  11.09

              	
                Administrative
                  Agent May File Proofs of Claim

              	
                84

              
	
                Section
                  11.10

              	
                Authority
                  of Administrative Agent to Release Collateral and Liens

              	
                85

              
	
                Section
                  11.11

              	
                The
                  Arranger, the Co-Syndication Agents and the Co-Documentation
                  Agents

              	
                85

              
	 	 
	
                ARTICLE
                  XII MISCELLANEOUS

              	
                85

              
	 	 	 
	
                Section
                  12.01

              	
                Notices

              	
                85

              
	
                Section
                  12.02

              	
                Waivers;
                  Amendments

              	
                86

              
	
                Section
                  12.03

              	
                Expenses,
                  Indemnity; Damage Waiver

              	
                87

              
	
                Section
                  12.04

              	
                Successors
                  and Assigns

              	
                90

              
	
                Section
                  12.05

              	
                Survival;
                  Revival; Reinstatement

              	
                93

              
	
                Section
                  12.06

              	
                Counterparts;
                  Integration; Effectiveness

              	
                93

              
	
                Section
                  12.07

              	
                Severability

              	
                94

              
	
                Section
                  12.08

              	
                Right
                  of Setoff

              	
                94

              
	
                Section
                  12.09

              	
                GOVERNING
                  LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS

              	
                94

              
	
                Section
                  12.10

              	
                Headings

              	
                95

              
	
                Section
                  12.11

              	
                Confidentiality

              	
                96

              
	
                Section
                  12.12

              	
                Interest
                  Rate Limitation

              	
                96

              
	
                Section
                  12.13

              	
                EXCULPATION
                  PROVISIONS

              	
                97

              
	
                Section
                  12.14

              	
                Collateral
                  Matters; Swap Agreements

              	
                98

              
	
                Section
                  12.15

              	
                No
                  Third Party Beneficiaries

              	
                98

              

      

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    

    
      	
              Section
                12.16

            	
              USA
                Patriot Act Notice

            	
              98

            
	
              Section
                12.17

            	
              General
                Partner Liability

            	
              98

            

    

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    ANNEXES,
      EXHIBITS AND SCHEDULES

     

    
      	
              Annex
                I

            	 	
              List
                of Maximum Credit Amounts

            
	 	 	 
	
              Exhibit
                A

            	 	
              Form
                of Note

            
	
              Exhibit
                B

            	 	
              Form
                of Compliance Certificate

            
	
              Exhibit
                C-1

            	 	
              Security
                Instruments

            
	
              Exhibit
                C-2

            	 	
              Form
                of Guarantee and Collateral Agreement

            
	
              Exhibit
                D

            	 	
              Form
                of Assignment and Assumption

            
	
              Exhibit
                E-1

            	 	
              Form
                of Maximum Credit Amount Increase Certificate

            
	
              Exhibit
                E-2

            	 	
              Form
                of Additional Lender Certificate

            
	 	 	 
	 	 	 
	
              Schedule
                1.02

            	 	
              Approved
                Counterparties

            
	
              Schedule
                7.05

            	 	
              Litigation

            
	
              Schedule
                7.11

            	 	
              Material
                Agreements

            
	
              Schedule
                7.14

            	 	
              Subsidiaries
                and Partnerships

            
	
              Schedule
                7.18

            	 	
              Gas
                Imbalances

            
	
              Schedule
                7.19

            	 	
              Marketing
                Contracts

            
	
              Schedule
                7.20

            	 	
              Swap
                Agreements

            

    

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

     

     

    THIS
      AMENDED AND RESTATED CREDIT AGREEMENT
      dated as
      of October 1, 2007, is among EV Energy Partners, L.P., a limited partnership
      duly formed and existing under the laws of the State of Delaware (the
“Parent”),
      EV
      Properties, L.P., a limited partnership duly formed and existing under the
      laws
      of the State of Delaware (the “Borrower”),
      each
      of the Lenders from time to time party hereto; JPMORGAN
      CHASE BANK, N.A. (in
      its
      individual capacity, “JPMorgan”),
      as
      administrative agent for the Lenders (in such capacity, together with its
      successors in such capacity, the “Administrative
      Agent”);
      BNP
      PARIBAS and (in its individual capacity, “BNP
      Paribas”)
      and
      WACHOVIA BANK, NATIONAL ASSOCIATION (in its individual capacity, “Wachovia”),
      as
      co-syndication agents for the Lenders (in such capacity, together with each
      of
      their successors in such capacity, the “Co-Syndication
      Agents”);
      and
      COMPASS BANK (in its individual capacity, “Compass”)
      and
      UNION BANK OF CALIFORNIA, N.A. (in its individual capacity, “UBOC”),
      as
      co-documentation agents for the Lenders (in such capacity, together with each
      of
      their successors in such capacity, the “Documentation
      Agent”).

     

    R
      E C I T A L S

     

    A. The
      Borrower, Parent and Administrative Agent, the lenders and others party thereto
      entered into that certain Credit Agreement dated September 29, 2006 (the
“Existing
      Credit Agreement”)
      pursuant to which the lenders party thereto made certain loans to and extensions
      of credit available on behalf of the Borrower.

     

    B. The
      Borrower and the Parent have requested that the Administrative Agent,
      Co-Syndication Agents, Documentation Agent and the Lenders and each has agreed
      to amend, restate, and increase the Existing Credit Agreement to make certain
      loans and extensions of credit to the Borrower subject to the terms and
      conditions of this Agreement.

     

    C. In
      consideration of the mutual covenants and agreements herein contained and of
      the
      loans, extensions of credit and commitments hereinafter referred to, the parties
      hereto agree as follows:

     

    ARTICLE
      I

    Definitions
      and Accounting Matters

     

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

     

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

     

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

     

    “Acquisition
      Agreement”
means
      that certain Asset Purchase and Sale Agreement between Seller and Borrower,
      as
      Buyer dated as of July 17, 2007, as amended from time to time and subject to
      Section 9.20.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Acquisition
      Documents”
means
      (a) the Acquisition Agreement, and (b) all bills of sale, assignments,
      agreements, instruments and documents executed and delivered in connection
      therewith, in each case, as amended from time to time.

     

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

     

    “Additional
      Lender”
has
      the
      meaning assigned to such term in Section 2.06(c)(i).

     

    “Additional
      Lender Certificate”
has
      the
      meaning assigned to such term in Section 2.06(c)(ii)(F).

     

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

     

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

     

    “Affected
      Loans”
has
      the
      meaning assigned such term in Section 5.05.

     

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

     

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

     

    “Aggregate
      Maximum Credit Amounts”
at
      any
      time shall equal the sum of the Maximum Credit Amounts, as the same may be
      increased, reduced or terminated pursuant to Section 2.06.

     

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

     

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

     

    “Applicable
      Margin”
means,
      for any day, with respect to any ABR Loan or Eurodollar Loan, as the case may
      be, the rate per annum set forth in the Borrowing Base Utilization Grid below
      based upon the Borrowing Base Utilization Percentage then in
      effect:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              Borrowing
                Base Utilization Grid

            	 
	
              Borrowing
                Base 
Utilization Percentage

            	 	 	
              
              

              ≤
50%

            	
              
              

               

            	
               

            	
              
              

              >
                50% ≤ 75%

            	
              
              

               

            	
               

            	
              
              

              >
                75% ≤ 90%

            	
              
              

               

            	
               

            	
              
              

              >
                90%

            	
              
              

               

            
	
              ABR
                Loans

            	 	 	
              
              

              0.000%

            	
              
              

               

            	 	
              
              

              0.000%

            	
              
              

               

            	 	
              
              

              0.000%

            	
              
              

               

            	 	
              
              

              0.250%

            	
              
              

               

            
	
              Eurodollar
                Loans

            	 	 	
              
              

              1.000%

            	
              
              

               

            	 	
              
              

              1.250%

            	
              
              

               

            	 	
              
              

              1.500%

            	
              
              

               

            	 	
              
              

              1.750%

            	
              
              

               

            

    

     

    Each
      change in the Applicable Margin shall apply during the period commencing on
      the
      effective date of such change and ending on the date immediately preceding
      the
      effective date of the next such change, provided, however, that if at any time
      the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a),
      then
      the “Applicable Margin” means the rate per annum set forth on the grid when the
      Borrowing Base Utilization Percentage is at its highest level.

     

    “Applicable
      Percentage”
means,
      with respect to any Lender, the percentage of the Aggregate Maximum Credit
      Amounts represented by such Lender’s Maximum Credit Amount as such percentage is
      set forth on Annex I.

     

    “Approved
      Counterparty”
means
      (a) any Lender or any Affiliate of a Lender; (b) any other Person whose long
      term senior unsecured debt rating is A/A2 by S&P or Moody’s (or their
      equivalent) or higher; (c) any Person listed on Schedule 1.02; or (d) any other
      Person approved by the Majority Lenders.

     

    “Arranger”
means
      J.P.
      Morgan Securities Inc., in its
      sole
      capacity as sole lead arranger and sole book runner hereunder.

     

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

     

    “Availability
      Period”
means
      the period from and including the Effective Date to but excluding the
      Termination Date.

     

    “Available
      Cash” means,
      with respect to any fiscal quarter ending prior to the Termination Date:

    

    (a) the
      sum
      of (i) all cash and cash equivalents of the Parent and its Consolidated
      Subsidiaries on hand at the end of such fiscal quarter, and (ii) if the
      General Partner so determines, all or any portion of any additional cash and
      cash equivalents of the Partnership Group on hand on the date of determination
      of Available Cash with respect to such fiscal quarter, including cash from
      Working Capital Borrowings (as defined in the Parent LP Agreement), less

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b) the
      amount of any cash reserves established by the General Partner to
      (i) provide for the proper conduct of the business of the Partnership Group
      (including reserves for future capital expenditures and for anticipated future
      credit needs of the Partnership Group) subsequent to such fiscal quarter,
      (ii) comply with applicable law or any loan agreement, security agreement,
      mortgage, debt instrument or other agreement or obligation to which any Group
      Member is a party or by which it is bound or its assets are subject or
      (iii) provide funds for distributions under Section 6.4
      or
Section 6.5
      of the
      Parent LP Agreement in respect of any one or more of the next four fiscal
      quarters; provided, however, that the General Partner may not establish cash
      reserves pursuant to (iii) above if the effect of such reserves would be
      that the Parent is unable to distribute the Minimum Quarterly Distribution
      (as
      defined in the Parent LP Agreement) on all Common Units (as defined in the
      Parent LP Agreement), plus any Cumulative Common Unit Arrearage (as defined
      in
      the Parent LP Agreement) on all Common Units, with respect to such fiscal
      quarter; and, provided further, that disbursements made by a Group Member or
      cash reserves established, increased or reduced after the end of such fiscal
      quarter but on or before the date of determination of Available Cash with
      respect to such fiscal quarter shall be deemed to have been made, established,
      increased or reduced, for purposes of determining Available Cash, within such
      fiscal quarter if the General Partner so determines. 

     

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

     

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

     

    “Borrowing
      Base”
means
      at any time an amount equal to the amount determined in accordance with Section
      2.07, as the same may be adjusted from time to time pursuant to Section 6.03,
      Section 8.13(c), or Section 9.12(d).

     

    “Borrowing
      Base Deficiency”
occurs
      if at any time the total Revolving Credit Exposures exceeds the Borrowing Base
      then in effect.

     

    “Borrowing
      Base Utilization Percentage”
means,
      as of any day, the fraction expressed as a percentage, the numerator of which
      is
      the sum of the Revolving Credit Exposures of the Lenders on such day, and the
      denominator of which is the Borrowing Base in effect on such day.

     

    “Borrowing
      Request”
means
      a
      request by the Borrower for a Borrowing in accordance with Section
      2.03.

     

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

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

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

     

    “Casualty
      Event”
means
      any loss, casualty or other insured damage to, or any nationalization, taking
      under power of eminent domain or by condemnation or similar proceeding of,
      any
      Property of the Borrower or any of its Subsidiaries having a fair market value
      in excess of $5,000,000
      in the
      aggregate for any calendar year.

     

    “Change
      in Control”
means
      (a) the acquisition of ownership, directly or indirectly, beneficially or of
      record, by any Person or group (within the meaning of the Securities Exchange
      Act of 1934 and the rules of the SEC thereunder as in effect on the date
      hereof), other than EnerVest, Ltd., EnCap Investments, L.P. and any of their
      respective Affiliates, of Equity Interests representing more than 50%
      of the
      aggregate ordinary voting power represented by the issued and outstanding Equity
      Interests of the Parent, (b) occupation of a majority of the seats (other than
      vacant seats) on the board of directors of EV Management by Persons who were
      neither (i) nominated by the board of directors of EV Management nor (ii)
      appointed by directors so nominated or (c) the Parent fails to own directly
      or
      indirectly all of the Equity Interests of the Borrower. 

     

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

     

    “Class”,
      when
      used in reference to any Loan or Borrowing, refers to whether such Loan, or
      the
      Loans comprising such Borrowing, are Working Capital Revolving Loans or General
      Revolving Loans.

     

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

     

    “Commitment”
means,
      with respect to each Lender, the commitment of such Lender to make Loans,
      including Working Capital Revolving Loans, and to acquire participations in
      Letters of Credit hereunder, expressed as an amount representing the maximum
      aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such
      commitment may be (a) modified from time to time pursuant to Section 2.06 and
      (b) modified from time to time pursuant to assignments by or to such Lender
      pursuant to Section 12.04(b). The amount representing each Lender’s Commitment
      shall at any time be the lesser of such Lender’s Maximum Credit Amount and such
      Lender’s Applicable Percentage of the then effective Borrowing
      Base.

     

    “Commitment
      Fee Rate”
means,
      for any day, the rate per annum set forth below based upon the Borrowing Base
      Utilization Percentage then in effect:

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              Borrowing
                Base 
Utilization Percentage

            	
               

            	
              ≤50%

            	
               

            	
              >50%
                ≤75%

            	
               

            	
              >75%

            	 
	
              Commitment
                Fee Rate

            	 	 	
              0.250%

            	
               

            	 	
              0.300%

            	
               

            	 	
              0.375%

            	
               

            

    

     

    “Consolidated
      Net Income”
means
      with respect to the Parent and the Consolidated Subsidiaries, for any period,
      the aggregate of the net income (or loss) of the Parent and the Consolidated
      Subsidiaries after allowances for taxes for such period determined on a
      consolidated basis in accordance with GAAP; provided that there shall be
      excluded from such net income (to the extent otherwise included therein) the
      following: (a) the net income of any Person in which the Parent or a
      Consolidated Subsidiary has an interest (which interest does not cause the
      net
      income of such other Person to be consolidated with the net income of the
      Borrower and the Consolidated Subsidiaries in accordance with GAAP), except
      to
      the extent of the amount of dividends or distributions actually paid in cash
      during such period by such other Person to the Parent or to a Consolidated
      Subsidiary, as the case may be; (b) the net income (but not loss) during such
      period of any Consolidated Subsidiary to the extent that the declaration or
      payment of dividends or similar distributions or transfers or loans by that
      Consolidated Subsidiary is not at the time permitted by operation of the terms
      of its charter or any agreement, instrument or Governmental Requirement
      applicable to such Consolidated Subsidiary or is otherwise restricted or
      prohibited, in each case determined in accordance with GAAP; (c) the net income
      (or loss) of any Person acquired in a pooling-of-interests transaction for
      any
      period prior to the date of such transaction; (d) any extraordinary gains or
      losses during such period; (e) non-cash gains, losses or adjustments under
      FASB
      Statement No. 133 as a result of changes in the fair market value of
      derivatives; and (f) any gains or losses attributable to writeups or writedowns
      of assets, including ceiling test writedowns; and provided further that if
      the
      Parent or the Borrower or any Consolidated Subsidiary shall acquire or dispose
      of any Property during such period, then Consolidated Net Income shall be
      calculated after giving pro
      forma effect
      to
      such acquisition or disposition, as if such acquisition or disposition had
      occurred on the first day of such period.

     

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

     

    “Control”
means
      the possession, directly or indirectly, of the power to direct or cause the
      direction of the management or policies of a Person, whether through the ability
      to exercise voting power, by contract or otherwise. For the purposes of this
      definition, and without limiting the generality of the foregoing, any Person
      that owns directly or indirectly 10% or more of the Equity Interests having
      ordinary voting power for the election of the directors or other governing
      body
      of a Person (other than as a limited partner of such other Person) will be
      deemed to “control” such other Person. “Controlling”
and
      “Controlled”
have
      meanings correlative thereto.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Debt”
means,
      for any Person, the sum of the following (without duplication): (a) all
      obligations of such Person for borrowed money or evidenced by bonds, bankers’
acceptances, debentures, notes or other similar instruments; (b) all obligations
      of such Person (whether contingent or otherwise) in respect of letters of
      credit, surety or other bonds and similar instruments; (c) all accounts payable,
      accrued expenses, liabilities or other obligations of such Person, in each
      such
      case to pay the deferred purchase price of Property or services; (d) all
      obligations under Capital Leases; (e) all obligations under Synthetic Leases;
      (f) all Debt (as defined in the other clauses of this definition) of others
      secured by (or for which the holder of such Debt has an existing right,
      contingent or otherwise, to be secured by) a Lien on any Property of such
      Person, whether or not such Debt is assumed by such Person, provided, however,
      if not assumed, the amount of any such Debt shall not exceed the fair market
      value of the Property subject to such Lien; (g) all Debt (as defined in the
      other clauses of this definition) of others guaranteed by such Person or in
      which such Person otherwise assures a creditor against loss of the Debt
      (howsoever such assurance shall be made) to the extent of the lesser of the
      amount of such Debt and the maximum stated amount of such guarantee or assurance
      against loss; (h) all obligations or undertakings of such Person to maintain
      or
      cause to be maintained the financial position or covenants of others or to
      purchase the Debt or Property of others; (i) obligations to deliver
      commodities, goods or services, including, without limitation, Hydrocarbons,
      in
      consideration of one or more advance payments, other than gas balancing or
      pipeline transportation arrangements in the ordinary course of business; (j)
      obligations to pay for goods or services whether or not such goods or services
      are actually received or utilized by such Person, other than retainers paid
      for
      professional services or similar arrangements entered into in the ordinary
      course of business; (k) any Debt of a partnership for which such Person is
      liable either by agreement, by operation of law or by a Governmental Requirement
      but only to the extent of such liability; (l) Disqualified Capital Stock; and
      (m) the undischarged balance of any production payment created by such Person
      or
      for the creation of which such Person directly or indirectly received payment.
      The Debt of any Person shall include all obligations of such Person of the
      character described above to the extent such Person remains legally liable
      in
      respect thereof notwithstanding that any such obligation is not included as
      a
      liability of such Person under GAAP.

     

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

     

    “Disqualified
      Capital Stock”
means
      any Equity Interest that, by its terms (or by the terms of any security into
      which it is convertible or for which it is exchangeable) or upon the happening
      of any event, matures or is mandatorily redeemable for any consideration other
      than other Equity Interests (which would not constitute Disqualified Capital
      Stock), pursuant to a sinking fund obligation or otherwise, or is convertible
      or
      exchangeable for Debt or redeemable for any consideration other than other
      Equity Interests (which would not constitute Disqualified Capital Stock) at
      the
      option of the holder thereof, in whole or in part, on or prior to the date
      that
      is one year after the earlier of (a) the Maturity Date and (b) the date on
      which
      there are no Loans, LC Exposure or other obligations hereunder outstanding
      and
      all of the Commitments are terminated.

     

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

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “EBITDAX”
means,
      for any period, the sum of Consolidated Net Income for such period plus the
      following expenses or charges to the extent deducted from Consolidated Net
      Income in such period: interest, income taxes, depreciation, depletion,
      amortization, exploration expenses and all noncash charges, minus all noncash
      income added to Consolidated Net Income.

     

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

     

    “Engineering
      Reports”
has
      the
      meaning assigned such term in Section 2.07(c)(i).

     

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

     

    “Environmental
      Permit”
means
      any permit, registration, license, approval, consent, exemption, variance,
      or
      other authorization required under or issued pursuant to applicable
      Environmental Laws.

     

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

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

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

     

    “ERISA
      Event”
means
      (a) a “Reportable Event” described in section 4043 of ERISA and the regulations
      issued thereunder, (b) the withdrawal of the Borrower or any of its Subsidiaries
      or any ERISA Affiliate from a Plan during a plan year in which it was a
“substantial employer” as defined in section 4001(a)(2) of ERISA, (c) the filing
      of a notice of intent to terminate a Plan or the treatment of a Plan amendment
      as a termination under section 4041 of ERISA, (d) the institution of proceedings
      to terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability
      pursuant to Section 4202 of ERISA or (f) any other event or condition which
      might constitute grounds under section 4042 of ERISA for the termination of,
      or
      the appointment of a trustee to administer, any Plan.

     

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

     

    “EV
      Management”
means
      EV Management, L.L.C., and its successors and permitted assigns that are
      admitted as the general partner of the General Partner, and in its capacity
      as
      the general partner of the General Partner (except where the context otherwise
      requires).

     

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

     

    “Excepted
      Liens”
means:
      (a) Liens for Taxes, assessments or other governmental charges or levies which
      are not delinquent or which are being contested in good faith by appropriate
      action and for which adequate reserves have been maintained in accordance with
      GAAP; (b) Liens in connection with workers’ compensation, unemployment insurance
      or other social security, old age pension or public liability obligations which
      are not delinquent or which are being contested in good faith by appropriate
      action and for which adequate reserves have been maintained in accordance with
      GAAP; (c) statutory landlord’s liens, operators’, vendors’, carriers’,
      warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s,
      construction or other like Liens arising by operation of law in the ordinary
      course of business or incident to the exploration, development, operation and
      maintenance of Oil and Gas Properties each of which is in respect of obligations
      that are not delinquent or which are being contested in good faith by
      appropriate action and for which adequate reserves have been maintained in
      accordance with GAAP; (d) contractual Liens which arise in the ordinary course
      of business under operating agreements, joint venture agreements, oil and gas
      partnership agreements, oil and gas leases, farm-out agreements, division
      orders, contracts for the sale, transportation or exchange of oil and natural
      gas, unitization and pooling declarations and agreements, area of mutual
      interest agreements, overriding royalty agreements, marketing agreements,
      processing agreements, net profits agreements, development agreements, gas
      balancing or deferred production agreements, injection, repressuring and
      recycling agreements, salt water or other disposal agreements, seismic or other
      geophysical permits or agreements, and other agreements which are usual and
      customary in the oil and gas business and are for claims which are not
      delinquent or which are being contested in good faith by appropriate action
      and
      for which adequate reserves have been maintained in accordance with GAAP,
      provided that any such Lien referred to in this clause does not materially
      impair the use of the Property covered by such Lien for the purposes for which
      such Property is held by the Borrower or any of its Subsidiaries or materially
      impair the value of such Property subject thereto; (e) Liens arising solely
      by
      virtue of any statutory or common law provision relating to banker’s liens,
      rights of set-off or similar rights and remedies and burdening only deposit
      accounts or other funds maintained with a creditor depository institution,
      provided that no such deposit account is a dedicated cash collateral account
      or
      is subject to restrictions against access by the depositor in excess of those
      set forth by regulations promulgated by the Board and no such deposit account
      is
      intended by the Borrower or any of its Subsidiaries to provide collateral to
      the
      depository institution; (f) easements, restrictions, servitudes, permits,
      conditions, covenants, exceptions or reservations in any Property of the
      Borrower or any of its Subsidiaries for the purpose of roads, pipelines,
      transmission lines, transportation lines, distribution lines for the removal
      of
      gas, oil, coal or other minerals or timber, and other like purposes, or for
      the
      joint or common use of real estate, rights of way, facilities and equipment,
      that do not secure any monetary obligations and which in the aggregate do not
      materially impair the use of such Property for the purposes of which such
      Property is held by the Borrower or any of its Subsidiaries or materially impair
      the value of such Property subject thereto; (g) Liens on cash or securities
      pledged to secure performance of tenders, surety and appeal bonds, government
      contracts, performance and return of money bonds, bids, trade contracts, leases,
      statutory obligations, regulatory obligations and other obligations of a like
      nature incurred in the ordinary course of business and (h) judgment and
      attachment Liens not giving rise to an Event of Default, provided that any
      appropriate legal proceedings which may have been duly initiated for the review
      of such judgment shall not have been finally terminated or the period within
      which such proceeding may be initiated shall not have expired and no action
      to
      enforce such Lien has been commenced; provided, further that Liens described
      in
      clauses (a) through (e) shall remain “Excepted Liens” only for so long as no
      action to enforce such Lien has been commenced and no intention to subordinate
      the first priority Lien granted in favor of the Administrative Agent and the
      Lenders is to be hereby implied or expressed by the permitted existence of
      such
      Excepted Liens.

     

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    

    “Excluded
      Taxes”
means,
      with respect to the Administrative Agent, any Lender, any Issuing Bank or any
      other recipient of any payment to be made by or on account of any obligation
      of
      the Borrower or any Guarantor hereunder or under any other Loan Document, (a)
      income or franchise taxes imposed on (or measured by) its net income by the
      United States of America or such other jurisdiction under the laws of which
      such
      recipient is organized or in which its principal office is located or, in the
      case of any Lender, in which its applicable lending office is located, (b)
      any
      branch profits taxes imposed by the United States of America or any similar
      tax
      imposed by any other jurisdiction in which the Borrower or any Guarantor is
      located and (c) in the case of a Foreign Lender any withholding tax that is
      imposed on amounts payable to such Foreign Lender at the time such Foreign
      Lender becomes a party to this Agreement (or designates a new lending office)
      or
      is attributable to such Foreign Lender’s failure to comply with Section 5.03(e),
      except to the extent that such Foreign Lender (or its assignor, if any) was
      entitled, at the time of designation of a new lending office (or assignment),
      to
      receive additional amounts with respect to such withholding tax pursuant to
      Section 5.03(a) or Section 5.03(c).

     

    “Existing
      Credit Agreement”
has
      the
      meaning assigned such term in the Recitals of this Agreement.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

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

     

    “Financial
      Officer”
means,
      for any Person, the chief financial officer, principal accounting officer,
      treasurer or controller of such Person. Unless otherwise specified, all
      references to a Financial Officer shall mean a Financial Officer of EV
      Management.

     

    “Financial
      Statements”
means
      the financial statement or statements of the Borrower and its Consolidated
      Subsidiaries referred to in Section 7.04(a).

     

    “Foreign
      Lender”
means
      any Lender that is organized under the laws of a jurisdiction other than that
      in
      which the Borrower is located. For purposes of this definition, the United
      States of America, each State thereof and the District of Columbia shall be
      deemed to constitute a single jurisdiction.

     

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

     

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

     

    “General
      Partner”
means
      EV
      Energy
      GP, L.P., a Delaware limited partnership, and its successors and permitted
      assigns that are admitted to the Parent as general partner of the Parent, in
      its
      capacity as general partner of the Partnership (except as the context otherwise
      requires).

     

    “General
      Revolving Loan”
means
      a
      Loan made pursuant to Section 2.01(a) which is not a Working Capital Revolving
      Loan.

     

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

     

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

     

    “Group
      Member” means
      a
      member of the Partnership Group.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    “Guarantors”
means
      (a) the Parent, (b) EV Properties GP, LLC, a Delaware limited liability company,
      (c) Enervest Production Partners, Ltd., a Texas limited partnership, (d) CGas
      Properties, L.P., a Delaware limited partnership, (e) Enervest-Cargas, Ltd.,
      a
      Texas limited partnership, (f) Lower Cargas Operating Company LLC, a Louisiana
      limited liability company, (g) EnerVest Monroe Marketing, Ltd., a Texas limited
      partnership, (h) EnerVest Monroe Gathering, Ltd., a Texas limited partnership,
      (i) EVCG GP, LLC, a Delaware limited liability company, (j) EVPP GP, LLC, a
      Delaware limited liability company and (k) each other Material Domestic
      Subsidiary or other Domestic Subsidiary that guarantees the Indebtedness
      pursuant to Section 8.14(b).

     

    “Guarantee
      Agreement”
means
      an agreement executed by the Guarantors in form and substance reasonably
      satisfactory to the Administrative Agent unconditionally guarantying on a joint
      and several basis, payment of the Indebtedness, as the same may be amended,
      modified or supplemented from time to time.

     

    “Hazardous
      Material”
means
      any substance regulated or as to which liability might arise under any
      applicable Environmental Law and including, without limitation: (a) any
      chemical, compound, material, product, byproduct, substance or waste defined
      as
      or included in the definition or meaning of “hazardous substance,” “hazardous
      material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous
      substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar
      meaning or import found in any applicable Environmental Law; (b) petroleum
      hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil
      and gas waste, crude oil, and any components, fractions, or derivatives thereof;
      and (c) radioactive materials, asbestos containing materials, polychlorinated
      biphenyls, or radon.

