Document:

ex10_1.htm

Exhibit 10.1

 

	 	
 

EXECUTION VERSION

 

Published CUSIP Number: ____

 

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of November 15, 2012

among

INTERSECTIONS INC.,

as the Borrower,

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and L/C Issuer,

and

THE OTHER LENDERS PARTY HERETO

 

  

  

  

 

TABLE OF CONTENTS

 

	
Section

	 	Page

 

	 	 	 
	
ARTICLE I

	
DEFINITIONS AND ACCOUNTING TERMS

	 	 
	
1.01

	
Amendment and Restatement

	
1

	 	 	 
	
1.02

	
Defined Terms

	
2

	 	 	 
	
1.03

	
Other Interpretive Provisions

	
26

	 	 	 
	
1.04

	
Accounting Terms

	
27

	 	 	 
	
1.05

	
Rounding

	
28

	 	 	 
	
1.06

	
Times of Day

	
28

	 	 	 
	
1.07

	
Letter of Credit Amounts

	
28

	 	 	 
	
1.08

	
Covenant Adjustments

	
28

	 	 	 
	
ARTICLE II

	
COMMITMENTS AND CREDIT EXTENSIONS

	 	 
	
2.01

	
Committed Loans

	
28

	 	 	 
	
2.02

	
Borrowings of Committed Loans

	
29

	 	 	 
	
2.03

	
Letters of Credit

	
29

	 	 	 
	
2.04

	
Swing Line Loans

	
38

	 	 	 
	
2.05

	
Prepayments

	
41

	 	 	 
	
2.06

	
Termination or Reduction of Commitments

	
41

	 	 	 
	
2.07

	
Repayment of Loans

	
42

	 	 	 
	
2.08

	
Interest

	
42

	 	 	 
	
2.09

	
Unused Fees

	
42

	 	 	 
	
2.10

	
Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate

	
43

	 	 	 
	
2.11

	
Evidence of Debt

	
43

	 	 	 
	
2.12

	
Payments Generally; Administrative Agent’s Clawback

	
44

	 	 	 
	
2.13

	
Sharing of Payments by Lenders

	
46

	 	 	 
	
2.14

	
Cash Collateral

	
47

	 	 	 
	
2.15

	
Defaulting Lenders

	
48

	 	 	 
	
ARTICLE III

	
TAXES, YIELD PROTECTION AND ILLEGALITY

	 	 
	
3.01

	
Taxes

	
50

	 	 	 
	
3.02

	
Illegality

	
55

 

  

-i-

  

 

TABLE OF CONTENTS

(continued)

 

	
Section

	 	Page
	 	 	 

 

	
3.03

	
Inability to Determine Rates

	
55

	 	 	 
	
3.04

	
Increased Costs

	
56

	 	 	 
	
3.05

	
Mitigation Obligations; Replacement of Lenders

	
57

	 	 	 
	
3.06

	
Survival

	
58

	 	 	 
	
ARTICLE IV

	
CONDITIONS PRECEDENT TO EFFECTIVENESS

	 	 
	
4.01

	
Conditions of Effectiveness

	
58

	 	 	 
	
4.02

	
Conditions to all Credit Extensions

	
60

	 	 	 
	
ARTICLE V

	
REPRESENTATIONS AND WARRANTIES

	 	 
	
5.01

	
Existence, Qualification and Power

	
61

	 	 	 
	
5.02

	
Authorization; No Contravention

	
61

	 	 	 
	
5.03

	
Governmental Authorization; Other Consents

	
61

	 	 	 
	
5.04

	
Binding Effect

	
61

	 	 	 
	
5.05

	
Financial Statements; No Material Adverse Effect

	
62

	 	 	 
	
5.06

	
Litigation

	
62

	 	 	 
	
5.07

	
No Default

	
62

	 	 	 
	
5.08

	
Ownership of Property; Liens; Investments

	
63

	 	 	 
	
5.09

	
Environmental Compliance

	
63

	 	 	 
	
5.10

	
Insurance

	
63

	 	 	 
	
5.11

	
Taxes

	
63

	 	 	 
	
5.12

	
ERISA Compliance

	
63

	 	 	 
	
5.13

	
Subsidiaries; Equity Interests

	
64

	 	 	 
	
5.14

	
Margin Regulations; Investment Company Act

	
65

	 	 	 
	
5.15

	
Disclosure

	
65

	 	 	 
	
5.16

	
Compliance with Laws

	
65

	 	 	 
	
5.17

	
Intellectual Property; Licenses, Etc.

	
65

	 	 	 
	
5.18

	
Solvency

	
66

	 	 	 
	
5.19

	
OFAC

	
66

	 	 	 
	
5.20

	
Casualty, Etc

	
66

 

  

-ii-

  

 

TABLE OF CONTENTS

(continued)

 

	
Section

	 	Page
	 	 	 

	
5.21

	
Collateral Documents

	
66

	 	 	 
	
ARTICLE VI

	
AFFIRMATIVE COVENANTS

	 	 
	
6.01

	
Financial Statements

	
66

	 	 	 
	
6.02

	
Certificates; Other Information

	
68

	 	 	 
	
6.03

	
Notices

	
70

	 	 	 
	
6.04

	
Payment of Obligations

	
70

	 	 	 
	
6.05

	
Preservation of Existence, Etc.

	
70

	 	 	 
	
6.06

	
Maintenance of Properties

	
71

	 	 	 
	
6.07

	
Maintenance of Insurance

	
71

	 	 	 
	
6.08

	
Compliance with Laws

	
71

	 	 	 
	
6.09

	
Books and Records

	
71

	 	 	 
	
6.10

	
Inspection Rights

	
71

	 	 	 
	
6.11

	
Use of Proceeds

	
71

	 	 	 
	
6.12

	
Covenant to Guarantee Obligations and Give Security

	
72

	 	 	 
	
6.13

	
Further Assurances

	
73

	 	 	 
	
6.14

	
Bank Accounts

	
73

	 	 	 
	
ARTICLE VII

	
NEGATIVE COVENANTS

	 	 
	
7.01

	
Liens

	
74

	 	 	 
	
7.02

	
Indebtedness

	
75

	 	 	 
	
7.03

	
Investments

	
77

	 	 	 
	
7.04

	
Fundamental Changes

	
79

	 	 	 
	
7.05

	
Dispositions

	
80

	 	 	 
	
7.06

	
Restricted Payments

	
80

	 	 	 
	
7.07

	
Change in Nature of Business

	
81

	 	 	 
	
7.08

	
Transactions with Affiliates

	
81

	 	 	 
	
7.09

	
Burdensome Agreements

	
81

	 	 	 
	
7.10

	
Use of Proceeds

	
82

	 	 	 
	
7.11

	
Financial Covenants

	
82

 

  

-iii-

  

 

TABLE OF CONTENTS

(continued)

 

	
Section

	  	
Page

	  	  	  
	
7.12

	
Sanctions

	
82

	  	  	  
	
7.13

	
Inactive Subsidiary

	
82

	  	  	  
	
ARTICLE VIII

	
EVENTS OF DEFAULT AND REMEDIES

	  	  
	
8.01

	
Events of Default

	
82

	  	  	  
	
8.02

	
Remedies upon Event of Default

	
84

	  	  	  
	
8.03

	
Application of Funds

	
85

	  	  	  
	
ARTICLE IX

	
ADMINISTRATIVE AGENT

	  	  
	
9.01

	
Appointment and Authority

	
86

	  	  	  
	
9.02

	
Rights as a Lender

	
87

	  	  	  
	
9.03

	
Exculpatory Provisions

	
87

	  	  	  
	
9.04

	
Reliance by Administrative Agent

	
88

	  	  	  
	
9.05

	
Delegation of Duties

	
88

	  	  	  
	
9.06

	
Resignation of Administrative Agent

	
89

	  	  	  
	
9.07

	
Non-Reliance on Administrative Agent and Other Lenders

	
90

	  	  	  
	
9.08

	
Reserved

	
90

	  	  	  
	
9.09

	
Administrative Agent May File Proofs of Claim

	
90

	  	  	  
	
9.10

	
Collateral and Guaranty Matters

	
91

	  	  	  
	
9.11

	
Secured Cash Management Agreements and Secured Hedge Agreements

	
91

	  	  	  
	
ARTICLE X

	
MISCELLANEOUS

	  	  
	
10.01

	
Amendments, Etc.

	
92

	  	  	  
	
10.02

	
Notices; Effectiveness; Electronic Communications

	
93

	  	  	  
	
10.03

	
No Waiver; Cumulative Remedies; Enforcement

	
95

	  	  	  
	
10.04

	
Expenses; Indemnity; Damage Waiver

	
96

	  	  	  
	
10.05

	
Payments Set Aside

	
98

	  	  	  
	
10.06

	
Successors and Assigns

	
98

	  	  	  
	
10.07

	
Treatment of Certain Information; Confidentiality

	
103

	  	  	  
	
10.08

	
Right of Setoff

	
104

 

  

-iv-

  

 

TABLE OF CONTENTS

(continued)

 

	
Section

	 	Page
	 	 	 

	
10.09

	
Interest Rate Limitation

	
105

	 	 	 
	
10.10

	
Counterparts; Integration; Effectiveness

	
105

	 	 	 
	
10.11

	
Survival of Representations and Warranties

	
105

	 	 	 
	
10.12

	
Severability

	
105

	 	 	 
	
10.13

	
Replacement of Lenders

	
106

	 	 	 
	
10.14

	
Governing Law; Jurisdiction; Etc.

	
106

	 	 	 
	
10.15

	
Waiver of Jury Trial

	
107

	 	 	 
	
10.16

	
No Advisory or Fiduciary Responsibility

	
108

	 	 	 
	
10.17

	
Electronic Execution of Assignments and Certain Other Documents

	
108

	 	 	 
	
10.18

	
USA PATRIOT Act Notice

	
109

	 	 	 
	
10.19

	
Time of the Essence

	
109

 

  

-v-

  

 

	
SCHEDULES

 

	
1.02

	
Existing Letters of Credit

	
2.01

	
Commitments and Applicable Percentages

	
5.03

	
Certain Authorizations

	
5.06

	
Litigation

	
5.09

	
Environmental Matters

	
5.12(d)

	
Pension Plans

	
5.13

	
Subsidiaries and Other Equity Investments

	
6.12

	
Guarantors

	
7.01

	
Existing Liens

	
7.02

	
Existing Indebtedness

	
7.03(f)

	
Existing Investments

	
7.05(h)

	
NEI Property

	
7.09

	
Burdensome Agreements

	
10.02

	
Administrative Agent’s Office, Certain Addresses for Notices

	  	  
	
EXHIBITS  

 

	
Form of:

	
A

	
Committed Loan Notice

	
B

	
Swing Line Loan Notice

	
C

	
Note

	
D

	
Compliance Certificate

	
E-1

	
Assignment and Assumption

	
E-2

	
Administrative Questionnaire

	
F

	
Guaranty

	
G

	
Pledge Agreement

	
H

	
Security Agreement

	
I

	
Forms of U.S. Tax Compliance Certificates

	
J

	
Opinion Matters – Counsel to Loan Parties

  

-vi-

  

AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of November 15, 2012, among INTERSECTIONS INC., a Delaware corporation (the “Borrower”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

 

PRELIMINARY STATEMENTS:

 

A.           The Borrower, certain subsidiaries of the Borrower party thereto (together with the Borrower, collectively, the “Existing Borrowers”), the lenders party thereto and Bank of America, as Administrative Agent thereunder, are parties to that certain Credit Agreement dated as of July 3, 2006 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Existing Credit Agreement”).

 

B.            The Existing Borrowers have requested that the Existing Credit Agreement be amended and restated on the terms and conditions contained in this Agreement (the “Amendment and Restatement”).

 

C.            The Borrower, the other Existing Borrowers, the Lenders, the Administrative Agent and the Swing Line Lender have agreed to amend and restate the Existing Credit Agreement on the terms and conditions set forth in this Agreement.

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.01        Amendment and Restatement. In order to facilitate the Amendment and Restatement and otherwise to effectuate the desires of the Borrowers, the Administrative Agent, the L/C Issuer and the Lenders:

 

(a)           Upon the effectiveness of this Agreement, the Commitments shall be as set forth in Schedule 2.01 and simultaneously with such effectiveness the portion of Loans outstanding under the Existing Credit Agreement immediately prior to such effectiveness shall be reallocated in accordance with such Commitments and the requisite assignments to effect such reallocation shall be deemed to have been made in such amounts by and between the applicable Lenders and from each assignor Lender to the corresponding assignee Lender, with the same force and effect as if each such assignment was evidenced by an Assignment and Assumption (as defined in the Existing Credit Agreement).  Notwithstanding anything to the contrary in Section 10.06 of the Existing Credit Agreement or Section 10.06 of this Agreement, no other documents or instruments, including any Assignment and Assumption, shall be executed in connection with such assignments (all of which requirements are hereby waived), and each such assignment shall be deemed to be made with all applicable representations, warranties and covenants as if evidenced by an Assignment and Assumption.  On the Closing Date, each assignee Lender shall make full cash settlement with each corresponding assignor Lender, either directly or through the Administrative Agent, as the Administrative Agent may direct or approve, with respect to all such assignments and reallocations such that after giving effect to such settlements each Lender’s Commitments and Applicable Percentage shall be as set forth on Schedule 2.01.

 

  

1

  

 

(b)            Upon the effectiveness of this Agreement, the terms and provisions of the Existing Credit Agreement which in any manner govern or evidence the Obligations (as defined in the Existing Credit Agreement), the rights and interests of the administrative agent and the lenders under the Existing Credit Agreement and any terms, conditions or matters related to any thereof, shall be and hereby are amended and restated in their entirety by the terms, conditions and provisions of this Agreement, and the terms and provisions of the Existing Credit Agreement, except as otherwise expressly provided herein, shall be superseded by this Agreement.

 

Notwithstanding this amendment and restatement of the Existing Credit Agreement, including anything in this Section 1.01, and in any related “Loan Documents” (as such term is defined in the Existing Credit Agreement and referred to herein, individually or collectively, as the “Existing Loan Documents”), (i) all of the indebtedness, liabilities and obligations owing by any Person under the Existing Credit Agreement and other Existing Loan Documents outstanding as of the Closing Date shall continue as Obligations hereunder and all obligations under swap contracts and in relation to cash management agreements existing on the Closing Date shall continue as Secured Cash Management Agreements and Secured Hedge Agreements hereunder, and (ii) neither the execution and delivery of this Agreement and any other Loan Document (as defined herein) nor the consummation of any other transaction contemplated hereunder is intended to constitute a novation of the Existing Credit Agreement or of any of the other Existing Loan Documents or any obligations thereunder outstanding as of the Closing Date.

 

1.02         Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“Acquisition” means the acquisition of (i) a controlling equity or other controlling ownership interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such equity or other ownership interest or upon the exercise of an option or warrant for, or conversion of securities into, such equity or other ownership interest, or (ii) assets of another Person which constitute all or substantially all of the assets of such Person or of a line or lines of business conducted by such Person.

 

“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit E-2 or any other form approved by the Administrative Agent.

 

  

2

  

 

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

 

“Aggregate Commitments” means the Commitments of all the Lenders.

 

“Agreement” means this Credit Agreement.

 

“Applicable Percentage” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Commitment at such time, subject to adjustment as provided in Section 2.15.  If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, or if the Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

 

	
Pricing 

Level

	
Consolidated Leverage Ratio

	
Unused Fee

	
Loans/Letter

of Credit Fee

	
1

	
Less than or equal to 1.00 to 1.00

	
0.250%

	
1.75%

	
2

	
Less than or equal to 1.50 to 1.00, but greater than 1.00 to 1.00 

	
0.300%

	
2.00%

	
3

	
Less than or equal to 2.00 to 1.00, but greater than 1.50 to 1.00

	
0.350%

	
2.25%

	
4

	
Greater than 2.00 to 1.00

	
0.400%

	
2.50%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day of the month immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b) (“Applicable Rate Change Date”); provided, however, that if a Compliance Certificate is not delivered  when due in accordance with such Section, then Pricing Level 4 shall apply as of the first Business Day of the month following the date such Compliance Certificate was required to have been delivered.  The Applicable Rate in effect from the Closing Date through the first Applicable Rate Change Date, shall be determined based upon the Compliance Certificate delivered pursuant to Section 4.01(a)(xi).

 

Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).

 

 

  

3

  

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E-1 or any other form (including electronic documentation generated by MarkitClear or other electronic platform) approved by the Administrative Agent.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

 

“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2011, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.

 

“Available Liquidity” means, at any time, the sum of (i) cash and Cash Equivalents for the Borrower and its Subsidiaries on a consolidated basis at such time plus (ii) the difference between the Aggregate Commitments and the Total Outstandings at such time.

 

“Availability Period” means the period from and including the Closing Date to the earliest of (i) the Maturity Date, (ii) the date of termination of the Aggregate Commitments pursuant to Section 2.06, and (iii) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located, which day is also a London Banking Day.

 

  

4

  

 

“Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations).  For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount by which such purchase price exceeds the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such insurance proceeds, as the case may be.

 

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

 

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

 

 “Cash Equivalents” means any of the following types of Investments, to the extent owned by the Borrower or any of its Subsidiaries free and clear of all Liens (other than Liens created under the Collateral Documents):

 

(a)            readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided that the full faith and credit of the United States of America is pledged in support thereof;

 

(b)            time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case with maturities of not more than 90 days from the date of acquisition thereof;

 

(c)            commercial paper issued by any Person organized under the laws of any state of the United States of America and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than 180 days from the date of acquisition thereof; and

 

(d)            Investments, classified in accordance with GAAP as current assets of the Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c) of this definition.

 

  

5

  

 

“Cash Management Agreement” means any agreement that is not prohibited by the terms hereof to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

 

“Cash Management Bank” means any Person that, (a) at the time it enters into a Cash Management Agreement with a Loan Party, is a Lender or an Affiliate of a Lender, or (b) at the time it (or its Affiliate) becomes a Lender, is a party to a Cash Management Agreement with a Loan Party, in each case in its capacity as a party to such Cash Management Agreement.

 

“CFC” means a Person that is a controlled foreign corporation under Section 957 of the Code.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

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

 

(a)            any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 25% or more of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); provided, that with respect to Loeb Holding Corporation and its Affiliates the “25%” in this subpart (a) shall be deemed to read “49%” and the parenthetical following such percentage shall be disregarded; or

 

  

6

  

 

(b)            during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors.

 

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all of the “Collateral” and “mortgaged property” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties, but shall not include the Excluded Property.

 

“Collateral Documents” means, collectively, the Security Agreement (including any joinder agreement or supplement thereto), the Pledge Agreement (including any joinder agreement or supplement thereto), each of the mortgages, collateral assignments, security agreements, pledge agreements, joinder agreements or supplements to any of the foregoing or other similar agreements delivered to the Administrative Agent pursuant to Section 6.12, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties or the Secured Parties.

 

“Commitment” means, as to each Lender, its obligation to (a) make Committed Loans to the Borrower pursuant to Section 2.01(b), (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

“Committed Borrowing” means a borrowing consisting of simultaneous Committed Loans made by each of the Lenders pursuant to Section 2.01.

 

“Committed Loans” has the meaning specified in Section 2.01.

 

  

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“Committed Loan Notice” means a notice of a Committed Borrowing pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Consolidated EBITDA” means, for any Measurement Period, an amount equal to Consolidated Net Income for such Measurement Period plus (a) the following to the extent deducted in calculating such Consolidated Net Income:  (i) Consolidated Interest Charges, (ii) income tax expense (net of credits), (iii) depreciation and amortization expense, (iv) non-cash charges for the impairment of goodwill, (v) non-cash stock compensation expenses, and (vi) other non-recurring expenses reducing such Consolidated Net Income which do not represent a cash item in such period or any future period (in each case of or by the Borrower and its Subsidiaries for such Measurement Period) and minus (b) all extraordinary non-cash items increasing Consolidated Net Income for such Measurement Period.

 

“Consolidated Fixed Charge Coverage Ratio” means at any date of determination the ratio of (a) Consolidated EBITDA minus (i) income taxes paid in cash during such period, and (ii) capital expenditures (other than capital expenditures financed with Indebtedness) to (b) Consolidated Fixed Charges, in each case, for the most recently completed Measurement Period.

 

“Consolidated Fixed Charges” means, for any Measurement Period, the sum of (a) Consolidated Interest Charges paid in cash during such Measurement Period, (b) the aggregate principal amount of all regularly scheduled principal payments, but excluding any such payments in respect of Loans or Letters of Credit hereunder, (c) deferred purchase price obligations (including any earn-out payments or similar obligations due and payable) paid in cash during such Measurement Period, and (d) the aggregate amount of all Restricted Payments made during such Measurement Period, excluding any such Restricted Payments permitted by Sections 7.06(e) and (f).

 

“Consolidated Funded Indebtedness” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (including any earn-out payments or similar obligations due and payable) (other than trade accounts payable in the ordinary course of business), (e) all Attributable Indebtedness, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Borrower or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary (it being understood that the Borrower’s “identity-theft” operations with various financial institutions shall not be deemed to be a partnership or joint venture for purposes of this definition).

 

  

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“Consolidated Interest Charges” means, for any period, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, (b) all interest paid or payable with respect to discontinued operations and (c) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, in each case, of or by the Borrower and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period.

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for the most recently completed Measurement Period.

 

“Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the Borrower and its Subsidiaries for that period, excluding:  (a) extraordinary gains  and losses, net of tax, and (b) income, gains and losses from discontinued operations.

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

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

 

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

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the LIBOR Monthly Floating Rate plus (ii) the Applicable Rate based on Pricing Level 4 plus (iii) 2% per annum; and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.

 

  

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“Defaulting Lender” means, subject to Section 2.15(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, the L/C Issuer, the Swing Line Lender and each other Lender promptly following such determination.

 

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

 

“Disclosed Litigation” has the meaning set forth in Section 5.06.

 

  

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“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person  including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

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

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

 

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 10.06(b)(iii)).

 

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

  

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“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Excluded Property” means (i) any owned or leased real property having, on an individual basis, an appraised value of less than $1,000,000, (ii) the NEI Property, (iii) any owned or leased personal property which is located outside of the United States, (iv) any personal property (including, without limitation, motor vehicles) in respect of which perfection of a Lien is not either (a) governed by the Uniform Commercial Code or (b) effected by appropriate evidence of the Lien being filed in any of the United States Copyright Office, the United States Patent and Trademark Office, the Canadian Copyright Office and the Canadian Patent and Trademark Office, (v) any property subject to a Permitted Lien if the documents governing such Lien or the Indebtedness secured thereby prohibit the Loan Party owning such property from granting any other Liens in such property, (vi) any lease, license or other contract or any rights thereunder if the grant of a security interest in such lease, license, contract or rights is prohibited by the terms of such lease, license or contract or by applicable law and would result in the termination of such lease, license or contract, but only to the extent that any such prohibition is not rendered ineffective pursuant to the Uniform Commercial Code or any other applicable law (including Debtor Relief Laws), (vii) any Internet domain name owned or held by any Loan Party in trust or otherwise for the beneficial ownership of a third party, and (vii) any real or personal property owned by Screening.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient  or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 10.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii), (a)(iii) or (c), amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

 

  

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“Existing Credit Agreement” has the meaning specified in the recitals to this Agreement.

 

“Existing Letters of Credit” means each letter of credit set forth on Schedule 1.02 attached hereto.

