Document:

exv10w23

 

Exhibit 10.23

REVOLVING CREDIT AGREEMENT DATED AS OF DECEMBER 18,

2006 AMONG ATLAS ENERGY OPERATING COMPANY, LLC, AS

BORROWER; AER PIPELINE CONSTRUCTION, INC., AIC, LLC,

ATLAS AMERICA, LLC, ATLAS ENERGY OHIO, LLC, ATLAS ENERGY

RESOURCES, LLC, ATLAS NOBLE, LLC, ATLAS RESOURCES, LLC,

REI-NY, LLC, RESOURCE ENERGY, LLC, RESOURCE WELL

SERVICES, LLC, AND VIKING RESOURCES LLC AS GUARANTORS;

WACHOVIA BANK, NATIONAL ASSOCIATION AS ADMINISTRATIVE

AGENT AND ISSUING BANK; BANK OF AMERICA, N.A. AND

COMPASS BANK AS CO-SYNDICATION AGENTS; BANK OF

OKLAHOMA, N.A., U.S. BANK, NATIONAL ASSOCIATION AND BNP

PARIBAS AS CO-DOCUMENTATION AGENTS AND THE LENDERS

SIGNATORY HERETO $250,000,000 SENIOR SECURED REVOLVING

CREDIT FACILITY WACHOVIA CAPITAL MARKETS, LLC AS LEAD

ARRANGER

 

 

EXECUTION COPY

REVOLVING CREDIT AGREEMENT

Dated as of December 18, 2006

Among

ATLAS ENERGY OPERATING COMPANY, LLC,

as Borrower

AER PIPELINE CONSTRUCTION, INC.

AIC, LLC,

ATLAS AMERICA, LLC,

ATLAS ENERGY OHIO, LLC,

ATLAS ENERGY RESOURCES, LLC,

ATLAS NOBLE, LLC,

ATLAS RESOURCES, LLC,

REI-NY, LLC,

RESOURCE ENERGY, LLC,

RESOURCE WELL SERVICES, LLC,

and

VIKING RESOURCES LLC

as Guarantors

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Issuing Bank

BANK OF AMERICA, N.A.

and

COMPASS BANK

as Co-Syndication Agents

BANK OF OKLAHOMA, N.A.,

U.S. BANK, NATIONAL ASSOCIATION

and

BNP PARIBAS

as Co-Documentation Agents

and

THE LENDERS SIGNATORY HERETO

$250,000,000 Senior Secured Revolving Credit Facility

WACHOVIA CAPITAL MARKETS, LLC

as Lead Arranger

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I Definitions and Accounting Matters	 	 	1	 
	 
	 	 	 	 	 	 
	Section 1.01

	 	Terms Defined Above
	 	 	1	 
	Section 1.02

	 	Certain Defined Terms
	 	 	1	 
	Section 1.03

	 	Accounting Terms and Determinations
	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE II Commitments	 	 	15	 
	 
	 	 	 	 	 	 
	Section 2.01

	 	Loans and Letters of Credit
	 	 	15	 
	Section 2.02

	 	Borrowings, Continuations and Conversions, Letters of Credit
	 	 	15	 
	Section 2.03

	 	Commitments; Changes of Commitments
	 	 	17	 
	Section 2.04

	 	Fees
	 	 	19	 
	Section 2.05

	 	Several Obligations
	 	 	19	 
	Section 2.06

	 	Notes
	 	 	20	 
	Section 2.07

	 	Prepayments
	 	 	20	 
	Section 2.08

	 	Borrowing Base
	 	 	20	 
	Section 2.09

	 	Assumption of Risks
	 	 	22	 
	Section 2.10

	 	Obligation to Reimburse and to Prepay
	 	 	22	 
	Section 2.11

	 	Lending Offices
	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE III Payments of Principal and Interest	 	 	24	 
	 
	 	 	 	 	 	 
	Section 3.01

	 	Repayment of Loans
	 	 	24	 
	Section 3.02

	 	Interest
	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE IV Payments; Pro Rata Treatment; Computations; Etc.	 	 	25	 
	 
	 	 	 	 	 	 
	Section 4.01

	 	Payments
	 	 	25	 
	Section 4.02

	 	Pro Rata Treatment
	 	 	25	 
	Section 4.03

	 	Computations
	 	 	25	 
	Section 4.04

	 	Non-receipt of Funds by the Administrative Agent
	 	 	25	 
	Section 4.05

	 	Set-off, Sharing of Payments, Etc.
	 	 	26	 
	Section 4.06

	 	Taxes
	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE V Capital Adequacy	 	 	29	 
	 
	 	 	 	 	 	 
	Section 5.01

	 	Additional Costs
	 	 	29	 
	Section 5.02

	 	Limitation on LIBOR Loans
	 	 	30	 
	Section 5.03

	 	Illegality
	 	 	31	 
	Section 5.04

	 	Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03
	 	 	31	 
	Section 5.05

	 	Compensation
	 	 	31	 
	 
	 	 	 	 	 	 
	ARTICLE VI Conditions Precedent	 	 	32	 
	 
	 	 	 	 	 	 
	Section 6.01

	 	Initial Funding
	 	 	32	 
	Section 6.02

	 	Initial and Subsequent Loans and Letters of Credit
	 	 	33	 

 i 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 6.03

	 	Conditions Precedent for the Benefit of Lenders
	 	 	34	 
	Section 6.04

	 	No Waiver
	 	 	34	 
	 
	 	 	 	 	 	 
	ARTICLE VII Representations and Warranties	 	 	34	 
	 
	 	 	 	 	 	 
	Section 7.01

	 	Corporate Existence
	 	 	34	 
	Section 7.02

	 	Financial Condition
	 	 	34	 
	Section 7.03

	 	Litigation
	 	 	35	 
	Section 7.04

	 	No Breach
	 	 	35	 
	Section 7.05

	 	Authority
	 	 	35	 
	Section 7.06

	 	Approvals
	 	 	35	 
	Section 7.07

	 	Use of Loans
	 	 	35	 
	Section 7.08

	 	ERISA
	 	 	35	 
	Section 7.09

	 	Taxes
	 	 	36	 
	Section 7.10

	 	Titles, etc.
	 	 	36	 
	Section 7.11

	 	No Material Misstatements
	 	 	37	 
	Section 7.12

	 	Investment Company Act
	 	 	37	 
	Section 7.13

	 	[Intentionally Deleted]
	 	 	37	 
	Section 7.14

	 	Partnership Interests
	 	 	37	 
	Section 7.15

	 	Capitalization and Subsidiaries
	 	 	38	 
	Section 7.16

	 	Location of Business and Offices
	 	 	38	 
	Section 7.17

	 	Defaults
	 	 	38	 
	Section 7.18

	 	Environmental Matters
	 	 	38	 
	Section 7.19

	 	Compliance with the Law
	 	 	39	 
	Section 7.20

	 	Insurance
	 	 	39	 
	Section 7.21

	 	Hedging Agreements
	 	 	39	 
	Section 7.22

	 	Restriction on Liens
	 	 	40	 
	Section 7.23

	 	Material Agreements
	 	 	40	 
	Section 7.24

	 	Gas Imbalances
	 	 	40	 
	Section 7.25

	 	Relationship of Obligors
	 	 	40	 
	Section 7.26

	 	Solvency
	 	 	40	 
	 
	 	 	 	 	 	 
	ARTICLE VIII Affirmative Covenants	 	 	41	 
	 
	 	 	 	 	 	 
	Section 8.01

	 	Reporting Requirements
	 	 	41	 
	Section 8.02

	 	Litigation
	 	 	42	 
	Section 8.03

	 	Maintenance, Etc.
	 	 	43	 
	Section 8.04

	 	Environmental Matters
	 	 	44	 
	Section 8.05

	 	Further Assurances
	 	 	44	 
	Section 8.06

	 	Performance of Obligations
	 	 	44	 
	Section 8.07

	 	Engineering Reports
	 	 	44	 
	Section 8.08

	 	Title Curative
	 	 	45	 
	Section 8.09

	 	Additional Collateral
	 	 	45	 
	Section 8.10

	 	ERISA Information and Compliance
	 	 	48	 
	 
	 	 	 	 	 	 
	ARTICLE IX Negative Covenants	 	 	48	 
	 
	 	 	 	 	 	 
	Section 9.01

	 	Debt
	 	 	48	 
	Section 9.02

	 	Hedging Agreements
	 	 	49	 
	Section 9.03

	 	Liens
	 	 	50	 

 ii 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 9.04

	 	Investments, Loans and Advances
	 	 	50	 
	Section 9.05

	 	Dividends, Distributions and Redemptions
	 	 	51	 
	Section 9.06

	 	Sales and Leasebacks
	 	 	51	 
	Section 9.07

	 	Nature of Business
	 	 	51	 
	Section 9.08

	 	Limitation on Leases
	 	 	51	 
	Section 9.09

	 	Mergers, Etc.
	 	 	51	 
	Section 9.10

	 	Proceeds of Notes and Letters of Credit
	 	 	52	 
	Section 9.11

	 	ERISA Compliance
	 	 	52	 
	Section 9.12

	 	Sale or Discount of Receivables
	 	 	53	 
	Section 9.13

	 	Current Ratio
	 	 	53	 
	Section 9.14

	 	Funded Debt to EBITDA
	 	 	53	 
	Section 9.15

	 	Consolidated Interest Coverage Ratio
	 	 	53	 
	Section 9.16

	 	Sale of Oil and Gas Properties
	 	 	53	 
	Section 9.17

	 	Environmental Matters
	 	 	53	 
	Section 9.18

	 	Transactions with Affiliates
	 	 	54	 
	Section 9.19

	 	Subsidiaries
	 	 	54	 
	Section 9.20

	 	Negative Pledge Agreements
	 	 	54	 
	Section 9.21

	 	Gas Imbalances, Take-or-Pay or Other Prepayments
	 	 	54	 
	Section 9.22

	 	Accounting Changes
	 	 	54	 
	 
	 	 	 	 	 	 
	ARTICLE X Events of Default; Remedies	 	 	54	 
	 
	 	 	 	 	 	 
	Section 10.01

	 	Events of Default
	 	 	54	 
	Section 10.02

	 	Remedies
	 	 	56	 
	Section 10.03

	 	Present Assignment of Interests
	 	 	56	 
	 
	 	 	 	 	 	 
	ARTICLE XI The Administrative Agent	 	 	57	 
	 
	 	 	 	 	 	 
	Section 11.01

	 	Appointment, Powers and Immunities
	 	 	57	 
	Section 11.02

	 	Reliance by Administrative Agent
	 	 	58	 
	Section 11.03

	 	Defaults
	 	 	58	 
	Section 11.04

	 	Rights as a Lender
	 	 	58	 
	Section 11.05

	 	Indemnification
	 	 	58	 
	Section 11.06

	 	Non-Reliance on Administrative Agent and other Lenders
	 	 	59	 
	Section 11.07

	 	Action by Administrative Agent
	 	 	59	 
	Section 11.08

	 	Resignation or Removal of Administrative Agent
	 	 	59	 
	 
	 	 	 	 	 	 
	ARTICLE XII Miscellaneous	 	 	60	 
	 
	 	 	 	 	 	 
	Section 12.01

	 	Waiver
	 	 	60	 
	Section 12.02

	 	Notices
	 	 	60	 
	Section 12.03

	 	Payment of Expenses, Indemnities, etc.
	 	 	60	 
	Section 12.04

	 	Amendments, Etc.
	 	 	62	 
	Section 12.05

	 	Successors and Assigns
	 	 	62	 
	Section 12.06

	 	Assignments and Participations
	 	 	63	 
	Section 12.07

	 	Invalidity
	 	 	64	 
	Section 12.08

	 	Counterparts
	 	 	64	 
	Section 12.09

	 	References, Use of Word “Including”
	 	 	64	 
	Section 12.10

	 	Survival
	 	 	64	 
	Section 12.11

	 	Captions
	 	 	64	 

 iii 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 12.12

	 	NO ORAL AGREEMENTS
	 	 	64	 
	Section 12.13

	 	GOVERNING LAW, SUBMISSION TO JURISDICTION
	 	 	64	 
	Section 12.14

	 	Interest
	 	 	66	 
	Section 12.15

	 	Confidentiality
	 	 	66	 
	Section 12.16

	 	USA Patriot Act Notice
	 	 	67	 

EXHIBITS

	 	 	 	 	 
	Exhibit A	 	Form of Note
	Exhibit B

	 	 	 	Form of Borrowing, Continuation and Conversion Request
	Exhibit C

	 	 	 	Form of Compliance Certificate
	Exhibit D

	 	 	 	Security Instruments
	Exhibit E

	 	 	 	Form of Assignment Agreement
	Exhibit F

	 	 	 	Form of Letter in Lieu
	Exhibit G

	 	 	 	Form of Guaranty
	Exhibit H

	 	 	 	Form of Security Agreement
	Exhibit I

	 	 	 	Form of Hedging Compliance Report

SCHEDULES

	 	 	 
	Schedule 7.03

	 	Litigation
	Schedule 7.10

	 	Ownership Report
	Schedule 7.14

	 	Partnership Interests
	Schedule 7.15

	 	Subsidiary Interests
	Schedule 7.20

	 	Insurance
	Schedule 7.21

	 	Hedging Agreements
	Schedule 7.23

	 	Material Agreements
	Schedule 7.24

	 	Gas Imbalance Status for Obligors and Subsidiaries
	Schedule 9.01

	 	Debt

 iv 

 

 

REVOLVING CREDIT AGREEMENT

THIS REVOLVING CREDIT AGREEMENT dated as of December 18, 2006, among ATLAS ENERGY
OPERATING COMPANY, LLC, a Delaware limited liability company (the “Borrower”); AER PIPELINE
CONSTRUCTION, INC., a Delaware corporation (“AER Construction”); AIC, LLC, a Delaware limited
liability company (“AIC”); ATLAS AMERICA, LLC, a Pennsylvania limited liability company (“Atlas
PA”); ATLAS ENERGY RESOURCES, LLC, a Delaware limited liability company (“AER”); ATLAS ENERGY OHIO,
LLC, an Ohio limited liability company (“Atlas Ohio”); ATLAS NOBLE, LLC, a Delaware limited
liability company (“Atlas Noble”); ATLAS RESOURCES, LLC, a Pennsylvania limited liability company
(“Atlas Resources”); REI-NY, LLC, a Delaware limited liability company (“REI”); RESOURCE ENERGY,
LLC, a Delaware limited liability company (“Resource Energy”); RESOURCE WELL SERVICES, LLC, a
Delaware limited liability company (“RWS”); and VIKING RESOURCES LLC, a Pennsylvania limited
liability company (“Viking”) (AER Construction, AIC, Atlas PA, AER, Atlas Ohio, Atlas Noble, Atlas
Resources, REI, Resource Energy, RWS, and Viking collectively, the “Guarantors”; the Borrower and
the Guarantors collectively, the “Obligors”); each of the lenders that is a signatory hereto or
which becomes a signatory hereto as provided in Section 12.06 (individually, together with its
successors and assigns, a “Lender” and, collectively, the “Lenders”); WACHOVIA BANK, NATIONAL
ASSOCIATION, as administrative agent for the Lenders (in such capacity, together with its
successors in such capacity the “Administrative Agent”), BANK OF AMERICA, N.A., AND COMPASS BANK,
as co-syndication agents, BANK OF OKLAHOMA, N.A., U.S. BANK, NATIONAL ASSOCIATION, and BNP PARIBAS,
as co-documentation agents, and WACHOVIA BANK, NATIONAL ASSOCIATION, as issuing bank (in such
capacity, together with its successors in such capacity, the “Issuing Bank”).

The Borrower has requested that the Lenders provide a revolving credit facility, and the
Lenders are willing to do so on the terms and conditions set forth herein.

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

ARTICLE I

Definitions and Accounting Matters

Section 1.01 Terms Defined Above. As used in this Agreement, the terms
“Administrative Agent,” “AER,” “AER Construction,” “AIC,” “Atlas Noble,” “Atlas Ohio,” “Atlas PA,”
“Atlas Resources,” “Borrower,” “Guarantors,” “Issuing Bank,” “Lender,” “Lenders,” “Obligors,”
“REI,” “Resource Energy,” “RWS,” and “Viking” shall have the meanings indicated above.

Section 1.02 Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Article I or in other provisions of this
Agreement in the singular to have equivalent meanings when used in the plural and vice versa):

AAI means Atlas America, Inc., a Delaware corporation

AAI Credit Agreement means the Amended and Restated Credit Agreement dated as of April
27, 2006, among AAI, as borrower, the lenders party thereto, and Wachovia Bank, National
Association, as administrative agent, as amended prior to the date hereof.

Additional Costs shall have the meaning assigned such term in Section 5.01(a).

 

 

Adjusted LIBOR shall mean, with respect to any LIBOR Loan, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be
equal to the quotient of (i) LIBOR for such Loan for the Interest Period for such Loan divided by
(ii) 1 minus the Reserve Requirement for such Loan for such Interest Period.

AEM shall mean Atlas Energy Management, Inc., a Delaware corporation.

Affected Loans shall have the meaning assigned such term in Section 5.04.

Affiliate of any Person shall mean (i) any Person directly or indirectly controlled by,
controlling or under common control with such first Person, (ii) any director or officer of such
first Person or of any Person referred to in clause (i) above and (iii) if any Person in clause (i)
above is an individual, any member of the immediate family (including parents, spouse and children)
of such individual and any trust whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is controlled by any such member or trust. For
purposes of this definition, any Person which owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed to “control” (including, with
its correlative meanings, “controlled by” and “under common control with”) such corporation or
other Person.

Agreement shall mean this Credit Agreement, as the same may from time to time be further
amended or supplemented.

Aggregate Maximum Revolving Credit Amounts at any time shall equal the sum of the Maximum
Revolving Credit Amounts of the Lenders (initially, $250,000,000), as the same may be reduced
pursuant to Section 2.03(d).

Aggregate Revolving Credit Commitments at any time shall equal the amount calculated in
accordance with Section 2.03.

Aggregate Revolving Credit Commitments Utilization shall mean at any time, an amount
equal to the quotient of (i) the aggregate principal amount of Loans outstanding plus LC Exposure,
divided by (ii) the Aggregate Revolving Credit Commitments.

Applicable Commitment Fee Rate shall mean the per annum percentage set forth at the
appropriate intersection in the table shown below, based on the Aggregate Revolving Credit
Commitments Utilization as in effect from time to time:

	 	 	 	 	 
	 	 	Applicable
	 	 	Commitment
	Aggregate Revolving Credit Commitments Utilization	 	Fee Rate
	Less than or equal to 25%

	 	 	0.25	%
	Greater than 25%

	 	 	0.375	%

Each change in the Applicable Commitment Fee Rate resulting from a change in the Aggregate
Revolving Credit Commitments Utilization shall take effect on the day such change in the Aggregate
Revolving Credit Commitments Utilization occurs.

2

 

Applicable Lending Office shall mean, for each Lender and for each Type of Loan, the
lending office of such Lender (or an Affiliate of such Lender) designated for such Type of Loan on
the signature pages hereof or such other offices of such Lender (or of an Affiliate of such Lender)
as such Lender may from time to time specify to the Administrative Agent and the Borrower as the
office by which its Loans of such Type are to be made and maintained.

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

	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margin
	 	 	 	 	 	 	Base Rate
	Borrowing Base Utilization	 	LIBOR Loans	 	Loans
	Less than or equal to 25%
	 	 	1.00      	%	 	 	0.00      	%
	Greater than 25%,
	 	 	 	 	 	 	 	 
	but less than or equal to 50%
	 	 	1.25      	%	 	 	0.25      	%
	Greater than 50%,
	 	 	 	 	 	 	 	 
	but less than or equal to 75%
	 	 	1.50      	%	 	 	0.50      	%
	Greater than 75%
	 	 	1.75      	%	 	 	0.75      	%

Each change in the Applicable Margin resulting from a change in the Borrowing Base Utilization
shall take effect on the day such change in the Borrowing Base Utilization occurs.

Assignment shall have the meaning assigned such term in Section 12.06(b).

Atlas America E&P Operations shall have the meaning assigned such term in the
Registration Statement.

Base Rate shall mean, with respect to any Base Rate Loan, for any day, a rate per annum
equal to the higher of (i) the Federal Funds Rate for any such day plus
1 / 2  of 1% or (ii) the Prime Rate for such day. Each change
in any interest rate provided for herein based upon the Base Rate resulting from a change in the
Base Rate shall take effect at the time of such change in the Base Rate.

Base Rate Loans shall mean Loans that bear interest at rates based upon the Base Rate.

Borrowing Base shall mean at any time an amount equal to the amount determined in
accordance with Section 2.08.

Borrowing Base Deficiency shall mean, and occur at any time when, the amount by which the
aggregate outstanding principal amount of the Loans plus the LC Exposure exceeds the Borrowing
Base, whether as the result of a redetermination, a scheduled reduction, or otherwise.

Borrowing Base Period shall mean (i) the period from the Closing Date until March 14,
2007, and (ii) each six-month period commencing March 15 and September 15 thereafter.

Borrowing Base Utilization shall mean at any time, an amount equal to the quotient of (i)
the aggregate principal amount of Loans outstanding plus LC Exposure, divided by (ii) the Borrowing
Base.

3

 

Business Day shall mean any day other than a day on which commercial banks are authorized or
required to close in Texas or North Carolina and, where such term is used in the definition of
"Quarterly Date” or if such day relates to a borrowing or continuation of, a payment or prepayment
of principal of or interest on, or a conversion of or into, or the Interest Period for, a LIBOR
Loan or a notice by the Borrower with respect to any such borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.

Change of Control means the occurrence of any of the following events: (a) after the
Closing Date, any Person or two or more Persons acting as a group shall acquire beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act, and including holding proxies to vote for the election of directors other than
proxies held by AER’s management or their designees to be voted in favor of persons nominated by
AER’s Board of Directors) of 35% or more of the outstanding voting units of AER, measured by voting
power (including both common units and any preferred units entitling the holders thereof to vote
with the holders of common units in elections for directors of AER), (b) the Borrower shall fail
beneficially to own, directly or indirectly, 85% of the outstanding shares of voting capital stock
of any Wholly Owned Subsidiary now or hereafter existing that is a Guarantor, (c) AER shall fail
beneficially to own, directly or indirectly, 100% of the membership interests of Borrower, or (d)
AAI and/or one or more of its directly or indirectly wholly-owned subsidiaries ceases to own at
least 51% of the equity of AEM.

Closing Date shall mean the date upon which the conditions precedent for initial funding
set forth in Section 6.01 are satisfied.

Code shall mean the Internal Revenue Code of 1986, as amended from time to time and any
successor statute.

Commitment shall mean for any Lender, its Revolving Credit Commitment.

Consolidated Interest Coverage Ratio shall mean the ratio of (i) EBITDA for such Person
and its Consolidated Subsidiaries on a consolidated basis for the fiscal quarter ending on such
date to (ii) cash interest payments made for such Person and its Consolidated Subsidiaries on a
consolidated basis for such fiscal quarter.

Consolidated Net Income shall mean with respect to such Person and its Consolidated
Subsidiaries, for any period, the aggregate of the net income (or loss) of such Person and its
Consolidated Subsidiaries after allowances for taxes for such period, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded from such net income (to the
extent otherwise included therein) the following: (i) the net income of any other entity in which
such Person or any Consolidated Subsidiary has an interest (which interest does not cause the net
income of such other entity to be consolidated with the net income of such Person and its
Consolidated Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends
or distributions actually paid in such period by such other entity to such Person or to a
Consolidated Subsidiary, as the case may be; (ii) the net income (but not loss) of any Consolidated
Subsidiary to the extent that the declaration or payment of dividends or similar distributions or
transfers or loans by that Consolidated Subsidiary is not at the time permitted by operation of the
terms of its charter or any agreement, instrument or Governmental Requirement applicable to such
Consolidated Subsidiary, or is otherwise restricted or prohibited in each case determined in
accordance with GAAP; (iii) the net income (or loss) of any entity acquired in a
pooling-of-interests transaction for any period prior to the date of such transaction; (iv) any
gains or losses attributable to discontinued operations, in an aggregate amount not to exceed
$5,000,000 or to Property sales not in the ordinary course of business, and (v) the cumulative
effect of a change in accounting principles and any gains or losses attributable to writeups or
write downs of assets.

4

 

Consolidated Subsidiaries shall mean each Subsidiary of a Person (whether now existing or
hereafter created or acquired) the financial statements of which shall be (or should have been)
consolidated with the financial statements of such Person in accordance with GAAP; provided,
however, that the Consolidated Subsidiaries of Borrower shall not include the Unrestricted
Entities, except with respect to the financial statements delivered from time to time by Borrower
pursuant to Sections 8.01 (a) and (b).

Debt shall mean, for any Person the sum of the following (without duplication): (i) all
obligations of such Person for borrowed money or evidenced by bonds, debentures, notes or other
similar instruments (including principal, interest, fees and charges); (ii) all obligations of such
Person (whether contingent or otherwise) in respect of bankers’ acceptances, letters of credit,
surety or other bonds and similar instruments; (iii) all obligations of such Person to pay the
deferred purchase price of Property or services (other than for borrowed money); (iv) all
obligations under leases which shall have been, or should have been, in accordance with GAAP,
recorded as capital leases in respect of which such Person is liable (whether contingent or
otherwise); (v) all obligations under operating leases which require such Person or its Affiliate
to make payments over the term of such lease, including payments at termination, based on the
purchase price or appraisal value of the Property subject to such lease plus a marginal interest
rate, and used primarily as a financing vehicle for, or to monetize, such Property; (vi) all Debt
(as described in the other clauses of this definition) and other obligations of others secured by a
Lien on any asset of such Person, whether or not such Debt is assumed by such Person; (vii) all
Debt (as described in the other clauses of this definition) and other obligations of others
guaranteed by such Person or in which such Person otherwise assures a creditor against loss of the
debtor or obligations of others; (viii) all obligations or undertakings of such Person to maintain
or cause to be maintained the financial position or covenants of others or to purchase the Debt or
Property of others; (ix) obligations to deliver goods or services including Hydrocarbons in
consideration of advance payments; (x) obligations to pay for goods or services whether or not such
goods or services are actually received or utilized by such Person; (xi) any capital stock of such
Person in which such Person has a mandatory obligation to redeem such stock; (xii) any Debt of a
Subsidiary for which such Person is liable either by agreement or because of a Governmental
Requirement; (xiii) the undischarged balance of any production payment created by such Person or
for the creation of which such Person directly or indirectly received payment; and (xiv) all
obligations of such Person under Hedging Agreements.

Default shall mean an Event of Default or an event which with notice or lapse of
applicable grace period or both would become an Event of Default.

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

EBITDA shall mean, for any period, the sum of Consolidated Net Income for such period
plus the following expenses or charges to the extent deducted from Consolidated Net Income in such
period: interest, income taxes, depreciation, depletion and amortization.

          Engineering Reports shall have the meaning assigned such term in Section 2.08.

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

5

 

ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time and any successor statute.

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

ERISA Event shall mean (i) a “Reportable Event” described in Section 4043 of ERISA and
the regulations issued thereunder, (ii) the withdrawal of the Borrower, any Subsidiary or any ERISA
Affiliate from a Plan during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA, (iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate a Plan by the PBGC or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan.

Event of Default shall have the meaning assigned such term in Section 10.01.

Excepted Liens shall mean: (i) Liens for taxes, assessments or other governmental charges
or levies not yet due or which are being contested in good faith by appropriate action and for
which adequate reserves have been maintained; (ii) Liens in connection with worker’s compensation,
unemployment insurance or other social security, old age pension or public liability obligations
not yet due or which are being contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP; (iii) operators’ Liens in favor of Persons
other than Obligors, Subsidiaries and their Affiliates, vendors’, carriers’, warehousemen’s,
repairmen’s, mechanics’, workmen’s, materialmen’s, construction or other like Liens arising by
operation of law in the ordinary course of business or incident to the exploration, development,
operation and maintenance of Oil and Gas Properties or statutory landlord’s liens, each of which is
in respect of obligations that have not been outstanding more than 90 days or which are being
contested in good faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP; (iv) any Liens reserved in leases by lessors or farmout
agreements by farmors for royalties and for compliance with the terms of the farmout agreements or
leases in the case of leasehold estates, to the extent that any such Lien referred to in this
clause does not materially impair the use of the Property covered by such Lien for the purposes for
which such Property is held by any Obligor or any Subsidiary or materially impair the value of such
Property subject thereto; (v) encumbrances (other than to secure the payment of borrowed money or
the deferred purchase price of Property or services), easements, restrictions, servitudes, permits,
conditions, covenants, exceptions or reservations in any rights of way or other Property of any
Obligor or any Subsidiary for the purpose of roads, pipelines, transmission lines, transportation
lines, distribution lines for the transportation of gas, oil, or timber, and other like purposes,
or for the joint or common use of real estate, rights of way, facilities and equipment, and
defects, irregularities, zoning restrictions and deficiencies in title of any rights of way or
other Property which in the aggregate do not materially impair the use of such rights of way or
other Property for the purposes of which such rights of way and other Property are held by any
Obligor or any Subsidiary or materially impair the value of such Property subject thereto; (vi)
deposits of cash or securities to secure the performance of bids, trade contracts, leases,
statutory obligations and other obligations of a like nature incurred in the ordinary course of
business; and (vii) Liens permitted by the Security Instruments.

6

 

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

Fee Letter shall mean that certain letter agreement from Wachovia Bank, National
Association and Wachovia Capital Markets, LLC to the Borrower dated October 26, 2006, concerning
certain fees in connection with this Agreement and any agreements or instruments executed in
connection therewith, as the same may be amended or replaced from time to time.

Financial Statements shall mean: (i) from the Closing Date until financial statements and
reports have been delivered pursuant to Section 8.1(a) or Section 8.1(b), as applicable, the
audited balance sheet of AER at July 14, 2006, and the unaudited consolidated statements of income,
stockholders’ equity and cash flow of Atlas America E&P Operations for the nine months ended
September 30, 2006; or (ii) thereafter, the most-recently available financial statements and
reports described in Section 8.1(a) and Section 8.1(b).

Funded Debt shall mean, for any Person the sum of the following (without duplication):
(i) all obligations of such Person for borrowed money or evidenced by bonds, debentures, notes or
other similar instruments (including principal, interest, fees and charges); (ii) all obligations
of such Person (whether contingent or otherwise) in respect of bankers’ acceptances, letters of
credit, surety or other bonds and similar instruments; (iii) all obligations of such Person to pay
the deferred purchase price of Property or services (other than for borrowed money); (iv) all
obligations under leases which shall have been, or should have been, in accordance with GAAP,
recorded as capital leases in respect of which such Person is liable (whether contingent or
otherwise); (v) obligations to pay for goods or services whether or not such goods or services are
actually received or utilized by such Person; (vi) any capital stock of such Person in which such
Person has a mandatory obligation to redeem such stock; (vii) the undischarged balance of any
production payment created by such Person or for the creation of which such Person directly or
indirectly received payment; and (viii) all obligations of such Person under Hedging Agreements.

GAAP shall mean generally accepted accounting principles in the United States of America
in effect from time to time.

Governmental Authority shall include the country, the state, county, city and political
subdivisions in which any Person or such Person’s Property is located or which exercises valid
jurisdiction over any such Person or such Person’s Property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them including monetary authorities which
exercises valid jurisdiction over any such Person or such Person’s Property. Unless otherwise
specified, all references to Governmental Authority herein shall mean a Governmental Authority
having jurisdiction over, where applicable, any Obligor, their Subsidiaries or any of their
Property or the Administrative Agent, any Lender or any Applicable Lending Office.

7

 

Governmental Requirement shall mean any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate,
license, authorization or other directive or requirement (whether or not having the force of law),
including, without limitation, Environmental Laws, energy regulations and occupational, safety and
health standards or controls, of any Governmental Authority.

Guarantor shall mean each of the parties named as “Guarantors” in the opening paragraph
of this Agreement and each of the parties that from time to time become a party to a Guaranty
Agreement pursuant to the terms of this Agreement.

Guaranty Agreement shall mean, collectively, (i) an agreement executed by a Guarantor
substantially in the form of Exhibit G (or such other agreement in form and substance satisfactory
to the Administrative Agent) guarantying, unconditionally, payment of the Indebtedness, together
with (ii) any amendment, modification, supplement, restatement, ratification, or reaffirmation of
any Guaranty Agreement made in accordance with the Loan Documents.

Hedging Agreements shall mean any commodity, interest rate or currency swap, cap, floor,
collar, forward agreement or other exchange or protection agreements or any option with respect to
any such transaction.

Highest Lawful Rate means, as of a particular date, the highest non-usurious rate of
interest, if any, permitted from day to day by applicable law. To the extent Texas law is
applicable, the Lenders hereby notify and disclose to the Borrower that, for purposes of Texas
Finance Code §303.001, as it may from time to time be amended, the “applicable ceiling” shall be
the “weekly ceiling” from time to time in effect as limited by Texas Finance Code §303.009;
provided, however, that to the extent permitted by applicable law, the Lender reserves the right to
change the “applicable ceiling” from time to time by further notice and disclosure to the Borrower.

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

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

Indebtedness shall mean any and all amounts owing or to be owing by the Borrower or any
Obligor to the Administrative Agent, the Issuing Bank and/or the Lenders or any Affiliates of
Lenders in connection with the Loan Documents, any Letter of Credit Agreements, any Hedging
Agreements now or hereafter arising between the Borrower or any Obligor and the Administrative
Agent, the Issuing Bank, any Lender or its Affiliate and permitted by the terms of this Agreement,
and all renewals, extensions and/or rearrangements of any of the foregoing.

          Indemnified Parties shall have the meaning assigned such term in Section 12.03(a)(ii).

Indemnity Matters shall mean any and all actions, suits, proceedings (including any
investigations, litigation or inquiries), claims, demands and causes of action made or threatened
against a Person and, in connection therewith, all losses, liabilities, damages (including, without
limitation, consequential damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or concurrent negligence of such
Person seeking indemnification.

8

 

Initial Borrowing Base shall have the meaning assigned such term in Section 2.08(a).

Initial Funding shall mean the funding of the initial Loans or issuance of the initial
Letters of Credit upon satisfaction of the conditions set forth in Sections 6.01 and 6.02.

Initial Public Offering shall mean the initial offering or issuance of equity interests
by AER pursuant to the Registration Statement.

Initial Reserve Report shall mean collectively the reports prepared by Borrower, copies
of which have been delivered to the Administrative Agent, dated as of September 30, 2006, based on
the reports dated as of March 31, 2006, prepared by Wright & Company, Inc. in connection with the
AAI Credit Agreement.

Intercompany Debt shall mean Funded Debt that is owed by an Obligor to another Obligor.

Intercompany Notes shall mean the promissory notes executed to evidence the Intercompany
Debt.

Interest Period shall mean, with respect to any LIBOR Loan, the period commencing on the
date such LIBOR Loan is made and ending on the numerically corresponding day in the first, second,
third, or sixth calendar month thereafter, as the Borrower may select as provided in Section 2.02,
except that each Interest Period which commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end after the Revolving Credit
Termination Date; (ii) no Interest Period for any LIBOR Loan may end after the due date of any
installment, if any, provided for in Section 3.01 to the extent that such LIBOR Loan would need to
be prepaid prior to the end of such Interest Period in order for such installment to be paid when
due; (iii) each Interest Period which would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding Business Day); and (iv) no Interest
Period shall have a duration of less than one month and, if the Interest Period for any LIBOR Loans
would otherwise be for a shorter period, such Loans shall not be available hereunder.

Issuing Bank shall have the meaning assigned to such term in the introductory paragraph
to this Agreement, or any other Lender agreed to between the Borrower and the Administrative Agent
to issue Letters of Credit.

          LC Commitment at any time shall mean $50,000,000.

LC Exposure at any time shall mean the difference between (i) the aggregate face amount
of all undrawn and uncancelled Letters of Credit plus (ii) the aggregate of all amounts drawn under
all Letters of Credit and not yet reimbursed.

Letter of Credit Agreements shall mean the written agreements with the Issuing Bank, as
issuing lender for any Letter of Credit, executed in connection with the issuance by the Issuing
Bank of the Letters of Credit, such agreements to be on the Issuing Bank’s customary form for
letters of credit of comparable amount and purpose as from time to time in effect or as otherwise
agreed to by the Borrower and the Issuing Bank.

9

 

Letters of Credit shall mean the stand-by letters of credit issued pursuant to Section
2.01(b) and all reimbursement obligations pertaining to any such letters of credit, and “Letter of
Credit” shall mean any one of the Letters of Credit and the reimbursement obligations pertaining
thereto.

LIBOR shall mean the rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) of interest determined on the basis of the rate for deposits in Dollars for a period equal
to the applicable Interest Period commencing on the first day of such Interest Period appearing on
Dow Jones Market Service Page 3750 as of 11:00 a.m. (London time) two (2) Business Days prior to
the first day of the applicable Interest Period. In the event that such rate does not appear on Dow
Jones Market Service Page 3750, “LIBOR” shall be determined by the Administrative Agent to be the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in
Dollars are offered by leading reference banks in the London interbank market to the Administrative
Agent at approximately 11:00 a.m. (London time) two Business Days prior to the first day of the
applicable Interest Period for a period equal to such Interest Period and in an amount
substantially equal to the amount of the applicable Loan.

LIBOR Loans shall mean Loans the interest rates on which are determined on the basis of
rates referred to in the definition of “Adjusted LIBOR”.

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

Loan Documents shall mean this Agreement, the Notes, all Letters of Credit, all Letter of
Credit Agreements, the Fee Letter, the Security Instruments, and the Guaranty Agreements.

Loans shall mean the loans as provided for by Section 2.01(a) or any Continuations or
Conversions thereof.

Majority Lenders shall mean, at any time while no Loans are outstanding, Lenders having
at least sixty-six and two-thirds percent (66 2/3%) of the Aggregate Revolving Credit Commitments
and, at any time while Loans are outstanding, Lenders holding at least sixty-six and two-thirds
percent (66 2/3%) of the outstanding aggregate principal amount of the Loans (without regard to any
sale by a Lender of a participation in any Loan under Section 12.06(c)).

Management Agreement shall mean the Management Agreement dated of even date herewith
between AER and AEM.

Material Adverse Effect shall mean any material and adverse effect on (i) the assets,
liabilities, financial condition, business, operations or affairs of the Borrower and the
Guarantors taken as a whole, or (ii) the ability of the Borrower or any Guarantor to carry out its
business as at the Closing Date (excluding the dissolution or liquidation of any Guarantor pursuant
to a merger to the extent permitted under Section 9.09) or meet its obligations under the Loan
Documents on a timely basis, or (iii) the Administrative Agent’s and the Lenders’ interests in the
collateral securing the Indebtedness, or the Administrative Agents’ or the Lenders’ ability to
enforce their rights and remedies under this Agreement or any other Loan Document, at law or in
equity.

10

 

          Material Agreements shall have the meaning assigned to such term in Section 7.23.

Maximum Revolving Credit Amount shall mean, as to each Lender, the dollar amount of such
Lender’s Percentage Share of the Aggregate Maximum Revolving Credit Amount (as the same may be
reduced pursuant to Section 2.03(d) pro rata to each Lender based on its Percentage Share), as
modified from time to time to reflect any assignments permitted by Section 12.06(b).

Mortgage shall mean any one of the mortgages listed on Exhibit D hereto, and Mortgages
means all of them.

Mortgaged Property shall mean the Property owned by the Obligors and which is subject to
the Liens existing and to exist under the terms of the Security Instruments.

          Multiemployer Plan shall mean a Plan defined as such in Section 3(37) or 4001(a)(3) of
ERISA.

Notes shall mean the Notes provided for by Section 2.06, together with any and all
renewals, extensions for any period, increases, rearrangements, substitutions or modifications
thereof.

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

Oil and Gas Properties Collateral Value shall mean the collateral value of the Oil and
Gas Properties as determined by the Lenders in accordance with the procedures set forth under
Section 2.08.

Other Taxes shall have the meaning assigned such term in Section 4.06(b).

11

 

Ownership Report shall mean a report prepared by the Borrower on a well by well basis
reflecting the working and net revenue interests for each Obligor, and the gross working interest
and gross revenue interests for each Partnership and such other information reasonably requested by
Lender in form attached hereto as Schedule 7.10.

Partnerships shall mean such partnerships listed on Schedule 7.14 and such other
partnerships which are principally engaged in the acquisition and development of Oil and Gas
Properties as may be wholly or partially owned directly or indirectly by any Obligor from time to
time hereafter.

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

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

Permitted Merger shall mean such merger or consolidation as is permitted under Section
9.09.

Person shall mean any individual, corporation, company, voluntary association,
partnership, joint venture, trust, unincorporated organization or government or any agency,
instrumentality or political subdivision thereof, or any other form of entity.

Plan shall mean any employee pension benefit plan, as defined in Section 3(2) of ERISA,
which (i) is currently or hereafter sponsored, maintained or contributed to by the Borrower, any
Subsidiary or an ERISA Affiliate or (ii) was at any time during the preceding six calendar years
sponsored, maintained or contributed to, by the Borrower, any Subsidiary or an ERISA Affiliate.

Post-Default Rate shall mean, in respect of any principal of any Loan or any other amount
payable by the Borrower under this Agreement or any other Loan Document, a rate per annum equal to
two percent (2%) per annum above the Base Rate as in effect from time to time plus the Applicable
Margin (if any), but in no event to exceed the Highest Lawful Rate.

Prime Rate shall mean the rate of interest from time to time announced publicly by the
Administrative Agent as its prime commercial lending rate. Such rate is set by the Administrative
Agent as a general reference rate of interest, taking into account such factors as the
Administrative Agent may deem appropriate, it being understood that many of the Administrative
Agent’s commercial or other loans are priced in relation to such rate, that it is not necessarily
the lowest or best rate actually charged to any customer and that the Administrative Agent may make
various commercial or other loans at rates of interest having no relationship to such rate.

Principal Office shall mean the principal office of the Administrative Agent, presently
located at 1001 Fannin, Suite 2255, Houston, Texas 77002-6709.

Property shall mean any interest in any kind of property or asset, whether real, personal
or mixed, moveable or immoveable, tangible or intangible.

Quarterly Dates shall mean the first day of each January, April, July, and October in
each year, the first of which shall be April 1, 2007; provided, however, that if any such day is
not a Business Day, such Quarterly Date shall be the next succeeding Business Day.

RAI shall mean Resource America, Inc., a Delaware corporation.

12

 

Redetermination Date shall mean the date that the redetermined Borrowing Base becomes
effective subject to the notice requirements specified in Section 2.08(b) both for scheduled
redeterminations and unscheduled redeterminations.

Registration Statement means the Form S-1 Registration Statement filed by AER with the
SEC as Registration No. 333-136094, as amended.

Regulation D shall mean Regulation D of the Board of Governors of the Federal Reserve
System (or any successor), as the same may be amended or supplemented from time to time.

Regulatory Change shall mean, with respect to any Lender, any change after the Closing
Date in any Governmental Requirement (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of lenders (including such
Lender or its Applicable Lending Office) of or under any Governmental Requirement (whether or not
having the force of law) by any Governmental Authority charged with the interpretation or
administration thereof.

          Required Payment shall have the meaning assigned such term in Section 4.04.

Reserve Report shall mean a report, in form and substance satisfactory to the
Administrative Agent, setting forth, as of each July 1 or January 1, immediately prior to the
commencement of each Borrowing Base Period, as applicable (or such other date in the event of an
unscheduled redetermination); (i) the oil and gas reserves attributable to all of the Obligors’ Oil
and Gas Properties whether owned directly or indirectly by such Person and expressly including such
reserves attributable to each Obligor’s net ownership in the Partnerships’ Oil and Gas Properties
together with a projection of the rate of production and future net income, taxes, operating
expenses and capital expenditures with respect thereto as of such date, based upon the pricing
assumptions consistent with SEC reporting requirements at the time and (ii) such other information
as the Administrative Agent may reasonably request.

Reserve Requirement shall mean, for any Interest Period for any LIBOR Loan, the average
maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion Dollars against
"Eurocurrency liabilities” (as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks by reason of any Regulatory Change against (i) any category of liabilities
which includes deposits by reference to which LIBOR is to be determined as provided in the
definition of “LIBOR” or (ii) any category of extensions of credit or other assets which include a
LIBOR Loan.

Responsible Officer shall mean, as to any Person, the Chief Executive Officer, the
President or any Vice President of such Person and, with respect to financial matters, the term
"Responsible Officer” shall include the Chief Financial Officer of such Person. Unless otherwise
specified, all references to a Responsible Officer herein shall mean a Responsible Officer of the
Borrower.

Revolving Credit Commitment shall mean, for any Lender, its obligation to make Loans and
participate in the issuance of Letters of Credit as provided in Section 2.01(b) up to the lesser of
(i) such Lender’s Maximum Revolving Credit Amount and (ii) such Lender’s Percentage Share of the
then effective Borrowing Base.

Revolving Credit Termination Date shall mean the earliest to occur of (i) the fifth
anniversary date of the Closing Date, (ii) the date that the Commitments are terminated pursuant to
Section 10.02, and (iii) the date that the Commitments are fully terminated pursuant to Section
2.03(d).

13

 

Scheduled Redetermination Date shall have the meaning assigned such term in Section
2.08(b).

SEC shall mean the Securities and Exchange Commission or any successor Governmental
Authority.