     

    “Highest
      Lawful Rate”
means,
      with respect to each Lender, the maximum nonusurious interest rate, if any,
      that
      at any time or from time to time may be contracted for, taken, reserved, charged
      or received on the Notes or on other Indebtedness under laws applicable to
      such
      Lender which are presently in effect or, to the extent allowed by law, under
      such applicable laws which may hereafter be in effect and which allow a higher
      maximum nonusurious interest rate than applicable laws allow as of the date
      hereof.

     

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

     

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

     

    “Indebtedness”
means
      any and all amounts owing or to be owing by the Borrower, any of its
      Subsidiaries or any Guarantor (whether direct or indirect (including those
      acquired by assumption), absolute or contingent, due or to become due, now
      existing or hereafter arising): (a) to the Administrative Agent, any Issuing
      Bank or any Lender under any Loan Document; (b) to any Lender or any Affiliate
      of a Lender under any Swap Agreements among such Person and the Parent, the
      Borrower or any Subsidiary or assigned to such Person while such Person (or
      in
      the case of its Affiliate, the Lender affiliated therewith) is a Lender
      hereunder and (c) all renewals, extensions and/or rearrangements of any of
      the
      above.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    “Indemnified
      Taxes”
means
      Taxes other than Excluded Taxes.

     

    “Initial
      Reserve Reports”
means
      the mid-year report prepared
      by or under the supervision of the chief engineer of EV Management with
      respect to the value of the Oil and Gas Properties of the Borrower and its
      Subsidiaries as of July 1, 2007 and with respect to the Acquisition Properties,
      the report
      prepared
      by or under the supervision of the chief engineer of EV Management with
      an
      effective date of July 1, 2007.

     

    “Interest
      Election Request”
means
      a
      request by the Borrower to convert or continue a Borrowing in accordance with
      Section 2.04.

     

    “Interest
      Period”
means
      with respect to any Eurodollar Borrowing, the period commencing on the date
      of
      such Borrowing and ending on the numerically corresponding day in the calendar
      month that is one, two, three or six months thereafter, as the Borrower may
      elect; provided, that (a) if any Interest Period would end on a day other than
      a
      Business Day, such Interest Period shall be extended to the next succeeding
      Business Day unless such next succeeding Business Day would fall in the next
      calendar month, in which case such Interest Period shall end on the next
      preceding Business Day and (b) any Interest Period pertaining to a Eurodollar
      Borrowing that commences on the last Business Day of a calendar month (or on
      a
      day for which there is no numerically corresponding day in the last calendar
      month of such Interest Period) shall end on the last Business Day of the last
      calendar month of such Interest Period. For purposes hereof, the date of a
      Borrowing initially shall be the date on which such Borrowing is made and
      thereafter shall be the effective date of the most recent conversion or
      continuation of such Borrowing.

     

    “Interim
      Redetermination”
has
      the
      meaning assigned such term in Section 2.07(b).

     

    “Investment”
means,
      for any Person: (a) the acquisition (whether for cash, Property, services or
      securities or otherwise) of Equity Interests of any other Person or any
      agreement to make any such acquisition (including, without limitation, any
      “short sale” or any sale of any securities at a time when such securities are
      not owned by the Person entering into such short sale); (b) the making of any
      deposit with, or advance, loan or capital contribution to, assumption of Debt
      of, purchase or other acquisition of any other Debt or equity participation
      or
      interest in, or other extension of credit to, any other Person (including the
      purchase of Property from another Person subject to an understanding or
      agreement, contingent or otherwise, to resell such Property to such Person,
      but
      excluding any such advance, loan or extension of credit having a term not
      exceeding ninety (90) days representing the purchase price of inventory or
      supplies sold by such Person in the ordinary course of business); or (c) the
      entering into of any guarantee of, or other contingent obligation (including
      the
      deposit of any Equity Interests to be sold) with respect to, Debt or other
      liability of any other Person and (without duplication) any amount committed
      to
      be advanced, lent or extended to such Person.

     

    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

     

    “Issuing
      Bank”
means
      JPMorgan, in its capacity as an issuer of Letters of Credit hereunder, and
      its
      successors in such capacity as provided in Section 2.08(i). The Issuing Bank
      may, in its discretion, arrange for one or more Letters of Credit to be issued
      by Affiliates of such Issuing Bank, in which case the term “Issuing
      Bank”
shall
      include any such Affiliate with respect to Letters of Credit issued by such
      Affiliate.

     

    “LC
      Commitment”
at
      any
      time means Fifty Million Dollars ($50,000,000). 

     

    “LC
      Disbursement”
means
      a
      payment made by any Issuing Bank pursuant to a Letter of Credit issued by such
      Issuing Bank.

     

    “LC
      Exposure”
means,
      at any time, the sum of (a) the aggregate undrawn amount of all outstanding
      Letters of Credit at such time plus (b) the aggregate amount of all LC
      Disbursements that have not yet been reimbursed by or on behalf of the Borrower
      at such time. The LC Exposure of any Lender at any time shall be its Applicable
      Percentage of the total LC Exposure at such time.

     

    “Lenders”
means
      the Persons listed on Annex I, and any Person that shall have become a party
      hereto pursuant to an Assignment and Assumption, other than any such Person
      that
      ceases to be a party hereto pursuant to an Assignment and Assumption, and any
      Person that shall have become a party hereto as an Additional Lender pursuant
      to
      Section 2.06(c).

     

    “Letter
      of Credit”
means
      any letter of credit issued pursuant to this Agreement.

     

    “Letter
      of Credit Agreements”
means
      all letter of credit applications and other agreements (including any
      amendments, modifications or supplements thereto) submitted by the Borrower,
      or
      entered into by the Borrower, with any Issuing Bank relating to any Letter
      of
      Credit issued by such Issuing Bank.

     

    “LIBO
      Rate”
means,
      with respect to any Eurodollar Borrowing for any Interest Period, the rate
      appearing on Page 3750 of the Dow Jones Market Service (or on any successor
      or
      substitute page of such Service, or any successor to or substitute for such
      Service, providing rate quotations comparable to those currently provided on
      such page of such Service, as determined by the Administrative Agent from time
      to time for purposes of providing quotations of interest rates applicable to
      dollar deposits in the London interbank market) at approximately 11:00 a.m.,
      London time, two Business Days prior to the commencement of such Interest
      Period, as the rate for dollar deposits with a maturity comparable to such
      Interest Period. In the event that such rate is not available at such time
      for
      any reason, then the “LIBO
      Rate”
with
      respect to such Eurodollar Borrowing for such Interest Period shall be the
      rate
      (rounded upwards, if necessary, to the next 1/100th of 1%) at which dollar
      deposits of $1,000,000 and for a maturity comparable to such Interest Period
      are
      offered by the principal London office of the Administrative Agent in
      immediately available funds in the London interbank market at approximately
      11:00 a.m., London time, two Business Days prior to the commencement of such
      Interest Period.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

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

     

    “Limited
      Partnership Agreement”
means
      the Agreement of Limited Partnership of the Borrower.

     

    “Loan
      Documents”
means
      this Agreement, the Notes, the Letter of Credit Agreements, the Letters of
      Credit and the Security Instruments.

     

    “Loans”
means
      the loans made by the Lenders to the Borrower pursuant to this
      Agreement.

     

    “Majority
      Lenders”
means,
      at any time while no Loans or LC Exposure is outstanding, Lenders having greater
      than fifty percent (50%) of the Aggregate Maximum Credit Amounts; and at any
      time while any Loans or LC Exposure is outstanding, Lenders holding greater
      than
      fifty percent (50%) of the outstanding aggregate principal amount of the Loans
      or participation interests in Letters of Credit (without regard to any sale
      by a
      Lender of a participation in any Loan under Section 12.04(c)).

     

    “Managers”
means
      the members of the Board of Managers or Board of Directors (however designated
      from time to time) of EV Management as constituted from time to
      time.

     

    “Material
      Acquisition”
means
      any acquisition of Oil and Gas Properties by the Borrower or any Guarantor
      whose
      purchase price is greater than or equal to 10% of the then effective Borrowing
      Base.

     

    “Material
      Adverse Effect”
means
      a
      material adverse change in, or material adverse effect on (a) the business,
      operations, Property, liabilities (actual or contingent) or condition (financial
      or otherwise) of the Borrower and its Guarantors taken as a whole, (b) the
      ability of the Borrower and its Guarantors, taken as a whole, to perform their
      obligations under the Loan Documents (c) the validity or enforceability of
      any
      Loan Document or (d) the rights and remedies of or benefits available to the
      Administrative Agent, any other Agent, any Issuing Bank or any Lender under
      any
      Loan Document.

     

    “Material
      Domestic Subsidiary”
means,
      as of any date, any Domestic Subsidiary that (a) is a Wholly-Owned Subsidiary
      and (b) together with its Subsidiaries, owns Property having a fair market
      value
      of $1,000,000 or more.

     

    “Material
      Indebtedness”
means
      Debt (other than the Loans and Letters of Credit), or obligations in respect
      of
      one or more Swap Agreements, of any one or more of the Borrower and its
      Subsidiaries in an aggregate principal amount exceeding $1,000,000. For purposes
      of determining Material Indebtedness, the “principal amount” of the obligations
      of the Borrower or any of its Subsidiaries in respect of any Swap Agreement
      at
      any time shall be the maximum aggregate amount (giving effect to any netting
      agreements) that the Borrower or such Subsidiary would be required to pay if
      such Swap Agreement were terminated at such time.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    “Maturity
      Date”
means
      October 1, 2012. 

     

    “Maximum
      Credit Amount”
means,
      as to each Lender, the amount set forth opposite such Lender’s name on Annex I
      under the caption “Maximum Credit Amounts”, as the same may be (a) reduced or
      terminated from time to time in connection with a reduction or termination
      of
      the Aggregate Maximum Credit Amounts pursuant to Section 2.06(b), (b) increased
      from time to time pursuant to Section 2.06(c) or (c) modified from time to
      time
      pursuant to any assignment permitted by Section 12.04(b).

     

    “Maximum
      Credit Amount Increase Certificate”
has
      the
      meaning assigned to such term in Section 2.06(c)(ii)(E).

     

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

     

    “Mortgaged
      Property”
means
      any Property owned by the Borrower or any Guarantor which is subject to the
      Liens existing and to exist under the terms of the Security
      Instruments.

     

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

     

    “New
      Borrowing Base Notice”
has
      the
      meaning assigned such term in Section 2.07(d).

     

    “Notes”
means
      the promissory notes of the Borrower described in Section 2.02(d) and being
      substantially in the form of Exhibit A, together with all amendments,
      modifications, replacements, extensions and rearrangements thereof.

     

    “Oil
      and Gas Properties”
means
      (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or
      unitized with Hydrocarbon Interests; (c) all presently existing or future
      unitization, pooling agreements and declarations of pooled units and the units
      created thereby (including without limitation all units created under orders,
      regulations and rules of any Governmental Authority) which may affect all or
      any
      portion of the Hydrocarbon Interests; (d) all operating agreements,
      contracts and other agreements, including production sharing contracts and
      agreements, which relate to any of the Hydrocarbon Interests or the production,
      sale, purchase, exchange or processing of Hydrocarbons from or attributable
      to
      such Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may
      be
      produced and saved or attributable to the Hydrocarbon Interests, including
      all
      oil in tanks, and all rents, issues, profits, proceeds, products, revenues
      and
      other incomes from or attributable to the Hydrocarbon Interests; (f) all
      tenements, hereditaments, appurtenances and Properties in any manner
      appertaining, belonging, affixed or incidental to the Hydrocarbon Interests
      and
      (g) all Properties, rights, titles, interests and estates described or referred
      to above, including any and all Property, real or personal, now owned or
      hereinafter acquired and situated upon, used, held for use or useful in
      connection with the operating, working or development of any of such Hydrocarbon
      Interests or Property (excluding drilling rigs, automotive equipment, rental
      equipment or other personal Property which may be on such premises for the
      purpose of drilling a well or for other similar temporary uses) and including
      any and all oil wells, gas wells, injection wells or other wells, buildings,
      structures, fuel separators, liquid extraction plants, plant compressors, pumps,
      pumping units, field gathering systems, tanks and tank batteries, fixtures,
      valves, fittings, machinery and parts, engines, boilers, meters, apparatus,
      equipment, appliances, tools, implements, cables, wires, towers, casing, tubing
      and rods, surface leases, rights-of-way, easements and servitudes together
      with
      all additions, substitutions, replacements, accessions and attachments to any
      and all of the foregoing.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    “Other
      Taxes”
means
      any and all present or future stamp or documentary taxes or any other excise
      or
      Property taxes, charges or similar levies arising from any payment made
      hereunder or from the execution, delivery or enforcement of, or otherwise with
      respect to, this Agreement and any other Loan Document.

     

    “Parent”
means
      EV Energy Partners, L.P., a Delaware limited partnership.

     

    “Parent
      LP Agreement”
means
      the First Amended and Restated Agreement of Limited Partnership of the Parent
      dated as of September 29, 2006, as the same may be amended, modified,
      supplemented or restated from time to time.

     

    “Partnership
      Group” means
      the
      Parent and its Consolidated Subsidiaries.

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    “Proposed
      Borrowing Base”
has
      the
      meaning assigned to such term in Section 2.07(c)(i).

     

    “Proposed
      Borrowing Base Notice”
has
      the
      meaning assigned to such term in Section 2.07(c)(ii).

     

    “Proved
      Developed Producing Properties”
means
      Oil and Gas Properties which are categorized as “Proved Reserves” that are both
“Developed” and “Producing”, as such terms are defined in the Definitions for
      Oil and Gas Reserves as promulgated by the Society of Petroleum Engineers (or
      any generally recognized successor) as in effect at the time in
      question.

     

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

     

    “Redetermination
      Date”
means,
      with respect to any Scheduled Redetermination or any Interim Redetermination,
      the date that the redetermined Borrowing Base related thereto becomes effective
      pursuant to Section 2.07(d).

     

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

     

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

     

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

     

    “Release”
means
      any depositing, spilling, leaking, pumping, pouring, placing, emitting,
      discarding, abandoning, emptying, discharging, migrating, injecting, escaping,
      leaching, dumping, or disposing.

     

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

     

    “Required
      Lenders”
means,
      at any time while no Loans or LC Exposure is outstanding, Lenders having at
      least sixty-six and two-thirds percent (66-2/3%) of the Aggregate Maximum Credit
      Amounts; and at any time while any Loans or LC Exposure is outstanding, Lenders
      holding at least sixty-six and two-thirds percent (66-2/3%) of the outstanding
      aggregate principal amount of the Loans or participation interests in Letters
      of
      Credit (without regard to any sale by a Lender of a participation in any Loan
      under Section 12.04(c)).

     

    “Reserve
      Report”
means
      a
      report, in form and substance reasonably satisfactory to the Administrative
      Agent, setting forth, as of each January 1st or July 1st (or such other date
      in
      the event of an Interim Redetermination) the oil and gas reserves attributable
      to the Oil and Gas Properties of the Borrower and its Subsidiaries, together
      with a projection of the rate of production and future net income, taxes,
      operating expenses and capital expenditures with respect thereto as of such
      date, based upon the economic assumptions consistent with the Administrative
      Agent’s lending requirements at the time.

    
      
        
        

      

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

     

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

     

    “Revolving
      Credit Exposure”
means,
      with respect to any Lender at any time, the sum of the outstanding principal
      amount of such Lender’s Loans and its LC Exposure at such time.

     

    “Scheduled
      Redetermination”
has
      the
      meaning assigned such term in Section 2.07(b).

     

    “Scheduled
      Redetermination Date”
means
      the date on which a Borrowing Base that has been redetermined pursuant to a
      Scheduled Redetermination becomes effective as provided in Section
      2.07(d).

     

    “Security
      Instruments”
means
      the Guarantee Agreement, and all mortgages, deeds of trust and other agreements,
      instruments or certificates described or referred to in Exhibit C-1, and any
      and
      all other agreements, instruments, consents or certificates now or hereafter
      executed and delivered by the Parent, the Borrower or any other Person (other
      than Swap Agreements with the Lenders or any Affiliate of a Lender or
      participation or similar agreements between any Lender and any other lender
      or
      creditor with respect to any Indebtedness pursuant to this Agreement) in
      connection with, or as security for the payment or performance of the
      Indebtedness, the Notes, this Agreement, or reimbursement obligations under
      the
      Letters of Credit, as such agreements may be amended, modified, supplemented
      or
      restated from time to time.

     

    “Seller”
means
      Plantation Operating, LLC, a Delaware limited liability company.

     

    “Senior
      Debt”
means
      any unsecured senior or senior subordinated Debt of the Borrower or any
      Guarantor issued pursuant to Section 9.02(e).

     

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

     

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

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    “Taxes”
means
      any and all present or future taxes, levies, imposts, duties, deductions,
      charges or withholdings imposed by any Governmental Authority.

     

    “Termination
      Date”
means
      the earlier of the Maturity Date and the date of termination of the
      Commitments.

     

    “Total
      Debt”
means,
      at any date, all Debt described in clauses (a), (d), (e), (g), (h), (l) and
      (m)
      of the definition of Debt herein, of the Parent and its Consolidated
      Subsidiaries, excluding all non-cash obligations under FAS 133.

    
      
        
        

      

      
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    “Transactions”
means,
      with respect to (a) the Borrower, the execution, delivery and performance by
      the
      Borrower of this Agreement and each other Loan Document and Acquisition Document
      to which it is a party, the borrowing of Loans, the use of the proceeds thereof
      and the issuance of Letters of Credit hereunder, and the grant of Liens by
      the
      Borrower on Mortgaged Properties and other Properties pursuant to the Security
      Instruments and (b) any Guarantor, the execution, delivery and performance
      by
      such Guarantor of each Loan Document and Acquisition Document to which it is
      a
      party, the Acquisition, the guaranteeing of the Indebtedness and the other
      obligations under the Guarantee Agreement by such Guarantor and such Guarantor’s
      grant of the security interests and provision of collateral under the Security
      Instruments, and the grant of Liens by such Guarantor on Mortgaged Properties
      and other Properties pursuant to the Security Instruments.

     

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

     

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

     

    “Working
      Capital Revolving Sub-Commitment”
means,
      with respect to each Lender, the commitment of such Lender to make Working
      Capital Revolving Loans hereunder, expressed as an amount representing the
      maximum aggregate amount of such Lender’s Working Capital Revolving Loans
      hereunder, as such commitment may be reduced or increased from time to time
      pursuant to Section 2.06. The initial aggregate amount of the Lenders’ Working
      Capital Revolving Sub-Commitments shall at any time be equal to the lesser
      of
      (i) 90% of the Borrowing Base and (ii) the total Commitments. The Working
      Capital Revolving Sub-Commitments are a subset of the Commitments. Each Lender's
      Working Capital Revolving Sub-Commitment shall be pro rata to its Applicable
      Percentage of the total Commitments.

     

    “Working
      Capital Revolving Loan”
has
      the
      meaning assigned to such term in Section 2.01(b).

     

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

     

    Section
      1.04 Terms
      Generally.
      The
      definitions of terms herein shall apply equally to the singular and plural
      forms
      of the terms defined. Whenever the context may require, any pronoun shall
      include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
      phrase “without limitation”. The word “will” shall be construed to have the same
      meaning and effect as the word “shall”. Unless the context requires otherwise
      (a) any definition of or reference to any agreement, instrument or other
      document herein shall be construed as referring to such agreement, instrument
      or
      other document as from time to time amended, supplemented or otherwise modified
      (subject to any restrictions on such amendments, supplements or modifications
      set forth in the Loan Documents herein), (b) any reference herein to any law
      shall be construed as referring to such law as amended, modified, codified
      or
      reenacted, in whole or in part, and in effect from time to time, (c) any
      reference herein to any Person shall be construed to include such Person’s
      successors and assigns (subject to the restrictions contained in the Loan
      Documents herein), (d) the words “herein”, “hereof” and “hereunder”, and words
      of similar import, shall be construed to refer to this Agreement in its entirety
      and not to any particular provision hereof, (e) with respect to the
      determination of any time period, the word “from” means “from and including” and
      the word “to” means “to and including” and (f) any reference herein to Articles,
      Sections, Annexes, Exhibits and Schedules shall be construed to refer to
      Articles and Sections of, and Annexes, Exhibits and Schedules to, this
      Agreement. No provision of this Agreement or any other Loan Document shall
      be
      interpreted or construed against any Person solely because such Person or its
      legal representative drafted such provision.

    
      
        
        

      

      
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    Section
      1.05 Accounting
      Terms and Determinations; GAAP.
      Unless
      otherwise specified herein, all accounting terms used herein shall be
      interpreted, all determinations with respect to accounting matters hereunder
      shall be made, and all financial statements and certificates and reports as
      to
      financial matters required to be furnished to the Administrative Agent or the
      Lenders hereunder shall be prepared, in accordance with GAAP, applied on a
      basis
      consistent with the Financial Statements except for changes in which the
      Borrower’s independent certified public accountants concur and which are
      disclosed to Administrative Agent on the next date on which financial statements
      are required to be delivered to the Lenders pursuant to Section 8.01(a);
      provided that, unless the Borrower and the Majority Lenders shall otherwise
      agree in writing, no such change shall modify or affect the manner in which
      compliance with the covenants contained herein is computed such that all such
      computations shall be conducted utilizing financial information presented
      consistently with prior periods.

     

    ARTICLE
      II

    The
      Credits

     

    Section
      2.01 Commitments. 

     

    (a) Subject
      to the terms and conditions set forth herein, each Lender agrees to make Loans
      to the Borrower during the Availability Period in an aggregate principal amount
      that will not result in (i) such Lender’s Revolving Credit Exposure exceeding
      such Lender’s Commitment or (ii) the total Revolving Credit Exposures exceeding
      the total Commitments. 

     

    (b) Subject
      to the terms and conditions set forth herein, each Lender agrees to make
      revolving credit loans (the “Working
      Capital Revolving Loans”)
      to the
      Borrower from time to time during the Availability Period, in an aggregate
      principal amount that will not result in (i) such Lender’s Working Capital
      Revolving Loans exceeding such Lender’s Working Capital Revolving
      Sub-Commitment, (ii) the sum of all Working Capital Revolving Loans
      exceeding the total Working Capital Revolving Sub-Commitments, or (iii) the
      sum of the total Revolving Credit Exposure exceeding the total
      Commitments.

     

    (c) The
      Working Capital Revolving Sub-Commitment of each Lender constitutes a subset
      of
      such Lender’s Commitment such that (i) the availability of the Commitments of
      such Lender shall be reduced by the outstanding principal amount of such
      Lender’s Working Capital Revolving Loans as of the time of determination and
      (ii) the Working Capital Revolving Sub-Commitment of each Lender shall be
      reduced by the amount, if any, by which (A) the outstanding principal
      amount of such Lender’s Revolving Credit Exposure as of the time of
      determination exceeds
      (B) the amount equal to such Lender’s Commitment minus such Lender’s
      Working Capital Revolving Sub-Commitment.

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (d) Within
      the foregoing limits and subject to the terms and conditions set forth herein,
      the Borrower may borrow, prepay and reborrow Loans during the Availability
      Period. 

     

    (e) On
      the
      Effective Date (or as soon as practicable with respect to (iii)):

     

    (i) the
      Borrower shall pay all accrued and unpaid commitment fees, break funding fees
      under Section 5.02 and all other fees that are outstanding under the Existing
      Credit Agreement for the account of each “Lender” under the Existing Credit
      Agreement;

     

    (ii) each
“ABR
      Loan” and Eurodollar Loan” outstanding under the Existing Credit Agreement shall
      be deemed to be repaid with the proceeds of a new ABR Loan or Eurodollar Loan,
      as applicable, under this Agreement;

     

    (iii) the
      Administrative Agent shall use reasonable efforts to cause such “Lender” under
      the Existing Credit Agreement to deliver to the Borrower as soon as practicable
      after the Effective Date the Note issued by the Borrower to it under the
      Existing Credit Agreement, marked “cancelled” or otherwise defaced;

     

    (iv) each
      Letter of Credit issued and outstanding under the Existing Credit Agreement
      (if
      any) shall be deemed issued under this Agreement without payment of additional
      fees; and

     

    (v) the
      Existing Credit Agreement and the commitments thereunder shall be superseded
      by
      this Agreement and such commitments shall terminate.

     

    It
      is the
      intent of the parties hereto that this Agreement not constitute a novation
      of
      the obligations and liabilities existing under the Existing Credit Agreement
      or
      evidence repayment of any such obligations and liabilities and that this
      Agreement amend and restate in its entirety the Existing Credit Agreement and
      re-evidence the obligations of the Borrower outstanding thereunder.

     

    Section
      2.02 Loans
      and Borrowings.

     

    (a) Borrowings;
      Several Obligations.
      Each
      Loan shall be made as part of a Borrowing comprised entirely of General
      Revolving Loans or Working Capital Revolving Loans as the Borrower may request
      in accordance herewith and made by the Lenders ratably in accordance with their
      respective Commitments. The failure of any Lender to make any Loan required
      to
      be made by it shall not relieve any other Lender of its obligations hereunder;
      provided that the Commitments are several and no Lender shall be responsible
      for
      any other Lender’s failure to make Loans as required.

     

    (b) Types
      of Loans.
      Subject
      to Section 3.03, each Borrowing shall be comprised entirely of ABR Loans or
      Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender
      at its option may make any Eurodollar Loan by causing any domestic or foreign
      branch or Affiliate of such Lender to make such Loan; provided that any exercise
      of such option shall not affect the obligation of the Borrower to repay such
      Loan in accordance with the terms of this Agreement.

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (c) Minimum
      Amounts; Limitation on Number of Borrowings.
      At the
      commencement of each Interest Period for any Eurodollar Borrowing, such
      Borrowing shall be in an aggregate amount that is an integral multiple of
      $500,000
      and
      not
      less than $1,000,000.
      At the
      time that each ABR Borrowing is made, such Borrowing shall be in an aggregate
      amount that is an integral multiple of $250,000 and not less than $1,000,000;
      provided that an ABR Borrowing may be in an aggregate amount that does not
      exceed (i) with respect to Working Capital Revolving Borrowings, the entire
      unused and available balance of the Working Capital Revolving Sub-Commitments,
      (ii) with respect to General Revolving Borrowings, (A) the total
      Commitments less total Revolving Credit Exposure, or (B) amounts required to
      finance the reimbursement of an LC Disbursement as contemplated by Section
      2.08(e). Borrowings of more than one Type or Class may be outstanding at the
      same time; provided that there shall not at any time be more than a total of
      fifteen (15) Eurodollar Borrowings outstanding. Notwithstanding any other
      provision of this Agreement, the Borrower shall not be entitled to request,
      or
      to elect to convert or continue, any Borrowing if the Interest Period requested
      with respect thereto would end after the Maturity Date.

     

    (d) Notes.
      If
      a
      Lender shall make a written request to the Administrative Agent and the Borrower
      to have its Loans evidenced by a promissory note, then the Borrower shall
      execute and deliver a single promissory note of the Borrower in substantially
      the form of Exhibit A, payable to the order of such Lender in a principal amount
      equal to its Maximum Credit Amount as then in effect, and otherwise duly
      completed. The date, amount, Type, interest rate and, if applicable, Interest
      Period of each Loan made by each Lender, and all payments made on account of
      the
      principal thereof, may be recorded by such Lender on its books for its Note,
      and, prior to any transfer, may be endorsed by such Lender on a schedule
      attached to such Note or any continuation thereof or on any separate record
      maintained by such Lender; provided that the failure to make any such notation
      or to attach a schedule shall not affect any Lender’s or the Borrower’s rights
      or obligations in respect of such Loans or affect the validity of such transfer
      by any Lender of its Note. 

     

    Section
      2.03 Requests
      for Borrowings.
      To
      request a Borrowing, the Borrower shall notify the Administrative Agent of
      such
      request by telephone (a) in the case of a Eurodollar Borrowing, not later than
      12:00 noon., Houston time, three Business Days before the date of the proposed
      Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00 noon,
      Houston time, one Business Day before the date of the proposed Borrowing;
      provided that no such notice shall be required for any deemed request of an
      ABR
      Borrowing to finance the reimbursement of an LC Disbursement as provided in
      Section 2.08(e). Each such telephonic Borrowing Request shall be irrevocable
      and
      shall be confirmed promptly by hand delivery or telecopy to the Administrative
      Agent of a written Borrowing Request in a form approved by the Administrative
      Agent and signed by the Borrower. Each such telephonic and written Borrowing
      Request shall specify the following information in compliance with Section
      2.02:

     

    (i) the
      aggregate amount of the requested Borrowing;

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (ii) the
      date
      of such Borrowing, which shall be a Business Day;

     

    (iii) whether
      such Borrowing is to be comprised of Working Capital Revolving Loans or General
      Revolving Loans;

     

    (iv) whether
      such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

     

    (v) in
      the
      case of a Eurodollar Borrowing, the initial Interest Period to be applicable
      thereto, which shall be a period contemplated by the definition of the term
      “Interest Period”;

     

    (vi) the
      amount of the then effective Borrowing Base, the current total Revolving Credit
      Exposures (without regard to the requested Borrowing) and the pro
      forma
      total
      Revolving Credit Exposures (giving effect to the requested Borrowing);
      and

     

    (vii) the
      location and number of the Borrower’s account to which funds are to be
      disbursed, which shall comply with the requirements of Section
      2.05.