 

“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471 (b) (1) of the Code.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

 

“Foreign Government Scheme or Arrangement” has the meaning specified in Section 5.12(d).

 

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Plan” has the meaning specified in Section 5.12(d).

 

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

 

  

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

 

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

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

  

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“Guarantors” means, collectively, the Subsidiaries of the Borrower listed on Schedule 6.12 and each other Subsidiary of the Borrower that shall be required to execute and deliver a guaranty, guaranty joinder agreement or a guaranty supplement pursuant to Section 6.12.

 

“Guaranty” means, collectively, the Guaranty made by the Guarantors in favor of Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit F, together with each other guaranty and guaranty supplement delivered pursuant to Section 6.12.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedge Bank” means any Person that, (a) at the time it enters into a Swap Contract not prohibited under Article VI or VII, is a Lender or an Affiliate of a Lender, or (b) at the time it (or its Affiliate) becomes a Lender, is a party to a Swap Contract not prohibited under Article VI or VII, in each case, in its capacity as a party to such Swap Contract.

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a)            all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)            the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)            net obligations of such Person under any Swap Contract;

 

(d)           all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and not past due for more than 90 days after the date on which such trade account was created);

 

(e)            indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse but excluding indebtedness arising under customary reservation or retentions or title in agreements with suppliers entered into in the ordinary course of business;

 

  

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(f)             all Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations of such Person and all Synthetic Debt of such Person;

 

(g)           all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, in each case only to the extent due prior to the Maturity Date; and

 

(h)            all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Indemnitees” has the meaning specified in Section 10.04(b).

 

“Information” has the meaning specified in Section 10.07.

 

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of, such Person.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

“IP Rights” has the meaning specified in Section 5.17.

 

“IRS” means the United States Internal Revenue Service.

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, unless the context requires otherwise, includes the Swing Line Lender.

 

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

 

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

 

  

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

 

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

 

“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

 

“Letter of Credit Sublimit” means an amount equal to $10,000,000.  The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

“LIBOR Monthly Floating Rate” means a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

	
LIBOR Monthly Floating Rate  

	
=

	
LIBOR Monthly Floating Base Rate

	
1.00 – Eurodollar Reserve Percentage

Where,

 

“Eurodollar Reserve Percentage” means, for any day, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”).  The LIBOR Monthly Floating Rate for each outstanding Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

 

“LIBOR Monthly Floating Base Rate” means, for all Loans, on each day any such Loan is outstanding, the fluctuating rate of interest (rounded upwards, as necessary, to the nearest 1/100 of 1%) equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the most recent Interest Rate Change Date, for Dollar deposits (for delivery on such Interest Rate Change Date) with a term of one month, as adjusted from time to time in the Administrative Agent’s sole discretion for changes in deposit insurance requirements  and other regulatory costs.  If such rate is not available at such time for any reason, then the “LIBOR Monthly Floating Base Rate” shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery in same day funds in the approximate amount of the Loans outstanding with a term equivalent to a one-month would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time), on each day any such Loan is outstanding.

 

  

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“Interest Rate Change Date” means the first day of each month; provided however, that if such date is not a Business Day, then the “Interest Rate Change Date” shall be the next succeeding Business Day.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Committed Loan or a Swing Line Loan.

 

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the Guaranty, (d) the Collateral Documents, (e) each Issuer Document, and (f) any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 2.14.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor.

 

“London Banking Day” mean any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

 

“Material Contract” means, with respect to any Person, each contract to which such Person is a party that is material to the business, condition (financial or otherwise), operations, performance, properties or prospects of such Person.

 

“Maturity Date” means November 15, 2015.

 

“Measurement Period” means, at any date of determination, the most recently completed four fiscal quarters of the Borrower.

 

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 100% of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issued and outstanding at such time, and (ii) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.14(a)(i), (a)(ii) or (a)(iii), an amount equal to 100% of the Outstanding Amount of all LC Obligations.

 

  

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“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

 

“NEI Property” means the property listed on Schedule 7.05(h).

 

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 10.01 and (ii) has been approved by the Required Lenders.

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Note” means a promissory note made by a Borrower in favor of a Lender evidencing Loans made by such Lender to such Borrower, substantially in the form of Exhibit C.

 

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Letter of Credit, Secured Cash Management Agreement or Secured Hedge Agreement, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“Ordinary Dividends” means cash dividends paid to the holders of capital stock of the Borrower in the ordinary course of business.

 

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

  

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“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.05).

 

“Outstanding Amount” means (i) with respect to Committed Loans on any date, the amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Committed Loans occurring on such date; (ii) with respect to Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Swing Line Loans occurring on such date; and (iii) with respect to any L/C Obligations on any date, the amount of the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“Participant Register” has the meaning specified in Section 10.06(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Act” means the Pension Protection Act of 2006.

 

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

 

  

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“Permitted Liens” has the meaning given thereto in Section 7.01.

 

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

 

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Borrower or any ERISA Affiliate or any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.

 

“Platform” has the meaning specified in Section 6.02.

 

“Pledge Agreement” means the Amended and Restated Pledge Agreement dated of even date herewith (and each joinder agreement with respect thereto) made by the Borrower and each Subsidiary of the Borrower party thereto (including by execution and delivery of a joinder agreement with respect thereto) in favor of the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit G attached hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time in compliance herewith and therewith.

 

“Prime Rate” means, for any day, the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its “prime rate”.  The “prime rate” is a rate set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, and may not be its lowest rate offered.  Any change in such rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Public Lender” has the meaning specified in Section 6.02.

 

“Recipient” means the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.

 

“Register” has the meaning specified in Section 10.06(c).

 

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

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

 

  

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“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders.  The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time; provided that, the amount of any participation in any Swing Line Loan and Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the Swing Line Lender or L/C Issuer, as the case may be, in making such determination.

 

“Responsible Officer” means (i) the chief executive officer, president, chief financial officer, chief accounting officer, treasurer, or assistant treasurer of a Loan Party, (ii) solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of a Loan Party,  and (ii) solely for purposes of notices given pursuant to Article II, any other officer of the applicable Loan Party so designated by any of the officers identified in clause (i) in a notice to the Administrative Agent.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof).

 

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

 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., and any successor thereto.

 

“Sanction(s)” means any international economic sanction administered or enforced by OFAC, the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

 

“Screening” means Screening International Holdings LLC, a Delaware limited liability company.

 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“Secured Cash Management Agreement” means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank.

 

  

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“Secured Hedge Agreement” means any Swap Contract permitted under this Agreement that is entered into by and between any Loan Party and any Hedge Bank.

 

“Secured Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuer, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.11(a), and the other Persons the Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

 

“Security Agreement” means the Amended and Restated Security Agreement dated of even date herewith (and each joinder agreement with respect thereto) made by the Borrower and each Subsidiary of the Borrower party thereto (including by execution and delivery of a joinder agreement with respect thereto) in favor of the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit H attached hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time in compliance herewith or therewith.

 

“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is equal to or greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.  Notwithstanding the foregoing, subject to the Borrower’s compliance with Section 7.13, the term “Subsidiary” or “Subsidiaries” shall not include Screening.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

  

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

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

 

“Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan” has the meaning specified in Section 2.04(a).

 

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B.

 

“Swing Line Sublimit” means an amount equal to the lesser of (a) $7,000,000 and (b) the Aggregate Commitments.  The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

“Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

  

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“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Threshold Amount” means $1,000,000.

 

“Total Credit Exposure” means, as to any Lender at any time, the unused Commitments and Revolving Credit Exposure of such Lender at such time.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

“United States” and “U.S.” mean the United States of America.

 

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

 

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

 

“U.S. Loan Party” means any Loan Party that is organized under the laws of one of the states of the United States of America and that is not a CFC.

 

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(III).

 

1.03        Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)            The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

  

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(b)           In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(c)            Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.04        Accounting Terms.  (a)  Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.  Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

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

 

  

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(c)           Consolidation of Variable Interest Entities.  All references herein to consolidated financial statements of the Borrower and its Subsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Borrower is required to consolidate pursuant to FASB ASC 810 as if such variable interest entity were a Subsidiary as defined herein.

 

1.05        Rounding.  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

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

 

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

 

1.08         Covenant Adjustments.

 

(a)           Covenant Acquisition Adjustment. Except as otherwise expressly provided herein, for purposes of calculating the financial covenant in Sections 7.11(a) for any period (or a portion of a period) that includes the date of the consummation of any Acquisition permitted under Section 7.03(g), references to “the Borrower and its Subsidiaries” shall include each acquired Person, or lines of business, as applicable, and the EBITDA of such acquired Person or line of business (such EBITDA to be formulated on the basis of the definition of Consolidated EBITDA set forth herein), as if the Acquisition had been consummated on the first day of any such period of measurement.

 

(b)           Covenant Disposition Adjustment.  Except as otherwise expressly provided herein, for purposes of calculating the financial covenant in Sections 7.11(a) for any period (or a portion of a period) that includes the date of any Disposition of a Subsidiary or line of business, as applicable, Consolidated EBITDA shall be determined on a historical pro forma basis to exclude the results of operations of such Subsidiary or line of business, as applicable, so disposed.

 

ARTICLE II

COMMITMENTS AND CREDIT EXTENSIONS

 

2.01        Committed Loans.  Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “Committed Loan”) to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided, however, that after giving effect to any Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Commitment.  Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01.

 

  

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2.02        Borrowings of Committed Loans. (a)  Each Committed Borrowing shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 11:00 a.m. on the requested date of any Committed Borrowing.  Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower.  Each Borrowing of Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice (whether telephonic or written) shall specify (i) the requested date of the Borrowing (which shall be a Business Day), and (ii) the principal amount of Committed Loans to be borrowed.

 

(b)           Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Committed Loans.  Each Lender shall make the amount of its Committed Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.02, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided, however, that if, on the date the Committed Loan Notice with respect to such Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the Borrower as provided above.

 

2.03         Letters of Credit.

 

(a)            The Letter of Credit Commitment.

 

(i)             Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit.  Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

 

  

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

 

(A)       subject to Section 2.03(b)(iii), the expiry date of the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or

 

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

 

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

 

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

 

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

 

(C)         except as otherwise agreed by the Administrative Agent and the L/C Issuer, the Letter of Credit is in an initial stated amount less than $100,000;

 

  

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

 

(E)         any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.15(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or

 

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

 

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

 

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

 

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

 

(b)           Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

 

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

 

  

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

 

(iii)           If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

 

  

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

 

(c)           Drawings and Reimbursements; Funding of Participations.

 

(i)            Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof.  Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing.  If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage thereof.  In such event, the Borrower shall be deemed to have requested a Committed Borrowing of Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice).  Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

(ii)            Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a Committed Loan to the Borrower in such amount.  The Administrative Agent shall remit the funds so received to the L/C Issuer.

 

  

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(iii)           With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

 

(iv)           Until each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.

 

(v)           Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice).  No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

 

(vi)           If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Committed Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be.  A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

  

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(d)           Repayment of Participations.

 

(i)            At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Administrative Agent.

 

(ii)            If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement until the date that is 180 days following such termination.

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

(f)             Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document.  The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.  The L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

 

  

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

 

(h)           Letter of Credit Fees.  The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate times the daily amount available to be drawn under such Letter of Credit.  For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07.  Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears.  If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.  Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

 

(i)            Fees Payable to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect.  Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

 

  

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

 

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

 

2.04         Swing Line Loans. (a)  The Swing Line.  Subject to the terms and conditions set forth herein, the Swing Line Lender, in reliance upon the agreements of the other Lenders set forth in this Section 2.04, shall make loans (each such loan, a “Swing Line Loan”) to the Borrower from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Commitment; provided, however, that (x) after giving effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the Revolving Credit Exposure of any Lender at such time shall not exceed such Lender’s Commitment, (y) the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan, and (z) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) that it has, or by such Credit Extension may have, Fronting Exposure.  Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04.  Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Swing Line Loan.

 

(b)           Borrowing Procedures.  Each Swing Line Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower.  Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower at its office by crediting the account of the Borrower on the books of the Swing Line Lender in immediately available funds.

 

  

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(c)            Refinancing of Swing Line Loans.  (i)  The Swing Line Lender at any time in its sole discretion may request, on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Lender make a Committed Loan in an amount equal to such Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding.  Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Committed Loans, but subject to the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.02.  The Swing Line Lender shall furnish the Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent.  Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed to have made a Committed Loan to the Borrower in such amount.  The Administrative Agent shall remit the funds so received to the Swing Line Lender.

 

(ii)            If for any reason any Swing Line Loan cannot be refinanced by such a Committed Borrowing in accordance with Section 2.05(c)(i), the request for Committed Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.05(c)(i) shall be deemed payment in respect of such participation.

 

(iii)           If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Committed Borrowing or funded participation in the relevant Swing Line Loan, as the case may be.  A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

 

  

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(iv)           Each Lender’s obligation to make Committed Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02.  No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.

 

(d)           Repayment of Participations.

 

(i)            At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Swing Line Lender.

 

(ii)            If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such demand upon the request of the Swing Line Lender.  The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement

 

(e)            Interest for Account of Swing Line Lender.  The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans.  Until each Lender funds its Committed Loan or risk participation pursuant to this Section 2.04 to refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.

 

  

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(f)            Payments Directly to Swing Line Lender.  The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

 

2.05        Prepayments. (a)  The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Committed Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m. on the date of prepayment of Committed Loans; and (ii) any prepayment of Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or the total amount outstanding, if less.  Each such notice shall specify the date and amount of such prepayment.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Subject to Section 2.15, each such prepayment shall be applied to the Committed Loans of the Lenders in accordance with their respective Applicable Percentages.

 

(b)           The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000.  Each such notice shall specify the date and amount of such prepayment.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

 

(c)           If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then in effect, the Borrower shall immediately prepay Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided, however, that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(d) unless after the prepayment in full of the Committed Loans and Swing Line Loans the Total Outstandings exceed the Aggregate Commitments then in effect.

 

2.06         Termination or Reduction of Commitments.  The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate Commitments, such Sublimit shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments.  Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage.  All fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

 

  

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2.07         Repayment of Loans. (a) Committed Loans.  The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Committed Loans outstanding on such date.

 

(b)           Swing Line Loans.  The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date ten Business Days after such Loan is made and (ii) the Maturity Date.

 

2.08         Interest.

 

(a)            Subject to the provisions of Section 2.08(b) and Article III, each Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the LIBOR Monthly Floating Rate plus the Applicable Rate for Loans.

 

(b)           While any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(c)           Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(d)           Interest on each Loan shall be due and payable in arrears on the first Business Day of each month and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.09         Unused Fees.  In addition to certain fees described in Sections 2.03(h) and (i), the Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, a fee (the “Unused Fee”) equal to the Applicable Rate times the actual daily amount by which the Aggregate Commitments exceeds the sum of (i) the Outstanding Amount of Committed Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.15.  The Unused Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period.  The Unused Fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

 

  

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2.10        Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.  (a)  Other than calculations in respect of interest at the Prime Rate, which shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed, all computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

(b)           If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the Consolidated Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or the L/C Issuer, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period.  This paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/C Issuer, as the case may be, under Section 2.03(c)(iii), 2.03(i) or 2.08(b) or under Article VIII.  The Borrower’s obligations under this paragraph shall survive the termination of the Aggregate Commitments and the repayment of all other Obligations hereunder for a period not to exceed six (6) months after the later of such termination or repayment.

 

2.11         Evidence of Debt. (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

 

  

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(b)           In addition to the accounts and records referred to in Section 2.11(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

2.12        Payments Generally; Administrative Agent’s Clawback. (a)  General.  All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected on computing interest or fees, as the case may be.

 

(b)           (i) Funding by Lenders; Presumption by Administrative Agent.   Unless the Administrative Agent shall have received notice from a Lender prior to 12:00 noon on the date of any Borrowing of Loans that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

  

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

 

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

 

(c)            Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

(d)           Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint.  The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c).

 

(e)            Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

 

(f)            Insufficient Funds.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied as provided in Section 8.03.

 

  

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2.13        Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) the Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of the Facilities due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time, then, in each case under clauses (a) and (b) above, the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact, and (B) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

 

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

 

(ii)           the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 2.14, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than an assignment to the Borrower or any Affiliate thereof (as to which the provisions of this Section shall apply).

 

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

 

  

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2.14        Cash Collateral.

 

(a)           Certain Credit Support Events.  If (i) the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrower shall be required to provide Cash Collateral pursuant to Section 8.02(c), or (iv) there shall exist a Defaulting Lender, the Borrower shall immediately (in the case of clause (iii) above) or within one Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount equal to the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.15(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

 

(b)           Grant of Security Interest.  The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.14(c).  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or the L/C Issuer as herein provided or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. The Borrower shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.

 

(c)           Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.14 or Sections 2.03, 2.04, 2.15 or 8.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(d)           Release.  Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.06(b)(vi))) or (ii) the good faith determination by the Administrative Agent and the L/C Issuer that there exists excess Cash Collateral; provided, however, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

 

  

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2.15        Defaulting Lenders.

 

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

 

(i)            Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.01.

 

(ii)            Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder; third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.14; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuer’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.14; sixth, to the payment of any amounts owing to the Lenders, the L/C Issuer or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer or the Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.14(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.14(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

  

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(iii)           Certain Fees.

 

(A)        No Defaulting Lender shall be entitled to receive any fee payable under Section 2.09 for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(B)        Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.14.

 

(C)         With respect to any fee payable under Section 2.09 or any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the L/C Issuer and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

 

(iv)           Reallocation of Applicable Percentages to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 4.02 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

  

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(v)           Cash Collateral, Repayment of Swing Line Loans.  If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.14.

 

(b)           Defaulting Lender Cure.  If the Borrower, the Administrative Agent, Swing Line Lender and the L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Committed Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.15(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01         Taxes. (a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

 

(i)            Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws.  If any applicable Laws (as determined in the good faith discretion of the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the Administrative Agent (as determined in the good faith discretion of the Administrative Agent) or a Loan Party (as determined in the good faith discretion of the Borrower), then the Administrative Agent or such Loan Party shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

 

(ii)            If any Loan Party or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

  

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(iii)           If any Loan Party or the Administrative Agent shall be required by any applicable Laws other than the Code to withhold or deduct any Taxes from any payment, then (A) such Loan Party or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

(c)           Payment of Other Taxes by the Borrower.  Without limiting the provisions of subsection (a) above, the Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it with respect to payments of Other Taxes made by the Administrative Agent to the relevant Governmental Authority in accordance with applicable Law.

 

(d)           Tax Indemnifications.

 

(i)             Each of the Loan Parties shall, and does hereby, jointly and severally indemnify each Recipient, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.  Each of the Loan Parties shall, and does hereby, jointly and severally indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.

 

  

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(ii)            Each Lender and the L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender or the L/C Issuer (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (y) the Administrative Agent and the Loan Parties, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Loan Parties, as applicable, against any Excluded Taxes attributable to such Lender or the L/C Issuer, in each case, that are payable or paid by the Administrative Agent or a Loan Party in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto (including the fees, charges and disbursements of any counsel for the Administrative Agent or any Loan Party, as applicable), whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender and the L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).

 

(e)           Evidence of Payments.  Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by the Borrower or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

 

(f)           Status of Lenders; Tax Documentation.

 

(i)             Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.  Any Lender which, in accordance with the immediately preceding sentence, elects not to provide properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit payments to be made under any Loan Document without withholding or at a reduced rate of withholding shall be subject to withholding Tax with respect to such payments.

 

  

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(ii)           Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

 

(A)          any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

(B)           any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

(I)          in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(II)        executed originals of IRS Form W-8ECI;

 

(III)       in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit I-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

 

  

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(IV)        to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-2 or Exhibit I-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-4 on behalf of each such direct and indirect partner;

 

(C)           any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

 

(D)           if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(iii)           Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

  

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(g)           Treatment of Certain Refunds.  Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the L/C Issuer, as the case may be.  If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 3.01, it shall pay to the Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by a Loan Party under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Loan Party, upon the request of the Recipient, agrees to repay the amount paid over to the Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to the Loan Party pursuant to this subsection the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Loan Party or any other Person.

 

(b)           Survival.  Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or the L/C Issuer, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.

 

3.02         Illegality.  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to make, maintain or fund Loans whose interest is determined by reference to the LIBOR Monthly Floating Rate, or to determine or charge interest rates based upon the LIBOR Monthly Floating Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, the interest rate on all Loans shall be converted to the Prime Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.

 

3.03         Inability to Determine Rates.  If the Required Lenders (with respect to any outstanding Committed Loan or request for a Committed Loan), or the Swing Line Lender (with respect to any outstanding Swing Line Loan or request for a Swing Line Loan) determines that for any reason that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the amount of such Committed Loan or Swing Line Loan, (b) adequate and reasonable means do not exist for determining the LIBOR Monthly Floating Base Rate, or (c) the LIBOR Monthly Floating Base Rate does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, (x) the obligation of the Lenders to make or maintain Loans bearing interest based on the LIBOR Monthly Floating Base Rate shall be suspended, and the interest rate on all Loans shall be converted to the Prime Rate.  Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of such Loans, or, failing that, such Loans so requested will bear interest at the Prime Rate.

 

  

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3.04         Increased Costs.

 

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

 

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

 

(ii)            subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)           impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan the interest on which is determined by reference to the LIBOR Monthly Floating Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

 

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

 

  

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

 

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

 

3.05         Mitigation Obligations; Replacement of Lenders. (a) Designation of a Different Lending Office.  If any Lender requests compensation under Section 3.04, or requires any Loan Party to pay any Indemnified Taxes or additional amounts to any Lender, the L/C Issuer, or any Governmental Authority for the account of any Lender or the L/C Issuer pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender or the L/C Issuer shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or the L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender or the L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the L/C Issuer, as the case may be.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or the L/C Issuer in connection with any such designation or assignment.

 

(b)           Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 3.05(a), the Borrower may replace such Lender in accordance with Section 10.13.

 

  

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3.06         Survival.  All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments, repayment of all other Obligations hereunder, and resignation of the Administrative Agent.

 

ARTICLE IV

CONDITIONS PRECEDENT TO EFFECTIVENESS

 

4.01        Conditions of Effectiveness.  The effectiveness of this Agreement is subject to satisfaction of the following conditions precedent:

 

(a)           The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (or other electronic form, in any case followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:

 

(i)            executed counterparts of this Agreement, the Guaranty and each Collateral Document, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower;

 

(ii)            a Note executed by the Borrower in favor of each Lender requesting a Note;

 

(iii)           completed requests for information, dated on or before the date of this Agreement, listing all effective financing statements that name any Loan Party as debtor, together with copies of such other financing statements;

 

(iv)           evidence of the completion of all actions, recordings and filings required by the terms of the Collateral Documents, or otherwise as the Administrative Agent may deem necessary or desirable in order to perfect or protect the Liens created thereby (including but not limited to landlord access agreements in form and substance reasonably satisfactory to the Administrative Agent), and evidence that the Administrative Agent, for the benefit of the Secured Parties, holds a perfected, first priority Lien (subject to Liens permitted by Section 7.01) in the Collateral;

 

(v)           such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party;

 

  

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(vi)           such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed and  is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

(vii)          a favorable opinion of Venable LLP, counsel to the Loan Parties, and as requested by the Lenders, a favorable opinion of local counsel to the Loan Parties, in each case, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit J and such other matters concerning the Loan Parties and the Loan Documents as the Lenders may reasonably request;

 

(viii)         a certificate of a Responsible Officer of each Loan Party either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

 

(ix)           a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, and (C) no actions, suits, proceedings, claims or disputes pending or, to the knowledge of any Loan Party after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower, any other Borrower or any of their respective Subsidiaries or against any of their properties or revenues that (i) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (ii) except as specifically disclosed in Schedule 5.06, either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect, and there has been no adverse change in the status, or financial effect on any Loan Party or any Subsidiary thereof, of the matters described on Schedule 5.06;

 

(x)           evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf of the Secured Parties, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitutes Collateral;

 

(xi)           a duly completed Compliance Certificate as of the last day of the fiscal quarter of the Borrower ended September 30, 2012, signed by a Responsible Officer of the Borrower;

 

  

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(xii)           such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or any Lender reasonably may require.