Security Agreement shall mean, collectively, (i) an agreement executed by an Obligor
substantially in the form of Exhibit H (or such other agreement in form and substance satisfactory
to the Administrative Agent) pursuant to which such Obligor pledges and assigns the collateral
named therein as security for repayment of the Indebtedness, together with (ii) any amendment,
modification, supplement, restatement, ratification, or reaffirmation of any Security Agreement
made in accordance with the Loan Documents.

Security Instruments shall mean the agreements or instruments described or referred to in
Exhibit D, and any and all other agreements or instruments now or hereafter executed and delivered
by the Obligors or any other Person (other than participation or similar agreements between any
Lender and any other lender or creditor with respect to any Indebtedness pursuant to this
Agreement) in connection with, or as security for the payment or performance of, the Notes, the
Guarantees, the Hedge Agreements, this Agreement, or reimbursement obligations under the Letters of
Credit, as such agreements may be amended, supplemented or restated from time to time.

Special Entity shall mean any joint venture, limited liability company or partnership,
general or limited partnership or any other type of partnership or company other than a corporation
in which the Borrower or one or more of its other Subsidiaries is a member, owner, partner or joint
venturer and owns, directly or indirectly, at least a majority of the equity of such entity or
controls such entity, but excluding any tax partnerships that are not classified as partnerships
under state law. For purposes of this definition, any Person which owns directly or indirectly an
equity investment in another Person which allows the first Person to manage or elect managers who
manage the normal activities of such second Person will be deemed to “control” such second Person
(e.g. a sole general partner controls a limited partnership).

Subsidiary shall mean (i) any corporation of which at least a majority of the outstanding
shares of stock having by the terms thereof ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether or not at the time stock of any other
class or classes of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned or controlled by the
Borrower or one or more of its Subsidiaries or by the Borrower and one or more of its Subsidiaries
and (ii) any Special Entity.

          Taxes shall have the meaning assigned such term in Section 4.06(a).

Transfer shall mean any sale, assignment, farm-out, conveyance or other transfer of any
Oil and Gas Property, or any interest in any Oil and Gas Property (including, without limitation,
any working interest, overriding royalty interest, production payments, net profits interest,
royalty interest, or mineral fee interest) or in any Partnership, except for (i) the sale of
Hydrocarbons in the ordinary course of business on a current basis, or (ii) the sale or transfer of
equipment in the ordinary course of business that is no longer necessary for the business of any
Obligor or is contemporaneously replaced by equipment of at least comparable value and use.

Type shall mean, with respect to any Loan, a Base Rate Loan or a LIBOR Loan.

Unrestricted Entities shall mean Subsidiaries of the Borrower designated as Unrestricted
Entities by the Borrower and approved by Majority Lenders. As of the Closing Date, the Unrestricted
Entities are each of the Subsidiaries marked with an asterisk on Schedule 7.15 hereto.

14

 

Wholly Owned Subsidiary shall mean a Subsidiary for which all of the outstanding shares
of stock or other equity of such entity is owned directly or indirectly by Borrower or one of
Borrower’s Wholly Owned Subsidiaries.

Section 1.03 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial statements and certificates and
reports as to financial matters required to be furnished to the Administrative Agent or the Lenders
hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with the
audited financial statements of the Borrower referred to in Section 7.02 (except for changes
concurred with by the Borrower’s independent public accountants).

ARTICLE II

Commitments

Section 2.01 Loans and Letters of Credit.

(a) Loans. Each Lender severally agrees, on the terms and conditions of this
Agreement, to make loans to the Borrower during the period from and including (i) the Closing Date
or (ii) such later date that such Lender becomes a party to this Agreement as provided in Section
12.06(b), to and up to, but excluding, the Revolving Credit Termination Date in an aggregate
principal amount at any one time outstanding up to, but not exceeding, the amount of such Lender’s
Revolving Credit Commitment as then in effect; provided, however, that the aggregate principal
amount of all such Loans by all Lenders hereunder at any one time outstanding together with the LC
Exposure shall not exceed the lesser of (i) the Borrowing Base and (ii) the Aggregate Maximum
Revolving Credit Amounts. Subject to the terms of this Agreement, during the period from the
Closing Date to and up to, but excluding, the Revolving Credit Termination Date, the Borrower may
borrow, repay and reborrow the amount described in this Section 2.01(a).

(b) Letters of Credit. During the period from and including the Closing Date to,
but excluding, five (5) Business Days prior to the Revolving Credit Termination Date, the Issuing
Bank, as issuing bank for the Lenders, agrees to extend credit for the account of any Obligor at
any time and from time to time by issuing, renewing, extending or reissuing Letters of Credit;
provided however, the LC Exposure at any one time outstanding shall not exceed the lesser of (i)
the LC Commitment or (ii) the Aggregate Revolving Credit Commitments, as then in effect, minus the
aggregate principal amount of all Loans then outstanding. The Lenders shall participate in such
Letters of Credit according to their respective Percentage Shares. Each of the Letters of Credit
shall (i) be issued by the Issuing Bank, (ii) contain such terms and provisions as are reasonably
required by the Issuing Bank, (iii) be for the account of such Obligor, and (iv) expire not later
than the earlier of (A) twelve months from the date of issuance of such Letter of Credit and (B)
five (5) Business Days before the Revolving Credit Termination Date.

(c) Limitation on Types of Loans. Subject to the other terms and provisions of
this Agreement, at the option of the Borrower, the Loans may be Base Rate Loans or LIBOR Loans;
provided that, without the prior written consent of the Majority Lenders, no more than eight LIBOR
Loans may be outstanding at any time.

          Section 2.02 Borrowings, Continuations and Conversions, Letters of Credit.

(a) Borrowings. The Borrower shall give the Administrative Agent (which shall
promptly notify the Lenders) advance notice as hereinafter provided of each borrowing hereunder,
which shall specify (i) the aggregate amount of such borrowing, (ii) the Type and (iii) the date
(which shall be a Business Day) of the Loans to be borrowed, and (iv) (in the case of LIBOR Loans)
the duration of the Interest Period therefor.

15

 

(b) Minimum Amounts. If a borrowing consists in whole or in part of LIBOR Loans,
such LIBOR Loans shall be in amounts of at least $500,000 or any whole multiple of $250,000 in
excess thereof. If a borrowing consists in whole or in part of Base Rate Loans, such Base Rate
Loans shall be in amounts of at least $500,000 or integral multiples of $250,000 in excess thereof.

(c) Notices. All borrowings, continuations and conversions shall require advance
written notice to the Administrative Agent (which shall promptly notify the Lenders) in the form of
Exhibit B (or telephonic notice promptly confirmed by such a written notice), which in each case
shall be irrevocable, from the Borrower to be received by the Administrative Agent not later than
12:00 p.m. Charlotte, North Carolina time at least one Business Day prior to the date of each Base
Rate Loan borrowing and three Business Days prior to the date of each LIBOR Loan borrowing,
continuation or conversion. Without in any way limiting the Borrower’s obligation to confirm in
writing any telephonic notice, the Administrative Agent may act without liability upon the basis of
telephonic notice believed by the Administrative Agent in good faith to be from the Borrower prior
to receipt of written confirmation. In each such case, the Borrower hereby waives the right to
dispute the Administrative Agent’s record of the terms of such telephonic notice except in the case
of gross negligence or willful misconduct by the Administrative Agent.

(d) Continuation Options. Subject to the provisions made in this Section 2.02(d),
the Borrower may elect to continue all or any part of any LIBOR Loan beyond the expiration of the
then current Interest Period relating thereto by giving advance notice as provided in Section
2.02(c) to the Administrative Agent (which shall promptly notify the Lenders) of such election,
specifying the amount of such Loan to be continued and the Interest Period therefor. In the absence
of such a timely and proper election, the Borrower shall be deemed to have elected to convert such
LIBOR Loan to a Base Rate Loan pursuant to Section 2.02(e). All or any part of any LIBOR Loan may
be continued as provided herein, provided that (i) any continuation of any such Loan shall be (as
to each Loan as continued for an applicable Interest Period) in amounts of at least $500,000 or any
whole multiple of $250,000 in excess thereof and (ii) no Default shall have occurred and be
continuing. If a Default shall have occurred and be continuing, each LIBOR Loan shall be converted
to a Base Rate Loan on the last day of the Interest Period applicable thereto.

(e) Conversion Options. The Borrower may elect to convert all or any part of any
LIBOR Loan on the last day of the then current Interest Period relating thereto to a Base Rate Loan
by giving advance notice to the Administrative Agent (which shall promptly notify the Lenders) of
such election. Subject to the provisions made in this Section 2.02(e), the Borrower may elect to
convert all or any part of any Base Rate Loan at any time and from time to time to a LIBOR Loan by
giving advance notice as provided in Section 2.02(c) to the Administrative Agent (which shall
promptly notify the Lenders) of such election. All or any part of any outstanding Loan may be
converted as provided herein, provided that (i) any conversion of any Base Rate Loan into a LIBOR
Loan shall be (as to each such Loan into which there is a conversion for an applicable Interest
Period) in amounts of at least $500,000 or any whole multiple of $250,000 in excess thereof and
(ii) no Default shall have occurred and be continuing. If a Default shall have occurred and be
continuing, no Base Rate Loan may be converted into a LIBOR Loan.

(f) Advances. Not later than 12:00 p.m. Charlotte, North Carolina time on the
date specified for each the borrowing hereunder, each Lender shall make available the amount of the
Loan to be made by it on such date to the Administrative Agent, to an account which the
Administrative Agent shall specify, in immediately available funds, for the account of the
Borrower. The amounts so received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by depositing the same, in
immediately available funds, in an account of the Borrower, designated by the Borrower and
maintained at the Principal Office.

16

 

(g) Letters of Credit. The Borrower shall give the Issuing Bank (which shall
promptly notify the Lenders of such request and their Percentage Share of such Letter of Credit)
advance notice to be received by the Issuing Bank not later than 12:00 p.m. Charlotte, North
Carolina time not less than three Business Days prior thereto of each request for the issuance, and
at least ten Business Days prior to the date of the renewal or extension, of a Letter of Credit
hereunder which request shall specify (i) the amount of such Letter of Credit, (ii) the date (which
shall be a Business Day) such Letter of Credit is to be issued, renewed or extended, (iii) the
duration thereof, (iv) the name and address of the beneficiary thereof, and (v) such other
information as the Issuing Bank may reasonably request, all of which shall be reasonably
satisfactory to the Issuing Bank. Subject to the terms and conditions of this Agreement, on the
date specified for the issuance, renewal or extension of a Letter of Credit, the Administrative
Agent shall issue, renew or extend such Letter of Credit to the beneficiary thereof.

In conjunction with the issuance of each Letter of Credit, the Borrower shall execute a
Letter of Credit Agreement. In the event of any conflict between any provision of a Letter of
Credit Agreement and this Agreement, the Borrower, the Issuing Bank, the Administrative Agent and
the Lenders hereby agree that the provisions of this Agreement shall govern.

The Issuing Bank will send to the Borrower and each Lender, immediately upon issuance of
any Letter of Credit, or an amendment thereto, a true and complete copy of such Letter of Credit,
or such amendment thereto.

Section 2.03 Commitments; Changes of Commitments.

(a) Commitments. The initial amount of the Aggregate Revolving Credit Commitments
shall be $155,000,000. The Aggregate Revolving Credit Commitments may be increased from time to
time in accordance with subsection (b) of this section, or reduced from time to time in accordance
with subsection (c) of this section.

(b) Increase in Revolving Credit Commitments.

(i) Provided there exists no Default or Event of Default and subject to the
conditions set forth under clause (v) below, upon notice to the Administrative Agent (which
shall promptly notify the Lenders), Borrower may from time to time request an increase in the
Revolving Credit Commitments; provided, that (A) the Aggregate Revolving Credit Commitments
shall not at any time exceed the lesser of (1) the Aggregate Maximum Revolving Credit Amounts
after adjustments resulting from reductions thereof pursuant to Section 2.03(d) and (2) the
then effective Borrowing Base, and (B) such increase of the Revolving Credit Commitments
shall be in a minimum amount of $5,000,000, or integral multiples of $1,000,000 in excess
thereof. At the time of sending such notice, Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is requested to
respond (which shall in no event be less than ten (10) Business Days from the date of
delivery of such notice to the Lenders).

(ii) Each Lender shall notify the Administrative Agent within such time period
whether or not it agrees to increase its Revolving Credit Commitment and, if so, whether by
an amount equal to, greater than, or less than its Percentage Share of such requested
increase. Any Lender not responding within such time period shall be deemed to have declined
to increase its Revolving Credit Commitment.

17

 

(iii) The Administrative Agent shall notify Borrower of the Lenders’ responses to
the request made hereunder. To achieve the full amount of a requested increase and subject to
the approval of the Administrative Agent and the Issuing Bank (which approvals shall not be
unreasonably withheld), Borrower may also invite additional Persons to become Lenders
pursuant to a joinder agreement in form and substance satisfactory to the Administrative
Agent and its counsel.

(iv) If the Aggregate Revolving Credit Commitments are increased in accordance with
this Section, the Administrative Agent and Borrower shall determine the effective date (such
date, the “Increase Effective Date”) and the final allocation of such increase. The
Administrative Agent shall promptly (i) notify Borrower of the final allocation of such
increase in the Revolving Credit Commitment and the Increase Effective Date, and (ii) notify
each Lender of its Revolving Credit Commitment as of the Increase Effective Date.

(v) As a condition precedent to such increase, Borrower shall deliver to the
Administrative Agent a certificate of each Obligor dated as of the Increase Effective Date
signed by a Responsible Officer of such Obligor (i) certifying and attaching the resolutions
adopted by such Obligor approving or consenting to such increase, and (ii) in the case of
Borrower, certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article VII and the other Loan Documents are true
and correct on and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and except that for purposes of this Section
2.03(b), the representations and warranties contained in Section 7.02 shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively,
of Section 8.01, (B) no Default or Event of Default exists, and (C) no Material Adverse
Effect shall have occurred. To the extent necessary to keep the outstanding Loans ratable
with any revised Percentage Shares of the Lenders arising from any nonratable increase in the
Revolving Credit Commitment under this Section, Borrower shall prepay Loans outstanding on
the Increase Effective Date and/or Lenders shall make assignments pursuant to arrangements
satisfactory to the Administrative Agent (provided, that in each case, Borrower shall pay any
additional amounts required pursuant to Section 5.05).

(vi) This Section shall supersede any provisions in Sections 4.05 or 12.04 to the
contrary.

(c) Reduction in Aggregate Revolving Credit Commitments. The Borrower shall have
the right to reduce the amount of the Aggregate Revolving Credit Commitments at any time, or from
time to time, upon not less than three (3) Business Days’ prior notice to the Administrative Agent
(who shall promptly notify the Lenders) of each such reduction, which notice shall specify the
effective date thereof and the amount of any such reduction (which shall not be less than
$10,000,000 or any whole multiple of $10,000,000 in excess thereof; and no more than an amount by
which the Aggregate Revolving Credit Commitments would be less than the aggregate outstanding
principal amount of the Loans plus the LC Exposure, after giving effect to any concurrent
prepayment pursuant to Section 2.07) and shall be irrevocable and effective only upon receipt by
the Administrative Agent.

(d) Reduction in Aggregate Maximum Revolving Credit Amounts. The Borrower shall
have the right to terminate or to reduce the amount of the Aggregate Maximum Revolving Credit
Amounts at any time, or from time to time, upon not less than three (3) Business Days’ prior notice
to the Administrative Agent (who shall promptly notify the Lenders) of each such termination or
reduction, which notice shall specify the effective date thereof and the amount of any such
reduction (which shall not be less than $10,000,000 or any whole multiple of $10,000,000 in excess
thereof; and no more than an amount by which the Aggregate Maximum Revolving Credit Amounts would
be less than the Aggregate Revolving Credit Commitments) and shall be irrevocable and effective
only upon receipt by the Administrative Agent. The Aggregate Maximum Revolving Credit Amounts once
terminated or reduced may not be reinstated.

18

 

      Section 2.04 Fees.

(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender a commitment fee on the daily average unused amount of the Aggregate
Revolving Credit Commitments up to, but excluding, the earlier of the date the Aggregate Revolving
Credit Commitments are terminated or the Revolving Credit Termination Date at the Applicable
Commitment Fee Rate. Accrued commitment fees shall be payable quarterly in arrears on each
Quarterly Date and on the earlier of the date the Aggregate Revolving Credit Commitments are
terminated or the Revolving Credit Termination Date. Borrower and Lenders acknowledge and agree
that the unused commitment fees payable hereunder are bona fide unused commitment fees and are
intended as reasonable compensation to Lenders for committing to make funds available to Borrower
as described herein and for no other purposes.

(b) Letter of Credit Fees.

(i) The Borrower agrees to pay the Administrative Agent, for the account of each
Lender, commissions for issuing the Letters of Credit on the daily average outstanding of the
maximum liability of the Issuing Bank existing from time to time under such Letter of Credit
(calculated separately for each Letter of Credit) at the rate per annum equal to the
Applicable Margin in effect from time to time for LIBOR Loans, provided that each Letter of
Credit shall bear a minimum commission of $500 and further provided, during any period
commencing on the date of an Event of Default until the same is paid in full or all Events of
Default are cured and waived, equal to the Post-Default Rate. Each Letter of Credit shall be
deemed to be outstanding up to the full face amount of the Letter of Credit until the Issuing
Bank has received the canceled Letter of Credit or a written cancellation of the Letter of
Credit from the beneficiary of such Letter of Credit in form and substance acceptable to the
Issuing Bank, or for any reductions in the amount of the Letter of Credit (other than from a
drawing), written notification from the beneficiary of such Letter of Credit. Such
commissions are payable in advance at issuance of the Letter of Credit for the first year
thereof and thereafter, quarterly in arrears on each Quarterly Date and upon cancellation or
expiration of each such Letter of Credit.

(ii) The Borrower agrees to pay the Administrative Agent, for the account of the
Issuing Bank, commissions for issuing the Letters of Credit (calculated separately for each
Letter of Credit) equal to 0.125% of the face amount of each Letter of Credit, payable upon
issuance of such Letter of Credit.

(c) Fee Letter. The Borrower shall pay to Administrative Agent for its account
such other fees as are set forth in the Fee Letter on the dates specified therein to the extent not
paid prior to the Closing Date.

Section 2.05 Several Obligations. The failure of any Lender to make any Loan to
be made by it or to provide funds for disbursements or reimbursements under Letters of Credit on
the date specified therefor shall not relieve any other Lender of its obligation to make its Loan
or provide funds on such date, but no Lender shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender or to provide funds to be provided by such
other Lender.

19

 

Section 2.06 Notes. The Loans made by each Lender shall be evidenced by a single
promissory note of the Borrower in substantially the form of Exhibit A dated (i) the Closing Date
or (ii) the effective date of an Assignment pursuant to Section 12.06(b), payable to the order of
such Lender in a principal amount equal to its Maximum Revolving Credit Amount as originally in
effect and otherwise duly completed and such substitute Notes as required by Section 12.06(b). The
date, amount, Type, interest rate and Interest Period of each Loan made by each Lender, and all
payments made on account of the principal thereof, shall be recorded by such Lender on its books
for its Note, and, prior to any transfer may be endorsed by such Lender on the schedule attached to
such Note or any continuation thereof or on any separate record maintained by such Lender. Failure
to make any such notation or to attach a schedule shall not affect any Lender’s or the Borrower’s
rights or obligations in respect of such Loans or affect the validity of such transfer by any
Lender of its Note.

     Section 2.07 Prepayments

(a) Voluntary Prepayments. The Borrower may prepay the Base Rate Loans upon not
less than one (1) Business Day’s prior notice to the Administrative Agent (which shall promptly
notify the Lenders), which notice shall specify the prepayment date (which shall be a Business Day)
and the amount of the prepayment (which shall be at least $100,000 or the remaining aggregate
principal balance outstanding on the Notes) and shall be irrevocable and effective only upon
receipt by the Administrative Agent, provided that interest on the principal prepaid, accrued to
the prepayment date, shall be paid on the prepayment date. The Borrower may prepay LIBOR Loans on
the same conditions as for Base Rate Loans (except that prior notice to the Administrative Agent
shall be not less than three (3) Business Days for LIBOR Loans) and in addition such prepayments of
LIBOR Loans shall be subject to the terms of Section 5.05 and shall be in an amount equal to all of
the LIBOR Loans for the Interest Period prepaid. In the event of a voluntary prepayment pursuant to
this Section 2.07(a), Borrower shall be entitled to reborrow such amounts pursuant to Section 2.01.

(b) Mandatory Prepayments. If a Borrowing Base Deficiency results from the
redetermination of the Borrowing Base pursuant to Section 2.08(b) or (d), then the Borrower shall,
within thirty (30) days notify Administrative Agent of Borrower’s election to, (i) prepay the Loans
in two equal installments equal to one half of the aggregate principal amount sufficient to
eliminate such Borrowing Base Deficiency, together with interest on the principal amount paid
accrued to the date of each such prepayment due ninety (90) days and one hundred and eighty (180)
days from the date of such redetermination, (ii) pledge, or cause any Subsidiary to pledge,
additional unencumbered collateral of sufficient value and character (as determined by the
Administrative Agent and the Lenders in their sole discretion) that when added to the existing
collateral shall cause the Borrowing Base to equal or exceed the aggregate outstanding Loans plus
the LC Exposure, or (iii) any combination of (i) and (ii) satisfactory to the Administrative Agent
and all Lenders. If, because of LC Exposure, a Borrowing Base Deficiency remains after prepaying
all of the Loans, the Borrower shall pay to the Administrative Agent on behalf of the Lenders an
amount equal to such remaining Borrowing Base Deficiency to be held as cash collateral as provided
in Section 2.10(b).

(c) Generally. Prepayments permitted or required under this Section 2.07 shall
be without premium or penalty, except as required under Section 5.05 for prepayment of LIBOR Loans.
Any prepayments on the Loans may be reborrowed subject to the then effective Aggregate Revolving
Credit Commitments.

     Section 2.08 Borrowing Base.

(a) The Borrowing Base shall be determined in accordance with Section 2.08(b) by the
Administrative Agent with the concurrence of the Lenders and is subject to redetermination in
accordance with Section 2.08(d). Upon any redetermination of the Borrowing Base, such
redetermination shall remain in effect until the next Redetermination Date. So long as any of the
Commitments are in effect or any LC Exposure or Loans are outstanding hereunder, this facility
shall be governed by the then effective Borrowing Base. During the period from and after the
Closing Date until the first redetermination or reduction pursuant to Section 2.08, the amount of
the Borrowing Base shall be $155,000,000 (the “Initial Borrowing Base”) which amount is comprised
of the Oil and Gas Properties Collateral Value.

20

 

(b) Upon receipt of the reports required by Section 8.07 and such other reports, data and
supplemental information as may from time to time be reasonably requested by the Administrative
Agent (the “Engineering Reports”), the Borrowing Base shall be redetermined for each Borrowing Base
Period and each such redetermination shall be effective as of the date set forth in such notice of
redetermination delivered by the Administrative Agent to Borrower (the “Scheduled Redetermination
Date"). The Oil and Gas Properties Collateral Value shall be determined based upon the loan
collateral value assigned to the Mortgaged Properties. The Borrowing Base shall be equal to the sum
of the Oil and Gas Properties Collateral Value and such other credit factors (including without
limitation the assets, liabilities, cash flow, business, properties, prospects, management and
ownership of the Borrower and its Subsidiaries) which the Lenders deem significant. The Lenders’
determination of the Borrowing Base shall be in their sole discretion and shall not be subject to
review or challenge. Upon each redetermination of the Borrowing Base, the Administrative Agent
shall recommend to the Lenders a new Borrowing Base and the Lenders in accordance with their
customary policies and procedures for extending credit to oil and gas reserve-based customers shall
establish the redetermined Borrowing Base by unanimous agreement in the event of any increase in
the Borrowing Base and by agreement of at least the Majority Lenders in the event of any
redetermination to maintain or reduce the Borrowing Base. If a redetermined Borrowing Base is not
approved by the Administrative Agent and the applicable Lenders within twenty (20) days of the
submission to the Lenders by the Administrative Agent of its recommended Borrowing Base, the
Administrative Agent shall notify each Lender that the recommended Borrowing Base has not been
approved and request that each Lender submit to the Administrative Agent within ten (10) days
thereafter its proposed Borrowing Base. Promptly following the 10 th  day after
such request, the Administrative Agent shall determine the Borrowing Base for such Redetermination
by calculating the highest Borrowing Base then acceptable to the Administrative Agent and a number
of Lenders sufficient to constitute Majority Lenders (or all Lenders in the case of an increase).
If the Borrower does not furnish the Engineering Reports by the date required, the Lenders may
nonetheless determine a new Borrowing Base. It is expressly understood that the Lenders shall have
no obligation to determine the Borrowing Base at any particular amount, either in relation to the
Maximum Revolving Credit Amount or otherwise.

(c) The Borrower shall have the right to reduce the amount of the Borrowing Base upon not
less than thirty (30) days’ prior written notice to the Administrative Agent (who shall promptly
notify the Lenders) of the reduction, which shall specify the effective date thereof and the amount
of such reduction (which shall not be less than $1,000,000 or any whole multiple of $1,000,000 in
excess thereof, no more than an amount which would cause a Borrowing Base Deficiency) and shall be
irrevocable and effective only upon receipt by the Administrative Agent. The Borrowing Base once
reduced at Borrower’s election may not be reinstated by Borrower, nor shall Lenders be obligated to
determine the Borrowing Base at any subsequent Scheduled Redetermination Date or other Special
Borrowing Base Determination at any particular amount, either in relation to the Borrowing Base
prior or subsequent to any such optional reduction by Borrower.

(d) In addition to “Scheduled Redeterminations” pursuant to Section 2.08(b), the Borrower
and the Majority Lenders may each request one (1) additional redetermination of the Borrowing Base
during each Borrowing Base Period. In the event the Borrower or Majority Lenders request a “Special
Borrowing Base Determination” pursuant to this Section 2.08(d), the Borrower shall deliver written
notice of such request to the Administrative Agent which shall include: (i) Engineering Report(s)
prepared as of a date not more than thirty (30) calendar days prior to the date of such request,
and (ii) such other information as Administrative Agent and the Lenders shall request prepared as
of a date not more than thirty (30) calendar days prior to the date of such request. Likewise, in
the event the Lenders exercise their option for a Special Borrowing Base Determination, the
Administrative Agent shall give the Borrower notice of the redetermined Borrowing Base which shall
state the effective date of the redetermination.

21

 

Section 2.09 Assumption of Risks. The Borrower assumes all risks of the acts or
omissions of any beneficiary of any Letter of Credit or any transferee thereof with respect to its
use of such Letter of Credit. Neither the Issuing Bank (except in the case of gross negligence or
willful misconduct on the part of the Issuing Bank or any of its employees), its correspondents nor
any Lender shall be responsible for the validity, sufficiency or genuineness of certificates or
other documents or any endorsements thereon, even if such certificates or other documents should in
fact prove to be invalid, insufficient, fraudulent or forged; for errors, omissions, interruptions
or delays in transmissions or delivery of any messages by mail, telex, or otherwise, whether or not
they be in code; for errors in translation or for errors in interpretation of technical terms; the
validity or sufficiency of any instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason; the failure of any
beneficiary or any transferee of any Letter of Credit to comply fully with conditions required in
order to draw upon any Letter of Credit; or for any other consequences arising from causes beyond
the Issuing Bank’s control or the control of the Issuing Bank’s correspondents. In addition,
neither the Issuing Bank, the Administrative Agent nor any Lender shall be responsible for any
error, neglect, or default of any of the Issuing Bank’s correspondents; and none of the above shall
affect, impair or prevent the vesting of any of the Issuing Bank’s, the Administrative Agent’s or
any Lender’s rights or powers hereunder or under the Letter of Credit Agreements, all of which
rights shall be cumulative. The Issuing Bank and its correspondents may accept certificates or
other documents that appear on their face to be in order, without responsibility for further
investigation of any matter contained therein regardless of any notice or information to the
contrary. In furtherance and not in limitation of the foregoing provisions, the Borrower agrees
that any action, inaction or omission taken or not taken by the Issuing Bank or by any
correspondent for the Issuing Bank in good faith in connection with any Letter of Credit, or any
related drafts, certificates, documents or instruments, shall be binding on the Borrower and shall
not put the Issuing Bank or its correspondents under any resulting liability to the Borrower.

     Section 2.10 Obligation to Reimburse and to Prepay.

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

22

 

Notwithstanding anything in this Agreement to the contrary, the Borrower will not be liable
for payment or performance that results from the gross negligence or willful misconduct of the
Issuing Bank, except (i) where the Borrower or any Subsidiary actually recovers the proceeds for
itself or the Issuing Bank of any payment made by the Issuing Bank in connection with such gross
negligence or willful misconduct or (ii) in cases where the Administrative Agent makes payment to
the named beneficiary of a Letter of Credit.

(b) In the event of the occurrence of any Event of Default, a payment or prepayment
pursuant to Section 2.07(b) or the maturity of the Notes, whether by acceleration or otherwise, an
amount equal to the LC Exposure (or the excess in the case of Section 2.07(b)) shall be deemed to
be forthwith due and owing by the Borrower to the Issuing Bank, the Administrative Agent and the
Lenders as of the date of any such occurrence; and the Borrower’s obligation to pay such amount
shall be absolute and unconditional, without regard to whether any beneficiary of any such Letter
of Credit has attempted to draw down all or a portion of such amount under the terms of a Letter of
Credit, and, to the fullest extent permitted by applicable law, shall not be subject to any defense
or be affected by a right of set-off, counterclaim or recoupment which the Borrower may now or
hereafter have against any such beneficiary, the Issuing Bank, the Administrative Agent, the
Lenders or any other Person for any reason whatsoever. Such payments shall be held by the Issuing
Bank on behalf of the Lenders as cash collateral securing the LC Exposure in an account or accounts
at the Principal Office; and the Borrower hereby grants to and by its deposit with the
Administrative Agent grants to the Administrative Agent a security interest in such cash
collateral. In the event of any such payment by the Borrower of amounts contingently owing under
outstanding Letters of Credit and in the event that thereafter drafts or other demands for payment
complying with the terms of such Letters of Credit are not made prior to the respective expiration
dates thereof, the Administrative Agent agrees, if no Event of Default has occurred and is
continuing or if no other amounts are outstanding under this Agreement, the Notes or the Security
Instruments, to remit to the Borrower amounts for which the contingent obligations evidenced by the
Letters of Credit have ceased.

(c) Each Lender severally and unconditionally agrees that it shall promptly reimburse the
Issuing Bank an amount equal to such Lender’s Percentage Share of any disbursement made by the
Issuing Bank under any Letter of Credit that is not reimbursed according to this Section 2.10.

(d) Notwithstanding anything to the contrary contained herein, if no Default exists and
subject to availability under the Aggregate Revolving Credit Commitments (after reduction for LC
Exposure), to the extent the Borrower has not reimbursed the Issuing Bank for any drawn upon Letter
of Credit within one (1) Business Days after notice of such disbursement has been received by the
Borrower, the amount of such Letter of Credit reimbursement obligation shall automatically be
funded by the Lenders as a Loan hereunder and used by the Lenders to pay such Letter of Credit
reimbursement obligation. If an Event of Default has occurred and is continuing, or if the funding
of such Letter of Credit reimbursement obligation as a Loan would cause the aggregate amount of all
Loans outstanding to exceed the Aggregate Revolving Credit Commitments (after reduction for LC
Exposure), such Letter of Credit reimbursement obligation shall not be funded as a Loan, but
instead shall accrue interest as provided in Section 2.10(a).

23

 

Section 2.11 Lending Offices. The Loans of each Type made by each Lender shall be
made and maintained at such Lender’s Applicable Lending Office for Loans of such Type.

ARTICLE III

Payments of Principal and Interest

Section 3.01 Repayment of Loans.

(a) Loans. On the Revolving Credit Termination Date the Borrower shall repay the
outstanding aggregate principal of the Notes.

(b) Generally. The Borrower will pay to the Administrative Agent, for the account
of each Lender, the principal payments required by this Section 3.01.

     Section 3.02 Interest.

(a) Interest Rates. The Borrower will pay to the Administrative Agent, for the
account of each Lender, interest on the unpaid principal amount of each Loan made by such Lender
for the period commencing on the date such Loan is made to, but excluding, the date such Loan shall
be paid in full, at the following rates per annum:

(i) if such a Loan is a Base Rate Loan, the Base Rate (as in effect from time to
time) plus the Applicable Margin, but in no event to exceed the Highest Lawful Rate; and

(ii) if such a Loan is a LIBOR Loan, for each Interest Period relating thereto, the
Adjusted LIBOR for such Loan plus the Applicable Margin (as in effect from time to time), but
in no event to exceed the Highest Lawful Rate.

(b) Post-Default Rate. Notwithstanding the foregoing, the Borrower will pay to
the Administrative Agent, for the account of each Lender interest at the applicable Post-Default
Rate on any Loan made by such Lender, and (to the fullest extent permitted by law) on any other
amount payable by the Borrower hereunder, under any Loan Document or under any Note held by such
Lender to or for account of such Lender, for the period commencing on the date of an Event of
Default until the same is paid in full or all Events of Default are cured or waived.

(c) Due Dates. Accrued interest on Base Rate Loans shall be payable on each
Quarterly Date commencing on the first Quarterly Date, and accrued interest on each LIBOR Loan
shall be payable on the last day of the Interest Period therefor and, if such Interest Period is
longer than three months, at three-month intervals following the first day of such Interest Period,
except that interest payable at the Post-Default Rate shall be payable from time to time on demand
and interest on any LIBOR Loan that is converted into a Base Rate Loan (pursuant to Section 5.04)
shall be payable on the date of conversion (but only to the extent so converted). Any accrued and
unpaid interest on the Loans on the Revolving Credit Termination Date shall be paid on such date.

(d) Determination of Rates. Promptly after the determination of any interest rate
provided for herein or any change therein, the Administrative Agent shall notify the Lenders to
which such interest is payable and the Borrower thereof. Each determination by the Administrative
Agent of an interest rate or fee hereunder shall, except in cases of manifest error, be final,
conclusive and binding on the parties.

24

 

ARTICLE IV

Payments; Pro Rata Treatment; Computations; Etc.

Section 4.01 Payments. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower under this Agreement,
the Notes, Letters of Credit, and the Letter of Credit Agreements shall be made in Dollars, in
immediately available funds, to the Administrative Agent at such account as the Administrative
Agent shall specify by notice to the Borrower from time to time, not later than 12:00 p.m.
Charlotte, North Carolina time on the date on which such payments shall become due (each such
payment made after such time on such due date to be deemed to have been made on the next succeeding
Business Day). Such payments shall be made without (to the fullest extent permitted by applicable
law) defense, set-off or counterclaim. Each payment received by the Administrative Agent under this
Agreement or any Note for account of a Lender shall be paid promptly to such Lender in immediately
available funds. Except as otherwise provided in the definition of “Interest Period”, if the due
date of any payment under this Agreement or any Note would otherwise fall on a day which is not a
Business Day such date shall be extended to the next succeeding Business Day and interest shall be
payable for any principal so extended for the period of such extension. At the time of each payment
to the Administrative Agent of any principal of or interest on any borrowing, the Borrower shall
notify the Administrative Agent of the Loans to which such payment shall apply. In the absence of
such notice the Administrative Agent may specify the Loans to which such payment shall apply, but
to the extent possible such payment or prepayment will be applied first to the Loans comprised of
Base Rate Loans.

Section 4.02 Pro Rata Treatment. Except to the extent otherwise provided herein
each Lender agrees that: (i) each borrowing from the Lenders under Section 2.01 and each
continuation and conversion under Section 2.02 shall be made from the Lenders pro rata in
accordance with their Percentage Share, each payment of fees under Sections 2.04(a) and 2.04(b)(i)
shall be made for account of the Lenders pro rata in accordance with their Percentage Share, and
each termination or reduction of the amount of the Aggregate Revolving Credit Commitments or the
Aggregate Maximum Revolving Credit Amounts under Section 2.03 shall be applied to the Commitment of
each Lender, pro rata according to the amounts of its respective Commitment; (ii) each payment of
principal of Loans by the Borrower shall be made for account of the Lenders pro rata in accordance
with the respective unpaid principal amount of the Loans held by the Lenders; and (iii) each
payment of interest on Loans by the Borrower shall be made for account of the Lenders pro rata in
accordance with the amounts of interest due and payable to the respective Lenders; and (iv) each
reimbursement by the Borrower of disbursements under Letters of Credit shall be made for account of
the Issuing Bank or, if funded by the Lenders, pro rata for the account of the Lenders, in
accordance with the amounts of reimbursement obligations due and payable to each respective Lender.

Section 4.03 Computations. Interest on LIBOR Loans and fees shall be computed on
the basis of a year of 360 days and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which such interest is payable, unless such calculation would
exceed the Highest Lawful Rate, in which case interest shall be calculated on the per annum basis
of a year of 365 or 366 days, as the case may be. Interest on Base Rate Loans shall be computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the
first day but excluding the last day) occurring in the period for which such interest is payable.

Section 4.04 Non-receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Borrower prior to the date on
which such notifying party is scheduled to make payment to the Administrative Agent (in the case of
a Lender) of the proceeds of a Loan or a payment under a Letter of Credit to be made by it
hereunder or (in the case of the Borrower) a payment to the Administrative Agent for account of one
or more of the Lenders hereunder (such payment being herein called the “Required Payment”), which
notice shall be effective upon receipt, that it does not intend to make the Required Payment to the
Administrative Agent, the Administrative Agent may assume that the Required Payment has been made
and may, in reliance upon such assumption (but shall not be required to), make the amount thereof
available to the intended recipient(s) on such date and, if such Lender or the Borrower (as the
case may be) has not in fact made the Required Payment to the Administrative Agent, the
recipient(s) of such payment shall, on demand, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Administrative Agent until, but excluding, the date
the Administrative Agent recovers such amount at a rate per annum which, for any Lender as
recipient, will be equal to the Federal Funds Rate, and for the Borrower as recipient, will be
equal to the Base Rate plus the Applicable Margin.

25

 

     Section 4.05 Set-off, Sharing of Payments, Etc.

(a) The Borrower agrees that, in addition to (and without limitation of) any right of
set-off, bankers’ lien or counterclaim a Lender may otherwise have, each Lender shall have the
right and be entitled (after consultation with the Administrative Agent), at its option, to offset
balances held by it or by any of its Affiliates for account of the Borrower or any Subsidiary at
any of its offices, in Dollars or in any other currency, against any principal of or interest on
any of such Lender’s Loans, or any other amount payable to such Lender hereunder, which is not paid
when due (regardless of whether such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Administrative Agent thereof, provided that such Lender’s
failure to give such notice shall not affect the validity thereof.

(b) If any Lender shall obtain payment of any principal of or interest on any Loan made
by it to the Borrower under this Agreement (or reimbursement as to any Letter of Credit) through
the exercise of any right of set-off, banker’s lien or counterclaim or similar right or otherwise,
and, as a result of such payment, such Lender shall have received a greater percentage of the
principal or interest (or reimbursement) then due hereunder by the Borrower to such Lender than the
percentage received by any other Lenders, it shall promptly (i) notify the Administrative Agent and
each other Lender thereof and (ii) purchase from such other Lenders participations in (or, if and
to the extent specified by such Lender, direct interests in) the Loans (or participations in
Letters of Credit) made by such other Lenders (or in interest due thereon, as the case may be) in
such amounts, and make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such excess payment (net of any expenses which may
be incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance
with the unpaid principal and/or interest on the Loans held by each of the Lenders (or
reimbursements of Letters of Credit). To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise) if such payment is
rescinded or must otherwise be restored. The Borrower agrees that any Lender so purchasing a
participation (or direct interest) in the Loans made by other Lenders (or in interest due thereon,
as the case may be) may exercise all rights of set-off, banker’s lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a direct holder of Loans
(or Letters of Credit) in the amount of such participation. Nothing contained herein shall require
any Lender to exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower. If under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a set-off to which this Section 4.05 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this Section 4.05 to share the
benefits of any recovery on such secured claim.

26

 

     Section 4.06 Taxes.

(a) Payments Free and Clear. Any and all payments by the Borrower hereunder shall
be made, in accordance with Section 4.01, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender, the Issuing Bank and the
Administrative Agent, taxes imposed on its income, and franchise or similar taxes imposed on it, by
(i) any jurisdiction (or political subdivision thereof) of which the Administrative Agent, the
Issuing Bank or such Lender, as the case may be, is a citizen or resident or in which such Lender
has an Applicable Lending Office, (ii) the jurisdiction (or any political subdivision thereof) in
which the Administrative Agent, the Issuing Bank or such Lender is organized, or (iii) any
jurisdiction (or political subdivision thereof) in which such Lender, the Issuing Bank or the
Administrative Agent is presently doing business which taxes are imposed solely as a result of
doing business in such jurisdiction (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to the
Lenders, the Issuing Bank or the Administrative Agent (i) the sum payable shall be increased by the
amount necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.06) such Lender, the Issuing Bank or the
Administrative Agent (as the case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.

(b) Other Taxes. In addition, to the fullest extent permitted by applicable law,
the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this Agreement, any
Assignment or any Security Instrument (hereinafter referred to as “Other Taxes”).

(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
BORROWER WILL INDEMNIFY EACH LENDER AND THE ISSUING BANK AND THE ADMINISTRATIVE AGENT FOR THE FULL
AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, BUT NOT LIMITED TO, ANY TAXES OR OTHER TAXES IMPOSED BY
ANY GOVERNMENTAL AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID BY SUCH LENDER, THE
ISSUING BANK OR THE ADMINISTRATIVE AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY LENDER), AS THE CASE
MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH
RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED UNLESS
THE PAYMENT OF SUCH TAXES WAS NOT CORRECTLY OR LEGALLY ASSERTED AND SUCH LENDER’S PAYMENT OF SUCH
TAXES OR OTHER TAXES WAS THE RESULT OF ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. ANY PAYMENT
PURSUANT TO SUCH INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER THE DATE ANY LENDER,
THE ISSUING BANK OR THE ADMINISTRATIVE AGENT, AS THE CASE MAY BE, MAKES WRITTEN DEMAND THEREFOR. IF
ANY LENDER, ISSUING BANK OR THE ADMINISTRATIVE AGENT RECEIVES A REFUND OR CREDIT IN RESPECT OF ANY
TAXES OR OTHER TAXES FOR WHICH SUCH LENDER, ISSUING BANK OR THE ADMINISTRATIVE AGENT HAS RECEIVED
PAYMENT FROM THE BORROWER IT SHALL PROMPTLY NOTIFY THE BORROWER OF SUCH REFUND OR CREDIT AND SHALL,
IF NO DEFAULT HAS OCCURRED AND IS CONTINUING, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A REQUEST BY
THE BORROWER (OR PROMPTLY UPON RECEIPT, IF THE BORROWER HAS REQUESTED APPLICATION FOR SUCH REFUND
OR CREDIT PURSUANT HERETO), PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO THE BORROWER WITHOUT
INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR CREDITED) PROVIDED THAT THE BORROWER, UPON THE
REQUEST OF SUCH LENDER, THE ISSUING BANK OR THE ADMINISTRATIVE AGENT, AGREES TO RETURN SUCH REFUND
OR CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH LENDER OR THE ADMINISTRATIVE AGENT IN
THE EVENT SUCH LENDER OR THE ADMINISTRATIVE AGENT IS REQUIRED TO REPAY SUCH REFUND OR CREDIT.

27

 

(d) Lender Representations.

(i) Each Lender represents that it is either (1) a banking association or
corporation organized under the laws of the United States of America or any state thereof or
(2) it is entitled to complete exemption from United States withholding tax imposed on or
with respect to any payments, including fees, to be made to it pursuant to this Agreement (A)
under an applicable provision of a tax convention to which the United States of America is a
party or (B) because it is acting through a branch, agency or office in the United States of
America and any payment to be received by it hereunder is effectively connected with a trade
or business in the United States of America. Each Lender that is not a banking association or
corporation organized under the laws of the United States of America or any state thereof
agrees to provide to the Borrower and the Administrative Agent on the Closing Date, or on the
date of its delivery of the Assignment pursuant to which it becomes a Lender, and at such
other times as required by United States law or as the Borrower or the Administrative Agent
shall reasonably request, two accurate and complete original signed copies of either (A)
Internal Revenue Service Form W-8ECI (or successor form) certifying that all payments to be
made to it hereunder will be effectively connected to a United States trade or business (the
“Form W-8ECI Certification”) or (B) Internal Revenue Service Form W-8BEN (or successor form)
certifying that it is entitled to the benefit of a provision of a tax convention to which the
United States of America is a party which completely exempts from United States withholding
tax all payments to be made to it hereunder (the “Form W-8BEN Certification”). In addition,
each Lender agrees that if it previously filed a Form W-8ECI Certification, it will deliver
to the Borrower and the Administrative Agent a new Form W-8ECI Certification prior to the
first payment date occurring in each of its subsequent taxable years; and if it previously
filed a Form W8BEN Certification, it will deliver to the Borrower and the Administrative
Agent a new certification prior to the first payment date falling in the third year following
the previous filing of such certification. Each Lender also agrees to deliver to the Borrower
and the Administrative Agent such other or supplemental forms as may at any time be required
as a result of changes in applicable law or regulation in order to confirm or maintain in
effect its entitlement to exemption from United States withholding tax on any payments
hereunder, provided that the circumstances of such Lender at the relevant time and applicable
laws permit it to do so. If a Lender determines, as a result of any change in either (i) a
Governmental Requirement or (ii) its circumstances, that it is unable to submit any form or
certificate that it is obligated to submit pursuant to this Section 4.06, or that it is
required to withdraw or cancel any such form or certificate previously submitted, it shall
promptly notify the Borrower and the Administrative Agent of such fact. If a Lender is
organized under the laws of a jurisdiction outside the United States of America, unless the
Borrower and the Administrative Agent have received a Form W-8BEN Certification or Form
W-8ECI Certification satisfactory to them indicating that all payments to be made to such
Lender hereunder are not subject to United States withholding tax, the Borrower shall
withhold taxes from such payments at the applicable statutory rate. Each Lender agrees to
indemnify and hold harmless the Borrower or Administrative Agent, as applicable, from any
United States taxes, penalties, interest and other expenses, costs and losses incurred or
payable by (i) the Administrative Agent as a result of such Lender’s failure to submit any
form or certificate that it is required to provide pursuant to this Section 4.06 or (ii) the
Borrower or the Administrative Agent as a result of their reliance on any such form or
certificate which such Lender has provided to them pursuant to this Section 4.06.