     

    If
      no
      election as to the Type of Borrowing is specified, then the requested Borrowing
      shall be an ABR Borrowing. If no election as to the Class of Borrowing is
      specified, then the requested Borrowing shall be a General Revolving Borrowing.
      If no Interest Period is specified with respect to any requested Eurodollar
      Borrowing, then the Borrower shall be deemed to have selected an Interest Period
      of one month’s duration. Each Borrowing Request shall constitute a
      representation that the amount of the requested Borrowing shall not cause the
      total Revolving Credit Exposures to exceed the total Commitments (i.e., the
      lesser of the Aggregate Maximum Credit Amounts and the then effective Borrowing
      Base). 

     

    Promptly
      following receipt of a Borrowing Request in accordance with this Section 2.03,
      the Administrative Agent shall advise each Lender of the details thereof and
      of
      the amount of such Lender’s Loan to be made as part of the requested
      Borrowing.

     

    Section
      2.04 Interest
      Elections.

     

    (a) Conversion
      and Continuance.
      Each
      Borrowing initially shall be of the Type and Class specified in the applicable
      Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
      initial Interest Period as specified in such Borrowing Request. Thereafter,
      the
      Borrower may elect to convert such Borrowing to a different Type or to continue
      such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
      Periods therefor, all as provided in this Section 2.04. The Borrower may elect
      different options with respect to different portions of the affected Borrowing,
      in which case each such portion shall be allocated ratably among the Lenders
      holding the Loans comprising such Borrowing, and the Loans comprising each
      such
      portion shall be considered a separate Borrowing.

     

    (b) Interest
      Election Requests.
      To make
      an election pursuant to this Section 2.04, the Borrower shall notify the
      Administrative Agent of such election by telephone by the time that a Borrowing
      Request would be required under Section 2.03 if the Borrower were requesting
      a
      Borrowing of the Type resulting from such election to be made on the effective
      date of such election. Each such telephonic Interest Election Request shall
      be
      irrevocable and shall be confirmed promptly by hand delivery or telecopy to
      the
      Administrative Agent of a written Interest Election Request in a form approved
      by the Administrative Agent
      and
      signed by the Borrower.

    
      
        
        

      

      
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    (c) Information
      in Interest Election Requests.
      Each
      telephonic and written Interest Election Request shall specify the following
      information in compliance with Section 2.02:

     

    (i) the
      Borrowing to which such Interest Election Request applies and, if different
      options are being elected with respect to different portions thereof, the
      portions thereof to be allocated to each resulting Borrowing (in which case
      the
      information to be specified pursuant to Section 2.04(c)(iii) and (iv) shall
      be
      specified for each resulting Borrowing);

     

    (ii) the
      effective date of the election made pursuant to such Interest Election Request,
      which shall be a Business Day;

     

    (iii) whether
      the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
      and

     

    (iv) if
      the
      resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
      applicable thereto after giving effect to such election, which shall be a period
      contemplated by the definition of the term “Interest Period”.

     

    If
      any
      such Interest Election Request requests a Eurodollar Borrowing but does not
      specify an Interest Period, then the Borrower shall be deemed to have selected
      an Interest Period of one month’s duration.

     

    (d) Notice
      to Lenders by the Administrative Agent.
      Promptly following receipt of an Interest Election Request, the Administrative
      Agent shall advise each Lender of the details thereof and of such Lender’s
      portion of each resulting Borrowing.

     

    (e) Effect
      of Failure to Deliver Timely Interest Election Request and Events of Default
      and
      Borrowing Base Deficiencies on Interest Election.
      If the
      Borrower fails to deliver a timely Interest Election Request with respect to
      a
      Eurodollar Borrowing prior to the end of the Interest Period applicable thereto,
      then, unless such Borrowing is repaid as provided herein, at the end of such
      Interest Period such Borrowing shall be converted to an ABR Borrowing.
      Notwithstanding any contrary provision hereof, if an Event of Default or a
      Borrowing Base Deficiency has occurred and is continuing: (i) no outstanding
      Borrowing may be converted to or continued as a Eurodollar Borrowing (and any
      Interest Election Request that requests the conversion of any Borrowing to,
      or
      continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective)
      and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an
      ABR
      Borrowing at the end of the Interest Period applicable thereto.

    
      
        
        

      

      
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    Section
      2.05 Funding
      of Borrowings.

     

    (a) Funding
      by Lenders.
      Each
      Lender shall make each Loan to be made by it hereunder on the proposed date
      thereof by wire transfer of immediately available funds by 1:00 p.m., Houston
      time, to the account of the Administrative Agent most recently designated by
      it
      for such purpose by notice to the Lenders. The Administrative Agent will make
      such Loans available to the Borrower by promptly crediting the amounts so
      received, in like funds, to an account of the Borrower and designated by the
      Borrower in the applicable Borrowing Request; provided that ABR Loans made
      to
      finance the reimbursement of an LC Disbursement as provided in Section 2.08(e)
      shall be remitted by the Administrative Agent to the Issuing Bank that made
      such
      LC Disbursement.
      Nothing
      herein shall be deemed to obligate any Lender to obtain the funds for its Loan
      in any particular place or manner or to constitute a representation by any
      Lender that it has obtained or will obtain the funds for its Loan in any
      particular place or manner.

     

    (b) Presumption
      of Funding by the Lenders.
      Unless
      the Administrative Agent shall have received notice from a Lender prior to
      the
      proposed date of any Borrowing that such Lender will not make available to
      the
      Administrative Agent such Lender’s share of such Borrowing, the Administrative
      Agent may assume that such Lender has made such share available on such date
      in
      accordance with Section 2.05(a) and may, in reliance upon such assumption,
      make
      available to the Borrower a corresponding amount. In such event, if a Lender
      has
      not in fact made its share of the applicable Borrowing available to the
      Administrative Agent, then the applicable Lender and the Borrower severally
      agree to pay to the Administrative Agent forthwith on demand such corresponding
      amount with interest thereon, for each day from and including the date such
      amount is made available to the Borrower to but excluding the date of payment
      to
      the Administrative Agent, at (i) in the case of such Lender, the greater of
      the
      Federal Funds Effective Rate and a rate determined by the Administrative Agent
      in accordance with banking industry rules on interbank compensation or (ii)
      in
      the case of the Borrower, the interest rate applicable to ABR Loans. If such
      Lender pays such amount to the Administrative Agent, then such amount shall
      constitute such Lender’s Loan included in such Borrowing.

     

    Section
      2.06 Termination,
      Reduction and Increase of Aggregate Maximum Credit Amounts.

     

    (a) Scheduled
      Termination of Commitments.
      Unless
      previously terminated, the Commitments shall terminate on the Maturity Date.
      If
      at any time the Aggregate Maximum Credit Amounts or the Borrowing Base is
      terminated or reduced to zero, then the Commitments shall terminate on the
      effective date of such termination or reduction.

     

    (b) Optional
      Termination and Reduction of Aggregate Credit Amounts. 

     

    (i) The
      Borrower may at any time terminate, or from time to time reduce, the Aggregate
      Maximum Credit Amounts; provided that (A) each reduction of the Aggregate
      Maximum Credit Amounts shall be in an amount that is an integral multiple of
      $500,000 and not less than $1,000,000, (B) any such reduction shall not apply
      to
      the Working Capital Revolving Sub-Commitments until such time that the amount
      of
      the aggregate Commitments equals the amount of the aggregate Working Capital
      Revolving Sub-Commitments and, thereafter, shall reduce both the aggregate
      Commitments and the aggregate Working Capital Revolving Sub-Commitments, and
      (C)
      the Borrower shall not terminate or reduce the Aggregate Maximum Credit Amounts
      if, after giving effect to any concurrent prepayment of the Loans in accordance
      with Section 3.04(c), the total Revolving Credit Exposures would exceed the
      total Commitments.

    
      
        
        

      

      
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    (ii) The
      Borrower shall notify the Administrative Agent of any election to terminate
      or
      reduce the Aggregate Maximum Credit Amounts under Section 2.06(b)(i) at least
      three Business Days prior to the effective date of such termination or
      reduction, specifying such election and the effective date thereof. Promptly
      following receipt of any notice, the Administrative Agent shall advise the
      Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
      to this Section 2.06(b)(ii) shall be irrevocable. Any termination or reduction
      of the Aggregate Maximum Credit Amounts shall be permanent and may not be
      reinstated. Each reduction of the Aggregate Maximum Credit Amounts shall be
      made
      ratably among the Lenders in accordance with each Lender’s Applicable
      Percentage.

     

    (c) Optional
      Increase in Aggregate Maximum Credit Amounts.

     

    (i) Subject
      to the conditions set forth in Section 2.06(c)(ii), the Borrower may increase
      the Aggregate Maximum Credit Amounts then in effect by increasing the Maximum
      Credit Amount of a Lender or by causing a Person that at such time is not a
      Lender to become a Lender (an “Additional
      Lender”).

     

    (ii) Any
      increase in the Aggregate Maximum Credit Amounts shall be subject to the
      following additional conditions:

     

    (A) such
      increase shall not be less than $5,000,000
      unless
      the Administrative Agent otherwise consents, and no such increase shall be
      permitted if after giving effect thereto the Aggregate Maximum Credit Amounts
      would exceed $700,000,000.

     

    (B) no
      Default shall have occurred and be continuing at the effective date of such
      increase;

     

    (C) on
      the
      effective date of such increase, no Eurodollar Borrowings shall be outstanding
      or if any Eurodollar Borrowings are outstanding, then the effective date of
      such
      increase shall be the last day of the Interest Period in respect of such
      Eurodollar Borrowings unless the Borrower pays compensation to the extent
      required by Section 5.02;

     

    (D) no
      Lender’s Maximum Credit Amount may be increased without the consent of such
      Lender;

     

    (E) if
      the
      Borrower elects to increase the Aggregate Maximum Credit Amounts by increasing
      the Maximum Credit Amount of a Lender, the Borrower and such Lender shall
      execute and deliver to the Administrative Agent a certificate substantially
      in
      the form of Exhibit E-1 (a “Maximum
      Credit Amount Increase Certificate”),
      and
      the Borrower shall deliver a new Note payable to the order of such Lender in
      a
      principal amount equal to its Maximum Credit Amount after giving effect to
      such
      increase, and otherwise duly completed; and

    
      
        
        

      

      
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    (F) If
      the
      Borrower elects to increase the Aggregate Maximum Credit Amounts by causing
      an
      Additional Lender to become a party to this Agreement, then (1) the Borrower
      must obtain the prior written consent of the Administrative Agent, (2) the
      Borrower and such Additional Lender shall execute and deliver to the
      Administrative Agent a certificate substantially in the form of Exhibit E-2
      (an
“Additional
      Lender Certificate”),
      together with an Administrative Questionnaire and a processing and recordation
      fee of $3,500, and (3) the Borrower shall deliver a Note payable to the order
      of
      such Additional Lender in a principal amount equal to its Maximum Credit Amount,
      and otherwise duly completed.

     

    (iii) Subject
      to acceptance and recording thereof pursuant to Section 2.06(c)(iv), from and
      after the effective date specified in the Maximum Credit Amount Increase
      Certificate or the Additional Lender Certificate (or if any Eurodollar
      Borrowings are outstanding, then the last day of the Interest Period in respect
      of such Eurodollar Borrowings, unless the Borrower has paid compensation
      required by Section 5.02): (A) the amount of the Aggregate Maximum Credit
      Amounts shall be increased as set forth therein, and (B) in the case of an
      Additional Lender Certificate, any Additional Lender party thereto shall be
      a
      party to this Agreement and the other Loan Documents and have the rights and
      obligations of a Lender under this Agreement and the other Loan Documents.
      In
      addition, the Lender or the Additional Lender, as applicable, shall purchase
      a
      pro rata portion of the outstanding Loans (and participation interests in
      Letters of Credit) of each of the other Lenders (and such Lenders hereby agree
      to sell and to take all such further action to effectuate such sale) such that
      each Lender (including any Additional Lender, if applicable) shall hold its
      Applicable Percentage of the outstanding Loans (and participation interests)
      after giving effect to the increase in the Aggregate Maximum Credit
      Amounts.

     

    (iv) Upon
      its
      receipt of a duly completed Maximum Credit Amount Increase Certificate or an
      Additional Lender Certificate, executed by the Borrower and the Lender or the
      Borrower and the Additional Lender party thereto, as applicable, the processing
      and recording fee referred to in Section 2.06(c)(ii), the Administrative
      Questionnaire referred to in Section 2.06(c)(ii), if applicable, and the written
      consent of the Administrative Agent to such increase required by Section
      2.06(c)(i), the Administrative Agent shall accept such Maximum Credit Amount
      Increase Certificate or Additional Lender Certificate and record the information
      contained therein in the Register required to be maintained by the
      Administrative Agent pursuant to Section 12.04(b)(iv). No increase in the
      Aggregate Maximum Credit Amounts shall be effective for purposes of this
      Agreement unless it has been recorded in the Register as provided in this
      Section 2.06(c)(iv).

     

    Section
      2.07 Borrowing
      Base.

     

    (a) Initial
      Borrowing Base.
      For
      the
      period from and including the Effective Date to but excluding the first
      Redetermination Date, the amount of the Borrowing Base shall be $235,000,000.
      Notwithstanding the foregoing, the Borrowing Base may be subject to further
      adjustments from time to time pursuant to Section 6.03, Section 8.13(c) or
      Section 9.12(d). 

    
      
        
        

      

      
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    (b) Scheduled
      and Interim Redeterminations.
      Subject
      to Section 2.07(d), the Borrowing Base shall be redetermined (a
      “Scheduled
      Redetermination”)
      on
      April 1st and October 1st of each
      year,
      commencing April 1st, 2008. In addition, either the Borrower or the
      Administrative Agent, at the direction of the Required Lenders, may once during
      each calendar year, each elect to cause the Borrowing Base to be redetermined
      between the Effective Date and the first Scheduled Redetermination and
      thereafter, between Scheduled Redeterminations (an “Interim
      Redetermination”)
      in
      accordance with this Section
      2.07.
      The
      Borrower shall have the right, once during each calendar year, to initiate
      an
      Interim Redetermination in addition to the one otherwise provided in this
      Section 2.07(b) when it makes a Material Acquisition, provided such Interim
      Redetermination is in accordance with this Section 2.07.

     

    (c) Scheduled
      and Interim Redetermination Procedure.

     

    (i) Each
      Scheduled Redetermination and each Interim Redetermination shall be effectuated
      as follows: Upon receipt by the Administrative Agent of (A) the Reserve Report
      and the certificate required to be delivered by the Borrower to the
      Administrative Agent, in the case of a Scheduled Redetermination, pursuant
      to
      Section 8.12(a) and (c), and, in the case of an Interim Redetermination,
      pursuant to Section 8.12(b) and (c), and (B) such other reports, data and
      supplemental information, including, without limitation, the information
      provided pursuant to Section 8.12(c), as may, from time to time, be reasonably
      requested by the Required Lenders (the Reserve Report, such certificate and
      such
      other reports, data and supplemental information being the “Engineering
      Reports”),
      the
      Administrative Agent shall evaluate the information contained in the Engineering
      Reports and shall, in good faith, propose a new Borrowing Base (the
“Proposed
      Borrowing Base”)
      based
      upon such information and such other information (including, without limitation,
      the status of title information with respect to the Oil and Gas Properties
      as
      described in the Engineering Reports and the existence of any other Debt) as
      the
      Administrative Agent deems appropriate in its sole discretion and consistent
      with its normal oil and gas lending criteria as it exists at the particular
      time.
      In no
      event shall the Proposed Borrowing Base exceed the Aggregate Maximum Credit
      Amounts.

     

    (ii) The
      Administrative Agent shall notify the Borrower and the Lenders of the Proposed
      Borrowing Base (the “Proposed
      Borrowing Base Notice”):

     

    (A) in
      the
      case of a Scheduled Redetermination (1) if the Administrative Agent shall have
      received the Engineering Reports required to be delivered by the Borrower
      pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on
      or
      before the March 15th and September 15th of such year following the
      date of delivery of such Engineering Report or (2) if the Administrative Agent
      shall not have received the Engineering Reports required to be delivered by
      the
      Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner,
      then promptly after the Administrative Agent has received complete Engineering
      Reports from the Borrower and has had a reasonable opportunity to determine
      the
      Proposed Borrowing Base in accordance with Section 2.07(c)(i) and in any event,
      within fifteen (15) days after the Administrative Agent has received the
      required Engineering Report; and

     

    (B) in
      the
      case of an Interim Redetermination, promptly, and in any event, within fifteen
      (15) days after the Administrative Agent has received the required Engineering
      Reports.

    
      
        
        

      

      
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    (iii) Any
      Proposed Borrowing Base that would increase the Borrowing Base then in effect
      must be approved or deemed to have been approved by all of the Lenders as
      provided in this Section 2.07(c)(iii); and any Proposed Borrowing Base that
      would decrease or maintain the Borrowing Base then in effect must be approved
      or
      be deemed to have been approved by the Required Lenders as provided in this
      Section 2.07(c)(iii). Upon receipt of the Proposed Borrowing Base Notice, each
      Lender shall have fifteen (15) days to agree with the Proposed Borrowing Base
      or
      disagree with the Proposed Borrowing Base by proposing an alternate Borrowing
      Base. If at the end of such fifteen (15) days, any Lender has not communicated
      its approval or disapproval in writing to the Administrative Agent, such silence
      shall be deemed to be an approval of the Proposed Borrowing Base. If, at the
      end
      of such 15-day period, all of the Lenders, in the case of a Proposed Borrowing
      Base that would increase the Borrowing Base then in effect, or the Required
      Lenders, in the case of a Proposed Borrowing Base that would decrease or
      maintain the Borrowing Base then in effect, have approved or deemed to have
      approved, as aforesaid, then the Proposed Borrowing Base shall become the new
      Borrowing Base, effective on the date specified in Section 2.07(d). If, however,
      at the end of such 15-day period, all of the Lenders or the Required Lenders,
      as
      applicable, have not approved or deemed to have approved, as aforesaid, then
      the
      Administrative Agent shall poll the Lenders to ascertain the highest Borrowing
      Base then acceptable to a number of Lenders sufficient to constitute the
      Required Lenders and, so long as such amount does not increase the Borrowing
      Base then in effect, such amount shall become the new Borrowing Base, effective
      on the date specified in Section 2.07(d).

     

    (d) Effectiveness
      of a Redetermined Borrowing Base.
      After a
      redetermined Borrowing Base is approved or is deemed to have been approved
      by
      all of the Lenders or the Required Lenders, as applicable, pursuant to Section
      2.07(c)(iii), the Administrative Agent shall notify the Borrower and the Lenders
      of the amount of the redetermined Borrowing Base (the “New
      Borrowing Base Notice”),
      and
      such amount shall become the new Borrowing Base, effective and applicable to
      the
      Borrower, the Administrative Agent, each Issuing Bank and the
      Lenders:

     

    (i) in
      the
      case of a Scheduled Redetermination, (A) if the Administrative Agent shall
      have
      received the Engineering Reports required to be delivered by the Borrower
      pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on
      the
      April 1st or October 1st, as applicable, following delivery of the New Borrowing
      Base Notice, or (B) if the Administrative Agent shall not have received the
      Engineering Reports required to be delivered by the Borrower pursuant to Section
      8.12(a) and (c) in a timely and complete manner, then on the Business Day next
      succeeding delivery of the New Borrowing Base Notice; and

     

    (ii) in
      the
      case of an Interim Redetermination, on the Business Day next succeeding delivery
      of such notice.

     

    Such
      amount shall then become the Borrowing Base until the next Scheduled
      Redetermination Date, the next Interim Redetermination date or the next
      adjustment to the Borrowing Base under Section 8.13(c) or Section 9.12(d),
      whichever occurs first. 

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    (e) Reduction
      of Borrowing Base Upon Issuance of Senior Debt.
      Notwithstanding
      anything to the contrary contained herein, if the Borrower issues any Senior
      Debt during the period between Scheduled Redetermination dates or not in
      conjunction with an Interim Redetermination, then on the date on which such
      Senior Debt is issued, the Borrowing Base then in effect shall be reduced by
      an
      amount equal to the product of 0.30 multiplied by the stated principal amount
      of
      such Senior Debt. The Borrowing Base as so reduced shall become the new
      Borrowing Base immediately upon the date of such issuance, effective and
      applicable to the Borrower, the Agents, the Issuing Bank and the Lenders on
      such
      date until the next redetermination or modification thereof hereunder. For
      purposes of this Section 2.07(e), if any such Debt is issued at a discount
      or
      otherwise sold for less than “par”, the reduction shall be calculated based upon
      the stated principal amount without reference to such discount.

     

    Section
      2.08 Letters
      of Credit.

     

    (a) General.
      Subject
      to the terms and conditions set forth herein, the Borrower may request any
      Issuing Bank to issue Letters of Credit for its own account or for the account
      of the Borrower or any of its Subsidiaries, in a form reasonably acceptable
      to
      the Administrative Agent and such Issuing Bank, at any time and from time to
      time during the Availability Period; provided that the Borrower may not request
      the issuance, amendment, renewal or extension of Letters of Credit hereunder
      if
      a Borrowing Base Deficiency exists at such time or would exist as a result
      thereof. In the event of any inconsistency between the terms and conditions
      of
      this Agreement and the terms and conditions of any form of letter of credit
      application or other agreement submitted by the Borrower to, or entered into
      by
      the Borrower with, an Issuing Bank relating to any Letter of Credit, the terms
      and conditions of this Agreement shall control.

     

    (b) Notice
      of Issuance, Amendment, Renewal, Extension; Certain Conditions.
      To
      request the issuance of a Letter of Credit (or the amendment, renewal or
      extension of an outstanding Letter of Credit), the Borrower shall deliver as
      permitted by Section 12.01(a) (or transmit by electronic communication, if
      arrangements for doing so have been approved by the Issuing Bank) to any Issuing
      Bank and the Administrative Agent (not less than three (3) Business Days in
      advance of the requested date of issuance, amendment, renewal or extension)
      a
      notice:

     

    (i) requesting
      the issuance of a Letter of Credit or identifying the Letter of Credit issued
      by
      such Issuing Bank to be amended, renewed or extended;

     

    (ii) specifying
      the date of issuance, amendment, renewal or extension (which shall be a Business
      Day);

     

    (iii) specifying
      the date on which such Letter of Credit is to expire (which shall comply with
      Section 2.08(c));

     

    (iv) specifying
      the amount of such Letter of Credit;

     

    (v) specifying
      the name and address of the beneficiary thereof and such other information
      as
      shall be necessary to prepare, amend, renew or extend such Letter of Credit;
      and

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (vi) specifying
      the amount of the then effective Borrowing Base and whether a Borrowing Base
      Deficiency exists at such time, the current total Revolving Credit Exposures
      (without regard to the requested Letter of Credit or the requested amendment,
      renewal or extension of an outstanding Letter of Credit) and the pro
      forma
      total
      Revolving Credit Exposures (giving effect to the requested Letter of Credit
      or
      the requested amendment, renewal or extension of an outstanding Letter of
      Credit).

     

    Each
      notice shall constitute a representation that after giving effect to the
      requested issuance, amendment, renewal or extension, as applicable, (i)
      the LC
      Exposure shall not exceed the LC Commitment and (ii)
      the
      total Revolving Credit Exposures shall not exceed the lesser of the Aggregate
      Maximum Credit Amounts and the then effective Borrowing Base.

     

    If
      requested by any Issuing Bank, the Borrower also shall submit a letter of credit
      application on such Issuing Bank’s standard form in connection with any request
      for a Letter of Credit. 

     

    (c) Expiration
      Date.
      Each
      Letter of Credit shall expire at or prior to the close of business on the
      earlier of (i)
      the date
      one year after the date of the issuance of such Letter of Credit (or, in the
      case of any renewal or extension thereof, one year after such renewal or
      extension) and (ii)
      the date
      that is five Business Days prior to the Maturity Date.

     

    (d) Participations.
      By the
      issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing
      the amount thereof) and without any further action on the part of the Issuing
      Bank that issues such Letter of Credit or the Lenders, each Issuing Bank that
      issues a Letter of Credit hereunder hereby grants to each Lender, and each
      Lender hereby acquires from such Issuing Bank, a participation in such Letter
      of
      Credit equal to such Lender’s Applicable Percentage of the aggregate amount
      available to be drawn under such Letter of Credit. In consideration and in
      furtherance of the foregoing, each Lender hereby absolutely and unconditionally
      agrees to pay to the Administrative Agent, for the account of any Issuing Bank
      that issues a Letter of Credit hereunder, such Lender’s Applicable Percentage of
      each LC Disbursement made by such Issuing Bank and not reimbursed by the
      Borrower on the date due as provided in Section
      2.08(e),
      or of
      any reimbursement payment required to be refunded to the Borrower for any
      reason. Each Lender acknowledges and agrees that its obligation to acquire
      participations pursuant to this Section
      2.08(d)
      in
      respect of Letters of Credit is absolute and unconditional and shall not be
      affected by any circumstance whatsoever, including any amendment, renewal or
      extension of any Letter of Credit or the occurrence and continuance of a
      Default, the existence of a Borrowing Base Deficiency or reduction or
      termination of the Commitments, and that each such payment shall be made without
      any offset, abatement, withholding or reduction whatsoever.

     

    (e) Reimbursement.
      If
      the
      Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit,
      the Borrower shall reimburse such LC Disbursement by paying to the
      Administrative Agent an amount equal to such LC Disbursement not later than
      1:00
      p.m., Houston time, on the date that such LC Disbursement is made, if the
      Borrower shall have received notice of such LC Disbursement prior to 11:00
      a.m.,
      Houston time, on such date, or, if such notice has not been received by the
      Borrower prior to such time on such date, then not later than 1:00 p.m., Houston
      time, on (1) the Business Day that the Borrower receives such notice, if such
      notice is received prior to 11:00 a.m., Houston time, on the day of receipt,
      or
      (2) the Business Day immediately following the day that the Borrower receives
      such notice, if such notice is not received prior to such time on the day of
      receipt; provided that if such LC Disbursement is not less than $1,000,000,
      the
      Borrower shall, subject to the conditions to Borrowing set forth herein, be
      deemed to have requested, and the Borrower does hereby request under such
      circumstances, that such payment be financed with an ABR Borrowing in an
      equivalent amount and, to the extent so financed, the Borrower’s obligation to
      make such payment shall be discharged and replaced by the resulting ABR
      Borrowing. If the Borrower fails to make such payment when due, the
      Administrative Agent shall notify each Lender of the applicable LC Disbursement,
      the payment then due from the Borrower in respect thereof and such Lender’s
      Applicable Percentage thereof. Promptly following receipt of such notice, each
      Lender shall pay to the Administrative Agent its Applicable Percentage of the
      payment then due from the Borrower, in the same manner as provided in
Section
      2.05
      with
      respect to Loans made by such Lender (and Section
      2.05
      shall
      apply, mutatis mutandis, to the payment obligations of the Lenders), and the
      Administrative Agent shall promptly pay to the Issuing Bank the amounts so
      received by it from the Lenders. Promptly following receipt by the
      Administrative Agent of any payment from the Borrower pursuant to this
Section
      2.08(e),
      the
      Administrative Agent shall distribute such payment to the Issuing Bank or,
      to
      the extent that Lenders have made payments pursuant to this Section
      2.08(e)
      to
      reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
      interests may appear. Any payment made by a Lender pursuant to this Section
      2.08(e)
      to
      reimburse the Issuing Bank for any LC Disbursement (other than the funding
      of
      ABR Loans as contemplated above) shall not constitute a Loan and shall not
      relieve the Borrower of its obligation to reimburse such LC Disbursement. Any
      LC
      Disbursement not reimbursed by the Borrower or funded as a Loan prior to 1:00
      p.m., Houston time, shall bear interest for such day at the ABR plus the
      Applicable Margin.