 

(b)           (i)  All fees required to be paid to the Administrative Agent and the Arranger on or before the Closing Date shall have been paid and (ii) all fees required to be paid to the Lenders on or before the Closing Date shall have been paid.

 

(c)           Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

 

(d)           The Closing Date shall have occurred on or before November 30, 2012.

 

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

4.02         Conditions to all Credit Extensions.  The obligation of each Lender and the L/C Issuer to honor any Request for Credit Extension is subject to the following conditions precedent:

 

(a)           The representations and warranties of the Borrower and each other Loan Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in Sections 5.05(a) and (b) shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b), respectively.

 

(b)           No Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof.

 

(c)           The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

 

  

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(d)           The Administrative Agent shall have received, in form and substance satisfactory to it, such other assurances, certificates, documents or consents related to the foregoing as the Administrative Agent or the Required Lenders reasonably may require.

 

Each Request for Credit Extension submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

 

5.01         Existence, Qualification and Power.  Each Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to own or lease its assets and carry on its business and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

5.02         Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law.

 

5.03         Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, (b) the grant or confirmation by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof) or (d) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for the authorizations, approvals, actions, notices and filings listed on Schedule 5.03, all of which have been duly obtained, taken, given or made and are in full force and effect.

 

5.04        Binding Effect.  This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms.

 

  

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5.05        Financial Statements; No Material Adverse Effect. (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(b)           The unaudited consolidated and consolidating balance sheets of the Borrower and its Subsidiaries dated September 30, 2012, and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

 

(c)           Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

 

(d)           The consolidated and consolidating forecasted balance sheets, statements of income and cash flows of the Borrower and its Subsidiaries delivered pursuant to Section 6.01(c) were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Borrower’s best estimate of its future financial condition and performance.

 

5.06         Litigation.  There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or (b) except as specifically disclosed in  Schedule 5.06 (the “Disclosed Litigation”),] either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect, and there has been no adverse change in the status, or financial effect on any Loan Party or any Subsidiary thereof, of the matters described in Schedule 5.06.

 

5.07         No Default.  Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

 

  

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5.08        Ownership of Property; Liens; Investments.  Each Loan Party and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

5.09         Environmental Compliance.  Except as specifically disclosed in Schedule 5.09, the Borrower is not aware of any violation of any existing Environmental Laws by the Borrower or any of its Subsidiaries that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

5.10         Insurance.  The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts (after giving effect to any self-insurance compatible with the following standards), with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates.

 

5.11         Taxes.  The Borrower and its Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP.  There is no proposed tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect.  Neither any Loan Party nor any Subsidiary thereof is party to any tax sharing agreement.

 

5.12         ERISA Compliance. (a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state laws.  Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service.  To the best knowledge of the Borrower, nothing has occurred that would prevent or cause the loss of such tax-qualified status.

 

(b)           There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

 

  

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(c)           (i) No ERISA Event has occurred, and neither the Borrower nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) the Borrower and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher and neither the Borrower nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date; (iv) neither the Borrower nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid; (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA; and (vi) no Pension Plan has been terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.

 

(d)           Neither the Borrower nor any ERISA Affiliate maintains or contributes to, or has any unsatisfied obligation to contribute to, or liability under, any active or terminated Pension Plan other than (A) on the Closing Date, those listed on Schedule 5.12(d) hereto and (B) thereafter, Pension Plans not otherwise prohibited by this Agreement.

 

(e)           With respect to each scheme or arrangement mandated by a government other than the United States (a “Foreign Government Scheme or Arrangement”) and with respect to each employee benefit plan maintained or contributed to by any Loan Party or any Subsidiary of any Loan Party that is not subject to United States law (a “Foreign Plan”):

 

(i)            any employer and employee contributions required by law or by the terms of any Foreign Government Scheme or Arrangement or any Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices;

 

(ii)            the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations, as of the date hereof, with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and

 

(iii)           each Foreign Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities.

 

5.13        Subsidiaries; Equity Interests.  No Loan Party has any Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens except those created under the Collateral Documents.  No Loan Party has any equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13.  All of the outstanding Equity Interests in the Borrower have been validly issued, are fully paid and non-assessable.

 

  

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5.14        Margin Regulations; Investment Company Act. (a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.  Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01 or Section 7.05 or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness and within the scope of Section 8.01(e) will be margin stock.

 

(b)           None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

5.15        Disclosure.  The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

5.16        Compliance with Laws.  Each Loan Party and each Subsidiary thereof is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.17        Intellectual Property; Licenses, Etc.  The Borrower and each of its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person.  To the best knowledge of the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Borrower or any of its Subsidiaries infringes upon any rights held by any other Person.  No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

  

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5.18        Solvency.  Each Loan Party is, individually and together with its Subsidiaries on a consolidated basis, Solvent.

 

5.19        OFAC.  No Loan Party, nor, to the knowledge of any Loan Party, any Related Party, (i) is currently the subject of any Sanctions, (ii) is located, organized or residing in any Designated Jurisdiction, or (iii) is or has been (within the previous five (5) years) engaged in any transaction with any Person who is now or was then the subject of Sanctions or who is located, organized or residing in any Designated Jurisdiction.  No Loan, nor the proceeds from any Loan, has been used, directly or indirectly, to lend, contribute, provide or has otherwise made available to fund any activity or business in any Designated Jurisdiction or to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the subject of any Sanctions, or in any other manner that will result in any violation by any Person (including any Lender, the Administrative Agent, the L/C Issuer or the Swing Line Lender) of Sanctions.

 

5.20       Casualty, Etc.  Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

5.21        Collateral Documents.   Each Loan Party owns the property granted by it as Collateral under the Collateral Documents, free and clear of any and all Lines in favor of third parties, except Permitted Liens.  Upon the proper filing of UCC financing statements, and the taking of the other actions required by the Required Lenders, the Liens granted pursuant to the Collateral Documents will constitute valid and enforceable first, prior and perfected Liens on the Collateral in favor of the Administrative Agent, for the ratable benefit of the Secured Parties.

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to:

 

6.01        Financial Statements.  Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

 

  

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(a)           as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower (or, if earlier, 15 days after the date required to be filed with the SEC (without giving effect to any extension permitted by the SEC)), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, (i) such consolidated statements to be audited and accompanied by a report and opinion of Deloitte & Touche or such other independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit, and (ii) such consolidating statements to be certified by the chief executive officer, president, chief financial officer, chief accounting officer, treasurer, assistant treasurer or controller of the Borrower to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Borrower and its Subsidiaries;

 

(b)           as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (or, if earlier, 5 Business Days after the date required to be filed with the SEC (without giving effect to any extension permitted by the SEC)), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated statements to be certified by the chief executive officer, president, chief financial officer, chief accounting officer, treasurer, assistant treasurer, or controller of the Borrower as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes and such consolidating statements to be certified by the chief executive officer, president, chief financial officer, chief accounting officer, treasurer, assistant treasurer or controller of the Borrower to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Borrower and its Subsidiaries;

 

(c)           as soon as available, but in any event concurrently with the delivery of the financial statements referred to in Section 6.01(a), an annual business plan and budget of the Borrower and its Subsidiaries on a consolidated basis, including forecasts prepared by management of the Borrower, in form satisfactory to the Administrative Agent and the Required Lenders, of consolidated balance sheets and statements of income or operations and cash flows of the Borrower and its Subsidiaries on a quarterly basis for the immediately following fiscal year (including the fiscal year in which the Maturity Date occurs).

 

  

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As to any information contained in materials furnished pursuant to Section 6.02(d), the Borrower shall not be separately required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.

 

6.02      Certificates; Other Information.  Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

 

(a)           concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of Deloitte & Touche or such other independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default or, if any such Default shall exist, stating the nature and status of such event;

 

(b)           concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by the chief executive officer, president, chief financial officer, chief accounting officer, treasurer, assistant treasurer or controller of the Borrower (which delivery may, unless the Administrative Agent or a Lender requests executed originals, be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);

 

(c)           promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party or any of its Subsidiaries, or any audit of any of them;

 

(d)           promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any national securities exchange, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

 

(e)           promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

 

(f)            promptly, and in any event within five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof; and

 

  

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(g)           promptly, such additional information regarding the business, financial, legal or corporate affairs of any Loan Party or any Subsidiary thereof, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that:  (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to 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.  The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities.  The Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent and the Arranger shall treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”

 

  

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6.03        Notices.  Promptly after obtaining knowledge thereof, notify the Administrative Agent and each Lender:

 

(a)           of the occurrence of any Default;

 

(b)           of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws;

 

(c)           of the occurrence of any ERISA Event; and

 

(d)           of any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary thereof, including any determination by the Borrower referred to in Section 2.10(b).

 

Each notice pursuant to Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.  Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

 

6.04        Payment of Obligations.  Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary.

 

6.05        Preservation of Existence, Etc.  (a)  Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; (b) preserve, renew and maintain in full force and effect its good standing under the Laws of the jurisdiction of its organization, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; (c) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (d) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

 

  

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6.06        Maintenance of Properties.  (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

 

6.07        Maintenance of Insurance.  Maintain with financially sound and reputable insurance companies not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance compatible with the following standards) as are customarily carried under similar circumstances by such other Persons and providing for not less than 30 days’ prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance.

 

6.08        Compliance with Laws.  Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.09        Books and Records.  (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

 

6.10        Inspection Rights.  Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

 

6.11        Use of Proceeds.  Use the proceeds of the Credit Extensions for working capital, capital expenditures and other general corporate purposes not in contravention of any Law or of any Loan Document

 

  

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6.12        Covenant to Guarantee Obligations and Give Security. (a)  Upon the formation or acquisition of any new direct or indirect Subsidiary (other than any CFC or a Subsidiary that is held directly or indirectly by a CFC) by any Loan Party, then the Borrower shall, at the Borrower’s expense:

 

(i)            within 15 Business Days (or such later date as the Administrative Agent may consent to in its sole discretion) after receipt of a guaranty, guaranty joinder agreement or guaranty supplement, in form and substance reasonably satisfactory to the Administrative Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents formation or acquisition, cause such Subsidiary and any new direct or indirect parent of such Subsidiary (if it has not already done so), to duly execute and deliver such documents to the Administrative Agent,

 

(ii)           within 15 Business Days (or such later date as the Administrative Agent may consent to in its sole discretion) after such formation or acquisition, furnish to the Administrative Agent a description of the real and personal properties (other than Excluded Property) of such Subsidiary (including supplements to Schedule 5.13), in detail satisfactory to the Administrative Agent,

 

(iii)           within 20 days (or such later date as the Administrative Agent may consent to in its sole discretion) after such formation or acquisition, cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to duly execute and deliver to the Administrative Agent all Security Agreement supplements, Security Agreement joinder agreements; Pledge Agreement supplements, Pledge Agreement joinder agreements, and other security and pledge agreements, as specified by and in form and substance reasonably satisfactory to the Administrative Agent, securing payment of all the Obligations of such Subsidiary or such parent, as the case may be, under the Loan Documents and constituting Liens on all such real and personal properties (other than Excluded Property),

 

(iv)          within 45 days (or such later date as the Administrative Agent may consent to in its sole discretion) after such formation or acquisition, cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to take whatever action (including the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the reasonable opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties (other than Excluded Property) purported to be subject to the Security Agreement, Pledge Agreement, and other security and pledge agreements delivered pursuant to this Section 6.12, enforceable against all third parties in accordance with their terms,

 

(v)           within 60 days (or such later date as the Administrative Agent may consent to in its sole discretion) after such formation or acquisition, deliver to the Administrative Agent, upon the request of the Administrative Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent as to the matters contained in clauses (i), (iii) and (iv) above, and as to such other matters as the Administrative Agent may reasonably request, and

 

  

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(b)           Real Property.  Upon the acquisition of any parcel of real property (other than Excluded Property) by any Loan Party, within 15 Business Days after such acquisition the Borrower shall so notify the Administrative Agent, and after giving such notice, upon the request of the Administrative Agent, the Borrower shall, at the Borrower’s expense, within 60 days (or such later date as the Administrative Agent may consent to in its sole discretion) after such acquisition, deliver to the Administrative Agent such deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, title reports, mortgagee title insurance policies (in amounts and with endorsements reasonably acceptable to the Administrative Agent), surveys, appraisals, environmental reports, flood hazard certifications and other mortgage-related documents with respect to such parcel of real property as the Administrative Agent may request, each in scope, form and substance reasonably satisfactory to the Administrative Agent.

 

6.13        Further Assurances.  Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof as it relates to the granting and perfection of Liens in Collateral, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties or the Secured Parties, as applicable, the rights granted or now or hereafter intended to be granted to the Secured Parties or the Secured Parties, as applicable, under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

 

6.14        Bank Accounts.  Cause each Loan Party’s primary bank accounts to be maintained with Bank of America.

 

ARTICLE VII

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

 

  

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7.01        Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, or assign any accounts or other right to receive income, other than the following (each of the following being a “Permitted Lien”):

 

(a)           Liens pursuant to any Loan Document;

 

(b)           Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased except as contemplated by Section 7.02(e), (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.02(e);

 

(c)           Liens for taxes, assessments, or governmental charges or levies not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

 

(d)           contractual Liens of landlords which secure amounts not yet due and payable and which are limited to tangible personal property;

 

(e)           statutory liens of landlords and carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

 

(f)            pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

 

(g)           deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

(h)           easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

 

(i)            Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

 

(j)            Liens securing Indebtedness permitted under Section 7.02(e); provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition;

 

  

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(k)           other Liens securing Indebtedness outstanding in an aggregate principal amount not to exceed $1,000,000 at any time, provided that such Lien shall be limited to specific property and shall not be blanket Liens;

 

(l)            Liens deemed to exist in connection with Investments in repurchase agreements permitted hereunder;

 

(m)           leases or subleases granted to others not interfering in any material respect with the Borrower’s or any Subsidiary’s business;

 

(n)           Liens on the interest of any Person (other than the Borrower or any Subsidiary) in any property leased by such Person to a Borrower or any Subsidiary;

 

(o)           any interest of title of a lessor under, and Liens arising from UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted by this Agreement;

 

(p)           normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions;

 

(q)           Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection;

 

(r)            rights of licensors and licensees under licenses of trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights entered into in the ordinary course of business or in connection with any Investment permitted hereunder; and

 

(s)           Liens of sellers of goods to a Borrower or any Subsidiary of a Borrower arising under Article 2 of the Uniform Commercial Code or similar provisions of applicable law in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses.

 

7.02        Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)           obligations (contingent or otherwise) existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates or foreign exchange rates and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

 

(b)           Indebtedness under the Loan Documents;

 

  

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(c)           Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension; and provided, still further, that the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the then applicable market interest rate;

 

(d)           (i) Guarantees of the Borrower or any other Loan Party in respect of Indebtedness of the Borrower or any other Loan Party to the extent such Indebtedness is otherwise permitted hereunder and (ii) Guarantees of any Subsidiary of the Borrower that is not a Loan Party in respect of Indebtedness of any other Subsidiary of the Borrower that is also not a Loan Party to the extent such Indebtedness is otherwise permitted hereunder;

 

(e)           Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(i); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $10,000,000;

 

(f)            Indebtedness under surety bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

(g)           subject to Section 7.03, Indebtedness that may be deemed to exist under the agreements relating to any Acquisition or Disposition as a result of the obligation of the applicable Borrower or Subsidiary to pay indemnification, contingent purchase price payments or other purchase price adjustments or similar obligations;

 

(h)           Indebtedness under unsecured seller financing in connection with an Investment permitted by Section 7.03(g); provided that any such Indebtedness shall be subordinated to the Obligations in a manner satisfactory to the Administrative Agent and otherwise contain terms and conditions reasonably satisfactory to the Administrative Agent;

 

(i)            Indebtedness that may be deemed to exist in connection with Investments permitted pursuant to Section 7.03; and

 

(j)            other unsecured Indebtedness in an aggregate principal amount not to exceed $1,000,000 at any time outstanding.

 

  

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7.03        Investments.  Make or hold any Investments, except:

 

(a)           Investments held by the Borrower and its Subsidiaries in the form of cash or Cash Equivalents so long as such Investments are held in an account in which the Administrative Agent has a first priority, perfected security interest;

 

(b)           advances to officers, directors and employees of the Borrower and Subsidiaries in an aggregate amount not to exceed $2,500,000 at any time outstanding, for travel, tuition reimbursement, 401(k) account transition amounts, entertainment, relocation and analogous ordinary business purposes;

 

(c)           (i) Investments by the Borrower and its Subsidiaries in their respective Subsidiaries outstanding on the date hereof, (ii) additional Investments by the Borrower and its Subsidiaries in Loan Parties, (iii) additional Investments by Subsidiaries of the Borrower that are not Loan Parties in other Subsidiaries that are not Loan Parties and (iv) so long as no Default has occurred and is continuing or would result from such Investment, additional Investments by the Loan Parties in wholly-owned Subsidiaries that are not Loan Parties in an aggregate amount invested from the date hereof not to exceed $5,000,000;

 

(d)           Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(e)           Guarantees permitted by Section 7.02;

 

(f)            Investments existing on the date hereof (other than those referred to in Section 7.03(c)(i)) and set forth on Schedule 7.03(f);

 

(g)           Investments constituting an Acquisition by the Borrower or any Subsidiary; provided that, all of the following conditions shall be satisfied:

 

(i)            the Person to be (or whose assets are to be) acquired does not oppose such Acquisition;

 

(ii)           any Subsidiary newly created or acquired in connection with such Acquisition shall comply with the requirements of Section 6.12;

 

(iii)          the lines of business of the Person to be (or the property of which is to be) so acquired shall be substantially the same lines of business as one or more of the principal businesses of the Borrower and its Subsidiaries or reasonably related or incidental thereto;

 

(iv)          such Acquisition shall not include or result in any contingent liabilities that could reasonably be expected to be material to the business, financial condition, operations or prospects of the Borrower and its Subsidiaries, taken as a whole (as determined in good faith by the board of directors (or the persons performing similar functions) of the Borrower or such Subsidiary if the board of directors is otherwise approving such transaction and, in each other case, by a Responsible Officer);

 

  

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(v)           the total cash and noncash consideration (including all Equity Interests issued or transferred to the sellers thereof, all indemnities, earn-outs and other contingent payment obligations to, and the aggregate amounts paid or to be paid under non-compete, consulting and other affiliated agreements with, the sellers thereof, all write-downs of property and reserves for liabilities with respect thereto and all assumptions of debt, liabilities and other obligations in connection therewith) paid by or on behalf of the Borrower and its Subsidiaries for any such Acquisition, when aggregated with the total cash and noncash consideration, including any seller financing, paid by or on behalf of the Borrower and its Subsidiaries for all other Acquisitions made by the Borrower and its Subsidiaries pursuant to this Section 7.03(g), shall not exceed $25,000,000; for purposes of determining compliance with this clause (v) the Equity Interests of the Borrower shall be valued in accordance with GAAP;

 

(vi)          (A)  immediately before and immediately after giving pro forma effect to any such Acquisition (including all Indebtedness to be incurred in connection therewith), (i) Available Liquidity shall be no less than $15,000,000 and (ii) no Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition, the Borrower and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Acquisition had been consummated as of the first day of the fiscal period covered thereby; and

 

(vii)         the Borrower shall have delivered to the Administrative Agent and each Lender, at least five Business Days prior to the date on which any such Acquisition is to be consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders, certifying that all of the requirements set forth in this clause (vi) have been satisfied or will be satisfied on or prior to the consummation of such Acquisition;

 

(h)           Investments by the Borrower and its Subsidiaries not otherwise permitted under this Section 7.03 in an aggregate amount not to exceed $5,000,000 at any time outstanding; provided that, with respect to each Investment made pursuant to this Section 7.03(h):

 

(i)            such Investment shall not include or result in any contingent liabilities that could reasonably be expected to be material to the business, financial condition, operations or prospects of the Borrower and its Subsidiaries, taken as a whole (as determined in good faith by the board of directors (or persons performing similar functions) of the Borrower or such Subsidiary if the board of directors is otherwise approving such transaction and, in each other case, by a Responsible Officer);

 

  

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(ii)           such Investment shall be in property that is part of, or in lines of business that are, substantially the same lines of business as one or more of the principal businesses of the Borrower and its Subsidiaries in the ordinary course;

 

(iii)           any determination of the amount of such Investment shall include all cash and noncash consideration (including all Equity Interests issued or transferred to the sellers thereof, all indemnities, earnouts and other contingent payment obligations to, and the aggregate amounts paid or to be paid under noncompete, consulting and other affiliated agreements with, the sellers thereof, all write-downs of property and reserves for liabilities with respect thereto and all assumptions of debt, liabilities and other obligations in connection therewith) paid by or on behalf of the Borrower and its Subsidiaries in connection with such Investment (for purposes of determining compliance with this clause (iii) the Equity Interests of the Borrower shall be valued in accordance with GAAP); and

 

(iv)          (A) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition, the Borrower and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Investment had been consummated as of the first day of the fiscal period covered thereby; and

 

(i)            Restricted Payments permitted by Section 7.06(f).

 

7.04        Fundamental Changes.  Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

 

(a)           any Subsidiary may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries, provided that (A) when any Loan Party is merging with another Subsidiary, such Loan Party shall be the continuing or surviving Person, and (B) when any wholly-owned Subsidiary that is not a Loan Party is merging with any other Subsidiary that is not a Loan Party, the continuing or surviving Person shall be a wholly-owned Subsidiary;

 

(b)           any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to (i) the Borrower or (ii) any one or more other Subsidiaries, provided that (A) when such Disposition is by a Loan Party, such Disposition shall be to another Loan Party and (B) when such Disposition is by a wholly-owned Subsidiary that is not a Loan Party, such Disposition shall be to a Loan Party or another wholly-owned Subsidiary;

 

(c)            in connection with any acquisition permitted under Section 7.03, any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that (i) the Person surviving such merger shall be a wholly-owned Subsidiary of the Borrower and (ii) in the case of any such merger to which any Loan Party (other than the Borrower) is a party, such Loan Party is the surviving Person.

 

  

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7.05        Dispositions.  Make any Disposition or enter into any agreement to make any Disposition, except:

 

(a)           Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

 

(b)           Dispositions of inventory in the ordinary course of business;

 

(c)           Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

 

(d)           Dispositions of property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof must either be the Borrower or a Guarantor;

 

(e)           Dispositions resulting from casualty loss or condemnation;

 

(f)            Dispositions permitted by Section 7.03;

 

(g)           Dispositions permitted by Section 7.04;

 

(h)           the Disposition of the NEI Property; and

 

(i)            Dispositions by the Borrower and its Subsidiaries not otherwise permitted under this Section 7.05; provided that (A) at the time of such Disposition, no Default shall exist or would result from such Disposition, (B) the aggregate book value of all property Disposed of in reliance on this clause (i) in any fiscal year shall not exceed $1,000,000 and (C) the purchase price for such asset shall be paid to the Borrower or such Subsidiary solely in cash.