28

 

(ii) For any period with respect to which a Lender has failed to provide the
Borrower with the form required pursuant to this Section 4.06, if any (other than if such
failure is due to a change in a Governmental Requirement occurring subsequent to the date on
which a form originally was required to be provided), such Lender shall not be entitled to
indemnification under Section 4.06 with respect to taxes imposed by the United States which
taxes would not have been imposed but for such failure to provide such forms; provided,
however, that if a Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such taxes.

(iii) Any Lender claiming any additional amounts payable pursuant to this Section
4.06 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document requested by the Borrower or the Administrative Agent or to
change the jurisdiction of its Applicable Lending Office or to contest any tax imposed if the
making of such a filing or change or contesting such tax would avoid the need for or reduce
the amount of any such additional amounts that may thereafter accrue and would not, in the
sole determination of such Lender, be otherwise disadvantageous to such Lender.

ARTICLE V

Capital Adequacy

      Section 5.01 Additional Costs. 

(a) LIBOR Regulations, etc. The Borrower shall pay directly to each Lender from
time to time such amounts as such Lender may determine to be necessary to compensate such Lender
for any costs which it determines are attributable to its making or maintaining of any LIBOR Loans
or issuing or participating in Letters of Credit hereunder or its obligation to make any LIBOR
Loans or issue or participate in any Letters of Credit hereunder, or any reduction in any amount
receivable by such Lender hereunder in respect of any of such LIBOR Loans, Letters of Credit (such
increases in costs and reductions in amounts receivable being herein called “Additional Costs”),
resulting from any Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or any Note in respect of any of such LIBOR Loans or
Letters of Credit (other than taxes imposed on the overall net income of such Lender or of its
Applicable Lending Office for any of such LIBOR Loans by the jurisdiction in which such Lender has
its principal office or Applicable Lending Office); or (ii) imposes or modifies any reserve,
special deposit, minimum capital, capital ratio or similar requirements relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of such Lender, or the
Commitment or Loans of such Lender or the London interbank market; or (iii) imposes any other
condition affecting this Agreement or any Note (or any of such extensions of credit or liabilities)
or such Lender’s Commitment or Loans. Each Lender will notify the Administrative Agent and the
Borrower of any event occurring after the Closing Date which will entitle such Lender to
compensation pursuant to this Section 5.01(a) as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation, and will designate a different Applicable
Lending Office for the Loans of such Lender affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender, provided that such Lender shall have no obligation to so
designate an Applicable Lending Office located in the United States. If any Lender requests
compensation from the Borrower under this Section 5.01(a), the Borrower may, by notice to such
Lender, suspend the obligation of such Lender to make additional Loans of the Type with respect to
which such compensation is requested until the Regulatory Change giving rise to such request ceases
to be in effect (in which case the provisions of Section 5.04 shall be applicable).

29

 

(b) Regulatory Change. Without limiting the effect of the provisions of Section
5.01(a), in the event that at any time (by reason of any Regulatory Change or any other
circumstances arising after the Closing Date affecting (A) any Lender, (B) the London interbank
market or (C) such Lender’s position in such market), the Adjusted LIBOR, as determined in good
faith by such Lender, will not adequately and fairly reflect the cost to such Lender of funding its
LIBOR Loans, then, if such Lender so elects, by notice to the Borrower and the Administrative
Agent, the obligation of such Lender to make additional LIBOR Loans shall be suspended until such
Regulatory Change or other circumstances ceases to be in effect (in which case the provisions of
Section 5.04 shall be applicable).

(c) Capital Adequacy. Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Borrower shall pay directly to any Lender from
time to time on request such amounts as such Lender may reasonably determine to be necessary to
compensate such Lender or its parent or holding company for any costs which it determines are
attributable to the maintenance by such Lender or its parent or holding company (or any Applicable
Lending Office), pursuant to any Governmental Requirement following any Regulatory Change, of
capital in respect of its Commitment, its Note, or its Loans or any interest held by it in any
Letter of Credit, such compensation to include, without limitation, an amount equal to any
reduction of the rate of return on assets or equity of such Lender or its parent or holding company
(or any Applicable Lending Office) to a level below that which such Lender or its parent or holding
company (or any Applicable Lending Office) could have achieved but for such Governmental
Requirement. Such Lender will notify the Borrower that it is entitled to compensation pursuant to
this Section 5.01(c) as promptly as practicable after it determines to request such compensation.

(d) Compensation Procedure. Any Lender notifying the Borrower of the incurrence
of Additional Costs under this Section 5.01 shall in such notice to the Borrower and the
Administrative Agent set forth in reasonable detail the basis and amount of its request for
compensation. Determinations and allocations by each Lender for purposes of this Section 5.01 of
the effect of any Regulatory Change pursuant to Section 5.01(a) or (b), or of the effect of capital
maintained pursuant to Section 5.01(c), on its costs or rate of return of maintaining Loans or its
obligation to make Loans or issue Letters of Credit, or on amounts receivable by it in respect of
Loans or Letters of Credit, and of the amounts required to compensate such Lender under this
Section 5.01, shall be conclusive and binding for all purposes, provided that such determinations
and allocations are made on a reasonable basis. Any request for additional compensation under this
Section 5.01 shall be paid by the Borrower within thirty (30) days of the receipt by the Borrower
of the notice described in this Section 5.01(d).

Section 5.02 Limitation on LIBOR Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Adjusted LIBOR for any Interest
Period:

(i) the Administrative Agent determines (which determination shall be conclusive,
absent manifest error) that quotations of interest rates for the relevant deposits referred
to in the definition of “Adjusted LIBOR” in Section 1.02 are not being provided in the
relevant amounts or for the relevant maturities for purposes of determining rates of interest
for LIBOR Loans as provided herein; or

30

 

(ii) the Administrative Agent determines (which determination shall be conclusive,
absent manifest error) that the relevant rates of interest referred to in the definition of
“Adjusted LIBOR” in Section 1.02 upon the basis of which the rate of interest for LIBOR Loans
for such Interest Period is to be determined are not sufficient to adequately cover the cost
to the Lenders of making or maintaining LIBOR Loans; then the Administrative Agent shall give
the Borrower prompt notice thereof, and so long as such condition remains in effect, the
Lenders shall be under no obligation to make additional LIBOR Loans.

Section 5.03 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending Office to honor its
obligation to make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify the
Borrower thereof and such Lender’s obligation to make LIBOR Loans shall be suspended until such
time as such Lender may again make and maintain LIBOR Loans (in which case the provisions of
Section 5.04 shall be applicable).

Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03. If the
obligation of any Lender to make LIBOR Loans shall be suspended pursuant to Sections 5.01, 5.02 or
5.03 (“Affected Loans”), all Affected Loans which would otherwise be made by such Lender shall be
made instead as Base Rate Loans (and, if an event referred to in Section 5.01(b) or Section 5.03
has occurred and such Lender so requests by notice to the Borrower, all Affected Loans of such
Lender then outstanding shall be automatically converted into Base Rate Loans on the date specified
by such Lender in such notice) and, to the extent that Affected Loans are so made as (or converted
into) Base Rate Loans, all payments of principal which would otherwise be applied to such Lender’s
Affected Loans shall be applied instead to its Base Rate Loans.

Section 5.05 Compensation. The Borrower shall pay to each Lender within thirty
(30) days of receipt of written request of such Lender (which request shall set forth, in
reasonable detail, the basis for requesting such amounts and which shall be conclusive and binding
for all purposes provided that such determinations are made on a reasonable basis), such amount or
amounts as shall compensate it for any loss, cost, expense or liability which such Lender
determines are attributable to:

(i) any payment, prepayment or conversion of a LIBOR Loan properly made by such
Lender or the Borrower for any reason (including, without limitation, the acceleration of the
Loans pursuant to Section 10.01) on a date other than the last day of the Interest Period for
such Loan; or

(ii) any failure by the Borrower for any reason (including but not limited to, the
failure of any of the conditions precedent specified in Article VI to be satisfied) to
borrow, continue or convert a LIBOR Loan from such Lender on the date for such borrowing,
continuation or conversion specified in the relevant notice given pursuant to Section
2.02(c).

Without limiting the effect of the preceding sentence, such compensation shall include an
amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the
principal amount so paid, prepaid or converted or not borrowed for the period from the date of such
payment, prepayment or conversion or failure to borrow to the last day of the Interest Period for
such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan which would
have commenced on the date specified for such borrowing) at the applicable rate of interest for
such Loan provided for herein over (ii) the interest component of the amount such Lender would have
bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to
such principal amount and with maturities comparable to such period (as reasonably determined by
such Lender).

31

 

ARTICLE VI

Conditions Precedent

Section 6.01 Initial Funding. The obligation of the Lenders to make the Initial
Funding and of any Issuing Bank to issue any Letters of Credit hereunder is subject to the receipt
by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on or
before the Closing Date and the receipt by the Administrative Agent of the following documents and
satisfaction of the other conditions provided in this Section 6.01, each of which shall be
satisfactory to the Administrative Agent in form and substance:

(a) A certificate of the Secretary or an Assistant Secretary of the Borrower setting
forth (i) resolutions of its sole member with respect to the authorization of the Borrower to
execute and deliver the Loan Documents to which it is a party and to enter into the transactions
contemplated in those documents, (ii) the officers of the Borrower or its sole member (y) who are
authorized to sign the Loan Documents to which Borrower is a party and (z) who will, until replaced
by another officer or officers duly authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other communications in connection with this
Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized
officers, and (iv) the certificate of formation and operating agreement of the Borrower, certified
as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such
certificate until the Administrative Agent receives notice in writing from the Borrower to the
contrary.

(b) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting
forth (i) resolutions with respect to the authorization of such Guarantor to execute and deliver
the Loan Documents to which it is a party and to enter into the transactions contemplated in those
documents, (ii) the officers (y) who are authorized to sign the Loan Documents to which such
Guarantor is a party and (z) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes of signing documents and
giving notices and other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the certificate
of formation and operating agreement (or equivalent constituent documents) of such Guarantor,
certified as being true and complete. The Administrative Agent and the Lenders may conclusively
rely on such certificates until they receive notice in writing from any Guarantor to the contrary.

(c) Certificates of the appropriate state agencies with respect to the existence,
qualification and good standing of the Obligors.

(d) A compliance certificate which shall be substantially in the form of Exhibit C, duly
and properly executed by a Responsible Officer and dated as of the date of the Initial Funding.

     (e) The Notes, duly completed and executed.

(f) The Security Instruments, including those described on Exhibit D, duly completed and
executed by the respective parties thereto in sufficient number of counterparts for recording, if
necessary including delivery of all original stock certificates, blank stock powers, and
Intercompany Notes duly endorsed as required under such Security Instruments.

     (g) Review of Obligors’ financial condition satisfactory to Lenders.

(h) An opinion of Ledgewood, counsel to the Obligors and from other local counsel
acceptable to the Administrative Agent with respect to enforceability of the Security Instruments
under the laws of the states wherein the Oil and Gas Properties are located, each in form and
substance satisfactory to the Administrative Agent, as to such matters incident to the transactions
herein contemplated as the Administrative Agent may reasonably request.

32

 

(i) A certificate of insurance coverage of the Borrower and each Guarantor evidencing that the
Borrower and each Guarantor are carrying insurance in accordance with Section 7.20 and Section
8.03(b).

(j) Title information as the Administrative Agent may require setting forth the status
of title acceptable to the Administrative Agent to at least 80% of the value of the Oil and Gas
Properties of the Obligors, including the Obligors’ pro rata interest in the Partnerships’ Oil and
Gas Properties included in the Initial Reserve Report.

(k) The Administrative Agent shall have been furnished with appropriate UCC search
certificates and other evidence satisfactory to the Administrative Agent with respect to Obligors’
and the Partnerships’ Oil and Gas Properties reflecting no prior Liens other than Excepted Liens.

(l) Environmental assessments and other reports to the extent maintained by Obligors
covering Obligors’ and the Partnerships’ Oil and Gas Properties reporting on the current
environmental condition of such Properties satisfactory to Lenders.

(m) All authorizations, approvals or consents as may be necessary for the execution,
delivery and performance by any Obligor under this Agreement.

     (n) The Guaranty Agreements duly completed and executed by the Guarantors.

(o) Consummation of the Initial Public Offering on or prior to January 31, 2007, on
substantially the same terms as contained in the Registration Statement.

(p) (A) The Borrower shall have received all governmental, shareholder and third party
consents and approvals necessary to consummate the Initial Public Offering, which consents and
approvals are in full force and effect, (B) no order, decree, judgment, ruling or injunction exists
which restrains the consummation of the Initial Public Offering or the transactions contemplated by
this Agreement, and (C) there is no pending, or to the knowledge of the Borrower, threatened,
action, suit, investigation or proceeding which seeks to restrain or affect the Initial Public
Offering, or which, if adversely determined, could materially and adversely affect the ability of
AER to consummate the Initial Public Offering.

(q) Evidence that the AAI Credit Agreement has been, or concurrently with the Closing
Date is being, terminated and all Liens securing obligations under the AAI Credit Agreement have
been, or concurrently with the Closing Date are being released.

(r) Such other assurances, certificates, documents, consents or opinions as the
Administrative Agent or any Lender or special counsel to the Administrative Agent may reasonably
request.

Section 6.02 Initial and Subsequent Loans and Letters of Credit. The obligation
of the Lenders to make Loans to the Borrower upon the occasion of each borrowing hereunder and to
issue, renew, extend or reissue Letters of Credit (including the Initial Funding) is subject to the
further conditions precedent that, as of the date of such Loans and after giving effect thereto:

(a) no Default shall have occurred and be continuing;

(b) no Material Adverse Effect shall have occurred; and

33

 

(c) the representations and warranties made by the Borrower in Article VII and in the Security
Instruments shall be true on and as of the date of the making of such Loans or issuance, renewal,
extension or reissuance of a Letter of Credit with the same force and effect as if made on and as
of such date and following such new borrowing, except to the extent such representations and
warranties are expressly limited to an earlier date.

Each request for a borrowing or issuance, renewal, extension or reissuance of a Letter of
Credit by the Borrower hereunder shall constitute a certification by the Borrower to the effect set
forth in Section 6.02(c) (both as of the date of such notice and, unless the Borrower otherwise
notifies the Administrative Agent prior to the date of and immediately following such borrowing or
issuance, renewal, extension or reissuance of a Letter of Credit as of the date thereof).

Section 6.03 Conditions Precedent for the Benefit of Lenders. All conditions
precedent to the obligations of the Lenders to make any Loan are imposed hereby solely for the
benefit of the Lenders, and no other Person may require satisfaction of any such condition
precedent or be entitled to assume that the Lenders will refuse to make any Loan in the absence of
strict compliance with such conditions precedent.

Section 6.04 No Waiver. No waiver of any condition precedent shall preclude the
Administrative Agent or the Lenders from requiring such condition to be met prior to making any
subsequent Loan or preclude the Lenders from thereafter declaring that the failure of the Borrower
to satisfy such condition precedent constitutes a Default.

ARTICLE VII

Representations and Warranties

Each of the Obligors represents and warrants to the Administrative Agent and the Lenders
that (each representation and warranty herein is given as of the Closing Date and shall be deemed
repeated and reaffirmed on the dates of each borrowing and issuance, renewal, extension or
reissuance of a Letter of Credit as provided in Section 6.02):

Section 7.01 Corporate Existence. Each of the Obligors: (i) is a corporation, or
limited partnership or limited liability company duly organized, formed, legally existing and in
good standing under the laws of the jurisdiction of its incorporation or formation, as applicable;
(ii) has all requisite corporate, partnership, or limited liability company power, as applicable,
and has all material governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be conducted; and (iii) is
qualified to do business in all jurisdictions in which the nature of the business conducted by it
makes such qualification necessary and where failure so to qualify would have a Material Adverse
Effect.

Section 7.02 Financial Condition. The Financial Statements are complete and
correct and fairly present the consolidated financial condition of the AER and its Consolidated
Subsidiaries as of the applicable dates and the results of its operations for the applicable
period, all in accordance with GAAP, as applied on a consistent basis (subject, in the case of the
interim financial statements, to normal year-end adjustments, and in the case of the historical
financial statements of Atlas America E&P Operations, to the matters described in the Registration
Statement under the heading, “Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Comparability of Financial Statements”). Neither the Borrower nor any
Guarantor has on the Closing Date any material Debt, contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable
commitments. Since December 31, 2005, there has been no change or event having a Material Adverse
Effect.

34

 

Section 7.03 Litigation. Except as disclosed to the Lenders in Schedule 7.03
hereto, there is no litigation, legal, administrative or arbitral proceeding, investigation or
other action of any nature pending or, to the knowledge of the Obligors threatened against or
affecting the Obligors or any Subsidiary which involves the possibility of any judgment or
liability against any Obligor or any Subsidiary not fully covered by insurance (except for normal
deductibles), and which would have a Material Adverse Effect. Schedule 7.03 attached hereto is a
list of all litigation in which any Obligor is a party under which the amount in controversy
including all expenses, fees and costs is greater than $250,000.

Section 7.04 No Breach. Neither the execution and delivery of the Loan Documents,
nor compliance with the terms and provisions hereof will conflict with or result in a breach of, or
require any consent which has not been obtained as of the Closing Date under, the respective
charter or by-laws of the Obligors, or any Governmental Requirement, or any agreement or instrument
to which any Obligor is a party or by which it is bound or to which it or its Properties are
subject, or constitute a default under any such agreement or instrument, or result in the creation
or imposition of any Lien upon any of the revenues or assets of the Obligor pursuant to the terms
of any such agreement or instrument other than the Liens created by the Loan Documents.

Section 7.05 Authority. Each Obligor has all necessary corporate, limited
liability company, or partnership power and authority, as applicable, to execute, deliver and
perform its obligations under the Loan Documents to which it is a party; and the execution,
delivery and performance by each Obligor of the Loan Documents to which it is a party, have been
duly authorized by all necessary corporate, limited liability company, or partnership action, as
applicable, on its part; and the Loan Documents constitute the legal, valid and binding obligations
of each Obligor, enforceable in accordance with their terms.

Section 7.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority or any other Person are necessary for the
execution, delivery or performance by any Obligor of the Loan Documents to which it is a party or
for the validity or enforceability thereof, except for the recording and filing of the Security
Instruments as required by this Agreement.

Section 7.07 Use of Loans. The proceeds of the Loans shall be used (i) to repay
on the Closing Date advances from AAI relating to the AAI Credit Agreement, (ii) for the
development of the Obligors’ Oil and Gas Properties and the acquisition of Oil and Gas Properties
and related assets by the Obligors, (iii) to fund Obligors’ capital contributions under the
Partnerships, provided such capital contributions may not be used for the purpose of funding
partnership distributions, (iv) as working capital, (v) for Letters of Credit to support the
obligations of the Borrower and its Subsidiaries, and (vi) for general company purposes of the
Borrower and its Subsidiaries. Neither the Borrower nor any other Obligor is engaged principally,
or as one of its important activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of
Regulation T, U or X of the Board of Governors of the Federal Reserve System) and no part of the
proceeds of any Loan hereunder will be used to buy or carry any margin stock.

     Section 7.08 ERISA.

(a) Each Obligor, each Subsidiary and each ERISA Affiliate have complied in all material
respects with ERISA and, where applicable, the Code regarding each Plan.

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

35

 

(c) No act, omission or transaction has occurred which could result in imposition on any
Obligor, any Subsidiary or any ERISA Affiliate (whether directly or indirectly) of (i) either a
civil penalty assessed pursuant to section 502(c), (i) or (1) of ERISA or a tax imposed pursuant to
Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under
section 409 of ERISA.

(d) No contingent obligations remain due to the termination of any Plan (other than a
defined contribution plan) or any trust created under any such Plan since September 2, 1974. The
only Plan that has been terminated was for The Atlas Group, Inc. No liability to the PBGC (other
than for the payment of current premiums which are not past due) by any Obligor, any Subsidiary or
any ERISA Affiliate has been or is expected by any Obligor, any Subsidiary or any ERISA Affiliate
to be incurred with respect to any Plan. No ERISA Event with respect to any Plan has occurred.

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

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

(g) None of the Obligors, any Subsidiary or any ERISA Affiliate sponsors, maintains, or
contributes to an employee welfare benefit plan, as defined in section 3(l) of ERISA, including,
without limitation, any such plan maintained to provide benefits to former employees of such
entities, that may not be terminated by an Obligor, a Subsidiary or any ERISA Affiliate in its sole
discretion at any time without any material liability.

(h) None of the Obligors, any Subsidiary or any ERISA Affiliate sponsors, maintains or
contributes to, or has at any time in the preceding six calendar years, sponsored, maintained or
contributed to, any Multiemployer Plan.

(i) None of the Obligors, any Subsidiary or any ERISA Affiliate is required to provide
security under section 401 (a)(29) of the Code due to a Plan amendment that results in an increase
in current liability for the Plan.

Section 7.09 Taxes. Each Obligor and its Subsidiaries has filed all United States
federal income tax returns and all other tax returns which are required to be filed by them, or
otherwise obtained appropriate extensions to file, and have paid all material taxes due pursuant to
such returns or pursuant to any assessment received by any Obligor or any Subsidiary except such
taxes that are being contested in good faith by appropriate proceedings and for which such Obligor,
as applicable, has set aside on its books adequate reserves in accordance with GAAP. The charges,
accruals and reserves on the books of each Obligor and its Subsidiaries in respect of taxes and
other governmental charges are, in the opinion of the Borrower, adequate. No tax lien has been
filed and, to the knowledge of the Obligors, no claim is being asserted with respect to any such
tax, fee or other charge.

Section 7.10 Titles, etc.

(a) Each of the Obligors has good and marketable title to its Oil and Gas Properties,
free and clear of all Liens, except Excepted Liens. After giving full effect to the Excepted Liens,
each Obligor owns either directly in its own name, or indirectly through its percentage ownership
interest in the Partnerships, the net interests in production attributable to its Hydrocarbon
Interests reflected in the most recently delivered Ownership Report and the ownership of such Oil
and Gas Properties shall not in any material respect obligate such Obligor to bear the costs and
expenses relating to the maintenance, development and operations of each such Oil and Gas Property
in an amount in excess of the working interest of each Oil and Gas Property set forth in the most
recently delivered Reserve Report; provided that to the extent an Obligor is a general partner of a
Partnership, such Obligor is liable for all of the costs and expenses attributable to such
Partnership’s interest, but only entitled to such Obligor’s percentage interest in such
Partnership’s net revenues. In the event an Obligor, as a general partner, pays more than its
partnership share of such Partnership’s costs and expenses, such Obligor is entitled to
reimbursement of such excess amount out of the future income of such Partnership. All information
contained in the most recently delivered Ownership Report and Reserve Report is true and correct in
all material respects as of the date thereof.

36

 

(b) All leases and agreements necessary for the conduct of the business of the Obligors
are valid and subsisting, in full force and effect and there exists no default or event or
circumstance which with the giving of notice or the passage of time or both would give rise to a
default under any such lease or leases, which would affect in any material respect the conduct of
the business of any Obligor.

(c) The rights, Properties and other assets presently owned, leased or licensed by the
Obligors including, without limitation, all easements and rights of way, include all rights,
Properties and other assets necessary to permit each Obligor to conduct its business in all
material respects in the same manner as its business has been conducted prior to the Closing Date.

(d) All of the assets and Properties of any Obligor which are reasonably necessary for
the operation of its business are in good working condition and are maintained in accordance with
prudent business standards.

Section 7.11 No Material Misstatements. No written information, statement,
exhibit, certificate, document or report furnished to the Administrative Agent and the Lenders (or
any of them) by any Obligor in connection with the negotiation of this Agreement contained any
material misstatement of fact or omitted to state a material fact or any fact necessary to make the
statement contained therein not materially misleading in the light of the circumstances in which
made; provided that, with respect to financial projections concerning the Borrower and its
Subsidiaries, the Borrower represents only that such information was prepared in good faith based
on assumptions believed to be reasonable at the time. There is no fact peculiar to any Obligor
which has 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 other documents,
certificates and statements furnished to the Administrative Agent by or on behalf of the Obligors
prior to, or on, the Closing Date in connection with the transactions contemplated hereby.

Section 7.12 Investment Company Act. None of the Obligors nor any Subsidiary is
an “investment company” or a company “controlled” by an “investment company,” within the meaning of
the Investment Company Act of 1940, as amended.

     Section 7.13 [Intentionally Deleted]

Section 7.14 Partnership Interests. Obligors own the percentage general partner
and limited partner interests in the Partnerships set forth on Schedule 7.14. None of the Obligors
own any interest in any partnership or other Special Entity other than the Special Entities listed
on Schedule 7.15 and the Partnerships. The Obligors’ ownership interests in the Partnerships are
free and clear of any and all liens, claims and encumbrances including any preferential rights to
purchase and consents to assignments.

37

 

Section 7.15 Capitalization and Subsidiaries. The amount and type of the
authorized securities of each of the entities listed on Schedule 7.15 are accurately described
thereon, and all such securities that are issued and outstanding have been validly issued and are
fully paid and nonassessable and are owned by and issued to the Person listed as their owner on
Schedule 7.15. Except for the Persons set forth on Schedule 7.15, neither Borrower nor any
Guarantor owns directly or indirectly any capital stock of any other Person other than the
Partnerships. Borrower and each Guarantor has good and marketable title to all the securities of
the Subsidiaries (except for the Unrestricted Entities) issued to it, free and clear of all liens
and encumbrances, and all such securities have been duly and validly issued and are fully paid and
nonassessable.

Section 7.16 Location of Business and Offices. Each Obligor’s principal place of
business and chief executive offices are located at the address stated on the signature page of
this Agreement.

Section 7.17 Defaults. None of the Obligors is in default nor has any event or
circumstance occurred which, but for the expiration of any applicable grace period or the giving of
notice, or both, would constitute a default under any Material Agreement or instrument to which any
Obligor is a party or by which any Obligor is bound. No Default hereunder has occurred and is
continuing.

Section 7.18 Environmental Matters. Except as would not have a Material Adverse
Effect (or with respect to (c), (d) and (e) below, where the failure to take such actions would not
have a Material Adverse Effect):

(a) Neither any Property of Borrower or any Subsidiary nor the operations conducted
thereon violate any order or requirement of any court or Governmental Authority or any
Environmental Laws;

(b) Without limitation of clause (a) above, no Property of Borrower or any Subsidiary nor
the operations currently conducted thereon or, to the best knowledge of the Obligors, by any prior
owner or operator of such Property or operation, are in violation of or Subject to any existing,
pending or threatened action, suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under Environmental Laws;

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

(d) All hazardous substances, solid waste, and oil and gas exploration and production
wastes, if any, generated at any and all Property of Borrower or any Subsidiary have in the past
been transported, treated and disposed of in accordance with Environmental Laws and so as not to
pose an imminent and substantial endangerment to public health or welfare or the environment, and,
to the best knowledge of the Obligors, all such transport carriers and treatment and disposal
facilities have been and are operating in compliance with Environmental Laws and so as not to pose
an imminent and substantial endangerment to public health or welfare or the environment, and are
not the subject of any existing, pending or threatened action, investigation or inquiry by any
Governmental Authority in connection with any Environmental Laws;

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

38

 

(f) To the extent applicable, all Property of Borrower and each Subsidiary currently
satisfies all design, operation, and equipment requirements imposed by the OPA or scheduled as of
the Closing Date to be imposed by OPA during the term of this Agreement, and Borrower does not have
any reason to believe that such Property, to the extent subject to OPA, will not be able to
maintain compliance with the OPA requirements during the term of this Agreement; and

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

Section 7.19 Compliance with the Law. None of the Obligors has violated any
Governmental Requirement or failed to obtain any license, permit, franchise or other governmental
authorization necessary for the ownership of any of its Properties or the conduct of its business,
which violation or failure would have (in the event such violation or failure were asserted by any
Person through appropriate action) a Material Adverse Effect. Except for such acts or failures to
act as would not have a Material Adverse Effect, the Oil and Gas Properties of the Obligors (and
properties unitized therewith) have been maintained, operated and developed in a good and
workmanlike manner and in conformity with all applicable laws and all rules, regulations and orders
of all duly constituted authorities having jurisdiction and in conformity with the provisions of
all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other
contracts and agreements forming a part of such Oil and Gas Properties; specifically in this
connection, (i) after the Closing Date, no Oil and Gas Property of any Obligor is subject to having
allowable production reduced below the full and regular allowable (including the maximum
permissible tolerance) because of any overproduction (whether or not the same was permissible at
the time) prior to the Closing Date and (ii) none of the wells comprising a part of the Oil and Gas
Properties of any Obligor (or properties unitized therewith) are deviated from the vertical more
than the maximum permitted by applicable laws, regulations, rules and orders, and such wells are,
in fact, bottomed under and are producing from, and the well bores are wholly within, such Oil and
Gas Properties (or in the case of wells located on properties unitized therewith, such unitized
properties).

Section 7.20 Insurance. Schedule 7.20 attached hereto contains an accurate and
complete description of all material policies of fire, liability, workers’ compensation and other
forms of insurance owned or held by the Obligors. All such policies are in full force and effect,
all premiums with respect thereto covering all periods up to and including the date of the closing
have been paid, and no notice of cancellation or termination has been received with respect to any
such policy. Such policies are sufficient for compliance with all requirements of law and of all
agreements to which any Obligor is a party; are valid, outstanding and enforceable policies;
provide adequate insurance coverage in at least such amounts and against at least such risks (but
including in any event public liability) as are usually insured against in the same general area by
companies engaged in the same or a similar business for the assets and operations of the Obligors;
will remain in full force and effect through the respective dates set forth in Schedule 7.20
without the payment of additional premiums; and will not in any way be affected by, or terminate or
lapse by reason of, the transactions contemplated by this Agreement. Schedule 7.20 identifies all
material risks, if any, which each Obligor and their respective Board of Directors or officers have
designated as being self insured. None of the Obligors has been refused any insurance with respect
to its assets or operations, nor has its coverage been limited below usual and customary policy
limits, by an insurance carrier to which it has applied for any such insurance or with which it has
carried insurance during the last three years.

Section 7.21 Hedging Agreements. Schedule 7.21 sets forth, as of the Closing
Date, a true and complete list of all Hedging Agreements (including commodity price swap
agreements, forward agreements or contracts of sale which provide for prepayment for deferred
shipment or delivery of oil, gas or other commodities) of the Obligors, the material terms thereof
(including the type, term, effective date, termination date and notional amounts or volumes), the
net mark to market value thereof, all credit support agreements relating thereto (including any
margin required or supplied), and the counter party to each such agreement. Borrower is the only
Person authorized to enter into Hedging Agreements on behalf of the Obligors and the Partnerships,
and no other Obligor or Partnership currently does (or will in the future) enter into any Hedging
Agreement on its own behalf.

39

 

Section 7.22 Restriction on Liens. Neither the Borrower nor any Guarantor is a
party to any agreement or arrangement (other than this Agreement and the Security Instruments), or
subject to any order, judgment, writ or decree, which either restricts or purports to restrict its
ability to grant Liens to other Persons on or in respect of their respective assets or Properties.

Section 7.23 Material Agreements. Set forth on Schedule 7.23 is a complete list
of all agreements, indentures, purchase agreements, obligations in respect of letters of credit,
guarantees, partnership agreements, exploration and development agreements, joint venture
agreements, and other instruments which are material to each Obligor’s business, activities, and
operation or ownership of such Obligors’ Property (the "Material Agreements") in effect or to be in
effect as of the Closing Date (other than the Partnership Agreements set forth on Schedule 7.14 and
Hedging Agreements set forth on Schedule 7.21) providing for, evidencing, securing or otherwise
relating to any Debt of any such Obligor or any of its Subsidiaries, and all obligations of
Borrower or any of the Guarantors to issuers of surety or appeal bonds issued for account of any
such Obligor. The Borrower shall also make available to Administrative Agent and Lenders all
Material Agreements and other agreements and instruments (excluding any such agreements and other
instruments that are cancelable upon 60 or less days notice) of Borrower and each of the Obligors
relating to the purchase, transportation by pipeline, gas processing, marketing, sale and supply of
natural gas and other Hydrocarbons, but in any event, any such agreement or other instrument that
will account for more than 10% of the sales of any such Obligor during the Borrower’s current
fiscal year. Upon request by Administrative Agent, the Borrower shall deliver, or caused to be
delivered, to the Administrative Agent and the Lenders a complete and correct copy of all such
Material Agreements.

Section 7.24 Gas Imbalances. As of the Closing Date, except as set forth on
Schedule 7.24 or on the most recent certificate delivered pursuant to Section 8.07(c), on a net
basis there are no gas imbalances, take or pay or other prepayments with respect to any of the
Obligors’ Oil and Gas Properties which would require any such Obligors to deliver, in the
aggregate, five percent (5%) or more of the monthly production of Hydrocarbons produced from their
Oil and Gas Properties at some future time without then or thereafter receiving fall payment
therefor.

Section 7.25 Relationship of Obligors. The Obligors are engaged in related
businesses and each Obligor is directly and indirectly dependent upon each other Obligor for and in
connection with their business activities and their financial resources; and each Obligor has
determined, reasonably and in good faith, that such Obligor will receive substantial direct and
indirect economic and financial benefits from the extensions of credit made under this Agreement,
and such extensions of credit are in the best interests of such Obligor, having regard to all
relevant facts and circumstances.

Section 7.26 Solvency. The Borrower and its Subsidiaries individually and on a
consolidated basis are not insolvent as such term is used and defined in the United States
Bankruptcy Code.

40

 

ARTICLE VIII

Affirmative Covenants

Each of the Obligors covenants and agrees that, so long as any of the Commitments are in
effect and until payment in full of all Loans hereunder, all interest thereon and all other amounts
payable by the Obligors hereunder:

Section 8.01 Reporting Requirements. The Obligors shall deliver, or shall cause
to be delivered, to the Administrative Agent with sufficient copies of each for the Lenders:

(a) Annual Financial Statements. As soon as available and in any event within one
hundred (100) days after the end of each of its fiscal year, the audited consolidated and unaudited
consolidating statements of income, stockholders’ equity, changes in financial position and cash
flow for AER and its Consolidated Subsidiaries for such fiscal year, and the related consolidated
and consolidating balance sheets of AER and its Consolidated Subsidiaries as at the end of such
fiscal year, and setting forth in each case in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by the related opinion of independent public accountants of
recognized national standing acceptable to the Administrative Agent which opinion shall state that
said financial statements fairly present the consolidated and consolidating financial condition and
results of operations of such Person and its Consolidated Subsidiaries as at the end of, and for,
such fiscal year and that such financial statements have been prepared in accordance with GAAP,
except for such changes in such principles with which the independent public accountants shall have
concurred and such opinion shall not contain a “going concern” or like qualification or exception,
and a certificate of such accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of any Default.

(b) Quarterly Financial Statements. As soon as available and in any event within
fifty-five (55) days after the end of each of the first three fiscal quarterly periods of each of
its fiscal year for each of AER, consolidated and consolidating statements of income, stockholders’
equity, changes in financial position and cash flow of AER and its Consolidated Subsidiaries for
such period and for the period from the beginning of the respective fiscal year to the end of such
period, and the related consolidated and consolidating balance sheets as at the end of such period,
and setting forth in each case in comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, accompanied by the certificate of a Responsible Officer, which
certificate shall state that said financial statements fairly present the consolidated and
consolidating financial condition and results of operations of such Person and its Consolidated
Subsidiaries in accordance with GAAP, as at the end of, and for, such period (subject to normal
year-end audit adjustments).

(c) Notice of Default, Etc. Promptly after any Obligor knows that any Default,
Event of Default, labor dispute, or any Material Adverse Effect has occurred, a notice of such
Default or Material Adverse Effect, describing the same in reasonable detail and the action the
Borrower or any Guarantor proposes to take with respect thereto.

(d) Other Accounting Reports. Promptly upon receipt thereof, a copy of each other
report or letter submitted to the Obligor or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the books of the Obligor and
its Subsidiaries, and a copy of any response by the Obligor or any Subsidiary, or the board of
directors or comparable governing body of the Obligor or such Subsidiary, to such letter or report.

(e) SEC Filings, Etc. Promptly upon its becoming available, each financial
statement, report, notice or proxy statement sent by AER and its Subsidiaries to stockholders
generally and each regular or periodic report and any registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof filed by AER and its Subsidiaries
with or received by AER and its Subsidiaries in connection therewith from any securities exchange
or the SEC or any successor agency.

41

 

Documents required to be delivered pursuant to this Section 8.01(e) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on the date on which AER
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); provided that:
(i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender; and (ii) the Borrower
shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents.

(f) Notices Under Other Loan Agreements. Promptly after the furnishing thereof,
copies of any statement, report or notice furnished by AER, Borrower or any of its Subsidiaries to
any Person pursuant to the terms of any indenture, loan or credit or other similar agreement, other
than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other
provision of this Section 8.01.

(g) Other Matters. From time to time such other information regarding the
business, affairs or financial condition of any Obligor or any Subsidiary (including, without
limitation, any Plan or Multiemployer Plan and any reports or other information required to be
filed under ERISA) as any Lender or the Administrative Agent may reasonably request.

(h) Hedging Agreements. As soon as available and in any event within fifteen
Business Days after the last day of each fiscal quarter, (i) a report, in form and substance
satisfactory to the Administrative Agent, setting forth as of the last Business Day of such fiscal
quarter a true and complete list of all Hedging Agreements (including commodity price swap
agreements, forward agreements or contracts of sale which provide for prepayment for deferred
shipment or delivery of oil, gas or other commodities) of the Obligors, 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 7.21, any margin required or supplied under any credit support document, and the counter
party to each such agreement, and (ii) a hedging compliance report substantially in the form
attached hereto as Exhibit I.

The Borrower will furnish to the Administrative Agent, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate substantially in the
form of Exhibit C executed by a Responsible Officer (i) certifying as to the matters set forth
therein and stating that no Default has occurred and is continuing (or, if any Default has occurred
and is continuing, describing the same in reasonable detail), and (ii) setting forth in reasonable
detail the computations necessary to determine whether the Borrower is in compliance with Sections
9.13, 9.14, and 9.15 as of the end of Borrower’s fiscal quarter or fiscal year.

Section 8.02 Litigation. Borrower and its Subsidiaries shall promptly give to the
Administrative Agent notice of any litigation or proceeding against or adversely affecting Borrower
or any Subsidiary in which the amount claimed exceeds $1,000,000 or an aggregate of claims in
excess of $5,000,000 and is not otherwise covered in full by insurance (subject to normal and
customary deductibles and for which the insurer has not assumed the defense), or in which
injunctive or similar relief is sought. Borrower will, and will cause each of its Subsidiaries to,
promptly notify the Administrative Agent and each of the Lenders of any claim, judgment, Lien or
other encumbrance affecting any Property of Borrower or any Subsidiary if the value of the claim,
judgment, Lien, or other encumbrance affecting such Property shall exceed $1,000,000 or an
aggregate of such claims in excess of $5,000,000.

42

 

     Section 8.03 Maintenance, Etc.

(a) Generally. Except as permitted under Section 9.09, each Obligor shall and
shall cause each of its Subsidiaries to: preserve and maintain its organization, existence and all
of its material rights, privileges and franchises; keep books of record and account in which full,
true and correct entries will be made of all dealings or transactions in relation to its business
and activities; comply with all Governmental Requirements if failure to comply with such
requirements will have a Material Adverse Effect; pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or profits or on any of its Property
prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or
levy the payment of which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained; upon reasonable notice, permit representatives of the
Administrative Agent or any Lender, during normal business hours, to examine, copy and make
extracts from its books and records, to inspect its Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by such Lender or the
Administrative Agent (as the case may be); and keep, or cause to be kept, insured by financially
sound and reputable insurers all Property of a character usually insured by Persons engaged in the
same or similar business similarly situated against loss or damage of the kinds and in the amounts
customarily insured against by such Persons and carry such other insurance as is usually carried by
such Persons including, without limitation, environmental risk insurance to the extent reasonably
available.

(b) Proof of Insurance. Contemporaneously with the delivery of the financial
statements required by Section 8.01(a) to be delivered for each year, the Borrower will furnish or
cause to be furnished to the Administrative Agent and the Lenders a certificate of insurance
coverage from the insurer in form and substance satisfactory to the Administrative Agent listing
Administrative Agent as “loss payee” and, if requested, will furnish the Administrative Agent and
the Lenders copies of the applicable policies.

(c) Oil and Gas Properties. Borrower will and will cause each of its Subsidiaries
to, do or cause to be done all things reasonably necessary to preserve and keep in good repair,
working order and efficiency all of its Oil and Gas Properties and other material Properties
including, without limitation, all equipment, machinery and facilities, and from time to time will
make all the reasonably necessary repairs, renewals and replacements so that at all times the state
and condition of its Oil and Gas Properties and other material Properties will be fully preserved
and maintained, except to the extent a portion of such Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts. Borrower will and will cause each of its
Subsidiaries to promptly: (i) pay and discharge, or make reasonable and customary efforts to cause
to be paid and discharged, all delay rentals, royalties, expenses and indebtedness accruing under
the leases or other agreements affecting or pertaining to its Oil and Gas Properties, (ii) perform
or make reasonable and customary efforts to cause to be performed, in accordance with industry
standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases,
contracts and agreements affecting its interests in its Oil and Gas Properties and other material
Properties, (iii) will and will cause each Subsidiary to do all other things necessary to keep
unimpaired, except for Liens described in Section 9.03, its rights with respect to its Oil and Gas
Properties and other material Properties and prevent any forfeiture thereof or a default
thereunder, except to the extent a portion of such Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts and except for Transfers permitted by Section 9.16.
Borrower will and will cause each of its Subsidiaries to operate its Oil and Gas Properties and
other material Properties or cause or make reasonable and customary efforts to cause such Oil and
Gas Properties and other material Properties to be operated in a careful and efficient manner in
accordance with the practices of the industry and in compliance with all applicable contracts and
agreements and in compliance in all material respects with all Governmental Requirements.

43

 

     Section 8.04 Environmental Matters.

(a) Establishment of Procedures. The Obligors will and will cause each of their
Subsidiaries to establish and implement such procedures as may be reasonably necessary to
continuously determine and assure that any failure of the following does not have a Material
Adverse Effect: (i) all Property of the Obligors and their Subsidiaries and the operations
conducted thereon and other activities of the Obligors and their Subsidiaries are in compliance
with and do not violate the requirements of any Environmental Laws, (ii) no oil, hazardous
substances or solid wastes are disposed of or otherwise released on or to any Property owned by any
such party except in compliance with Environmental Laws, (iii) no hazardous substance will be
released on or to any such Property in a quantity equal to or exceeding that quantity which
requires reporting pursuant to Section 103 of CERCLA, and (iv) no oil, oil and gas exploration and
production wastes or hazardous substance is released on or to any such Property so as to pose an
imminent and substantial endangerment to public health or welfare or the environment.

(b) Notice of Action. The Obligors will promptly notify the Administrative Agent
and the Lenders in writing of any threatened action, investigation or inquiry by any Governmental
Authority of which any Obligor has knowledge in connection with any Environmental Laws, excluding
routine testing and corrective action.

(c) Future Acquisitions. The Obligors will and will cause each of their
Subsidiaries to provide environmental audits and tests in accordance with American Society for
Testing and Materials standards as reasonably requested by the Administrative Agent and the Lenders
(or as otherwise required to be obtained by the Administrative Agent or the Lenders by any
Governmental Authority) in connection with any future acquisitions of Oil and Gas Properties or
other material Properties.

Section 8.05 Further Assurances. The Obligors will and will cause each of their
Subsidiaries to cure promptly any defects in the creation and issuance of the Notes and the
execution and delivery of the Security Instruments and this Agreement. The Obligors at their
expense will and will cause each Subsidiary to promptly execute and deliver to the Administrative
Agent upon request all such other documents, agreements and instruments to comply with or
accomplish the covenants and agreements of the Obligors or any Subsidiary, as the case may be, in
any Loan Document, or to further evidence and more fully describe the collateral intended as
security for the Notes, or to correct any omissions in any Loan Document, or to state more fully
the security obligations set out herein or in any Loan Document, or to perfect, protect or preserve
any Liens created pursuant to any of the Security Instruments, or to make any recordings, to file
any notices or obtain any consents, all as may be necessary or appropriate in connection therewith.