     

    
      
        
        

      

      
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    (f) Obligations
      Absolute.
      The
      Borrower’s obligation to reimburse LC Disbursements as provided in Section
      2.08(e)
      shall be
      absolute, unconditional and irrevocable, and shall be performed strictly in
      accordance with the terms of this Agreement under any and all circumstances
      whatsoever and irrespective of (i)
      any lack
      of validity or enforceability of any Letter of Credit, any Letter of Credit
      Agreement or this Agreement, or any term or provision therein, (ii)
      any
      draft or other document presented under a Letter of Credit proving to be forged,
      fraudulent or invalid in any respect or any statement therein being untrue
      or
      inaccurate in any respect, (iii)
      payment
      by any Issuing Bank under a Letter of Credit issued by such Issuing Bank against
      presentation of a draft or other document that does not comply with the terms
      of
      such Letter of Credit or any Letter of Credit Agreement, or (iv)
      any
      other event or circumstance whatsoever, whether or not similar to any of the
      foregoing, that might, but for the provisions of this Section
      2.08(f),
      constitute a legal or equitable discharge of, or provide a right of setoff
      against, the Borrower’s obligations hereunder. Neither the Administrative Agent,
      the Lenders nor any Issuing Bank, nor any of their Related Parties shall have
      any liability or responsibility by reason of or in connection with the issuance
      or transfer of any Letter of Credit or any payment or failure to make any
      payment thereunder (irrespective of any of the circumstances referred to in
      the
      preceding sentence), or any error, omission, interruption, loss or delay in
      transmission or delivery of any draft, notice or other communication under
      or
      relating to any Letter of Credit (including any document required to make a
      drawing thereunder), any error in interpretation of technical terms or any
      consequence arising from causes beyond the control of any Issuing Bank; provided
      that the foregoing shall not be construed to excuse any Issuing Bank from
      liability to the Borrower to the extent of any direct damages (as opposed to
      consequential damages, claims in respect of which are hereby waived by the
      Borrower to the extent permitted by applicable law) suffered by the Borrower
      that are caused by such Issuing Bank’s failure to exercise care when determining
      whether drafts and other documents presented under a Letter of Credit comply
      with the terms thereof. The parties hereto expressly agree that, in the absence
      of gross negligence or willful misconduct on the part of any Issuing Bank (as
      finally determined by a court of competent jurisdiction), such Issuing Bank
      shall be deemed to have exercised all requisite care in each such determination.
      In furtherance of the foregoing and without limiting the generality thereof,
      the
      parties agree that, with respect to documents presented which appear on their
      face to be in substantial compliance with the terms of a Letter of Credit,
      the
      Issuing Bank that issued such Letter of Credit may, in its sole discretion,
      either accept and make payment upon such documents without responsibility for
      further investigation, regardless of any notice or information to the contrary,
      or refuse to accept and make payment upon such documents if such documents
      are
      not in strict compliance with the terms of such Letter of Credit.

     

    
      
        
        

      

      
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    (g) Disbursement
      Procedures.
      Each
      Issuing Bank shall, promptly following its receipt thereof, examine all
      documents purporting to represent a demand for payment under a Letter of Credit
      issued by such Issuing Bank. Such Issuing Bank shall promptly notify the
      Administrative Agent and the Borrower by telephone (confirmed by telecopy)
      of
      such demand for payment and whether such Issuing Bank has made or will make
      an
      LC Disbursement thereunder; provided that any failure to give or delay in giving
      such notice shall not relieve the Borrower of its obligation to reimburse such
      Issuing Bank and the Lenders with respect to any such LC Disbursement.

     

    (h) Interim
      Interest.
      If any
      Issuing Bank shall make any LC Disbursement, then, until the Borrower shall
      have
      reimbursed such Issuing Bank for such LC Disbursement (either with its own
      funds
      or a Borrowing under Section
      2.08(e)),
      the
      unpaid amount thereof shall bear interest, for each day from and including
      the
      date such LC Disbursement is made to but excluding the date that the Borrower
      reimburses such LC Disbursement, at the rate per annum then applicable to ABR
      Loans. Interest accrued pursuant to this Section
      2.08(h)
      shall be
      for the account of such Issuing Bank, except that interest accrued on and after
      the date of payment by any Lender pursuant to Section
      2.08(e)
      to
      reimburse such Issuing Bank shall be for the account of such Lender to the
      extent of such payment.

     

    (i) Replacement
      of an Issuing Bank.
      Any
      Issuing Bank may be replaced or resign at any time by written agreement among
      the Borrower, the Administrative Agent, such resigning or replaced Issuing
      Bank
      and, in the case of a replacement, the successor Issuing Bank. The
      Administrative Agent shall notify the Lenders of any such resignation or
      replacement of an Issuing Bank. At the time any such resignation or replacement
      shall become effective, the Borrower shall pay all unpaid fees accrued for
      the
      account of the resigning or replaced Issuing Bank pursuant to Section
      3.05(b).
      In the
      case of the replacement of an Issuing Bank, from and after the effective date
      of
      such replacement, (i)
      the
      successor Issuing Bank shall have all the rights and obligations of the replaced
      Issuing Bank under this Agreement with respect to Letters of Credit to be issued
      thereafter and (ii)
      references herein to “Issuing Bank” shall be deemed to refer to such successor
      or to any previous Issuing Bank, or to such successor and all previous Issuing
      Banks, as the context shall require. After the resignation or replacement of
      an
      Issuing Bank hereunder, the resigning or replaced Issuing Bank shall remain
      a
      party hereto and shall continue to have all the rights and obligations of an
      Issuing Bank under this Agreement with respect to Letters of Credit issued
      by it
      prior to such resignation or replacement, but shall not be required to issue
      additional Letters of Credit.

    
       

      
        
          
          

        

        
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    (j) Cash
      Collateralization.
      If
(i)
      any
      Event of Default shall occur and be continuing and the Borrower receives notice
      from the Administrative Agent or the Majority Lenders demanding the deposit
      of
      cash collateral pursuant to this Section
      2.08(j),
      or
(ii)
      the
      Borrower is required to pay to the Administrative Agent the excess attributable
      to an LC Exposure in connection with any prepayment pursuant to Section
      3.04(c),
      then
      the Borrower shall deposit, in an account with the Administrative Agent, in
      the
      name of the Administrative Agent and for the benefit of the Lenders, an amount
      in cash equal to, in the case of an Event of Default, the LC Exposure, and
      in
      the case of a payment required by Section
      3.04(c),
      the
      amount of such excess as provided in Section
      3.04(c),
      as of
      such date plus any accrued and unpaid interest thereon; provided that the
      obligation to deposit such cash collateral shall become effective immediately,
      and such deposit shall become immediately due and payable, without demand or
      other notice of any kind, upon the occurrence of any Event of Default with
      respect to the Borrower or any of its Subsidiaries described in Section
      10.01(h)
      or
Section
      10.01(i).
      The
      Borrower hereby grants to the Administrative Agent, for the benefit of each
      Issuing Bank and the Lenders, an exclusive first priority and continuing
      perfected security interest in and Lien on such account and all cash, checks,
      drafts, certificates and instruments, if any, from time to time deposited or
      held in such account, all deposits or wire transfers made thereto, any and
      all
      investments purchased with funds deposited in such account, all interest,
      dividends, cash, instruments, financial assets and other Property from time
      to
      time received, receivable or otherwise payable in respect of, or in exchange
      for, any or all of the foregoing, and all proceeds, products, accessions, rents,
      profits, income and benefits therefrom, and any substitutions and replacements
      therefor. The Borrower’s obligation to deposit amounts pursuant to this
Section
      2.08(j)
      shall be
      absolute and unconditional, without regard to whether any beneficiary of any
      such Letter of Credit has attempted to draw down all or a portion of such amount
      under the terms of a Letter of Credit, and, to the fullest extent permitted
      by
      applicable law, shall not be subject to any defense or be affected by a right
      of
      set-off, counterclaim or recoupment which the Borrower or any of its
      Subsidiaries may now or hereafter have against any such beneficiary, any Issuing
      Bank, the Administrative Agent, the Lenders or any other Person for any reason
      whatsoever. Such deposit shall be held as collateral securing the payment and
      performance of the Borrower’s and any Guarantor’s obligations under this
      Agreement and the other Loan Documents. The Administrative Agent shall have
      exclusive dominion and control, including the exclusive right of withdrawal,
      over such account; provided that investments of funds in such account in
      investments permitted by Section
      9.05(c)
      or
(e)
      may be
      made at the option of the Borrower at its direction, risk and expense. Interest
      or profits, if any, on such investments shall accumulate in such account. Moneys
      in such account shall be applied by the Administrative Agent to reimburse,
      on a
pro
      rata basis,
      each Issuing Bank for LC Disbursements for which it has not been reimbursed
      and,
      to the extent not so applied, shall be held for the satisfaction of the
      reimbursement obligations of the Borrower for the LC Exposure at such time
      or,
      if the maturity of the Loans has been accelerated, be applied to satisfy other
      obligations of the Borrower and the Guarantors, if any, under this Agreement
      or
      the other Loan Documents. If
      the
      Borrower is required to provide an amount of cash collateral hereunder as a
      result of the occurrence of an Event of Default, and the Borrower is not
      otherwise required to pay to the Administrative Agent the excess attributable
      to
      an LC Exposure in connection with any prepayment pursuant to Section
      3.04(c),
      then
      such amount (to the extent not applied as aforesaid) shall be returned to the
      Borrower within three Business Days after all Events of Default have been cured
      or waived. 

    
       

      
        
          
          

        

        
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    ARTICLE
      III

     

    Payments
      of Principal and Interest; Prepayments; Fees

     

    Section
      3.01 Repayment
      of Loans.
      The
      Borrower hereby unconditionally promises to pay to the Administrative Agent
      for
      the account of each Lender the then unpaid principal amount of each Loan on
      the
      Termination Date.

     

    Section
      3.02 Interest.

     

    (a) ABR
      Loans.
      Each
      ABR Loan comprising
      an ABR Borrowing shall bear interest at the Alternate Base Rate plus the
      Applicable Margin, but in no event to exceed the Highest Lawful
      Rate.

     

    (b) Eurodollar
      Loans.
      Each
      Eurodollar Loan comprising a Eurodollar Borrowing shall bear interest at the
      Adjusted LIBO Rate for the Interest Period in effect for such Eurodollar Loan
      plus the Applicable Margin, but in no event to exceed the Highest Lawful
      Rate.

     

    (c) Post-Default
      and Borrowing Base Deficiency Rate.
      Notwithstanding the foregoing, (i) if
      an Event of Default has occurred and is continuing, or if any principal of
      or
      interest on any Loan or any fee or other amount payable by the Borrower or
      any
      Guarantor hereunder or under any other Loan Document is not paid when due,
      whether at stated maturity, upon acceleration or otherwise, and including any
      payments in respect of a Borrowing Base Deficiency under Section
      3.04(c),
      then
      all Loans outstanding, in the case of an Event of Default, and such overdue
      amount, in the case of a failure to pay amounts when due, shall bear interest,
      after as well as before judgment, at a rate per annum equal to two percent
      (2%)
      plus the rate applicable to the Loans as provided in Section
      3.02(a),
      but in
      no event to exceed the Highest Lawful Rate, and (ii) during
      any Borrowing Base Deficiency, all Loans outstanding at such time shall bear
      interest, after as well as before judgment, at the rate then applicable to
      such
      Loans, plus the Applicable Margin, if any, plus an additional two percent (2%),
      but in no event to exceed the Highest Lawful Rate.

     

    (d) Interest
      Payment Dates.
      Accrued
      interest on each Loan shall be payable in arrears on: (i) with respect to any
      ABR Loan, the last day of each March, June, September and December; (ii) with
      respect to any Eurodollar Loan, the last day of the Interest Period applicable
      to the Borrowing of which such Loan is a part and (iii) in any case, on the
      Termination Date; provided that (x) interest accrued pursuant to Section
      3.02(c)(i)
      shall be
      payable on demand, (y) in the event of any repayment or prepayment of any Loan
      (other than an optional prepayment of an ABR Loan prior to the Termination
      Date), accrued interest on the principal amount repaid or prepaid shall be
      payable on the date of such repayment or prepayment, and (z) in the event of
      any
      conversion of any Eurodollar Loan prior to the end of the current Interest
      Period therefor, accrued interest on such Loan shall be payable on the effective
      date of such conversion.

    
       

      
        
          
          

        

        
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    (e) Interest
      Rate Computations.
      All
      interest hereunder shall be computed on the basis of a year of 360 days, unless
      such computation would exceed the Highest Lawful Rate, in which case interest
      shall be computed on the basis of a year of 365 days (or 366 days in a leap
      year), except that interest computed by reference to the Alternate Base Rate
      shall be computed on the basis of a year of 365 days (or 366 days in a leap
      year), and in each case shall be payable for the actual number of days elapsed
      (including the first day but excluding the last day). The applicable Alternate
      Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
      and such determination shall be conclusive absent manifest error, and be binding
      upon the parties hereto.

     

    Section
      3.03 Alternate
      Rate of Interest.
      If
      prior
      to the commencement of any Interest Period for a Eurodollar
      Borrowing:

     

    (a) the
      Administrative Agent determines (which determination shall be conclusive absent
      manifest error) that adequate and reasonable means do not exist for ascertaining
      the LIBO Rate or the Adjusted LIBO Rate for such Interest Period;
      or

     

    (b) the
      Administrative Agent is advised by the Majority Lenders that the LIBO Rate
      or
      Adjusted LIBO Rate, as applicable, for such Interest Period will not adequately
      and fairly reflect the cost to such Lenders of making or maintaining their
      Loans
      included in such Borrowing for such Interest Period;

     

    then
      the
      Administrative Agent shall give notice thereof to the Borrower and the Lenders
      by telephone or telecopy as promptly as practicable thereafter and, until the
      Administrative Agent notifies the Borrower and the Lenders that the
      circumstances giving rise to such notice no longer exist, (i)
      any
      Interest Election Request that requests the conversion of any Borrowing to,
      or
      continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
      and (ii)
      if any
      Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be
      made
      as an ABR Borrowing.

     

    Section
      3.04 Prepayments.

     

    (a) Optional
      Prepayments.
      The
      Borrower shall have the right at any time and from time to time to prepay any
      Borrowing in whole or in part, subject to prior notice in accordance with
Section
      3.04(b).

     

    (b) Notice
      and Terms of Optional Prepayment.
      The
      Borrower shall notify the Administrative Agent by telephone (confirmed by
      telecopy) of any prepayment hereunder (i)
      in the
      case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon, Houston
      time, three Business Days before the date of prepayment, or (ii)
      in the
      case of prepayment of an ABR Borrowing, not later than 12:00 noon, Houston
      time,
      one Business Day before the date of prepayment. Each such notice shall be
      irrevocable and shall specify the prepayment date and the principal amount
      of
      each Borrowing or portion thereof to be prepaid. Promptly following receipt
      of
      any such notice relating to a Borrowing, the Administrative Agent shall advise
      the Lenders of the contents thereof. Each partial prepayment of any Borrowing
      shall be in an amount that would be permitted in the case of an advance of
      a
      Borrowing of the same Type as provided in Section
      2.02.
      Each
      prepayment of a Borrowing shall be applied ratably to the Loans included in
      the
      prepaid Borrowing. Prepayments shall be accompanied by accrued interest to
      the
      extent required by Section
      3.02.

    
       

      
        
          
          

        

        
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    (c) Mandatory
      Prepayments.

     

    (i) If,
      after
      giving effect to any termination or reduction of the Aggregate Maximum Credit
      Amounts pursuant to Section
      2.06(b),
      the
      total Revolving Credit Exposures exceeds the total Commitments, then the
      Borrower shall (A)
      prepay
      the Borrowings on the date of such termination or reduction in an aggregate
      principal amount equal to such excess, and (B)
      if any
      excess remains after prepaying all of the Borrowings as a result of an LC
      Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
      equal to such excess to be held as cash collateral as provided in Section
      2.08(j).

     

    (ii) Upon
      any
      redetermination of or adjustment to the amount of the Borrowing Base in
      accordance with Section
      2.07
      or
Section
      8.13(c),
      if the
      total Revolving Credit Exposures exceeds the redetermined or adjusted Borrowing
      Base, then the Borrower shall (A)
      prepay
      the Borrowings in an aggregate principal amount equal to such excess, and
(B)
      if any
      excess remains after prepaying all of the Borrowings as a result of an LC
      Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
      equal to such excess to be held as cash collateral as provided in Section
      2.08(j).
      The
      Borrower shall be obligated to (a) make at least half of such prepayment and/or
      deposit of cash collateral within sixty days (60) following the later of its
      receipt of the New Borrowing Base Notice in accordance with Section
      2.07(d)
      or the
      date the adjustment occurs and (b) to make the remaining portion of such
      prepayment and/or deposit of cash collateral within one hundred twenty (120)
      days following the later of its receipt of the New Borrowing Base Notice in
      accordance with Section 2.07(d) or the date the adjustment occurs; provided
      that
      all payments required to be made pursuant to this Section
      3.04(c)(ii)
      must be
      made on or prior to the Termination Date.

     

    (iii) Upon
      any
      adjustments to the Borrowing Base pursuant to Section
      9.12(d),
      if the
      total Revolving Credit Exposures exceeds the Borrowing Base as adjusted, then
      the Borrower shall (A)
      prepay
      the Borrowings in an aggregate principal amount equal to such excess, and
(B)
      if any
      excess remains after prepaying all of the Borrowings as a result of an LC
      Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
      equal to such excess to be held as cash collateral as provided in Section
      2.08(j).
      The
      Borrower shall be obligated to make such prepayment and/or deposit of cash
      collateral on the date it or any Subsidiary receives cash proceeds as a result
      of such disposition; provided that all payments required to be made pursuant
      to
      this Section
      3.04(c)(ii)
      must be
      made on or prior to the Termination Date.

     

    (iv) Each
      prepayment of Borrowings pursuant to this Section
      3.04(c)
      shall be
      applied, first, ratably to any ABR Borrowings then outstanding, and, second,
      to
      any Eurodollar Borrowings then outstanding, and if more than one Eurodollar
      Borrowing is then outstanding, to each such Eurodollar Borrowing in order of
      priority beginning with the Eurodollar Borrowing with the least number of days
      remaining in the Interest Period applicable thereto and ending with the
      Eurodollar Borrowing with the most number of days remaining in the Interest
      Period applicable thereto. 

    
       

      
        
          
          

        

        
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    (v) Each
      prepayment of Borrowings pursuant to this Section
      3.04(c)
      shall be
      applied ratably to the Loans included in the prepaid Borrowings.
      Prepayments pursuant to this Section
      3.04(c)
      shall be
      accompanied by accrued interest to the extent required by Section
      3.02.

     

    (d) No
      Premium or Penalty.
      Prepayments permitted or required under this Section
      3.04
      shall be
      without premium or penalty, except as required under Section
      5.02.
      

     

    Section
      3.05 Fees.

     

    (a) Commitment
      Fees.
      The
      Borrower agrees to pay to the Administrative Agent for the account of each
      Lender a commitment fee, which shall accrue at the applicable Commitment Fee
      Rate on the average daily amount of the unused amount of the Commitment of
      such
      Lender during the period from and including the date of this Agreement to but
      excluding the Termination Date. Accrued commitment fees shall be payable in
      arrears on the last day of March, June, September and December of each year
      and
      on the Termination Date, commencing on the first such date to occur after the
      date hereof. All commitment fees shall be computed on the basis of a year of
      360
      days, unless such computation would exceed the Highest Lawful Rate, in which
      case interest shall be computed on the basis of a year of 365 days (or 366
      days
      in a leap year), and shall be payable for the actual number of days elapsed
      (including the first day but excluding the last day).

     

    (b) Letter
      of Credit Fees.
      The
      Borrower agrees to pay (i)
      to the
      Administrative Agent for the account of each Lender a participation fee with
      respect to its participations in Letters of Credit, which shall accrue at the
      same Applicable Margin used to determine the interest rate applicable to
      Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
      (excluding any portion thereof attributable to unreimbursed LC Disbursements)
      during the period from and including the date of this Agreement to but excluding
      the later of the date on which such Lender’s Commitment terminates and the date
      on which such Lender ceases to have any LC Exposure, (ii)
      to the
      Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum
      on the average daily amount of the LC Exposure (excluding any portion thereof
      attributable to unreimbursed LC Disbursements) during the period from and
      including the date of this Agreement to but excluding the later of the date
      of
      termination of the Commitments and the date on which there ceases to be any
      LC
      Exposure, provided that in no event shall such fee be less than $500 during
      any
      quarter and (iii)
      to each
      Issuing Bank, for its own account, its standard fees with respect to the
      amendment, renewal or extension of any Letter of Credit issued by such Issuing
      Bank or processing of drawings thereunder. Participation fees accrued through
      and including the last day of March, June, September and December of each year
      shall be payable on the third Business Day following such last day, commencing
      on the first such date to occur after the date of this Agreement and fronting
      fees with respect to any Letter of Credit shall be payable at the time of
      issuance of such Letter of Credit; provided that all such fees shall be payable
      on the Termination Date and any such fees accruing after the Termination Date
      shall be payable on demand. Any other fees payable to an Issuing Bank pursuant
      to this Section
      3.05(b)
      shall be
      payable within 10 days after demand. All participation fees and fronting fees
      shall be computed on the basis of a year of 360 days, unless such computation
      would exceed the Highest Lawful Rate, in which case such fees shall be computed
      on the basis of a year of 365 days (or 366 days in a leap year), and shall
      be
      payable for the actual number of days elapsed (including the first day but
      excluding the last day).

    
       

      
        
          
          

        

        
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    (c) Administrative
      Agent Fees.
      The
      Borrower agrees to pay to the Administrative Agent, for its own account, fees
      payable in the amounts and at the times separately agreed upon between the
      Borrower and the Administrative Agent.

     

    (d) Borrowing
      Base Increase Fees.
      The
      Borrower agrees to pay to the Administrative Agent, for the account of each
      Lender then party to this Agreement, ratably in accordance with its Applicable
      Percentage, a Borrowing Base increase fee equal to 0.25% on the amount of any
      increase of the Borrowing Base over the highest Borrowing Base previously in
      effect, payable on the day a New Borrowing Base Notice is given.

     

    ARTICLE
      IV

     

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

     

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

     

    (a) Payments
      by the Borrower.
      The
      Borrower shall make each payment required to be made by it hereunder (whether
      of
      principal, interest, fees or reimbursement of LC Disbursements, or of amounts
      payable under Section
      5.01,
      Section
      5.02,
      Section
      5.03
      or
      otherwise) prior to 1:00 p.m., Houston time, on the date when due, in
      immediately available funds, without defense, deduction, recoupment, set-off
      or
      counterclaim. Fees, once paid, shall be fully earned and shall not be refundable
      under any circumstances. Any amounts received after such time on any date may,
      in the discretion of the Administrative Agent, be deemed to have been received
      on the next succeeding Business Day for purposes of calculating interest
      thereon. All such payments shall be made to the Administrative Agent at its
      offices specified in Section
      12.01,
      except
      payments to be made directly to an Issuing Bank as expressly provided herein
      and
      except that payments pursuant to Section
      5.01,
      Section
      5.02,
      Section
      5.03
      and
Section
      12.03
      shall be
      made directly to the Persons entitled thereto. The Administrative Agent shall
      distribute any such payments received by it for the account of any other Person
      to the appropriate recipient promptly following receipt thereof. If any payment
      hereunder shall be due on a day that is not a Business Day, the date for payment
      shall be extended to the next succeeding Business Day, and, in the case of
      any
      payment accruing interest, interest thereon shall be payable for the period
      of
      such extension. All payments hereunder shall be made in dollars.

     

    (b) Application
      of Insufficient Payments.
      If at
      any time insufficient funds are received by and available to the Administrative
      Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
      interest and fees then due hereunder, such funds shall be applied (i)
      first,
      towards payment of interest and fees then due hereunder, ratably among the
      parties entitled thereto in accordance with the amounts of interest and fees
      then due to such parties, and (ii)
      second,
      towards payment of principal and unreimbursed LC Disbursements then due
      hereunder, ratably among the parties entitled thereto in accordance with the
      amounts of principal and unreimbursed LC Disbursements then due to such
      parties.

    
       

      
        
          
          

        

        
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    (c) Sharing
      of Payments by Lenders.
      If any
      Lender shall, by exercising any right of set-off or counterclaim or otherwise,
      obtain payment in respect of any principal of or interest on any of its Loans
      or
      participations in LC Disbursements resulting in such Lender receiving payment
      of
      a greater proportion of the aggregate amount of its Loans and participations
      in
      LC Disbursements and accrued interest thereon than the proportion received
      by
      any other Lender, then the Lender receiving such greater proportion shall
      purchase (for cash at face value) participations in the Loans and participations
      in LC Disbursements of other Lenders to the extent necessary so that the benefit
      of all such payments shall be shared by the Lenders ratably in accordance with
      the aggregate amount of principal of and accrued interest on their respective
      Loans and participations in LC Disbursements; provided that (i)
      if any
      such participations are purchased and all or any portion of the payment giving
      rise thereto is recovered, such participations shall be rescinded and the
      purchase price restored to the extent of such recovery, without interest, and
      (ii)
      the
      provisions of this Section
      4.01(c)
      shall
      not be construed to apply to any payment made by the Borrower pursuant to and
      in
      accordance with the express terms of this Agreement or any payment obtained
      by a
      Lender as consideration for the assignment of or sale of a participation in
      any
      of its Loans or participations in LC Disbursements to any assignee or
      participant, other than to the Borrower or any Subsidiary or Affiliate thereof
      (as to which the provisions of this Section
      4.01(c)
      shall
      apply). The Borrower consents to the foregoing and agrees, to the extent it
      may
      effectively do so under applicable law, that any Lender acquiring a
      participation pursuant to the foregoing arrangements may exercise against the
      Borrower rights of set-off and counterclaim with respect to such participation
      as fully as if such Lender were a direct creditor of the Borrower in the amount
      of such participation.

     

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

     

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

    
       

      
        
          
          

        

        
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    ARTICLE
      V

    Increased
      Costs; Break Funding Payments; Taxes;
      Illegality

     

    Section
      5.01 Increased
      Costs.

     

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

     

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

     

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

     

     

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

     

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

     

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

     

    (d) Effect
      of Failure or Delay in Requesting Compensation.
      Failure
      or delay on the part of any Lender or any Issuing Bank to demand compensation
      pursuant to this Section
      5.01
      shall
      not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand
      such compensation, provided that no Lender may make any such demand more than
      180 days after the Termination Date, nor for any amount which has accrued more
      than 365 days prior to such Lender or Issuing Bank delivering the certificate
      required in Section
      5.01(c).

    
      
         

        
          
            
            

          

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

     

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

     

    Section
      5.03 Taxes. 

     

    (a) Payments
      Free of Taxes.
      Any and
      all payments by or on account of any obligation of the Borrower or any Guarantor
      under any Loan Document shall be made free and clear of and without deduction
      for any Indemnified Taxes or Other Taxes; provided that if the Borrower or
      any
      Guarantor shall be required to deduct any Indemnified Taxes or Other Taxes
      from
      such payments, then (i)
      the sum
      payable shall be increased as necessary so that after making all required
      deductions (including deductions applicable to additional sums payable under
      this Section
      5.03(a)),
      the
      Administrative Agent, Lender or Issuing Bank (as the case may be) receives
      an
      amount equal to the sum it would have received had no such deductions been
      made,
(ii) the
      Borrower or such Guarantor shall make such deductions and (iii) the
      Borrower or such Guarantor shall pay the full amount deducted to the relevant
      Governmental Authority in accordance with applicable law.

     

    (b) Payment
      of Other Taxes by the Borrower.
      The
      Borrower shall pay any Other Taxes to the relevant Governmental Authority in
      accordance with applicable law.

     

    (c) Indemnification
      by the Borrower.
      The
      Borrower shall indemnify the Administrative Agent, each Lender and each Issuing
      Bank, within 10 days after written demand therefor, for the full amount of
      any
      Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender
      or such Issuing Bank, as the case may be, on or with respect to any payment
      by
      or on account of any obligation of the Borrower hereunder (including Indemnified
      Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
      under this Section
      5.03)
      and any
      penalties, interest and reasonable expenses arising therefrom or with respect
      thereto, whether or not such Indemnified Taxes or Other Taxes were correctly
      or
      legally imposed or asserted by the relevant Governmental Authority. A
      certificate of the Administrative Agent, a Lender or an Issuing Bank as to
      the
      basis of such Indemnified Taxes and Other Taxes and the amount of such payment
      or liability under this Section
      5.03
      shall be
      delivered to the Borrower and shall be conclusive absent manifest
      error.

    
      
         

        
          
            
            

          

          
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    (d) Evidence
      of Payments.
      As soon
      as practicable after any payment of Indemnified Taxes or Other Taxes by the
      Borrower or a Guarantor to a Governmental Authority, the Borrower shall deliver
      to the Administrative Agent the original or a certified copy of a receipt issued
      by such Governmental Authority evidencing such payment, a copy of the return
      reporting such payment or other evidence of such payment reasonably satisfactory
      to the Administrative Agent.

     

    (e) Foreign
      Lenders.
      Any
      Foreign Lender that is entitled to an exemption from or reduction of withholding
      tax under the law of the jurisdiction in which the Borrower is located, or
      any
      treaty to which such jurisdiction is a party, with respect to payments under
      this Agreement or any other Loan Document shall deliver to the Borrower (with
      a
      copy to the Administrative Agent), at the time or times prescribed by applicable
      law, such properly completed and executed documentation prescribed by applicable
      law or reasonably requested by the Borrower as will permit such payments to
      be
      made without withholding or at a reduced rate.