 

provided, however, that any Disposition pursuant to this Section 7.05 (a), (b), (c) or (f) shall be for fair market value or consideration otherwise reasonably satisfactory to the Administrative Agent.

 

7.06        Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

 

(a)           each Subsidiary may make Restricted Payments to the Borrower, any Subsidiaries of the Borrower that are Guarantors and any other Person that owns a direct Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;

 

  

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(b)           the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

 

(c)           the Borrower may declare and make Ordinary Dividends so long as immediately before and immediately after giving effect thereto (and any borrowings related thereto) no Default or Event of Default exists; provided that immediately before and immediately after giving effect to any such Ordinary Dividend, the Borrower is in pro form compliance with Section 7.11;

 

(d)           the Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity Interests with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests;

 

(e)           the Borrower may issue restricted stock units and make payments in respect thereof to the holders or other stock based compensation, in each case so long as treated as a compensation expense under GAAP; and

 

(f)            the Borrower may purchase, redeem or otherwise acquire its common Equity Interests in connection with its stock repurchase program and may declare and pay cash dividends not constituting Ordinary Dividends to the holders of capital stock of the Borrower; provided (i) the aggregate amount of such purchases, redemptions, acquisitions and cash dividends made after the date hereof shall not to exceed $21,000,000, and (ii) immediately before and immediately after giving effect to any Restricted Payment made pursuant to this clause (f), Available Liquidity shall be no less than $15,000,000.

 

7.07        Change in Nature of Business.  Engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the date hereof or any business substantially related or incidental thereto.

 

7.08        Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided that the foregoing restriction shall not apply to transactions between or among the Loan Parties.

 

7.09        Burdensome Agreements.  Enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any Guarantor or to otherwise transfer property to or invest in the Borrower or any Guarantor, except for any agreement in effect (A) on the date hereof and set forth on Schedule 7.09 or (B) at the time any Subsidiary becomes a Subsidiary of the Borrower, so long as such agreement was not entered into solely in contemplation of such Person becoming a Subsidiary of the Borrower, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (iii) shall not prohibit any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.02(j) or Permitted Lien solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness or Permitted Lien, any customary restriction or condition contained in any agreement relating to any Disposition permitted under the Agreement, or the anti-assignment provisions applicable to any contract with Governmental Authority; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.

 

  

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7.10        Use of Proceeds.  Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

 

7.11        Financial Covenants.

 

(a)            Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio at any time to be greater than 2.50 to 1.00.

 

(b)           Consolidated Fixed Charge Coverage Ratio.  Permit the Consolidated Fixed Charge Coverage Ratio to be less than 1.25 to 1.00.

 

7.12        Sanctions.  Permit any Loan or the proceeds of any Loan, directly or indirectly, (i) to be lent, contributed or otherwise made available to fund any activity or business in any Designated Jurisdiction; (ii) to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the subject of any Sanctions; or (iii) to be used in any other manner that will result in any violation by any Person (including any Lender, Administrative Agent, L/C Issuer or Swing Line Lender) of any Sanctions.

 

7.13         Inactive Subsidiary.  Permit Screening at any time to engage in any type of business or operations other than the Disposition of all or substantially all of its assets to Loan Parties or take other actions taken to wind up, liquidate and dissolve such Subsidiary.

 

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

 

8.01        Events of Default.  Any of the following shall constitute an Event of Default:

 

(a)           Non-Payment.  The Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

 

(b)           Specific Covenants.  Any Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05(a), 6.10, 6.11, or 6.12 or Article VII, or any Guarantor fails to perform or observe any term, covenant or agreement contained in the Guaranty; or

 

  

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(c)           Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days after the earlier of knowledge of any Loan Party thereof or notice thereof from the Administrative Agent or any Event of Default occurs under any other Loan Document; or

 

(d)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading when made or deemed made; or

 

(e)           Cross-Default.  (i) Any Loan Party or any Subsidiary thereof (A) fails to make any payment of principal and interest when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event, after giving effect to applicable grace periods, is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which a Loan Party or any Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Loan Party or such Subsidiary as a result thereof is greater than the Threshold Amount; or

 

(f)            Insolvency Proceedings, Etc.  Any Loan Party or any Subsidiary thereof institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

 

  

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(g)           Inability to Pay Debts; Attachment.  (i) Any Loan Party or any Subsidiary thereof becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or

 

(h)           Judgments.  There is entered against any Loan Party or any Subsidiary thereof (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of the potential claim and does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(i)            ERISA.  (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

 

(j)            Invalidity of Loan Documents.  Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or

 

(k)           Change of Control.  There occurs any Change of Control; or

 

(l)            Collateral Documents.  Any Collateral Document after delivery thereof pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien other than due to or failure by the Administrative Agent to take appropriate perfection action (subject to Liens permitted by Section 7.01) on the Collateral purported to be covered thereby; or

 

8.02        Remedies upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

 

  

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(a)           declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

 

(b)           declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;

 

(c)           require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount with respect thereto);

 

(d)           exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies available to it, the Lenders and the L/C Issuer under the Loan Documents; and

 

(e)           direct the Administrative Agent to exercise on behalf of the Secured Parties all rights and remedies available to the Secured Parties under the Collateral Documents.

 

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

 

8.03        Application of Funds.  After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02) or if at any time insufficient funds are received by and available to the Administrative Agent to pay fully all Obligations then due hereunder, any amounts received on account of the Obligations shall, subject to the provisions of Sections 2.14 and 2.15, be applied by the Administrative Agent in the following order:

 

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

 

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer (including fees and time charges for attorneys who may be employees of any Lender or the L/C Issuer) arising under the Loan Documents and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

 

  

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

 

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and Obligations then owing under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Lenders, the L/C Issuer, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them;

 

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections 2.03 and 2.14; and

 

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

 

Subject to Sections 2.03(c) and 2.14, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.

 

Notwithstanding the foregoing, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.  Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto.

 

ARTICLE IX

ADMINISTRATIVE AGENT

 

9.01        Appointment and Authority. (a) Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

 

  

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(b)           The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

 

9.02        Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

9.03        Exculpatory Provisions.  The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

 

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

 

(b)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

 

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

 

  

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The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.

 

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

9.04        Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

9.05        Delegation of Duties.  The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

  

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9.06        Resignation of Administrative Agent. (a)  The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, which successor Administrative Agent shall be consented to by the Borrower at all times other than during the existence of an Event of Default (which consent shall not be unreasonably withheld) or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

 

(b)           Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (ii) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.

 

  

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9.07        Non-Reliance on Administrative Agent and Other Lenders.  Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

9.08        Reserved.

 

9.09        Administrative Agent May File Proofs of Claim.  In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise

 

(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(h) and (i), 2.09, 2.10(b) and 10.04) allowed in such judicial proceeding; and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09, 2.10(b) and 10.04.

 

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

 

  

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9.10       Collateral and Guaranty Matters.  Each of the Lenders (including in its capacities as a potential Cash Management Bank and a potential Hedge Bank) and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion,

 

(a)           to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than (A) contingent indemnification obligations and (B) obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the L/C Issuer shall have been made), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.01;

 

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

 

(c)           to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.01(i).

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.  In each case as specified in this Section 9.10, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.10.

 

9.11        Secured Cash Management Agreements and Secured Hedge Agreements.  Except as otherwise expressly set forth herein, no Cash Management Bank or Hedge Bank that obtains the benefit of the provisions of Section 8.03, any Guaranty or any Collateral by virtue of the provisions hereof or of such Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Guaranty or any Collateral Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents.  Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.

 

  

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ARTICLE X

MISCELLANEOUS

 

10.01      Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

(a)           waive any condition set forth in Section 4.01 (other than Section 4.01(b)(i) or (c)), without the written consent of each Lender;

 

(b)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to  Section 8.02) without the written consent of such Lender;

 

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

 

(d)           reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;

 

(e)           change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;

 

(f)           change any provision of this Section 10.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

 

(g)           release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender; or

 

  

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(h)           release all or substantially all of the value of the Guaranty, without the written consent of each Lender, except to the extent the release of any Subsidiary from the Guaranty is permitted pursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone);

 

and provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; and (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender, or all Lenders or each affected Lender, may be effected with the consent of the applicable Lenders other than Defaulting Lenders, except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender, or all Lenders or each affected Lender under a Facility, that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.

 

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Borrower may replace such non-consenting Lender in accordance with Section 10.13; provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this paragraph).

 

10.02     Notices; Effectiveness; Electronic Communications.

 

(a)           Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)            if to the Borrower or any other Loan Party, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

 

(ii)           if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).

 

  

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Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).  Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

 

(b)           Electronic Communications.  Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent,  provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent, the Swingline Lender, the L/C Issuer or the Borrower may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

 

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s, any Loan Party’s or the Administrative Agent’s transmission of Borrower Materials through the Internet.

 

  

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(d)           Change of Address, Etc.  Each of the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.  Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.

 

(e)           Reliance by Administrative Agent, L/C Issuer and Lenders.  The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic or electronic Committed Loan Notices, Letter of Credit Applications and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Borrower shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

10.03     No Waiver; Cumulative Remedies; Enforcement.  No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

  

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Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

10.04     Expenses; Indemnity; Damage Waiver.

 

(a)           Costs and Expenses.  The Borrower shall pay (i) all reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out of pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out of pocket expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent, any Lender or the L/C Issuer, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

 

(b)           Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower or any other Loan Party) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.  Without limiting the provisions of Section 3.01(c), this Section 10.4(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

  

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(c)           Reimbursement by Lenders.  To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer, the Swing Line Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer, the Swing Line Lender or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the Total Credit Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender), such payment to be made severally among them based on such Lenders’ Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought), provided, further that, the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the L/C Issuer or the Swing Line Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the L/C Issuer or the Swing Line Lender in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).

 

  

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(d)           Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

 

(e)           Payments.  All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

 

(f)            Survival.  The agreements in this Section and the indemnity provisions of Section 10.02(e) shall survive the resignation of the Administrative Agent, the L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

 

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

 

10.06      Successors and Assigns.

 

(a)           Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

  

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(b)           Assignments by Lenders.  Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i)            Minimum Amounts.

 

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

 

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

 

(ii)           Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in respect of Swing Line Loans;

 

(iii)           Required Consents.  No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

 

  

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(A)          the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof;

 

(B)           the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and

 

(C)           the consent of the L/C Issuer and the Swing Line Lender shall be required for any assignment.

 

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

 

(v)           No Assignment to Certain Persons.  No such assignment shall be made (A) to the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) to a natural person.

 

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

 

  

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Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

 

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrower (and such agency being solely for tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 10.04(c) without regard to the existence of any participation.

 

  

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Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any  provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant.  The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 10.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.  Each Lender that sells a participation agrees, at the Borrower's request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(e)           Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

(f)            Resignation as L/C Issuer or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrower, resign as Swing Line Lender.  In the event of any such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case may be.  If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Committed Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Committed Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c).  Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

 

  

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10.07      Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i)  any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrower or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.  For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

  

103

  

 

Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.

 

10.08      Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent,  to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Issuer or their respective Affiliates, irrespective of whether or not such Lender, L/C Issuer or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Loan Party may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or the L/C Issuer different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.17 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have.  Each Lender and the L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

  

104

  

 

10.09      Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 

10.10     Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent or the L/C Issuer, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

10.11     Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

10.12     Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, the L/C Issuer or the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

 

  

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10.13     Replacement of Lenders.  If the Borrower is entitled to replace a Lender pursuant to the provisions of Section 3.06, or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(a)           the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 10.06(b);

 

(b)           such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

(c)            in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

 

(d)           such assignment does not conflict with applicable Laws; and

 

(e)           in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

10.14     Governing Law; Jurisdiction; Etc.

 

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

  

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(b)           SUBMISSION TO JURISDICTION.  THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           WAIVER OF VENUE.  THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

10.15     Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

  

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10.16      No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Arranger are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent and the Arranger, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent and the Arranger each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent nor the Arranger has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor the Arranger has any obligation to disclose any of such interests to the Borrower or its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

10.17      Electronic Execution of Assignments and Certain Other Documents.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

10.18      USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any 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 each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act.  The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

 

  

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10.19      Time of the Essence.  Time is of the essence of the Loan Documents.

 

[signature pages follow]

 

  

109

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	  	
INTERSECTIONS INC.

	  	  	  
	  	
By:

	 /s/ John Scanlon

 

	  	
Name:

	  John Scanlon

 

	  	
Title:

	  EVP + CFO

 

AMENDED AND RESTATED CREDIT AGREEMENT

(Intersections, Inc.)

Signature Page

 

  

 

  

 

	  	
BANK OF AMERICA, N.A., as

	  	
Administrative Agent

	  	  	  

	  	
By:

	 /s/ Michael D. Brannan

 

	  	
Name:

	  Michael D. Brannan

 

	  	
Title:

	  Senior Vice President

 

	  	
BANK OF AMERICA, N.A., as a Lender,

	  	
L/C Issuer and Swing Line Lender

	  	  	  

	  	
By:

	 /s/ Michael D. Brannan

 

	  	
Name:

	  Michael D. Brannan

 

	  	
Title:

	  Senior Vice President

 

AMENDED AND RESTATED CREDIT AGREEMENT

(Intersections, Inc.)

Signature Page

 

  

 

  

 

[OTHER LENDERS]Execution Version

 

CREDIT AGREEMENT

 

DATED AS OF

NOVEMBER 20, 2012

 

AMONG

 

EMERALD OIL, INC.,

AS BORROWER,

 

WELLS FARGO BANK, N.A.,

AS ADMINISTRATIVE AGENT,

 

AND

 

THE LENDERS PARTY HERETO

 

SOLE LEAD ARRANGER AND SOLE BOOK RUNNER

WELLS FARGO SECURITIES LLC

 

    	 

    	 

    

 

Execution Version

 

Table of
Contents

 

	 	 	Page
	 	 	 
	ARTICLE I
	Definitions and Accounting Matters
	 	 	 
	Section 1.01.	Terms Defined Above	1
	 	 	 
	Section 1.02.	Certain Defined Terms	1
	 	 	 
	Section 1.03.	Types of Loans and Borrowings	21
	 	 	 
	Section 1.04.	Terms Generally; Rules of Construction	21
	 	 	 
	Section 1.05.	Accounting Terms and Determinations; GAAP	21
	 	 	 
	ARTICLE II
	The Credits
	 	 	 
	Section 2.01.	Commitments	21
	 	 	 
	Section 2.02.	Loans and Borrowings	22
	 	 	 
	Section 2.03.	Requests for Borrowings	22
	 	 	 
	Section 2.04.	Interest Elections	23
	 	 	 
	Section 2.05.	Funding of Borrowings	24
	 	 	 
	Section 2.06.	Termination and Reduction of Aggregate Maximum Credit Amounts	25
	 	 	 
	Section 2.07.	Borrowing Base	26
	 	 	 
	Section 2.08.	Letters of Credit	28
	 	 	 
	Section 2.09.	Cash Collateral	32
	 	 	 
	Section 2.10.	Defaulting Lenders	33
	 	 	 
	ARTICLE III
	Payments of Principal and Interest; Prepayments; Fees
	 	 	 
	Section 3.01.	Repayment of Loans	35
	 	 	 
	Section 3.02.	Interest	35
	 	 	 
	Section 3.03.	Alternate Rate of Interest	36
	 	 	 
	Section 3.04.	Prepayments	37
	 	 	 
	Section 3.05.	Fees	38
	 	 	 
	ARTICLE IV
	Payments; Pro Rata Treatment; Sharing of Set-offs
	 	 	 
	Section 4.01.	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	39

 

    	 

    	 

    

 

	Section 4.02.	Presumption of Payment by the Borrower	40
	 	 	 
	Section 4.03.	Certain Deductions by the Administrative Agent	41
	 	 	 
	Section 4.04.	Disposition of Proceeds	41
	 	 	 
	ARTICLE V
	Increased Costs; Break Funding Payments; Taxes
	 	 	 
	Section 5.01.	Increased Costs	41
	 	 	 
	Section 5.02.	Break Funding Payments	42
	 	 	 
	Section 5.03.	Taxes	43
	 	 	 
	Section 5.04.	Designation of Different Lending Office	46
	 	 	 
	Section 5.05.	Replacement of Lenders	47
	 	 	 
	Section 5.06.	Illegality	47
	 	 	 
	ARTICLE VI
	Conditions Precedent
	 	 	 
	Section 6.01.	Effective Date	47
	 	 	 
	Section 6.02.	Each Credit Event	50
	 	 	 
	ARTICLE VII
	Representations and Warranties
	 	 	 
	Section 7.01.	Organization; Powers	50
	 	 	 
	Section 7.02.	Authority; Enforceability	50
	 	 	 
	Section 7.03.	Approvals; No Conflicts	51
	 	 	 
	Section 7.04.	Financial Condition; No Material Adverse Change	51
	 	 	 
	Section 7.05.	Litigation	51
	 	 	 
	Section 7.06.	Environmental Matters	52
	 	 	 
	Section 7.07.	Compliance with the Laws and Agreements; No Defaults	53
	 	 	 
	Section 7.08.	Investment Company Act	53
	 	 	 
	Section 7.09.	Taxes	53
	 	 	 
	Section 7.10.	ERISA	53
	 	 	 
	Section 7.11.	Disclosure; No Material Misstatements	54
	 	 	 
	Section 7.12.	Insurance	54
	 	 	 
	Section 7.13.	Restriction on Liens	54
	 	 	 
	Section 7.14.	Subsidiaries	55
	 	 	 
	Section 7.15.	Foreign Operations	55

 

    	ii

    	 

    

 

	Section 7.16.	Location of Business and Offices	55
	 	 	 
	Section 7.17.	Properties; Titles, Etc.	55
	 	 	 
	Section 7.18.	Maintenance of Properties	56
	 	 	 
	Section 7.19.	Gas Imbalances	56
	 	 	 
	Section 7.20.	Marketing of Production	56
	 	 	 
	Section 7.21.	Security Documents	57
	 	 	 
	Section 7.22.	Swap Agreements	57
	 	 	 
	Section 7.23.	Use of Loans and Letters of Credit	57
	 	 	 
	Section 7.24.	Solvency	57
	 	 	 
	Section 7.25.	OFAC	57
	 	 	 
	Section 7.26.	Anti-Terrorism Laws	57
	 	 	 
	ARTICLE VIII
	Affirmative Covenants
	 	 	 
	Section 8.01.	Financial Statements; Other Information	58
	 	 	 
	Section 8.02.	Notices of Material Events	61
	 	 	 
	Section 8.03.	Existence; Conduct of Business	61
	 	 	 
	Section 8.04.	Payment of Obligations	61
	 	 	 
	Section 8.05.	Performance of Obligations under Loan Documents	61
	 	 	 
	Section 8.06.	Operation and Maintenance of Properties	61
	 	 	 
	Section 8.07.	Insurance	62
	 	 	 
	Section 8.08.	Books and Records; Inspection Rights	62
	 	 	 
	Section 8.09.	Compliance with Laws	63
	 	 	 
	Section 8.10.	Environmental Matters	63
	 	 	 
	Section 8.11.	Further Assurances	63
	 	 	 
	Section 8.12.	Reserve Reports	64
	 	 	 
	Section 8.13.	Title Information	65
	 	 	 
	Section 8.14.	Additional Collateral; Additional Guarantors	65
	 	 	 
	Section 8.15.	ERISA Compliance	66
	 	 	 
	Section 8.16.	Marketing Activities	67
	 	 	 
	Section 8.17.	Preferred Stock	67
	 	 	 
	ARTICLE IX
	Negative Covenants
	 	 	 
	Section 9.01.	Financial Covenants	67

 

    	iii

    	 

    

 

	Section 9.02.	Debt	68
	 	 	 
	Section 9.03.	Liens	68
	 	 	 
	Section 9.04.	Dividends, Distributions and Redemptions	68
	 	 	 
	Section 9.05.	Investments, Loans and Advances	69
	 	 	 
	Section 9.06.	Nature of Business; No International Operations	70
	 	 	 
	Section 9.07.	Limitation on Leases	70
	 	 	 
	Section 9.08.	Proceeds of Notes	70
	 	 	 
	Section 9.09.	ERISA Compliance	70
	 	 	 
	Section 9.10.	Sale or Discount of Receivables	71
	 	 	 
	Section 9.11.	Mergers, Etc	71
	 	 	 
	Section 9.12.	Sale of Properties and Termination of Hedging Transactions	71
	 	 	 
	Section 9.13.	Sales and Leasebacks	72
	 	 	 
	Section 9.14.	Environmental Matters	72
	 	 	 
	Section 9.15.	Transactions with Affiliates	72
	 	 	 
	Section 9.16.	Subsidiaries	72
	 	 	 
	Section 9.17.	Negative Pledge Agreements; Dividend Restrictions	73
	 	 	 
	Section 9.18.	Take-or-Pay or Other Prepayments	73
	 	 	 
	Section 9.19.	Swap Agreements	73
	 	 	 
	Section 9.20.	Anti-Terrorism Laws	74
	 	 	 
	ARTICLE X
	Events of Default; Remedies
	 	 	 
	Section 10.01.	Events of Default	74
	 	 	 
	Section 10.02.	Remedies	76
	 	 	 
	ARTICLE XI
	The AgentS
	 	 	 
	Section 11.01.	Appointment; Powers	77
	 	 	 
	Section 11.02.	Duties and Obligations of Administrative Agent	77
	 	 	 
	Section 11.03.	Action by Administrative Agent	78
	 	 	 
	Section 11.04.	Reliance by Administrative Agent	78
	 	 	 
	Section 11.05.	Subagents	79
	 	 	 
	Section 11.06.	Resignation of Administrative Agent	79
	 	 	 
	Section 11.07.	Agents as Lenders	79
	 	 	 
	Section 11.08.	No Reliance	79

 

    	iv

    	 

    

 

	Section 11.09.	Administrative Agent May File Proofs of Claim	80
	 	 	 
	Section 11.10.	Authority of Administrative Agent to Release Collateral and Liens	80
	 	 	 
	Section 11.11.	Duties of any Arranger or Agent	80
	 	 	 
	ARTICLE XII
	Miscellaneous
	 	 	 
	Section 12.01.	Notices	81
	 	 	 
	Section 12.02.	Waivers; Amendments	81
	 	 	 
	Section 12.03.	Expenses, Indemnity; Damage Waiver	83
	 	 	 
	Section 12.04.	Successors and Assigns	85
	 	 	 
	Section 12.05.	Survival; Revival; Reinstatement	88
	 	 	 
	Section 12.06.	Counterparts; Integration; Effectiveness	89
	 	 	 
	Section 12.07.	Severability	89
	 	 	 
	Section 12.08.	Right of Setoff	89
	 	 	 
	Section 12.09.	GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS	90
	 	 	 
	Section 12.10.	Headings	91
	 	 	 
	Section 12.11.	Confidentiality	91
	 	 	 
	Section 12.12.	Interest Rate Limitation	92
	 	 	 
	Section 12.13.	Collateral Matters; Swap Agreements	92
	 	 	 
	Section 12.14.	No Third Party Beneficiaries	92
	 	 	 
	Section 12.15.	EXCULPATION PROVISIONS	93
	 	 	 
	Section 12.16.	USA Patriot Act Notice	93
	 	 	 
	Section 12.17.	Flood Insurance Provisions	93

 

    	v

    	 

    

 

ANNEXES, EXHIBITS AND SCHEDULES

 

	Annex I	List of Maximum Credit Amounts
	 	 	 
	Exhibit A	 	Form of Note
	Exhibit B	 	Form of Borrowing Request
	Exhibit C	 	Form of Interest Election Request
	Exhibit D	 	Form of Compliance Certificate
	Exhibit E	 	Security Instruments
	Exhibit F	 	Form of Assignment and Assumption
	Exhibit G-1	 	Form of U.S. Tax Compliance Certificate
	 	 	(Non-U.S. Lenders; non-partnerships)
	Exhibit G-2	 	Form of U.S. Tax Compliance Certificate
	 	 	(Foreign Participants; non-partnerships)
	Exhibit G-3	 	Form of U.S. Tax Compliance Certificate
	 	 	(Foreign Participants; partnerships)
	Exhibit G-4	 	Form of U.S. Tax Compliance Certificate
	 	 	(Non-U.S. Lenders; partnerships)
	 	 	 
	Schedule 7.05	 	Litigation
	Schedule 7.06	 	Environmental Matters
	Schedule 7.12	 	Insurance
	Schedule 7.14	 	Subsidiaries
	Schedule 7.19	 	Gas Imbalances
	Schedule 7.20	 	Marketing Contracts
	Schedule 7.22	 	Swap Agreements
	Schedule 9.02	 	Existing Debt
	Schedule 9.03	 	Existing Liens
	Schedule 9.05	 	Investments

 

    	vi

    	 

    

 

THIS CREDIT AGREEMENT
dated as of November 20, 2012, is among Emerald Oil, Inc., a Montana corporation (the “Borrower”), each of the
Lenders from time to time party hereto, Wells Fargo Bank, N.A. (in its individual capacity, “WF”), as administrative
agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

RECITALS

 

A.           The
Borrower has requested that the Lenders provide certain loans to and extensions of credit on behalf of the Borrower.