Section 8.06 Performance of Obligations. The Borrower will pay the Notes
according to the reading, tenor and effect thereof; the Guarantors will pay under the Guarantees
according to the terms thereof, and the Obligors will and will cause each of their Subsidiaries to
do and perform every act and discharge all of the obligations to be performed and discharged by
them under this Agreement and any other Loan Document, at the time or times and in the manner
specified.

     Section 8.07 Engineering Reports.

(a) Not less than 30 days prior to each Scheduled Borrowing Base Redetermination Date,
commencing with the Scheduled Borrowing Base Redetermination to occur on or around March 15, 2007,
the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report. The
Reserve Reports delivered in connection with each March 15 Scheduled Borrowing Base
Redetermination, commencing March 15, 2007, shall be prepared by certified independent petroleum
engineers or other independent petroleum consultant(s) acceptable to the Administrative Agent. The
Reserve Reports delivered in connection with each September 15 Scheduled Borrowing Base
Redetermination, commencing September 15, 2007, shall be prepared by or under the supervision of
the chief engineer of the Borrower and a Responsible Officer shall certify such Reserve Report to
be true and accurate and to have been prepared in accordance with the procedures used in the
immediately preceding Scheduled Borrowing Base Redetermination Reserve Report.

44

 

(b) In the event of an unscheduled redetermination, the Borrower shall furnish to the
Administrative Agent and the Lenders a Reserve Report prepared by or under the supervision of the
chief engineer of the Obligors together with the certificate of a Responsible Officer who shall
certify such Reserve Report to be true and accurate and to have been prepared in accordance with
the procedures used in the immediately preceding Reserve Report. For any unscheduled
redetermination requested by the Lenders or the Borrower pursuant to Section 2.08(d), the Borrower
shall provide such Reserve Report with an “as of” date as required by the Lenders as soon as
possible, but in any event no later than 30 days following the receipt of the request by the
Administrative Agent.

(c) With the delivery of each Reserve Report, the Borrower shall provide, or cause to be
provided, to the Administrative Agent and the Lenders, a certificate from a Responsible Officer
certifying that, to the best of his knowledge and in all material respects: (i) the information
contained in the Reserve Report and any other information delivered in connection therewith is true
and correct, (ii) the Obligors and the Partnerships own good and marketable 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 with respect to its Oil
and Gas Properties evaluated in such Reserve Report which would require any Obligor to deliver
Hydrocarbons produced from such Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor, (iv) none of Obligor’s or and the Partnerships’ Oil and
Gas Properties have been sold since the date of the last Borrowing Base determination except as set
forth on an exhibit to the certificate, which certificate shall list all of its Oil and Gas
Properties sold and in such detail as reasonably required by the Administrative Agent, (v) attached
to the certificate is a list of its Oil and Gas Properties added to and deleted from the
immediately prior Reserve Report and a list showing any change in working interest or net revenue
interest in its Oil and Gas Properties occurring and the reason for such change, (vi) attached to
the certificate is a list of all Persons disbursing proceeds to the Obligors from their Oil and Gas
Properties, and (vii) all of the Oil and Gas Properties evaluated by such Reserve Report are
Mortgaged Property except as set forth on a schedule attached to the certificate.

Section 8.08 Title Curative. Borrower shall cure, and shall cause its
Subsidiaries to cure or cause to be cured, any title defects or exceptions which are not Excepted
Liens raised by such information, or substitute acceptable Mortgaged Properties with no title
defects or exceptions except for Excepted Liens covering Mortgaged Properties of an equivalent
value, within 30 days after a request by the Administrative Agent to cure such defects or
exceptions.

      Section 8.09 Additional Collateral.

(a) Lien in Oil and Gas Properties. At all times hereunder that the Obligations
remain unpaid, including whenever any Obligor acquires any additional Oil and Gas Properties or
additional interests in existing Oil and Gas Properties, Obligors shall grant to the Administrative
Agent for the benefit of the Lenders as security for the Indebtedness a first-priority Lien
interest (subject only to Excepted Liens) covering at least 80% of the total value (based upon the
most recent Reserve Report plus the value of Oil and Gas Properties acquired after the date of such
Reserve Report determined on a basis consistent with the Reserve Report) of the Obligors’ Oil and
Gas Properties either directly under the Mortgages or indirectly under the pledge of their
interests in the Partnerships. Such Lien will be created and perfected by and in accordance with
the provisions of mortgages, deeds of trust, security agreements and financing statements, or other
Security Instruments, all in form and substance satisfactory to the Administrative Agent in its
sole discretion and in sufficient executed (and acknowledged where necessary or appropriate)
counterparts for recording purposes.

45

 

(b) Title Information. Concurrently with the granting of the Lien or other action
referred to in Section 8.09(a) above, the Borrower or its Subsidiaries will provide to the
Administrative Agent title information in form and substance satisfactory to the Administrative
Agent in its sole discretion with respect to such Obligor’s interests in such Oil and Gas
Properties.

(c) Legal Opinions. Promptly after the filing of any new Security Instrument in
any state, upon the request of the Administrative Agent, Borrower will provide, or cause to be
provided, to the Administrative Agent an opinion addressed to the Administrative Agent for the
benefit of the Lenders in form and substance satisfactory to the Administrative Agent in its sole
discretion from counsel acceptable to Administrative Agent, stating that the Security Instrument is
valid, binding and enforceable in accordance with its terms and in legally sufficient form for such
jurisdiction.

(d) Letters in Lieu.

(i) Upon request by Administrative Agent and Majority Lenders, Borrower shall, and
shall cause its Subsidiaries to, provide to Administrative Agent undated letters, in form of
Exhibit F attached hereto, from Borrower or such Subsidiary to each purchaser of production
and disburser of proceeds of production from or attributable to the Mortgaged Properties,
along with sufficient copies of additional executed letters with the addressees left blank,
authorizing and directing the addressees to make future payments attributable to production
from the Mortgaged Properties directly to Administrative Agent for the ratable benefit of the
Lenders.

(ii) Borrower and each of its Subsidiaries hereby designates Administrative Agent
as its agent and attorney-in-fact, to act in their name, place, and stead for the purpose of
completing and delivering any and all of the letters in lieu of division orders delivered by
Borrower and such Subsidiaries to Administrative Agent, including, without limitation,
completing any blanks contained in such letter and attaching exhibits thereto describing the
relevant Collateral. The Borrower and each of its Subsidiaries hereby ratifies and confirms
all that Administrative Agent shall lawfully do or cause to be done by virtue of this power
of attorney and the rights granted with respect to such power of attorney. This power of
attorney is coupled with the interest of Administrative Agent in the Collateral, shall
commence and be in full force and effect as of the Closing Date and shall remain in full
force and effect and shall be irrevocable so long as any Obligation remains outstanding or
unpaid or any Commitment exists. The powers conferred on Administrative Agent by this
appointment are solely to protect the interests of Administrative Agent and each of the
Lenders under the Loan Documents and shall not impose any duty upon Administrative Agent to
exercise any such powers. Administrative Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and shall not be responsible to
Borrower, its Subsidiaries, or any other Person for any act or failure to act with respect to
such powers, except for gross negligence or willful misconduct.

(iii) Until such time as Administrative Agent shall notify Borrower and its
Subsidiaries to the contrary, Borrower and its Subsidiaries shall be entitled to receive from
the purchasers or disbursers of production all such proceeds of runs, subject however to the
liens created under the Security Instruments. Upon the occurrence and during the continuance
of a Default or such other time as Administrative Agent shall in its discretion so elect,
Administrative Agent may deliver to the addressees the letters-in-lieu described in
Subsection 8.09(d)(i) above and may exercise all rights and remedies granted under the
Security Instruments, including the right to obtain possession of all proceeds of runs then
held by Borrower and its Subsidiaries or to receive directly from the purchaser or disburser
of production all other proceeds of runs.

46

 

(iv) In no case shall any failure, whether purposed or inadvertent, by
Administrative Agent to collect directly any such proceeds of runs constitute in any way a
waiver, remission or release of any of its rights under the Security Instruments, nor shall
any release of any other proceeds of runs or of any rights of Administrative Agent to collect
other proceeds of runs thereafter.

(e) Subordination of Obligor’s Liens.

(i) Each Obligor hereby subordinates and assigns in favor of Administrative Agent
for the benefit of the Lenders any and all liens, statutory or otherwise and any rights of
offset contractual or otherwise it has or may have in the future against such Obligors’
interests in the Mortgaged Properties or in the Oil and Gas Properties and revenues
attributable to its interest therein, including the Contracts and Records (defined below).

(ii) Any officer or employee of Administrative Agent is expressly granted the right
at its option upon not less than one (1) Business Day’s notice, to visit and inspect (a) each
Obligors’ offices, including all books and records, farmout agreements, area of mutual
interest agreements, development agreements, geologic and geophysical survey agreements,
operating agreements, contracts and other agreements that relate to any of the Mortgaged
Properties or in the Oil and Gas Properties, seismic, geological and geophysical, drilling
and production data and records, all accounting records, joint interest billing records,
division order records, land files, and contracts and records referring to the production,
sale, purchase, exchange or processing of Hydrocarbons whether such data, information or
agreements are in written form or electronic format (the “Contracts and Records”), and to
examine, take copies and extracts therefrom, and (b) any of the Mortgaged Properties.

(iii) Following the occurrence and during the continuance of an Event of Default,
each Obligor acknowledges that the Administrative Agent is expressly granted the right to
exercise any and all liens, statutory or otherwise, rights of offset or recoupment it has and
to receive the monies, income, proceeds, or benefits attributable to the sale of Oil and Gas
produced from or attributable to the Mortgaged Properties, to hold the same as security for
the Indebtedness and to apply it on the principal and interest or other amounts owing on any
of the Indebtedness, whether or not then due, in such order or manner as Administrative Agent
may elect.

(iv) In the event of a foreclosure, deed in lieu, or other transfer of record or
beneficial ownership or operations of the Mortgaged Properties, each Obligor, as bailee,
agrees to cooperate and assist Administrative Agent and its officers, agents and counsel in
the peaceful transfer and delivery of such Contracts and Records to such party or parties as
Administrative Agent may in writing direct.

(v) Following the occurrence and during the continuance of a Default or Event of
Default and within thirty (30) days after receipt of notice from Administrative Agent,
Obligors will relinquish their respective rights to operate the Properties of Obligors to the
Administrative Agent or its designee.

(f) Pledge of Partnerships. Borrower shall and shall cause each of its Wholly
Owned Subsidiaries that are not Unrestricted Entities to pledge all of its interest in any
Partnership and to provide such information about such Partnership as Lenders may reasonably
request.

47

 

(g) Subordination of Intercompany Debt. Any Intercompany Notes or advances of any
Obligor howsoever evidenced by journal entries or otherwise now or hereafter owed to or held by any
other Obligor are hereby subordinated to the Indebtedness of such other Obligor to the Lenders, and
any document or instrument evidencing such loans or advances shall contain a legend giving notice
of such subordination. Any Intercompany Notes or advances of any other Obligor due to such Obligor,
if the Administrative Agent so requests, shall be collected, enforced and received by such Obligor
as trustee for the Lenders and be paid over to the Administrative Agent for the account of the
Lenders on account of the Indebtedness but without affecting in any manner the liability of such
Obligor under the other provisions of this Agreement or any other Loan Document. Any Lien, claim,
right or other encumbrance on any property of any Obligor in favor of any other Obligor is hereby
subordinated in all respects to the Liens granted to the Administrative Agent for the benefit of
the Lenders.

Section 8.10 ERISA Information and Compliance. The Obligors will promptly furnish
and will cause the Subsidiaries and any ERISA Affiliate to promptly furnish to the Administrative
Agent with sufficient copies to the Lenders (i) promptly after the filing thereof with the United
States Secretary of Labor, the Internal Revenue Service or the PBGC, copies of each annual and
other report with respect to each Plan or any trust created thereunder, (ii) immediately upon
becoming aware of the occurrence of any ERISA Event or of any “prohibited transaction,” as
described in section 406 of ERISA or in section 4975 of the Code, in connection with any Plan or
any trust created thereunder, a written notice signed by a Responsible Officer specifying the
nature thereof, what action the Obligors, the Subsidiary or the ERISA Affiliate is taking or
proposes to take with respect thereto, and, when known, any action taken or proposed by the
Internal Revenue Service, the Department of Labor or the PBGC with respect thereto, and (iii)
immediately upon receipt thereof, copies of any notice of the PBGCs intention to terminate or to
have a trustee appointed to administer any Plan. With respect to each Plan (other than a
Multiemployer Plan), the Obligors will, and will cause each Subsidiary and ERISA Affiliate to, (i)
satisfy in full and in a timely manner, without incurring any late payment or underpayment charge
or penalty and without giving rise to any lien, all of the contribution and funding requirements of
section 412 of the Code (determined 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.

ARTICLE IX

Negative Covenants

The Obligors covenant and agree that, so long as any of the Commitments are in effect and
until payment in full of Loans hereunder, all interest thereon and all other amounts payable by the
Obligors hereunder, without the prior written consent of the Majority Lenders:

Section 9.01 Debt. None of the Obligors or their Subsidiaries (other than
Unrestricted Entities) and none of the Partnerships will incur, create, assume or permit to exist
any Debt, except:

(a) the Notes or other Indebtedness or any guaranty of or suretyship arrangement for the
Notes or other Indebtedness;

(b) Debt of the Borrower disclosed in Schedule 9.01, and any renewals or extensions (but
not increases) thereof;

(c) accounts payable (for the deferred purchase price of Property or services) from time
to time incurred in the ordinary course of business which, if greater than 90 days past the invoice
or billing date, are being contested in good faith by appropriate proceedings if reserves adequate
under GAAP shall have been established therefor;

48

 

     (d) Debt under leases permitted under Section 9.08;

(e) Debt associated with bonds or surety obligations pursuant to Governmental
Requirements in connection with the operation of any Obligor’s Oil and Gas Properties;

(f) Debt of the Obligors under Hedging Agreements permitted under Section 9.02;

(g) Debt to AAI not to exceed $15,000,000 in the aggregate; provided, that, all
such debt shall be unsecured and subordinated to the Obligations on terms and conditions
satisfactory to the Administrative Agent;

(h) Intercompany Debt; provided, that, (i) any such Intercompany Debt shall be
subordinated to the Obligations upon terms and conditions satisfactory to the Administrative Agent,
and (ii) such Intercompany Debt in excess of $250,000 shall be evidenced by an Intercompany Note
pledged to secure the Obligations and in the possession of the Administrative Agent; and

(i) Debt of the Borrower and its Subsidiaries not otherwise described under subparagraphs
(a) through (h) above not to exceed $5,000,000 in the aggregate.

Section 9.02 Hedging Agreements. Borrower shall not and shall not permit any
Guarantor to enter into or in any manner be liable on any Hedging Agreement except:

(a) Hedging Agreements entered into by the Borrower with the purpose and effect of fixing
prices on oil and/or gas expected to be produced by the Obligors and the Partnerships, provided
that at all times: (i) no such contract shall be for speculative purposes; (ii) no such contract
shall be entered into by the Borrower on behalf of another Person, except where Borrower has the
contractual authority to enter into such Hedging Agreement on behalf of such Person and the
obligations under such Hedging Agreement are fully recourse to such Person, (iii) no such contract
when aggregated with all Hedging Agreements entered into by the Borrower, shall be for nominal
volumes in excess of 85% of the total Oil and Gas attributable to the Obligors and Partnerships
estimated to be produced in any month from the Oil and Gas Properties classified as proved reserves
on the most recent Reserve Report(s) covering such Properties; (iv) the agreements documenting such
Hedging Agreements do not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party; and (v) each such
contract shall be with the Administrative Agent, or any of the Lenders or their Affiliates, or with
a counterparty or have a guarantor of the obligation of the counterparty who, at the time the
contract is made, has long-term obligations rated AA or Aa2 or better, respectively, by Standard &
Poor’s Corporation or Moody’s Investors Services, Inc. (or a successor credit rating agency).

(b) Hedging Agreements entered into with the purpose and effect of fixing interest rates
on a principal amount of the Notes of the Borrower that is accruing interest at a variable rate,
provided that (1) no such contract shall be for speculative purposes; (2) the floating rate index
of each such contract generally matches the index used to determine the floating rates of interest
on the corresponding Indebtedness of the Borrower to be hedged by such contract; (3) the aggregate
notional amount of such Hedging Agreements shall not exceed seventy-five percent (75%) of the
principal outstanding under the Notes; (4) the tenor of each such contract shall not extend beyond
the Revolving Credit Termination Date; and (5) each such contract shall be with a Lender or with a
counterparty or have a guarantor of the obligation of the counterparty who, at the time the
contract is made, has long-term obligations rated AA or Aa2 or better, respectively, by Standard &
Poor’s Corporation or Moody’s Investors Services, Inc. (or a successor credit rating agency).

49

 

(c) In the event the Borrower enters into a Hedging Agreement with any of the Lenders,
the Contingent Obligation evidenced under such Hedging Agreement shall not be applied against such
Lender’s Commitment nor against the Borrowing Base Utilization. Any Indebtedness incurred under any
Hedging Agreement with any Lender shall be treated as an Obligation pari passu with all Obligations
otherwise incurred hereunder or under the other Loan Documents and shall be secured under the
Security Instruments.

Section 9.03 Liens. None of the Borrower nor any of its 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 leases allowed under Section 9.08, but only on the Property under
lease;

(d) Liens on cash or securities of an Obligor securing the Debt described in Section
9.01(f) and (i); and

(e) Liens on the assets of Unrestricted Entities securing Debt of such Unrestricted
Entities.

Section 9.04 Investments, Loans and Advances. Borrower will not and will not
permit any Guarantor to make or permit to remain outstanding any loans or advances to or
investments in any Person, except that the foregoing restriction shall not apply to:

(a) accounts receivable arising in the ordinary course of business;

(b) 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;

(c) commercial paper maturing within one year from the date of creation thereof rated in
the highest grade by Standard & Poor’s Corporation or Moody’s Investors Service, Inc.;

(d) deposits maturing within one year from the date of creation thereof with, including
certificates of deposit issued by, any Lender or any office located in the United States of any
other bank or trust company which is organized under the laws of the United States or any state
thereof, has capital, surplus and undivided profits aggregating at least $100,000,000.00 (as of the
date of such Lender’s or bank or trust company’s most recent financial reports) and has a short
term deposit rating of no lower than A2 or P2, as such rating is set forth from time to time, by
Standard & Poor’s Corporation or Moody’s Investors Service, Inc., respectively;

(e) deposits in money market funds investing exclusively in investments described in
Section 9.04(c), or 9.04(d);

(f) investments, loans or advances in or to the Borrower or any Subsidiary permitted
under Section 9.01(g); and

50

 

(g) advances to fund Borrower’s and its Wholly Owned Subsidiaries’ capital contributions
under Partnerships as provided under Section 7.07(iii);

(h) Non-hostile acquisitions of equity securities, or assets constituting a business
unit, of any Person, provided that: (i) immediately prior to and after giving effect to such
acquisition, no Default or Event of Default exists or would result therefrom; (ii) if such
acquisition is of equity securities of a Person (other than an Unrestricted Entity), such person
becomes a Guarantor; (iii) such Person is principally engaged in the same business as the Obligors;
(iv) the Borrower shall be in pro forma compliance with the covenants set forth in Sections 9.13,
9.14 and 9.15 based on the trailing 12 quarters and as adjusted for such acquisition; (v) such
acquired Person or assets shall not be subject to any material liabilities except as permitted by
this Agreement; and (vi) a first priority perfected lien and security interest shall be granted to
the Administrative Agent for the benefit of the Lenders in such acquired assets; provided however,
that nothing herein shall require any Unrestricted Entity to grant a first priority lien in its
assets; and

(i) other investments, loans or advances not to exceed in the aggregate $7,500,000.

Section 9.05 Dividends, Distributions and Redemptions. The Borrower will not
declare or pay any dividend, purchase, redeem or otherwise acquire for value any of its stock now
or hereafter outstanding, return any capital to its stockholders or make any distribution of its
assets to its stockholders if an Event of Default has occurred and is continuing or would occur as
a result of such distribution.

Section 9.06 Sales and Leasebacks. Borrower shall not and shall not permit any
Guarantor to enter into any arrangement, directly or indirectly, with any Person whereby any such
Obligor shall sell or transfer any of its Property, whether now owned or hereafter acquired, and
whereby such shall then or thereafter rent or lease as lessee such Property or any part thereof or
other Property which such Obligor intends to use for substantially the same purpose or purposes as
the Property sold or transferred.

Section 9.07 Nature of Business. Borrower shall not and shall not permit any
Guarantor to allow any material change to be made in the character of its business or the business
of the Partnerships as an independent oil and gas exploration and production company. Borrower
shall not and shall not permit any Guarantor to materially amend, waive or modify any of their
Material Agreements or Partnership Agreements in any manner that could reasonably be expected to
cause any material and adverse effect on the Administrative Agent’s and the Lenders’ interests in
the collateral securing the Indebtedness, or the Administrative Agents’ or the Lenders’ ability to
enforce their rights and remedies under this Agreement or any other Loan Document, at law or in
equity.

Section 9.08 Limitation on Leases. Borrower shall not and shall not permit any
Guarantor to create, incur, assume or permit to exist any obligation for the payment of rent or
hire of Property of any kind whatsoever (real or personal including capital leases, but excluding
leases of Hydrocarbon Interests), under leases or lease agreements which would cause the aggregate
amount of all payments made by Borrower and the Guarantors pursuant to all such leases or lease
agreements to exceed $3,000,000 in any period of twelve consecutive calendar months during the life
of such leases.

Section 9.09 Mergers, Etc. Borrower shall not and shall not permit any Guarantor
to merge into or with or consolidate with any other Person, or liquidate, sell, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or substantially all of
its Property or assets (whether now owned or hereafter acquired) to or in favor of any other
Person, except, so long as no Default exists or would result therefrom, (i) any Guarantor may merge
with (A) the Borrower, provided the Borrower shall be the continuing or surviving Person, or (B)
any one or more other Subsidiaries, provided that when any Guarantor is merging with another
Subsidiary that is not a Guarantor, the continuing or surviving Person shall be a Guarantor, and
(ii) any Guarantor may dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or to another Subsidiary; provided if the transferor in
such a transaction is a Guarantor, then the transferee must either be the Borrower or a Guarantor.

51

 

Section 9.10 Proceeds of Notes and Letters of Credit. The Borrower will not
permit the proceeds of the Notes or Letters of Credit to be used for any purpose other than those
permitted by Section 7.07. Neither the Borrower nor any Person acting on behalf of the Borrower has
taken or will take any action which might cause any of the Loan Documents to violate Regulation T,
U or X or any other regulation of the Board of Governors of the Federal Reserve System or to
violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in
each case as now in effect or as the same may hereinafter be in effect.

Section 9.11 ERISA Compliance. The Borrower shall not, and shall not permit any
of its Subsidiaries at any time to:

(a) Engage in, or permit any Subsidiary or ERISA Affiliate to engage in, any transaction
in connection with which any Obligor, any Subsidiary or any ERISA Affiliate could be subjected to
either a civil penalty assessed pursuant to section 502(c), (i) or (1) of ERISA or a tax imposed by
Chapter 43 of Subtitle D of the Code;

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

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

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

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

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

(g) Acquire, or permit any Subsidiary or ERISA Affiliate to acquire, an interest in any
Person that causes such Person to become an ERISA Affiliate with respect to any Obligor, any
Subsidiary or any ERISA Affiliate if such Person sponsors, maintains or contributes to, or at any
time in the six-year period preceding such acquisition has sponsored, maintained, or contributed
to, (1) any Multiemployer Plan, or (2) any other Plan that is subject to Title IV of ERISA under
which the actuarial present value of the benefit liabilities under such Plan exceeds the current
value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities;

52

 

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

(i) Contribute to or assume an obligation to contribute to, or permit any Subsidiary or
ERISA Affiliate to contribute to or assume an obligation to contribute to, any employee welfare
benefit plan, as defined in section 3(l) of ERISA, including, without limitation, any such plan
maintained to provide

benefits to former employees of such entities, that may not be terminated by such entities in
their sole discretion at any time without any material liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to amend, a Plan resulting in an
increase in current liability such that any Obligor, any Subsidiary or any ERISA Affiliate is
required to provide security to such Plan under section 401 (a)(29) of the Code.

Section 9.12 Sale or Discount of Receivables. Borrower shall not, and shall not
permit any Guarantor to discount or sell (with or without recourse) any of its notes receivable or
accounts receivable.

Section 9.13 Current Ratio. The Borrower will not permit the ratio of its (i)
current assets (including any unused amount under the Borrowing Base but excluding assets under
Hedging Agreements.) to (ii) current liabilities (excluding liabilities under Hedging Agreements,
current maturities of the Notes and those portions of the advance payments received by the Borrower
for the drilling and completion of oil and gas wells that exceed the cost to Borrower of such
drilling and completion and are classified as current liabilities), to be less than 1.0 to 1.0 at
the end of any quarter. For the purposes of calculating the Borrower’s current ratio, the current
assets and current liabilities attributable to the Unrestricted Entities shall be excluded.

Section 9.14 Funded Debt to EBITDA. The Borrower will not permit the ratio of
Funded Debt to EBITDA of the Borrower as of the end of any fiscal quarter of the Borrower (on a
consolidated basis calculated quarterly based upon the four most recently completed quarters) to be
more than 3.50 to 1.00. For the purposes of calculating the ratio of Borrower’s Funded Debt to
EBITDA, (i) the EBITDA and Funded Debt attributable to the Unrestricted Entities (except for cash
distributions from Anthem Securities, Inc. paid to Borrower or Guarantors) shall be excluded, and
(ii) Funded Debt shall not include: (a) “asset retirement obligations,” as such term is used in
FASB Statement 143, to the extent such asset retirement obligations relate to the plugging and
abandonment of wells; or (b) liabilities under Hedging Agreements.

Section 9.15 Consolidated Interest Coverage Ratio. Borrower will not permit its
Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of Borrower beginning
December 31, 2006 (calculated upon the four most recently completed fiscal quarters, quarterly at
the end of each fiscal quarter) to be less than 2.50 to 1.00. For the purposes of calculating the
Consolidated Interest Coverage Ratio, the EBITDA and interest payments attributable to the
Unrestricted Entities shall be excluded.

Section 9.16 Sale of Oil and Gas Properties. The Obligors will not Transfer any
Oil and Gas Property or any interest in any Oil and Gas Property for which value was given in the
most recent Borrowing Base redetermination to any Person other than Obligors, provided, for so long
as no Default exists, Obligors may Transfer Oil and Gas Property assets with a market value of up
to $2,000,000 in the aggregate during any Borrowing Base Period. Upon any Transfer of Oil and Gas
Properties as permitted herein, the Borrowing Base shall be automatically reduced by the current
Oil and Gas Collateral Value attributable to such Oil and Gas Properties under current Borrowing
Base determination.

Section 9.17 Environmental Matters. None of the Obligors nor any Subsidiary will
cause or permit any of its Property to be in violation of, or do anything or permit anything to be
done which will subject any such Property to any remedial obligations under any Environmental Laws,
assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or remedial obligations
would have a Material Adverse Effect.

53

 

Section 9.18 Transactions with Affiliates. Except for the Management Agreement,
the Borrower shall not, and shall not permit any Guarantor 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 unless such transactions are otherwise permitted under this
Agreement, are in the ordinary course of its business
and are upon fair and reasonable terms no less favorable to it than it would obtain in a
comparable arm’s length transaction with a Person not an Affiliate.

Section 9.19 Subsidiaries. The Borrower shall not, and shall not permit any
Subsidiary to create or acquire any additional Subsidiaries (other than Unrestricted Entities) that
do not become Guarantors and deliver Security Agreements hereunder within fifteen (15) Business
Days of their creation or acquisition. Borrower shall not and shall not permit any Guarantor to
sell or to issue any stock or ownership interest of a Subsidiary, except to Borrower or any of its
Wholly Owned Subsidiaries and except in compliance with Section 9.04, Borrower shall not, and shall
not permit any Guarantor to, create any new Partnerships other than drilling fund limited
partnerships on terms substantially similar to the Partnerships set forth on Schedule 7.14.

Section 9.20 Negative Pledge Agreements. The Borrower shall not and shall not
permit any of Guarantor to create, incur, assume or permit to exist any contract, agreement or
understanding (other than this Agreement and the Security Instruments) which in any way prohibits
or restricts the granting, conveying, creation or imposition of any Lien on any of its Property or
restricts any Guarantor from paying dividends to the Borrower, or which requires the consent of or
notice to other Persons in connection therewith.

Section 9.21 Gas Imbalances, Take-or-Pay or Other Prepayments. The Borrower will
not and will not permit any Guarantor to allow gas imbalances, take-or-pay or other prepayments
with respect to the Oil and Gas Properties of the Guarantors which would require the Guarantors to
deliver in the aggregate five percent (5%) or more of their Hydrocarbons produced on a monthly
basis from such Oil and Gas Properties at some future time without then or thereafter receiving
full payment therefor.

Section 9.22 Accounting Changes. Borrower shall not and shall not permit any
Subsidiary to make any significant change in accounting treatment or reporting practices except as
required by GAAP, or change the fiscal year of the Borrower or any Subsidiary.

ARTICLE X

Events of Default; Remedies

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

(a) the Borrower shall default in the payment or prepayment when due of any principal of
or interest on any Loan, or any reimbursement obligation for a disbursement made under any Letter
of Credit, or any fees or other amount payable by it hereunder or under any Security Instrument; or

(b) any Obligor shall default in the payment when due of any principal of or interest on
any of its other Debt aggregating $2,500,000 or more, or any event specified in any note,
agreement, indenture or other document evidencing or relating to any such Debt shall occur if the
effect of such event is to cause, or (with the giving of any notice or the lapse of time or both)
to permit the holder or holders of such Debt (or a trustee or agent on behalf of such holder or
holders) to cause, such Debt to become due prior to its stated maturity; or

54

 

(c) any representation, warranty or certification made or deemed made herein or in any
Loan Document by any Obligor or any Subsidiary, or any certificate furnished to any Lender or the
Administrative Agent pursuant to the provisions hereof or any Security Instrument, shall prove to
have been false or misleading as of the time made or furnished in any material respect; or

(d) any Obligor shall default in the performance of any of its obligations under Article
IX or any other Article of this Agreement other than under Article VIII; or any Obligor shall
default in the performance of any of its obligations under Article VIII or under any Loan Document
to which it is a party (other than the payment of amounts due which shall be governed by Section
10.01(a)) and such default shall continue unremedied for a period of thirty (30) days following the
occurrence thereof; or

(e) any Obligor shall admit in writing its inability to, or be generally unable to, pay
its debts as such debts become due; or

(f) any Obligor shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property, (ii) make a general assignment for the benefit of its creditors, (iii)
commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect), (iv)
file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, liquidation or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Federal Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing; or

(g) a proceeding or case shall be commenced, without the application or consent of any
Obligor, in any court of competent jurisdiction, seeking (i) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of
a trustee, receiver, custodian, liquidator or the like of such Obligor of all or any substantial
part of its assets, or (iii) similar relief in respect of such Obligor under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of
60 days; or (iv) an order for relief against any Obligor shall be entered in an involuntary case
under the Federal Bankruptcy Code; or

(h) a judgment or judgments for the payment of money in excess of $2,500,000 in the
aggregate shall be rendered by a court against any Obligor and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution thereof shall not be
procured, within the period of time prescribed by applicable rules of civil procedure in which to
perfect an appeal thereof and such Obligor shall not, within said period, or such longer period
during which execution of the same shall have been stayed, or an appeal therefrom shall cause the
execution thereof to be stayed during such appeal; or

(i) the Loan Documents after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid, binding and
enforceable in accordance with their terms, or, with respect to the Security Instruments, cease to
create a valid and perfected Lien of the priority required thereby on any of the collateral
purported to be covered thereby, except to the extent permitted by the terms of this Agreement, or
any Obligor shall so state in writing; or

(j) an event having a Material Adverse Effect shall occur; or

55

 

(k) a Change of Control occurs; provided, any Change of Control that occurs as a result
of a Permitted Merger shall not constitute a Default; or

(l) any Obligor conceals any of its Property with the intent to hinder, delay or defraud
any Lender, the Issuing Bank, or the Administrative Agent with respect to their rights in the
Mortgaged Property or any other Property of the Obligors.

     Section 10.02 Remedies.

(a) In the case of an Event of Default other than one referred to in clauses (e), (f) or
(g) of Section 10.01, the Administrative Agent, upon request of the Majority Lenders, shall, by
notice to the Borrower, cancel the Commitments (in whole or part) and/or declare the principal
amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by
the Borrower hereunder and under the Notes (including without limitation the payment of cash
collateral to secure the LC Exposure as provided in Section 2.10(b)) to be forthwith due and
payable, whereupon such amounts shall be immediately due and payable without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other formalities of any kind,
all of which are hereby expressly waived by the Borrower.

(b) In the case of the occurrence of an Event of Default referred to in clauses (e), (f)
or (g) of Section 10.01, the Commitments shall be automatically canceled and the principal amount
then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the
Borrower hereunder and under the Notes (including without limitation the payment of cash collateral
to secure the LC Exposure as provided in Section 2.10(b)) shall become automatically immediately
due and payable without presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which are hereby expressly waived by the
Borrower.

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

     Section 10.03 Present Assignment of Interests.

(a) Notwithstanding that, under Article III of the Mortgages, the Obligors thereto have
unconditionally assigned to Administrative Agent for the ratable benefit of the Lenders all of the
proceeds of runs accruing to the Mortgaged Properties covered thereby:

(i) Until such time as Administrative Agent shall notify such Obligors to the
contrary, Obligors shall be entitled to receive from the purchasers or disbursers of
production all such proceeds of runs, subject however to the liens created under the
Mortgages, which liens are hereby affirmed and ratified. Automatically upon an Event of
Default under Section 10.01(e), (f) or (g) and upon the occurrence and during the continuance
of any other Event of Default, Administrative Agent may exercise all rights and remedies
granted under the Mortgages, including the right to obtain possession of all proceeds of runs
then held by Obligors or to receive directly from the purchasers or disbursers of production
all other proceeds of runs.

(ii) In no case shall any failure, whether purposed or inadvertent, by
Administrative Agent to collect directly any such proceeds of runs constitute in any way a
waiver, remission or release of any of its rights under the Mortgages, nor shall any release
of any other proceeds of runs or of any rights of Administrative Agent to collect other
proceeds of runs thereafter.

56

 

(iii) Obligors will upon the instruction of Administrative Agent join with
Administrative Agent in notifying, in writing and accompanied (if necessary) by certified
copies of the Mortgages, the purchasers or disbursers of production, produced from the
Mortgaged Properties, of the existence of the Mortgages, and instructing that all proceeds of
runs be paid directly to Administrative Agent for the ratable benefit of the Lenders.

(b) Notwithstanding that, under Article VIII of the Pledge, Assignment and Security
Agreement executed by each of the Obligors, as “Debtor” thereto (herein collectively the
"Pledges”), such parties have unconditionally assigned to Administrative Agent for the ratable
benefit of the Lenders all of the dividends,
interest, or other “Distributions” (as defined therein) paid or payable in respect of the
Collateral covered thereby:

(i) Until such time as Administrative Agent shall notify such Obligors to the
contrary, Obligors shall be entitled to receive and retain all such Distributions, subject
however to the security interests created under the Pledges, which liens are hereby affirmed
and ratified. Automatically upon an Event of Default under Section 10.01(f) or (g) and upon
the occurrence and during the continuance of any other Event of Default, Administrative Agent
may exercise all rights and remedies granted under the Pledges, including the right to obtain
possession of all Distributions then held by Obligors or to receive directly from the
Subsidiaries and Partnerships making such payments all future Distributions attributable to
the Collateral.

(ii) In no case shall any failure, whether purposed or inadvertent, by
Administrative Agent to collect directly any such Distributions constitute in any way a
waiver, remission or release of any of its rights under the Pledges, nor shall any release of
any other Distributions or of any rights of Administrative Agent to collect other
Distributions thereafter.

(iii) Obligors will upon the instruction of Administrative Agent join with
Administrative Agent in notifying in writing to the entities responsible for making such
Distributions of the existence of the Pledges, and instructing that all Distributions be paid
directly to Administrative Agent for the ratable benefit of the Lenders.

ARTICLE XI

The Administrative Agent

Section 11.01 Appointment, Powers and Immunities. Each Lender hereby irrevocably
appoints and authorizes the Administrative Agent to act as its agent hereunder and under the
Security Instruments with such powers as are specifically delegated to the Administrative Agent by
the terms of this Agreement and the Security Instruments, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in this sentence and in
Section 11.05 and the first sentence of Section 11.06 shall include reference to its Affiliates and
its and its Affiliates’ officers, directors, employees, attorneys, accountants, experts and
agents): (i) shall have no duties or responsibilities except those expressly set forth in the Loan
Documents, and shall not by reason of the Loan Documents be a trustee or fiduciary for any Lender;
(ii) makes no representation or warranty to any Lender and shall not be responsible to the Lenders
for any recitals, statements, representations or warranties contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received by any of them under,
this Agreement, or for the value, validity, effectiveness, genuineness, execution, effectiveness,
legality, enforceability or sufficiency of this Agreement, any Note or any other document referred
to or provided for herein or for any failure by any of the Obligors or any other Person (other than
the Administrative Agent) to perform any of its obligations hereunder or thereunder or for the
existence, value, perfection or priority of any collateral security or the financial or other
condition of the Borrower, its Subsidiaries or any other obligor or guarantor; (iii) except
pursuant to Section 11.07 shall not be required to initiate or conduct any litigation of collection
proceedings hereunder; and (iv) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument referred to or provided for herein
or in connection herewith including its own ordinary negligence, except for its own gross
negligence or willful misconduct. The Administrative Agent may employ agents, accountants,
attorneys and experts and shall not be responsible for the negligence or misconduct of any such
agents, accountants, attorneys or experts selected by it in good faith or any action taken or
omitted to be taken in good faith by it in accordance with the advice of such agents, accountants,
attorneys or experts. The Administrative Agent may deem and treat the payee of any Note as the
holder thereof for all purposes hereof unless and until a written notice of the assignment or
transfer thereof permitted hereunder shall have been filed with the Administrative Agent. The
Administrative Agent is authorized to release any collateral that is permitted to be sold or
released pursuant to the terms of the Loan Documents.

57

 

Section 11.02 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon any certification, notice or other communication (including any thereof by
telephone, telex, telecopier, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected by the
Administrative Agent.

Section 11.03 Defaults. The Administrative Agent shall not be deemed to have
knowledge of the occurrence of a Default (other than the non-payment of principal of or interest on
Loans or of fees or failure to reimburse for Letter of Credit drawings) unless the Administrative
Agent has received notice from a Lender or the Borrower specifying such Default and stating that
such notice is a “Notice of Default”. In the event that the Administrative Agent receives such a
notice of the occurrence of a Default, the Administrative Agent shall give prompt notice thereof to
the Lenders. In the event of a payment Default, the Administrative Agent shall give each Lender
prompt notice of each such payment Default.

Section 11.04 Rights as a Lender. With respect to its Commitments and the Loans
made by it and its participation in the issuance of Letters of Credit, Wachovia Bank, National
Association (and any successor acting as Administrative Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Administrative Agent, and the term “Lender” or “Lenders”
shall, unless the context otherwise indicates, include the Administrative Agent in its individual
capacity. Wachovia Bank, National Association (and any successor acting as Administrative Agent)
and its Affiliates may (without having to account therefor to any Lender) accept deposits from,
lend money to and generally engage in any kind of banking, trust or other business with the
Obligors (and any of their Affiliates) as if it were not acting as the Administrative Agent, and
Wachovia Bank, National Association and its Affiliates may accept fees and other consideration from
the Obligors for services in connection with this Agreement or otherwise without having to account
for the same to the Lenders.

Section 11.05 Indemnification. The Lenders agree to indemnify the Administrative
Agent and the Issuing Bank ratably in accordance with their Percentage Shares for the indemnity
matters as described in Section 12.03 to the extent not indemnified or reimbursed by the Obligors
under Section 12.03, but without limiting the obligations of the Obligors under said Section 12.03
and for any and all other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent or the Issuing Bank in any way relating to
or arising out of: (1) this Agreement, the Security Instruments or any other documents contemplated
by or referred to herein or the transactions contemplated hereby, but excluding, unless a Default
has occurred and is continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder or (ii) the enforcement of any of the terms of this
Agreement, any Security Instrument or of any such other documents; WHETHER OR NOT ANY OF THE
FOREGOING SPECIFIED IN THIS SECTION 11.05 ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF THE
ADMINISTRATIVE AGENT OR THE ISSUING BANK, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful misconduct of the
Administrative Agent.

58

 

Section 11.06 Non-Reliance on Administrative Agent and other Lenders. Each Lender
acknowledges and agrees that it has, independently and without reliance on the Administrative Agent
or any other Lender, and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Obligors and its decision to enter into this Agreement, and that it
will, independently and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the time, continue to make
its own analysis and decisions in taking or not taking action under this Agreement. The
Administrative Agent shall not be required to keep itself informed as to the performance or
observance by the Obligors of this Agreement, the Notes, the Security Instruments or any other
document referred to or provided for herein or to inspect the
properties or books of the Obligors. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the affairs, financial condition or business of the
Obligors (or any of their Affiliates) which may come into the possession of the Administrative
Agent or any of its Affiliates. In this regard, each Lender acknowledges that Haynes and Boone, LLP
is acting in this transaction as special counsel to the Administrative Agent only, except to the
extent otherwise expressly stated in any legal opinion or any Loan Document. Each Lender will
consult with its own legal counsel to the extent that it deems necessary in connection with the
Loan Documents and the matters contemplated therein.

Section 11.07 Action by Administrative Agent. Except for action or other matters
expressly required of the Administrative Agent hereunder, the Administrative Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall (i) receive
written instructions from the Majority Lenders (or all of the Lenders as expressly required by
Section 12.04) specifying the action to be taken, and (ii) be indemnified to its satisfaction by
the Lenders against any and all liability and expenses which may be incurred by it by reason of
taking or continuing to take any such action. The instructions of the Majority Lenders (or all of
the Lenders as expressly required by Section 12.04) and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If a Default has
occurred and is continuing, the Administrative Agent shall take such action with respect to such
Default as shall be directed by the Majority Lenders (or all of the Lenders as required by Section
12.04) in the written instructions (with indemnities) described in this Section 11.07, provided
that, unless and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall deem advisable in the best interests of the
Lenders. In no event, however, shall the Administrative Agent be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary to this Agreement and
the Security Instruments or applicable law.

Section 11.08 Resignation or Removal of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving notice thereof to the Lenders and the
Borrower, and the Administrative Agent may be removed at any time with or without cause by the
Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been
so appointed by the Majority Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent’s giving of notice of resignation or the Majority
Lenders’ removal of the retiring Administrative Agent, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent. Upon the acceptance of such
appointment hereunder by a successor Administrative Agent, such successor Administrative Agent
shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder. After any retiring Administrative Agent’s resignation or
removal hereunder as Administrative Agent, the provisions of this Article XI and Section 12.03
shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent.

59

 

ARTICLE XII

Miscellaneous

Section 12.01 Waiver. No failure on the part of the Administrative Agent or any
Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under any of the Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under any of the Loan Documents
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided
by law.

Section 12.02 Notices. All notices and other communications provided for herein
and in the other Loan Documents (including, without limitation, any modifications of, or waivers or
consents under, this Agreement or the other Loan Documents) shall be given or made by telex,
telecopy, courier or U.S. Mail or in writing and telexed, telecopied, mailed or delivered to the
intended recipient at the “Address for Notices” specified below its name on the signature pages
hereof or in the Loan Documents or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise provided in this Agreement or in
the other Loan Documents, all such communications shall be deemed to have been duly given when
transmitted, if transmitted before 1:00 p.m. local time on a Business Day (otherwise on the next
succeeding Business Day) by telex or telecopier and evidence or confirmation of receipt is
obtained, or personally delivered or, in the case of a mailed notice, three (3) Business Days after
the date deposited in the mails, postage prepaid, in each case given or addressed as aforesaid.

Section 12.03 Payment of Expenses, Indemnities, etc.