     

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

     

    Section
      5.05 Illegality.
      Notwithstanding
      any other provision of this Agreement, in the event that it becomes unlawful
      for
      any Lender or its applicable lending office to honor its obligation to make
      or
      maintain Eurodollar Loans either generally or having a particular Interest
      Period hereunder, then (a)
      such
      Lender shall promptly notify the Borrower and the Administrative Agent thereof
      and such Lender’s obligation to make such Eurodollar Loans shall be suspended
      (the “Affected
      Loans”)
      until
      such time as such Lender may again make and maintain such Eurodollar Loans
      and
(b)
      all
      Affected Loans which would otherwise be made by such Lender shall be made
      instead as ABR Loans (and, if such Lender so requests by notice to the Borrower
      and the Administrative Agent, all Affected Loans of such Lender then outstanding
      shall be automatically converted into ABR Loans on the date specified by such
      Lender in such notice) and, to the extent that Affected Loans are so made as (or
      converted into) ABR Loans, all payments of principal which would otherwise
      be
      applied to such Lender’s Affected Loans shall be applied instead to its ABR
      Loans.

    
      
         

        
          
            
            

          

          
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    ARTICLE
      VI

    Conditions
      Precedent

     

    Section
      6.01 Effective
      Date.
      The
      obligations of the Lenders to amend and restate the Existing Credit Agreement,
      to make Loans and of any Issuing Bank to issue Letters of Credit hereunder
      shall
      not become effective until the date on which each of the following conditions
      is
      satisfied (or waived in accordance with Section
      12.02):

     

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

     

    (b) The
      Administrative Agent shall have received a certificate of the Secretary of
      EV
      Management (or, with respect to CGAS Properties, L.P., EVCG GP, LLC) setting
      forth (i)
      resolutions of the board of directors or other managing body with respect to
      the
      authorization of the Parent, the Borrower and each Guarantor to execute and
      deliver the Loan Documents to which each is a party and to enter into the
      transactions contemplated in those documents, (ii)
      the
      individuals (y) who are authorized to sign the Loan Documents to which the
      Parent, the Borrower or such Guarantor is a party and (z) who will, until
      replaced by another individual duly authorized for that purpose, act as each
      such entity’s representative for the purposes of signing documents and giving
      notices and other communications in connection with this Agreement and the
      other
      Loan Documents to which it is a party, (iii)
      specimen
      signatures of such authorized individuals, and (iv)
      the
      articles or certificate of incorporation or formation, as applicable, and
      bylaws, operating agreement or partnership agreement, as applicable, of the
      Parent, the Borrower and each Guarantor, in each case, certified as being true
      and complete. The Administrative Agent and the Lenders may conclusively rely
      on
      such certificate until the Administrative Agent receives notice in writing
      from
      the Borrower to the contrary.

     

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

     

    (d) The
      Administrative Agent shall have received a compliance certificate which shall
      be
      substantially in the form of Exhibit B, duly and properly executed by a
      Responsible Officer and dated as of the Effective Date.

     

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

     

    (f) The
      Administrative Agent shall have received from each party thereto duly executed
      counterparts (in such number as may be requested by the Administrative Agent)
      of
      the Security Instruments, including the Guaranty Agreement and the other
      Security Instruments described on Exhibit C-1. In connection with the execution
      and delivery of the Security Instruments, the Administrative Agent shall:

    
      
         

        
          
            
            

          

          
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    (i) be
      reasonably satisfied that the Security Instruments create first priority,
      perfected Liens (subject only to Excepted Liens identified in clauses (a) to
      (d)
      and (f) of the definition thereof, but subject to the provisos at the end of
      such definition) on at least 80% of the total value of the Oil and Gas
      Properties evaluated in the Initial Reserve Report;
      and

     

    (ii) have
      received certificates, together with undated, blank stock powers for each such
      certificate, representing all of the issued and outstanding Equity Interests
      of
      each of the Guarantors.

     

    (g) The
      Administrative Agent shall have received an opinion of Haynes & Boone, LLP,
      special counsel to the Borrower, (i)
      The
      Energy Law Firm, special Louisiana counsel, (ii)
      Vorys,
      Sater, Seymour and Pease, LLP, special Ohio counsel, (iii)
      Waters,
      Warner & Harris, PLLC, special West Virginia counsel and (iv)
      any
      other special counsel requested by the Administrative Agent, each in
      form
      and substance satisfactory to the Administrative Agent.

     

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

     

    (i) The
      Administrative Agent shall have received such title information as the
      Administrative Agent may reasonably require, all of which shall be reasonably
      satisfactory to the Administrative Agent in form and substance, on at least
      70%
      of the total value of the Oil and Gas Properties evaluated by the Initial
      Reserve Report.

     

    (j) The
      Administrative Agent shall have received a certificate of a Responsible Officer
      certifying that (i) the Borrower has received all consents and approvals
      required by Section
      7.03
      and (ii)
      there are no actions, suits, investigations or proceedings by or before any
      arbitrator or Governmental Authority pending against or, to the knowledge of
      the
      Parent or the Borrower, threatened against or affecting the Parent, the Borrower
      or any of their Subsidiaries that involve any Loan Document.

     

    (k) The
      Administrative Agent shall be reasonably satisfied with the environmental
      condition of the Oil and Gas Properties of the Borrower and its
      Subsidiaries.

     

    (l) The
      Administrative Agent shall have received the financial statements referred
      to in
Section
      7.04(a)
      and the
      Initial Reserve Report.

     

    (m) The
      Administrative Agent shall have received appropriate UCC search certificates
      reflecting no prior Liens encumbering the Properties of the Parent, the Borrower
      and any of their Subsidiaries for each of the following jurisdictions: Delaware,
      Louisiana, West Virginia and Ohio and any other jurisdiction requested by the
      Administrative Agent,
      other
      than those being assigned or released on or prior to the Effective Date or
      Liens
      permitted by Section
      9.03.

     

    (n) The
      Administrative Agent shall have received:

    
      
         

        
          
            
            

          

          
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    (i) evidence
      of payment in full of all amounts due under Section
      2.01(e)(i),
      

     

    (ii) a
      list of
      all Swap Agreements to which the Borrower or any Subsidiary is a party as of
      the
      date of this Agreement, which list shall be listed on Schedule 7.20 hereto,
      and

     

    (iii) evidence
      of the assignment, novation or other transfer, if needed, to one or more Lenders
      or Approved Counterparties of each such Swap Agreements referred to in clause
      (ii) above, together with a copy of each such Swap Agreement, certified by
      the
      Borrower as being a true and complete copy.

     

    (o) The
      Administrative Agent shall have received a certificate from a Financial Officer
      of the Parent certifying that after giving effect to the borrowings under this
      Agreement, the Parent and its Subsidiaries, taken as a whole, are solvent as
      contemplated by Section
      7.04(b)
      and
Section
      7.04(c).

     

    (p) The
      Administrative Agent shall have received evidence that the Borrower has entered
      into commodity hedging arrangements in form and substance reasonably
      satisfactory to the Administrative Agent with Lenders (or their Affiliates)
      or
      investment grade counterparties reasonably acceptable to the Administrative
      Agent.

     

    (q) The
      Administrative Agent shall have received such other documents as the
      Administrative Agent or special counsel to the Administrative Agent may
      reasonably request.

     

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

     

    Section
      6.02 Each
      Credit Event.
      The
      obligation of each Lender to make a Loan on the occasion of any Borrowing
      (including the initial funding), and of each Issuing Bank to issue, amend,
      renew
      or extend any Letter of Credit, is subject to the satisfaction of the following
      conditions:

     

    (a) At
      the
      time of and immediately after giving effect to such Borrowing or the issuance,
      amendment, renewal or extension of such Letter of Credit, as applicable, no
      Default shall have occurred and be continuing.

     

    (b) At
      the
      time of and immediately after giving effect to such Borrowing or the issuance,
      amendment, renewal or extension of such Letter of Credit, as applicable, no
      Material Adverse Effect shall have occurred.

     

    (c) The
      representations and warranties of the Borrower and the Guarantors set forth
      in
      this Agreement and in the other Loan Documents shall be true and correct on
      and
      as of the date of such Borrowing or the date of issuance, amendment, renewal
      or
      extension of such Letter of Credit, as applicable, except to the extent any
      such
      representations and warranties are expressly limited to an earlier date, in
      which case, on and as of the date of such Borrowing or the date of issuance,
      amendment, renewal or extension of such Letter of Credit, as applicable, such
      representations and warranties shall continue to be true and correct as of
      such
      specified earlier date.

    
      
         

        
          
            
            

          

          
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    (d) The
      making of such Loan or the issuance, amendment, renewal or extension of such
      Letter of Credit, as applicable, would not conflict with, or cause any Lender
      or
      any Issuing Bank to violate or exceed, any applicable Governmental Requirement,
      and no Change in Law shall have occurred, and no litigation shall be pending
      or
      threatened, which does or, with respect to any threatened litigation, seeks
      to,
      enjoin, prohibit or restrain, the making or repayment of any Loan, the issuance,
      amendment, renewal, extension or repayment of any Letter of Credit or any
      participations therein or the consummation of the transactions contemplated
      by
      this Agreement or any other Loan Document.

     

    (e) The
      receipt by the Administrative Agent of a Borrowing Request in accordance with
      Section
      2.03
      or a
      request for a Letter of Credit in accordance with Section
      2.08(b),
      as
      applicable.

     

    Each
      request for a Borrowing and each issuance, amendment, renewal or extension
      of
      any Letter of Credit shall be deemed to constitute a representation and warranty
      by the Borrower on the date thereof as to the matters specified in Section
      6.02(a)
      through
(e).

     

    Section
      6.03 Acquisition.
      If
      the
      following conditions are satisfied by October 15, 2007, the Borrowing Base
      will
      automatically increase by $40,000,000:

     

    (a) The
      Administrative Agent shall have received (i) a certificate of a Responsible
      Officer certifying: (A) that the Borrower is concurrently consummating the
      Acquisition in accordance with the terms of the Acquisition Documents (with
      all
      of the material conditions precedent thereto having been satisfied in all
      material respects by the parties thereto) and acquiring substantially all of
      the
      Acquisition Properties contemplated by the Acquisition Documents; (B) as to
      the
      final purchase price for the Acquisition Properties after giving effect to
      all
      adjustments as of the closing date contemplated by the Acquisition Documents
      and
      specifying, by category, the amount of such adjustment; (C) that attached
      thereto is a true and complete list of the Acquisition Properties which have
      been excluded from the Acquisition pursuant to the terms of the Acquisition
      Documents, specifying with respect thereto the basis of exclusion as (1) title
      defect, (2) preferential purchase right, (3) environmental or (4) casualty
      loss;
      (D) that attached thereto is a true and complete list of all Acquisition
      Properties for which any seller has elected to cure a title defect, (E) that
      attached thereto is a true and complete list of all Acquisition Properties
      for
      which any seller has elected to remediate an adverse environmental condition,
      and (F) that attached thereto is a true and complete list of all Acquisition
      Properties which are currently pending final decision by a third party regarding
      purchase of such property in accordance with any preferential right; (ii) a
      true
      and complete executed copy of each of the material Acquisition Documents; and
      (iii) such other related documents and information as the Administrative Agent
      shall have reasonably requested.

    
      
         

        
          
            
            

          

          
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    (b) The
      Administrative Agent shall have received from the Borrower duly executed
      Security Instruments in compliance with Section
      8.14(a)
      and
(b),
      as
      applicable, for the Acquisition Properties.

     

    (c) The
      Administrative Agent shall have received title information as the Administrative
      Agent may reasonably require and which is satisfactory to the Administrative
      Agent setting forth the status of title to the Acquisition Properties evaluated
      in the applicable Reserve Report.

     

    (d) The
      Administrative Agent shall be reasonably satisfied with the environmental
      condition of the Acquisition Properties.

     

    (e) The
      Administrative Agent shall have received appropriate UCC search certificates
      reflecting no prior Liens encumbering the Acquisition Properties other than
      those being released or assigned to Administrative Agent concurrently with
      the
      consummation of the Acquisition and Liens permitted under Section
      9.03.

     

    (f) The
      Administrative Agent shall have received a legal opinion of the Borrower’s legal
      counsel in a form and of substance reasonably acceptable to the Administrative
      Agent.

     

    (g) The
      Administrative Agent shall have received a certificate of a Responsible Officer
      certifying (i) that the Borrower has received all consents and approvals
      required by Section
      7.03
      in
      connection with the Acquisition and (ii) there are no actions, suits,
      investigations or proceedings by or before any arbitrator or Governmental
      Authority pending against or, to the knowledge of the Parent or the Borrower,
      threatened against or affecting the Parent, the Borrower or any of their
      Subsidiaries that involve any Acquisition Document, the Transactions or that
      could impair the consummation of the Acquisition on the time and in the manner
      contemplated by the Acquisition Documents.

     

    (h) The
      Administrative Agent shall have received evidence satisfactory to it that all
      Liens associated with the Acquisition Properties (other than Liens permitted
      under Section
      9.03)
      have
      been released or terminated or assigned to the Administrative Agent
      contemporaneously with the Acquisition and that arrangements satisfactory to
      the
      Administrative Agent have been made for recording and filing of such releases
      or
      assignments, as applicable.

     

    (i) The
      Administrative Agent shall have received such other documents as the
      Administrative Agent or special counsel to the Administrative Agent may
      reasonably request.

     

    ARTICLE
      VII

    Representations
      and Warranties

     

     

    Each
      of
      the Parent and the Borrower represents and warrants to the Lenders
      that:

     

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

    
      
         

        
          
            
            

          

          
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    Section
      7.02 Authority;
      Enforceability.
      The
      Transactions are within the Parent’s, Borrower’s and each Guarantor’s
      partnership powers and have been duly authorized by all necessary partnership
      and, if required, member action (including, without limitation, any action
      required to be taken by any class of directors of the Borrower or any other
      Person, whether interested or disinterested, in order to ensure the due
      authorization of the Transactions). Each Loan Document and Acquisition Document
      to which the Parent, the Borrower and any Guarantor is a party has been duly
      executed and delivered by the Parent, the Borrower and such Guarantor and
      constitutes a legal, valid and binding obligation of the Parent, the Borrower
      and such Guarantor, as applicable, enforceable in accordance with its terms,
      subject to applicable bankruptcy, insolvency, reorganization, moratorium or
      other laws affecting creditors’ rights generally and subject to general
      principles of equity, regardless of whether considered in a proceeding in equity
      or at law.

     

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

     

    Section
      7.04 Financial
      Position; No Material Adverse Change.

     

    (a) The
      Parent has furnished to the Lenders (i) its audited consolidated balance sheet
      and related statement of income, stockholders’ equity and cash flows as of and
      for the fiscal year ended December 31, 2006 (which audit report for such
      financial statements is not subject to any qualification) and (ii) its unaudited
      consolidated balance sheet and related statement of income, stockholders’ equity
      and cash flows for the fiscal quarter ended June 30, 2007, which financial
      statements shall be prepared in accordance with GAAP. The financial statements
      in clauses (i) and (ii) present fairly, in all material respects, the
      consolidated financial condition of the Parent as of the dates and for the
      periods in accordance with GAAP, subject to year-end audit adjustments and
      the
      absence of footnotes in the case of the unaudited quarterly financial
      statements. 

    
      
         

        
          
            
            

          

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

     

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

     

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

     

    Section
      7.05 Litigation.
      Except
      as
      set forth on Schedule 7.05, there are no actions, suits, investigations or
      proceedings by or before any arbitrator or Governmental Authority pending
      against or, to the knowledge of the Parent or the Borrower, threatened against
      or affecting the Parent, the Borrower or any of their Subsidiaries or involving
      the 

     

    Acquisition
      as to which there is a reasonable possibility of an adverse determination that,
      if adversely determined, could reasonably be expected, individually or in the
      aggregate, to result in a Material Adverse Effect. Since the date of this
      Agreement, there has been no change in the status of the matters disclosed
      in
      Schedule 7.05 that, individually or in the aggregate, has resulted in, or could
      reasonably be expected to result in, a Material Adverse Effect.

     

    Section
      7.06 Environmental
      Matters.
      Except
      for such matters as set forth on Schedule 7.06 or that, individually or in
      the
      aggregate, could not reasonably be expected to have a Material Adverse Effect
      on
      the Parent or the Borrower:

     

    (a) the
      Borrower and its Subsidiaries and each of their respective Properties and
      operations thereon are, and within all applicable statute of limitation periods
      have been, in compliance with all applicable Environmental Laws;

     

    (b) the
      Borrower and its Subsidiaries have obtained all Environmental Permits required
      for their respective operations and each of their Properties, with all such
      Environmental Permits being currently in full force and effect, and none of
      the
      Borrower or its Subsidiaries has received any written notice or otherwise has
      knowledge that any such existing Environmental Permit will be revoked or that
      any application for any new Environmental Permit or renewal of any existing
      Environmental Permit will be protested or denied;

     

    (c) there
      are
      no claims, demands, suits, orders, inquiries, or proceedings concerning any
      violation of, or any liability (including as a potentially responsible party)
      under, any applicable Environmental Laws that is pending or threatened against
      the Borrower or its Subsidiaries or any of their respective Properties or as
      a
      result of any operations at the Properties;

    
      
         

        
          
            
            

          

          
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    (d) none
      of
      the Properties contain or have contained any: (i) underground storage tanks;
      (ii) asbestos-containing materials; or (iii) landfills or dumps; (iv) hazardous
      waste management units as defined pursuant to RCRA or any comparable state
      law;
      or (v) sites on or nominated for the National Priority List promulgated pursuant
      to CERCLA or any state remedial priority list promulgated or published pursuant
      to any comparable state law;

     

    (e) there
      has
      been no Release or threatened Release, of Hazardous Materials at, on, under
      or
      from any of the Borrower’s or their Subsidiaries’ Properties, there are no
      investigations, remediations, abatements, removals, or monitorings of Hazardous
      Materials required under applicable Environmental Laws at such Properties and
      none of such Properties are adversely affected by any Release or threatened
      Release of a Hazardous Material originating or emanating from any other real
      property;

     

    (f) neither
      the Borrower nor its Subsidiaries has received any written notice asserting
      an
      alleged liability or obligation under any applicable Environmental Laws with
      respect to the investigation, remediation, abatement, removal, or monitoring
      of
      any Hazardous Materials at, under, or Released or threatened to be Released
      from
      any real properties offsite the Parent’s, the Borrower’s or their Subsidiaries’
Properties and there are no conditions or circumstances that would reasonably
      be
      expected to result in the receipt of such written notice.

     

    (g) there
      has
      been no exposure of any Person or property to any Hazardous Materials as a
      result of or in connection with the operations and businesses of any of the
      Borrower’s or its Subsidiaries’ Properties that would reasonably be expected to
      form the basis for a claim for damages or compensation and, to the Borrower’s
      knowledge, there are no conditions or circumstances that would reasonably be
      expected to result in the receipt of notice regarding such exposure;
      and

     

    (h) To
      the
      extent requested by the Administrative Agent, the Borrower and its Subsidiaries
      have provided to the Administrative Agent complete and correct copies of all
      environmental site assessment reports, investigations, studies, analyses, and
      correspondence on environmental matters (including matters relating to any
      alleged non-compliance with or liability under Environmental Laws) that are
      in
      any of the Borrower’s or its Subsidiaries’ possession or control and relating to
      their respective Properties or operations thereon.

     

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

     

    (a) Each
      of
      the Parent, the Borrower and their Subsidiaries is in compliance with all
      Governmental Requirements applicable to it or its Property and all agreements
      and other instruments binding upon it or its Property, and possesses all
      licenses, permits, franchises, exemptions, approvals and other authorizations
      granted by Governmental Authorities necessary for the ownership of its Property
      and the present conduct of its business, except where the failure to do so,
      individually or in the aggregate, could not reasonably be expected to result
      in
      a Material Adverse Effect.

     

    (b) None
      of
      the Parent, the Borrower or any of their Subsidiaries is in default nor has
      any
      event or circumstance occurred which, but for the expiration of any applicable
      grace period or the giving of notice, or both, would constitute a default or
      would require the Parent, the Borrower or any of their Subsidiaries to Redeem
      or
      make any offer to Redeem all or any portion of any Debt outstanding under any
      indenture, note, credit agreement or instrument pursuant to which any Material
      Indebtedness is outstanding or by which the Borrower or any of its Subsidiaries
      or any of their Properties is bound.

    
      
         

        
          
            
            

          

          
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    (c) No
      Default has occurred and is continuing.

     

    Section
      7.08 Investment
      Company Act.
      None
      of
      the Parent, the Borrower or any of their Subsidiaries is an “investment company”
or a company “controlled” by an “investment company,” within the meaning of, or
      subject to regulation under, the Investment Company Act of 1940, as
      amended.

     

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

     

    Section
      7.10 ERISA. 

     

    (a) The
      Borrower, its Subsidiaries and each ERISA Affiliate have complied in all
      material respects with ERISA and, where applicable, the Code regarding each
      Plan, if any.

     

    (b) Each
      Plan, if any, is, and has been, maintained in substantial compliance with ERISA
      and, where applicable, the Code.

     

    (c) No
      act,
      omission or transaction has occurred that could result in imposition on the
      Borrower, any of its Subsidiaries or any ERISA Affiliate (whether directly
      or
      indirectly) of (i)
      either a
      civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502
      of
      ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of the Code or
(ii)
      breach
      of fiduciary duty liability damages under section 409 of ERISA.

     

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

     

    (e) Full
      payment when due has been made of all amounts which the Borrower, any of its
      Subsidiaries or any ERISA Affiliate is required under the terms of each Plan,
      if
      any, or applicable law to have paid as contributions to such Plan as of the
      date
      hereof, and no accumulated funding deficiency (as defined in section 302 of
      ERISA and section 412 of the Code), whether or not waived, exists with respect
      to any Plan.

    
      
         

        
          
            
            

          

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

     

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

     

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

     

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

     

    Section
      7.11 Disclosure;
      No Material Misstatements.
      As
      set
      forth on Schedule 7.11, the Borrower has disclosed to the Lenders all
      agreements, instruments and corporate or other restrictions to which it or
      any
      of its Subsidiaries is subject, and all other matters known to it, that,
      individually or in the aggregate, could reasonably be expected to result in
      a
      Material Adverse Effect. None of the reports, financial statements, certificates
      or other information furnished by or on behalf of the Borrower or any of its
      Subsidiaries to the Administrative Agent, any other Agent or any Lender or
      any
      of their Affiliates in connection with the negotiation of this Agreement or
      any
      other Loan Document or delivered hereunder or under any other Loan Document
      (as
      modified or supplemented by other information so furnished) contains any
      material misstatement of fact or omits to state any material fact necessary
      to
      make the statements therein, in the light of the circumstances under which
      they
      were made, not misleading; provided that, with respect to projected financial
      information, the Borrower represents only that such information was prepared
      in
      good faith based upon assumptions believed to be reasonable at the time. There
      is no fact peculiar to the Borrower or any of its Subsidiaries that could
      reasonably be expected to have a Material Adverse Effect or in the future is
      reasonably likely to have a Material Adverse Effect and which has not been
      set
      forth in this Agreement or the Loan Documents or the other documents,
      certificates and statements furnished to the Administrative Agent, any other
      Agent or the Lenders by or on behalf of the Borrower or any of its Subsidiaries
      prior to, or on, the date hereof in connection with the transactions
      contemplated hereby.

     

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

    
      
         

        
          
            
            

          

          
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    Section
      7.13 Restriction
      on Liens.
      None
      of
      the Parent, the Borrower or any of their Subsidiaries is a party to any material
      agreement or arrangement, or subject to any order, judgment, writ or decree,
      which either restricts or purports to restrict its ability to grant Liens to
      the
      Administrative Agent and the Lenders on or in respect of their Properties to
      secure the Indebtedness and the Loan Documents, except for any such restrictions
      on Properties subject to a Lien permitted under Section
      9.03
      set
      forth in the agreements or instruments evidencing or governing such Lien, but
      in
      each case, only on the property subject to such Lien.

     

    Section
      7.14 Subsidiaries.
      Except
      as
      set forth on Schedule 7.14 or as disclosed in writing, from time to time, to
      the
      Administrative Agent (which shall promptly furnish a copy to the Lenders),
      which
      shall be a supplement to Schedule 7.14, the Borrower has no Subsidiaries.
      The Borrower has no Foreign Subsidiaries.

     

    Section
      7.15 Location
      of Business and Offices.
      The
      Borrower’s jurisdiction of organization is Delaware; the name of the Borrower as
      listed in the public records of its jurisdiction of organization is EV
      Properties, L.P., and the organizational identification number of the Borrower
      in its jurisdiction of organization is 4135542 (or,
      in
      each case, as set forth in a notice delivered to the Administrative Agent
      pursuant to Section
      8.01(l)
      in
      accordance with Section
      12.01).
      The
      Borrower’s principal place of business and chief executive offices are located
      at the address specified in Section
      12.01
      (or as
      set forth in a notice delivered pursuant to Section
      8.01(l)
      and
Section
      12.01(c)).
      The
      Parent’s jurisdiction of organization is Delaware; the name of the Parent as
      listed in the public records of its jurisdiction of organization is EV Energy
      Partners, L.P., and the organizational identification number of the Parent
      in
      its jurisdiction of organization is 4134906 (or,
      in
      each case, as set forth in a notice delivered to the Administrative Agent
      pursuant to Section
      8.01(l)
      in
      accordance with Section
      12.01).
      The
      Parent’s principal place of business and chief executive offices are located at
      the address specified in Section
      12.01
      (or as
      set forth in a notice delivered pursuant to Section
      8.01(l)
      and
Section
      12.01(c)).
      Each
      Subsidiary’s jurisdiction of organization, name as listed in the public records
      of its jurisdiction of organization, organizational identification number in
      its
      jurisdiction of organization, and the location of its principal place of
      business and chief executive office is stated on Schedule 7.14 (or as set forth
      in a notice delivered pursuant to Section
      8.01(l)).

     

    Section
      7.16 Properties;
      Titles, Etc. 

     

    (a) Each
      of
      the Borrower and its Subsidiaries has good and defensible title to its Oil
      and
      Gas Properties evaluated in the most recently delivered Reserve Report and
      good
      title to all its personal Properties, in each case, free and clear of all Liens
      except Liens permitted by Section
      9.03.
      After
      giving full effect to the Excepted Liens, the Borrower or any of its
      Subsidiaries specified as the owner owns the net interests in production
      attributable to the Hydrocarbon Interests as reflected in the most recently
      delivered Reserve Report, and the ownership of such Properties shall not in
      any
      material respect obligate the Borrower or any of its Subsidiaries to bear the
      costs and expenses relating to the maintenance, development and operations
      of
      each such Property in an amount in excess of the working interest of each
      Property set forth in the most recently delivered Reserve Report that is not
      offset by a corresponding proportionate increase in the Borrower’s or any of its
      Subsidiaries’ net revenue interest in such Property.

    
      
         

        
          
            
            

          

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

     

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

     

    (d) All
      of
      the Properties of the Borrower and each of its Subsidiaries that are reasonably
      necessary for the operation of their businesses are in good working condition
      and are maintained in accordance with customary industry standards.

     

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

     

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

    
      
         

        
          
            
            

          

          
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    Section
      7.18 Gas
      Imbalances,
      Prepayments.
      As
      of the
      date hereof, except as set forth on Schedule 7.18 or on the most recent
      certificate delivered pursuant to Section
      8.12(c),
      on a
      net basis there are no gas imbalances, take or pay or other prepayments which
      would require the Borrower or any of its Subsidiaries to deliver, in the
      aggregate, two percent (2%) or more of the monthly production from Hydrocarbons
      produced from the Oil and Gas Properties at some future time without then or
      thereafter receiving full payment therefor.

     

    Section
      7.19 Marketing
      of Production.
      Except
      for contracts listed and in effect on the date hereof on Schedule 7.19, and
      thereafter either disclosed in writing to the Administrative Agent or included
      in the most recently delivered Reserve Report (with respect to all of which
      contracts the Borrower represents that it or its Subsidiaries are receiving
      a
      price for all production sold thereunder which is computed substantially in
      accordance with the terms of the relevant contract and are not having deliveries
      curtailed substantially below the subject Property’s delivery capacity), no
      material agreements exist (other than Swap Agreements permitted under
Section
      9.18)
      which
      are not cancelable on 60 days notice or less without penalty or detriment for
      the sale of production from the Borrower’s or its Subsidiaries’ Hydrocarbons
      (including, without limitation, calls on or other rights to purchase,
      production, whether or not the same are currently being exercised) that
      (a)
      pertain
      to the sale of production at a fixed price and (b)
      have a
      maturity or expiry date of more than six (6) months from the date hereof.

     

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

     

    Section
      7.21 Use
      of
      Loans and Letters of Credit. 