 

B.           The
Lenders have agreed to make such loans and extensions of credit subject to the terms and conditions of this Agreement.

 

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

 

ARTICLE
I

Definitions
and Accounting Matters

 

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

 

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

 

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

 

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

 

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

 

“Affected
Loans” has the meaning assigned to such term in Section 5.06.

 

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

 

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

 

“Aggregate
Maximum Credit Amounts” at any time shall equal the sum of the Maximum Credit Amounts, as the same may be reduced or
terminated pursuant to Section 2.06. As of the Effective Date, the Aggregate Maximum Credit Amounts are $400,000,000.

 

“Agreement”
means this Credit Agreement, including the Schedules and Exhibits hereto, as the same may be amended, modified, supplemented or
restated from time to time.

 

    	1

    	 

    

 

“Alternate
Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b)
the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1.0% and (c) the Adjusted LIBO Rate for an Interest Period
of three months on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1.0%. Any change
in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall
be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted
LIBO Rate, respectively.

 

“Anti-Terrorism
Laws” has the meaning assigned to such term in Section 7.26.

 

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

 

Borrowing Base Utilization Grid

 

	Borrowing Base Utilization Percentage	 	ABR Loans	 	 	Eurodollar Loans	 	 	Commitment Fee Rate	 
	< 25%	 	 	0.75	%	 	 	1.75	%	 	 	0.375	%
	>25% and <50%	 	 	1.00	%	 	 	2.00	%	 	 	0.375	%
	>50% and <75%	 	 	1.25	%	 	 	2.25	%	 	 	0.50	%
	>75% and <90%	 	 	1.50	%	 	 	2.50	%	 	 	0.50	%
	>90%	 	 	1.75	%	 	 	2.75	%	 	 	0.50	%

 

With respect to the
Loans, each change in the Applicable Margin and Commitment Fee Rate shall apply during the period commencing on the effective date
of such change in the Borrowing Base Utilization Percentage and ending on the date immediately preceding the effective date of
the next such change, provided, however, that if at any time the Borrower fails to deliver a Reserve Report pursuant to
Section 8.12(a), then the “Applicable Margin” and “Commitment Fee Rate” shall mean the rate
per annum set forth on the grid when the Borrowing Base Utilization Percentage is at its highest level for the period beginning
on the date such Reserve Report should have been delivered until the date it is actually delivered to the Administrative Agent.

 

“Applicable
Percentage” means, with respect to any Lender at any time, the percentage of the Aggregate Maximum Credit Amounts represented
by such Lender’s Maximum Credit Amount as such percentage is set forth on Annex I; provided that, in the case of Section
2.10, when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the Aggregate Maximum
Credit Amounts disregarding any Defaulting Lender’s Maximum Credit Amount represented by such Lender’s Maximum Credit
Amount.

 

“Approved
Counterparty” means (a) any Lender or any Affiliate of a Lender or (b) any other Person whose long term senior unsecured
debt rating at the time a particular Swap Agreement transaction is entered into is A or A2 by S&P or Moody’s (or their
equivalent), respectively, or higher.

 

    	2

    	 

    

 

“Approved
Petroleum Engineers” means (a) Netherland, Sewell & Associates, Inc. and (b) any other independent petroleum engineers
reasonably acceptable to the Administrative Agent.

 

“Arranger”
means Wells Fargo Securities, LLC, in its capacity as the sole lead arranger and sole bookrunner hereunder.

 

“Assignee”
has the meaning assigned to such term in Section 12.04(b).

 

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

 

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

 

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

 

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

 

“Borrowing
Base” means, at any time, an amount equal to the amount determined in accordance with Section 2.07, as the same may be
adjusted from time to time pursuant to Section 2.07(b), Section 2.07(c), Section 8.13(c) or Section 9.12(d). The Borrowing Base
on the Effective Date shall be the amount set forth in Section 2.07(a).

 

“Borrowing
Base Deficiency” occurs if at any time the total Revolving Credit Exposures exceeds the Borrowing Base then in effect;
provided, that, for purposes of determining the existence and amount of any Borrowing Base Deficiency, obligations under
any Letter of Credit will not be deemed to be outstanding to the extent such obligations are Cash Collateralized.

 

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

 

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

 

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

 

“Cash Collateralize”
means, to pledge and deposit with or deliver to the Administrative Agent (in a manner reasonably satisfactory to the Administrative
Agent, which may require such deposit to be made into a controlled account), for the benefit of any Issuing Bank or the Lenders,
as collateral for LC Exposure or obligations of the Lenders to fund participations in respect of LC Exposure, cash or deposit account
balances or, if the Administrative Agent and each Issuing Bank shall agree, in their sole discretion, other credit support, in
each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and each Issuing Bank. “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such Cash Collateral
and other credit support.

 

    	3

    	 

    

 

“Cash Management
Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit
or debit card, electronic funds transfer and other cash management services.

 

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

 

“Change in
Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof),
of Equity Interests representing more than 35% of the ordinary voting power represented by the issued and outstanding Equity Interests
of the Borrower (determined on a fully diluted basis), or (b) the board of directors of the Borrower shall cease to consist of
a majority of Continuing Directors.

 

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

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

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

 

“Commitment
Fee Rate” means the rate per annum set forth in the definition of “Applicable Margin”.

 

“Connection
Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that
are franchise Taxes or branch profits Taxes.

 

    	4

    	 

    

 

“Consolidated
Net Income” means with respect to the Borrower and the Consolidated Subsidiaries, for any period, the aggregate of the
net income (or loss) of the Borrower and the Consolidated Subsidiaries after allowances for taxes for such period determined on
a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent
otherwise included therein) the following: (a) the net income of any Person in which the Borrower or any Consolidated Subsidiary
has an interest (which interest does not cause the net income of such other Person to be consolidated with the net income of the
Borrower and the Consolidated Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions
actually paid in cash during such period by such other Person to the Borrower or to a Consolidated Subsidiary, as the case may
be; (b) the net income (but not loss) during such period of any Consolidated Subsidiary to the extent that the declaration or payment
of dividends or similar distributions or transfers or loans by that Consolidated Subsidiary is not at the time permitted by operation
of the terms of its charter or any agreement, instrument or Governmental Requirement applicable to such Consolidated Subsidiary
or is otherwise restricted or prohibited, in each case determined in accordance with GAAP; (c) the net income (or loss) of any
Person acquired in a pooling of interests transaction for any period prior to the date of such transaction; (d) any extraordinary
non-cash gains or losses during such period; (e) non-cash gains or losses under FASB ASC Topic 815 resulting from the net change
in mark to market portfolio of commodity price risk management activities during that period; and (f) any gains or losses attributable
to writeups or writedowns of assets, including ceiling test writedowns, provided that if such non-cash expense subsequently
becomes a cash expense, it will be included in the period during which it became a cash expense; provided that for the purposes
of calculating Consolidated Net Income for any period of four consecutive fiscal quarters (or less in the case of any period during
which the calculation of EBITDAX is being annualized for purposes of the financial covenant calculations in Section 9.01) (each,
a “Reference Period”), if during such Reference Period (or, in the case of pro forma calculations, during the
period from the last day of such Reference Period to and including the date as of which such calculation is made) the Borrower
or any Consolidated Subsidiary shall have made a disposition or acquisition, Consolidated Net Income for such Reference Period
shall be calculated after giving pro forma effect thereto as if such disposition or acquisition by the Borrower or its Consolidated
Subsidiaries occurred on the first day of such Reference Period (with the Reference Period for the purposes of pro forma calculations
being the most recent period of four consecutive fiscal quarters for which the relevant financial information is available).

 

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

 

“Continuing
Director” means the directors of the Borrower on the Effective Date and each other director if such other director’s
election to the Borrower’s board of directors was approved by, or whose nomination for election by the Borrower’s shareholders
was recommended by, a vote of at least a majority of the directors then still in office who either were directors on the Effective
Date or whose election or nomination for election was so previously approved or recommended.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. For purposes of this definition, a Person
shall be deemed to be “Controlled by” a Person if such Person possesses, directly or indirectly, power to vote 10%
or more of the Equity Interests having ordinary voting power for the election of directors, managers or the similar governing body
of such Person. “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Party”
means the Administrative Agent, any Issuing Bank or any other Lender.

 

    	5

    	 

    

 

“Debt”
means, for any Person, the sum of the following (without duplication): (a) all obligations of such Person for borrowed money or
evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all obligations of such Person
(whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts
payable and all accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of Property
or services (excluding accounts payable and accrued expenses, liabilities or other obligations to pay the deferred purchase price
of Property or services, from time to time incurred in the ordinary course of business which are not greater than ninety (90) days
past the date of invoice or delinquent or which are being contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP); (d) all obligations under Capital Leases; (e) all obligations under Synthetic
Leases; (f) all Debt (as defined in the other clauses of this definition) of others secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by) a Lien on any Property of such Person, whether or not such
Debt is assumed by such Person; (g) all Debt (as defined in the other clauses of this definition) of others guaranteed by such
Person or in which such Person otherwise assures a creditor against loss of the Debt (howsoever such assurance shall be made) to
the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee or assurance against loss;
(h) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of
others or to purchase the Debt or Property of others; (i) obligations to deliver commodities, goods or services, including Hydrocarbons,
in consideration of one or more advance payments, other than gas balancing arrangements in the ordinary course of business; (j)
obligations to pay for goods or services even if such goods or services are not actually received or utilized by such Person; (k)
any Debt of a partnership for which such Person is liable either by agreement, by operation of law or by a Governmental Requirement
but only to the extent of such liability; (l) Disqualified Capital Stock; (m) the undischarged balance of any production payment
created by such Person or for the creation of which such Person directly or indirectly received payment; and (n) that portion of
the Preferred Stock required by GAAP (as in effect on the Effective Date) to be classified as debt on the balance sheet of the
Borrower. The Debt of any Person shall include all obligations of such Person of the character described above to the extent such
Person remains legally liable in respect thereof notwithstanding that any such obligation is not included as a liability of such
Person under GAAP.

 

“Debtor Relief
Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, fraudulent conveyance, fraudulent transfer, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

 

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

 

“Defaulting
Lender” means, subject to Section 2.10, any Lender that (a) has failed to (i) fund all or any portion of the
Loans or participations in Letters of Credit required to be funded by it hereunder within two Business Days of the date such Loans
or participations were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in
writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding
(each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has
not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Bank or any other Lender any other amount required to
be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date
when due, (b) has notified the Borrower, the Administrative Agent or any Issuing Bank in writing that it does not intend to comply
with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement
relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be
specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days
after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower
that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting
Lender pursuant to this clause (c) upon receipt of such written confirmation from an authorized officer of such Lender by the
Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject
of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets,
including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from
the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent
that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error,
and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.10) upon delivery of written notice of
such determination to the Borrower, any Issuing Bank and each Lender.

 

    	6

    	 

    

 

“Deficiency
Notification Date” has the meaning assigned to such term in Section 3.04(c)(ii).

 

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

 

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

 

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

 

“EBITDAX”
means, for any period (without duplication), 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 (including amortization of original issue
discount and the interest component of any deferred payment obligations and Capital Leases), income taxes, depreciation, depletion,
amortization (including amortization of goodwill and debt issuance costs), exploration expenses and other similar noncash charges
(including noncash ASC 360, ASC 410 and ASC 815 charges), minus all noncash income (including noncash ASC 815 income) added to
Consolidated Net Income.

 

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

 

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

 

“Environmental
Laws” means any and all Governmental Requirements pertaining in any way to health, safety the environment, the preservation
or reclamation of natural resources, or the management, Release or threatened Release of any Hazardous Materials, in effect in
any jurisdiction in which the Borrower or any Loan Party is conducting, or at any time, has conducted business, or where any Property
of the Borrower or any Loan Party is located, including the Oil Pollution Act of 1990 (“OPA”), as amended, the
Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”),
as amended, the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended,
the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous
Materials Transportation Act, as amended, and other environmental conservation or protection Governmental Requirements.

 

    	7

    	 

    

 

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

 

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

 

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

 

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

 

“ERISA Event”
means (a) a Reportable Event, (b) the withdrawal of the Borrower, any Loan Party or any ERISA Affiliate from a Plan during a plan
year in which it was a “substantial employer” as defined in section 4001(a)(2) of ERISA, (c) the filing (or the receipt
by any Loan Party or any ERISA Affiliate) of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination
under section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal
liability pursuant to Section 4202 of ERISA, (f) any other event or condition which might constitute grounds under section 4042
of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or the incurrence by any Loan Party or
any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, including by
not limited to the imposition of any Lien in favor of the PBGC or any Plan, (g) on and after the effectiveness of the Pension Act,
a determination that a Plan is, or is expected to be, in “at risk” status (as defined in 303(i)(4) of ERISA or 430(i)(4)
of the Code) or (h) the failure of any Loan Party or any ERISA Affiliate to make by its due date a required installment under Section
430(j) of the Code with respect to any Plan or any failure by any Plan to satisfy the minimum funding standards (within the meaning
of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived.

 

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

 

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

 

    	8

    	 

    

 

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

 

    	9

    	 

    

 

“Excluded
Taxes” means any of the following Taxes imposed on or with respect to a Credit Party or required to be withheld or deducted
from a payment to a Credit Party, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of such Credit Party being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed
on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to
an assignment request by the Borrower under Section 5.05) or (ii) such Lender changes its lending office, except in each case to
the extent that, pursuant to Section 5.03, amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender acquired the applicable interest in a Loan or Commitment or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Credit Party’s failure to comply with Section 5.03(g), (d) any
U.S. federal withholding Taxes imposed under FATCA and (e) any U.S. federal backup withholding Taxes.

 

“Executive
Order” has the meaning assigned to such term in Section 7.26.

 

“Existing
Credit Agreements” means that certain Credit Agreement among the Borrower, Macquarie Bank Limited and the other lenders
party thereto dated as of February 10, 2012, as amended.

 

“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof
and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.

 

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

 

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

 

“Financial
Statements” means the financial statement or statements referred to in Section 7.04, including all footnotes attached
thereto.

 

“Fixed Charge
Coverage Ratio” means, for any period, the ratio of (a) consolidated EBITDAX of the Borrower and its Subsidiaries for
such period to (b) Fixed Charges for such period.

 

Fixed Charges”
means, for any period, the sum (without duplication) of (a) Interest Expense for such period and (b) Capital Lease expense of the
Borrower and its Subsidiaries for such period.

 

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

 

“Fronting
Exposure” means, at any time there is a Defaulting Lender, with respect to any Issuing Bank, such Defaulting Lender’s
Applicable Percentage of the outstanding LC Exposure other than LC Exposure as to which such Defaulting Lender’s participation
obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

    	10

    	 

    

 

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

 

“Governmental
Authority” means the government of the United States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central Bank).

 

“Governmental
Requirement” means any law (including common law), statute, code, ordinance, order, determination, rule, regulation,
judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement, whether
now or hereinafter in effect, including Environmental Laws, energy regulations and occupational, safety and health standards or
controls, of any Governmental Authority.

 

“Guarantors”
means:

 

(a)          Emerald
Oil, Inc., a Delaware corporation;

 

(b)          Emerald
WB LLC, a Colorado limited liability company;

 

(c)          Emerald
GRB LLC, a Colorado limited liability company;

 

(d)          Emerald
TR LLC, a Colorado limited liability company;

 

(e)          Emerald
Heath LLC, a Colorado limited liability company; and

 

(f)          each
other Guarantor that guarantees the Secured Obligations pursuant to Section 8.14(b).

 

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

 

“Hazardous
Material” means any substance regulated or as to which liability might arise under any applicable Environmental Law including:
(a) any chemical, compound, material, product, byproduct, substance or waste defined as or included in the definition or meaning
of “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,”
“toxic waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,”
“pollutant,” or words of similar meaning or import found in any applicable Environmental Law; (b) Hydrocarbons, petroleum
products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any components, fractions, or derivatives thereof;
and (c) radioactive materials, explosives, asbestos or asbestos containing materials, polychlorinated biphenyls, radon, infectious
or medical wastes.

 

“Highest Lawful
Rate” means, as to any Lender, at the particular time in question, the maximum non-usurious rate of interest which, under
applicable law, such Lender is then permitted to contract for, charge or collect from the Borrower on the Loans or the other obligations
of the Borrower hereunder, and as to any other Person, at the particular time in question, the maximum non-usurious rate of interest
which, under applicable law, such Person is then permitted to contract for, charge or collect with respect to the obligation in
question. If the maximum rate of interest which, under applicable law, the Lenders are permitted to contract for, charge or collect
from the Borrower on the Loans or the other obligations of the Borrower hereunder shall change after the date hereof, the Highest
Lawful Rate shall be automatically increased or decreased, as the case may be, as of the effective time of such change without
notice to the Borrower or any other Person.

 

    	11

    	 

    

 

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

 

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

 

“Indemnified
Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of
any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a) above, Other
Taxes.

 

“Initial Reserve
Report” means the report of the Borrower audited by Netherland, Sewell & Associates, Inc. as of September 10, 2012,
with respect to the value of the Oil and Gas Properties of the Borrower and its Subsidiaries as of June 30, 2012.

 

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

 

“Interest
Expense” means, for any period, total cash interest expense (including that attributable to Capital Leases and cash dividends
paid pursuant to the Preferred Stock Agreement) of the Borrower and its Subsidiaries for such period with respect to all outstanding
Debt of the Borrower and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to the
extent such net costs are allocable to such period in accordance with GAAP).

 

“Interest
Payment Date” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b)
with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to
the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest
Period.

 

“Interest
Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending
on the numerically corresponding day in the calendar month that is one, two, three or six months (or, if available to each Lender,
periods of nine or twelve months) thereafter, as the Borrower may elect; provided, that (a) if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such
next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding
Business Day, (b) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall
end on the last Business Day of the last calendar month of such Interest Period, (c) no Interest Period may have a term which would
extend beyond the Maturity Date and (d) the Borrower shall select Interest Periods so as not to require a payment or prepayment
of any Eurodollar Loan during an Interest Period for such Loan. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation
of such Borrowing.

 

    	12

    	 

    

 

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

 

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

 

“Investment”
means, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests
of any other Person or any agreement to make any such acquisition (including any “short sale” or any sale of any securities
at a time when such securities are not owned by the Person entering into such short sale); (b) the making of any deposit with,
or advance, loan or capital contribution to, assumption of Debt of, purchase or other acquisition of any other Debt of or equity
participation or interest in, or other extension of credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not exceeding ninety (90) days representing the purchase price of inventory
or supplies sold by such Person in the ordinary course of business); or (c) the purchase or acquisition (in one or a series of
transactions) of Property of another Person that constitutes a business unit.

 

“IRS”
means the U.S. Internal Revenue Service.

 

“Issuing Bank”
means WF and each Lender approved by the Administrative Agent and reasonably satisfactory to, or requested by, the Borrower that
agrees to act as an issuer of Letters of Credit hereunder, in each case, in its capacity as the issuer of Letters of Credit hereunder,
and its successors in such capacity as provided in Section 2.08(i). Any Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by its Affiliates, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.

 

“January 1
Reserve Report” has the meaning assigned to such term in Section 8.12(a).

 

“LC Commitment”
at any time means Five Million Dollars ($5,000,000.00).

 

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

 

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

 

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

 

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

 

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

 

    	13

    	 

    

 

“LIBO Rate”
means, with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum (rounder upwards,
if necessary, to the next 1/100 of 1%) determined on the basis of the rate for deposits in dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on such page
(or otherwise on such screen), the “LIBO Rate” shall be determined by reference to such other comparable publicly available
service for displaying the Eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability,
by reference to the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered
by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately
11:00 A.M., London time, two Business Days prior to the commencement of such Interest Period.

 

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

 

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

 

“Loan Party”
means the Borrower and each Guarantor.

 

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

 

“Majority
Lenders” means, at any time while no Loans or LC Exposure are outstanding, at least two (2) Lenders having greater than
fifty percent (50%) of the Aggregate Maximum Credit Amounts; and at any time while any Loans or LC Exposure is outstanding, at
least two (2) Lenders holding greater than fifty percent (50%) of the outstanding aggregate principal amount of the Loans or participation
interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c));
provided that the Maximum Credit Amounts of the Loans and participation interests in Letters of Credit of the Defaulting
Lenders (if any) shall be excluded from the determination of Majority Lenders.

 

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

 

“Material
Indebtedness” means Debt (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap
Agreements, of any one or more of any Loan Party in an aggregate principal amount exceeding $1,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of any Loan Party in respect of any Swap Agreement
at any time shall be the Swap Termination Value.

 

“Maturity
Date” means November 20, 2017.

 

    	14

    	 

    

 

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

 

“Minimum Collateral
Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances, an amount
equal to 105% of the Fronting Exposure of all Issuing Banks with respect to Letters of Credit issued and outstanding at such time
and (ii) if the Borrower agrees to deliver Cash Collateral consisting of property other than cash or deposit account balances,
an amount determined by the Administrative Agent and the Issuing Bank(s) in their sole discretion.

 

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

 

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

 

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

 

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

 

“Non-U.S.
Lender” means a Lender that is not a U.S. Person.

 

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

 

“Oil and Gas
Properties” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon
Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units
created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority)
which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements,
including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the production, sale,
purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and
under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents,
issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements,
hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests
and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real
or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating,
working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental
equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary
uses) and including any and all oil wells, gas wells, injection wells or other wells, 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.

 

    	15

    	 

    

 

“Organizational
Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or
equivalent or comparable constitutive documents with respect to such corporation’s jurisdiction); (b) with respect to any
limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement
of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and,
if applicable, any certificate or articles of formation or organization of such entity.