(a) The Obligors agree:

(i) whether or not the transactions hereby contemplated are consummated, to pay all
reasonable expenses of the Administrative Agent in the administration (both before and after
the execution hereof and including advice of counsel as to the rights and duties of the
Administrative Agent and the Lenders with respect thereto) of, and in connection with the
negotiation, syndication, investigation, preparation, execution and delivery of, recording or
filing of, preservation of rights under, enforcement of, and refinancing, renegotiation or
restructuring of, the Loan Documents and any amendment, waiver or consent relating thereto
(including, without limitation, travel, photocopy, mailing, courier, telephone and other
similar expenses of the Administrative Agent, the cost of environmental audits, surveys and
appraisals at reasonable intervals, the reasonable fees and disbursements of counsel and
other outside consultants for the Administrative Agent and, in the case of preservation or
enforcement of rights (including restructurings and workouts), the reasonable fees and
disbursements of counsel for the Administrative Agent and any of the Lenders); and promptly
reimburse the Administrative Agent for all amounts expended, advanced or incurred by the
Administrative Agent or the Lenders to satisfy any obligation of the Obligors under this
Agreement or any Security Instrument, including without limitation, all costs and expenses of
foreclosure;

60

 

(ii) To indemnify the Administrative Agent and each Lender and each of their affiliates
and each of their officers, directors, employees, representatives, agents, attorneys,
accountants and experts (“Indemnified Parties”) from, hold each of them harmless against and
promptly upon demand pay or reimburse each of them for, the indemnity matters which may be
incurred by or asserted against or involve any of them (whether or not any of them is
designated a party thereto) as a result of, arising out of or in any way related to (i) any
actual or proposed use by the Borrower or any Guarantor of the proceeds of any of the loans
or letters of credit, (ii) the execution, delivery and performance of the loan documents,
(iii) the operations of the business of the Obligors and their Subsidiaries, (iv) the failure
of the Obligors or any Subsidiary to comply with the terms of any loan document, or with any
governmental requirement, (v) any inaccuracy of any representation or any breach of any
warranty of the Obligors set forth in any of the loan documents, (vi) the issuance, execution
and delivery or transfer of or payment or failure to pay under any letter of credit, or (vii)
the payment of a drawing under any letter of credit notwithstanding the non-compliance,
non-delivery or other improper presentation of the manually executed draft(s) and
certification(s), (viii) any assertion that the Lenders were not entitled to receive the
proceeds received pursuant to the Security Instruments, or (ix) any other aspect of the loan
documents, including, without limitation, the reasonable fees and disbursements of counsel
and all other expenses incurred in connection with investigating, defending or preparing to
defend any such action, suit, proceeding (including any investigations, litigation or
inquiries) or claim and INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY
NEGLIGENCE OF ANY INDEMNIFIED PARTY, but excluding all indemnity matters arising solely by
reason of claims between the Lenders
or any Lender and the Administrative Agent or a Lender’s shareholders against the
Administrative Agent or Lender or by reason of the gross negligence or willful misconduct on
the part of the Indemnified Party; and

(iii) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED PARTIES FROM
AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR
PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER
ANY ENVIRONMENTAL LAW APPLICABLE TO THE OBLIGORS OR ANY SUBSIDIARY OR ANY OF THEIR
PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES
ON ANY OF THEIR PROPERTIES, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY ANY OBLIGOR
OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO ANY OBLIGOR OR ANY SUBSIDIARY,
(III) DUE TO PAST OWNERSHIP BY ANY OBLIGOR OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR
PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE
TIME, COULD RESULT IN PRESENT LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT
OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY
OBLIGOR OR ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN
CONNECTION WITH THE LOAN DOCUMENTS.

(b) No Indemnified Party may settle any claim to be indemnified without the consent of
the indemnitor, such consent not to be unreasonably withheld; provided, that the indemnitor may not
reasonably withhold consent to any settlement that an Indemnified Party proposes, if the indemnitor
does not have the financial ability to pay all its obligations outstanding and asserted against the
indemnitor at that time, including the maximum potential claims against the Indemnified Party to be
indemnified pursuant to this Section 12.03.

61

 

(c) In the case of any indemnification hereunder, the Administrative Agent or Lender, as
appropriate shall give notice to the Obligors of any such claim or demand being made against the
Indemnified Party and the Obligors shall have the non-exclusive right to join in the defense
against any such claim or demand provided that if any Obligor provides a defense, the Indemnified
Party shall bear its own cost of defense unless there is a conflict between the Obligors and such
Indemnified Party.

(d) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES NOTWITHSTANDING THE
SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT
CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES
OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED
PARTIES. To the extent that an Indemnified Party is found to have committed an act of gross
negligence or willful misconduct, this contractual obligation of indemnification shall continue but
shall only extend to the portion of the claim that is deemed to have occurred by reason of events
other than the gross negligence or willful misconduct of the Indemnified Party.

(e) The Obligors’ obligations under this Section 12.03 shall survive any termination of
this Agreement and the payment of the Notes and shall continue thereafter in full force and effect.

(f) The Obligors shall pay any amounts due under this Section 12.03 within thirty (30)
days of the receipt by the Obligors of notice of the amount due.

Section 12.04 Amendments, Etc. Any provision of this Agreement or any other Loan
Document may be amended, modified or waived with the Obligors’ and the Majority Lenders’ prior
written consent; provided that (i) no amendment, modification or waiver which extends the final
maturity of the Loans, increases the Aggregate Maximum Revolving Credit Amounts, increases the
Borrowing Base, reduces or forgives the principal amount of any Indebtedness outstanding under this
Agreement (including any principal due pursuant to a mandatory prepayment required pursuant to
Section 2.07(b)), postpones any date scheduled for any payment of principal or interest under this
Agreement (including any principal due pursuant to a mandatory prepayment required pursuant to
Section 2.07 (b)), releases any Guarantor, of the Indebtedness, or releases Security Instruments
which in the aggregate cover a material portion of the Mortgaged Property (as reflected on the most
recent Reserve Report delivered under Section 8.07) during each Borrowing Base Period, reduces the
interest rate applicable to the Loans or the fees payable to the Lenders generally, affects Section
2.03(a), this Section 12.04, Section 12.06(a), any provision of Section 4.05(b) that would alter
the pro rata sharing of payments required thereby, or modifies the definitions of “Majority
Lenders” or “Percentage Share” shall be effective without consent of all Lenders; (ii) no
amendment, modification or waiver which increases the Maximum Revolving Credit Amount or the
Commitment of any Lender shall be effective without the consent of such Lender; and (iii) no
amendment, modification or waiver which modifies the rights, duties or obligations of the
Administrative Agent shall be effective without the consent of the Administrative Agent.

Section 12.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and permitted assigns.

62

 

Section 12.06 Assignments and Participations 

(a) The Borrower may not assign its rights or obligations hereunder or under the Notes or
any Letters of Credit without the prior consent of all of the Lenders and the Administrative Agent.

(b) Any Lender may, upon the written consent of the Administrative Agent and, if no
Default exists, with consent of the Borrower (which consent will not be unreasonably withheld or
delayed), assign to one or more assignees all or a portion of its rights and obligations under this
Agreement pursuant to an Assignment Agreement substantially in the form of Exhibit E (an
"Assignment”); provided, however, that (i) any such assignment shall be in the amount of the lesser
of (A) at least $5,000,000 or (B) the total amount of a Lender’s rights and obligations under this
Agreement and (ii) the assignee or assignor shall pay to the Administrative Agent a processing and
recordation fee of $3,500 for each assignment. Any such assignment will become effective upon the
execution and delivery to the Administrative Agent of the Assignment and the consent of the
Administrative Agent. Promptly after receipt of an executed Assignment, the Administrative Agent
shall send to the Borrower a copy of such executed Assignment. Upon receipt of such executed
Assignment, the Borrower, will, at its own expense, execute and deliver new Notes to the assignor
and/or assignee, as appropriate, in accordance with their respective interests as they appear. Upon
the effectiveness of any assignment pursuant to this Section 12.06(b), the assignee will become a
"Lender,” if not already a “Lender,” for all purposes of this Agreement and the Security
Instruments. The assignor shall be relieved of its obligations hereunder to the extent of such
assignment (and if the assigning Lender no longer holds any rights or obligations under this
Agreement, such assigning Lender shall cease to be a “Lender” hereunder except that its rights
under Sections 4.06, 5.01, 5.05 and 12.03 shall not be affected).

(c) Each Lender may transfer, grant or assign participations in all or any part of such
Lender’s interests hereunder pursuant to this Section 12.06(c) to any Person, provided that: (i)
such Lender shall remain a “Lender” for all purposes of this Agreement and the transferee of such
participation shall not constitute a “Lender” hereunder; and (ii) no participant under any such
participation shall have rights to approve any amendment to or waiver of any of the Loan Documents
except to the extent such amendment
or waiver would (w) modify the definition of “Majority Lenders,” (x) forgive any principal
owing on any Indebtedness or extend the final maturity of the Loans, (y) reduce the interest rate
(other than as a result of waiving the applicability of any post-default increases in interest
rates) or fees applicable to any of the Commitments or Loans or Letters of Credit in which such
participant is participating, or postpone the payment of any thereof, or (z) release any guarantor
of the Indebtedness or release Security Instruments which in the aggregate cover more than five
percent (5%) by value of the Mortgaged Property (as reflected on the most recent Reserve Report
delivered under Section 8.07) during each Borrowing Base Period supporting any of the Commitments
or Loans or Letters of Credit in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this Agreement or any of the
Security Instruments (the participant’s rights against the granting Lender in respect of such
participation to be those set forth in the agreement with such Lender creating such participation),
and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation, provided that such participant shall be entitled to receive additional
amounts under Article V on the same basis as if it were a Lender and be indemnified under Section
12.03 as if it were a Lender. In addition, each agreement creating any participation must include
an agreement by the participant to be bound by the provisions of Section 12.15.

(d) The Lenders may furnish any information concerning the Borrower in the possession of
the Lenders from time to time to assignees and participants (including prospective assignees and
participants); provided that, such Persons agree to be bound by the provisions of Section 12.15.

(e) Notwithstanding anything in this Section 12.06 to the contrary, any Lender may assign
and pledge its Note to any Federal Reserve Bank. No such assignment and/or pledge shall release the
assigning and/or pledging Lender from its obligations hereunder.

63

 

(f) Notwithstanding any other provisions of this Section 12.06, no transfer or assignment
of the interests or obligations of any Lender or any grant of participations therein shall be
permitted if such transfer, assignment or grant would require the Borrower to file a registration
statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any state.

Section 12.07 Invalidity. In the event that any one or more of the provisions
contained in any of the Loan Documents shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
other provision of the Notes, this Agreement or any other Loan Document.

Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and any of
the parties hereto may execute this Agreement by signing any such counterpart.

Section 12.09 References, Use of Word “Including". The words “herein,” “hereof,”
"hereunder” and other words of similar import when used in this Agreement refer to this Agreement
as a whole, and not to any particular article, section or subsection. Any reference herein to a
Section or Article shall be deemed to refer to the applicable Section or Article of this Agreement
unless otherwise stated herein. Any reference herein to an exhibit, schedule, or other attachment
shall be deemed to refer to the applicable exhibit, schedule, or other attachment attached hereto
unless otherwise stated herein. The words “including,” “includes” and words of similar import mean
"including, without limitation.”

Section 12.10 Survival. The obligations of the parties under Section 4.06,
Article V, and Sections 11.05 and 12.03 shall survive the repayment of the Loans and the
termination of the Commitments. To the extent that any payments on the Indebtedness or proceeds of
any collateral are subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law or equitable cause, then to such extent, the
Indebtedness so satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent’s and the Lenders’ Liens, security interests, rights,
powers and remedies under this Agreement and each Security Instrument shall continue in full force
and effect. In such event, each Security Instrument shall be automatically reinstated and the
Obligors shall take such action as may be reasonably requested by the Administrative Agent and the
Lenders to effect such reinstatement.

Section 12.11 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the interpretation of
any provision of this Agreement.

Section 12.12 NO ORAL AGREEMENTS. THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT
AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN
SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. THE LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

Section 12.13 GOVERNING LAW, SUBMISSION TO JURISDICTION.

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

64

 

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

(c) THE BORROWER AND EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM
LOCATED AT 111 EIGHTH AVENUE, 13th  FLOOR, NEW YORK, NEW YORK, 10011, AS THE
DESIGNEE, APPOINTEE AND ADMINISTRATIVE AGENT OF THE BORROWER AND EACH GUARANTOR TO RECEIVE, FOR AND
ON BEHALF OF THE BORROWER AND EACH GUARANTOR, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS. IT IS UNDERSTOOD THAT A COPY
OF SUCH PROCESS SERVED ON SUCH ADMINISTRATIVE AGENT WILL BE PROMPTLY FORWARDED BY OVERNIGHT COURIER
TO
THE BORROWER AND THE RELEVANT GUARANTOR AT THEIR ADDRESSES SET FORTH UNDER ITS SIGNATURE
BELOW, BUT THE FAILURE OF THE BORROWER OR SUCH GUARANTOR TO RECEIVE SUCH COPY SHALL NOT AFFECT IN
ANY WAY THE SERVICE OF SUCH PROCESS. THE BORROWER AND EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AND
ANY GUARANTOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH
MAILING.

(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER OR
ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER OR ANY GUARANTOR IN ANY OTHER JURISDICTION.

(e) THE BORROWER, EACH GUARANTOR AND EACH LENDER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY SECURITY INSTRUMENT AND FOR ANY COUNTERCLAIM THEREIN;
(II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM
OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OF ADMINISTRATIVE AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS, AND (IV) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE
SECURITY INSTRUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.13.

65

 

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

66

 

Section 12.15 Confidentiality. Subject to provisions under Section 12.16 below,
in the event that the Borrower provides to the Administrative Agent or the Lenders written
confidential information belonging to the Borrower, if the Borrower shall denominate such
information in writing as “confidential,” the Administrative Agent and the Lenders shall thereafter
maintain such information in confidence in accordance with the standards of care and diligence that
each utilizes in maintaining its own confidential information. This obligation of confidence shall
not apply to such portions of the information which (i) are in the public domain, (ii) hereafter
become part of the public domain without the Administrative Agent or the Lenders breaching their
obligation of confidence to the Borrower, (iii) are previously known by the Administrative Agent or
the Lenders from some source other than the Borrower, (iv) are hereafter developed by the
Administrative Agent or the Lenders without using the Borrower’s information, (v) are hereafter
obtained by or available to the Administrative Agent or the Lenders from a third party who owes no
obligation of confidence to the Borrower with respect to such information or through any other
means other than through disclosure by the Borrower, (vi) are disclosed with the Borrower’s
consent, (vii) must be disclosed either pursuant to any Governmental Requirement or to Persons
regulating the activities of the Administrative Agent or the Lenders provided, Administrative Agent
and Lenders shall endeavor to provide notice to the Borrower as soon as practicable in the event
Borrower desires to enjoin the disclosure of such information, however, failure of Administrative
Agent or Lenders to provide such prior notice to Borrower shall not give rise to any claim or cause
of action by Borrower or any Obligor against Administrative Agent or such Lenders, (viii) as may be
required by law or regulation or order of any Governmental Authority in any judicial, arbitration
or governmental proceeding, or (ix) are disclosed to any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its obligations.
Further, the Administrative Agent or a Lender may disclose any such information to any other
Lender, any independent petroleum engineers or consultants, any independent certified public
accountants, any legal counsel employed by such Person in connection with this Agreement or any
Security Instrument, including without limitation, the enforcement or exercise of all rights and
remedies thereunder, or any assignee or participant (including prospective assignees and
participants) in the Loans; provided, however, that the Administrative Agent or the Lenders shall
receive a confidentiality agreement from the Person to whom such information is disclosed such that
said Person shall have the same obligation to maintain the confidentiality of such information as
is imposed upon the Administrative Agent or the Lenders hereunder. Notwithstanding anything to the
contrary provided herein, this obligation of confidence shall cease three (3) years from the date
the information was furnished, unless the Borrower requests in writing at least thirty (30) days
prior to the expiration of such three year period, to maintain the confidentiality of such
information for an additional three year period. The Borrower waives any and all other rights it
may have to confidentiality as against the Administrative Agent and the Lenders arising by
contract, agreement, statute or law except as expressly stated in this Section 12.15.

Section 12.16 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.

[The remainder of this page intentionally left blank. Signatures begin on the next page.]

67

 

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

	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	Address for Notice:	 	ATLAS ENERGY OPERATING COMPANY, LLC	 	 
	 	 	By:	 	Atlas Energy Resources, LLC,	 	 
	Atlas America, Inc.	 	 	 	its sole member	 	 
	311 Rouser Road

	 	 	 	By:	 	 	 	 
	Moon Township, Pennsylvania 15108

	 	 	 	 	 	Matthew A. Jones

	 	 
	Attention: Matthew A. Jones

	 	 	 	 	 	Chief Financial Officer	 	 
	Fax No.: 215.546.4785

	 	 	 	 	 		 	 
	E-mail:mjones@atlaspipelinepartners.com
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ATLAS ENERGY RESOURCES, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Matthew A. Jones	 	 
	 	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	AIC, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 	 	ATLAS AMERICA, LLC,	 	 
	 	 	a Pennsylvania limited liability company	 	 
	 	 	ATLAS NOBLE, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 	 	RESOURCE ENERGY, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 	 	VIKING RESOURCES, LLC,	 	 
	 	 	a Pennsylvania limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Atlas Energy Operating Company, LLC,	 	 
	 	 	 	 	their sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Atlas Energy Resources, LLC,	 	 
	 

	 	 	 	 	 	its sole member	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Matthew A. Jones      	 
	 	 	Chief Financial Officer 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ATLAS ENERGY OHIO, LLC,	 	 
	 	 	an Ohio limited liability company	 	 
	 	 	ATLAS RESOURCES, LLC,	 	 
	 	 	a Pennsylvania limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	AIC, LLC,	 	 	 	 
	 	 	 	 	their sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Atlas Energy Operating Company, LLC,	 	 
	 	 	 	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Atlas Energy Resources, LLC,	 	 
	 	 	 	 	 	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

Matthew A. Jones
	 	 
	 

	 	 	 	 	 	 	 	 	 	Chief Financial Officer	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	REI-NY, LLC,
	 	 	a Delaware limited liability company
	 	 	RESOURCE WELL SERVICES, LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	RESOURCE ENERGY, LLC,	 	 
	 	 	 	 	their sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Atlas Energy Operating Company, LLC,	 	 
	 	 	 	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Atlas Energy Resources, LLC,	 	 
	 	 	 	 	 	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Matthew A. Jones

	 	 
	 

	 	 	 	 	 	 	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	AER PIPELINE CONSTRUCTION, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 
	 	  	
 	 
	 	 	Matthew A. Jones      	 
	 	 	Chief Financial Officer 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

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

	 	By:	 	 	 	 
	 

	 	 	 	 

Jay Buckman
	 	 
	 

	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Lending Office for Base Rate Loans and	 	 
	 	 	LIBOR Loans and Address for Notices:	 	 
	 
	 	 	 	 	 	 
	 	 	Wachovia Bank, National Association	 	 
	 	 	1001 Fannin, Suite 2255	 	 
	 	 	Houston, Texas 77002	 	 
	 	 	Telecopier No.: 713-650-6354	 	 
	 	 	Telephone No.: 713-346-2707	 	 
	 	 	Attention: Jay Buckman	 	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A. 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	BANK OF OKLAHOMA, N.A. 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	BNP PARIBAS 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	COMPASS BANK 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	DZ BANK AG, DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	SOCIÉTÉ GÉNÉRALE 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	COMERICA BANK 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION 

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	Title:  	Name: 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	TEXAS CAPITAL BANK, N.A. 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	RZB FINANCE LLC 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT

 

 

EXHIBIT A

FORM OF NOTE 

			
	December ___, 2006
	 	$                    .00

FOR VALUE RECEIVED, ATLAS ENERGY OPERATING COMPANY, LLC, a Delaware limited liability
company (the “Borrower”) hereby promises to pay to the order of
                                        
, a national
banking association (the “Lender”), at the Principal Office of Wachovia Bank, National Association
(the “Administrative Agent”), at 301 South College Street, Charlotte, North Carolina 28288, the
principal sum of
                                        
 DOLLARS ($                    ) or such lesser amount as shall equal
the aggregate unpaid principal amount of the Loans made by the Lender to the Borrower under the
Credit Agreement as hereinafter defined), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of such Loan until such Loan shall be
paid in full, at the rates per annum and on the dates provided in the Credit Agreement.

The date, amount, Type, interest rate, Interest Period and maturity of each Loan made by
the Lender to the Borrower, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender
on the schedules attached hereto or any continuation thereof.

This Note is one of the Notes referred to in the Revolving Credit Agreement dated as of
December 18, 2006, among the Borrower, the Lenders which are or become parties thereto (including
the Lender) and the Administrative Agent (as the same may be amended or supplemented from time to
time, the “Credit Agreement”), and evidences Loans made by the Lender thereunder. Capitalized terms
used in this Note have the respective meanings assigned to them in the Credit Agreement.

This Note is issued pursuant to the Credit Agreement and is entitled to the benefits
provided for in the Credit Agreement and the Security Instruments. The Credit Agreement provides
for the acceleration of the maturity of this Note upon the occurrence of certain events, for
prepayments of Loans upon the terms and conditions specified therein and other provisions relevant
to this Note.

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

	 	 	 	 	 
	 	 	ATLAS ENERGY OPERATING
	 	 	COMPANY, LLC
	 

	 	By:
	 	Atlas Energy Resources, LLC,
	 

	 	 	 	its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit A – Page 1

 

 

EXHIBIT B

FORM OF BORROWING, CONTINUATION AND CONVERSION REQUEST

                    , 200___

ATLAS ENERGY OPERATING COMPANY, LLC, a Delaware limited liability company (the
“Borrower”), pursuant to the Revolving Credit Agreement dated as of December 18, 2006, among the
Borrower, certain Affiliates of the Borrower, Wachovia Bank, National Association, as
Administrative Agent for the lenders (the “Lenders”) which are or become parties thereto, and such
Lenders (together with all amendments or supplements thereto, the “Credit Agreement”), hereby makes
the requests indicated below (unless otherwise defined herein, capitalized terms are defined in the
Credit Agreement):

	 	 	 	 	 	 	 
	 

	 	 	1.	 	 	Loans:
	 
	 	 	 	 	 	 
	 

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

	 	 	(b	)	 	Requested funding date is                     , 200___;
	 
	 	 	 	 	 	 
	 

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

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

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

	 	 	 	 	 	                                       
                     .
	 
	 	 	 	 	 	 
	 

	 	 	2.	 	 	LIBOR Loan Continuation for LIBOR Loans maturing on :
	 
	 	 	 	 	 	 
	 

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

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

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

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

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

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

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

The undersigned certifies that he is the                      of the Borrower, and
that as such
he is authorized to execute this certificate on behalf of the Borrower. The undersigned further
certifies, represents and warrants on behalf of the Borrower that the Borrower is entitled to
receive the requested borrowing, continuation or conversion under the terms and conditions of the
Credit Agreement.

Exhibit B – Page 1

 

 

	 	 	 	 	 
	 	 	ATLAS ENERGY OPERATING
	 	 	COMPANY, LLC
	 

	 	By:	 	 
	 

	 	 	 	Atlas Energy Resources, LLC,
	 

	 	 	 	its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit B – Page 2

 

 

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE 

The undersigned hereby certifies that he is the
                                        
of ATLAS ENERGY
OPERATING COMPANY, LLC, a Delaware limited liability company (the “Borrower”) and that as such he
is authorized to execute this certificate on behalf of the Borrower. With reference to the
Revolving Credit Agreement dated as of December 18, 2006, among the Borrower, the guarantors party
thereto (each an “Obligor” and collectively, the “Obligors”), Wachovia Bank, National Association,
as Administrative Agent for the lenders (the “Lenders”) which are or become a party thereto, and
such Lenders (together with all amendments or supplements thereto being the “Credit Agreement”),
the undersigned represents and warrants as follows (each capitalized term used herein having the
same meaning given to it in the Credit Agreement unless otherwise specified):

(a) The representations and warranties of the Obligors contained in Article VII of the
Credit Agreement and in the Security Instruments and otherwise made in writing by or on
behalf of the
Obligors pursuant to the Credit Agreement and the Security Instruments were true and
correct when made, and are repeated at and as of the time of delivery hereof and are true and
correct at and as of the time of delivery hereof, except as such representations and
warranties are modified to give effect to the transactions expressly permitted by the Credit
Agreement.

(b) The Obligors have performed and complied with all agreements and conditions
contained in the Credit Agreement and in the Security Instruments required to be performed or
complied with by it prior to or at the time of delivery hereof.

(c) None of the Obligors nor any Subsidiary has incurred any material liabilities,
direct or contingent, since                     , except those set forth in Schedule 9.01 to the
Credit Agreement and except those allowed by the terms of the Credit Agreement or consented
to by the Lenders in writing.

(d) Since                     , no change has occurred,
either in any case or in the aggregate,
in the condition, financial or otherwise, of the Obligors or any Subsidiary which would have
a Material Adverse Effect.

(e) There exists, and, after giving effect to the loan or loans with respect to
which this certificate is being delivered, will exist, no Default under the Credit Agreement
or any event or circumstance which constitutes, or with notice or lapse of time (or both)
would constitute, an event of default under any loan or credit agreement, indenture, deed of
trust, security agreement or other agreement or instrument evidencing or pertaining to any
Debt of the Obligors or any Subsidiary, or under any material agreement or instrument to
which any Obligor or any Subsidiary is a party or by which any Obligor or any Subsidiary is
bound.

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

Exhibit C – Page 1

 

 

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

EXECUTED AND DELIVERED this                      day of
200___.

	 	 	 	 	 
	 	 	ATLAS ENERGY OPERATING
	 	 	COMPANY, LLC
	 

	 	By:	 	 
	 

	 	 	 	Atlas Energy Resources, LLC,
	 

	 	 	 	its sole member

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Exhibit C – Page 2

 

 

EXHIBIT D

SECURITY INSTRUMENTS

	1.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and REI-NY, LLC, to Wachovia Bank,
National Association, Administrative Agent, covering properties in
Chautauqua County, New York.
	 
	2.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Viking Resources, LLC to Wachovia
Bank, National Association, Administrative Agent, covering
properties in Columbiana County, Ohio.
	 
	3.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Atlas Noble, LLC to Wachovia Bank,
National Association, Administrative Agent, covering properties in
Coshocton County, Ohio.
	 
	4.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Viking Resources, LLC to Wachovia Bank, National Association,
Administrative Agent, covering properties in Geuga County, Ohio.
	 
	5.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, Viking Resources, LLC and Atlas Noble,
LLC to Wachovia Bank, National Association, Administrative Agent,
covering properties in Guernsey County, Ohio.
	 
	6.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC to Wachovia Bank, National Association,
Administrative Agent, covering properties in Holmes County, Ohio.
	 
	7.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Viking Resources, LLC to Wachovia
Bank, National Association, Administrative Agent, covering
properties in Mahoning County, Ohio.
	 
	8.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Atlas Noble, LLC to Wachovia Bank, National Association,
Administrative Agent, covering properties in Muskingum County,
Ohio.
	 
	9.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Atlas Noble, LLC and Atlas America, LLC, to Wachovia Bank,
National Association, Administrative Agent, covering properties in
Noble County, Ohio.
	 
	10.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Viking Resources, LLC to Wachovia Bank, National
Association, Administrative Agent, covering properties in Portage
County, Ohio.

Exhibit D – Page 1

 

 

	11.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Viking Resources, LLC to Wachovia
Bank, National Association, Administrative Agent, covering
properties in Stark County, Ohio.
	 
	12.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Viking Resources, LLC to Wachovia
Bank, National Association, Administrative Agent, covering
properties in Summit County, Ohio.
	 
	13.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Viking Resources, LLC to Wachovia
Bank, National Association, Administrative Agent, covering
properties in Trumbull County, Ohio.
	 
	14.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Viking Resources, LLC to Wachovia
Bank, National Association, Administrative Agent, covering
properties in Tuscarwas County, Ohio.
	 
	15.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Atlas America, LLC, to Wachovia
Bank, National Association, Administrative Agent, covering
properties in Washington County, Ohio.
	 
	16.	 	Open-End Mortgage, Indenture, Security Agreement, Financing
Statement and Assignment of Production dated December 18, 2006,
from Resource Energy, LLC, and Viking Resources, LLC to Wachovia
Bank, National Association, Administrative Agent, covering
properties in Wayne County, Ohio.
	 
	17.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
Resources, LLC, Atlas America, LLC, and Viking Resources, LLC to
Wachovia Bank, National Association, Administrative Agent,
covering properties in Armstrong County, Pennsylvania.
	 
	18.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
Resources, LLC to Wachovia Bank, National Association,
Administrative Agent, covering properties in Butler County,
Pennsylvania.
	 
	19.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
Resources, LLC, Atlas America, LLC, and Viking Resources, LLC to
Wachovia Bank, National Association, Administrative Agent,
covering properties in Clearfield County, Pennsylvania.
	 
	20.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
Resources, LLC, and Atlas America, LLC, to Wachovia Bank,
National Association, Administrative Agent, covering properties
in Crawford County, Pennsylvania.

Exhibit D – Page 2

 

 

	21.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Viking
Resources, LLC to Wachovia Bank, National Association, Administrative
Agent, covering properties in Elk County, Pennsylvania.
	 
	22.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
America, LLC, Atlas Resources, LLC, and Viking Resources, LLC to
Wachovia Bank, National Association, Administrative Agent,
covering properties in Fayette County, Pennsylvania.
	 
	23.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
America, LLC, and Viking Resources, LLC to Wachovia Bank,
National Association, Administrative Agent, covering properties
in Greene County, Pennsylvania.
	 
	24.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
America, LLC, Atlas Resources, LLC, and Viking Resources, LLC to
Wachovia Bank, National Association, Administrative Agent,
covering properties in Indiana County, Pennsylvania.
	 
	25.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
Resources, LLC, and Atlas America, LLC, to Wachovia Bank,
National Association, Administrative Agent, covering properties
in Lawrence County, Pennsylvania.
	 
	26.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
America, LLC, Atlas Resources, LLC, and Viking Resources, LLC to
Wachovia Bank, National Association, Administrative Agent,
covering properties in Mercer County, Pennsylvania.
	 
	27.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
Resources, LLC, to Wachovia Bank, National Association,
Administrative Agent, covering properties in Venango County,
Pennsylvania.
	 
	28.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Atlas
Resources, LLC, and Resource Energy, LLC, to Wachovia Bank,
National Association, Administrative Agent, covering properties
in Warren County, Pennsylvania.
	 
	29.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Viking
Resources, LLC to Wachovia Bank, National Association,
Administrative Agent, covering properties in Washington County,
Pennsylvania.
	 
	30.	 	Open-End Mortgage, Security Agreement, Financing Statement and
Assignment of Production dated December 18, 2006, from Viking
Resources, LLC to Wachovia Bank, National Association,
Administrative Agent, covering properties in Westmoreland County,
Pennsylvania.
	 
	31.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from AER Pipeline Construction, Inc., to
Wachovia Bank, National Association, Administrative Agent.
	 
	32.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from Atlas Energy Ohio, LLC, to Wachovia Bank,
National Association, Administrative Agent.

Exhibit D – Page 3

 

 

	33.	 	Pledge Agreement, Assignment and Security Agreement dated December 18,
2006, from Resource Well Services, LLC, to Wachovia Bank, National
Association, Administrative Agent.
	 
	34.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from AIC, LLC, to Wachovia Bank, National
Association, Administrative Agent.
	 
	35.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from Atlas America, LLC, to Wachovia Bank,
National Association, Administrative Agent.
	 
	36.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from Atlas Energy Resources, LLC to Wachovia
Bank, National Association, Administrative Agent.
	 
	37.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from Atlas Noble, LLC to Wachovia Bank,
National Association, Administrative Agent.
	 
	38.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from Atlas Resources, LLC to Wachovia Bank,
National Association, Administrative Agent.
	 
	39.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from REI-NY, LLC, to Wachovia Bank, National
Association, Administrative Agent.
	 
	40.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from Resource Energy, LLC, to Wachovia Bank,
National Association, Administrative Agent.
	 
	41.	 	Pledge Agreement, Assignment and Security Agreement dated
December 18, 2006, from Viking Resources, LLC to Wachovia Bank,
National Association, Administrative Agent.

Exhibit D – Page 4

 

 

EXHIBIT E

FORM OF ASSIGNMENT AND ASSUMPTION

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between
                                        

(the “Assignor”) and
                                        
 (the “Assignee”). Capitalized terms used but not defined
herein shall have the meanings given to them in the Credit Agreement identified below (the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the Assignor under the
respective facilities identified below (including, without limitation, the Letters of Credit
included in such facilities) and (ii) to the extent permitted to be assigned under applicable law,
all claims, suits, causes of action and any other right of the Assignor (in its capacity as a
Lender) against any Person, whether known or unknown, arising under or in connection with the
Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the foregoing, including,
but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all
other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i) above (the
rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to
herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to
the Assignor and, except as expressly provided in this Assignment and Assumption, without
representation or warranty by the Assignor.

	 	 	 	 	 
	1.

	 	Assignor:
	 	                                      
;                      
	2.

	 	Assignee:
	 	                                      
;                      
	3.

	 	Borrower:
	 	[Assignee is an Affiliate/Approved Fund of [identify Lender] 1
Atlas Energy Operating Company, LLC
	4.

	 	Administrative

Agent:
	 	Wachovia Bank, National Association, as the administrative agent under the

Credit Agreement
	5.

	 	Credit Agreement:
	 	Revolving Credit Agreement dated as of December 18, 2006, among Atlas
Energy Operating Company, LLC, the Lenders from time to time party thereto,
and Wachovia Bank, National Association, as Administrative Agent

 

			
	1	 	Select or delete as applicable.

Exhibit E – Page 1

 

 

	6.	 	Assigned Interest:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Aggregate	 	 	 	 	 	 	 	 	 
	Amount of	 	Amount of	 	 	Percentage	 	 	 	 
	Commitment/Loans	 	Commitment/Loans	 	 	Assigned of	 	 	CUSIP	 
	for all Lenders	 	Assigned	 	 	Commitment/Loans	 	 	Number	 
	$
	 	$		 	 	 	   	%	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	$
	 	$		 	 	 	  	%	 	 		 
	 
	 	 	 	 	 	 	 	 	 	 

[7.     Trade Date:                     ]

Effective
Date:
                    , 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

	 	 	 	 	 
	 	 	ASSIGNOR
	 	 	[NAME OF ASSIGNOR]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	ASSIGNEE
	 	 	[NAME OF ASSIGNEE]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Title:

[Consented to and] Accepted:

WACHOVIA BANK, NATIONAL

ASSOCIATION,

as Administrative Agent

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

[Consented to:]

WACHOVIA
BANK, NATIONAL ASSOCIATION,

as Issuing Bank

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

Exhibit E – Page 2

 

 

[Consented to:]

ATLAS ENERGY OPERATING

COMPANY, LLC

	 	 	 
	By:

	 	Atlas Energy Resources, LLC,

its sole member

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

Exhibit E – Page 3

 

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 8.01 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and assigns. This Assignment
and Assumption may be executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in
accordance with, the law of the State of New York.

Exhibit E – Page 4

 

 

EXHIBIT F

FORM OF LETTER IN LIEU 

Attn: Division Order Department

Re: Letter in Lieu of Transfer Order

Gentlemen:

[                    ], as Mortgagor, has executed the mortgages and
financing statements
described on Exhibit A attached hereto (the “Mortgage”) for the benefit of Wachovia Bank, National
Association, as administrative agent (“Lender”), granting a mortgage on and pledging those certain
properties (the “Pledged Properties”) described in the Mortgage to secure certain obligations also
described in the Mortgage. Enclosed is a copy of the Mortgage covering the Pledged Properties.

Exhibit B attached hereto lists the properties which are subject to the Mortgage for
which you are accounting to Mortgagor and the decimal interest in production heretofore paid to
Mortgagor with respect to its interest in each given property.

Pursuant to the assignment of production provision in the Mortgage, Mortgagor transferred
and assigned all of its interests in the Pledged Properties to Lender. Therefore, Mortgagor hereby
authorizes and instructs you that all future payments attributable to the Pledged Properties, which
would otherwise be paid to Mortgagor, should be made to:

	 	 	 
	if by wire transfer:

	 	Wachovia Bank, National Association
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Account No.
                                        

	 
	 	 
	if by check, check made payable to:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

until notified in writing by Lender to discontinue such payments. Also, Mortgagor hereby requests
that you change your records to reflect that Lender is entitled to the proceeds of production
attributable to the Pledged Properties.

In consideration of your acceptance of this Letter-in-Lieu of Transfer Order, Lender and
Mortgagor agree as follows:

1. Mortgagor has heretofore executed Transfer or Division Orders to you covering each of
the properties referred to in Exhibit B attached to this letter. This letter is being executed by
the undersigned in lieu of execution of separate Transfer or Division Orders. With respect to
proceeds from the sale of oil, gas and other hydrocarbons as to which you account hereunder, Lender
agrees that it will be bound by the terms, conditions, warranties and covenants of all such
Transfer or Division Orders heretofore executed by Mortgagor now in force, with the same effect as
though it had executed the originals thereof; provided, however, the aggregate liability of Lender
with respect to any warranty, representation, covenant or
indemnification contained therein or in this letter shall be limited to an amount equal to the
amounts disbursed by you to Lender hereunder.

Exhibit F – Page 1

 

 

2. Mortgagor hereby agrees that you are relieved of any responsibility in connection with the
application of the proceeds paid by you to Lender as hereinabove specified and payment made by you
to Lender shall be binding and conclusive as between you and Mortgagor.

In the absence of a question about the enclosed schedule, you are respectfully requested
to make disbursement to Lender as instructed herein and NOT TO SUSPEND OR DELAY any payments by
virtue of the assignment of production from Mortgagor to Lender. Should you require additional
documentation prior to implementing the manner of disbursement requested herein, notwithstanding
the warranties and indemnifications contained hereinabove, please suspend disbursements to
Mortgagor, pending execution of such additional documentation as you may reasonably require.

In order that we may have a record evidencing your acceptance of this Letter-in-Lieu of
Transfer Order, we request that you execute one copy of this letter in the space provided below and
return the same to Lender in the enclosed self-addressed envelope.

	 	 	 	 	 	 	 
	 	 	 	 	Very truly yours,
	 	 	 	 	[                                     
;   ]
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Printed Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	Wachovia Bank, National Association
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Printed Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	ACCEPTED this _____ day of ________, 20__.	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	Printed Name:

	 	 

	 	 	 	 
	Title:

	 	 

	 	 	 	 
	 

	 	 

	 	 	 	 

Exhibit F – Page 2

 

 

EXHIBIT G

CONTINUING GUARANTY AGREEMENT

THIS CONTINUING GUARANTY AGREEMENT (this “Guaranty Agreement”), dated as of December 18,
2006, is made by , a corporation (the “Guarantor”), in favor of WACHOVIA BANK, NATIONAL
ASSOCIATION, as administrative agent for the Lenders (the “Administrative Agent”).

WITNESSETH:

WHEREAS, the Lenders have made extensions of credit including but not limited to Loans
and Letters of Credit in the maximum aggregate principal amount not to exceed $250,000,000 at any
one time outstanding to Atlas Energy Operating Company, LLC, a Delaware limited liability company
(the “Borrower”), pursuant to that certain Revolving Credit Agreement dated as of December 18,
2006, by and among the Borrower, the financial institutions (the “Lenders”) party thereto, and
Wachovia Bank, National Association, in its capacity of the issuer of certain letters of credit and
as the Administrative Agent for the Lenders thereunder (the Credit Agreement together with the
exhibits and schedules thereto and all extensions, renewals, amendments, substitutions and
replacements thereto and thereof is herein referred to as the “Credit Agreement”);

WHEREAS, (i) the Letters of Credit may be issued under the Credit Agreement for the
account of one or more of the Guarantors, (ii) the proceeds of the Loans under the Credit Agreement
may be used by the Borrower to make loans to one or more of the Guarantors and for other general
corporate purposes of the Borrower and the Guarantors, and (iii) Hedging Agreements may be entered
into by one or more of the Guarantors and any Lender or its Affiliate, all as permitted pursuant to
the Credit Agreement and all of which will directly and indirectly benefit the Borrower and the
Guarantors;

WHEREAS, as a condition precedent to extending credit to the Borrower pursuant to the
Credit Agreement, the Lenders have required that, inter alia, each of the Guarantors execute and
deliver to the Administrative Agent, for and on behalf of the Lenders, a guaranty agreement;

WHEREAS, the Guarantor has determined, reasonably and in good faith, that (i) it has
adequate capital to conduct its business as presently conducted and as proposed to be conducted,
(ii) it will be able to meet its obligations hereunder and in respect of its existing and future
indebtedness and liabilities (contingent or otherwise) as and when the same shall become due and
payable, including those under this Guaranty Agreement, (iii) it is otherwise solvent and (iv) the
execution and delivery of this Guaranty Agreement and the consummation of the transactions
contemplated hereby will not render it insolvent;

WHEREAS, the Guarantor has determined that the execution and delivery of this Guaranty
Agreement is in furtherance of its corporate purposes and in its best interest and that it will
derive substantial benefit, whether directly or indirectly, from the making of this Guaranty
Agreement, having regard for all relevant facts and circumstances; and

WHEREAS, the Guarantor has agreed to execute and deliver this Guaranty Agreement to the
Administrative Agent, for the benefit of the Lenders.

Exhibit G – Page 1

 

 

NOW THEREFORE, for good and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Lenders to make Loans to the Borrower pursuant to the
Credit Agreement by fulfilling the requirements of the Credit Agreement, the Guarantor agrees, for
the benefit of each Lender, as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 Certain Terms. The following capitalized terms when used in this
Guaranty Agreement, including its preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural forms thereof):

“Administrative Agent” is defined in the preamble.

“Borrower” is defined in the first recital.

“Commitments” means each Commitment as defined in the Credit Agreement.

“Credit Agreement” is defined in the first recital.

“Guarantor” is defined in the preamble.

“Guaranty Agreement” is defined in the preamble.

“Lenders” is defined in the first recital.

“Taxes” is defined in clause (1) of Section 2.7.

“U.C.C.” means the Uniform Commercial Code as in effect in the State of Texas.

SECTION 1.2 Credit Agreement Definitions. Unless otherwise defined herein or the
context otherwise requires, capitalized terms used in this Guaranty Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.

SECTION 1.3 U.C.C. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the U.C.C. are used in this Guaranty
Agreement, including its preamble and recitals, with such meanings.

ARTICLE II

GUARANTY PROVISIONS

SECTION 2.1 Guaranty Agreement. The Guarantor hereby absolutely, unconditionally,
and irrevocably (1) guarantees the full and punctual payment when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise, of all Indebtedness of the
Borrower and each other Obligor now or hereafter existing under each of the Credit Agreement, the
Notes and each other Loan Document to which the Borrower or such other Obligor is or may become a
party, whether for principal, interest, fees, expenses or otherwise (including all such amounts
which would become due but for the operation of the automatic stay under Section 362(a) of the
United States Bankruptcy Code, 11 U.S.C.
§362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code,
11 U.S.C. §502(b) and §506(b)), and (2) indemnifies and holds harmless each Lender and each holder
of a Note for any and all costs and expenses (including reasonable attorney’s fees and expenses)
incurred by such Lender or such holder, as the case may be, in enforcing any rights under this
Guaranty Agreement; provided, however, that the Guarantor shall be liable under this Guaranty
Agreement for the maximum amount of such liability that can be hereby incurred without rendering
this Guaranty Agreement, as it relates to the Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount. This Guaranty
Agreement constitutes a guaranty of payment when due and not of collection, and the Guarantor
specifically agrees that it shall not be necessary or required that any Lender or any holder of any
Note exercise any right, assert any claim or demand or enforce any remedy whatsoever against the
Borrower or any other Obligor (or any other Person) before or as a condition to the obligations of
the Guarantor hereunder.

Exhibit G – Page 2

 

 

SECTION 2.2 Acceleration of Guaranty Agreement. The Guarantor agrees that, in the
event of the occurrence of any event of the type described in Section 10.01(e), (f) or (g) of the
Credit Agreement, with respect to the Borrower, any other Obligor or the Guarantor, and if such
event shall occur at a time when any of the Indebtedness may not then be due and payable by the
Borrower due to any automatic stay or other debtor relief laws, the Guarantor will pay to the
Lenders forthwith the full amount which would be payable hereunder by the Guarantor if all such
Indebtedness were then due and payable.

SECTION 2.3 Guaranty Agreement Absolute, etc. This Guaranty Agreement shall in
all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and
shall remain in full force and effect until all Indebtedness of the Borrower and each other Obligor
has been paid in full, all obligations of the Guarantor hereunder shall have been paid in full, all
Commitments shall have terminated and all Lender Hedging Agreements have terminated. Guarantor may
not rescind or revoke its obligations hereunder. The Guarantor guarantees that the Indebtedness of
the Borrower and each other Obligor will be paid strictly in accordance with the terms of the
Credit Agreement and each other Loan Document under which they arise, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of any Lender or any holder of any Note with respect thereto. The liability of the
Guarantor under this Guaranty Agreement shall be absolute, unconditional and irrevocable
irrespective of: (1) any lack of validity, legality or enforceability of the Credit Agreement, any
Note or any other Loan Document; (2) the failure of any Lender or any holder of any Note (a) to
assert any claim or demand or to enforce any right or remedy against the Borrower, any other
Obligor or any other Person (including any other guarantor) under the provisions of the Credit
Agreement, any Note, any other Loan Document or otherwise, or (b) to exercise any right or remedy
against any other guarantor of, or collateral securing, any Indebtedness of the Borrower or any
other Obligor; (3) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Indebtedness of the Borrower or any other Obligor, or any other extension,
compromise or renewal of any Indebtedness of the Borrower or any other Obligor; (4) any reduction,
limitation, impairment or termination of any Indebtedness of the Borrower or any other Obligor for
any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to (and the Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Indebtedness of the Borrower, any other Obligor or otherwise; (5) any amendment to,
rescission, waiver, or other modification of, or any consent to departure from, any of the terms of
the Credit Agreement, any Note or any other Loan Document; (6) any addition, exchange, release,
surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition
of, or consent to departure from, any other guaranty, held by any Lender or any holder of any Note
securing any of the Indebtedness of the Borrower or any other Obligor; (7) the insolvency or
bankruptcy of, or similar event affecting, the Borrower or any other Obligor; or (8) any other
circumstance which might otherwise constitute a defense available to, or a legal or equitable
discharge of, the Borrower, any other Obligor, any surety or any guarantor. Guarantor waives all
rights and defenses which may arise with respect to any of
the foregoing, and Guarantor waives any right to revoke this Guaranty Agreement with respect
to future indebtedness. Guarantor waives all rights or defenses under (1) Section 34.01 et
seq. of the Texas Business and Commerce Code, as amended, (2) Section 17.001 of the Texas
Civil Practice and Remedies Code, as amended, (3) Rule 31 of the Texas Rules of Civil Procedure, as
amended, or (4) common law, in equity, under contract, by statute, or otherwise.