     

    (a) The
      proceeds of the Working Capital Revolving Loans shall be used (i) for the
      exploration, development and/or acquisition of Oil and Gas Properties, (ii)
      for
      working capital (including such purposes for which Working Capital Borrowings,
      as defined in the Parent LP Agreement, are permitted under the terms of the
      Parent LP Agreement), and (iii) for general corporate purposes of the Parent,
      the Borrower and its Subsidiaries, including Restricted Payments. 

    
      
         

        
          
            
            

          

          
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    (b) The
      proceeds of the General Revolving Loans and the Letters of Credit shall be
      used
      (i) to provide funding in connection with the Acquisition, (ii) for the
      exploration, development and/or acquisition of Oil and Gas Properties, (iii)
      for
      working capital and (iv) for general corporate purposes of the Parent, the
      Borrower and its Subsidiaries, but will not be used to make any Restricted
      Payment permitted by Section
      9.04.

     

    (c) The
      Borrower and its Subsidiaries are not engaged principally, or as one of its
      or
      their important activities, in the business of extending credit for the purpose,
      whether immediate, incidental or ultimate, of buying or carrying margin stock
      (within the meaning of Regulation T, U or X of the Board). No part of the
      proceeds of any Loan or Letter of Credit will be used for any purpose which
      violates the provisions of Regulations T, U or X of the Board.

     

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

     

    ARTICLE
      VIII

    Affirmative
      Covenants

     

    Until
      the
      Commitments have expired or been terminated and the principal of and interest
      on
      each Loan and all fees payable hereunder and all other amounts payable under
      the
      Loan Documents shall have been paid in full and all Letters of Credit shall
      have
      expired or terminated and all LC Disbursements shall have been reimbursed,
      each
      of the Parent and the Borrower covenants and agrees with the Lenders
      that:

     

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

     

    (a) Annual
      Financial Statements.
      As soon
      as available and in accordance with applicable law, but in any event not later
      than 100 days after the end of each fiscal year, Parent’s audited consolidated
      balance sheet and related statements of operations, partners’ equity and cash
      flows as of the end of and for such year, setting forth in each case in
      comparative form the figures for the previous fiscal year, all reported on
      by
      independent public accountants of recognized national standing and reasonably
      acceptable to the Administrative Agent (without a “going concern” or like
      qualification or exception and without any qualification or exception as to
      the
      scope of such audit) to the effect that such consolidated financial statements
      present fairly in all material respects the financial position and results
      of
      operations of the Parent and its Consolidated Subsidiaries on a consolidated
      basis in accordance with GAAP consistently applied.

    
      
         

        
          
            
            

          

          
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    (b) Quarterly
      Financial Statements.
      As soon
      as available and in accordance with applicable law, but in any event not later
      than 55 days after the end of each of the first three fiscal quarters of each
      fiscal year of the Parent, its consolidated balance sheet and related statements
      of operations, partners’ equity and cash flows as of the end of and for such
      quarter and the then elapsed portion of the fiscal year, setting forth in each
      case in comparative form the figures for the corresponding period or periods
      of
      (or, in the case of the balance sheet, as of the end of) the previous fiscal
      year, all certified by a Financial Officer as presenting fairly in all material
      respects the financial position and results of operations of the Parent and
      its
      Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
      consistently applied, subject to normal year-end audit adjustments and the
      absence of footnotes. 

     

    (c) Certificate
      of Financial Officer — Compliance.
      Concurrently with any delivery of financial statements under Section
      8.01(a)
      or
Section
      8.01(b),
      a
      certificate of a Financial Officer in substantially the form of Exhibit B
      hereto (i)
      certifying as to whether a Default has occurred and, if a Default has occurred,
      specifying the details thereof and any action taken or proposed to be taken
      with
      respect thereto, (ii)
      setting
      forth reasonably detailed calculations demonstrating compliance with
Section
      9.01
      and
(iii)
      stating
      whether any change in GAAP or in the application thereof has occurred since
      the
      Effective Date and, if any such change has occurred, specifying the effect
      of
      such change on the financial statements accompanying such
      certificate.

     

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

     

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

     

    (f) Other
      Accounting Reports.
      Promptly upon receipt thereof, a copy of each other report or letter submitted
      to the Parent, the Borrower or any of their Subsidiaries by independent
      accountants in connection with any annual, interim or special audit made by
      them
      of the books of the Parent, the Borrower or any such Subsidiary, and a copy
      of
      any response by the Parent, the Borrower or any such Subsidiary to such letter
      or report.

    
      
         

        
          
            
            

          

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

     

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

     

    (i) Lists
      of Purchasers.
      Concurrently with the delivery of any Reserve Report to the Administrative
      Agent
      pursuant to Section 8.12, a list of all Persons purchasing Hydrocarbons from
      the
      Borrower or any of its Subsidiaries accounting for at least 85% of the revenues
      resulting from the sale of all Hydrocarbons in the one-year period prior to
      the
“as of” date of the most recent Reserve Report delivered pursuant to Section
      8.12.

     

    (j) Notice
      of Sales of Oil and Gas Properties.
      If
      during any period between two successive Redetermination Dates, the Borrower
      or
      any Subsidiary sells, transfers, assigns or otherwise disposes of Oil and Gas
      Properties or Equity Interests in any Subsidiary in accordance with Section
      9.12(d)
      with
      an aggregate fair market value which exceeds $5,000,000, prior written notice
      thereof, the price thereof and the anticipated date of closing and any other
      details thereof requested by the Administrative Agent or any
      Lender.

     

    (k) Notice
      of Casualty Events.
      Prompt
      written notice, and in any event within three Business Days, of the occurrence
      of any Casualty Event or the commencement of any action or proceeding that
      could
      reasonably be expected to result in a Casualty Event.

     

    (l) Information
      Regarding Borrower and Guarantors.
      Prompt
      written notice (and in any event within thirty (30) days prior thereto) of
      any
      change (i) in
      the Borrower or any Guarantor’s corporate name or in any trade name used to
      identify such Person in the conduct of its business or in the ownership of
      its
      Properties, (ii) in
      the location of the Borrower or any Guarantor’s chief executive office or
      principal place of business, (iii) in
      the Borrower or any Guarantor’s identity or corporate structure or in the
      jurisdiction in which such Person is incorporated or formed, (iv)
      in the
      Borrower or any Guarantor’s jurisdiction of organization or such Person’s
      organizational identification number in such jurisdiction of organization,
      and
(v) in
      the Borrower or any Guarantor’s federal taxpayer identification
      number.

     

    (m) Production
      Report and Lease Operating Statements.
      Within
      45 days after the end of each fiscal quarter, a report setting forth, for each
      fiscal quarter during the then-current fiscal year to date, the volume of
      production and sales attributable to production (and the prices at which such
      sales were made and the revenues derived from such sales) for each such quarter
      from the Oil and Gas Properties, and setting forth the related ad valorem,
      severance and production taxes and lease operating expenses attributable thereto
      and incurred for each such quarter.

    
      
         

        
          
            
            

          

          
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    (n) Notices
      of Certain Changes.
      Promptly, but in any event within thirty (30) days after the execution thereof,
      copies of any amendment, modification or supplement to the certificate or
      articles of incorporation, by-laws, any preferred stock designation or any
      other
      organic document of the Parent, the Borrower or any of their
      Subsidiaries.

     

    (o) Issuance
      of Senior Debt.
      In the
      event the Borrower intends to issue Senior Debt as contemplated by Section
      9.02(e),
      10 days
      prior written notice of such intended offering therefor, the amount thereof
      and
      the anticipated date of closing and will furnish a copy of the preliminary
      offering memorandum (if any) and the final offering memorandum (if
      any).

     

    (p) Annual
      Budget.
      Promptly, but in any event within 90 days after the end of each fiscal year,
      a
      budget for the then current fiscal year, including a pro forma balance sheet
      and
      income and cash flow projections. 

     

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

     

    Section
      8.02 Notices
      of Material Events.
      The
      Parent and/or the Borrower will furnish to the Administrative Agent and each
      Lender, promptly after the Parent or the Borrower obtains knowledge thereof,
      written notice of the following:

     

    (a) the
      occurrence of any Default;

     

    (b) the
      filing or commencement of, or the threat in writing of, any action, suit,
      investigation, arbitration or proceeding by or before any arbitrator or
      Governmental Authority against or affecting the Parent, the Borrower or any
      Subsidiary thereof, or any material adverse development in any action, suit,
      proceeding, investigation or arbitration (whether or not previously disclosed
      to
      the Lenders), that, in either case, if adversely determined, could reasonably
      be
      expected to result in liability in excess of $5,000,000;

     

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

     

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

     

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

    
      
         

        
          
            
            

          

          
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    Section
      8.03 Existence;
      Conduct of Business.
      The
      Parent and the Borrower will, and will cause each of their Subsidiaries to,
      do
      or cause to be done all things necessary to preserve, renew and keep in full
      force and effect its legal existence and the rights, licenses, permits,
      privileges and franchises material to the conduct of its business and maintain,
      if necessary, its qualification to do business in each other jurisdiction in
      which any of its Oil and Gas Properties is located or the ownership of its
      Properties requires such qualification, except where the failure to so qualify
      could not reasonably be expected to have a Material Adverse Effect; provided
      that the foregoing shall not prohibit any merger, consolidation, liquidation
      or
      dissolution permitted under Section
      9.11.

     

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

     

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

     

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

     

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

     

    (b) keep
      and
      maintain all Property material to the conduct of its business in good working
      order and condition, ordinary wear and tear excepted, and preserve, maintain
      and
      keep in good repair, working order and efficiency (ordinary wear and tear
      excepted) all of its material Oil and Gas Properties and other material
      Properties, including, without limitation, all equipment, machinery and
      facilities in accordance with customary industry standards.

    
      
         

        
          
            
            

          

          
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    (c) promptly
      pay and discharge, or make reasonable and customary efforts to cause to be
      paid
      and discharged, all delay rentals, royalties, expenses and indebtedness accruing
      under the leases or other agreements affecting or pertaining to its Oil and
      Gas
      Properties and will do all other things necessary to keep unimpaired their
      rights with respect thereto and prevent any forfeiture thereof or default
      thereunder except for leases or other agreements which are no longer used or
      useful in its business.

     

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

     

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

     

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

     

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

     

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

     

    Section
      8.10 Environmental
      Matters.

     

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

    
      
         

        
          
            
            

          

          
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    (b) The
      Borrower will promptly, but in no event later than five Business Days after
      the
      occurrence thereof, notify the Administrative Agent and the Lenders in writing
      of any threatened action, investigation or inquiry by any Governmental Authority
      or any threatened demand or lawsuit by any landowner or other third party
      against the Borrower or its Subsidiaries or their Properties of which the
      Borrower has knowledge in connection with any Environmental Laws (excluding
      routine testing and corrective action) if the Borrower reasonably anticipates
      that such action will result in liability (whether individually or in the
      aggregate) in excess of $5,000,000, not fully covered by insurance, subject
      to
      normal deductibles.

     

    (c) The
      Borrower will, and will cause each of its Subsidiaries to, provide environmental
      audits and tests in accordance with American Society of Testing Materials
      standards upon the reasonable request by the Administrative Agent and the
      Majority Lenders (or as otherwise required to be obtained by the Administrative
      Agent or the Majority Lenders by any Governmental Authority), in connection
      with
      any future acquisitions of Oil and Gas Properties or other material
      Properties.

     

    Section
      8.11 Further
      Assurances.

     

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

    
      
         

        
          
            
            

          

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

     

    Section
      8.12 Reserve
      Reports.

     

    (a) On
      or
      before March 1st and September 1st of each year, commencing March 1st, 2008,
      the
      Borrower shall furnish to the Administrative Agent and the Lenders a Reserve
      Report as of the immediately preceding January 1 or July 1, as applicable.
      The
      Reserve Report as of January 1 of each year shall be prepared by one or more
      petroleum engineers reasonably acceptable to the Administrative Agent and the
      July 1 Reserve Report of each year shall be prepared by or under the supervision
      of the chief engineer of EV Management who shall certify, on behalf of the
      Borrower, such Reserve Report to be based upon reasonable assumptions and
      estimates in light of the facts and circumstances known to the Borrower at
      the
      time such Reserve Report was prepared and to have been prepared in accordance
      with the procedures used in the immediately preceding January 1 Reserve
      Report.

     

    (b) In
      the
      event of an Interim Redetermination, the Borrower shall furnish to the
      Administrative Agent and the Lenders a Reserve Report prepared by or under
      the
      supervision of the chief engineer of EV Management who shall certify, on behalf
      of the Borrower, such Reserve Report to be based upon reasonable assumptions
      and
      estimates in light of the facts and circumstances known to the Borrower at
      the
      time such Reserve Report was prepared and to have been prepared in accordance
      with the procedures used in the immediately preceding January 1 Reserve Report.
      For any Interim Redetermination requested by the Administrative Agent or the
      Borrower pursuant to Section
      2.07(b),
      the
      Borrower shall provide such Reserve Report with an “as of” date as required by
      the Administrative Agent as soon as possible, but in any event no later than
      thirty (30) days following the receipt of such request.

     

    (c) With
      the
      delivery of each Reserve Report, the Borrower shall provide to the
      Administrative Agent and the Lenders a certificate from a Responsible Officer
      certifying that in all material respects: (i)
      the
      information contained in the Reserve Report and any other information delivered
      in connection therewith is based upon reasonable assumptions and estimates
      in
      light of the facts and circumstances known to the Borrower at the time such
      Reserve Report was prepared, (ii)
      the
      Borrower or its Subsidiaries owns good and defensible title to the Oil and
      Gas
      Properties evaluated in such Reserve Report and such Properties are free of
      all
      Liens except for Liens permitted by Section
      9.03,
      (iii)
      except
      as set forth on an exhibit to the certificate, on a net basis there are no
      gas
      imbalances, take or pay or other prepayments in excess of the volume specified
      in Section
      7.18
      with
      respect to their Oil and Gas Properties evaluated in such Reserve Report that
      would require the Borrower or any of its Subsidiaries to deliver Hydrocarbons
      either generally or produced from such Oil and Gas Properties at some future
      time without then or thereafter receiving full payment therefor, (iv)
      none of
      their Oil and Gas Properties evaluated in the previous Reserve Report have
      been
      sold since the date of the last Borrowing Base determination except as set
      forth
      on an exhibit to the certificate, which certificate shall list all of such
      Oil
      and Gas Properties sold and in such detail as reasonably required by the
      Administrative Agent, (v)
      attached
      to the certificate is a list of all marketing agreements entered into subsequent
      to the later of the date hereof or the most recently delivered Reserve Report
      that the Borrower could reasonably be expected to have been obligated to list
      on
      Schedule 7.19 had such agreement been in effect on the date hereof and
(vi)
      attached
      thereto is a schedule of the Oil and Gas Properties evaluated by such Reserve
      Report that are Mortgaged Properties and demonstrating the percentage of the
      present value that such Mortgaged Properties represent.

    
      
         

        
          
            
            

          

          
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    Section
      8.13 Title
      Information.

     

    (a) On
      or
      before the delivery to the Administrative Agent and the Lenders of each Reserve
      Report required by Section
      8.12(a),
      the
      Borrower will deliver title information in form and substance acceptable to
      the
      Administrative Agent covering enough of the Oil and Gas Properties evaluated
      by
      such Reserve Report that were not included in the immediately preceding Reserve
      Report, so that the Administrative Agent shall have received together with
      title
      information previously delivered to the Administrative Agent, satisfactory
      title
      information on at least 70% of the total value of the Oil and Gas Properties
      evaluated by such Reserve Report.

     

    (b) If
      the
      Borrower has provided title information for additional Properties under
Section
      8.13(a),
      the
      Borrower shall, within 60 days of notice from the Administrative Agent that
      title defects or exceptions exist with respect to such additional Properties,
      either (i)
      cure any
      such title defects or exceptions (including defects or exceptions as to
      priority) which are not permitted by Section
      9.03
      raised
      by such information, (ii)
      substitute acceptable Mortgaged Properties with no title defects or exceptions
      except for Excepted Liens (other than Excepted Liens described in clauses (e),
      (g) and (h) of such definition) having an equivalent value or (iii)
      deliver
      title information in form and substance acceptable to the Administrative Agent
      so that the Administrative Agent shall have received, together with title
      information previously delivered to the Administrative Agent, satisfactory
      title
      information on at least 70% of the value of the Oil and Gas Properties evaluated
      by such Reserve Report.

     

    (c) If
      the
      Borrower is unable to cure any title defect requested by the Administrative
      Agent or the Lenders to be cured within the 60-day period or the Borrower does
      not comply with the requirements to provide acceptable title information
      covering 70% of the value of the Oil and Gas Properties evaluated in the most
      recent Reserve Report, such default shall not be a Default, but instead the
      Administrative Agent and/or the Required Lenders shall have the right to
      exercise the following remedy in their sole discretion from time to time, and
      any failure to so exercise this remedy at any time shall not be a waiver as
      to
      future exercise of the remedy by the Administrative Agent or the Lenders. To
      the
      extent that the Administrative Agent or the Required Lenders are not satisfied
      with title to any Mortgaged Property after the 60-day period has elapsed, such
      unacceptable Mortgaged Property shall not count towards the 70% requirement,
      and
      the Administrative Agent may send a notice to the Borrower and the Lenders
      that
      the then outstanding Borrowing Base shall be reduced by an amount as determined
      by the Required Lenders to cause the Borrower to be in compliance with the
      requirement to provide acceptable title information on 70% of the value of
      the
      Oil and Gas Properties. This new Borrowing Base shall become effective
      immediately after receipt of such notice.

    
      
         

        
          
            
            

          

          
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    Section
      8.14 Additional
      Collateral; Additional Guarantors.

     

    (a) In
      connection with each redetermination of the Borrowing Base, the Borrower shall
      review the Reserve Report and the list of current Mortgaged Properties (as
      described in Section
      8.12(c)(vi))
      to
      ascertain whether the Mortgaged Properties represent at least 80% of the total
      value of the Oil and Gas Properties evaluated in the most recently completed
      Reserve Report after giving effect to exploration and production activities,
      acquisitions, dispositions and production. In the event that the Mortgaged
      Properties do not represent at least 80% of such total value, then the Borrower
      shall, and shall cause its Subsidiaries to, grant to the Administrative Agent
      or
      its designee as security for the Indebtedness a first-priority Lien interest
      (provided the Excepted Liens of the type described in clauses (a) to (d) and
      (f)
      of the definition thereof may exist, but subject to the provisos at the end
      of
      such definition) on additional Oil and Gas Properties not already subject to
      a
      Lien of the Security Instruments such that after giving effect thereto, the
      Mortgaged Properties will represent at least 80% of such total value. All such
      Liens will be created and perfected by and in accordance with the provisions
      of
      deeds of trust, security agreements and financing statements or other Security
      Instruments, all in form and substance reasonably satisfactory to the
      Administrative Agent or its designee and in sufficient executed (and
      acknowledged where necessary or appropriate) counterparts for recording
      purposes. In order to comply with the foregoing, if any Subsidiary places a
      Lien
      on its Oil and Gas Properties and such Subsidiary is not a Guarantor, then
      it
      shall become a Guarantor and comply with Section
      8.14(b).

     

    (b) In
      the
      event that (i)
      the
      Borrower determines that any Subsidiary is a Material Domestic Subsidiary or
      (ii)
      any
      Wholly-Owned Subsidiary incurs or guarantees any Debt, then the Borrower shall
      promptly cause such Subsidiary to guarantee the Indebtedness pursuant to the
      Guarantee Agreement. In connection with any such guaranty, the Borrower shall,
      or shall cause such Subsidiary to, (A)
      execute
      and deliver a supplement to the Guarantee Agreement executed by such Subsidiary,
      (B)
      pledge
      all of the Equity Interests of such Subsidiary (including, without limitation,
      delivery of original stock certificates evidencing the Equity Interests of
      such
      Subsidiary, together with an appropriate undated stock powers for each
      certificate duly executed in blank by the registered owner thereof) and
(C)
      execute
      and deliver such other additional closing documents, certificates and legal
      opinions as shall reasonably be requested by the Administrative Agent or its
      designee.

     

    Section
      8.15 ERISA
      Compliance.
      The
      Borrower will promptly furnish, and will cause its Subsidiaries and any ERISA
      Affiliate to promptly furnish, to the Administrative Agent (a)
      promptly
      after the filing thereof with the United States Secretary of Labor, the Internal
      Revenue Service or the PBGC, copies of each annual and other report with respect
      to each Plan, if any, or any trust created thereunder, (b)
      immediately upon becoming aware of the occurrence of any ERISA Event or of
      any
“prohibited transaction,” as described in section 406 of ERISA or in section
      4975 of the Code, in connection with any Plan or any trust created thereunder,
      a
      written notice signed by the President or the principal Financial Officer of
      the
      Borrower, its Subsidiaries or the ERISA Affiliate, as the case may be,
      specifying the nature thereof, what action the Borrower, its Subsidiaries or
      the
      ERISA Affiliate is taking or proposes to take with respect thereto, and, when
      known, any action taken or proposed by the Internal Revenue Service, the
      Department of Labor or the PBGC with respect thereto, and (c)
      immediately upon receipt thereof, copies of any notice of the PBGC’s intention
      to terminate or to have a trustee appointed to administer any Plan. With respect
      to each Plan, if any (other than a Multiemployer Plan), the Borrower will,
      and
      the Borrower will cause each of its Subsidiaries and ERISA Affiliates to,
(i)
      satisfy
      in full and in a timely manner, without incurring any late payment or
      underpayment charge or penalty and without giving rise to any lien, all of
      the
      contribution and funding requirements of section 412 of the Code (determined
      without regard to subsections (d), (e), (f) and (k) thereof) and of section
      302
      of ERISA (determined without regard to sections 303, 304 and 306 of ERISA),
      and
(ii)
      pay, or
      cause to be paid, to the PBGC in a timely manner, without incurring any late
      payment or underpayment charge or penalty, all premiums required pursuant to
      sections 4006 and 4007 of ERISA.

    
      
         

        
          
            
            

          

          
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    Section
      8.16 Marketing
      Activities.
      The
      Borrower will not, and will not permit any of its Subsidiaries to, engage in
      marketing activities for any Hydrocarbons or enter into any contracts related
      thereto other than (a)
      contracts for the sale of Hydrocarbons scheduled or reasonably estimated to
      be
      produced from their proved Oil and Gas Properties during the period of such
      contract, (b)
      contracts for the sale of Hydrocarbons scheduled or reasonably estimated to
      be
      produced from proved Oil and Gas Properties of third parties during the period
      of such contract associated with the Oil and Gas Properties of the Borrower
      and
      its Subsidiaries that the Borrower or one of its Subsidiaries has the right
      to
      market pursuant to joint operating agreements, unitization agreements or other
      similar contracts that are usual and customary in the oil and gas business
      and
      (c)
      other
      contracts for the purchase and/or sale of Hydrocarbons of third parties
(i)
      which
      have generally offsetting provisions (i.e. corresponding pricing mechanics,
      delivery dates and points and volumes) such that no “position” is taken,
(ii)
      for
      which appropriate credit support has been taken to alleviate the material credit
      risks of the counterparty thereto, or (iii) which otherwise constitute Swap
      Agreements permitted under Section
      9.18.

     

    Section
      8.17 Clean-Down.
      The
      Borrower will cause the aggregate outstanding principal balance of the Working
      Capital Revolving Loans which constitute “Working Capital Borrowings” under and
      as defined in the Parent LP Agreement, to be zero for a period of at least
      15
      consecutive days (i) during each calendar year commencing in 2008, and (ii)
      during each twelve (12) month period commencing on the Effective Date.

     

    ARTICLE
      IX

    Negative
      Covenants

     

    Until
      the
      Commitments have expired or been terminated and the principal of and interest
      on
      each Loan and all fees payable hereunder and all other amounts payable under
      the
      Loan Documents have been paid in full and all Letters of Credit have expired
      or
      terminated and all LC Disbursements shall have been reimbursed, each of the
      Parent and the Borrower covenants and agrees with the Lenders that:

    
      
         

        
          
            
            

          

          
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    Section
      9.01 Financial
      Covenants. 

     

    (a) Ratio
      of Total Debt to EBITDAX.
      The
      Parent will not, as of any date of determination, permit its ratio of Total
      Debt
      as of such date to EBITDAX for the most recent period of four fiscal quarters
      for which financial statements are available to be greater than 4.0 to
      1.0.

     

    (b) Current
      Ratio.
      The
      Parent will not permit, as of the last day of any fiscal quarter, its ratio
      of
(i)
      consolidated current assets (including the unused amount of the total
      Commitments, but excluding non-cash assets under FAS 133) to (ii)
      consolidated current liabilities (excluding non-cash obligations under FAS
      133
      and current maturities under this Agreement) to be less than 1.0 to
      1.0.

     

    Section
      9.02 Debt.
      None
      of
      the Parent, the Borrower or any of their Subsidiaries will incur, create, assume
      or suffer to exist any Debt, except:

     

    (a) the
      Notes
      or other Indebtedness arising under the Loan Documents or any guaranty of or
      suretyship arrangement for the Notes or other Indebtedness arising under the
      Loan Documents.

     

    (b) accounts
      payable and other accrued expenses, liabilities or other obligations to pay
      (for
      the deferred purchase price of Property or services) from time to time incurred
      in the ordinary course of business which are not greater than ninety (90) days
      past the date of invoice or delinquent or which are being contested in good
      faith by appropriate action and for which adequate reserves have been maintained
      in accordance with GAAP.

     

    (c) intercompany
      Debt among the Parent, the Borrower and any of the Borrower’s Subsidiaries or
      between Subsidiaries to the extent permitted by Section
      9.05(g);
      provided that such Debt is not held, assigned, transferred, negotiated or
      pledged to any Person other than the Parent or one of its Wholly-Owned
      Subsidiaries, and, provided further, that any such Debt owed by the Borrower
      to
      either the Parent or a Guarantor shall be subordinated to the Indebtedness
      owed
      by the Borrower or a Guarantor on terms set forth in the Guarantee
      Agreement.

     

    (d) endorsements
      of negotiable instruments for collection in the ordinary course of
      business.

     

    (e) Senior
      Debt, the principal amount of which does not exceed $300,000,000 and any
      guarantees thereof; provided that (i) the Borrower shall have complied with
      Section
      8.01(o),
      (ii) at
      the time of incurring such Senior Debt (1) no Default has occurred and is then
      continuing and (2) no Default would result from the incurrence of such Senior
      Debt after giving effect to the incurrence of such Senior Debt (and any
      concurrent repayment of Debt with the proceeds of such incurrence), (iii) the
      incurrence of such Senior Debt (and any concurrent repayment of Debt with the
      proceeds of such incurrence) would not result in the total Revolving Credit
      Exposure exceeding the Borrowing Base then in effect, (iv) such Senior Debt
      does
      not have any scheduled amortization prior to the date which is one year after
      the Maturity Date, (v) such Senior Debt does not mature sooner than the date
      which is one year after the Maturity Date and (vi) prior to the incurrence
      of
      such Debt, the Borrowing Base is adjusted pursuant to Section
      2.07(e).
      

    
      
         

        
          
            
            

          

          
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    (f) other
      Debt, including Capital Leases and purchase money Debt not to exceed $10,000,000
      in the aggregate, not to exceed the lesser of $20,000,000 or 5% of the then
      effective Borrowing Base in the aggregate at any one time
      outstanding.

     

    Section
      9.03 Liens.
      None
      of
      the Parent, the Borrower or any of their Subsidiaries will create, incur, assume
      or permit to exist any Lien on any of its Properties (now owned or hereafter
      acquired), except:

     

    (a) Liens
      securing the payment of any Indebtedness.

     

    (b) Excepted
      Liens.

     

    (c) Liens
      securing purchase money Debt and Debt under Capital Leases permitted under
      Section
      9.02(e).

     

    (d) Liens
      on
      posted collateral or margin to secure obligations under Swap Agreements
      permitted by Section
      9.18.

     

    (e) Liens
      on
      Property not constituting collateral for the Indebtedness and not otherwise
      permitted by the foregoing clauses of this Section
      9.03;
      provided that the aggregate principal or face amount of all Debt secured under
      this Section
      9.03(e)
      shall
      not exceed $1,000,000 at any time.

     

    Section
      9.04 Dividends,
      Distributions and Redemptions. 

     

    (a) Restricted
      Payments.
      The
      Parent and the Borrower will not, and will not permit any of their Subsidiaries
      to, declare or make, or agree to pay or make, directly or indirectly, any
      Restricted Payment, return any capital to its stockholders or make any
      distribution of their Property to their respective Equity Interest holders,
      except (i) the Parent or the Borrower may declare and pay dividends or
      distributions with respect to its Equity Interests payable solely in additional
      shares of its Equity Interests (other than Disqualified Capital Stock), (ii)
      the
      Borrower and its Subsidiaries may declare and pay dividends or distributions
      ratably with respect to their Equity Interests and (iii) so long as no Borrowing
      Base Deficiency, Default or Event of Default has occurred and is continuing
      or
      would result therefrom, the Parent may declare and pay quarterly cash dividends
      to its partners of Available Cash in accordance with the Parent LP
      Agreement.