 

“Other Connection
Taxes” means with respect to any Credit Party, Taxes imposed as a result of a present or former connection between such
Credit Party and the jurisdiction imposing such Tax (other than connections arising from such Credit Party having executed, delivered,
become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged
in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes”
means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment
made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security
interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed
with respect to an assignment (other than an assignment made pursuant to Section 5.05).

 

“Participant”
has the meaning assigned to such term in Section 12.04(c).

 

“Participant
Register” has the meaning assigned to such term in Section 12.04(c).

 

“Patriot Act”
has the meaning assigned to such term in Section 12.16.

 

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

 

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

 

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

 

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

 

“Preferred
Stock” means the shares issued under the Preferred Stock Agreement.

 

“Preferred
Stock Agreement” means that certain convertible preferred stock agreement to be entered into among the Borrower and Arclight
Capital Partners, LLC pursuant to that letter of intent dated as of October 30, 2012 between the Borrower and Arclight Capital
Partners, LLC.

 

    	16

    	 

    

 

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

 

“Prohibited
Transaction” has the meaning assigned such term in Section 406 of ERISA and Section 4975(c) of the Code.

 

“Property”
means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including cash,
securities, accounts and contract rights.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Reportable
Event” means any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, with respect
to a Pension Plan, other than those events as to which notice is waived pursuant to DOL Reg. Section 4043 as in effect on the date
hereof (no matter how such notice requirement may be changed in the future).

 

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

 

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“Reserve Report”
means a report, in form and substance reasonably satisfactory to the Administrative Agent, setting forth, as of each January 1st
or July 1st, the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the Loan Parties, together
with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect
thereto as of such date based upon the economic assumptions consistent with SEC reporting requirements at the time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Secured Cash
Management Agreement” means a Cash Management Agreement between (a) any Loan Party and (b) a Secured Cash Management
Provider.

 

“Secured Cash
Management Provider” means, with respect to any Cash Management Agreement, a Lender, an Affiliate of a Lender, the Administrative
Agent or an Affiliate of the Administrative Agent who is the counterparty to any such Cash Management Agreement.

 

“Secured Obligations”
means any and all amounts owing or to be owing by any Loan Party to (a) to the Administrative Agent, any Issuing Bank or any Lender
under any Loan Document or (b) to any Secured Swap Provider or Secured Cash Management Provider and all renewals, extensions and/or
rearrangements of any of the foregoing, in each case, whether direct or indirect (including those acquired by assumption), absolute
or contingent, due or to become due, now existing or hereafter arising) (including interest accruing after the maturity of the
Loans and LC Disbursements and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding).

 

“Secured Swap
Agreement” means a Swap Agreement between (a) any Loan Party and (b) a Secured Swap Provider.

 

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“Secured Swap
Provider” means, with respect to any Swap Agreement, (a) a Lender or an Affiliate of a Lender who is the counterparty
to any such Swap Agreement with a Loan Party or (b) any Person who was a Lender or an Affiliate of a Lender at time when such Person
entered into any such Swap Agreement who is a counterparty to any such Swap Agreement with a Loan Party.

 

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

 

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

 

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

 

“Subsidiary”
means as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or
to “Subsidiaries” in this Agreement shall refer to a direct or indirect Subsidiary or Subsidiaries of the Borrower.

 

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

 

“Swap Termination
Value” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements have been closed
out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date
referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Agreements, as determined by the
counterparties to such Swap Agreements.

 

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

 

“Taxes”
means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

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

 

“Total Debt”
means, at any date, all Debt (excluding Debt described in clauses (i), (j) and (m) of such definition) of the Borrower and its
Consolidated Subsidiaries on a consolidated basis (excluding non-cash obligations under ASC 815).

 

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

 

“Transferee”
means any Assignee or Participant.

 

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

 

“U.S. Person”
means a certificate substantially in the form of Exhibit G-1, G-2, G-3 or G-4.

 

“U.S. Tax
Compliance Certificate” has the meaning assigned such term in Section 5.03(g)(ii)(B)(3).

 

“WF”
has the meaning assigned to such term in the preamble hereto.

 

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

 

    	20

    	 

    

 

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

 

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

 

Section
1.05.         Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters
hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished
to the Administrative Agent or the Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent
with the Financial Statements except for changes in which Borrower’s independent certified public accountants concur and
which are disclosed to Administrative Agent on the next date on which financial statements are required to be delivered to the
Lenders pursuant to Section 8.01(a); provided that, unless the Borrower and the Majority Lenders shall otherwise agree
in writing, no such change shall modify or affect the manner in which compliance with the covenants contained herein is computed
such that all such computations shall be conducted utilizing financial information presented consistently with prior periods.
Notwithstanding anything in this Agreement or any other Loan Document to the contrary, for the purposes of calculating compliance
with any covenant in this Agreement or any other Loan Document, no effect shall be given to any change in GAAP arising out of
a change described in the Proposed Accounting Standards Update to Leases (Topic 840) dated August 17, 2010 or a substantially
similar pronouncement.

 

ARTICLE
II

The
Credits

 

Section
2.01.         Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans to the Borrower during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (b) the
total Revolving Credit Exposures exceeding the total Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, repay and reborrow the Loans.

 

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Section
2.02.         Loans and Borrowings.

 

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

 

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

 

(c)  Minimum
Amounts; Limitation on Number of Borrowings.  At the commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. At the time
that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and
not less than $1,000,000; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section
2.08(e). Borrowings of more than one Type may be outstanding at the same time, provided that there shall not at any time
be more than a total of five (5) Eurodollar Borrowings outstanding. Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.

 

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

 

Section
2.03.         Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone or electronic communication approved by the Administrative
Agent (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, Denver, Colorado time, three Business Days before
the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 10:00 a.m., Denver, Colorado time, on
the date of the proposed Borrowing; provided that no such notice shall be required for any deemed request of an ABR Borrowing
to finance the reimbursement of an LC Disbursement as provided in Section 2.08(e). Each such telephonic (or electronic communication
approved by the Administrative Agent) Borrowing Request shall be irrevocable and must be confirmed promptly by hand delivery,
facsimile or e-mail to the Administrative Agent of a written Borrowing Request in substantially the form of Exhibit B and signed
by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with
Section 2.02:

 

    	22

    	 

    

 

(i)          the
aggregate amount of the requested Borrowing;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
2.04.         Interest Elections.

 

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

 

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

 

    	23

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
2.05.         Funding of Borrowings.

 

(a)  Funding
by Lenders. Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 10:00 a.m., Denver, Colorado time, to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing
Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.08(e)
shall be remitted by the Administrative Agent to the applicable Issuing Bank. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for its Loan in any particular place or manner or to constitute a representation by any Lender that it has
obtained or will obtain the funds for its Loan in any particular place or manner.

 

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

 

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

 

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

 

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

 

(i)          The
Borrower may at any time terminate, or from time to time reduce, the Aggregate Maximum Credit Amounts; provided that (A)
each reduction of the Aggregate Maximum Credit Amounts shall be in an amount that is an integral multiple of $1,000,000 and not
less than $5,000,000 and (B) the Borrower shall not terminate or reduce the Aggregate Maximum Credit Amounts if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 3.04, the total Revolving Credit Exposures would exceed the
total Commitments.

 

(ii)         The
Borrower shall notify the Administrative Agent of any election to terminate or reduce the Aggregate Maximum Credit Amounts under
Section 2.06(b)(i) at least three Business Days prior to the effective date of such termination or reduction, specifying such election
and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each notice delivered by the Borrower pursuant to this Section 2.06(b)(ii) shall be irrevocable; provided
that a notice of termination of the Aggregate Maximum Credit Amounts delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Aggregate
Maximum Credit Amounts shall be permanent and may not be reinstated. Each reduction of the Aggregate Maximum Credit Amounts pursuant
to this Section 2.06(b)(ii) shall be made ratably among the Lenders in accordance with each Lender’s Applicable Percentage.

 

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Section
2.07.         Borrowing Base.

 

(a)  Initial
Borrowing Base. For the period from and including the Effective Date to but excluding the first Redetermination Date, the amount
of the Borrowing Base shall be $27,500,000. Following the first Redetermination Date, the Borrowing Base shall be determined pursuant
to this Section 2.07. Notwithstanding the foregoing, the Borrowing Base may be subject to further adjustments from time to time
pursuant to Section 2.07(b), Section 2.07(c), Section 8.13(c) or Section 9.12(d).

 

(b)  Scheduled
and Interim Redeterminations. The Borrowing Base shall be redetermined semi-annually in accordance with this Section 2.07 (such
redeterminations, a “Scheduled Redetermination”), and, subject to Section 2.07(d), such redetermined Borrowing
Base shall become effective and applicable to the Borrower, the Agents, the Issuing Bank(s) and the Lenders on April 1st and October
1st of each year commencing April 1, 2013. In addition, the Borrower may, by notifying the Administrative Agent thereof, and the
Administrative Agent may, at the direction of the Required Lenders, by notifying the Borrower thereof, each elect to cause the
Borrowing Base to be redetermined (an “Interim Redetermination”) (i) one time during each 6 month period occurring
between any Scheduled Redeterminations and (ii) one additional time during any 12 month period, each in accordance with this Section
2.07.

 

(c)  Scheduled
and Interim Redetermination Procedure.

 

(i)          Each
Scheduled Redetermination and each Interim Redetermination shall be effectuated as follows: upon receipt by the Administrative
Agent of (A) the Reserve Report and the certificate required to be delivered by the Borrower to the Administrative Agent, in the
case of a Scheduled Redetermination, pursuant to Section 8.12(a) and (c), and, in the case of an Interim Redetermination, pursuant
to Sections 8.12(b) and (c), and (B) such other reports, data and supplemental information, including the information provided
pursuant to Section 8.12(c), as may, from time to time, be reasonably requested by the Administrative Agent or the Majority Lenders
(the Reserve Report, such certificate and such other reports, data and supplemental information being the “Engineering
Reports”), the Administrative Agent shall evaluate the information contained in the Engineering Reports and shall, in
good faith and in its sole discretion, propose a new Borrowing Base (the “Proposed Borrowing Base”) based upon
such information and such other information (including the status of title information with respect to the Oil and Gas Properties
as described in the Engineering Reports and the existence of any other Debt) as the Administrative Agent deems appropriate in its
sole discretion and consistent with its customary oil and gas lending criteria as it exists at the particular time. In no event
shall the Proposed Borrowing Base exceed the Aggregate Maximum Credit Amounts.

 

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

 

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

 

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(B)         in
the case of an Interim Redetermination, promptly, and in any event, before or on or about the fifteenth (15th) day after the Administrative
Agent has received the required Engineering Reports.

 

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

 

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

 

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

 

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

 

(e)  Potential
Adjustment of Borrowing Base Upon Termination of Swap Agreements. If the Borrower or any of its Subsidiaries shall terminate
or create any off-setting positions which have the economic effect of terminating any Swap Agreements (regardless of how evidenced)
upon which the Lenders relied in determining the Borrowing Base, and which would affect the Borrowing Base in an amount greater
than 5% of the then current Borrowing Base (after giving effect to any replacement Swap Agreements), then, within 10 Business Days
of such termination, the Borrowing Base shall be adjusted in an amount determined by the Administrative Agent equal to the economic
value of such Swap Agreements.

 

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Such amount shall then
become the Borrowing Base, until the next Scheduled Redetermination Date, the next Interim Redetermination Date or the next adjustment
to the Borrowing Base under Section 2.07(c), Section 8.13(c) or Section 9.12(d), whichever occurs first. Notwithstanding the foregoing,
no Scheduled Redetermination or Interim Redetermination shall become effective until the New Borrowing Base Notice related thereto
is received by the Borrower.

 

Section
2.08.         Letters of Credit.

 

(a)  General.
Subject to the terms and conditions set forth herein, the Borrower may request the issuance of dollar denominated Letters of Credit
for its own account or for the account of any Loan Party, in a form reasonably acceptable to the Administrative Agent and the applicable
Issuing Bank, at any time and from time to time during the period from the Effective Date until the day which is ten (10) Business
Days prior to the end of the Availability Period; provided that the Borrower may not request the issuance, amendment, renewal
or extension of Letters of Credit hereunder if a Borrowing Base Deficiency exists at such time or would exist as a result thereof.
In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the applicable
Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

 

(b)  Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or deliver by facsimile (or transmit
by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to the applicable
Issuing Bank and the Administrative Agent (not less than five (5) Business Days in advance of the requested date of issuance, amendment,
renewal or extension) a notice:

 

(i)          requesting
the issuance of a Letter of Credit or identifying the Letter of Credit to be amended, renewed or extended;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)  Expiration
Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is eighteen
months after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension of a Letter of Credit,
eighteen months after such renewal or extension), in each case unless consented to by the relevant Issuing Lender and the Administrative
Agent, and (ii) the date that is ten (10) Business Days prior to the Maturity Date.

 

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

 

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(e)  Reimbursement.
If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, Denver, Colorado time,
on the next Business Day after the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Denver, Colorado time, on the date of such LC Disbursement, or, if such notice has not been received
by the Borrower prior to such time on such date, then not later than 12:00 noon, Denver, Colorado time, two (2) Business Days after
the Borrower receives such notice; provided that, unless the Borrower has notified the relevant Issuing Bank and Administrative
Agent that it will reimburse such LC Disbursement on the date when the LC Disbursement is made and makes such reimbursement on
the next Business Day, the Borrower shall, subject to the conditions to Borrowing set forth herein, be deemed to have requested,
and the Borrower does hereby request under such circumstances, that such payment be financed with an ABR Borrowing in an equivalent
amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by
the resulting ABR Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender
of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable
Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.05 with respect to Loans made
by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt
by the Administrative Agent of any payment from the Borrower pursuant to this Section 2.08(e), the Administrative Agent shall distribute
such payment to the applicable Issuing Bank or, to the extent that Lenders have made payments pursuant to this Section 2.08(e)
to reimburse the applicable Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment
made by a Lender pursuant to this Section 2.08(e) to reimburse the applicable Issuing Bank for any LC Disbursement (other than
the funding of ABR Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation
to reimburse such LC Disbursement.

 

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

 

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

 

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

 

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

 

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

 

Section
2.09.         Cash Collateral.

 

(a)           At
any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative
Agent or an Issuing Bank (with a copy to the Administrative Agent), the Borrower shall Cash Collateralize the Fronting Exposure
of the applicable Issuing Bank with respect to such Defaulting Lender (determined after giving effect to Section 2.10(a)(iv)
and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount. The Borrower
may use proceeds of Borrowings for the provision of Cash Collateral (so long as no Borrowing Base Deficiency, Default or Event
of Default exists or would result therefrom).

 

(i)          Grant
of Security Interest. The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants
to the Administrative Agent, for the benefit of the Issuing Bank(s), and agrees to maintain, a first priority security interest
in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of LC Exposure,
to be applied pursuant to subsection (ii) below. If at any time the Administrative Agent determines that Cash Collateral is subject
to any right or claim of any Person other than the Administrative Agent and the Issuing Bank(s) as herein provided, or that the
total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, within 2 Business Days upon
demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient
to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

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(ii)         Application.
Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.09 or
Section 2.10 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation
to fund participations in respect of LC Exposure (including, as to Cash Collateral provided by a Defaulting Lender, any interest
accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may
otherwise be provided for herein.

 

(iii)        Termination
of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce the Fronting Exposure of the Issuing
Bank(s) shall no longer be required to be held as Cash Collateral pursuant to this Section 2.09 following (i) the elimination
of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii)
the determination by the Administrative Agent and the Issuing Bank(s) that there exists excess Cash Collateral; provided that,
subject to Section 2.10, the Person providing Cash Collateral and the Issuing Bank(s) may agree that Cash Collateral shall
be held to support future anticipated Fronting Exposure or other obligations; and provided further that to the extent that such
Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant
to the Loan Documents.

 

Section
2.10.         Defaulting Lenders.

 

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

 

(i)          Waivers
and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect
to this Agreement shall be restricted as set forth in the definition of Majority Lenders.

 

(ii)         Defaulting
Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account
of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article X or otherwise) or received
by the Administrative Agent from a Defaulting Lender pursuant to Section 12.08 shall be applied at such time or times as
may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting
Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting
Lender to the Issuing Bank(s) hereunder; third, to Cash Collateralize the Fronting Exposure of the Issuing Bank(s) with
respect to such Defaulting Lender in accordance with Section 2.09; fourth, as the Borrower may request (so long as
no Default or Event of Default exists), to the funding of any Loan or funded participation in respect of which such Defaulting
Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth,
if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to
(A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans and funded participations
under this Agreement and (B) Cash Collateralize the Issuing Banks’ future Fronting Exposure with respect to such Defaulting
Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.09; sixth,
to the payment of any amounts owing to the Lenders or the Issuing Bank(s) as a result of any judgment of a court of competent jurisdiction
obtained by any Lender or the Issuing Bank(s) against such Defaulting Lender as a result of such Defaulting Lender’s breach
of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any
amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against
such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and eighth,
to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (1) such payment
is a payment of the principal amount of any Loans or funded participations in Letters of Credit in respect of which such Defaulting
Lender has not fully funded its appropriate share, and (2) such Loans were made or the related Letters of Credit were issued at
a time when the conditions set forth in Section 6.02 were satisfied or waived, such payment shall be applied solely to pay
the Loans of, and funded participations in Letters of Credit owed to, all Non-Defaulting Lenders on a pro rata basis prior to being
applied to the payment of any Loans of, or funded participations in Letters of Credit owed to, such Defaulting Lender until such
time as all Loans and funded and unfunded participations in LC Exposure are held by the Lenders pro rata in accordance with the
Commitment under the Agreement without giving effect to Section 2.10(a)(iv). Any payments, prepayments or other amounts
paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral
pursuant to this Section 2.10(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably
consents hereto.

 

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(iii)        Certain
Fees.

 

(A)         No
Defaulting Lender shall be entitled to receive any commitment fee for any period during which that Lender is a Defaulting Lender
(and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting
Lender). Commitment fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to
Section 3.05(a).

 

(B)         Each
Defaulting Lender shall be entitled to receive Letter of Credit fees pursuant to Section 3.05(b) for any period during which
that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of
Credit for which it has provided Cash Collateral pursuant to Section 2.09.

 

(C)         With
respect to any commitment fee or letter of credit fee not required to be paid to any Defaulting Lender pursuant to clause (A) or
(B) above, the Borrower shall (1) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting
Lender with respect to such Defaulting Lender’s participation in LC Exposure that has been reallocated to such Non-Defaulting
Lender pursuant to clause (iv) below, (2) pay to each Issuing Bank, as applicable, the amount of any such fee otherwise payable
to such Defaulting Lender to the extent allocable to such Issuing Bank’s Fronting Exposure to such Defaulting Lender, and
(3) not be required to pay the remaining amount of any such fee.

 

(iv)        Reallocation
of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in LC Exposure
shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without
regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 6.02
are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent
at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time),
and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting
Lender’s Applicable Percentage of the Commitment. No reallocation hereunder shall constitute a waiver or release of any claim
of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim
of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

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(v)         Cash
Collateral. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall,
without prejudice to any right or remedy available to it hereunder or under law, Cash Collateralize the Issuing Banks’ Fronting
Exposure in accordance with the procedures set forth in Section 2.09.

 

(b)           Defaulting
Lender Cure. If the Borrower, the Administrative Agent and the Issuing Bank(s) agree in writing that a Lender is no longer
a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in
such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral),
such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such
other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations
in Letters of Credit to be held pro rata by the Lenders in accordance with the Commitments under this Agreement (without giving
effect to Section 2.10(a)(iv), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments
will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was
a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected
parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder
arising from that Lender having been a Defaulting Lender.

 

(c)            New
Letters of Credit. So long as any Lender is a Defaulting Lender, no Issuing Bank shall be required to issue, extend, renew
or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

 

ARTICLE
III

Payments of Principal and Interest; Prepayments; Fees

 

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

 

Section
3.02.         Interest.

 

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

 

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

 

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(c)  Post-Default
Rate. Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the
Borrower or any Guarantor hereunder or under any other Loan Document is not paid when due, whether at stated maturity, upon acceleration
or otherwise, and including any payments in respect of a Borrowing Base Deficiency under Section 3.04, then all Loans and other
amounts outstanding, shall, upon the request of the Required Lenders, as of the date of such failure to pay the relevant amount
when due or such later date determined by the Required Lenders, bear interest, after as well as before judgment, at a rate per
annum equal to two percent (2%) plus the rate applicable to ABR Loans as provided in Section 3.02(a), but in no event to exceed
the Highest Lawful Rate, until such time as such overdue Loans or other payments have been paid.

 

(d)  Interest
Payment Dates. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and on
the Termination Date; provided that (i) interest accrued pursuant to Section 3.02(c) shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than an optional prepayment of an ABR Loan prior to the Termination
Date), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment,
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion.

 

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

 

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

 

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

 

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

 

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

 

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Section
3.04.         Prepayments.

 

(a)  Optional
Prepayments. Subject to break funding costs payable pursuant to Section 5.02 and prior notice in accordance with Section 3.04(b),
the Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, in a minimum aggregate
amount of $100,000 or any integral multiple of $100,000 in excess thereof or if less than $100,000, the remaining balance of the
Borrowing.

 

(b)  Notice
and Terms of Optional Prepayment. The Borrower shall notify the Administrative Agent by telephone (confirmed by facsimile or
e-mail) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 10:00 a.m., Denver,
Colorado time, three Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing, not later
than 10:00 a.m., Denver, Colorado time, one Business Day before the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated
by Section 2.06(b), then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section
2.06(b). Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders
of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of
an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by
Section 3.02 and any amounts due under Section 5.02.

 

(c)  Mandatory
Prepayments.

 

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

 

(ii)         Upon
any redetermination of or adjustment to the amount of the Borrowing Base in accordance with Section 2.07 or Section 8.13(c), if
the total Revolving Credit Exposures exceeds the redetermined or adjusted Borrowing Base, then, after receiving notice from the
Administrative Agent by means of a New Borrowing Base Notice or notice of adjustment pursuant to Section 8.13(c), in each case,
of such Borrowing Base Deficiency (such date of receipt of notice, the “Deficiency Notification Date”), the
Borrower shall at its option:

 

(A)
within thirty (30) days of the Deficiency Notification Date (1) prepay the Borrowings in an aggregate principal amount equal to
such excess, and (2) if any excess remains after prepaying all of the Borrowings as a result of any LC Exposure, pay to the Administrative
Agent on behalf of the Lenders an amount equal to such excess to be held as Cash Collateral as provided in Section 2.08(j),

 

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(B)
promptly notify the Administrative Agent that it shall pay off such Borrowing Base Deficiency in installments and then, commencing
on the 30th day after the Deficiency Notification Date and same day of each month for the two months thereafter (or if any such
day is not a Business Day, the immediately preceding Business Day), prepay the Borrowings in an amount equal to one-third (1/3rd)
of such Borrowing Base Deficiency so that the Borrowing Base Deficiency is reduced to zero within 90 days of the Deficiency Notification
Date, or

 

(C)
within fifteen (15) days following the Deficiency Notification Date, submit (and pledge as Collateral) additional Oil and Gas Properties
owned by the Borrower or any of the other Loan Parties for consideration in connection with the determination of the Borrowing
Base which the Administrative Agent and the Required Lenders deem satisfactory, in their sole discretion, to eliminate such Borrowing
Base Deficiency;

 

provided
that, notwithstanding the options set forth above, in all cases, the Borrowing Base Deficiency must be eliminated on or prior to
the Termination Date.