Exhibit G – Page 3

 

 

SECTION 2.4 Reinstatement. The Guarantor agrees that this Guaranty Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole
or in part) of any of the Indebtedness is rescinded or must otherwise be restored by any Lender or
any holder of any Note, upon the insolvency, bankruptcy or reorganization of the Borrower, any
other Obligor or otherwise, all as though such payment had not been made.

SECTION 2.5 Waiver, etc. The Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Indebtedness of the Borrower
or any other Obligor and this Guaranty Agreement and any requirement that the Administrative Agent,
any other Lender or any holder of any Note protect, secure, perfect or insure any security interest
or Lien, or any property subject thereto, or exhaust any right or take any action against the
Borrower, any other Obligor or any other Person (including any other guarantor) or entity or any
collateral securing the Indebtedness of the Borrower or any other Obligor, as the case may be.

SECTION 2.6 Waiver of Subrogation. Until the Indebtedness is paid in full, all
Commitments have terminated and all Lender Hedging Agreements have terminated, the Guarantor shall
not enforce or exercise any claim or other rights which it may now or hereafter acquire against the
Borrower or any other Obligor that arise from the existence, payment, performance or enforcement of
the Guarantor’s obligations under this Guaranty Agreement or any other Loan Document, including any
right of subrogation, reimbursement, exoneration, or indemnification, any right to participate in
any claim or remedy of the Lenders against the Borrower or any other Obligor or any collateral
which the Administrative Agent now has or hereafter acquires, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including the right to take or
receive from the Borrower or any other Obligor, directly or indirectly, in cash or other property
or by set-off or in any manner, payment or security on account of such claim or other rights. If
any amount shall be paid to the Guarantor in violation of the preceding sentence, such amount shall
be deemed to have been paid to the Guarantor for the benefit of, and held in trust for, the
Lenders, and shall forthwith be paid to the Lenders to be credited and applied upon the
Indebtedness, whether matured or unmatured. The Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by the Credit Agreement and that
the waiver set forth in this Section is knowingly made in contemplation of such benefits.

SECTION 2.7 Payments Free and Clear of Taxes, etc. The Guarantor hereby agrees
that:

(a) All payments by the Guarantor hereunder shall be made in accordance with
Section 4.06 of the Credit Agreement free and clear of and without deduction for any present
or future income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or
receipts (such non-excluded items being called “Taxes”). In the event that any withholding or
deduction from any payment to be made by the Guarantor hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then the Guarantor will (i) pay
directly to the relevant authority the full amount required to be so withheld or deducted;
(ii) promptly forward to such Lender an official receipt or other documentation satisfactory
to such Lender evidencing such payment to such authority; and (iii) pay to such Lender such
additional amount or amounts as is necessary to ensure that the net amount actually received
by such Lender will equal the full amount such Lender would have received had no such
withholding or deduction been required. Moreover, if any Taxes are directly asserted against
any Lender with respect to any payment received by such Lender hereunder, such Lender may pay
such Taxes and the Guarantor will promptly pay such additional amounts (including, if
incurred as a result of Guarantor’s or the Borrower’s action, omission or delay, any
penalties, interest or expenses) as is necessary in order that the net amount received by
such Lender after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Lender would have received had such Taxes not been asserted.

Exhibit G – Page 4

 

 

(b) If the Guarantor fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to any Lender the required receipts or other required documentary evidence,
the Guarantor shall indemnify such Lender for any incremental Taxes, interest or penalties
that may become payable by such Lender as a result of any such failure.

(c) Without prejudice to the survival of any other agreement of the Guarantor
hereunder, the agreements and obligations of the Guarantor contained in this Section 2.7
shall survive the payment in full of the principal of and interest on the Loans.

SECTION 2.8 Contribution Agreement. Upon full and final payment of the
Indebtedness, Guarantor and all other Guarantors which have made payments upon all or any part of
the Indebtedness shall be entitled to contribution from all of the other Guarantors, to the end
that all such payments upon the Indebtedness shall be shared among all Guarantors who guaranteed
such Indebtedness in proportion to their respective Net Worths (defined below), provided that the
contribution obligations of each of the Guarantors shall be limited to the maximum amount that it
can pay at such time without rendering its contribution obligations voidable under applicable law
relating to fraudulent conveyances or fraudulent transfers. As used in this subsection, the “Net
Worth” of each of the Guarantors means, at any time, the remainder of (i) the fair value of such
Guarantor’s assets (other than such right of contribution), minus (ii) the fair value of such
Guarantor’s liabilities (other than its liabilities under its guaranty of the Indebtedness).

SECTION 2.9 Subordination. Guarantor hereby subordinates and makes inferior to
the Indebtedness any and all Intercompany Debt now or at any time hereafter owed by the Borrower or
other Obligor to the Guarantor. Guarantor agrees that after the occurrence of any Default or Event
of Default under the Credit Agreement, it will not permit the Borrower to repay such Intercompany
Debt or any part thereof and it will not accept payment from the Borrower of such Intercompany Debt
or any part thereof without the prior written consent of the Majority Lenders as defined in the
Credit Agreement. If Guarantor receives any such payment without the prior required written
consent, the amount so paid shall be held in trust for the benefit of the Lenders, shall be
segregated from the other funds of such Guarantor, and shall forthwith be paid over to the
Administrative Agent to be held by the Administrative Agent as collateral for, or then or at any
time thereafter applied in whole or in part by the Administrative Agent against, all or any
portions of the Indebtedness, whether matured or unmatured, in such order as the Administrative
Agent shall elect.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS

SECTION 3.1 Representations, Warranties and Covenants. By execution hereof,
Guarantor covenants and agrees that certain representations, warranties, terms, covenants, and
conditions set forth in the Credit Agreement and other Loan Documents are applicable to Guarantor
and shall be imposed upon Guarantor, and Guarantor reaffirms that each such representation and
warranty is true and correct and covenants and agrees to promptly and properly perform, observe,
and comply with each such term, covenant, or condition. Moreover, Guarantor acknowledges and agrees
that this Guaranty Agreement is subject to the offset provisions of the Credit Agreement in favor
of the Administrative Agent and the Lenders

Exhibit G – Page 5

 

 

ARTICLE IV

MISCELLANEOUS PROVISIONS

SECTION 4.1 Loan Document. This Guaranty Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be
construed, administered and applied in accordance with the terms and provisions thereof.

SECTION 4.2 Releases. At such time as the Loans shall have been paid in full, the
Commitments have been terminated and no Lender Hedging Agreements are outstanding, the
Administrative Agent shall, at the request and expense of the Guarantor following such termination,
promptly execute and deliver to the Guarantor such documents and instruments as the Guarantor shall
reasonably request to evidence termination and release of this Guaranty Agreement.

SECTION 4.3 Administrative Agent and Lenders; Successors and Assigns.

(a) The Administrative Agent is Administrative Agent for each Lender under the
Credit Agreement. All rights granted to Administrative Agent under or in connection with this
Guaranty Agreement are for each Lender’s ratable benefit. The Administrative Agent may,
without the joinder of any Lender, exercise any rights in Administrative Agent’s or Lenders’
favor under or in connection with this Guaranty Agreement. The Administrative Agent’s and
each Lender’s rights and obligations vis-a-vis each other may be subject to one or more
separate agreements between those parties. However, the Guarantor is not required to inquire
about any such agreement and is not subject to any terms of it unless the Guarantor
specifically enters into such agreement. Therefore, neither Guarantor nor its successors or
assigns is entitled to any benefits or provisions of any such separate agreement nor is it
entitled to rely upon or raise as a defense any party’s failure or refusal to comply with the
provisions of any such agreement.

(b) This Guaranty Agreement benefits the Administrative Agent, the Lenders, and
their respective successors and assigns and binds Guarantor and its successors and assigns.
Upon appointment of any successor Administrative Agent under the Credit Agreement, all of the
rights of Administrative Agent under this Guaranty Agreement automatically vests in that new
Administrative Agent as successor Administrative Agent on behalf of Lenders without any
further act, deed, conveyance, or other formality other than that appointment. The rights of
the Administrative Agent and the Lenders under this Guaranty Agreement may be transferred
with any assignment of the obligations hereby guaranteed pursuant to and in accordance with
the terms of the Credit Agreement. The Credit Agreement contains provisions governing
assignments of the obligations guaranteed under this Guaranty Agreement.

SECTION 4.4 Amendments, etc. No amendment to or waiver of any provision of this
Guaranty Agreement, nor consent to any departure by the Guarantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by or on behalf of the party against whom
it is sought to be enforced and is in conformity with the requirements of Section 12.04 of the
Credit Agreement. Each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.

Exhibit G – Page 6

 

 

SECTION 4.5 Addresses for Notices to the Guarantor. All notices and other
communications hereunder to the Guarantor shall be in writing and mailed or delivered to it,
addressed to it at the address set forth below or at such other address as shall be designated by
the Guarantor in a written notice to the Administrative Agent at the address specified in the
Credit Agreement complying as to delivery with the
terms of this Section. All such notices and other communications shall, when mailed, be
effective when deposited in the mails, addressed as aforesaid. Address for notices:

	 	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

	 	 	 	 	 	 	 
	 

	 	Attn:	 	 	 	 
	 

	 	Facsimile:
	 	 

	 	 
	 

	 	Telephone:
	 	 

	 	 
	 

	 	 	 	 

	 	 

SECTION 4.6 No Waiver; Remedies. In addition to, and not in limitation of,
Section 2.3 and Section 2.5, no failure on the part of any Lender or any holder of a Note to
exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

SECTION 4.7 Section Captions. Section captions used in this Guaranty Agreement
are for convenience of reference only, and shall not affect the construction of this Guaranty
Agreement.

SECTION 4.8 Setoff. In addition to, and not in limitation of, any rights of any
Lender or any holder of a Note under applicable law, upon the occurrence of an Event of Default
under or as defined in the Credit Agreement, each Lender and each such holder shall be entitled to
exercise any right of offset or banker’s lien against each and every account and other property or
interest that the Guarantor may now or hereafter have with, or which is now or hereafter in the
possession of, any such Lender, to the extent of the full amount of the Indebtedness.

SECTION 4.9 Severability. Wherever possible each provision of this Guaranty
Agreement shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Guaranty
Agreement.

SECTION 4.10 Governing Law. THIS GUARANTY AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
THIS GUARANTY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.

SECTION 4.11 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDERS OR THE
GUARANTOR MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH
SUCH LITIGATION. THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF TEXAS. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

Exhibit G – Page 7

 

 

SECTION 4.12 Waiver of Jury Trial. THE GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDERS OR THE
GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS
ENTERING INTO THE CREDIT AGREEMENT.

SECTION 4.13 Entire Agreement. THIS GUARANTY AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.

Remainder of Page Intentionally Blank. Signature Page to Follow.

Exhibit G – Page 8

 

 

IN WITNESS WHEREOF, the Guarantor has caused this Guaranty Agreement to be duly executed and
delivered by an officer duly authorized as of the date first written above.

	 	 	 	 	 
	 	 	GUARANTOR:
	 
	 	 	 	 
	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

[SIGNATURES CONTINUED ON NEXT PAGE]

Signature Page — Exhibit G — Page 1

 

 

This Guaranty Agreement is accepted by the Administrative Agent, for and on behalf of the
Lenders, as of the date first written above.

	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
	 	 	in its capacity as Administrative Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

Signature Page — Exhibit G — Page 2

 

 

EXHIBIT H

FORM OF PLEDGE, ASSIGNMENT, AND SECURITY AGREEMENT

THIS PLEDGE, ASSIGNMENT, AND SECURITY AGREEMENT (this “Security Agreement”) is executed
as of December 18, 2006, by [                    ], a
[                    ] (“Debtor”), whose address is
                                        
, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
(in its capacity as “Administrative Agent” for Lenders (hereafter defined)), as “Secured Party,”
whose address is 1001 Fannin, Suite 4300, Houston, Texas 77002.

RECITALS

A. Debtor, Wachovia Bank, National Association, as Administrative Agent (including its
permitted successors and assigns in such capacity, the “Administrative Agent”), and Lenders now or
hereafter party to the Credit Agreement (including their respective permitted successors and
assigns, the “Lenders”) have entered into a Revolving Credit Agreement dated as of December 18,
2006 (as amended, modified, supplemented, or restated from time to time, the “Credit Agreement”);

B. This Security Agreement is integral to the transactions contemplated by the Loan
Documents (as defined in the Credit Agreement), and the execution and delivery hereof, is a
condition precedent to Lenders’ Indebtedness to extend credit under the Loan Documents.

ACCORDINGLY, for valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Debtor and Secured Party hereby agree as follows:

1. REFERENCE TO CREDIT AGREEMENT. The terms, conditions, and provisions of the Credit
Agreement are incorporated herein by reference, the same as if set forth herein verbatim, which
terms, conditions, and provisions shall continue to be in full force and effect hereunder so long
as Lenders are obligated to lend under the Credit Agreement and thereafter until the Indebtedness
is paid and performed in full.

2. CERTAIN DEFINITIONS. Unless otherwise defined herein, or the context hereof otherwise
requires, each term defined in either of the Credit Agreement or in the UCC is used in this
Security Agreement with the same meaning; provided that, if the definition given to such term in
the Credit Agreement conflicts with
the definition given to such term in the UCC, the Credit Agreement definition shall control to the
extent legally allowable; and if any definition given to such term in Chapter 9 of the UCC
conflicts with the definition given to such term in any other chapter of the UCC, the Chapter 9
definition shall prevail. As used herein, the following terms have the meanings indicated:

Collateral has the meaning set forth in Paragraph 4 hereof.

Collateral Notes has the meaning set forth in Paragraph 4 hereof.

Collateral Note Security has the meaning set forth in Paragraph 4 hereof.

Collateral Obligor means any Person obligated with respect to any of the
Collateral, whether as an account debtor, obligor on an instrument, issuer of securities, or
otherwise.

Exhibit H – Page 1

 

 

Control Agreement means, with respect to any Collateral consisting of investment
property, Deposit Accounts, electronic chattel paper, and letter-of-credit rights, an
agreement evidencing that Secured Party has “control” (as defined in the UCC) of such
Collateral.

Indebtedness means, collectively, (a) the “Indebtedness” as defined in the Credit
Agreement, and (b) all Indebtedness, liabilities, and Indebtedness of Debtor arising under
this Security Agreement or any Guaranty Agreement assuring payment of the Indebtedness; it
being the intention and contemplation of Debtor and Secured Party that future advances will
be made by Secured Party or one or more Lenders to Debtor for a variety of purposes, that
Debtor may guarantee (or otherwise become directly or contingently obligated with respect to)
the Indebtedness of others to Secured Party or to one or more Lenders, that from time to time
overdrafts of Debtor’s accounts with Secured Party or with other Lenders may occur, and that
Secured Party or one or more Lenders may from time to time acquire from others Indebtedness
of Debtor to such others, and that payment and repayment of all of the foregoing are intended
to and shall be part of the Indebtedness secured hereby. The Indebtedness shall include,
without limitation, future, as well as existing, advances, Indebtedness, liabilities, and
Indebtedness owed by Debtor to Secured Party or to any Lender arising under the Loan
Documents or otherwise.

Lender means, individually, or Lenders means, collectively, on any date of
determination, Administrative Agent and Lenders and their permitted successors and assigns.

Material Agreements has the meaning set forth in Paragraph 4 hereof.

Partnerships shall mean (a) those partnerships and limited liability companies
listed on Annex B attached hereto and incorporated herein by reference, as such partnerships
or limited liability companies exist or may hereinafter be restated, amended, or
restructured, (b) any partnership, joint venture, or limited liability company in which
Debtor shall, at any time, become a limited or general partner, venturer, or member, or (c)
any partnership, joint venture, or corporation formed as a result of the restructure,
reorganization, or amendment of the Partnerships.

Partnership Agreements shall mean (a) those agreements listed on Annex B attached
hereto and incorporated herein by reference (together with any modifications, amendments, or
restatements thereof), and (b) partnership agreements, joint venture agreements, or
organizational agreements for any of the partnerships, joint ventures, or limited liability
companies described in clause (b) of the definition of “Partnerships” above (together with
any modifications, amendments or restatements thereof), and “Partnership Agreement” means any
one of the Partnership Agreements.

Partnership Interests shall mean all of Debtor’s Right, title and interest now or
hereafter accruing under the Partnership Agreements with respect to all distributions,
allocations, proceeds, fees, preferences, payments, or other benefits, which Debtor now is or
may hereafter become entitled to receive with respect to such interests in the Partnerships
and with respect to the repayment of all loans now or hereafter made by Debtor to the
Partnerships.

Pledged Securities means, collectively, the Pledged Shares and any other Collateral
constituting securities.

Pledged Shares has the meaning set forth in Paragraph 4 hereof.

Exhibit H – Page 2

 

 

Security Interest means the security interest granted and the pledge and assignment made
under Paragraph 3 hereof.

UCC means the Uniform Commercial Code, including each such provision as it may
subsequently be renumbered, as enacted in the State of Texas or other applicable
jurisdiction, as amended at the time in question.

3.SECURITY INTEREST. In order to secure the full and complete payment and performance of
the Indebtedness when due, Debtor hereby grants to Secured Party a Security Interest in all of
Debtor’s rights, titles, and interests in and to the Collateral and pledges, collaterally
transfers, and assigns the Collateral to Secured Party, all upon and subject to the terms and
conditions of this Security Agreement. Such Security Interest is granted and pledge and assignment
are made as security only and shall not subject Secured Party to, or transfer or in any way affect
or modify, any obligation of Debtor with respect to any of the Collateral or any transaction
involving or giving rise thereto. If the grant, pledge, or collateral transfer or assignment of any
specific item of the Collateral is expressly prohibited by any contract, then the Security Interest
created hereby nonetheless remains effective to the extent allowed by the UCC or other applicable
law, but is otherwise limited by that prohibition.

4. COLLATERAL. As used herein, the term “Collateral” means the following items and types
of property, wherever located, now owned or in the future existing or acquired by Debtor, and all
proceeds and products thereof, and any substitutes or replacements therefor:

(a) All accounts, inventory, and any accessions thereto, and general intangibles
(including payment intangibles);

(b) All rights, titles, and interests of Debtor in and to all outstanding stock,
equity, or other investment securities owned by Debtor, including, without limitation, all
capital stock of any Subsidiary of the Debtor set forth on Annex B (the “Pledged Shares”);

(c) All rights, titles, and interests of Debtor in and to all promissory notes and
other instruments payable to Debtor, including, without limitation, all inter-company notes
from Subsidiaries and those set forth on Annex B (“Collateral Notes”) and all rights, titles,
interests, and Liens Debtor may have, be, or become entitled to under all present and future
loan agreements, security agreements, pledge agreements, deeds of trust, mortgages,
guarantees, or other documents assuring or securing payment of or otherwise evidencing the
Collateral Notes, including, without limitation, those set forth on Annex B (“Collateral Note
Security”);

(d) The Partnership Interests and all rights of Debtor with respect thereto,
including, without limitation, all Partnership Interests set forth on Annex B and all of
Debtor’s distribution rights, income rights, liquidation interest, accounts, contract rights, general intangibles,
notes, instruments, drafts, and documents relating to the Partnership Interests;

(e) All of Debtor’s rights, titles, and interests in other proprietary rights
whether now owned or hereafter acquired by Debtor (collectively, the “Proprietary Rights”),
including without limitation: (i) any knowledge or information that is material to Debtor’s
business and that enables Debtor to operate its business with the accuracy, efficiency, or
precision necessary for commercial success, or otherwise affords Debtor a commercial
advantage for the possession or knowledge thereof including, without limitation, all
geological, geophysical, engineering, accounting, title, legal, and other technical or
business data, customer lists, credit files, computer records, computer programs, storage
media, and computer software; (ii) any new and useful process, machine, manufacture, or
composition of matter, or any new and useful improvement thereof that is material to the
operation of Debtor’s business and developed by Debtor, its employees, or agents; and (iii)
all information or other items recognized as “trade secrets” under state or federal law and
all comparable rights recognized in foreign jurisdictions or conventions or by treaty;

Exhibit H – Page 3

 

 

(f) (i) All of Debtor’s rights, titles, and interests in, to, and under those
contracts listed on Annex B (the “Material Agreements”), including, without limitation, all
rights of Debtor to receive moneys due and to become due under or pursuant to the Material
Agreements, (ii) all rights of Debtor to receive proceeds of any insurance, indemnity,
warranty, or guaranty with respect to the Material Agreements, (iii) all claims of Debtor for
damages arising out of or for breach of or default under the Material Agreements, and (iv)
all rights of Debtor to compel performance and otherwise exercise all rights and remedies
under the Material Agreements;

(g) All present and future distributions, income, increases, profits, combinations,
reclassifications, improvements, and products of, accessions, attachments, and other
additions to, tools, parts, and equipment used in connection with, and substitutes and
replacements for, all or part of the Collateral described above;

(h) All present and future accounts, contract rights, general intangibles, cash and
noncash proceeds, and other rights arising from or by virtue of, or from the voluntary or
involuntary sale or other disposition of, or collections with respect to, or insurance
proceeds payable with respect to, or proceeds payable by virtue of warranty or other claims
against the manufacturer of, or claims against any other Person with respect to, all or any
part of the Collateral heretofore described in this clause or otherwise; and

(i) All present and future security for the payment to any Obligor of any of the
Collateral described above and goods which gave or will give rise to any such Collateral or
are evidenced, identified, or represented therein or thereby.

The description of the Collateral contained in this Paragraph 4 shall not be deemed to permit
any action prohibited by this Security Agreement or by the terms incorporated in this Security
Agreement.

5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to Secured Party that:

(a) Credit Agreement. To the extent certain representations and warranties
in the Credit Agreement are applicable to it or its assets or operations, each such
representation and warranty is true and correct.

(b) Binding Indebtedness/Perfection. This Security Agreement creates a
legal, valid, and binding Lien in and to the Collateral in favor of Secured Party and
enforceable against Debtor. For Collateral in which the Security Interest may be perfected by
the filing of Financing Statements, once those Financing Statements have been properly filed
in the jurisdictions described on Annex A hereto, the Security Interest in that Collateral
will be fully perfected and the Security Interest will constitute a first-priority Lien on
such Collateral, subject only to Excepted Liens or, to the extent Financing Statements have
already been filed in the jurisdictions described on Annex A hereto, and such Financing
Statements have not lapsed, the Security Interest in that Collateral is currently perfected
and constitutes a first-priority Lien on such Collateral, subject only to Excepted Liens.
With respect to Collateral consisting of investment property (other than Pledged Securities
covered by Paragraph 5(j)), upon the delivery of such Collateral to Secured Party or delivery
of an executed Control Agreement with respect to such Collateral, the Security Interest in
that Collateral will be fully perfected and the Security Interest will constitute a
first-priority Lien on such Collateral, subject only to Excepted Liens. None of the
Collateral has been delivered nor control with respect thereto given to any other Person.
Other than the Financing Statements and Control Agreements with respect to this Security
Agreement, there are no other financing statements or control agreements covering any
Collateral, other than those evidencing Excepted Liens. The creation of the Security Interest
does not require the consent of any Person that has not been obtained.

Exhibit H – Page 4

 

 

(c) Debtor Information. Debtor’s exact legal name, mailing address,
jurisdiction of organization, type of entity, and state issued organizational identification
number are as set forth on Annex A hereto.

(d) Location. Annex A sets forth (i) Debtor’s place of business and chief
executive office, (ii) the location of Debtor’s books and records concerning its accounts,
and (iii) the location of all other Collateral (other than Collateral to the extent located
on the Mortgaged Properties). All such books, records, and Collateral are in Debtor’s
possession.

(e) Governmental Authority. No Authorization, approval, or other action by,
and no notice to or filing with, any Governmental Authority is required either (i) for the
pledge by Debtor of the Collateral pursuant to this Security Agreement or for the execution,
delivery, or performance of this Security Agreement by Debtor, or (ii) for the exercise by
Secured Party of the voting or other rights provided for in this Security Agreement or the
remedies in respect of the Collateral pursuant to this Security Agreement (except as may be
required in connection with the disposition of the Pledged Securities by laws affecting the
offering and sale of securities generally).

(f) Maintenance of Collateral. All tangible Collateral which is useful in
and necessary to Debtor’s business is in good repair and condition, ordinary wear and tear
excepted.

(g) Liens. Debtor owns all presently existing Collateral, and will acquire
all hereafter-acquired Collateral, free and clear of all liens, except Excepted Liens.

(h) Collateral. Annex B accurately lists all Collateral Notes, Collateral
Note Security, Pledged Shares, Partnership Interests, and Material Agreements in which Debtor
has any rights, titles, or interest (but such failure of such description to be accurate or
complete shall not impair the Security Interest in such Collateral).

(i) Instruments, Chattel Paper, Collateral Notes, and Collateral Note
Security. All instruments and chattel paper, including, without limitation, the
Collateral Notes, have been delivered to Secured Party, together with corresponding
endorsements duly executed by Debtor in favor of Secured Party, and such endorsements have
been duly and validly executed and are binding and enforceable against
Debtor in accordance with their terms. Each Collateral Note and the documents evidencing
the Collateral Note Security are in full force and effect; there have been no renewals or
extensions of, or amendments, modifications, or supplements to, any thereof about which the
Secured Party has not been advised in writing; and no “default” or “event of default” has
occurred and is continuing under any such Collateral Note or documents evidencing the
Collateral Note Security. Debtor has good title to the Collateral Notes and Collateral Note
Security, and such Collateral Notes and Collateral Note Security are free from any claim for
credit, deduction, or allowance of a Collateral Obligor and free from any defense, condition,
dispute, setoff, or counterclaim, and there is no extension or indulgence with respect
thereto.

Exhibit H – Page 5

 

 

(j) Pledged Securities; Pledged Shares. All Collateral that is Pledged
Shares is duly authorized, validly issued, fully paid, and non-assessable, and the transfer
thereof is not subject to any restrictions, other than restrictions imposed by applicable
securities and corporate laws. The Pledged Securities include 100% of the issued and
outstanding common stock or other equity interests of each Subsidiary owned by Debtor. As of
the date hereof, no shares of capital stock or other equity securities are issued, reserved
for issuance or outstanding, and there are no other options, warrants or other rights
presently outstanding to purchase or otherwise acquire any authorized but unissued,
unauthorized or treasury shares of capital stock of any subsidiary. None of the Pledged
Shares is subject to preemptive rights. Debtor has good title to the Pledged Securities, free
and clear of all Liens and encumbrances thereon (except for the Security Interest created
hereby), and has delivered to Secured Party (i) all stock certificates, or other instruments
or documents representing or evidencing the Pledged Securities, together with corresponding
assignment or transfer powers duly executed in blank by Debtor, and such powers have been
duly and validly executed and are binding and enforceable against Debtor in accordance with
their terms or (ii) to the extent such Pledged Securities are uncertificated, an executed
Control Agreement with respect to such Pledged Securities. The pledge of the Pledged
Securities in accordance with the terms hereof creates a valid and perfected first priority
security interest in the Pledged Securities securing payment of the Indebtedness.

(k) Partnership Interests. Each Partnership issuing a Partnership Interest,
is duly organized, currently existing, and in good standing under all applicable laws; there
have been no amendments, modifications, or supplements to any agreement or certificate
creating any Partnership or any material contract relating to the Partnerships, of which
Secured Party has not been advised in writing; no default or breach or event of default or
breach has occurred and is continuing under any Partnership Agreement; and no approval or
consent of the partners of any Partnership is required as a condition to the validity and
enforceability of the Security Interest created hereby or the consummation of the
transactions contemplated hereby which has not been duly obtained by Debtor. Debtor has good
title to the Partnership Interests free and clear of all Liens and encumbrances (except for
the Security Interest granted hereby). The Partnership Interests are validly issued, fully
paid, and nonassessable and are not subject to statutory, contractual, or other restrictions
governing their transfer, ownership, or control, which would materially adversely affect the
rights of the Lenders hereunder or the ability of the Secured Party to exercise its rights or
remedies with respect to the Partnership Interests, except as set forth on Annex C or
applicable securities laws. None of the Partnership Interests is subject to preemptive
rights. All capital contributions required to be made by the terms of the Partnership
Agreements for each Partnership have been made.

(l) Accounts; General Intangibles. All Collateral that is accounts or
general intangibles is free from any claim for credit, deduction, or allowance of a
Collateral Obligor and free from any defense, condition, dispute, setoff, or counterclaim,
and there is no extension or indulgence with respect thereto.

(m) Material Agreements. All Material Agreements to which Debtor is a party
are set forth on Schedule 7.23 to the Credit Agreement. Each Material Agreement is in full
force and effect; there have been no amendments, modifications, or supplements to any
Material Agreement of which Secured Party has not been advised in writing; and no default or
breach or event of default or breach has occurred and is continuing under any Material
Agreement.

The foregoing representations and warranties will be true and correct in all respects with
respect to any additional Collateral or additional specific descriptions of certain Collateral
delivered to Secured Party in the future by Debtor. The failure of any of these representations or
warranties or any description of Collateral therein to be accurate or complete shall not impair the
Security Interest in any such Collateral.

Exhibit H – Page 6

 

 

6. COVENANTS. So long as Lenders are committed to extend credit to Debtor under the
Credit Agreement and thereafter until the Indebtedness is paid and performed in full, Debtor
covenants and agrees with Secured Party that Debtor will:

(a) Credit Agreement. (i) Comply with, perform, and be bound by all
covenants and agreements in the Credit Agreement that are applicable to it, its assets, or
its operations, each of which is hereby ratified and confirmed (INCLUDING, WITHOUT
LIMITATION, THE INDEMNIFICATION AND RELATED PROVISIONS IN SECTION 12.03 OF THE CREDIT
AGREEMENT); AND (ii) CONSENT TO AND APPROVE THE VENUE, SERVICE OF PROCESS, AND WAIVER OF JURY
TRIAL PROVISIONS OF SECTION 12.13 OF THE CREDIT AGREEMENT.

(b) Information/Record of Collateral. Maintain, at the place where Debtor
is entitled to receive notices under the Loan Documents, a current record of where all
Collateral is located, permit representatives of Secured Party at any time during normal
business hours to inspect and make abstracts from such records, and furnish to Secured Party,
at such intervals as Secured Party may request, such documents, lists, descriptions,
certificates, and other information as may be necessary or proper to keep Secured Party
informed with respect to the identity, location, status, condition, and value of the
Collateral. In addition, from time to time at the request of Secured Party deliver to Secured
Party such information regarding Debtor as Secured Party may reasonably request.

(c) Annexes. Immediately update all annexes hereto if any information
therein shall become inaccurate or incomplete. Notwithstanding any other provision herein,
Debtor’s failure to describe any Collateral required to be listed on any annex hereto shall
not impair Secured Party’s Security Interest in the Collateral.

(d) Perform Indebtedness. Fully perform all of Debtor’s duties under and in
connection with each transaction to which the Collateral, or any part thereof, relates, so
that the amounts thereof shall actually become payable in their entirety to Secured Party.
Furthermore, notwithstanding anything to the contrary contained herein, (i) Debtor shall
remain liable under the contracts, agreements, documents, and instruments included in the
Collateral to the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Security Agreement had not been executed, (ii) the
exercise by Secured Party of any of its rights or remedies hereunder shall not release Debtor
from any of its duties or obligations under the contracts, agreements, documents, and
instruments included in the Collateral, and (iii) Secured Party shall not have any
indebtedness, liability, or obligation under any of the contracts, agreements, documents, and
instruments included in the Collateral by reason of this Security Agreement, and Secured
Party shall not be obligated to perform any of the obligations or duties of Debtor thereunder
or to take any action to collect or enforce any claim for payment assigned hereunder.

(e) Notices. (i) Except as may be otherwise expressly permitted under the
terms of the Credit Agreement, promptly notify Secured Party of (A) any change in any fact or
circumstances represented or warranted by Debtor with respect to any of the Collateral or
Indebtedness, (B) any claim, action, or proceeding affecting title to all or any of the
Collateral or the Security Interest and, at the request of Secured Party, appear in and
defend, at Debtor’s expense, any such action or proceeding, (C) any material change in the
nature of the Collateral, (D) any material damage to or loss of Collateral, and (E) the
occurrence of any other event or condition (including, without limitation, matters as to Lien
priority) that could have a material adverse effect on the Collateral (taken as a whole) or
the Security Interest created hereunder; and (ii) give Secured Party thirty (30) days written
notice before any proposed (A) relocation of its principal place of business or chief
executive office, (B) change of its name, identity, or corporate structure, (C) relocation of
the place where its books and records concerning its accounts are kept, (D) relocation of any
Collateral (other than delivery of inventory in the ordinary course of business to third
party contractors for processing and sales of inventory in the ordinary course of business or
as permitted by the Credit Agreement) to a location not described on the attached Annex A,
and (E) change of its jurisdiction of organization or organizational identification number,
as applicable. Prior to making any of the changes contemplated in clause (ii) preceding,
Debtor shall execute and deliver all such additional documents and perform all additional
acts as Secured Party, in its sole discretion, may request in order to continue or maintain
the existence and priority of the Security Interests in all of the Collateral.

Exhibit H – Page 7

 

 

(f) Collateral in Trust. Hold in trust (and not commingle with other assets
of Debtor) for Secured Party all Collateral that is Collateral Notes or Pledged Securities,
at any time received by Debtor, and promptly deliver same to Secured Party, unless Secured
Party at its option (which may be evidenced only by a writing signed by Secured Party stating
that Secured Party elects to permit Debtor to so retain) permits Debtor to retain the same,
but any Collateral Notes or Pledged Securities, so retained shall be marked to state that
they are assigned to Secured Party; each such instrument shall be endorsed to the order of
Secured Party (but the failure of same to be so marked or endorsed shall not impair the
Security Interest thereon).

(g) Control. Execute all documents and take any action required by Secured
Party in order for Secured Party to obtain “control” (as defined in the UCC) with respect to
Collateral consisting of uncertificated Pledged Securities. If Debtor at any time holds or
acquires an interest in any electronic chattel paper or any “transferable record,” as that
term is defined in the federal Electronic Signatures in Global and National Commerce Act, or
in the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction,
promptly notify Secured Party thereof and, at the request of Secured Party, take such action
as Secured Party may reasonably request to vest in Secured Party control under the UCC of
such electronic chattel paper or control under the federal Electronic Signatures in Global
and National Commerce Act or, as the case may be, the Uniform Electronic Transactions Act, as
so in effect in such jurisdiction, of such transferable record.

(h) Further Assurances. At Debtor’s expense and Secured Party’s request,
before or after a Default or Event of Default, (i) file or cause to be filed such
applications and take such other actions as Secured Party may request to obtain the consent
or approval of any Governmental Authority to Secured Party’s rights hereunder, including,
without limitation, the Right to sell all the Collateral upon a Default or Event of Default
without additional consent or approval from such Governmental Authority (and, because Debtor
agrees that Secured Party’s remedies at law for failure of Debtor to comply with this
provision would be inadequate and that such failure would not be adequately compensable in
damages, Debtor agrees that its covenants in this provision may be specifically enforced);
(ii) from time to time promptly execute and deliver to Secured Party all such other
assignments, certificates, supplemental documents, and financing statements, and do all other
acts or things as Secured Party may reasonably request in order to more fully create,
evidence, perfect, continue, and preserve the priority of the Security Interest and to carry
out the provisions of this
Security Agreement; and (iii) pay all filing fees in connection with any financing,
continuation, or termination statement or other instrument with respect to the Security
Interests.

Exhibit H – Page 8

 

 

(i) Encumbrances. Not create, permit, or suffer to exist, and shall defend
the Collateral against, any Lien or other encumbrance on the Collateral, and shall defend
Debtor’s rights in the Collateral and Secured Party’s Security Interest in, the Collateral
against the claims and demands of all Persons except those holding or claiming Excepted
Liens. Debtor shall do nothing to impair the rights of Secured Party in the Collateral.

(j) Estoppel and Other Agreements and Matters. Upon the reasonable request
of Secured Party, either (i) use commercially reasonable efforts to cause the landlord or
lessor for each location where any of its inventory or equipment is maintained to execute and
deliver to Secured Party an estoppel and subordination agreement in such form as may be
reasonably acceptable to Secured Party and its counsel, or (ii) deliver to Secured Party a
legal opinion or other evidence (in each case that is reasonably satisfactory to Secured
Party and it counsel) that neither the applicable lease nor the laws of the jurisdiction in
which that location is situated provide for contractual, common law, or statutory landlord’s
Liens that is senior to or pari passu with the Security Interest.

(k) Impairment of Collateral. Not use any of the Collateral, or permit the
same to be used, for any unlawful purpose, in any manner that is reasonably likely to
adversely impair the value or usefulness of the Collateral, or in any manner inconsistent
with the provisions or requirements of any policy of insurance thereon nor affix or install
any accessories, equipment, or device on the Collateral or on any component thereof if such
addition will impair the original intended function or use of the Collateral or such
component.

(l) Collateral Notes and Collateral Note Security. Without the prior written
consent of Secured Party not (i) modify or substitute, or permit the modification or
substitution of, any Collateral Note or any document evidencing the Collateral Note Security
or (ii) release any Collateral Note Security unless specifically required by the terms
thereof.

(m) Securities. Except as permitted by the Credit Agreement, not sell,
exchange, or otherwise dispose of, or grant any option, warrant, or other right with respect
to, any of the Pledged Securities; to the extent any issuer of any Pledged Securities is
controlled by Debtor and/or its Affiliates, not permit such issuer to issue any additional
            shares of stock or other securities in addition to or in substitution for the Pledged
Securities, except issuances to Debtor on terms acceptable to Secured Party; pledge
hereunder, immediately upon Debtor’s acquisition (directly or indirectly) thereof, any and
all additional shares of stock or other securities of each Subsidiary of Debtor; and take any
action necessary, required, or requested by Secured Party to allow Secured Party to fully
enforce its Security Interest in the Pledged Securities, including, without limitation, the
filing of any claims with any court, liquidator, trustee, custodian, receiver, or other like
person or party.

(n) Partnerships and Partnership Interests. (i) Promptly perform, observe,
and otherwise comply with each and every covenant, agreement, requirement, and condition set
forth in the contracts and agreements creating or relating to any Partnership; (ii) do or
cause to be done all things necessary or appropriate to keep the Partnerships in full force
and effect and the rights of Debtor and Secured Party thereunder unimpaired; (iii) except as
expressly permitted by the Credit Agreement, not consent to any Partnership selling, leasing,
or disposing of substantially all of its assets in a single transaction or a series of
transactions; (iv) notify Secured Party of the occurrence of any default or breach or event
of default or breach under any contract or agreement creating or relating to the
Partnerships; (v) not consent to the amendment, modification, surrender, impairment,
forfeiture, cancellation, dissolution, or termination of any Partnership, or material
agreement relating thereto; (vi) except as permitted by the Credit Agreement, not transfer,
sell, or assign any of the Partnership Interests or any part thereof; (vii) pledge hereunder,
immediately upon Debtor’s acquisition (directly or indirectly) thereof, any and all
additional Partnership Interests of any Partnership granted to Debtor; and any and all
additional shares of stock or other securities of each; (viii) deliver to Secured Party a
fully-executed Acknowledgment of Pledge, substantially in the form of Annex D, for each
Partnership Interest; and (ix) take any action necessary, required, or requested by Secured
Party to allow Secured Party to fully enforce its Security Interest in the Partnership
Interests, including, without limitation, the filing of any claims with any court,
liquidator, trustee, custodian, receiver, or other like person or party.

Exhibit H – Page 9

 

 

(o) Material Agreements. (i) Promptly perform, observe, and otherwise
comply with each and every covenant, agreement, requirement, and condition set forth in the
Material Agreements; (ii) do or cause to be done all things necessary or appropriate to keep
the Material Agreements in full force and effect and the rights of Debtor and Secured Party
thereunder unimpaired; (iii) notify Secured Party of the occurrence of any default or breach
or event of default or breach under any Material Agreement; and (iv) without the prior
written consent of Secured Party, not consent to the amendment, modification, surrender,
impairment, forfeiture, cancellation, dissolution, or termination of any Material Agreement.

(p) Modification of Accounts. In accordance with prudent business
practices, endeavor to collect or cause to be collected from each account debtor under its
accounts, as and when due, any and all amounts owing under such accounts. Except in the
ordinary course of business consistent with prudent business practices and industry
standards, without the prior written consent of Secured Party, Debtor shall not (i) grant any
extension of time for any payment with respect to any of the accounts, (ii) compromise,
compound, or settle any of the accounts for less than the full amount thereof, (iii) release,
in whole or in part, any Person liable for payment of any of the accounts, (iv) allow any
credit or discount for payment with respect to any account other than trade discounts granted
in the ordinary course of business, (v) release any Lien or guaranty securing any account,
(vi) modify or substitute, or permit the modification or substitution of, any contract to
which any of the Collateral which is accounts relates.

7. DEFAULT; REMEDIES. If an Event of Default exists, Secured Party may, at its election
(but subject to the terms and conditions of the Credit Agreement), exercise any and all rights
available to a secured party under the UCC, in addition to any and all other rights afforded by the
Loan Documents, at law, in equity, or otherwise, including, without limitation, (a) requiring
Debtor to assemble all or part of the Collateral and make it available to Secured Party at a place
to be designated by Secured Party which is reasonably convenient to Debtor and Secured Party, (b)
surrendering any policies of insurance on all or part of the Collateral and receiving and applying
the unearned premiums as a credit on the Indebtedness, (c) applying by appropriate judicial
proceedings for appointment of a receiver for all or part of the Collateral (and Debtor hereby
consents to any such appointment), and (d) applying to the Indebtedness any cash held by Secured
Party under this Security Agreement, including, without limitation, any cash in the Cash Collateral
Account (defined in Section 8(h)).

(a) Notice. Reasonable notification of the time and place of any public
sale of the Collateral, or reasonable notification of the time after which any private sale
or other intended disposition of the Collateral is to be made, shall be sent to Debtor and to
any other Person entitled to notice under the UCC; provided that, if any of the Collateral
threatens to decline speedily in value or is of the type customarily sold on a recognized
market, Secured Party may sell or otherwise dispose of the Collateral without notification,
advertisement, or other notice of any kind. It is agreed that notice sent or given not less
than ten days prior to the taking of the action to which the notice relates is reasonable
notification and notice for the purposes of this subparagraph.

Exhibit H – Page 10

 

 

(b) Condition of Collateral; Warranties. Secured Party has no obligation to
clean-up or otherwise prepare the Collateral for sale. Secured Party may sell the Collateral
without giving any warranties as to the Collateral. Secured Party may specifically disclaim
any warranties of title or the like. This procedure will not be considered adversely to
affect the commercial reasonableness of any sale of the Collateral.

(c) Compliance with Other Laws. Secured Party may comply with any
applicable state or federal law requirements in connection with a disposition of the
Collateral and compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

(d) Sales of Pledged Securities.

(i) Debtor agrees that, because of the Securities Act of 1933, as amended, or
the rules and regulations promulgated thereunder (collectively, the “Securities Act”),
or any other laws or regulations, and for other reasons, there may be legal or
practical restrictions or limitations affecting Secured Party in any attempts to
dispose of certain portions of the Pledged Securities and for the enforcement of its
rights. For these reasons, Secured Party is hereby authorized by Debtor, but not
obligated, upon the occurrence and during the continuation of an Event of Default, to
sell all or any part of the Pledged Securities at private sale, subject to investment
letter or in any other manner which will not require the Pledged Securities, or any
part thereof, to be registered in accordance with the Securities Act or any other laws
or regulations, at a reasonable price at such private sale or other distribution in the
manner mentioned above. Debtor understands that Secured Party may in its discretion
approach a limited number of potential purchasers and that a sale under such
circumstances may yield a lower price for the Pledged Securities, or any part thereof,
than would otherwise be obtainable if such Collateral were either afforded to a larger
number or potential purchasers, registered under the Securities Act, or sold in the
open market. Debtor agrees that any such private sale made under this Paragraph 7(d)
shall be deemed to have been made in a commercially reasonable manner, and that Secured
Party has no obligation to delay the sale of any Pledged Securities to permit the
issuer thereof to register it for public sale under any applicable federal or state
securities laws.