     

    (b) Repayment
      of Senior Debt; Amendment of terms of Senior Debt.
      The
      Borrower will not, and will not permit any Subsidiary to, prior to the date
      that
      is one year after the Maturity Date: (i) call, make or offer to make any
      optional or voluntary Redemption of or otherwise optionally or voluntarily
      Redeem (whether in whole or in part) the Senior Debt, except that the Borrower
      may prepay the Senior Debt with the net cash proceeds of any sale of Equity
      Interests (other than Disqualified Capital Stock) of the Borrower or (ii) amend,
      modify, waive or otherwise change, consent or agree to any amendment,
      modification, waiver or other change to, any of the terms of the Senior Debt
      if
      (1) the effect thereof would be to shorten its maturity or average life or
      increase the amount of any payment of principal thereof or increase the rate
      or
      shorten any period for payment of interest thereon or (2) such action requires
      the payment of a consent fee (howsoever described), provided that the foregoing
      shall not prohibit the execution of supplemental documents associated with
      the
      incurrence of additional Senior Debt to the extent permitted by Section
      9.02(e),
      the
      execution of supplements to add guarantors, if required by the terms of any
      Senior Debt documents, provided such Person complies with Section
      8.14(b).

    
      
         

        
          
            
            

          

          
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    Section
      9.05 Investments,
      Loans and Advances.
      None
      of
      the Parent, the Borrower or their Subsidiaries will make or permit to remain
      outstanding any Investments in or to any Person, except that the foregoing
      restriction shall not apply to:

     

    (a) Investments
      reflected in the Financial Statements.

     

    (b) accounts
      receivable arising in the ordinary course of business.

     

    (c) direct
      obligations of the United States or any agency thereof, or obligations
      guaranteed by the United States or any agency thereof, in each case maturing
      within one year from the date of creation thereof.

     

    (d) commercial
      paper maturing within one year from the date of creation thereof rated in the
      two highest grades by S&P or Moody’s.

     

    (e) deposits
      maturing within one year from the date of creation thereof with, including
      certificates of deposit issued by, any Lender or any office located in the
      United States of any other bank or trust company which is organized under the
      laws of the United States or any state thereof, has capital, surplus and
      undivided profits aggregating at least $250,000,000 (as of the date of such
      bank
      or trust company’s most recent financial reports) and has a short term deposit
      rating of no lower than A2 or P2, as such rating is set forth from time to
      time,
      by S&P or Moody’s, respectively.

     

    (f) deposits
      in money market funds investing exclusively in Investments described in
Section
      9.05(c),
      Section
      9.05(d)
      or
Section
      9.05(e).

     

    (g) Investments (i)
      made by
      the Parent or the Borrower in or to Guarantors, (ii)
      made by
      any Subsidiary or the Parent in or to the Borrower or any Guarantor,
      and
      (iii) made by the Borrower or any Guarantor in Subsidiaries that are not
      Guarantors, provided that the aggregate of all Investments made by the Borrower
      and the Guarantors in or to all Subsidiaries that are not Guarantors shall
      not
      exceed $5,000,000 at any time.

     

    (h) subject
      to the limits in Section
      9.06,
      Investments (including, without limitation, capital contributions) in general
      or
      limited partnerships or other types of entities (each a “Venture”)
      entered into by the Parent, the Borrower or any of their Subsidiaries with
      others in the ordinary course of business; provided that (i)
      any such
      Venture is engaged exclusively in oil and gas exploration, development,
      production, processing and related activities, including
      transportation, (ii)
      the
      interest in such venture is acquired in the ordinary course of business and
      on
      fair and reasonable terms and (iii)
      such
      Venture interests acquired and capital contributions made (valued as of the
      date
      such interest was acquired or the contribution made) do not exceed, in the
      aggregate at any time outstanding an amount equal to $5,000,000.

    
      
         

        
          
            
            

          

          
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    (i) subject
      to the limits in Section
      9.06,
      Investments in Persons by the Borrower or a Subsidiary; provided, that,
      contemporaneously with such Investment, such Person becomes a Wholly-Owned
      Subsidiary and, as of the date such Investment is made (and after giving effect
      to all related transactions) (1) all of the representations and warranties
      contained in each Loan Document are true and correct and (2) no Default or
      Event
      of Default has occurred and is continuing or would result from such person
      being
      a Wholly-Owned Subsidiary.

     

    (j) subject
      to the limits in Section
      9.06,
      Investments in direct ownership interests in additional Oil and Gas Properties
      and gas gathering systems, production facilities or processing facilities
      related thereto or related to farm-out, farm-in, joint operating, joint venture
      or area of mutual interest agreements, gathering systems, pipelines, production
      facilities, processing facilities or other similar arrangements which are usual
      and customary in the oil and gas exploration and production business located
      within the geographic boundaries of the United States of America.

     

    (k) loans
      or
      advances to employees, officers or directors in the ordinary course of business
      of the Parent, the Borrower or any of their Subsidiaries, in each case only
      as
      permitted by applicable law, including Section 402 of the Sarbanes Oxley Act
      of
      2002, but in any event not to exceed $1,000,000 in the aggregate at any
      time.

     

    (l) Investments
      in stock, obligations or securities received in settlement of debts arising
      from
      Investments permitted under this Section
      9.05
      owing to
      the Parent, the Borrower or any of its Subsidiaries as a result of a bankruptcy
      or other insolvency proceeding of the obligor in respect of such debts or upon
      the enforcement of any Lien in favor of the Parent, the Borrower or any of
      their
      Subsidiaries; provided that the Borrower shall give the Administrative Agent
      prompt written notice in the event that the aggregate amount of all Investments
      held at any one time under this Section
      9.05(j)
      exceeds
$1,000,000.

     

    (m) other
      Investments not to exceed, in the aggregate, $1,000,000 at any time
      outstanding.

     

    Section
      9.06 Nature
      of Business;
      International Operations.
      The
      Parent and the Borrower will not, and will not permit any of their Subsidiaries
      to, allow any material change to be made in the character of its business as
      independent oil and gas exploration and production companies. From and after
      the
      date hereof, the Parent, the Borrower and their Subsidiaries will not acquire
      or
      make any other expenditure (whether such expenditure is capital, operating
      or
      otherwise) in or related to, any Oil and Gas Properties not located within
      the
      geographical boundaries of the United States.

     

    Section
      9.07 Limitation
      on Leases.
      Neither
      the Borrower nor any of its Subsidiaries will create, incur, assume or suffer
      to
      exist any obligation for the payment of rent or hire of Property of any kind
      whatsoever (real or personal but excluding Capital Leases permitted under
      Section 9,02(f) and leases of Hydrocarbon Interests), under leases or lease
      agreements which would cause the aggregate amount of all payments made by the
      Borrower and its Subsidiaries pursuant to all such leases or lease agreements,
      including, without limitation, any residual payments at the end of any lease,
      to
      exceed $5,000,000 in any period of twelve consecutive calendar months during
      the
      life of such leases.

    
      
         

        
          
            
            

          

          
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    Section
      9.08 Proceeds
      of Loans.
      The
      Borrower will not permit the proceeds of the Loans to be used for any purpose
      other than those permitted by Section
      7.21.
      Neither
      the Borrower nor any Person acting on behalf of the Borrower has taken or will
      take any action which might cause any of the Loan Documents to violate
      Regulations T, U or X or any other regulation of the Board or to violate Section
      7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder,
      in each case as now in effect or as the same may hereinafter be in effect.
      If
      requested by the Administrative Agent, the Borrower will furnish to the
      Administrative Agent and each Lender a statement to the foregoing effect in
      conformity with the requirements of FR Form U-1 or such other form referred
      to
      in Regulation U, Regulation T or Regulation X of the Board, as the case may
      be.

     

    Section
      9.09 ERISA
      Compliance.
      The
      Borrower and its Subsidiaries will not at any time:

     

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

     

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

     

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

     

    (d) permit
      to
      exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding
      deficiency within the meaning of section 302 of ERISA or section 412 of the
      Code, whether or not waived, with respect to any Plan.

     

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

    
      
         

        
          
            
            

          

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

     

    (g) acquire,
      or permit any ERISA Affiliate to acquire, an interest in any Person that causes
      such Person to become an ERISA Affiliate with respect to the Borrower or any
      of
      its Subsidiaries or with respect to any ERISA Affiliate of the Borrower or
      any
      of its Subsidiaries if such Person sponsors, maintains or contributes to, or
      at
      any time in the six-year period preceding such acquisition has sponsored,
      maintained, or contributed to, (i)
      any
      Multiemployer Plan, or (ii)
      any
      other Plan that is subject to Title IV of ERISA under which the actuarial
      present value of the benefit liabilities under such Plan exceeds the current
      value of the assets (computed on a plan termination basis in accordance with
      Title IV of ERISA) of such Plan allocable to such benefit
      liabilities.

     

    (h) incur,
      or
      permit any ERISA Affiliate to incur, a liability to or on account of a Plan
      under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA.

     

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

     

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

     

    Section
      9.10 Sale
      or Discount of Receivables.
      Except
      for receivables obtained by the Borrower or any of its Subsidiaries out of
      the
      ordinary course of business or the settlement of joint interest billing accounts
      in the ordinary course of business or discounts granted to settle collection
      of
      accounts receivable or the sale of defaulted accounts arising in the ordinary
      course of business in connection with the compromise or collection thereof
      and
      not in connection with any financing transaction, neither the Borrower nor
      any
      of its Subsidiaries will discount or sell (with or without recourse) any of
      its
      notes receivable or accounts receivable.

     

    Section
      9.11 Mergers,
      Etc. None
      of
      the Parent, the Borrower or any of their Subsidiaries will merge into or with
      or
      consolidate with any other Person, or sell, lease or otherwise dispose of
      (whether in one transaction or in a series of transactions) all or substantially
      all of its Property to any other Person, except that any Wholly-Owned Subsidiary
      may merge with any other Wholly-Owned Subsidiary and that the Borrower or the
      Parent may merge with any Wholly-Owned Subsidiary so long as the Borrower is
      the
      survivor.

     

    Section
      9.12 Sale
      of Properties.
      The
      Borrower will not, and will not permit any of its Subsidiaries to, sell, assign,
      farm-out, convey or otherwise transfer any Property except for: (a)
      the sale
      of Hydrocarbons in the ordinary course of business; (b)
      farmouts
      of undeveloped acreage and assignments in connection with such farmouts;
(c)
      the sale
      or transfer of Property that is no longer necessary for the business of the
      Borrower or such Subsidiary or is replaced by equipment of at least comparable
      value and use; (d)
      sales or
      other dispositions (including Casualty Events) of Oil and Gas Properties or
      any
      interest therein or Subsidiaries owning Oil and Gas Properties; provided that
      (i)
      100% of
      the consideration received in respect of such sale or other disposition shall
      be
      cash, (ii)
      the
      consideration received in respect of such sale or other disposition shall be
      equal to or greater than the fair market value of the Oil and Gas Property,
      interest therein or Subsidiary subject of such sale or other disposition (as
      reasonably determined by the board of directors of EV Management on behalf
      of
      the Borrower and, if requested by the Administrative Agent, the Borrower shall
      deliver a certificate of a Responsible Officer of the Borrower certifying to
      that effect), (iii)
      if such
      sale or other disposition of Oil and Gas Property or Subsidiary owning Oil
      and
      Gas Properties included in the most recently delivered Reserve Report during
      any
      period between two successive Scheduled Redetermination Dates has a fair market
      value (as determined by the Administrative Agent), individually or in the
      aggregate, in excess of 10% of the then current Borrowing Base, the Borrowing
      Base shall be reduced, effective immediately upon such sale or disposition,
      by
      an amount equal to the value, if any, assigned such Property as determined
      by
      the Required Lenders in the most recently delivered Reserve Report and
(iv)
      if any
      such sale or other disposition is of a Subsidiary owning Oil and Gas Properties,
      such sale or other disposition shall include all the Equity Interests of such
      Subsidiary; and (e)
      sales
      and other dispositions of Properties not regulated by Section
      9.12(a)
      to (d)
      having a fair market value not to exceed $1,000,000 during
      any 12-month period.

     

    
      
        
        

      

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

       

      Section
        9.14 Transactions
        with Affiliates.
        The
        Parent and the Borrower will not, and will not permit any Subsidiary to,
        enter
        into any transaction, including, without limitation, any purchase, sale,
        lease
        or exchange of Property or the rendering of any service, with any Affiliate
        (other than the Guarantors and Wholly-Owned Subsidiaries of the Borrower)
        unless
        such transactions are otherwise permitted under this Agreement and are upon
        fair
        and reasonable terms no less favorable to it than it would obtain in a
        comparable arm’s length transaction with a Person not an Affiliate.

       

      Section
        9.15 Subsidiaries.
        The
        Parent and the Borrower shall not, and shall not permit their Subsidiaries
        to,
        create or acquire any additional Subsidiary unless the Borrower gives written
        notice to the Administrative Agent of such creation or acquisition and complies
        with Section
        8.14(b).
        The
        Parent and the Borrower shall not, and shall not permit any of their
        Subsidiaries to, sell, assign or otherwise dispose of any Equity Interests
        in
        any of its Subsidiaries except as permitted under Section
        9.12.
        Neither
        the Parent nor the Borrower shall have any Foreign Subsidiaries.

       

      Section
        9.16 Negative
        Pledge Agreements; Dividend Restrictions.
        Neither
        the Borrower nor any of its Subsidiaries will create, incur, assume or suffer
        to
        exist any contract, agreement or understanding (other than this Agreement,
        Security Instruments, Capital Leases, purchase money security interests creating
        Liens permitted by Section
        9.03(c)
        or
        collateral or margin agreements permitted by Section
        9.03(d)
        securing
        Swap Agreements) that in any way prohibits or restricts the granting, conveying,
        creation or imposition of any Lien on any of its Property in favor of the
        Administrative Agent and the Lenders or restricts any Subsidiary from paying
        dividends or making distributions to the Borrower or any Guarantor, or which
        requires the consent of or notice to other Persons in connection
        therewith.

       

      
        
          
          

        

        
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      Section
        9.17 Gas
        Imbalances, Take-or-Pay or Other Prepayments.
        Except
        as
        set forth on Schedule 7.18 or on the most recent certificate delivered pursuant
        to Section
        8.12(c),
        the
        Borrower will not, and will not permit any of its Subsidiaries to, allow
        gas
        imbalances, take-or-pay or other prepayments with respect to the Oil and
        Gas
        Properties of the Borrower or any of its Subsidiaries that would require
        the
        Borrower or such Subsidiary to deliver, in the aggregate, two percent (2%)
        or
        more of the aggregate monthly production of Hydrocarbons of the Borrower
        and its
        Subsidiaries at some future time without then or thereafter receiving full
        payment therefor.

       

      Section
        9.18 Swap
        Agreements.
        None
        of
        the Parent, the Borrower or any Subsidiary will enter into any Swap Agreements
        with any Person other than Swap Agreements (a) in respect of commodities
        (i)
        with an
        Approved Counterparty and (ii)
        the
        notional volumes for which (when aggregated with other commodity Swap Agreements
        then in effect other than basis differential swaps on volumes already hedged
        pursuant to other Swap Agreements) do not exceed, as of the date such Swap
        Agreement is executed, 90% of the reasonably anticipated projected production
        of
        Hydrocarbons from Proved Developed Producing Properties for each month during
        the period during which such Swap Agreement is in effect for each of crude
        oil,
        natural gas and natural gas liquids, calculated separately, for a rolling
        5-year
        period based on projections from the most recent Reserve Report plus any
        re-characterization of reserves to Proved Developed Producing Properties
        since
        the date of the most recent Reserve Report; provided however that, the Borrower
        or any of its Subsidiaries may hedge such natural gas liquids with crude
        oil or
        natural gas hedges, or a combination of crude oil and natural gas hedges
        (measured by british thermal unit equivalence) and provided further that,
        if
        Proved Developed Producing Properties include any natural gas production
        for
        which the sales price of such production is based upon formula or actual
        volumes
        for residue gas and natural gas liquids after processing of such natural
        gas,
        the Borrower or any of its Subsidiaries may hedge such natural gas volumes
        with
        a combination of crude oil, natural gas and natural gas liquid hedges (measured
        by british thermal unit equivalence) as reasonably determined by the Borrower
        and (b) in respect of interest rates with an Approved Counterparty, as follows:
        (i) Swap Agreements effectively converting interest rates from fixed to
        floating, the notional principal amounts of which (when aggregated with all
        other Swap Agreements of the Borrower and its Subsidiaries then in effect
        effectively converting interest rates from fixed to floating) do not exceed
        50%
        of the then outstanding principal amount of the Borrower’s Debt for borrowed
        money which bears interest at a fixed rate and (ii) Swap Agreements effectively
        converting interest rates from floating to fixed, the notional principal
        amounts
        of which (when aggregated with all other Swap Agreements of the Borrower
        and its
        Subsidiaries then in effect effectively converting interest rates from floating
        to fixed) do not exceed 75% of the then outstanding principal amount of the
        Borrower’s Debt for borrowed money which bears interest at a floating rate. In
        no event shall any Swap Agreement contain any requirement, agreement or covenant
        for the Borrower or any of its Subsidiaries to post collateral or margin
        (other
        than cash or cash equivalents not to exceed an aggregate amount of $2,000,000,
        and any letters of credit providing credit support for such Swap Agreement)
        to
        secure their obligations under such Swap Agreement or to cover market exposures,
        except for contingent obligations, if any, to post collateral or margin in
        connection with Swap Agreements with any Lender or an Affiliate of a Lender,
        in
        the event that the Borrower’s or such Subsidiary’s obligations under such Swap
        Agreement is no longer secured by the collateral provided under the Loan
        Documents.

       

      
        
          
          

        

        
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      Section
        9.19 Tax
        Status as Partnership.
        The
        Parent and the Borrower shall not alter their status as partnerships for
        purposes of United States Federal Income taxes. The Parent and the Borrower
        shall not, and shall not permit any Subsidiary to, amend or modify any provision
        of their articles, bylaws, or partnership or limited liability company
        organization or operating documents or agreements, or any agreements with
        Affiliates of the type referred to in Section
        9.14,
        if such
        amendment or modification could reasonably be expected to have a Material
        Adverse Effect.

       

      Section
        9.20 Acquisition
        Documents.
        The
        Borrower will not, and will not permit any of its Subsidiaries to, amend,
        modify, or supplement or fail to enforce any indemnity obligations of the
        Seller
        under the Acquisition Documents, if the effect thereof could reasonably be
        expected to have a Material Adverse Effect (and provided that the Borrower
        promptly furnishes to the Administrative Agent a copy of such amendment,
        modification or supplement).

       

      ARTICLE
        X

      Events
        of Default; Remedies

       

      Section
        10.01 Events
        of Default.
        One
        or
        more of the following events shall constitute an “Event
        of Default”:

       

      (a) the
        Borrower shall fail to pay any principal of any Loan or any reimbursement
        obligation in respect of any LC Disbursement when and as the same shall become
        due and payable, whether at the due date thereof or at a date fixed for
        prepayment thereof or otherwise.

       

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

       

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

      (d) the
        Parent, the Borrower or any of their Subsidiaries shall fail to observe or
        perform any covenant, condition or agreement contained in, Section
        8.01(l),
        Section
        8.02,
        Section
        8.03
        or in
ARTICLE
        IX.

       

      
        
          
          

        

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

       

      (f) the
        Parent, the Borrower or any of their Subsidiaries shall fail to make any
        payment
        (whether of principal or interest and regardless of amount) in respect of
        any
        Material Indebtedness, when and as the same shall become due and payable
        (after
        giving effect to any applicable notice and cure period).

       

      (g) any
        event
        or condition occurs (after giving effect to any notice or cure period) that
        results in any Material Indebtedness becoming due prior to its scheduled
        maturity or that enables or permits (with or without the giving of notice,
        the
        lapse of time or both) the holder or holders of any Material Indebtedness
        or any
        trustee or agent on its or their behalf to cause any Material Indebtedness
        to
        become due, or to require the Redemption thereof or any offer to Redeem to
        be
        made in respect thereof, prior to its scheduled maturity or require the Parent,
        the Borrower or any of their Subsidiaries to make an offer in respect
        thereof.

       

      (h) an
        involuntary proceeding shall be commenced or an involuntary petition shall
        be
        filed seeking (i)
        liquidation, reorganization or other relief in respect of the Parent, the
        Borrower or any of their Subsidiaries or its debts, or of a substantial part
        of
        its assets, under any Federal, state or foreign bankruptcy, insolvency,
        receivership or similar law now or hereafter in effect or (ii)
        the
        appointment of a receiver, trustee, custodian, sequestrator, conservator
        or
        similar official for the Parent, the Borrower or any of their Subsidiaries
        or
        for a substantial part of its assets, and, in any such case, such proceeding
        or
        petition shall continue undismissed for 60 days or an order or decree approving
        or ordering any of the foregoing shall be entered.

       

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

       

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

       

      
        
          
          

        

        
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      (k) (i)
        one or
        more judgments for the payment of money in an aggregate amount in excess
        of
        $5,000,000 (to the extent not covered by independent third party insurance
        provided by insurers of the highest claims paying rating or financial strength
        as to which the insurer does not dispute coverage and is not subject to an
        insolvency proceeding) or (ii)
        any one
        or more non monetary judgments that have, or could reasonably be expected
        to
        have, individually or in the aggregate, a Material Adverse Effect, shall
        be
        rendered against the Parent, the Borrower, any of their Subsidiaries or any
        combination thereof and the same shall remain undischarged for a period of
        30
        consecutive days during which execution shall not be effectively stayed,
        or any
        action shall be legally taken by a judgment creditor to attach or levy upon
        any
        assets of the Parent, the Borrower or any of their Subsidiaries to enforce
        any
        such judgment.

       

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

       

      (m) an
        ERISA
        Event shall have occurred that, in the opinion of the Majority Lenders, when
        taken together with all other ERISA Events that have occurred, could reasonably
        be expected to result in liability of the Parent, the Borrower and their
        Subsidiaries in an aggregate amount exceeding $5,000,000 in any
        year.

       

      (n) a
        Change
        in Control shall occur.

       

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

       

      
        
          
          

        

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

       

      (c) All
        proceeds realized from the liquidation or other disposition of collateral
        or
        otherwise received after maturity of the Notes, whether by acceleration or
        otherwise, shall be applied: first,
        to
        reimbursement of expenses and indemnities provided for in this Agreement
        and the
        Security Instruments; second,
        to
        accrued interest on the Notes; third,
        to
        fees; fourth,
        pro
        rata to principal outstanding on the Notes and Indebtedness referred to in
        Clause (b) of the definition of Indebtedness owing to a Lender or an Affiliate
        of a Lender; fifth,
        to any
        other Indebtedness; sixth,
        to
        serve as cash collateral to be held by the Administrative Agent to secure
        the LC
        Exposure; and any excess shall be paid to the Borrower or as otherwise required
        by any Governmental Requirement.

       

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

       

      ARTICLE
        XI

      The
        Administrative Agent

       

      Section
        11.01 Appointment;
        Powers.

       

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

       

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

       

      
        
          
          

        

        
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      Section
        11.03 Action
        by Agent.
        The
        Administrative Agent shall have no duty to take any discretionary action
        or
        exercise any discretionary powers, except discretionary rights and powers
        expressly contemplated hereby or by the other Loan Documents that the
        Administrative Agent is required to exercise in writing as directed by the
        Majority Lenders (or such other number or percentage of the Lenders as shall
        be
        necessary under the circumstances as provided in Section
        12.02)
        and in
        all cases the Administrative Agent shall be fully justified in failing or
        refusing to act hereunder or under any other Loan Documents unless it
        shall (a)
        receive
        written instructions from the Majority Lenders or the Lenders, as applicable,
        (or such other number or percentage of the Lenders as shall be necessary
        under
        the circumstances as provided in Section
        12.02)
        specifying the action to be taken and (b)
        be
        indemnified to its satisfaction by the Lenders against any and all liability
        and
        expenses which may be incurred by it by reason of taking or continuing to
        take
        any such action. The instructions as aforesaid and any action taken or failure
        to act pursuant thereto by the Administrative Agent shall be binding on all
        of
        the Lenders. If a Default has occurred and is continuing, then the
        Administrative Agent shall take such action with respect to such Default
        as
        shall be directed by the requisite Lenders in the written instructions (with
        indemnities) described in this Section
        11.03,
        provided that, unless and until the Administrative Agent shall have received
        such directions, the Administrative Agent may (but shall not be obligated
        to)
        take such action, or refrain from taking such action, with respect to such
        Default as it shall deem advisable in the best interests of the Lenders.
        In no
        event, however, shall the Administrative Agent be required to take any action
        which exposes the Administrative Agent to personal liability or which is
        contrary to this Agreement, the Loan Documents or applicable law. If a Default
        has occurred and is continuing, neither the Co-Syndication Agents nor the
        Co-Documentation Agents shall have any obligation to perform any act in respect
        thereof. No Agent shall be liable for any action taken or not taken by it
        with
        the consent or at the request of the Majority Lenders or the Lenders (or
        such
        other number or percentage of the Lenders as shall be necessary under the
        circumstances as provided in Section
        12.02),
        and
        otherwise the Administrative Agent shall not be liable for any action taken
        or
        not taken by it hereunder or under any other Loan Document or under any other
        document or instrument referred to or provided for herein or therein or in
        connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except
        for its own gross negligence or willful misconduct.

       

      
        
          
          

        

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

       

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

       

      Section
        11.06 Resignation
        or Removal of Agents.
        Subject
        to the appointment and acceptance of a successor Agent as provided in this
        Section
        11.06,
        any
        Agent may resign at any time by notifying the Lenders, each Issuing Bank
        and the
        Borrower, and any Agent may be removed at any time with or without cause
        by the
        Majority Lenders. Upon any such resignation or removal, the Majority Lenders
        shall have the right, with the approval of the Borrower, to appoint a successor.
        If no successor shall have been so appointed by the Majority Lenders and
        shall
        have accepted such appointment within 30 days after the retiring Agent gives
        notice of its resignation or removal of the retiring Agent, then the retiring
        Agent may, on behalf of the Lenders and each Issuing Bank, appoint a successor
        Agent. Upon the acceptance of its appointment as Agent hereunder by a successor,
        such successor shall succeed to and become vested with all the rights, powers,
        privileges and duties of the retiring Agent, and the retiring Agent shall
        be
        discharged from its duties and obligations hereunder. The fees payable by
        the
        Borrower to a successor Agent shall be the same as those payable to its
        predecessor unless otherwise agreed between the Borrower and such successor.
        After the Agent’s resignation hereunder, the provisions of this ARTICLE
        XI
        and
Section
        12.03
        shall
        continue in effect for the benefit of such retiring Agent, its sub-agents
        and
        their respective Related Parties in respect of any actions taken or omitted
        to
        be taken by any of them while it was acting as Agent.

       

      
        
          
          

        

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

      Section
        11.10 Authority
        of Administrative Agent to Release Collateral and Liens.
        Each
        Lender and each Issuing Bank hereby authorizes the Administrative Agent to
        release any collateral that is permitted to be sold or released pursuant
        to the
        terms of the Loan Documents. Each Lender and each Issuing Bank hereby authorizes
        the Administrative Agent to execute and deliver to the Borrower, at the
        Borrower’s sole cost and expense, any and all releases of Liens, termination
        statements, assignments or other documents reasonably requested by the Borrower
        in connection with any sale or other disposition of Property to the extent
        such
        sale or other disposition is permitted by the terms of Section
        9.12
        or is
        otherwise authorized by the terms of the Loan Documents.

       

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

       

      ARTICLE
        XII

      Miscellaneous

       

      Section
        12.01 Notices. 

       

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

       

      
        
          
          

        

        
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      (i) if
        to the
        Borrower or the Parent, to it at 1001 Fannin St., Suite 800, Houston, Texas
        77002, Attention of Michael E. Mercer, Chief Financial Officer (Telecopy
        No.
        (713) 651-1280);

      

      (ii) if
        to the
        Administrative Agent, to it at 10 South Dearborn, Fl 19, IL1 0010, Chicago,
        Illinois 60693, Attention of Loan and Agency Services, Attention of Kerry
        Sroczynski (Telecopy No. (312) 385-7096), with a copy to 600 Travis, 20th
        Floor,
        Houston, Texas 77002, Attention of Lisa Miller (Telecopy No. (713) 750-2666),
        and for all other correspondence other than borrowings, continuation, conversion
        and Letter of Credit requests 600 Travis, 20th Floor, Houston, Texas 77002,
        Attention of Chuck Kingswell-Smith (Telecopy No. (713) 716-7770);

       

      (iii) if
        to any
        other Lender, in its capacity as such, or any other Lender in its capacity
        as an
        Issuing Bank, to it at its address (or telecopy number) set forth in its
        Administrative Questionnaire.