 

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

 

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

 

(v)         Prepayments
pursuant to this Section 3.04(c) shall be accompanied by accrued interest to the extent required by Section 3.02.

 

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

 

Section
3.05.         Fees.

 

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

 

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(b)  Letter
of Credit Fees. The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee
with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Margin used to determine the
interest rate applicable to Eurodollar Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from and including the date of this Agreement to but excluding
the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, (ii) to each applicable Issuing Bank a fronting fee at the time of issuance of each Letter of Credit, which shall equal
the greater of (A) $500 or (B) 0.125% of the face amount of such Letter of Credit and (iii) to each Issuing Bank, for its own account,
its standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings
thereunder. Participation fees accrued through and including the last day of March, June, September and December of each year shall
be payable on such last day, commencing on the first such date to occur after the date of this Agreement; provided that
all such fees shall be payable on the Termination Date and any such fees accruing after the Termination Date shall be payable on
demand. Any other fees payable to any Issuing Bank pursuant to this Section 3.05(b) shall be payable within 10 days after demand.
All participation fees shall be computed on the basis of a year of 360 days unless such computation would exceed the Highest Lawful
Rate, in which case interest shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and shall be payable
for the actual number of days elapsed (including the first day but excluding the last day).

 

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

 

(d)  Other
Fees. The Borrower agrees to pay to the Administrative Agent other fees payable in the amount and at the times to be agreed
by the Administrative Agent and the Borrower.

 

ARTICLE
IV

Payments; Pro Rata Treatment; Sharing of Set-offs

 

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

 

(a)  Payments
by the Borrower. The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Section 5.01, Section 5.02, Section 5.03 or otherwise) prior
to 10:00 a.m., Denver, Colorado time, on the date when due, in immediately available funds, without defense, deduction, recoupment,
set-off or counterclaim. Fees, once paid, shall be fully earned and shall not be refundable under any circumstances. Any amounts
received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative
Agent at its offices specified in Section 12.01, except payments to be made directly to the applicable Issuing Bank as expressly
provided herein and except that payments pursuant to Section 5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made directly
to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of
any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be
made in dollars.

 

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(b)  Application
of Insufficient Payments. If at any time insufficient funds are received by and available to the Administrative Agent to pay
fully all amounts of principal, unreimbursed LC Disbursements, interest, fees and other amounts then due hereunder, such funds
shall be applied: first, ratably to reimbursement of expenses and indemnities provided for in this Agreement and the Security Instruments;
second, to accrued interest on the Loans; third, to fees; fourth, pro rata to outstanding principal of the Loans and unreimbursed
LC Disbursements; and fifth, if applicable, to serve as Cash Collateral to be held by the Administrative Agent to secure the LC
Exposure, in each case, ratably among the parties entitled thereto in accordance with the amounts then due to such parties.

 

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

 

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

 

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

 

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

 

ARTICLE
V

Increased Costs; Break Funding Payments; Taxes

 

Section
5.01.         Increased Costs.

 

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

 

(i)          subject
any Credit Party to any Taxes (other than (A) Indemnified Taxes and (B) Taxes described in clauses (b) through (e) of the definition
of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations,
or its deposits, reserves, other liabilities or capital attributable thereto;

 

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

 

(iii)        impose
on any Lender or any Issuing Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting
this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

 

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

 

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

 

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

 

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

 

(e)  Dodd-Frank
Act. Notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder or issued in connection therewith, and all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel Committee on Bank Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case
be deemed to be a Change in Law, regardless of the date enacted, adopted or issued.

 

Section
5.02.         Break Funding Payments.
In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan into an ABR Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan
on the date specified in any notice delivered pursuant hereto, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event or (d) the assignment of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 5.04(a). In the case of
a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event
not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event
to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for
the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period,
for dollar deposits of a comparable amount and period from other banks in the eurodollar market.

 

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

 

Section
5.03.         Taxes.

 

(a)  Defined
Terms. For purposes of this Section 5.03, the term “Lender” includes any Issuing Bank and the term “applicable
law” includes FATCA.

 

(b)  Payments
Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made
without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the
good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment
by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall
timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if
such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that, after
such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under
this Section 5.03), the amounts received with respect to this agreement equal the sum which would have been received had no such
deduction or withholding been made.

 

(c)  Payment
of Other Taxes by the Loan Parties. The Loan Parties shall (without duplication of amounts otherwise payable under this Section
5.03) timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative
Agent timely reimburse it for, Other Taxes.

 

(d)  Indemnification
by the Loan Parties. The Loan Parties shall (without duplication of amounts otherwise payable under this Section 5.03) jointly
and severally indemnify each Credit Party, within 10 days after written demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 5.03) payable or
paid by such Credit Party or required to be withheld or deducted from a payment to such Credit Party and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by
a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender,
shall be conclusive absent manifest error.

 

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(e)  Indemnification
by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i)
any Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative
Agent for such Taxes and without limiting the obligation of the Loan Parties to do so) and (ii) any Taxes attributable to such
Lender's failure to comply with the provisions of Section 12.04(c) relating to the maintenance of a Participant Register, in either
case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts
at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any
other source against any amount due to the Administrative Agent under this paragraph (e).

 

(f)  Evidence
of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this
Section 5.03, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

(g)  Status
of Lenders. (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made
under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by
the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower
or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or
the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation
(other than such documentation set forth in Section 5.03(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any
material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii)         Without
limiting the generality of the foregoing,

 

(A)         any
Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

(B)         any
Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in
such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent),
whichever of the following is applicable:

 

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(1)         in
the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect
to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction
of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any
other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)         executed
originals of IRS Form W-8ECI;

 

(3)         in
the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x)
a certificate substantially in the form of Exhibit G-1 to the effect that such Non-U.S. Lender is not a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y)
executed originals of IRS Form W-8BEN; or

 

(4)         to
the extent a Non-U.S. Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI,
IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or
other certification documents from each beneficial owner, as applicable; provided that if the Non-U.S. Lender is a partnership
and one or more direct or indirect partners of such Non-U.S. Lender are claiming the portfolio interest exemption, such Non-U.S.
Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on behalf of each such direct and
indirect partner;

 

(C)         any
Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in
such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent),
executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law
to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

 

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(D)         if
a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b)
of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed
by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed
by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply
with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA
or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

 

Each Lender agrees
that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update
such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do
so.

 

(h)  Treatment
of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund
of , or a credit which such party specifically elected to receive in lieu of a refund and which such party actually was able to
utilize for, any Taxes as to which it has been indemnified pursuant to this Section 5.03 (including by the payment of additional
amounts pursuant to this Section 5.03), it shall pay to the indemnifying party an amount equal to such refund or credit (but only
to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund or credit), net
of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund or credit). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay
such refund or credit to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event
will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of
which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund or credit had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be
construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

 

(i)  Survival.
Each party’s obligations under this Section 5.03 shall survive the resignation or replacement of the Administrative
Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction
or discharge of all obligations under the Loan Documents.

 

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

 

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Section
5.05.         Replacement of Lenders.
If (a) any Lender requests compensation under Section 5.01, (b) the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 5.03, (c) any Lender is a Defaulting Lender, (d)
any Lender has asserted that any adoption or change of the type described in Section 5.06 has occurred or (e) any Lender has not
approved a proposed waiver or amendment that requires the consent of all Lenders, all non-Defaulting Lenders or all Lenders affected
thereby, but which has been approved by Required Lenders (with, in the case of such determination, the percentage threshold set
forth in the definition of Required Lenders being deemed to be raised to 85%), then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse
(in accordance with and subject to the restrictions contained in Section 12.04(b)), all its interests, rights and obligations
under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 5.01 or payments required to be made pursuant to Section 5.03,
such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment
and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower
to require such assignment and delegation cease to apply.

 

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

 

ARTICLE
VI

 

Conditions
Precedent

 

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

 

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

 

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

 

(i)          be
reasonably satisfied that the Security Instruments create first priority, perfected Liens (except that Excepted Liens identified
in clauses (a) to (d) and (f) of the definition thereof, but subject to the provisos at the end of such definition may exist) on
at least 85% of the total value of the Oil and Gas Properties evaluated in the Initial Reserve Report; and

 

(ii)         have
received certificates, if appropriate, together with undated, blank stock powers for each such certificate, representing all of
the issued and outstanding Equity Interests of each Domestic Subsidiary and not less than 66% of all of the issued and outstanding
Equity Interests of each Foreign Subsidiary, which is directly owned by either the Borrower or a Domestic Subsidiary.

 

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

 

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

 

(e)  The
Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower in form and substance reasonably
satisfactory to the Administrative Agent certifying that (i) all government and third party approvals necessary in connection with
the Transactions have been obtained on satisfactory terms and (ii) no action or proceeding is pending or threatened in any court
or before any Governmental Authority seeking to enjoin or prevent the consummation of the Transactions contemplated hereby.

 

(f)  The
Administrative Agent shall have received certificates of insurance coverage of the Loan Parties in form and substance reasonably
satisfactory to the Administrative Agent evidencing that the Loan Parties are carrying insurance in accordance with Section 7.12.

 

(g)  The
Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower in form and substance reasonably
satisfactory to the Administrative Agent certifying that the Borrower and the Loan Parties will have no outstanding Debt for borrowed
money or outstanding payment obligations with respect to Disqualified Capital Stock other than the Secured Obligations under this
Agreement.

 

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(h)  The
Administrative Agent shall have received satisfactory evidence (including a customary pay off letter) that (i) all commitments
under the Existing Credit Agreements shall have been terminated in full and all amounts outstanding under the Existing Credit Agreements
shall have been paid in full, (ii) satisfactory arrangements shall have been made for the termination of all Liens granted in connection
therewith and (iii) the existing hedges of the Loan Parties have been terminated or novated to WF.

 

(i)  The
Administrative Agent shall have received (i) the financial statements referred to in Section 7.04(a), (ii) projections for the
next twelve (12) months for the Borrower and its Subsidiaries in form and substance reasonably acceptable to the Administrative
Agent and (iii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 8.12(c)(i)-(iii).

 

(j)  The
Administrative Agent shall have received all documentation and other information required by regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.

 

(k)  The
Administrative Agent shall have received an opinion of Davis Graham & Stubbs LLP, counsel to the Loan Parties, substantially
in a form and of substance reasonably acceptable to the Administrative Agent and an opinion of local counsel in each state where
Oil and Gas Properties included in the Borrowing Base are located, substantially in a form and of substance reasonably satisfactory
to the Administrative Agent.

 

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

 

(m)  The
Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties
of the Borrower and the Loan Parties for each of the following jurisdictions: Montana, Colorado, Delaware and any other jurisdiction
requested by the Administrative Agent; other than those being released on or prior to the Effective Date or Liens permitted by
Section 9.03.

 

(n)  The
Administrative Agent shall have received title information as the Administrative Agent may reasonably require satisfactory to the
Administrative Agent setting forth the status of title to at least 85% of the total value of the Oil and Gas Properties evaluated
in the Initial Reserve Report.

 

(o)  The
Administrative Agent shall be reasonably satisfied with the environmental condition of the Oil and Gas Properties of the Borrower
and the Loan Parties.

 

(p)  The
Administrative Agent shall have received such other certificates, documents, instruments and agreements as the Administrative Agent
shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents.

 

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The Administrative
Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank(s) to issue Letters of Credit hereunder shall
not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 12.02) at or prior to
4:00 p.m., Denver, Colorado time, on November 30, 2012 (and, in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
VII

Representations
and Warranties

 

The Borrower represents
and warrants to the Lenders that:

 

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

 

Section
7.02.         Authority; Enforceability.
The Transactions are within each Loan Party’s entity powers and have been duly authorized by all necessary entity and, if
required, equity holder action. Each Loan Document to which a Loan Party is a party has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation, as applicable, enforceable in accordance with its terms, subject to applicable
Debtor Relief Laws and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at
law.

 

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

 

Section
7.04.         Financial Condition; No Material Adverse Change.

 

(a)  The
Borrower has furnished to the Lenders (i) the audited consolidated balance sheet for the Borrower and its Consolidated Subsidiaries
and related statements of operations, stockholders’ equity, as applicable, and cash flows as of the end of and for the fiscal
year ended December 31, 2011, and (ii) the unaudited consolidated balance sheet for the Borrower and its Consolidated Subsidiaries
and related statements of operations, stockholders’ equity, as applicable, and cash flows as of the end of and for the fiscal
quarter ended June 30, 2012, which financial statements shall be prepared in accordance with GAAP. The financial statements in
clauses (i) and (ii) present fairly, in all material respects, the financial condition of Borrower and its Consolidated Subsidiaries
on a consolidated basis, as of the dates and for the periods set forth above in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the unaudited quarterly financial statements.

 

(b)  Since
December 31, 2011, there has been no event, development or circumstance that has had or could reasonably be expected to have a
Material Adverse Effect.

 

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

 

Section 7.05.         Litigation.

 

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

 

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

 

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

 

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

 

(b)  the
Borrower and the Guarantors have obtained all Environmental Permits required for their respective operations and each of their
Properties, with all such Environmental Permits being currently in full force and effect, and neither the Borrower nor any Guarantor
has received any written notice or otherwise has knowledge that any such existing Environmental Permit will be revoked or that
any application for any new Environmental Permit or renewal of any existing Environmental Permit will be protested or denied;

 

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

 

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

 

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

 

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

 

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

 

(h)  the
Borrower has provided or made available to Lenders complete and correct copies of all environmental site assessment reports, investigations,
studies, analyses, and correspondence on environmental matters (including matters relating to any alleged non-compliance with or
liability under Environmental Laws) that are in the Borrower’s or any Guarantor’s possession or control and relating
to their respective Properties or operations thereon.

 

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

 

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

 

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

 

(c)  No
Default has occurred and is continuing.

 

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

 

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

 

Section
7.10.         ERISA. 

 

(a)  Each
Plan is, and has been, operated, administered and maintained in substantial compliance with, and the Borrower and each ERISA Affiliate
have complied in all material respects with, ERISA, the terms of the applicable Plan and, where applicable, the Code.

 

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

 

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

 

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(d)  The
actuarial present value of the benefit liabilities under each Plan which is subject to Title IV of ERISA does not, as of the end
of the Borrower’s most recently ended fiscal year, exceed the current value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities by an amount that could reasonably
be expected to have a Material Adverse Effect. The term “actuarial present value of the benefit liabilities” shall
have the meaning specified in section 4041 of ERISA.

 

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

 

Section 7.11.         Disclosure;
No Material Misstatements. The Borrower have disclosed to the Administrative Agent and the Lenders all agreements, instruments
and corporate or other restrictions to which it or any Loan Party is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the written reports, financial
statements, certificates or other information furnished by or on behalf of the Borrower and the Guarantors to the Administrative
Agent or any Lender or any of their Affiliates in connection with the negotiation of this Agreement or any other Loan Document
or delivered hereunder or under any other Loan Document (as modified or supplemented by other information so furnished) contain
any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that, with respect to projected financial information,
the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable
at the time. There is no fact peculiar to the Loan Parties which could reasonably be expected to have a Material Adverse Effect
which has not been set forth in this Agreement or the Loan Documents or the other documents, certificates and statements furnished
to the Administrative Agent or the Lenders by or on behalf of the Loan Parties prior to, or on, the date hereof in connection
with the transactions contemplated hereby. There are no statements or conclusions in any Reserve Report which are based upon or
include misleading information or fail to take into account material information regarding the matters reported therein, it being
understood that projections concerning volumes attributable to the Oil and Gas Properties and production and cost estimates contained
in each Reserve Report are necessarily based upon professional opinions, estimates and projections and the Loan Parties do not
warrant that such opinions, estimates and projections will ultimately prove to have been accurate.

 

Section 7.12.         Insurance.
The Borrower has, and has caused all of its Loan Parties to have, (a) all insurance policies sufficient for the compliance by
each of them with all material Governmental Requirements and all material agreements and (b) insurance coverage, or self-insurance,
in at least amounts and against such risk (including public liability) that are usually insured against by companies similarly
situated and engaged in the same or a similar business for the assets and operations of the Borrower and the Loan Parties. Schedule
7.12, as of the date hereof, sets forth a list of all insurance maintained by the Borrower and all the Loan Parties. The Administrative
Agent and the Lenders have been named as additional insureds in respect of such liability insurance policies and the Administrative
Agent has been named as loss payee with respect to Property loss insurance.

 

Section 7.13.         Restriction
on Liens. Neither the Borrower nor any Loan Parties is a party to any material agreement or arrangement (other than Capital
Leases creating Liens permitted by Section 9.03(c), but then only on the Property subject of such Capital Lease), or subject to
any order, judgment, writ or decree, which either restricts or purports to restrict its ability to grant Liens to the Administrative
Agent and the Lenders on or in respect of their Properties to secure the Secured Obligations and the Loan Documents.

 

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Section 7.14.         Subsidiaries.
Except as set forth on Schedule 7.14 or as disclosed in writing to the Administrative Agent (which shall promptly furnish
a copy to the Lenders), which shall be a supplement to Schedule 7.14, there are no other Subsidiaries of the Borrower.

 

Section 7.15.         Foreign
Operations. The Borrower and the Loan Parties do not own any Oil and Gas Properties not located within the geographical boundaries
of the United States.

 

Section 7.16.         Location
of Business and Offices. The Borrower’s jurisdiction of organization is Montana; the name of the Borrower as listed
in the public records of its jurisdiction of organization is Emerald Oil, Inc.; and the organizational identification number of
the Borrower in its jurisdiction of organization is D-215504 (or, in each case, as set forth in a notice delivered to the Administrative
Agent pursuant to Section 8.01(l) in accordance with Section 12.01). The Borrower’s principal place of business and chief
executive offices are located at the address specified in Section 12.01 (or as set forth in a notice delivered pursuant to Section
8.01(l) and Section 12.01(c)). Each Loan Party’s jurisdiction of organization, name as listed in the public records of its
jurisdiction of organization, organizational identification number in its jurisdiction of organization, and the location of its
principal place of business and chief executive office is stated on Schedule 7.14 (or as set forth in a notice delivered
pursuant to Section 8.01(l)).

 

Section 7.17.         Properties;
Titles, Etc.

 

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

 

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

 

(c)  The
rights and Properties presently owned, leased or licensed by the Loan Parties including all easements and rights of way, include
all rights and Properties necessary to permit the Loan Parties to conduct their business in all material respects in the same manner
as its business has been conducted prior to the date hereof.

 

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

 

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

 

Section 7.18.         Maintenance
of Properties. Except for such acts or failures to act as could not be reasonably expected to have a Material Adverse Effect,
the Oil and Gas Properties (and Properties unitized therewith) of the Loan Parties have been maintained, operated and developed
in a good and workmanlike manner and in conformity with all Governmental Requirements and in conformity with the provisions of
all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming
a part of the Oil and Gas Properties of the Loan Parties. Specifically in connection with the foregoing, except for those as could
not be reasonably expected to have a Material Adverse Effect, (i) no Oil and Gas Property of the Loan Parties is subject to having
allowable production reduced below the full and regular allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (ii) none of the wells comprising a part of the Oil and
Gas Properties (or Properties unitized therewith) of the Loan Parties is deviated from the vertical more than the maximum permitted
by Governmental Requirements, and such wells are, in fact, bottomed under and are producing from, and the well bores are wholly
within, the Oil and Gas Properties (or in the case of wells located on Properties unitized therewith, such unitized Properties)
of the Loan Parties. All pipelines, wells, gas processing plants, platforms and other material improvements, fixtures and equipment
owned in whole or in part by the Loan Parties that are necessary to conduct normal operations are being maintained in a state
adequate to conduct normal operations, and with respect to such of the foregoing which are operated by the Loan Parties in a manner
consistent with the Loan Parties’ past practices (other than those the failure of which to maintain in accordance with this
Section 7.17 could not reasonably be expected to have a Material Adverse Effect).

 

Section 7.19.         Gas
Imbalances. Except as set forth on Schedule 7.19 or on the most recent certificate delivered pursuant to Section 8.12(c),
on a net basis there are no gas imbalances which would require the Borrower or any of its Restricted Subsidiaries to deliver Hydrocarbons
produced from their Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor exceeding
two percent (2.0%) of the aggregate volumes of Hydrocarbons (on an Mcf equivalent basis) listed in the most recent Reserve Report.

 

Section 7.20.         Marketing
of Production. Except for contracts listed and in effect on the date hereof on Schedule 7.20, and thereafter either
disclosed in writing to the Administrative Agent or included in the most recently delivered Reserve Report (with respect to all
of which contracts (a) the Loan Parties are receiving a price for all production sold thereunder which is computed substantially
in accordance with the terms of the relevant contract and are not having deliveries curtailed substantially below the subject
Property’s delivery capacity) and (b) no material agreements exist which are not cancelable on 60 days notice or less without
penalty or detriment for the sale of production from the Loan Parties’ Hydrocarbons (including calls on or other rights
to purchase, production, whether or not the same are currently being exercised) that (i) pertain to the sale of production at
a fixed price and (ii) have a maturity or expiry date of longer than six (6) months from the date hereof.

 

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Section 7.21.         Security
Documents. The Security Instruments are effective to create in favor of the Administrative Agent, for the benefit of the Lenders,
a legal, valid and enforceable security interest in the Mortgaged Property and proceeds thereof. The Secured Obligations are and
shall be at all times secured by a legal, valid and enforceability perfected first priority Liens in favor of the Administrative
Agent, covering and encumbering the Mortgaged Properties and other Properties pledged pursuant to the Security Instruments, to
the extent such Liens may be perfected by the recording of a mortgage, the filing of a UCC financing statement or by possession
(in each case, to the extent available in the applicable jurisdiction); provided that, except in the case of pledged Equity
Interests or as otherwise provided herein, Liens permitted by Section 9.03 may exist).

 

Section 7.22.         Swap
Agreements. Schedule 7.22, as of the date hereof, and after the date hereof, each report required to be delivered by
the Borrower pursuant to Section 8.01(d), sets forth, a true and complete list of all Swap Agreements of the Loan Parties, the
material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark
to market value thereof, all credit support agreements relating thereto (including any margin required or supplied) and the counterparty
to each such agreement.

 

Section 7.23.         Use
of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used to acquire oil and gas assets,
refinance existing debt, provide working capital for exploration and production operations, for general corporate purposes of
the Borrower and its Subsidiaries and to pay fees and expenses associated with the Transactions. No Loan Party is engaged principally,
or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds
of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

 

Section 7.24.         Solvency.
After giving effect to the transactions contemplated hereby, (a) the aggregate assets (after giving effect to amounts that could
reasonably be received by reason of indemnity, offset, insurance or any similar arrangement), at a fair valuation, of the Loan
Parties, taken as a whole, will exceed the aggregate Debt of the Loan Parties on a consolidated basis, as the Debt becomes absolute
and matures, (b) each Loan Party will not have incurred or intended to incur, and will not believe that it will incur, Debt beyond
its ability to pay such Debt (after taking into account the timing and amounts of cash to be received by it and the amounts to
be payable on or in respect of its liabilities, and giving effect to amounts that could reasonably be received by reason of indemnity,
offset, insurance or any similar arrangement) as such Debt becomes absolute and matures and (c) each Loan Party will not have
(and will have no reason to believe that it will have thereafter) unreasonably small capital for the conduct of its business.