(ii) Secured Party is authorized, in connection with any such sale, (A) to
restrict the prospective bidders on or purchasers of any of the Pledged Securities to a
limited number of sophisticated investors who will represent and agree that they are
purchasing for their own account for investment and not with a view to the distribution
or sale of any of such Pledged Securities, and (B) to impose such other limitations or
conditions in connection with any such sale as Secured Party reasonably deems necessary
in order to comply with applicable law. Debtor covenants and agrees that it will
execute and deliver such documents and take such other action as Secured Party
reasonably deems necessary in order that any such sale may be made in compliance with
applicable law. Upon any such sale Secured Party shall have the right to deliver,
assign, and transfer to the purchaser thereof the Pledged Securities so sold. Each
purchaser at any such sale shall hold the Pledged Securities so sold absolutely free
from any claim or right of Debtor of whatsoever kind, including any equity or right of
redemption of Debtor. Debtor, to the extent permitted by applicable law, hereby
specifically waives all rights of redemption, stay, or appraisal which it has or may
have under any law now existing or hereafter enacted.

Exhibit H – Page 11

 

 

(iii) Debtor agrees that ten days’ written notice from Secured Party to Debtor of
Secured Party’s intention to make any such public or private sale or sale at a broker’s
board or
on a securities exchange shall constitute reasonable notice under the UCC. Such
notice shall (A) in case of a public sale, state the time and place fixed for such
sale, (B) in case of sale at a broker’s board or on a securities exchange, state the
board or exchange at which such a sale is to be made and the day on which the Pledged
Securities, or the portion thereof so being sold, will first be offered for sale at
such board or exchange, and (C) in the case of a private sale, state the day after
which such sale may be consummated. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as Secured Party may
fix in the notice of such sale. At any such sale, the Pledged Securities may be sold in
one lot as an entirety or in separate parcels, as Secured Party may reasonably
determine. Secured Party shall not be obligated to make any such sale pursuant to any
such notice. Secured Party may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned.

(iv) In case of any sale of all or any part of the Pledged Securities on
credit or for future delivery, the Pledged Securities so sold may be retained by
Secured Party until the selling price is paid by the purchaser thereof, but Secured
Party shall not incur any liability in case of the failure of such purchaser to take up
and pay for the Pledged Securities so sold and in case of any such failure, such
Pledged Securities may again be sold upon like notice. Secured Party, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or suits
at law or in equity to foreclose the Security Interests and sell the Pledged
Securities, or any portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction.

(v) Without limiting the foregoing, or imposing upon Secured Party any
obligations or duties not required by applicable law, Debtor acknowledges and agrees
that, in foreclosing upon any of the Pledged Securities, or exercising any other rights
or remedies provided Secured Party hereunder or under applicable law, Secured Party
may, but shall not be required to, (A) qualify or restrict prospective purchasers of
the Pledged Securities by requiring evidence of sophistication or creditworthiness, and
requiring the execution and delivery of confidentiality agreements or other documents
and agreements as a condition to such prospective purchasers’ receipt of information
regarding the Pledged Securities or participation in any public or private foreclosure
sale process, (B) provide to prospective purchasers business and financial information
regarding Debtor or the Companies available in the files of Secured Party at the time
of commencing the foreclosure process, without the requirement that Secured Party
obtain, or seek to obtain, any updated business or financial information or verify, or
certify to prospective purchasers, the accuracy of any such business or financial
information, or (C) offer for sale and sell the Pledged Securities with, or without,
first employing an appraiser, investment banker, or broker with respect to the
evaluation of the Pledged Securities, the solicitation of purchasers for Pledged
Securities, or the manner of sale of Pledged Securities.

(e) Application of Proceeds. Secured Party shall apply the proceeds of any
sale or other disposition of the Collateral under this Paragraph 7 in the following order:
first, to the payment of all expenses incurred in retaking, holding, and preparing any of the
Collateral for sale(s) or other disposition, in arranging for such sale(s) or other
disposition, and in actually selling or disposing of the same (all of which are part of the
Indebtedness); second, toward repayment of amounts expended by Secured Party under Paragraph
8; and third, toward payment of the balance of the Indebtedness in the order and manner
specified in the Credit Agreement. Any surplus remaining shall be delivered to Debtor or as a
court of competent jurisdiction may direct. If the proceeds are insufficient to pay the
Indebtedness in full, Debtor shall remain liable for any deficiency.

Exhibit H – Page 12

 

 

(f) Sales on Credit. If Secured Party sells any of the Collateral upon
credit, Debtor will be credited only with payments actually made by the purchaser, received
by the Secured Party, and applied to the indebtedness of the purchaser. In the event the
purchaser fails to pay for the Collateral, Secured Party may resell the Collateral and Debtor
shall be credited with the proceeds of the sale.

8. OTHER RIGHTS OF SECURED PARTY.

(a) Performance. If Debtor fails to keep the Collateral in good repair,
working order, and condition, as required by the Loan Documents, or fails to pay when due all
Taxes on any of the Collateral in the manner required by the Loan Documents, or fails to
preserve the priority of the Security Interest in any of the Collateral, or fails to keep the
Collateral insured as required by the Loan Documents, or otherwise fails to perform any of
its obligations under the Loan Documents with respect to the Collateral, then Secured Party
may, at its option, but without being required to do so, make such repairs, pay such Taxes,
prosecute or defend any suits in relation to the Collateral, or insure and keep insured the
Collateral in any amount deemed appropriate by Secured Party, or take all other action which
Debtor is required, but has failed or refused, to take under the Loan Documents. Any sum
which may be expended or paid by Secured Party under this subparagraph (including, without
limitation, court costs and reasonable attorneys’ fees) shall bear interest from the dates of
expenditure or payment at the Post-Default Rate until paid and, together with such interest,
shall be payable by Debtor to Secured Party upon demand and shall be part of the
Indebtedness.

(b) Collection. If an Event of Default exists and upon notice from Secured
Party, each Collateral Obligor with respect to any payments on any of the Collateral
(including, without limitation, dividends and other Distributions with respect to the Pledged
Securities and Partnership Interests, payments on Collateral Notes, insurance proceeds
payable by reason of loss or damage to any of the Collateral, or payments or distributions
with respect to Deposit Accounts) is hereby authorized and directed by Debtor to make payment
directly to Secured Party, regardless of whether Debtor was previously making collections
thereon. Subject to Paragraph 8(f) hereof, until such notice is given, Debtor is authorized
to retain and expend all payments made on Collateral. If an Event of Default exists, Secured
Party shall have the Right in its own name or in the name of Debtor to compromise or extend
time of payment with respect to all or any portion of the Collateral for such amounts and
upon such terms as Secured Party may determine; to demand, collect, receive, receipt for, sue
for, compound, and give acquittances for any and all amounts due or to become due with
respect to Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Debtor on any notes, acceptances, checks, drafts, money orders, or other
evidences of payment on Collateral that may come into the possession of Secured Party; to
sign the name of Debtor on any invoice or bill of lading relating to any Collateral, on any
drafts against Collateral Obligors or other Persons making payment with respect to
Collateral, on assignments and verifications of accounts or other Collateral and on notices
to Collateral Obligors making payment with respect to Collateral; to send requests for
verification of obligations to any Collateral Obligor; and to do all other acts and things
necessary to carry out the intent of this Security Agreement. If an Event of Default exists
and any Collateral Obligor fails or refuses to make payment on any Collateral when due,
Secured Party is authorized, in its sole discretion, either in its own name or in the name of
Debtor, to take such action as Secured Party shall deem appropriate for the collection of any
amounts owed with respect to Collateral or upon which a delinquency exists. Regardless of any
other provision hereof, however, Secured Party shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of, any amounts owed with
respect to Collateral, nor shall it be under any duty whatsoever to anyone except Debtor to
account for funds that it shall actually receive hereunder. Without limiting the generality
of the foregoing, Secured Party shall have no responsibility for ascertaining any maturities,
calls, conversions, exchanges, offers, tenders, or similar matters relating to any
Collateral, or for informing Debtor with respect to any of such matters (irrespective of
whether Secured Party actually has, or may be deemed to have, knowledge thereof). The receipt
of Secured Party to any Collateral Obligor shall be a full and complete release, discharge,
and acquittance to such Collateral Obligor, to the extent of any amount so paid to Secured
Party.

Exhibit H – Page 13

 

 

(c) Proprietary Rights. For purposes of enabling Secured Party to exercise
its rights and remedies under this Security Agreement and enabling Secured Party and its
successors and assigns to enjoy the full benefits of the Collateral, Debtor hereby grants to
Secured Party an irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to Debtor) to make, have made, use, sell, import, reproduce, distribute,
display and perform publicly, create derivative works, perform by means of digital
transmission, license, or sublicense any of the Proprietary Rights. Debtor shall provide
Secured Party with reasonable access to all media in which any of the Proprietary Rights may
be recorded or stored and all computer programs used for the completion or printout thereof.
This license shall also inure to the benefit of all successors, assigns, and transferees of
Secured Party. Upon the occurrence of a Event of Default, Secured Party may require that
Debtor assign all of its right, title, and interest in and to the Proprietary Rights or any
part thereof to Secured Party or such other Person as Secured Party may designate pursuant to
documents satisfactory to Secured Party. If no Default or Event of Default exists, Debtor
shall have the exclusive, non-transferable right and license to use the Proprietary Rights in
the ordinary course of business and the exclusive right to grant to other Persons licenses
and sublicenses with respect to the Proprietary Rights for full and fair consideration.

(d) Record Ownership of Securities. If a Default or Event of Default
exists, Secured Party at any time may have any Collateral that is Pledged Securities and that
is in the possession of Secured Party, or its nominee or nominees, registered in its name, or
in the name of its nominee or nominees, as Secured Party; and, as to any Collateral that is
Pledged Securities so registered, Secured Party shall execute and deliver (or cause to be
executed and delivered) to Debtor all such proxies, powers of attorney, dividend coupons or
orders, and other documents as Debtor may reasonably request for the purpose of enabling
Debtor to exercise the voting rights and powers which it is entitled to exercise under this
Security Agreement or to receive the dividends and other Distributions and payments in
respect of such Collateral that is Pledged Securities or proceeds thereof which it is
authorized to receive and retain under this Security Agreement.

(e) Voting of Securities. As long as no Default exists, Debtor is entitled
to exercise all voting rights pertaining to any Pledged Securities and Partnership Interests;
provided, however, that no vote shall be cast or consent, waiver, or ratification given or
action taken without the prior written consent of Secured Party which would (x) be
inconsistent with or violate any provision of this Security Agreement or any other Loan
Document or (y) amend, modify, or waive any term, provision or condition of the certificate
of incorporation, bylaws, certificate of formation, or other charter document, or other
agreement relating to, evidencing, providing for the issuance of, or securing any Collateral;
and provided further that Debtor shall give Secured Party at least five Business Days’ prior
written notice in the form of an officers’ certificate of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any voting or other consensual
rights pertaining to the Collateral or any part thereof which might have a material adverse
effect on the value of the Collateral or any part thereof. If an Event of Default exists and
if Secured Party elects to exercise such right, the right to vote any Pledged Securities
shall be vested exclusively in Secured Party. To this end, Debtor hereby irrevocably
constitutes and appoints Secured Party the proxy and attorney-in-fact of Debtor, with full
power of substitution, to vote, and to act with respect to, any and all Collateral that is
Pledged Securities standing in the name of Debtor or with respect to which Debtor is entitled
to vote and act, subject to the understanding that such proxy may not be exercised unless an
Event of Default exists. The proxy herein granted is coupled with an interest, is
irrevocable, and shall continue until the Indebtedness has been paid and performed in full.

Exhibit H – Page 14

 

 

(f) Certain Proceeds. Notwithstanding any contrary provision herein, any
and all

(i) dividends, interest, or other Distributions paid or payable other than in
cash in respect of, and instruments and other property received, receivable, or
otherwise distributed in respect of, or in exchange for, any Collateral;

(ii) dividends, interest, or other Distributions hereafter paid or payable in
cash in respect of any Collateral in connection with a partial or total liquidation or
dissolution, or in connection with a reduction of capital, capital surplus, or
paid-in-surplus;

(iii) cash paid, payable, or otherwise distributed in redemption of, or in
exchange for, any Collateral; and

(iv) dividends, interest, or other Distributions paid or payable in violation
of the Loan Documents,

shall be part of the Collateral hereunder, and shall, if received by Debtor, be held in trust
for the benefit of Secured Party, and shall forthwith be delivered to Secured Party (accompanied by
proper instruments of assignment and/or stock and/or bond powers executed by Debtor in accordance
with Secured Party’s instructions) to be held subject to the terms of this Security Agreement. Any
cash proceeds of Collateral which come into the possession of Secured Party on and after the
occurrence of an Event of Default (including, without limitation, insurance proceeds) may, at
Secured Party’s option, be applied in whole or in part to the Indebtedness (to the extent then
due), be released in whole or in part to or on the written instructions of Debtor for any general
or specific purpose, or be retained in whole or in part by Secured Party as additional Collateral.
Any cash Collateral in the possession of Secured Party may be invested by Secured Party in
certificates of deposit issued by Secured Party (if Secured Party issues such certificates) or by
any state or national bank having combined capital and surplus greater than $100,000,000 with a
rating from Moody’s and S&P of P-1 and A-1+, respectively, or in securities issued or guaranteed by
the United States of America or any agency thereof. Secured Party shall never be obligated to make
any such investment and shall never have any liability to Debtor for any loss which may result
therefrom. All interest and other amounts earned from any investment of Collateral may be dealt
with by Secured Party in the same manner as other cash Collateral. The provisions of this
subparagraph are applicable whether or not a Default or Event of Default exists.

Exhibit H – Page 15

 

 

(g) Use and Operation of Collateral. Should any Collateral come into the
possession of Secured Party, Secured Party may use or operate such Collateral for the purpose
of preserving it or its value pursuant to the order of a court of appropriate jurisdiction or
in accordance with any other rights held by Secured Party in respect of such Collateral.
Debtor covenants to promptly reimburse and pay to Secured Party, at Secured Party’s request,
the amount of all reasonable expenses (including, without limitation, the cost of any
insurance and payment of Taxes or other charges) incurred by Secured Party in connection with
its custody and preservation of Collateral, and all such expenses, costs, Taxes, and other
charges shall bear interest at the Post-Default Rate until repaid and, together with such
interest, shall be payable by Debtor to Secured Party upon demand and shall become part of
the Indebtedness. However, the risk of accidental loss or damage to, or diminution in value
of, Collateral is on Debtor, and Secured Party shall have no liability whatever for failure
to obtain or maintain insurance, nor to determine whether any insurance ever in force is
adequate as to amount or as to the risks insured. With respect to Collateral that is in the
possession of Secured Party, Secured Party shall have no duty to fix or preserve rights
against prior parties to such Collateral and shall never be liable for any failure to use
diligence to collect any amount payable in respect of such Collateral, but shall be liable
only to account to Debtor for what it may actually collect or receive thereon. The provisions
of this subparagraph are applicable whether or not an Event of Default exists.

(h) Power of Attorney. Debtor hereby irrevocably constitutes and appoints
Secured Party and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the name of Debtor
or in its own name, to take after the occurrence and during the continuance of an Event of
Default and from time to time thereafter, any and all action and to execute any and all
documents and instruments which Secured Party at any time and from time to time deems
necessary or desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, Debtor hereby gives Secured Party the power and
right on behalf of Debtor and in its own name to do any of the following after the occurrence
and during the continuance of an Event of Default and from time to time thereafter, without
notice to or the consent of Debtor:

(i) to receive, endorse, and collect any drafts or other instruments or
documents in connection with clause (b) above and this clause (i);

(ii) to demand, sue for, collect, or receive, in the name of Debtor or in its
own name, any money or property at any time payable or receivable on account of or in
exchange for any of the Collateral and, in connection therewith, endorse checks, notes,
drafts, acceptances, money orders, documents of title or any other instruments for the
payment of money under the Collateral or any policy of insurance;

(iii) to pay or discharge taxes, Liens, or other encumbrances levied or
placed on or threatened against the Collateral;

(iv) to notify post office authorities to change the address for delivery of
Debtor to an address designated by Secured Party and to receive, open, and dispose of
mail addressed to Debtor; and

Exhibit H – Page 16

 

 

(v) (A) to direct account debtors and any other parties liable for any payment under any of the
Collateral to make payment of any and all monies due and to become due thereunder directly to
Secured Party or as Secured Party shall direct; (B) to receive payment of and receipt for any and
all monies, claims, and other amounts due and to become due at any time in respect of or arising
out of any Collateral; (C) to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments, proxies, stock powers,
verifications, and notices in connection with accounts and other documents relating to the
Collateral; (D) to commence and prosecute any suit, action, or proceeding at law or in equity in
any court of competent jurisdiction to collect the Collateral or any part thereof and to enforce
any other right in respect of any Collateral; (E) to defend any suit, action, or proceeding brought
against Debtor with respect to any Collateral; (F) to settle, compromise, or adjust any suit,
action, or proceeding described above and, in connection therewith, to give such discharges or
releases as Secured Party may deem appropriate; (G) to exchange any of the Collateral for other
property upon any merger, consolidation, reorganization, recapitalization, or other readjustment of
the issuer thereof and, in connection therewith, deposit any of the Collateral with any committee,
depositary, transfer agent, registrar, or other designated agency upon such terms as Secured Party
may determine; (H) to add or release any guarantor, indorser, surety, or other party to any of the
Collateral; (I) to renew, extend, or otherwise change the terms and conditions of any of the
Collateral; (J) to make, settle, compromise or adjust any claims under or pertaining to any of the
Collateral (including claims under any policy of insurance); (K) to execute on behalf of Debtor any
financing statements or continuation statements with respect to the Security Interests created
hereby, and to do any and all acts and things to protect and preserve the Collateral, including,
without limitation, the protection and prosecution of all rights included in the Collateral; and
(L) to sell, transfer, pledge, convey, make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though Secured Party were the absolute owner
thereof for all purposes, and to do, at Secured Party’s option and Debtor’s expense, at any time,
or from time to time, all acts and things which Secured Party deems necessary to protect, preserve,
maintain, or realize upon the Collateral and Secured Party’s security interest therein.

This power of attorney is a power coupled with an interest and shall be irrevocable.
Secured Party shall be under no duty to exercise or withhold the exercise of any of the
rights, powers, privileges, and options expressly or implicitly granted to Secured Party in
this Security Agreement, and shall not be liable for any failure to do so or any delay in
doing so. Neither Secured Party nor any Person designated by Secured Party shall be liable
for any act or omission or for any error of judgment or any mistake of fact or law. This
power of attorney is conferred on Secured Party solely to protect, preserve, maintain, and
realize upon its Security Interest in the Collateral. Secured Party shall not be responsible
for any decline in the value of the Collateral and shall not be required to take any steps to
preserve rights against prior parties or to protect, preserve, or maintain any Lien given to
secure the Collateral.

(i) Purchase Money Collateral. To the extent that Secured Party or any
Lender has advanced or will advance funds to or for the account of Debtor to enable Debtor to
purchase or otherwise acquire rights in Collateral, Secured Party or such Lender, at its
option, may pay such funds (i) directly to the Person from whom Debtor will make such
purchase or acquire such rights, or (ii) to Debtor, in which case Debtor covenants to
promptly pay the same to such Person, and forthwith furnish to Secured Party evidence
satisfactory to Secured Party that such payment has been made from the funds so provided.

(j) Subrogation. If any of the Indebtedness is given in renewal or
extension or applied toward the payment of indebtedness secured by any Lien, Secured Party
shall be, and is hereby, subrogated to all of the rights, titles, interests, and Liens
securing the indebtedness so renewed, extended, or paid.

Exhibit H – Page 17

 

 

(k) Indemnification. Debtor hereby assumes all liability for the
Collateral, for the Security Interest, and for any use, possession, maintenance, and
management of, all or any of the Collateral, including, without limitation, any Taxes arising
as a result of, or in connection with, the transactions contemplated herein, and agrees to
assume liability for, and to indemnify and hold Secured Party and each Lender harmless from
and against, any and all claims, causes of action, or liability, for injuries to or deaths of
Persons and damage to property, howsoever arising from or incident to such use, possession,
maintenance, and management, whether such Persons be agents or employees of Debtor or of
third parties, or such damage be to property of Debtor or of others. Debtor agrees to
indemnify, save, and hold Secured Party and each Lender harmless from and against, and
covenants to defend Secured Party and each Lender against, any and all losses, damages,
claims, costs, penalties, liabilities, and expenses (collectively, “Claims”), including,
without limitation, court costs and attorneys’ fees, AND ANY OF THE FOREGOING ARISING FROM
THE NEGLIGENCE OF SECURED PARTY OR ANY LENDER, OR ANY OF THEIR RESPECTIVE OFFICERS,
EMPLOYEES, AGENTS, ADVISORS, EMPLOYEES, OR REPRESENTATIVES, howsoever arising or incurred
because of, incident to, or with respect to Collateral or any use, possession, maintenance,
or management thereof; provided, however, that the indemnity set forth in this Paragraph 8(l)
will not apply to Claims caused by the gross negligence or willful misconduct of Secured
Party or any Lender.

(l) Continuing Liability. Notwithstanding anything to the contrary
contained in this Security Agreement, (i) Debtor shall remain liable under the contracts,
agreements, documents, and instruments included in the Collateral to the extent set forth
therein to perform all of its duties and obligation thereunder to the same extent as if this
Security Agreement had not been executed, (ii) the exercise by Secured Party of any of its
rights or remedies hereunder shall not release Debtor from any of its duties or obligations
under the contracts, agreements, documents, and instruments included in the Collateral, and
(iii) Secured Party shall not have any indebtedness, liability, or obligation under any of
the contracts, agreements, documents, and instruments included in the Collateral by reason of
this Security Agreement, and Secured Party shall not be obligated to perform any of the
obligations or duties of Debtor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.

9. MISCELLANEOUS.

(a) Continuing Security Interest. This Security Agreement creates a
continuing security interest in the Collateral and shall (i) remain in full force and effect
until the termination of the obligations of Lenders to advance Borrowings or issue Letters of
Credit under the Loan Documents, the payment in full of the Indebtedness, and the expiration
of all Letters of Credit and all Hedging Agreements issued by any Lender or any Affiliate of
any Lender to any Obligor; and (ii) inure to the benefit of and be enforceable by Secured
Party, Lenders, and their respective successors, transferees, and assigns. Without limiting
the generality of the foregoing clause (ii), Secured Party and Lenders may assign or
otherwise transfer any of their respective rights under this Security Agreement to any other
Person in accordance with the terms and provisions of Section 12.06 of the Credit Agreement,
and to the extent of such assignment or transfer such Person shall thereupon become vested
with all the rights and benefits in respect thereof granted herein or otherwise to Secured
Party or Lenders, as the case may be. Upon payment in full of the Indebtedness, the
termination of the commitment of Lenders to extend credit or issue Letters of Credit under
the Loan Documents, and the expiration and termination of all Letters of Credit and Hedging
Agreements issued by any Lender or any Affiliate of any Lender to any Obligor, Debtor shall
be entitled to the return, upon its request and at its expense, of such of the Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.

Exhibit H – Page 18

 

 

(b) Reference to Miscellaneous Provisions. This Security Agreement is one of the
“Loan Documents” referred to in the Credit Agreement, and all provisions relating to Loan
Documents set forth in Section 12 of the Credit Agreement, other than the provisions relating
to governing law, are incorporated herein by reference, the same as if set forth herein
verbatim.

(c) Term. Upon the later of (i) the termination of Lenders’ commitments to
fund Loans and issue Letters of Credit under the Credit Agreement and (ii) the full and final
payment and performance of the Indebtedness (including expiration of any Hedging Agreements
between Debtor and by Lender or its Affiliate), this Security Agreement shall thereafter
terminate upon receipt by Secured Party of Debtor’s written notice of such termination;
provided that no Collateral Obligor, if any, on any of the Collateral shall ever be obligated
to make inquiry as to the termination of this Security Agreement, but shall be fully
protected in making payment directly to Secured Party until actual notice of such total
payment of the Indebtedness is received by such Collateral Obligor.

(d) Actions Not Releases. The Security Interest and Debtor’s obligations
and Secured Party’s rights hereunder shall not be released, diminished, impaired, or
adversely affected by the occurrence of any one or more of the following events: (i) the
taking or accepting of any other security or assurance for any or all of the Indebtedness;
(ii) any release, surrender, exchange, subordination, or loss of any security or assurance at
any time existing in connection with any or all of the Indebtedness; (iii) the modification
of, amendment to, or waiver of compliance with any terms of any of the other Loan Documents
without the notification or consent of Debtor, except as required therein (the right to such
notification or consent being herein specifically waived by Debtor); (iv) the insolvency,
bankruptcy, or lack of corporate or trust power of any party at any time liable for the
payment of any or all of the Indebtedness, whether now existing or hereafter occurring; (v)
any renewal, extension, or rearrangement of the payment of any or all of the Indebtedness,
either with or without notice to or consent of Debtor, or any adjustment, indulgence,
forbearance, or compromise that may be granted or given by Secured Party or any Lender to
Debtor; (vi) any neglect, delay, omission, failure, or refusal of Secured Party or any Lender
to take or prosecute any action in connection with any other agreement, document, guaranty,
or instrument evidencing, securing, or assuring the payment of all or any of the
Indebtedness; (vii) any failure of Secured Party or any Lender to notify Debtor of any
renewal, extension, or assignment of the Indebtedness or any part thereof, or the release of
any Collateral or other security, or of any other action taken or refrained from being taken
by Secured Party or any Lender against Debtor or any new agreement between or among Secured
Party or one or more Lenders and Debtor, it being understood that except as expressly
provided herein, neither Secured Party nor any Lender shall be required to give Debtor any
notice of any kind under any circumstances whatsoever with respect to or in connection with
the Indebtedness, including, without limitation, notice of acceptance of this Security
Agreement or any Collateral ever delivered to or for the account of Secured Party hereunder;
(viii) the illegality, invalidity, or unenforceability of all or any part of the Indebtedness
against any party obligated with respect thereto by reason of the fact that the Indebtedness,
or the interest paid or payable with respect thereto, exceeds the amount permitted by law,
the act of creating the Indebtedness, or any part thereof, is ultra vires, or the officers,
partners, or trustees creating same acted in excess of their authority, or for any other
reason; or (ix) if any payment by any party obligated with respect thereto is held to
constitute a preference under applicable laws or for any other reason Secured Party or any
Lender is required to refund such payment or pay the amount thereof to someone else.

(e) Waivers. Except to the extent expressly otherwise provided herein or in
other Loan Documents and to the fullest extent permitted by applicable law, Debtor waives (i)
any right to require Secured Party or any Lender to proceed against any other Person, to
exhaust its rights in Collateral, or to pursue any other right which Secured Party or any
Lender may have; (ii) with respect to the Indebtedness, presentment and demand for payment,
protest, notice of protest and nonpayment, and notice of the intention to accelerate; and
(iii) all rights of marshaling in respect of any and all of the Collateral.

Exhibit H – Page 19

 

 

(f) Financing Statement; Authorization. Secured Party shall be entitled at
any time to file this Security Agreement or a carbon, photographic, or other reproduction of
this Security Agreement, as a financing statement, but the failure of Secured Party to do so
shall not impair the validity or enforceability of this Security Agreement. Debtor hereby
irrevocably authorizes Secured Party at any time and from time to time to file in any UCC
jurisdiction any initial financing statements and amendments thereto (without the requirement
for Debtor’s signature thereon) that (i) describe the Collateral (A) as “all assets of
Debtor” or words of similar effect, regardless of whether any particular asset comprised in
the Collateral falls within the scope of Article 9 of the UCC of the state or such
jurisdiction or whether such assets are included in the Collateral hereunder, or (B) as being
of an equal or lesser scope or with greater detail, and (ii) contain any other information
required by Article 9 of the UCC of the state or such jurisdiction for the sufficiency or
filing office acceptance of any financing statement or amendment, including whether the
Debtor is an organization, the type of organization, and any organization identification
number issued to Debtor. Debtor agrees to furnish any such information to Secured Party
promptly upon request.

(g) Amendments. This Security Agreement may be amended only by an
instrument in writing executed jointly by Debtor and Secured Party, and supplemented only by
documents delivered or to be delivered in accordance with the express terms hereof.

(h) Multiple Counterparts. This Security Agreement has been executed in a
number of identical counterparts, each of which shall be deemed an original for all purposes
and all of which constitute, collectively, one agreement; but, in making proof of this
Security Agreement, it shall not be necessary to produce or account for more than one such
counterpart. Signatures transmitted by facsimile shall be binding and deemed original until
such original signatures are received from the parties hereto by the Secured Party.

(i) Parties Bound; Assignment. This Security Agreement shall be binding on
Debtor and Debtor’s heirs, legal representatives, successors, and assigns and shall inure to
the benefit of Secured Party and Secured Party’s successors and assigns.

(i) Secured Party is the administrative agent for each Lender under the
Credit Agreement, the Security Interest and all rights granted to Secured Party
hereunder or in connection herewith are for the ratable benefit of each Lender, and
Secured Party may, without the joinder of any Lender, exercise any and all rights in
favor of Secured Party or Lenders hereunder, including, without limitation, conducting
any foreclosure sales hereunder, and executing full or partial releases hereof,
amendments or modifications hereto, or consents or waivers hereunder. The rights of
each Lender vis-a-vis Secured Party and each other Lender may be subject to one or more
separate agreements between or among such parties, but Debtor need not inquire about
any such agreement or be subject to any terms thereof unless Debtor specifically joins
therein; and consequently, neither Debtor nor Debtor’s heirs, personal representatives,
successors, and assigns shall be entitled to any benefits or provisions of any such
separate agreements or be entitled to rely upon or raise as a defense, in any manner
whatsoever, the failure or refusal of any party thereto to comply with the provisions
thereof.

Exhibit H – Page 20

 

 

(ii) Debtor may not, without the prior written consent of Secured Party,
assign any rights, duties, or obligations hereunder.

(j) GOVERNING LAW . THE SUBSTANTIVE LAWS OF THE
STATE OF TEXAS, EXCEPT TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION GOVERN THE
CREATION, PERFECTION, VALIDITY, OR ENFORCEMENT OF LIENS UNDER THIS
SECURITY AGREEMENT, AND THE APPLICABLE FEDERAL LAWS OF THE
UNITED STATES OF AMERICA, SHALL GOVERN THE VALIDITY, CONSTRUCTION,
ENFORCEMENT AND INTERPRETATION OF THIS SECURITY AGREEMENT AND ALL
OF THE OTHER LOAN DOCUMENTS.

Remainder of Page Intentionally Blank.

Signature Page to Follow.

Exhibit H – Page 21

 

 

EXECUTED as of the date first stated in this Pledge, Assignment, and Security Agreement.

	 	 	 
	 

as DEBTOR

	 	 

Exhibit H — Pledge, Assignment and Security Agreement

Signature Page

 

 

ANNEX A TO SECURITY AGREEMENT

DEBTOR INFORMATION AND LOCATION OF COLLATERAL 

(TO BE PROVIDED BY BORROWER)

	 	 	 	 	 
	A. Exact Legal Name of Debtor:
	 	 	 	 
	B. Mailing Address of Debtor:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	C. Type of Entity:
	 	 	 	 
	D. Jurisdiction of Organization:
	 	 	 	 
	E. State Issued Organizational Identification Number:	 	 

Exhibit H — Annex A to Security Agreement

 

 

ANNEX B TO SECURITY AGREEMENT

COLLATERAL DESCRIPTIONS

(TO BE PROVIDED BY BORROWER)

A. Collateral Notes and Collateral Note Security:

B. Pledged Shares:

C. Partnership Interests:

D. Material Agreements:

Exhibit H — Annex B to Security Agreement

 

 

ANNEX C TO SECURITY AGREEMENT 

STATUTORY, CONTRACTUAL, OR OTHER RESTRICTIONS GOVERNING THE TRANSFER,

OWNERSHIP, OR CONTROL OF THE PARTNERSHIP INTERESTS

(TO BE PROVIDED BY BORROWER)

Exhibit H — Annex C to Security Agreement

Page 1

 

 

ANNEX D TO SECURITY AGREEMENT

ACKNOWLEDGMENT OF PLEDGE

	 	 	 	 	 	 	 	 	 	 	 
	  PARTNERSHIP:

	 	 	 	 	 	INTEREST OWNER:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 

BY THIS ACKNOWLEDGMENT OF PLEDGE, dated as of      , 20     ,
           (the “Partnership”)
hereby acknowledges the pledge in favor of Wachovia Bank, National Association (“Pledgee”), in its
capacity as Administrative Agent for certain Lenders and as Secured Party under that certain
Pledge, Assignment, and Security Agreement dated as of           ,            (as amended, modified,
supplemented, or restated from time to time, the “Security Agreement”), against, and a security
interest in favor of Pledgee in, all of           ’s (the “Interest Owner”) rights in connection
with any partnership interest in the Partnership now and hereafter owned by the Interest Owner
(“Partnership Interest”).

A. Pledge Records. The Partnership has identified Pledgee’s interest in all of
the Interest Owner’s Right, title, and interest in and to all of the Interest Owner’s Partnership
Interest as subject to a pledge and security interest in favor of Pledgee in the Partnership
Records.

B. Partnership Distributions, Accounts, and Correspondence. The Partnership
hereby acknowledges that (i) all proceeds, distributions, and other amounts payable to the Interest
Owner, including, without limitation, upon the termination, liquidation, and dissolution of the
Partnership shall be paid and remitted to the Pledgee upon demand, (ii) all funds in deposit
accounts shall be held for the benefit of Pledgee, and (iii) all future correspondence, accountings
of distributions, and tax returns of the Partnership shall be provided to the Pledgee. The
Partnership acknowledges and accepts such direction and hereby agrees that it shall, upon the
written demand by the Administrative Agent, pay directly to the Administrative Agent at such
address any and all distributions, income, and cash flow arising from the Partnership Interests
whether payable in cash, property or otherwise, subject to and in accordance with the terms and
conditions of the Partnership. The Pledgee may from time to time notify the Partnership of any
change of address to which such amounts are to be paid.

Remainder of Page Intentionally Blank.

Signature Page to Follow.

Annex D to Security Agreement

Page 1

 

 

EXECUTED as of the date first stated in this Acknowledgment of Pledge.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	[PARTNERSHIP]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

As General Partner
	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Exhibit H — Annex D to Security Agreement

Page 2

 

 

EXHIBIT I

FORM OF HEDGING COMPLIANCE REPORT

(Attached)

Exhibit I — Page 1

 

 

SCHEDULE 7.03

LITIGATION

None.

SCHEDULE 7.03 TO CREDIT AGREEMENT — Page 1

 

 

SCHEDULE 7.10

OWNERSHIP REPORT

SCHEDULE 7.10 TO CREDIT AGREEMENT Page 1

 

 

SCHEDULE 7.14

PARTNERSHIP INTERESTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Well	 	 	 	 	 	GP as	 	Atlas Total	 	 
	Progam #	 	Program Name	 	Count	 	GP%	 	LP%	 	Interest	 	GP
	 	19	 	 	VIKING RESOURCES 1999 LP
	 	 	22	 	 	 	25.00	%	 	 	0.00	%	 	 	25.00	%	 	Viking Resources LLC
	 	21	 	 	VIKING 89 CANTON
	 	 	4	 	 	 	63.50	%	 	 	0.00	%	 	 	63.50	%	 	Viking Resources LLC
	 	22	 	 	VIKING 1990-2 ACCREDITED ONLY
	 	 	4	 	 	 	54.85	%	 	 	0.00	%	 	 	54.85	%	 	Viking Resources LLC
	 	23	 	 	VIKING RESOURCES 1991-1
	 	 	8	 	 	 	60.79	%	 	 	2.31	%	 	 	63.10	%	 	Viking Resources LLC
	 	24	 	 	1991 VIKING RESOURCES LTD.PSHP
	 	 	14	 	 	 	35.32	%	 	 	0.86	%	 	 	36.18	%	 	Viking Resources LLC
	 	25	 	 	1991 BRYAN JOINT VENTURE
	 	 	2	 	 	 	30.00	%	 	 	0.00	%	 	 	30.00	%	 	Viking Resources LLC
	 	26	 	 	1992 VIKING RESOURCES LTD.PSHP
	 	 	6	 	 	 	35.26	%	 	 	2.00	%	 	 	37.27	%	 	Viking Resources LLC
	 	27	 	 	1992-2 VIKING RESOURCES
	 	 	3	 	 	 	30.68	%	 	 	1.37	%	 	 	32.05	%	 	Viking Resources LLC
	 	28	 	 	1993 VIKING RESOURCES LTD.PSHP
	 	 	9	 	 	 	30.93	%	 	 	2.70	%	 	 	33.63	%	 	Viking Resources LLC
	 	29	 	 	1994 VIKING RESOURCES LTD.PSHP
	 	 	33	 	 	 	30.00	%	 	 	1.07	%	 	 	31.07	%	 	Viking Resources LLC
	 	30	 	 	1995 VIKING RESOURCES LTD.PSHP
	 	 	48	 	 	 	30.00	%	 	 	3.25	%	 	 	33.25	%	 	Viking Resources LLC
	 	31	 	 	1996 VIKING RESOURCES LTD.PSHP
	 	 	51	 	 	 	30.00	%	 	 	0.00	%	 	 	30.00	%	 	Viking Resources LLC
	 	32	 	 	1997 VIKING RESOURCES LTD.PSHP
	 	 	45	 	 	 	30.00	%	 	 	0.18	%	 	 	30.18	%	 	Viking Resources LLC
	 	33	 	 	1998 VIKING RESOURCES LTD.PSHP
	 	 	31	 	 	 	25.00	%	 	 	0.00	%	 	 	25.00	%	 	Viking Resources LLC
	 	100040	 	 	CMSV/RAI 1989 DRILLING PROGRAM
	 	 	14	 	 	 	20.00	%	 	 	65.86	%	 	 	85.86	%	 	Resource Energy LLC
	 	100043	 	 	CMSV/RAI 1990 NATURAL GAS DEVL
	 	 	10	 	 	 	20.00	%	 	 	45.84	%	 	 	65.84	%	 	Resource Energy LLC
	 	100058	 	 	DALTON ASSOCIATES
	 	 	1	 	 	 	28.00	%	 	 	50.31	%	 	 	78.31	%	 	Resource Energy LLC
	 	100061	 	 	ROYAL ASSOCIATES
	 	 	1	 	 	 	7.50	%	 	 	66.77	%	 	 	74.27	%	 	Resource Energy LLC
	 	100062	 	 	WOOSTER ASSOCIATES
	 	 	1	 	 	 	24.10	%	 	 	31.70	%	 	 	55.80	%	 	Resource Energy LLC
	 	100071	 	 	ATWOOD YIELD PLUS
	 	 	41	 	 	 	1.00	%	 	 	62.23	%	 	 	63.23	%	 	Resource Energy LLC
	 	100072	 	 	ATWOOD YIELD PLUS II
	 	 	3	 	 	 	1.00	%	 	 	59.40	%	 	 	60.40	%	 	Resource Energy LLC
	 	100073	 	 	ATWOOD YIELD PLUS III
	 	 	27	 	 	 	1.00	%	 	 	44.18	%	 	 	45.18	%	 	Resource Energy LLC
	 	100074	 	 	ATWOOD YIELD PLUS IV
	 	 	35	 	 	 	1.00	%	 	 	44.51	%	 	 	45.51	%	 	Resource Energy LLC
	 	100075	 	 	ATWOOD YIELD PLUS V
	 	 	11	 	 	 	1.00	%	 	 	59.23	%	 	 	60.23	%	 	Resource Energy LLC
	 	100076	 	 	BRIGHTON INCOME PARTNERSHIP
	 	 	24	 	 	 	50.00	%	 	 	0.00	%	 	 	50.00	%	 	Resource Energy LLC
	 	100077	 	 	BRIGHTON/LEVENGOOD DRILLING
	 	 	8	 	 	 	10.00	%	 	 	51.43	%	 	 	61.43	%	 	Resource Energy LLC
	 	100079	 	 	DOVER-ATWOOD 1993 DRLNG PROG
	 	 	79	 	 	 	15.15	%	 	 	0.00	%	 	 	15.15	%	 	Resource Energy LLC
	 	100081	 	 	EAST OHIO GAS DRILLING
	 	 	2	 	 	 	1.00	%	 	 	59.77	%	 	 	60.77	%	 	Resource Energy LLC
	 	100083	 	 	LEVENGOOD INDUSTRIAL
	 	 	20	 	 	 	1.00	%	 	 	32.35	%	 	 	33.35	%	 	Resource Energy LLC

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Well	 	 	 	 	 	GP as	 	Atlas Total	 	 
	Progam #	 	Program Name	 	Count	 	GP%	 	LP%	 	Interest	 	GP
	 	100084	 	 	TWC YIELD PLUS 1991
	 	 	30	 	 	 	1.00	%	 	 	36.52	%	 	 	37.52	%	 	Resource Energy LLC
	 	100804	 	 	TRIANGLE ENERGY ASSOC. 1984
	 	 	6	 	 	 	1.00	%	 	 	68.51	%	 	 	69.51	%	 	Resource Energy LLC
	 	100810	 	 	LANGASCO OHIO DRLG PTRS 1985
	 	 	4	 	 	 	1.00	%	 	 	78.89	%	 	 	79.89	%	 	Resource Energy LLC
	 	100812	 	 	TRIANGLE ENERGY ASSOC. 1985
	 	 	5	 	 	 	1.00	%	 	 	82.12	%	 	 	83.12	%	 	Resource Energy LLC
	 	100813	 	 	SCH JOINT VENTURE
	 	 	15	 	 	 	73.33	%	 	 	0.00	%	 	 	73.33	%	 	Resource Energy LLC
	 	100814	 	 	LANGASCO OHIO DRLG PTRS 1986
	 	 	4	 	 	 	1.00	%	 	 	60.23	%	 	 	61.23	%	 	Resource Energy LLC
	 	100815	 	 	LANGASCO ROY INCOME PTRS 1986
	 	 	64	 	 	 	1.00	%	 	 	91.48	%	 	 	92.48	%	 	Resource Energy LLC
	 	100852	 	 	TD ENERGY ASSOCIATES 1983
	 	 	3	 	 	 	1.43	%	 	 	67.28	%	 	 	68.71	%	 	Resource Energy LLC
	 	100855	 	 	TD/TRIANGLE ENERGY ASSOCIATES
	 	 	1	 	 	 	2.35	%	 	 	77.53	%	 	 	79.88	%	 	Resource Energy LLC
	 	100856	 	 	CLINCHER ENERGY ASSOC 1986
	 	 	4	 	 	 	2.00	%	 	 	87.31	%	 	 	89.31	%	 	Resource Energy LLC
	 	100945	 	 	Atlas America Public #15-2006 (B)
	 	 	0	 	 	 	34.22	%	 	 	0.00	%	 	 	34.22	%	 	Atlas Resources LLC
	 	100946	 	 	Atlas America Public #15-2005 (A)
	 	 	159	 	 	 	36.07	%	 	 	0.00	%	 	 	36.07	%	 	Atlas Resources LLC
	 	100947	 	 	Atlas America Series #26
	 	 	138	 	 	 	38.31	%	 	 	0.00	%	 	 	38.31	%	 	Atlas Resources LLC
	 	100948	 	 	Atlas America Public #14-2005 (A)
	 	 	339	 	 	 	35.00	%	 	 	0.00	%	 	 	35.00	%	 	Atlas Resources LLC
	 	100949	 	 	Atlas America Public #14-2004
	 	 	262	 	 	 	35.00	%	 	 	0.00	%	 	 	35.00	%	 	Atlas Resources LLC