       

      (b) Notices
        and other communications to the Lenders hereunder may be delivered or furnished
        by electronic communications pursuant to procedures approved by the
        Administrative Agent; provided that the foregoing shall not apply to notices
        pursuant to ARTICLE
        II,
        ARTICLE
        III,
        ARTICLE
        IV
        and
ARTICLE
        V
        unless
        otherwise agreed by the Administrative Agent and the applicable Lender. The
        Administrative Agent or the Borrower may, in its discretion, agree to accept
        notices and other communications to it hereunder by electronic communications
        pursuant to procedures approved by it; provided that approval of such procedures
        may be limited to particular notices or communications.

       

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

       

      Section
        12.02 Waivers;
        Amendments. 

       

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

       

      
        
          
          

        

        
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      (b) Neither
        this Agreement nor any provision hereof nor any Security Instrument nor any
        provision thereof may be waived, amended or modified except pursuant to an
        agreement or agreements in writing entered into by the Borrower and the Majority
        Lenders or by the Borrower and the Administrative Agent with the consent
        of the
        Majority Lenders; provided that no such agreement shall (i)
        increase
        the Maximum Credit Amount of any Lender without the written consent of such
        Lender, (ii)
        increase
        the Borrowing Base without the written consent of each Lender, decrease or
        maintain the Borrowing Base without the consent of the Required Lenders,
        or
        modify in any manner Section
        2.07
        without
        the consent of each Lender, (iii)
        reduce
        the principal amount of any Loan or LC Disbursement or reduce the rate of
        interest thereon, or reduce any fees payable hereunder, or reduce any other
        Indebtedness hereunder or under any other Loan Document, without the written
        consent of each Lender affected thereby, (iv)
        postpone
        the scheduled date of payment of the principal amount of any Loan or LC
        Disbursement, or any interest thereon, or any fees payable hereunder, or
        any
        other Indebtedness hereunder or under any other Loan Document, or reduce
        the
        amount of, waive or excuse any such payment, or postpone or extend the
        Termination Date or the Maturity Date without the written consent of each
        Lender
        affected thereby, (v)
        change
Section
        4.01(b)
        or
Section
        4.01(c)
        in a
        manner that would alter the pro rata sharing of payments required thereby,
        without the written consent of each Lender, (vi)
        waive or
        amend Section
        6.01,
        Section
        10.02(c)
        or
Section
        8.14
        or
        change the definition of the terms “Material Domestic Subsidiary” or
“Subsidiary”, without the written consent of each Lender, (vii)
        release
        any Guarantor (except as set forth in the Guarantee Agreement), release all
        or
        substantially all of the collateral (other than as provided in Section
        11.09),
        or
        reduce the percentage set forth in Section
        8.14(a)
        to less
        than 75%, without the written consent of each Lender, or (viii)
        change
        any of the provisions of this Section
        12.02(b)
        or the
        definition of “Majority Lenders”, “Required Lenders” or any other provision
        hereof specifying the number or percentage of Lenders required to waive,
        amend
        or modify any rights hereunder or under any other Loan Documents or make
        any
        determination or grant any consent hereunder or any other Loan Documents,
        without the written consent of each Lender; provided further that no such
        agreement shall amend, modify or otherwise affect the rights or duties of
        the
        Administrative Agent, any other Agent, or any Issuing Bank hereunder or under
        any other Loan Document without the prior written consent of the Administrative
        Agent, such other Agent or such Issuing Bank, as the case may be.
        Notwithstanding the foregoing, any supplement to Schedule 7.14 (Subsidiaries)
        shall be effective simply by delivering to the Administrative Agent a
        supplemental schedule clearly marked as such and, upon receipt, the
        Administrative Agent will promptly deliver a copy thereof to the
        Lenders.

       

      Section
        12.03 Expenses,
        Indemnity; Damage Waiver.
        

       

      (a) The
        Borrower shall pay (i)
        all
        reasonable out-of-pocket expenses incurred by the Administrative Agent and
        its
        Affiliates, including, without limitation, the reasonable fees, charges and
        disbursements of counsel and other outside consultants for the Administrative
        Agent, the reasonable travel, photocopy, mailing, courier, telephone and
        other
        similar expenses and, in connection with the syndication of the credit
        facilities provided for herein, the preparation, negotiation, execution,
        delivery and administration (both before and after the execution hereof and
        including advice of counsel to the Administrative Agent as to the rights
        and
        duties of the Administrative Agent and the Lenders with respect thereto)
        of this
        Agreement and the other Loan Documents and any amendments, modifications
        or
        waivers of or consents related to the provisions hereof or thereof (whether
        or
        not the transactions contemplated hereby or thereby shall be consummated),
        (ii)
        all
        out-of-pocket costs, expenses, Taxes, assessments and other charges incurred
        by
        any Agent in connection with any filing, registration, recording or perfection
        of any security interest contemplated by this Agreement or any Security
        Instrument or any other document referred to therein, (iii)
        all
        reasonable out-of-pocket expenses incurred by each Issuing Bank in connection
        with the issuance, amendment, renewal or extension of any Letter of Credit
        issued by such Issuing Bank or any demand for payment thereunder, (iv)
        all
        out-of-pocket expenses incurred by any Agent, any Issuing Bank or any Lender,
        including the fees, charges and disbursements of any counsel for any Agent,
        any
        Issuing Bank or any Lender, in connection with the enforcement or protection
        of
        its rights in connection with this Agreement or any other Loan Document,
        including its rights under this Section
        12.03,
        or in
        connection with the Loans made or Letters of Credit issued hereunder, including,
        without limitation, all such out-of-pocket expenses incurred during any workout,
        restructuring or negotiations in respect of such Loans or Letters of
        Credit.

       

      
        
          
          

        

        
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      (b) THE
        BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGERS, EACH ISSUING BANK AND
        EACH
        LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH
        PERSON
        BEING CALLED AN “INDEMNITEE”)
        AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS,
        DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND
        DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED
        AGAINST
        ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF
(i)
        THE
        EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
        AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY
        THE
        PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE
        OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS
        CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii)
        THE
        FAILURE OF THE BORROWER OR ANY OF ITS SUBSIDIARIES TO COMPLY WITH THE TERMS
        OF
        ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL
        REQUIREMENT, (iii)
        ANY
        INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT
        OF
        THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY
        INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH,
        (iv)
        ANY LOAN
        OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT
        LIMITATION, (a)
        ANY
        REFUSAL BY ANY ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER
        OF
        CREDIT ISSUED BY SUCH ISSUING BANK IF THE DOCUMENTS PRESENTED IN CONNECTION
        WITH
        SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT,
        OR
(b)
        THE
        PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE
        NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS
        PRESENTED IN CONNECTION THEREWITH, (v)
        ANY
        OTHER ASPECT OF THE LOAN DOCUMENTS, (vi)
        THE
        OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES BY THE BORROWER
        AND ITS SUBSIDIARIES, (vii)
        ANY
        ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED
        PURSUANT TO THE SECURITY INSTRUMENTS, (viii)
        ANY
        ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ITS SUBSIDIARIES OR ANY OF
        THEIR
        PROPERTIES, INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE,
        RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL
        OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES
        ON
        ANY OF THEIR PROPERTIES, (ix)
        THE
        BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY OF ITS SUBSIDIARIES WITH
        ANY
        ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY OF ITS SUBSIDIARIES,
        (x)
        THE PAST
        OWNERSHIP BY THE BORROWER OR ANY OF ITS SUBSIDIARIES OF ANY OF THEIR PROPERTIES
        OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY
        PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi)
        THE
        PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED
        RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL
        OF
        OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR AT ANY
        OF
        THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES
        OR
        ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM
        ANY
        PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES,
(xii)
        ANY
        ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS
        SUBSIDIARIES, OR (xiii)
        ANY
        OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN
        DOCUMENTS, OR (xiv)
        ANY
        ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING
        TO
        ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY
        AND
        REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
        SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
        NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
        WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION,
        ALL
        TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS
        OF
        ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
        FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY
        SHALL
        NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
        DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
        JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE
        GROSS
        NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

       

      
        
          
          

        

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

       

      
        
          
          

        

        
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      (d) To
        the
        extent permitted by applicable law, the Borrower shall not assert, and hereby
        waives, any claim against any Indemnitee, on any theory of liability, for
        special, indirect, consequential or punitive damages (as opposed to direct
        or
        actual damages) arising out of, in connection with, or as a result of, this
        Agreement, any other Loan Document or any agreement or instrument contemplated
        hereby or thereby, the Transactions, any Loan or Letter of Credit or the
        use of
        the proceeds thereof.

       

      (e) All
        amounts due under this Section
        12.03
        shall be
        payable within ten (10) Business Days of written demand therefor.

       

      Section
        12.04 Successors
        and Assigns.

       

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

       

      (b) (i)
        Subject
        to the conditions set forth in Section
        12.04(b)(ii),
        any
        Lender may assign to one or more assignees all or a portion of its rights
        and
        obligations under this Agreement (including all or a portion of its Commitment
        and the Loans at the time owing to it) with the prior written consent (such
        consent not to be unreasonably withheld) of:

       

      (A) the
        Borrower, provided that no consent of the Borrower shall be required for
        an
        assignment to a Lender or an Affiliate of a Lender or, if an Event of Default
        has occurred and is continuing, to any other assignee; and 

       

      (B) the
        Administrative Agent, provided that no consent of the Administrative Agent
        shall
        be required for an assignment to an assignee that is a Lender or any Affiliate
        of a Lender, immediately prior to giving effect to such assignment.

       

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

       

      
        
          
          

        

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

       

      (B) each
        partial assignment shall be made as an assignment of a proportionate part
        of all
        the assigning Lender’s rights and obligations under this Agreement;

       

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

       

      (D) the
        assignee, if it shall not be a Lender, shall deliver to the Administrative
        Agent
        an Administrative Questionnaire; and

       

      (E) any
        assignment of a given percentage of a Lender's Commitment shall cover the
        same
        percentage of such Lender's Working Capital Revolving Commitment, and vice
        versa.

       

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

       

      (iv) The
        Administrative Agent, acting for this purpose as an agent of the Borrower,
        shall
        maintain at one of its offices a copy of each Assignment and Assumption
        delivered to it and a register for the recordation of the names and addresses
        of
        the Lenders, and the Maximum Credit Amount of, and principal amount of the
        Loans
        and LC Disbursements owing to, each Lender pursuant to the terms hereof from
        time to time (the “Register”).
        The
        entries in the Register shall be conclusive, and the Borrower, the
        Administrative Agent, each Issuing Bank and the Lenders may treat each Person
        whose name is recorded in the Register pursuant to the terms hereof as a
        Lender
        hereunder for all purposes of this Agreement, notwithstanding notice to the
        contrary. The Register shall be available for inspection by the Borrower,
        any
        Issuing Bank and any Lender, at any reasonable time and from time to time
        upon
        reasonable prior notice.
        In
        connection with any changes to the Register, if necessary, the Administrative
        Agent will reflect the revisions on Annex I and forward a copy of such revised
        Annex I to the Borrower, each Issuing Bank and each Lender.

       

      
        
          
          

        

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

       

      (c) (i) Any
        Lender may, without the consent of the Borrower, the Administrative Agent
        or any
        Issuing Bank, sell participations to one or more banks or other entities
        (a
“Participant”)
        in all
        or a portion of such Lender’s rights and obligations under this Agreement
        (including all or a portion of its Commitment and the Loans owing to it);
        provided that (1) such Lender’s obligations under this Agreement shall
        remain unchanged, (2) such Lender shall remain solely responsible to the
        other parties hereto for the performance of such obligations and (3) the
        Borrower, the Administrative Agent, each Issuing Bank and the other Lenders
        shall continue to deal solely and directly with such Lender in connection
        with
        such Lender’s rights and obligations under this Agreement. Any agreement or
        instrument pursuant to which a Lender sells such a participation shall provide
        that such Lender shall retain the sole right to enforce this Agreement and
        to
        approve any amendment, modification or waiver of any provision of this
        Agreement; provided that such agreement or instrument may provide that such
        Lender will not, without the consent of the Participant, agree to any amendment,
        modification or waiver described in the proviso to Section
        12.02
        that
        affects such Participant. In addition such agreement must provide that the
        Participant be bound by the provisions of Section
        12.03.
        Subject
        to Section
        12.04(c)(ii),
        the
        Borrower agrees that each Participant shall be entitled to the benefits of
        Section
        5.01,
        Section
        5.02
        and
Section
        5.03
        to the
        same extent as if it were a Lender and had acquired its interest by assignment
        pursuant to Section
        12.04(b).
        To the
        extent permitted by law, each Participant also shall be entitled to the benefits
        of Section
        12.08
        as
        though it were a Lender, provided such Participant agrees to be subject to
        Section
        4.01(c)
        as
        though it were a Lender.

       

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

       

      (d) Any
        Lender may at any time pledge or assign a security interest in all or any
        portion of its rights under this Agreement to secure obligations of such
        Lender,
        including any pledge or assignment to secure obligations to a Federal Reserve
        Bank, and this Section
        12.04(d)
        shall
        not apply to any such pledge or assignment of a security interest; provided
        that
        no such pledge or assignment of a security interest shall release a Lender
        from
        any of its obligations hereunder or substitute any such pledgee or assignee
        for
        such Lender as a party hereto.

       

      
        
          
          

        

        
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      Section
        12.05 Survival;
        Revival; Reinstatement. 

       

      (a) All
        covenants, agreements, representations and warranties made by the Borrower
        herein and in the certificates or other instruments delivered in connection
        with
        or pursuant to this Agreement or any other Loan Document shall be considered
        to
        have been relied upon by the other parties hereto and shall survive the
        execution and delivery of this Agreement and the making of any Loans and
        issuance of any Letters of Credit, regardless of any investigation made by
        any
        such other party or on its behalf and notwithstanding that the Administrative
        Agent, any other Agent, any Issuing Bank or any Lender may have had notice
        or
        knowledge of any Default or incorrect representation or warranty at the time
        any
        credit is extended hereunder, and shall continue in full force and effect
        as
        long as the principal of or any accrued interest on any Loan or any fee or
        any
        other amount payable under this Agreement is outstanding and unpaid or any
        Letter of Credit is outstanding and so long as the Commitments have not expired
        or terminated. The provisions of Section
        5.01,
        Section
        5.02,
        Section
        5.03
        and
Section
        12.03
        and
ARTICLE
        XI
        shall
        survive and remain in full force and effect regardless of the consummation
        of
        the transactions contemplated hereby, the repayment of the Loans, the expiration
        or termination of the Letters of Credit and the Commitments or the termination
        of this Agreement, any other Loan Document or any provision hereof or
        thereof.

       

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

       

      Section
        12.06 Counterparts;
        Integration; Effectiveness. 

       

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

       

      (b) This
        Agreement, the other Loan Documents and any separate letter agreements with
        respect to fees payable to the Administrative Agent constitute the entire
        contract among the parties relating to the subject matter hereof and thereof
        and
        supersede any and all previous agreements and understandings, oral or written,
        relating to the subject matter hereof and thereof. THIS
        AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG
        THE
        PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
        CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
        UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

       

      
        
          
          

        

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

       

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

       

      Section
        12.08 Right
        of Setoff.
        If
        an
        Event of Default shall have occurred and be continuing, each Lender and each
        of
        its Affiliates is hereby authorized at any time and from time to time, to
        the
        fullest extent permitted by law, to set off and apply any and all deposits
        (general or special, time or demand, provisional or final) at any time held
        and
        other obligations (of whatsoever kind, including, without limitations
        obligations under Swap Agreements) at any time owing by such Lender or Affiliate
        to or for the credit or the account of the Borrower or any of its Subsidiaries
        against any of and all the obligations of the Borrower or any of its
        Subsidiaries owed to such Lender now or hereafter existing under this Agreement
        or any other Loan Document, irrespective of whether or not such Lender shall
        have made any demand under this Agreement or any other Loan Document and
        although such obligations may be unmatured. The rights of each Lender under
        this
Section
        12.08
        are in
        addition to other rights and remedies (including other rights of setoff)
        which
        such Lender or its Affiliates may have.

       

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

       

      (a) THIS
        AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
        WITH,
        THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL
        LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE
        INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
        LOCATED. CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN
        REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT
        APPLY
        TO THIS AGREEMENT OR THE NOTES.

       

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

       

      
        
          
          

        

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

       

      (d) EACH
        PARTY HEREBY (i)
        IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
        LAW,
        TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
        OR
        ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii)
        IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
        IT
        MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
        PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION
        TO,
        ACTUAL DAMAGES; (iii)
        CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL
        FOR
        ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
        SUCH
        PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
        WAIVERS, AND (iv)
        ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN
        DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
        OTHER
        THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
12.09.

       

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

       

      
        
          
          

        

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

       

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

       

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

       

      Section
        12.12 Interest
        Rate
        Limitation.
        It
        is the
        intention of the parties hereto that each Lender shall conform strictly to
        usury
        laws applicable to it. Accordingly, if the transactions contemplated hereby
        would be usurious as to any Lender under laws applicable to it (including
        the
        laws of the United States of America and the State of Texas or any other
        jurisdiction whose laws may be mandatorily applicable to such Lender
        notwithstanding the other provisions of this Agreement), then, in that event,
        notwithstanding anything to the contrary in any of the Loan Documents or
        any
        agreement entered into in connection with or as security for the Notes, it
        is
        agreed as follows: (a)
        the
        aggregate of all consideration which constitutes interest under law applicable
        to any Lender that is contracted for, taken, reserved, charged or received
        by
        such Lender under any of the Loan Documents or agreements or otherwise in
        connection with the Notes shall under no circumstances exceed the maximum
        amount
        allowed by such applicable law, and any excess shall be canceled automatically
        and if theretofore paid shall be credited by such Lender on the principal
        amount
        of the Indebtedness (or, to the extent that the principal amount of the
        Indebtedness shall have been or would thereby be paid in full, refunded by
        such
        Lender to the Borrower); and (b)
        in the
        event that the maturity of the Notes is accelerated by reason of an election
        of
        the holder thereof resulting from any Event of Default under this Agreement
        or
        otherwise, or in the event of any required or permitted prepayment, then
        such
        consideration that constitutes interest under law applicable to any Lender
        may
        never include more than the maximum amount allowed by such applicable law,
        and
        excess interest, if any, provided for in this Agreement or otherwise shall
        be
        canceled automatically by such Lender as of the date of such acceleration
        or
        prepayment and, if theretofore paid, shall be credited by such Lender on
        the
        principal amount of the Indebtedness (or, to the extent that the principal
        amount of the Indebtedness shall have been or would thereby be paid in full,
        refunded by such Lender to the Borrower). All sums paid or agreed to be paid
        to
        any Lender for the use, forbearance or detention of sums due hereunder shall,
        to
        the extent permitted by law applicable to such Lender, be amortized, prorated,
        allocated and spread throughout the stated term of the Loans evidenced by
        the
        Notes until payment in full so that the rate or amount of interest on account
        of
        any Loans hereunder does not exceed the maximum amount allowed by such
        applicable law. If at any time and from time to time (i)
        the
        amount of interest payable to any Lender on any date shall be computed at
        the
        Highest Lawful Rate applicable to such Lender pursuant to this Section
        12.12
        and
        (ii)
        in
        respect of any subsequent interest computation period the amount of interest
        otherwise payable to such Lender would be less than the amount of interest
        payable to such Lender computed at the Highest Lawful Rate applicable to
        such
        Lender, then the amount of interest payable to such Lender in respect of
        such
        subsequent interest computation period shall continue to be computed at the
        Highest Lawful Rate applicable to such Lender until the total amount of interest
        payable to such Lender shall equal the total amount of interest which would
        have
        been payable to such Lender if the total amount of interest had been computed
        without giving effect to this Section
        12.12.
        To the
        extent that Chapter 303 of the Texas Finance Code is relevant for the purpose
        of
        determining the Highest Lawful Rate applicable to a Lender, such Lender elects
        to determine the applicable rate ceiling under such Chapter by the weekly
        ceiling from time to time in effect. Chapter 346 of the Texas Finance Code
        does
        not apply to the Borrower’s obligations hereunder.

       

      
        
          
          

        

        
          96

          
            

          

        

        
          
          

        

      

       

      Section
        12.13 EXCULPATION
        PROVISIONS.
        EACH
        OF
        THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT
        AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND
        KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT
        IT
        HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE
        AND
        KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT
        HAS
        BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
        NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
        DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
        AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN
        OF
        THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
        ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
        THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
        AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY
        OF
        ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
        ON THE
        BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT
        THE
        PROVISION IS NOT “CONSPICUOUS.”

       

      
        
          
          

        

        
          97

          
            

          

        

        
          
          

        

      

       

      Section
        12.14 Collateral
        Matters; Swap Agreements.
        The
        benefit of the Security Instruments and of the provisions of this Agreement
        relating to any collateral securing the Indebtedness shall also extend to
        and be
        available to those Lenders or their Affiliates which are counterparties to
        any
        Swap Agreement with the Borrower or any of its Subsidiaries on a pro
        rata
        basis in
        respect of any obligations of the Borrower or any of its Subsidiaries which
        arise under any such Swap Agreement while such Person or its Affiliate is
        a
        Lender, but only while such Person or its Affiliate is a Lender, including
        any
        Swap Agreements between such Persons in existence prior to the date hereof.
        No
        Lender or any Affiliate of a Lender shall have any voting rights under any
        Loan
        Document as a result of the existence of obligations owed to it under any
        such
        Swap Agreements.

       

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

       

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

       

      Section
        12.17 General
        Partner Liability.
        The
        Lenders agree for themselves and their respective successors and assigns,
        including any subsequent holder of any Note, no claim arising against the
        Borrower or the Parent under any Loan Document shall be asserted against
        the
        General Partner or EV Management (or any member, manager, officer, director,
        partner, employee, or agent of the General Partner or EV Management) and
        no
        judgment, order or execution entered in any suit, action or proceeding, whether
        legal or equitable, on this Agreement, such Note or any of the other Loan
        Documents shall be obtained or enforced against the General Partner or EV
        Management or their respective assets for the purpose of obtaining satisfaction
        and payment of such Note, the Indebtedness evidenced thereby or any claims
        arising thereunder or under this Agreement or any other Loan Document, any
        right
        to proceed against the General Partner or EV Management (or any member, manager,
        officer, director, partner, employee, or agent of the General Partner or
        EV
        Management) individually or its respective assets being hereby expressly
        waived,
        renounced and remitted by the Lenders for themselves and their respective
        successors and assigns. Nothing in this Section
        12.17,
        however, shall be construed so as to prevent the Administrative Agent, any
        Lender or any other holder of any Note from commencing any action, suit or
        proceeding with respect to or causing legal papers to be served upon the
        General
        Partner or EV Management for the purpose of (i) obtaining jurisdiction over
        the
        Borrower or the Parent or (ii) obtaining judgment, order or execution against
        the General Partner or EV Management arising out of any fraud or intentional
        misrepresentation by the General Partner or EV Management in connection with
        the
        Loan Documents or of recovery of moneys received by the General Partner or
        EV
        Management in violation of the terms of this Agreement.

       

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        98

        
          

        

      

      
        
        

      

    

     

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

     

    

    
      	
              BORROWER:

            	
              EV
                PROPERTIES, L.P.

            
	 	 
	 	
              By:
                EV Properties GP, LLC, its general partner

            
	 	 
	 	
              By:
                EV Energy Partners, L.P., its sole member

            
	 	 
	 	
              By:
                EV Energy GP, L.P., its general partner

            
	 	 
	 	
              By:
                EV Management, L.L.C., its general partner

            
	 	 
	 	
              By:

            	
              /s/
                Michael E. Mercer

            
	 	 	
              Michael
                E. Mercer

            
	 	 	
              Senior
                Vice President and Chief

            
	 	 	
              Financial
                Officer

            
	 	 	 
	
              PARENT:

            	
              EV
                ENERGY PARTNERS, L.P.

            
	 	
              By:
                EV Energy GP, L.P., its general partner

            
	 	 
	 	
              By:
                EV Management, L.L.C., its general partner

            
	 	 
	 	
              By:

            	
              /s/
                Michael E. Mercer

            
	 	 	
              Michael
                E. Mercer

            
	 	 	
              Senior
                Vice President and Chief

            
	 	 	
              Financial
                Officer

            

    

    

    Signature
      Page

    Credit
      Agreement

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    
      	
              ADMINISTRATIVE
                AGENT:

            	
              JPMORGAN
                CHASE BANK, N.A., as

            
	 	
              Administrative
                Agent

            
	 	 
	 	
              By:

            	
              /s/
                Jo Linda Papadakis

            
	 	
              Name:

            	
              Jo
                Linda Papadakis

            
	 	
              Title:

            	
              Vice
                President

            

    

    

    Signature
      Page

    Credit
      Agreement

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	
              LENDERS:

            	
              JPMORGAN
                CHASE BANK, N.A.,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Jo Linda Papadakis

            
	 	
              Name:

            	
              Jo
                Linda Papadakis

            
	 	
              Title:

            	
              Vice
                President

            

    

    

    Signature
      Page

    Credit
      Agreement

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    

    
      	
              LENDERS:

            	
              UNION
                BANK OF CALIFORNIA, N.A.,
                as
                a

            
	 	
              Lender

            
	 	 
	 	
              By:

            	
              /s/
                Daniel A. Davis

            
	 	
              Name:

            	
              Daniel
                A. Davis

            
	 	
              Title:

            	
              Vice
                President

            

    

    

    Signature
      Page

    Credit
      Agreement

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    
      	
              LENDERS:

            	
              WACHOVIA
                BANK, NATIONAL

            
	 	
              ASSOCIATION,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Paul Pritchett

            
	 	
              Name:

            	
              Paul
                Pritchett

            
	 	
              Title:

            	
              Vice
                President

            

    

    

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      Page

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      Agreement

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
              LENDERS:

            	
              COMPASS
                BANK,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Dorothy Marchand

            
	 	
              Name:

            	
              Dorothy
                Marchand

            
	 	
              Title:

            	
              Senior
                Vice President

            

    

    

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      Agreement

    

    
      
        
        

      

      
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              LENDERS:

            	
              BNP
                PARIBAS,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Robert Long

            
	 	
              Name:

            	
              Robert
                Long

            
	 	
              Title:

            	
              Vice
                President

            
	 	 	 
	 	
              By:

            	
              /s/
                Polly Schott

            
	 	
              Name:

            	
              Polly
                Schott

            
	 	
              Title:

            	
              Vice
                President

            

    

    

    Signature
      Page

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      Agreement

    
      
        
        

      

      
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              LENDERS:

            	
              COMERICA
                BANK,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Juli Bieser

            
	 	
              Name:

            	
              Juli
                Bieser

            
	 	
              Title:

            	
              Senior
                Vice President

            

    

    

    Signature
      Page

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      Agreement

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	
              LENDERS:

            	
              WELLS
                FARGO BANK, N.A.,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Scott Hodges

            
	 	
              Name:

            	
              Scott
                Hodges

            
	 	
              Title:

            	
              Vice
                President

            

    

    

    Signature
      Page

    Credit
      Agreement

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      	
              LENDERS:

            	
              CITIBANK,
                N.A.,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Thomas Bedavides

            
	 	
              Name:

            	
              Thomas
                Bedavides

            
	 	
              Title:

            	
              Vice
                President

            

    

    

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      Page

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      Agreement

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      	
              LENDER:

            	
              THE
                BANK OF NOVA SCOTIA,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                David G. Mills

            
	 	
              Name:

            	
              
                David
                  G. Mills

              

            
	 	
              Title:

            	
              Director

            

    

    

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      Page

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      Agreement

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	
              LENDERS:

            	
              ROYAL
                BANK OF CANADA,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Linda M. Stephens

            
	 	
              Name:

            	
              Linda
                M. Stephens

            
	 	
              Title:

            	
              Authorized
                Signatory

            

    

    

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      Page

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      Agreement

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
              LENDERS:

            	
              AMEGY
                BANK NATIONAL ASSOCIATION,

            
	 	
              as
                a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Chris R. Petersen

            
	 	
              Name:

            	
              Chris
                R. Petersen

            
	 	
              Title:

            	
              Banking
                Officer

            

    

    

    Signature
      Page

    Credit
      Agreement

    

    
      
        
        

      

      
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              LENDERS:

            	
              CREDIT
                SUISSE, CAYMAN ISLANDS

            
	 	
              BRANCH,
                as a Lender

            
	 	 
	 	
              By:

            	
              /s/
                Vanessa Gomez  /s/
                James Neira

            
	 	
              Name:

            	
              Vanessa
                Gomez James Neira

            
	 	
              Title:

            	
              Vice
                President Associate

            

    

    

    Signature
      Page

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      Agreement

    

    
      
        
        

      

      
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    SCHEDULE
      7.20

    Credit
      Agreement

     

    
      
        
        

      

      
        15

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