SCHEDULE 7.14 TO CREDIT
AGREEMENT                                        
Page 1

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Well	 	 	 	 	 	GP as	 	AtlasTotal	 	 
	Progam #	 	Program Name	 	Count	 	GP%	 	LP%	 	Interest	 	GP
	 	100951	 	 	ATLAS LP #1 - 1985
	 	 	7	 	 	 	16.00	%	 	 	5.25	%	 	 	21.25	%	 	Atlas Resources LLC
	 	100952	 	 	ATLAS ENERGY PARTNERS LP-1986
	 	 	7	 	 	 	16.00	%	 	 	4.98	%	 	 	20.98	%	 	Atlas Resources LLC
	 	100953	 	 	ATLAS ENERGY PARTNERS LP-1987
	 	 	9	 	 	 	22.38	%	 	 	2.69	%	 	 	25.07	%	 	Atlas Resources LLC
	 	100954	 	 	ATLAS ENERGY PARTNERS LP-1988
	 	 	9	 	 	 	24.36	%	 	 	1.53	%	 	 	25.89	%	 	Atlas Resources LLC
	 	100955	 	 	ATLAS ENERGY PARTNERS LP-1989
	 	 	9	 	 	 	18.00	%	 	 	7.44	%	 	 	25.44	%	 	Atlas Resources LLC
	 	100956	 	 	ATLAS ENERGY PARTNERS LP-1990
	 	 	12	 	 	 	25.00	%	 	 	3.16	%	 	 	28.16	%	 	Atlas Resources LLC
	 	100957	 	 	ATLAS ENERGY NINETIES - 10
	 	 	11	 	 	 	25.00	%	 	 	5.54	%	 	 	30.54	%	 	Atlas Resources LLC
	 	100958	 	 	ATLAS ENERGY NINETIES - 11
	 	 	14	 	 	 	30.00	%	 	 	10.51	%	 	 	40.51	%	 	Atlas Resources LLC
	 	100959	 	 	Atlas America Series #25A
	 	 	137	 	 	 	35.00	%	 	 	0.00	%	 	 	35.00	%	 	Atlas Resources LLC
	 	100960	 	 	ATLAS ENERGY PARTNERS LP-1991
	 	 	12	 	 	 	25.00	%	 	 	1.62	%	 	 	26.62	%	 	Atlas Resources LLC
	 	100961	 	 	ATLAS AMERICA SERIES 21-A
	 	 	66	 	 	 	33.83	%	 	 	0.00	%	 	 	33.83	%	 	Atlas Resources LLC
	 	100962	 	 	ATLAS AMERICA SERIES 21-B
	 	 	89	 	 	 	34.00	%	 	 	0.21	%	 	 	34.21	%	 	Atlas Resources LLC
	 	100963	 	 	ATLAS ENERGY NINETIES - 12
	 	 	14	 	 	 	30.00	%	 	 	3.56	%	 	 	33.56	%	 	Atlas Resources LLC
	 	100964	 	 	ATLAS ENERGY NINETIES — JV 92
	 	 	52	 	 	 	33.00	%	 	 	3.11	%	 	 	36.11	%	 	Atlas Resources LLC
	 	100965	 	 	ATLAS ENERGY PARTNERS LP-1992
	 	 	6	 	 	 	25.00	%	 	 	3.13	%	 	 	28.13	%	 	Atlas Resources LLC
	 	100966	 	 	ATLAS AMERICA SER 22-2002 LTD
	 	 	51	 	 	 	32.53	%	 	 	0.03	%	 	 	32.56	%	 	Atlas Resources LLC
	 	100967	 	 	ATLAS ENERGY NINETIES-PUBLIC 1
	 	 	13	 	 	 	24.00	%	 	 	3.73	%	 	 	27.73	%	 	Atlas Resources LLC
	 	100968	 	 	ATLAS ENERGY NINETIES-1993 LTD
	 	 	16	 	 	 	30.00	%	 	 	2.54	%	 	 	32.54	%	 	Atlas Resources LLC
	 	100969	 	 	ATLAS ENERGY PARTNERS LP-1993
	 	 	8	 	 	 	25.00	%	 	 	4.02	%	 	 	29.02	%	 	Atlas Resources LLC
	 	100970	 	 	ATLAS ENERGY NINETIES-PUBLIC 2
	 	 	13	 	 	 	24.00	%	 	 	0.68	%	 	 	24.68	%	 	Atlas Resources LLC
	 	100971	 	 	ATLAS ENERGY NINETIES - 14
	 	 	50	 	 	 	33.00	%	 	 	3.57	%	 	 	36.57	%	 	Atlas Resources LLC
	 	100972	 	 	ATLAS ENERGY PARTNERS LP-1994
	 	 	11	 	 	 	25.00	%	 	 	2.10	%	 	 	27.10	%	 	Atlas Resources LLC
	 	100973	 	 	ATLAS ENERGY NINETIES-PUBLIC 3
	 	 	25	 	 	 	25.00	%	 	 	1.12	%	 	 	26.12	%	 	Atlas Resources LLC

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Well	 	 	 	 	 	GP as	 	AtlasTotal	 	 
	Progam #	 	Program Name	 	Count	 	GP%	 	LP%	 	Interest	 	GP
	 	100974	 	 	ATLAS ENERGY NINETIES - 15
	 	 	58	 	 	 	30.00	%	 	 	0.66	%	 	 	30.66	%	 	Atlas Resources LLC
	 	100975	 	 	Atlas America Series #23
	 	 	47	 	 	 	32.00	%	 	 	0.00	%	 	 	32.00	%	 	Atlas Resources LLC
	 	100976	 	 	Atlas America Public #11
	 	 	167	 	 	 	35.00	%	 	 	0.02	%	 	 	35.02	%	 	Atlas Resources LLC
	 	100977	 	 	ATLAS ENERGY PARTNERS LP-1995
	 	 	6	 	 	 	25.00	%	 	 	0.00	%	 	 	25.00	%	 	Atlas Resources LLC
	 	100978	 	 	ATLAS ENERGY NINETIES-PUBLIC 4
	 	 	32	 	 	 	25.00	%	 	 	0.88	%	 	 	25.88	%	 	Atlas Resources LLC
	 	100979	 	 	ATLAS ENERGY NINETIES - 16
	 	 	49	 	 	 	21.50	%	 	 	2.37	%	 	 	23.87	%	 	Atlas Resources LLC
	 	100980	 	 	ATLAS ENERGY PARTNERS LP-1996
	 	 	13	 	 	 	25.00	%	 	 	0.00	%	 	 	25.00	%	 	Atlas Resources LLC
	 	100981	 	 	ATLAS ENERGY NINETIES-PUBLIC 5
	 	 	33	 	 	 	25.00	%	 	 	1.53	%	 	 	26.53	%	 	Atlas Resources LLC
	 	100982	 	 	ATLAS ENERGY NINETIES - 17
	 	 	46	 	 	 	26.50	%	 	 	0.42	%	 	 	26.92	%	 	Atlas Resources LLC
	 	100983	 	 	ATLAS ENERGY PARTNERS LP-1997
	 	 	6	 	 	 	25.00	%	 	 	0.00	%	 	 	25.00	%	 	Atlas Resources LLC
	 	100984	 	 	ATLAS ENERGY NINETIES-PUBLIC 6
	 	 	55	 	 	 	25.00	%	 	 	0.36	%	 	 	25.36	%	 	Atlas Resources LLC
	 	100985	 	 	ATLAS ENERGY NINETIES - 18
	 	 	63	 	 	 	31.50	%	 	 	0.18	%	 	 	31.68	%	 	Atlas Resources LLC
	 	100986	 	 	ATLAS ENERGY PARTNERS LP-1998
	 	 	19	 	 	 	25.00	%	 	 	0.00	%	 	 	25.00	%	 	Atlas Resources LLC
	 	100988	 	 	ATLAS ENERGY NINETIES - 19
	 	 	81	 	 	 	31.50	%	 	 	0.22	%	 	 	31.72	%	 	Atlas Resources LLC
	 	100989	 	 	ATLAS ENERGY — PUBLIC #7
	 	 	62	 	 	 	31.00	%	 	 	0.39	%	 	 	31.39	%	 	Atlas Resources LLC
	 	100990	 	 	Atlas America Series #24A
	 	 	75	 	 	 	32.63	%	 	 	0.00	%	 	 	32.63	%	 	Atlas Resources LLC
	 	100991	 	 	Atlas America Series #24B
	 	 	119	 	 	 	33.22	%	 	 	0.00	%	 	 	33.22	%	 	Atlas Resources LLC
	 	100992	 	 	Atlas America Public #12
	 	 	221	 	 	 	35.00	%	 	 	0.13	%	 	 	35.13	%	 	Atlas Resources LLC
	 	100993	 	 	Atlas America Series #25B
	 	 	171	 	 	 	35.00	%	 	 	0.00	%	 	 	35.00	%	 	Atlas Resources LLC
	 	100994	 	 	ATLAS ENERGY PUBLIC #8
	 	 	58	 	 	 	29.00	%	 	 	1.15	%	 	 	30.15	%	 	Atlas Resources LLC
	 	100995	 	 	ATLAS ENERGY 1999
	 	 	5	 	 	 	25.00	%	 	 	0.00	%	 	 	25.00	%	 	Atlas Resources LLC
	 	100996	 	 	ATLAS AMERICA PUBLIC 9 LTD
	 	 	82	 	 	 	29.00	%	 	 	0.09	%	 	 	29.09	%	 	Atlas Resources LLC
	 	100997	 	 	ATLAS AMERICA SERIES 20 LTD
	 	 	104	 	 	 	27.00	%	 	 	0.02	%	 	 	27.02	%	 	Atlas Resources LLC
	 	100998	 	 	ATLAS AMERICA PUBLIC 10 LTD
	 	 	107	 	 	 	32.00	%	 	 	0.07	%	 	 	32.07	%	 	Atlas Resources LLC

SCHEDULE 7.14 TO CREDIT AGREEMENT
                                         Page 2

 

 

SCHEDULE 7.15

SUBSIDIARY INTERESTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Number of
	 	 	 	 	Number of	 	Issued
	Subsidiary	 	100% Owner	 	Authorized Shares	 	Shares
	Atlas America, LLC
	 	Borrower	 	 	N/A	 	 	 	N/A	 
	Atlas Noble, LLC
	 	Borrower	 	 	N/A	 	 	 	N/A	 
	Resource Energy, LLC
	 	Borrower	 	 	N/A	 	 	 	N/A	 
	REI-NY, LLC
	 	Resource Energy, LLC	 	 	N/A	 	 	 	N/A	 
	Resource Well Services, LLC
	 	Resource Energy, LLC	 	 	N/A	 	 	 	N/A	 
	Viking Resources, LLC
	 	Borrower	 	 	N/A	 	 	 	N/A	 
	AIC, LLC
	 	Borrower	 	 	N/A	 	 	 	N/A	 
	Anthem Securities, Inc.1
	 	AIC, LLC	 	 	500	 	 	 	500	 
	Atlas Energy Ohio, LLC
	 	AIC, LLC	 	 	N/A	 	 	 	N/A	 
	Atlas Resources, LLC
	 	AIC, LLC	 	 	N/A	 	 	 	N/A	 
	AER Pipeline Construction, Inc.
	 	Borrower	 	 	1,000	 	 	 	1,000	 

 

			
	1	 	Not a Guarantor and securities not pledged hereunder.

SCHEDULE 7.15 TO CREDIT AGREEMENT
                                         Page 1

 

 

SCHEDULE 7.20

INSURANCE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Coverage Type	 	Policy Number	 	Insurance Carrier	 	Coverage Description	 	Limit	 	Deductible	 	Exp. Date
	Worker’s Compensation
	 	1063995-3	 	NY State Insurance Fund	 	Statutory Employer’s Liability	 	NY Unlimited	 	 	 	 	 	 	9/18/2007	 
	Disability Insurance
	 	DBL511575-4	 	NY State Insurance Fund	 	Disability Benefits	 	NY - Statutory	 	 	 	 	 	 	6/15/2007	 
	Worker’s Compensation
	 	WC2-641-436089-016	 	Liberty Mutual Insurance Co	 	Statutory	 	PA
AZ, KS, NC	 	 	 	 	 	 	2/6/2007	 
	 
	 	 	 	 	 	 	 	MD, OK, TN,	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Employer’s Liability	 	DE, SC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Bodily Injury by Accident	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   each accident	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   policy limit	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   Bodily Injury by Disease	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	Automobile
	 	73200463	 	Federal Insurance Co.	 	 	 	 	 	 	 	 	 	 	 	 	3/1/2007	 
	 
	 	 	 	 	 	Bodily Injury & Property	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Damage combined single limit	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	of liability	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Hired & Non- Owned Liability	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Uninsured Motorists	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   OH	 	$	25,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   PA & NY	 	$	50,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   TN	 	$	60,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   Applies only to employees	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   driving a company owned	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   vehicle within the scope of	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   their employment.	 	 	 	 	 	 	 	 	 	 	 	 

SCHEDULE 7.20 TO CREDIT AGREEMENT
                                         Page 1

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Coverage Type	 	Policy Number	 	Insurance Carrier	 	Coverage Description	 	Limit	 	Deductible	 	Exp. Date
	Automobile (continued)
	 	73200463	 	Federal Insurance Co.	 	Under Insured Motorists	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   OH	 	$	25,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   PA & NY	 	$	50,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   TN	 	$	60,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Physical Damage	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Valuation: Actual Cash	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Value	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Comprehensive Perils	 	 	 	 	 	$	1,000	 	 	 	 	 
	 
	 	 	 	 	 	Collision	 	 	 	 	 	$	1,000	 	 	 	 	 
	 
	 	 	 	 	 	Towing & Labor	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Hired Automobile	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Physical Damage	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Comprehensive
Perils - $30,000
	 	 	 	 	 	$	1,000	 	 	 	 	 
	 
	 	 	 	 	 	   Collision - $40,000	 	 	 	 	 	$	1,000	 	 	 	 	 
	 
	 	 	 	 	 	ATV Deductible	 	 	 	 	 	$	500	 	 	 	 	 
	 
	 	 	 	 	 	Snowmobile Deductible	 	 	 	 	 	$	100	 	 	 	 	 
	Commercial Package
	 	3710-6326	 	Federal Insurance Co.	 	Commercial Property
Section	 	 	 	 	 	 	 	 	 	 	3/1/2007	 
	 
	 	 	 	 	 	Chubb Broad Form	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	(equivalent to Special	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Cause of Loss form)	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Valuation: Replacement	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Cost	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Agreed Amount	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Coinsurance -None	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Blanket Building,	 	$	5,406,000	 	 	$	1,000	 	 	 	 	 
	 
	 	 	 	 	 	Contents &	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Improvements &	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Betterments	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Electronic Data	 	 	819,194	 	 	$	1,000	 	 	 	 	 
	 
	 	 	 	 	 	Processing Property	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Blanket Extra Expense	 	$	250,000	 	 	None	 	 	 	 
	 
	 	 	 	 	 	Valuable Papers	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Limit varies by location	 	$	25,000-$100,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Pollutant Clean-up at a	 	$	25,000	 	 	None	 	 	 	 
	 
	 	 	 	 	 	scheduled location due	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	to a covered cause of	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	loss	 	 	 	 	 	 	 	 	 	 	 	 

SCHEDULE 7.20 TO CREDIT AGREEMENT            Page 2

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Policy	 	 	 	 	 	 	 	 	 	 
	Coverage Type	 	Number	 	Insurance Carrier	 	Coverage Description	 	Limit	 	Deductible	 	Exp. Date
	Commercial Package
	 	3710-6326	 	Federal Insurance Co.	 	Commercial General
Liability Section	 	 	 	 	 	 	 	 	 	 	3/1/2007	 
	Continued
	 	 	 	 	 	Bodily Injury & Property	 	 	 	 	 	$	2,500	 	 	 	 	 
	 
	 	 	 	 	 	Damage combined	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	single limit of liability	 	 	 	 	 	Bodily Injury &	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Property Damage Per	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Occurrence	 	 	 	 
	 
	 	 	 	 	 	Per Occurrence	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	General Aggregate	 	$	2,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Products/Completed	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Operations Aggregate	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Personal/Advertising	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Injury	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Fire Legal Liability	 	$	250,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Medical Expense	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Stop Gap Employer’s	 	$	1,000,000	 	 	$	1,000	 	 	 	 	 
	 
	 	 	 	 	 	Liability - Ohio	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Employee Benefits	 	$	1,000,000	 	 	$	1,000	 	 	 	 	 
	 
	 	 	 	 	 	Liability	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   Claims Made	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Underground Resources &	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Equipment Aggregate	 	$	1,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Premises/Operations;	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Products/Completed	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Operations; XCU	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Equipment Floater
Section	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Scheduled Equipment	 	$	7,313,141	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	All Risk, including	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	breakdown for compressor	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	engines.	 	 	 	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Policy	 	 	 	 	 	 	 	 	 	 
	Coverage Type	 	Number	 	Insurance Carrier	 	Coverage Description	 	Limit	 	Deductible	 	Exp. Date
	 
	 	 	 	 	 	Coinsurance: 80%	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Actual Cash Value	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Mobile Equipment of	 	$	100,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Others	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Rental Expense	 	$	25,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Employees’ Tools &	 	$	10,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Clothing	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Schedule of Deductibles	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Mechanical Breakdown of	 	$	25,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Compressors	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  All other causes - 5%	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  per occurrence subject	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  to a $5,000 minimum and	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  $25,000 maximum	 	 	 	 	 	 	 	 	 	 	 	 

SCHEDULE 7.20 TO CREDIT AGREEMENT
                                         Page 3

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Policy	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Coverage Type	 	Number	 	Insurance Carrier	 	Coverage Description	 	Limit	 	Deductible	 	 	 	 	 	Exp. Date
	 
	 	 	 	 	 	Schedule of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Deductibles	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	(continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Radio Stations,	 	$	1,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  2-ways, Tower,	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Mast, tools	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Extra Expense	 	$	5,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Oil & Gas Lease	 	$	174,000	 	 	 	1,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Property Form	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Scheduled Disposal	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Wells (2)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pollution
	 	37250307	 	Federal	 	Bodily Injury and	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Property Damage	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Liability
	 	 	 	Insurance Co.	 	combined	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	single limit per	 	$	1,000,000	 	 	$	10,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	pollution incident	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Policy Aggregate	 	$	1,000,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Sub limit	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  On-site pollution	 	$	100,000	 	 	$	10,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  clean-up	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Per pollution incident	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Commercial
	 	7972-09-63	 	Federal	 	Underlying policies	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3/1/2007	 
	 
	 	 	 	 	 	include:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Umbrella
	 	 	 	Insurance Co.	 	  Employers Liability;	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  General	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Liability;	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Automobile Liability;	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	  Pollution Liability	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Following form on	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	excess liability	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	section	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Per Occurrence	 	$	25,000,000	 	 	$	10,000	* 	 	 		 	 	 	 	 
	 
	 	 	 	 	 	Policy Aggregate	 	$	25,000,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Pollution Sublimit	 	$	10,000,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	*Self-Insured Retention	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Policy	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Coverage Type	 	Number	 	Insurance Carrier	 	Coverage Description	 	Limit	 	Deductible	 	 	 	 	 	Exp. Date
	Commercial
	 	G22036683001	 	Westchester	 	Underlying policy	 	$	24,000,000	 	 	Excess of	 	 	 	 	 	 	3/1/2007	 
	Excess
	 	 	 	Surplus	 	Federal Insurance Co.	 	 	 	 	 	$	26,000,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Umbrella Policy	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Liability
	 	 	 	Lines Insurance Co.	 	Excess General	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Liability only -	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	following form	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Operations of Atlas	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	America Inc. as	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	respects	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Atlas Resources Inc. /	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	drilling partnerships	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Commercial
	 	4927027	 	National Union	 	Dishonesty by	 	$	1,000,000	 	 	$	2,500	 	 	 	 	 	 	 	6/30/2007	 
	 
	 	 	 	 	 	employees Including	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Crime
	 	 	 	Fire Insurance Co.	 	ERISA Endorsement	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

SCHEDULE 7.20 TO CREDIT AGREEMENT
                                         Page 4

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Policy	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Coverage Type	 	Number	 	Insurance Carrier	 	Coverage Description	 	Limit	 	Deductible	 	 	 	 	 	Exp. Date
	1st Layer
	 	6728569	 	National Union	 	Limit of Liability	 	$	10,000,000	 	 	$	250,000*	 	 	 		 	 	 	6/30/2007	 
	Directors
& Officers Liability
	 	 	 	Fire Insurance Co.	 	*Corporate Reimbursement	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Continuity Date: 9/27/2000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	SEC Claims Retention	 	 	 	 	 	$	350,000	 	 	 	 	 	 	 	 	 
	2nd Layer Directors
& Officers Liability
	 	 	 	XL Specialty	 	Limit of Liability	 	 	 	 	 	Excess of National	 	 	 	 	 	 	 	 
	 
	 	ELU089358-06	 	Insurance Co.	 	Following Form	 	$	10,000,000	 	 	Union	 	 	 	 	 	 	6/30/2007	 
	Employment
	 	RNN15248-	 	Fireman’s Fund	 	Employment Practices	 	 	5,000,000	 	 	 	50,000	 	 	 	 	 	 	 	6/30/2007	 
	 
	 	 	 	 	 	Liability	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Practices Liability
	 	01-2006	 	Insurance Co.	 	Per claim limit	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
	 	 	 	 	 	Aggregate Limit each policy	 	 	5,000,000	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	period	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Pending & Prior Litigation:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	8/15/2003	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

SCHEDULE 7.20 TO CREDIT AGREEMENT
                                         Page 5

 

 

SCHEDULE 7.21

HEDGING AGREEMENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	AAI INC Financial hedges:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Monthly	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Contracted	 	 	 	 
	Deal ref #	 	Execution date	 	Counterparty	 	Delivery Pt.	 	Volume	 	Price	 	Period
	 	1264210	 	 	10/27/2005
	 	Wachovia Bank	 	NYMEX	 	 	340,000	 	 	$	10.760	 	 	Apr 1, ‘06 - Mar 31,’07
	 	1264211	 	 	10/27/2005
	 	Wachovia Bank	 	NYMEX	 	 	200,000	 	 	$	8.40	 	 	Apr 1, ‘07 - Dec 31,’08
	 	1268446	 	 	11/2/2005
	 	Wachovia Bank	 	NYMEX	 	 	400,000	 	 	$	8.40	 	 	Apr 1, ‘07 - Dec 31,’08
	 	1322095	 	 	1/12/2006
	 	Wachovia Bank	 	NYMEX	 	 	210,000	 	 	$	9.36	 	 	Apr 1, ‘07 - Dec 31,’08
	 	1396179	 	 	3/22/2006
	 	Wachovia Bank	 	NYMEX	 	 	410,000	 	 	$	9.00	 	 	Apr 1, ‘07 - Dec 31,’07
	 	1396180	 	 	3/22/2006
	 	Wachovia Bank	 	NYMEX	 	 	410,000	 	 	$	8.95	 	 	Jan - Dec 2008
	 	1396182	 	 	3/22/2006
	 	Wachovia Bank	 	NYMEX	 	 	410,000	 	 	$	8.35	 	 	Jan - Dec 2009
	 	1424477	 	 	4/20/2006
	 	Wachovia Bank	 	NYMEX	 	 	400,000	 	 	$	8.87	 	 	Jan - Dec 2009
	 	1520697	 	 	7/25/2006
	 	Wachovia Bank	 	NYMEX	 	 	150,000	 	 	$	10.02	 	 	Nov - Mar2006/7
	 	167118	 	 	10/6/2006
	 	Key Bank	 	NYMEX	 	 	150,000	 	 	$	7.88	 	 	Jan - Dec 2007
	 	167120	 	 	10/6/2006
	 	Key Bank	 	NYMEX	 	 	130,000	 	 	$	8.17	 	 	Jan - Dec 2008
	 	167121	 	 	10/6/2006
	 	Key Bank	 	NYMEX	 	 	250,000	 	 	$	7.79	 	 	Jan - Dec 2009
	 	1597061	 	 	10/6/2006
	 	Wachovia Bank	 	NYMEX	 	 	250,000	 	 	$	7.85	 	 	Jan - Dec 2009
	 	1604188	 	 	10/13/2006
	 	Wachovia Bank	 	NYMEX	 	 	100,000	 	 	$	7.46	 	 	Jan - Dec 2010
	 	1604189	 	 	10/13/2006
	 	Wachovia Bank	 	NYMEX	 	 	100,000	 	 	$	7.45	 	 	Jan - Dec 2010
	 	1597063	 	 	10/6/2006
	 	Wachovia Bank	 	NYMEX	 	 	150,000	 	 	$	7.50X$8.60	 	 	Jan - Dec 2007
	 	1597068	 	 	10/6/2006
	 	Wachovia Bank	 	NYMEX	 	 	130,000	 	 	$	7.50X$9.40	 	 	Jan - Dec 2008

SCHEDULE 7.21 TO CREDIT AGREEMENT
                                         Page 1

 

 

SCHEDULE 7.23

MATERIAL AGREEMENTS

1. Omnibus Agreement, dated February 2, 2000, among Atlas America, Inc., Resource Energy,
Inc., Viking Resources Corporation, Atlas Pipeline Operating Partnership, L.P. and Atlas Pipeline
Partners, L.P.

2. Amendment and Joinder to Omnibus Agreement, dated December 18, 2006, among Atlas Pipeline
Partners, L.P., Atlas Pipeline Operating Partnership, L.P., Atlas America, Inc., Resource Energy,
LLC, Viking Resources LLC, Atlas Energy Resources, LLC and Atlas Energy Operating Company, LLC.

3. Master Natural Gas Gathering Agreement, dated February 2, 2000, among Atlas America, Inc.,
Resource Energy, Inc., Viking Resources Corporation, Atlas Pipeline Operating Partnership, L.P. and
Atlas Pipeline Partners, L.P.

4. Amendment dated October 25, 2005 among Atlas America, Inc., Atlas Pipeline Operating
Partnership, L.P., Atlas Pipeline Partners, L.P., Atlas Resources, Inc., Atlas Noble Corp.,
Resource Energy, Inc. and Viking Resources Corporation.

5. Amendment and Joinder to Gas Gathering Agreements, dated December 18, 2006, among Atlas
Pipeline Operating Partnership, L.P., Atlas Pipeline Partners, L.P., Atlas America, Inc., Resource
Energy, LLC, Viking Resources, LLC, Atlas Noble, LLC, Atlas Resources, LLC, Atlas America, LLC,
Atlas Energy Resources, LLC and Atlas Energy Operating Company, LLC.

6. Contribution, Conveyance and Assumption Agreement, dated December 18, 2006, among Atlas
America, Inc., Atlas Energy Resources, LLC and Atlas Energy Operating Company, LLC.

7. Management Agreement, dated December 18, 2006, among Atlas Energy Resources, LLC, Atlas
Energy Operating Company, LLC and Atlas Energy Management, Inc.

8. Drilling and Operating Agreement, dated September 15, 2004, between Atlas America, Inc.
(PA) and Knox Energy, LLC.

9. Gas Purchase Agreement, dated March 31, 1999, between Northeast Ohio Gas Marketing, Inc.
and Resource Energy, Inc., as amended by Amendment, dated February 1, 2001, among FirstEnergy
Solutions Corp., Atlas Energy Group, Inc. and Resource Energy, Inc., and by Second Amendment, dated
July 16, 2003, among FirstEnergy Solutions Corp., Atlas Energy Group, Inc. and Resource Energy,
Inc., and by Assignment and Novation, dated April 1, 2005, among FirstEnergy Solutions Corp.,
Amerada Hess Corporation and the other parties named therein.

SCHEDULE 7.23 TO CREDIT AGREEMENT
                                         Page 1

 

 

SCHEDULE 7.24

GAS IMBALANCES

None.

SCHEDULE 7.24 TO CREDIT AGREEMENT
                                         Page 1

 

 

SCHEDULE 9.01

DEBT

None.

SCHEDULE 9.01 TO CREDIT
AGREEMENT                                        
Page 1exv10w24

 

Exhibit 10.24

CONTINUING GUARANTY AGREEMENT DATED DECEMBER 18, 2006

BY ATLAS ENERGY RESOURCES, LLC IN FAVOR OF WACHOVIA

BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT FOR

THE LENDERS

CONTINUING GUARANTY AGREEMENT

THIS CONTINUING GUARANTY AGREEMENT (this “Guaranty Agreement”), dated as of December 18,
2006, is made by ATLAS ENERGY RESOURCES, LLC, a Delaware limited liability company (the
“Guarantor”), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent for the
Lenders (the “Administrative Agent”).

WITNESSETH:

WHEREAS, the Lenders have made extensions of credit including but not limited to Loans
and Letters of Credit in the maximum aggregate principal amount not to exceed $250,000,000 at any
one time outstanding to Atlas Energy Operating Company, LLC, a Delaware limited liability company
(the “Borrower”), pursuant to that certain Revolving Credit Agreement dated as of December 18,
2006, by and among the Borrower, the financial institutions (the “Lenders”) party thereto, and
Wachovia Bank, National Association, in its capacity of the issuer of certain letters of credit and
as the Administrative Agent for the Lenders thereunder (the Credit Agreement together with the
exhibits and schedules thereto and all extensions, renewals, amendments, substitutions and
replacements thereto and thereof is herein referred to as the “Credit Agreement”);

WHEREAS, (i) the Letters of Credit may be issued under the Credit Agreement for the
account of one or more of the Guarantors, (ii) the proceeds of the Loans under the Credit Agreement
may be used by the Borrower to make loans to one or more of the Guarantors and for other general
corporate purposes of the Borrower and the Guarantors, and (iii) Hedging Agreements may be entered
into by one or more of the Guarantors and any Lender or its Affiliate, all as permitted pursuant to
the Credit Agreement and all of which will directly and indirectly benefit the Borrower and the
Guarantors;

WHEREAS, as a condition precedent to extending credit to the Borrower pursuant to the
Credit Agreement, the Lenders have required that, inter alia, each of the Guarantors execute and
deliver to the Administrative Agent, for and on behalf of the Lenders, a guaranty agreement;

WHEREAS, the Guarantor has determined, reasonably and in good faith, that (i) it has
adequate capital to conduct its business as presently conducted and as proposed to be conducted,
(ii) it will be able to meet its obligations hereunder and in respect of its existing and future
indebtedness and liabilities (contingent or otherwise) as and when the same shall become due and
payable, including those under this Guaranty Agreement, (iii) it is otherwise solvent and (iv) the
execution and delivery of this Guaranty Agreement and the consummation of the transactions
contemplated hereby will not render it insolvent;

WHEREAS, the Guarantor has determined that the execution and delivery of this Guaranty
Agreement is in furtherance of its corporate purposes and in its best interest and that it will
derive substantial benefit, whether directly or indirectly, from the making of this Guaranty
Agreement, having regard for all relevant facts and circumstances; and

WHEREAS, the Guarantor has agreed to execute and deliver this Guaranty Agreement to the
Administrative Agent, for the benefit of the Lenders.

 

 

NOW THEREFORE, for good and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Lenders to make Loans to the Borrower pursuant to the
Credit Agreement by fulfilling the requirements of the Credit Agreement, the Guarantor agrees, for
the benefit of each Lender, as follows:

 

 

ARTICLE I

DEFINITIONS

SECTION 1.1 Certain Terms. The following capitalized terms when used in this
Guaranty Agreement, including its preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural forms thereof):

“Administrative Agent” is defined in the preamble.

“Borrower” is defined in the first recital.

“Commitments” means each Commitment as defined in the Credit Agreement.

“Credit Agreement” is defined in the first recital.

“Guarantor” is defined in the preamble.

“Guaranty Agreement” is defined in the preamble.

“Lenders” is defined in the first recital.

“Taxes” is defined in clause (1) of Section 2.7.

“U.C.C.” means the Uniform Commercial Code as in effect in the State of Texas.

SECTION 1.2 Credit Agreement Definitions. Unless otherwise defined herein or the
context otherwise requires, capitalized terms used in this Guaranty Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.

SECTION 1.3 U.C.C. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the U.C.C. are used in this Guaranty
Agreement, including its preamble and recitals, with such meanings.

ARTICLE II

GUARANTY PROVISIONS

SECTION 2.1 Guaranty Agreement. The Guarantor hereby absolutely, unconditionally,
and irrevocably (1) guarantees the full and punctual payment when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise, of all Indebtedness of the
Borrower and each other Obligor now or hereafter existing under each of the Credit Agreement, the
Notes and each other Loan Document to which the Borrower or such other Obligor is or may become a
party, whether for principal, interest, fees, expenses or otherwise (including all such amounts
which would become due but for the
operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11
U.S.C. §362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy
Code, 11 U.S.C. §502(b) and §506(b)), and (2) indemnifies and holds harmless each Lender and each
holder of a Note for any and all costs and expenses (including reasonable attorney’s fees and
expenses) incurred by such Lender or such holder, as the case may be, in enforcing any rights under
this Guaranty Agreement; provided, however, that the Guarantor shall be liable under this Guaranty
Agreement for the maximum amount of such liability that can be hereby incurred without rendering
this Guaranty Agreement, as it relates to the Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount. This Guaranty
Agreement constitutes a guaranty of payment when due and not of collection, and the Guarantor
specifically agrees that it shall not be necessary or required that any Lender or any holder of any
Note exercise any right, assert any claim or demand or enforce any remedy whatsoever against the
Borrower or any other Obligor (or any other Person) before or as a condition to the obligations of
the Guarantor hereunder.

 

 

SECTION 2.2 Acceleration of Guaranty Agreement. The Guarantor agrees that, in the
event of the occurrence of any event of the type described in Section 10.01(e), (f) or (g) of the
Credit Agreement, with respect to the Borrower, any other Obligor or the Guarantor, and if such
event shall occur at a time when any of the Indebtedness may not then be due and payable by the
Borrower due to any automatic stay or other debtor relief laws, the Guarantor will pay to the
Lenders forthwith the full amount which would be payable hereunder by the Guarantor if all such
Indebtedness were then due and payable.

SECTION 2.3 Guaranty Agreement Absolute, etc. This Guaranty Agreement shall in
all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and
shall remain in full force and effect until all Indebtedness of the Borrower and each other Obligor
has been paid in full, all obligations of the Guarantor hereunder shall have been paid in full, all
Commitments shall have terminated and all Lender Hedging Agreements have terminated. Guarantor may
not rescind or revoke its obligations hereunder. The Guarantor guarantees that the Indebtedness of
the Borrower and each other Obligor will be paid strictly in accordance with the terms of the
Credit Agreement and each other Loan Document under which they arise, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of any Lender or any holder of any Note with respect thereto. The liability of the
Guarantor under this Guaranty Agreement shall be absolute, unconditional and irrevocable
irrespective of: (1) any lack of validity, legality or enforceability of the Credit Agreement, any
Note or any other Loan Document; (2) the failure of any Lender or any holder of any Note (a) to
assert any claim or demand or to enforce any right or remedy against the Borrower, any other
Obligor or any other Person (including any other guarantor) under the provisions of the Credit
Agreement, any Note, any other Loan Document or otherwise, or (b) to exercise any right or remedy
against any other guarantor of, or collateral securing, any Indebtedness of the Borrower or any
other Obligor; (3) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Indebtedness of the Borrower or any other Obligor, or any other extension,
compromise or renewal of any Indebtedness of the Borrower or any other Obligor; (4) any reduction,
limitation, impairment or termination of any Indebtedness of the Borrower or any other Obligor for
any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to (and the Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Indebtedness of the Borrower, any other Obligor or otherwise; (5) any amendment to,
rescission, waiver, or other modification of, or any consent to departure from, any of the terms of
the Credit Agreement, any Note or any other Loan Document; (6) any addition, exchange, release,
surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition
of, or consent to departure from, any other guaranty, held by any Lender or any holder of any Note
securing any of the Indebtedness of the Borrower or any other Obligor; (7) the insolvency or
bankruptcy of, or similar event affecting, the Borrower or any other Obligor; or (8) any other
circumstance which might otherwise constitute a defense available to, or a legal or equitable
discharge of, the Borrower, any other Obligor, any surety or any guarantor. Guarantor waives all
rights and defenses which may arise with respect to any of
the foregoing, and Guarantor waives any right to revoke this Guaranty Agreement with respect
to future indebtedness. Guarantor waives all rights or defenses under (1) Section 34.01 et
seq. of the Texas Business and Commerce Code, as amended, (2) Section 17.001 of the Texas
Civil Practice and Remedies Code, as amended, (3) Rule 31 of the Texas Rules of Civil Procedure, as
amended, or (4) common law, in equity, under contract, by statute, or otherwise.

 

 

SECTION 2.4 Reinstatement. The Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in
whole or in part) of any of the Indebtedness is rescinded or must otherwise be restored by any
Lender or any holder of any Note, upon the insolvency, bankruptcy or reorganization of the
Borrower, any other Obligor or otherwise, all as though such payment had not been made.

SECTION 2.5 Waiver, etc. The Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Indebtedness of the Borrower
or any other Obligor and this Guaranty Agreement and any requirement that the Administrative Agent,
any other Lender or any holder of any Note protect, secure, perfect or insure any security interest
or Lien, or any property subject thereto, or exhaust any right or take any action against the
Borrower, any other Obligor or any other Person (including any other guarantor) or entity or any
collateral securing the Indebtedness of the Borrower or any other Obligor, as the case may be.

SECTION 2.6 Waiver of Subrogation. Until the Indebtedness is paid in full, all
Commitments have terminated and all Lender Hedging Agreements have terminated, the Guarantor shall
not enforce or exercise any claim or other rights which it may now or hereafter acquire against the
Borrower or any other Obligor that arise from the existence, payment, performance or enforcement of
the Guarantor’s obligations under this Guaranty Agreement or any other Loan Document, including any
right of subrogation, reimbursement, exoneration, or indemnification, any right to participate in
any claim or remedy of the Lenders against the Borrower or any other Obligor or any collateral
which the Administrative Agent now has or hereafter acquires, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including the right to take or
receive from the Borrower or any other Obligor, directly or indirectly, in cash or other property
or by set-off or in any manner, payment or security on account of such claim or other rights. If
any amount shall be paid to the Guarantor in violation of the preceding sentence, such amount shall
be deemed to have been paid to the Guarantor for the benefit of, and held in trust for, the
Lenders, and shall forthwith be paid to the Lenders to be credited and applied upon the
Indebtedness, whether matured or unmatured. The Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by the Credit Agreement and that
the waiver set forth in this Section is knowingly made in contemplation of such benefits.

SECTION 2.7 Payments Free and Clear of Taxes, etc. The Guarantor hereby agrees
that:

(a) All payments by the Guarantor hereunder shall be made in accordance with Section 4.06
of the Credit Agreement free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes
imposed on or measured by any Lender’s net income or receipts (such non-excluded items being called
“Taxes”). In the event that any withholding or deduction from any payment to be made by the
Guarantor hereunder is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Guarantor will (i) pay directly to the relevant authority the full amount
required to be so withheld or deducted; (ii) promptly forward to such Lender an official receipt or
other documentation satisfactory to such Lender evidencing such payment to such authority; and
(iii) pay to such Lender such additional amount or amounts as is necessary to ensure that the net
amount actually received by such Lender will equal the full amount such Lender would have received
had no such withholding or deduction been required. Moreover, if any Taxes are directly asserted
against any Lender with respect to any payment received by such Lender
hereunder, such Lender may pay such Taxes and the Guarantor will promptly pay such additional
amounts (including, if incurred as a result of Guarantor’s or the Borrower’s action, omission or
delay, any penalties, interest or expenses) as is necessary in order that the net amount received
by such Lender after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Lender would have received had such Taxes not been asserted.

 

 

(b) If the Guarantor fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to any Lender the required receipts or other required documentary evidence, the
Guarantor shall indemnify such Lender for any incremental Taxes, interest or penalties that may
become payable by such Lender as a result of any such failure.

(c) Without prejudice to the survival of any other agreement of the Guarantor hereunder,
the agreements and obligations of the Guarantor contained in this Section 2.7 shall survive the
payment in full of the principal of and interest on the Loans.

SECTION 2.8 Contribution Agreement. Upon full and final payment of the
Indebtedness, Guarantor and all other Guarantors which have made payments upon all or any part of
the Indebtedness shall be entitled to contribution from all of the other Guarantors, to the end
that all such payments upon the Indebtedness shall be shared among all Guarantors who guaranteed
such Indebtedness in proportion to their respective Net Worths (defined below), provided that the
contribution obligations of each of the Guarantors shall be limited to the maximum amount that it
can pay at such time without rendering its contribution obligations voidable under applicable law
relating to fraudulent conveyances or fraudulent transfers. As used in this subsection, the “Net
Worth” of each of the Guarantors means, at any time, the remainder of (i) the fair value of such
Guarantor’s assets (other than such right of contribution), minus (ii) the fair value of such
Guarantor’s liabilities (other than its liabilities under its guaranty of the Indebtedness).

SECTION 2.9 Subordination. Guarantor hereby subordinates and makes inferior to
the Indebtedness any and all Intercompany Debt now or at any time hereafter owed by the Borrower or
other Obligor to the Guarantor. Guarantor agrees that after the occurrence of any Default or Event
of Default under the Credit Agreement, it will not permit the Borrower to repay such Intercompany
Debt or any part thereof and it will not accept payment from the Borrower of such Intercompany Debt
or any part thereof without the prior written consent of the Majority Lenders as defined in the
Credit Agreement. If Guarantor receives any such payment without the prior required written
consent, the amount so paid shall be held in trust for the benefit of the Lenders, shall be
segregated from the other funds of such Guarantor, and shall forthwith be paid over to the
Administrative Agent to be held by the Administrative Agent as collateral for, or then or at any
time thereafter applied in whole or in part by the Administrative Agent against, all or any
portions of the Indebtedness, whether matured or unmatured, in such order as the Administrative
Agent shall elect.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS

SECTION 3.1 Representations, Warranties and Covenants. By execution hereof,
Guarantor covenants and agrees that certain representations, warranties, terms, covenants, and
conditions set forth in the Credit Agreement and other Loan Documents are applicable to Guarantor
and shall be imposed upon Guarantor, and Guarantor reaffirms that each such representation and
warranty is true and correct and covenants and agrees to promptly and properly perform, observe,
and comply with each such term, covenant, or condition. Moreover, Guarantor acknowledges and agrees
that this Guaranty Agreement is subject to the offset provisions of the Credit Agreement in favor
of the Administrative Agent and the Lenders.

 

 

ARTICLE IV

MISCELLANEOUS PROVISIONS

SECTION 4.1 Loan Document. This Guaranty Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be
construed, administered and applied in accordance with the terms and provisions thereof.

SECTION 4.2 Releases. At such time as the Loans shall have been paid in full, the
Commitments have been terminated and no Lender Hedging Agreements are outstanding, the
Administrative Agent shall, at the request and expense of the Guarantor following such termination,
promptly execute and deliver to the Guarantor such documents and instruments as the Guarantor shall
reasonably request to evidence termination and release of this Guaranty Agreement.

SECTION 4.3 Administrative Agent and Lenders; Successors and Assigns.

(a) The Administrative Agent is Administrative Agent for each Lender under the Credit
Agreement. All rights granted to Administrative Agent under or in connection with this Guaranty
Agreement are for each Lender’s ratable benefit. The Administrative Agent may, without the joinder
of any Lender, exercise any rights in Administrative Agent’s or Lenders’ favor under or in
connection with this Guaranty Agreement. The Administrative Agent’s and each Lender’s rights and
obligations vis-a-vis each other may be subject to one or more separate agreements between those
parties. However, the Guarantor is not required to inquire about any such agreement and is not
subject to any terms of it unless the Guarantor specifically enters into such agreement. Therefore,
neither Guarantor nor its successors or assigns is entitled to any benefits or provisions of any
such separate agreement nor is it entitled to rely upon or raise as a defense any party’s failure
or refusal to comply with the provisions of any such agreement.

(b) This Guaranty Agreement benefits the Administrative Agent, the Lenders, and their
respective successors and assigns and binds Guarantor and its successors and assigns. Upon
appointment of any successor Administrative Agent under the Credit Agreement, all of the rights of
Administrative Agent under this Guaranty Agreement automatically vests in that new Administrative
Agent as successor Administrative Agent on behalf of Lenders without any further act, deed,
conveyance, or other formality other than that appointment. The rights of the Administrative Agent
and the Lenders under this Guaranty Agreement may be transferred with any assignment of the
obligations hereby guaranteed pursuant to and in accordance with the terms of the Credit Agreement.
The Credit Agreement contains provisions governing assignments of the obligations guaranteed under
this Guaranty Agreement.

SECTION 4.4 Amendments, etc. No amendment to or waiver of any provision of this
Guaranty Agreement, nor consent to any departure by the Guarantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by or on behalf of the party against whom
it is sought to be enforced and is in conformity with the requirements of Section 12.04 of the
Credit Agreement. Each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.

SECTION 4.5 Addresses for Notices to the Guarantor. All notices and other
communications hereunder to the Guarantor shall be in writing and mailed or delivered to it,
addressed to it at the address set forth below or at such other address as shall be designated by
the Guarantor in a written notice to the Administrative Agent at the address specified in the
Credit Agreement complying as to delivery with the terms of this Section. All such notices and
other communications shall, when mailed, be effective when deposited in the mails, addressed as
aforesaid. Address for notices:

	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	Attn:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Facsimile:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Telephone:	 	 	 	 
	 

	 	 	 	 

	 	 

 

 

SECTION 4.6 No Waiver; Remedies. In addition to, and not in limitation of,
Section 2.3 and Section 2.5, no failure on the part of any Lender or any holder of a Note to
exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

SECTION 4.7 Section Captions. Section captions used in this Guaranty Agreement
are for convenience of reference only, and shall not affect the construction of this Guaranty
Agreement.

SECTION 4.8 Setoff. In addition to, and not in limitation of, any rights of any
Lender or any holder of a Note under applicable law, upon the occurrence of an Event of Default
under or as defined in the Credit Agreement, each Lender and each such holder shall be entitled to
exercise any right of offset or banker’s lien against each and every account and other property or
interest that the Guarantor may now or hereafter have with, or which is now or hereafter in the
possession of, any such Lender, to the extent of the full amount of the Indebtedness.

SECTION 4.9 Severability. Wherever possible each provision of this Guaranty
Agreement shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Guaranty
Agreement.

SECTION 4.10 Governing Law. THIS GUARANTY AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
THIS GUARANTY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.

SECTION 4.11 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDERS OR THE
GUARANTOR MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION. THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF TEXAS. THE GUARANTOR HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

 

SECTION 4.12 Waiver of Jury Trial. THE GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
LENDERS OR THE GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE LENDERS ENTERING INTO THE CREDIT AGREEMENT.

SECTION 4.13 Entire Agreement. THIS GUARANTY AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.

Remainder of Page Intentionally Blank. Signature Page to Follow.

 

 

IN WITNESS WHEREOF, the Guarantor has caused this Guaranty Agreement to be duly executed
and delivered by an officer duly authorized as of the date first written above.

	 	 	 	 	 
	 	GUARANTOR: 

ATLAS ENERGY RESOURCES, LLC, 

a Delaware limited liability company

 	 
	 	By:  	 	 
	 	 	Matthew A. Jones      	 
	 	 	Chief Financial Officer 	 
	 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

 

This Guaranty Agreement is accepted by the Administrative Agent, for and on behalf of the
Lenders, as of the date first written above.

	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION, 

in its capacity as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Jay Buckman      	 
	 	 	Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]