 

Section 7.25.         OFAC.
Neither the Loan Parties, nor any director, officer, agent, employee or Affiliate of the Loan Parties is currently subject to
any material U.S. sanctions administered by U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”),
and the Borrower will not directly or indirectly use the proceeds from the Borrowings or lend, contribute or otherwise make available
such proceeds to any Loan Party, joint venture partner or other Person, for the purpose of financing the activities of any Person
currently subject to any U.S. sanctions administered by OFAC.

 

Section 7.26.         Anti-Terrorism
Laws. (a) None of the Loan Parties or, to the knowledge of any of the Borrower, any of their Affiliates is in violation of
any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107 56.

 

(b)          No
Loan Party or, to the knowledge of the Borrower, their respective brokers or other agents acting or benefiting in any capacity
in connection with the Loans is any of the following:

 

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(i)          a
Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

 

(ii)         a
Person or entity owned or controlled by, or acting for or on behalf of, any Person or entity that is listed in the annex to, or
is otherwise subject to the provisions of, the Executive Order;

 

(iii)        a
Person or entity with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law;

 

(iv)         a
Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive
Order; or

 

(v)          a
Person or entity that is named as a “specially designated national and blocked person” on the most current list published
by the U.S. Treasury Department Office of Foreign Assets Control at its official website or any replacement website or other replacement
official publication or such list.

 

(c)          No
Loan Party or, to the knowledge of the Borrower, any of its brokers or other agents acting in any capacity in connection with the
Loans (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit
of any Person described in clause (b) above, (ii) deals in, or otherwise engages in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

 

ARTICLE
VIII

Affirmative
Covenants

 

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

 

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

 

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

 

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

 

(c)  Certificate
of Financial Officer — Compliance. Concurrently with any delivery of financial statements under Section 8.01(a) or Section
8.01(b), commencing with the delivery of financial statements for the fiscal year ending December 31, 2012, a certificate of a
Financial Officer of the Borrower in substantially the form of Exhibit D hereto (i) certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto,
(ii) setting forth reasonably detailed calculations demonstrating compliance with Section 9.01 and (iii) stating whether any change
in GAAP or in the application thereof has occurred since the date of the most recently delivered financial statements referred
to in Section 7.04(a) and (b) and, if any such change has occurred, specifying the effect of such change on the financial statements
accompanying such certificate.

 

(d)  Certificate
of Financial Officer – Swap Agreements. Concurrently with the delivery of each Reserve Report hereunder, a certificate
of a Financial Officer, in form and substance satisfactory to the Administrative Agent, setting forth as of the last Business Day
of such fiscal quarter or fiscal year, a true and complete list of all Swap Agreements of each Loan Party, the material terms thereof
(including the type, term, effective date, termination date and notional amounts or volumes), the net mark-to-market value therefor,
any new credit support agreements relating thereto not listed on Schedule 7.22, any margin required or supplied under any
credit support document, and the counterparty to each such agreement.

 

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

 

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

 

(g)  SEC
and Other Filings; Reports to Shareholders. Promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by any Loan Party with the SEC, or with any national securities exchange, or
distributed by a Loan Party to its shareholders generally, as the case may be. Documents required to be delivered pursuant to Section
8.01 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which a Loan Party
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).

 

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

 

(i)  Lists
of Purchasers. Concurrently with the delivery of any Reserve Report to the Administrative Agent pursuant to Section 8.12,
a list of all Persons purchasing Hydrocarbons from any Loan Party.

 

(j)  Notice
of Sales of Oil and Gas Properties and Unwinds of Swap Agreements. In the event the Borrower or any other Loan Party intends
to sell, transfer, assign or otherwise dispose of any Oil or Gas Properties with a fair market value in excess of $1,000,000 (in
a single transaction or in multiple transactions over any three month period) or terminate, unwind, cancel or otherwise dispose
of Swap Agreements, in each case, in accordance with Section 9.12, prior written notice of the foregoing, the price thereof, in
the case of Oil and Gas Properties, and the anticipated decline in the mark-to-market value thereof or net cash proceeds therefrom,
in the case of Swap Agreements, and the anticipated date of closing and any other details thereof reasonably requested by the Administrative
Agent or any Lender.

 

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

 

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

 

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

 

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

 

(o)  Other
Requested Information. Promptly following any request therefor, such other information regarding the operations, business affairs
and financial condition of the Borrower or any Subsidiary (including any Plan or Multiemployer Plan and any reports or other information
required to be filed under ERISA), or compliance with the terms of this Agreement or any other Loan Document, as the Administrative
Agent or any Lender may reasonably request.

 

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

 

(a)  the
occurrence of any Default;

 

(b)  the
filing or commencement of, or the threat in writing of, any action, suit, proceeding, investigation or arbitration by or before
any arbitrator or Governmental Authority against or affecting the Loan Parties thereof not previously disclosed in writing to the
Lenders or any material adverse development in any action, suit, proceeding, investigation or arbitration (whether or not previously
disclosed to the Lenders) that, in either case, if adversely determined, could reasonably be expected to result in a Material Adverse
Effect;

 

(c)  the
occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected
to result in liability of the Borrower or any Loan Party in an aggregate amount exceeding $500,000; and

 

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

 

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

 

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

 

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

 

Section 8.05.         Performance
of Obligations under Loan Documents. The Borrower will pay the Loans according to the reading, tenor and effect thereof, and
cause each other Loan Party to, do and perform every act and discharge all of the obligations to be performed and discharged by
them under the Loan Documents, including this Agreement, at the time or times and in the manner specified.

 

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

 

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(a)  operate
its Oil and Gas Properties and other material Properties or cause such Oil and Gas Properties and other material Properties to
be operated in accordance with the customary practices of the industry and in compliance with all applicable contracts and agreements
and in compliance with all Governmental Requirements, including applicable pro ration requirements and Environmental Laws, and
all applicable laws, rules and regulations of every other Governmental Authority from time to time constituted to regulate the
development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons and other minerals therefrom,
except, in each case, where the failure to comply could not reasonably be expected to have a Material Adverse Effect.

 

(b)  preserve,
maintain and keep in good repair, working order and efficiency (ordinary wear and tear excepted) all of its material Oil and Gas
Properties and other Properties material to the conduct of its business, including all equipment, machinery and facilities.

 

(c)  promptly
pay and discharge, or use commercially reasonable efforts to cause to be paid and discharged, all delay rentals, royalties, expenses
and indebtedness accruing under the leases or other agreements affecting or pertaining to its Oil and Gas Properties and will do
all other things necessary to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder.

 

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

 

(e)  operate
its Oil and Gas Properties and other material Properties or use commercially reasonable efforts to cause such Oil and Gas Properties
and other material Properties to be operated in accordance with the practices of the industry and in material compliance with all
applicable contracts and agreements and in compliance in all material respects with all Governmental Requirements.

 

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

 

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

 

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

 

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

 

Section 8.10.         Environmental
Matters.

 

(a)  The
Borrower shall at its sole expense: (i) comply, and shall cause its Properties and operations and each other Loan Party and each
other Loan Party’s Properties and operations to comply, with all applicable Environmental Laws, the breach of which Environmental
Laws could be reasonably expected to have a Material Adverse Effect; (ii) not Release, and shall cause each other Loan Party not
to Release, any Hazardous Material, on, under, about or from any of the Borrower’s or the other Loan Parties’ Properties
or any other Property to the extent caused by the Borrower’s or any of the other Loan Parties’ operations except in
compliance with applicable Environmental Laws, the Release of which could reasonably be expected to have a Material Adverse Effect;
(iii) timely obtain or file, and shall cause each other Loan Party to timely obtain or file, all notices, and Environmental Permits,
if any, required under applicable Environmental Laws to be obtained or filed in connection with the operation or use of the Borrower’s
or the other Loan Parties’ Properties, which failure to obtain or file could reasonably be expected to have a Material Adverse
Effect; (iv) promptly commence and diligently prosecute to completion, and shall cause each of other Loan Party to promptly commence
and diligently prosecute to completion, any assessment, evaluation, investigation, monitoring, containment, cleanup, removal, repair,
restoration, remediation or other remedial obligations (collectively, the “Remedial Work”) in the event any Remedial
Work is required or reasonably necessary under applicable Environmental Laws because of or in connection with the actual or suspected
past, present or future disposal or other Release of any Hazardous Materials on, under, about or from any of the Borrower’s
or the other Loan Parties’ Properties, which failure to commence and diligently prosecute to completion could reasonably
be expected to have a Material Adverse Effect; and (v) establish and implement, and shall cause each the other Loan Party to establish
and implement, such policies of environmental audit and compliance as may be necessary to continuously determine and assure that
the Borrower’s and the other Loan Parties’ obligations under this Section 8.10(a) are timely and fully satisfied, which
failure to establish and implement could reasonably be expected to have a Material Adverse Effect.

 

(b)  The
Borrower will promptly, but in no event later than five days of the occurrence of a triggering event, notify the Administrative
Agent and the Lenders in writing of any threatened action, investigation or inquiry by any Governmental Authority or any threatened
demand or lawsuit by any landowner or other third party against the Borrower or the other Loan Parties or their Properties of which
the Borrower has knowledge in connection with any Environmental Laws (excluding routine testing and corrective action) if the Borrower
reasonably anticipates that such action will result in liability (whether individually or in the aggregate) in excess of $500,000,
not fully covered by insurance, subject to normal deductibles.

 

Section 8.11.         Further
Assurances.

 

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

 

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

 

Section 8.12.         Reserve
Reports.

 

(a)  On
or before March 1st and September 1st of each year, the Borrower shall furnish to the Administrative Agent and the Lenders
a Reserve Report evaluating the Oil and Gas Properties of the Borrower and the other Loan Parties as of the immediately preceding
January 1st and July 1st. The Reserve Report as of January 1st delivered on or before March 1st of each year (the “January
1 Reserve Report”) shall be prepared by one or more Approved Petroleum Engineers, and each other Reserve Report of each
year may be prepared by one or more Approved Petroleum Engineers or internally under the supervision of the chief engineer of the
Borrower who shall certify such Reserve Report to be true and accurate and to have been prepared in accordance with the procedures
used in the immediately preceding January 1 Reserve Report.

 

(b)  In
the event of an Interim Redetermination, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report
prepared by or under the supervision of the chief engineer of the Borrower who shall certify such Reserve Report to be true and
accurate and to have been prepared in accordance with the procedures used in the immediately preceding January 1 Reserve Report.
For any Interim Redetermination requested by the Administrative Agent or the Borrower pursuant to Section 2.07(b), the Borrower
shall provide such Reserve Report with an “as of” date as required by the Administrative Agent as soon as possible,
but in any event no later than thirty (30) days following the receipt of such request.

 

(c)  With
the delivery of each Reserve Report, the Borrower shall provide to the Administrative Agent and the Lenders a certificate from
a Responsible Officer certifying that in all material respects: (i) the information contained in the Reserve Report and any other
information delivered in connection therewith is true and correct, (ii) the Borrower or the other Loan Parties own good and defensible
title to the Oil and Gas Properties evaluated in such Reserve Report and such Properties are free of all Liens except for Liens
permitted by Section 9.03, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances
in excess of the volume specified in Section 7.19 with respect to its Oil and Gas Properties evaluated in such Reserve Report which
would require the Borrower or any other Loan Party to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties
at some future time without then or thereafter receiving full payment therefor, (iv) none of their Oil and Gas Properties have
been sold since the date of the last Borrowing Base determination except as set forth on an exhibit to the certificate, which exhibit
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 all marketing agreements entered into subsequent to the later of the date hereof or the most recently
delivered Reserve Report which the Borrower could reasonably be expected to have been obligated to list on Schedule 7.20
had such agreement been in effect on the date hereof and (vi) attached thereto is a schedule of the Oil and Gas Properties evaluated
by such Reserve Report that are Mortgaged Properties and demonstrating the percentage of the total value of the Oil and Gas Properties
that the value of such Mortgaged Properties represent and that such percentage is in compliance with Section 8.14(a).

 

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Section 8.13.         Title
Information.

 

(a)  On
or before the delivery to the Administrative Agent and the Lenders of each Reserve Report required by Section 8.12(a), the Borrower
will deliver title information in form and substance acceptable to the Administrative Agent covering enough of the Oil and Gas
Properties evaluated by such Reserve Report that were not included in the immediately preceding Reserve Report, so that the Administrative
Agent shall have received together with title information previously delivered to the Administrative Agent, satisfactory title
information on at least 85% of the total value of the Oil and Gas Properties evaluated by such Reserve Report.

 

(b)  If
the Borrower has provided title information for additional Properties under Section 8.13(a), the Borrower shall, within 60 days
of notice from the Administrative Agent that title defects or exceptions exist with respect to such additional Properties, either
(i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by Section
9.03 raised by such information, (ii) substitute acceptable Mortgaged Properties with no title defects or exceptions except for
Excepted Liens (other than Excepted Liens described in clauses (e), (g) and (h) of such definition) having an equivalent value
or (iii) deliver title information in form and substance acceptable to the Administrative Agent so that the Administrative Agent
shall have received, together with title information previously delivered to the Administrative Agent, satisfactory title information
on at least 85% of the value of the Oil and Gas Properties evaluated by such Reserve Report.

 

(c)  If
the Borrower is unable to cure any title defect requested by the Administrative Agent or the Lenders to be cured within the 60-day
period or the Borrower does not comply with the requirements to provide acceptable title information covering 85% of the value
of the Oil and Gas Properties evaluated in the most recent Reserve Report, such default shall not be a Default, but instead the
Administrative Agent and/or the Majority Lenders shall have the right to exercise the following remedy in their sole discretion
from time to time, and any failure to so exercise this remedy at any time shall not be a waiver as to future exercise of the remedy
by the Administrative Agent or the Lenders. To the extent that the Administrative Agent or the Majority Lenders are not satisfied
with title to any Mortgaged Property after the 60-day period has elapsed, such unacceptable Mortgaged Property shall not count
towards the 85% requirement, and the Administrative Agent may send a notice to the Borrower and the Lenders that the then outstanding
Borrowing Base shall be reduced by an amount as determined by the Required Lenders to cause the Borrower to be in compliance with
the requirement to provide acceptable title information on 85% of the value of the Oil and Gas Properties. This new Borrowing Base
shall become effective immediately after receipt of such notice.

 

Section 8.14.         Additional
Collateral; Additional Guarantors.

 

(a)  In
connection with each redetermination of the Borrowing Base, the Borrower shall review the Reserve Report and the list of current
Mortgaged Properties (as described in Section 8.12(c)(vi)) to ascertain whether the Mortgaged Properties represent at least 85%
of the total value of the Oil and Gas Properties evaluated in the most recently completed Reserve Report after giving effect to
exploration and production activities, acquisitions, dispositions and production. In the event that the Mortgaged Properties do
not represent at least 85% of such total value, then the Borrower shall, and shall cause the other Loan Parties to, grant, within
thirty (30) days of delivery of the certificate required under Section 8.12(c), to the Administrative Agent as security for the
Secured Obligations a first-priority Lien interest (provided that Excepted Liens of the type described in clauses (a) to (d) and
(f) of the definition thereof may exist, but subject to the provisos at the end of such definition) on additional Oil and Gas Properties
not already subject to a Lien of the Security Instruments such that after giving effect thereto, the Mortgaged Properties will
represent at least 85% of such total value. All such Liens will be created and perfected by and in accordance with the provisions
of deeds of trust, security agreements and financing statements or other Security Instruments, all in form and substance reasonably
satisfactory to the Administrative Agent and in sufficient executed (and acknowledged where necessary or appropriate) counterparts
for recording purposes.

 

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(b)  The
Borrower shall promptly cause each (i) newly created or acquired Domestic Subsidiary that is a Wholly-Owned Subsidiary or (ii)
Loan Party that guarantees other Debt of any Loan Party to guarantee the Secured Obligations pursuant to the Guaranty Agreement.
In connection with any such guaranty, the Borrower shall, or shall cause: (A) such Domestic Subsidiary that is a Wholly-Owned Subsidiary
that guarantees other Debt of any Loan Party to execute and deliver a supplement to the Guaranty Agreement, (B) the parent(s) of
such Domestic Subsidiary to pledge all of the Equity Interests of such Domestic Subsidiary (including delivery (if applicable)
of original certificates evidencing the Equity Interests of such Domestic Subsidiary, together with an appropriate undated stock
powers for each certificate duly executed in blank by the registered owner thereof) and (C) such parent(s) or Domestic Subsidiary,
as applicable, to execute and deliver such other additional closing documents, certificates and legal opinions as shall reasonably
be requested by the Administrative Agent.

 

(c)  In
the event that any Loan Party becomes the owner of a first tier Foreign Subsidiary, then such Loan Party shall (i) pledge 66% of
all the Equity Interests of such Foreign Subsidiary (including delivery of original stock certificates evidencing such Equity Interests
of such Foreign Subsidiary, together with appropriate stock powers for each certificate duly executed in blank by the registered
owner thereof) and (ii) (along with such Foreign Subsidiary) execute and deliver such other additional closing documents, certificates
and legal opinions as shall reasonably be requested by the Administrative Agent.

 

Section 8.15.         ERISA
Compliance. The Borrower will promptly furnish and will cause each Subsidiary and any ERISA Affiliate to promptly furnish
to the Administrative Agent (i) immediately upon becoming aware of the occurrence of any ERISA Event or of any Prohibited Transaction,
which could reasonably be expected to result in liability of the Borrower or any other Loan Party in an aggregate amount exceeding
$500,000, in connection with any Plan or any trust created thereunder, a written notice of the Borrower or such other Loan Party
or ERISA Affiliate, as the case may be, specifying the nature thereof, what action such Person is taking or proposes to take with
respect thereto, and, when known, any action taken or proposed by the Internal Revenue Service, the Department of Labor or the
PBGC with respect thereto, and (ii) immediately upon receipt thereof, copies of any notice of the PBGC’s intention to terminate
or to have a trustee appointed to administer any Plan. With respect to each Plan (other than a Multiemployer Plan), the Borrower
will, and will cause each Subsidiary and ERISA Affiliate to, (i) satisfy in full and in a timely manner, without incurring any
late payment or underpayment charge or penalty and without giving rise to any lien, all of the contribution and funding requirements
of section 412 of the Code and of section 302 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.
Promptly following receipt thereof, the Borrower will promptly furnish and will cause each Subsidiary and any ERISA Affiliate
to promptly furnish to the Administrative Agent copies of any documents described in Sections 101(k) or 101(l) of ERISA that any
Loan Party or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided, that if the Loan Parties
or any of their ERISA Affiliates have not requested such documents or notices from the administrator or sponsor of the applicable
Multiemployer Plan, then, upon reasonable request of the Administrative Agent, the Loan Parties and/or their ERISA Affiliates
shall promptly make a request for such documents or notices from such administrator or sponsor and the Borrower shall provide
copies of such documents and notices to the Administrative Agent promptly after receipt thereof.

 

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

 

Section 8.17.         Preferred
Stock. Prior to the issuance of the Preferred Stock, the Administrative Agent shall be reasonably satisfied with the terms
and conditions of the Preferred Stock Agreement in its final form.

 

ARTICLE
IX

Negative
Covenants

 

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

 

Section 9.01.         Financial
Covenants.

 

(a)  Ratio
of Total Debt to EBITDAX. The Borrower will not, as of the last day of any fiscal quarter, commencing with the quarter ending
December 31, 2012, permit its ratio of Total Debt as of such date to EBITDAX for the four fiscal quarters ending on such date to
be greater than 3.5 to 1.0; provided that, for purposes of this Section 9.01(a), EBITDAX for the four fiscal quarters ending
(i) December 31, 2012, shall equal EBITDAX for the fiscal quarter ending on such date multiplied by four (4), (ii) March 31, 2013,
shall equal EBITDAX for the two fiscal quarters ending on such date multiplied by two (2) and (iii) June 30, 2013, shall equal
EBITDAX for the three fiscal quarters ending on such date multiplied by four (4) and divided by three (3).

 

(b)  Current
Ratio. The Borrower will not, as of the last day of any fiscal quarter, commencing with the quarter ending December 31, 2012,
permit its ratio of (i) consolidated current assets (including the unused amount of the total Commitments, but excluding non-cash
current assets under ASC 815) to (ii) consolidated current liabilities (excluding non-cash current obligations under ASC 815, reclamation
obligations to the extent classified as current liabilities under GAAP, and current maturities under this Agreement) to be less
than 1.0 to 1.0.

 

(c)  Fixed
Charge Coverage Ratio. The Borrower will not, as of the last day of any fiscal quarter, commencing with the quarter ending
December 31, 2012, permit its Fixed Charge Coverage Ratio for any four consecutive quarters to be less than 3:1.

 

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Section 9.02.         Debt.
The Borrower will not, and will not permit any other Loan Party to, incur, create, assume or suffer to exist any Debt, except:

 

(a)  the
Loans or other Secured Obligations arising under the Loan Documents or any guaranty of or suretyship arrangement for the Loans
or other Secured Obligations arising under the Loan Documents.

 

(b)  Debt
of any Loan Party under Capital Leases not exceed $1,000,000.

 

(c)  Debt
associated with bonds or surety obligations required by Governmental Requirements in connection with the operation of the Oil and
Gas Properties.

 

(d)  Debt
between (i) the Borrower and its Subsidiaries which are Loan Parties and (ii) the Subsidiaries of the Borrower which are Loan Parties.

 

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

 

(f)  the
Preferred Stock.

 

(g)  other
Debt not to exceed $1,000,000 in the aggregate at any one time outstanding.

 

Section 9.03.         Liens.
The Borrower will not, and will not permit any other Loan Party to, create, incur, assume or permit to exist any Lien on any of
its Properties (now owned or hereafter acquired), except:

 

(a)  Liens
securing the payment of any Secured Obligations.

 

(b)  Liens
existing on the Effective Date and disclosed on Schedule 9.03 and Excepted Liens.

 

(c)  Liens
securing Capital Leases permitted by Section 9.02(d) but only on the Property that is the subject of any such lease.

 

(d)  other
Liens on Property not constituting collateral for the Secured Obligations not to exceed $1,000,000 in the aggregate at any one
time outstanding.

 

Section 9.04.         Dividends,
Distributions and Redemptions. The Borrower will not, and will not permit any of the other Loan Parties to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, return any capital or make any distribution of its Property
to its Equity Interest holders, except (i) the Borrower may make Restricted Payments with respect to its Equity Interests with
or by issuing additional shares of its Equity Interests (other than Disqualified Capital Stock), (ii) Subsidiaries of the Borrower
may declare and pay dividends ratably with respect to their holders’ Equity Interests, (iii) so long as no Default, Event
of Default or Borrowing Base Deficiency is occurring or would result therefrom, the Borrower may make Restricted Payments pursuant
to and in accordance with stock option plans or other benefit plans for it and its Subsidiaries’ respective management or
employees, and (iv) so long as no Default, Event of Default or Borrowing Base Deficiency is occurring or would result therefrom,
the Borrower may make dividends with respect to the Preferred Stock at a rate no more than 8% per annum as follows: (A) for any
period from the Effective Date through December 31, 2013 by issuing additional Preferred Stock, (B) for the period beginning January
1, 2014 through December 31, 2014 by issuing additional Preferred Stock for 50% of any such dividend and in cash for the other
50% and (C) thereafter in cash.

 

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Section 9.05.         Investments,
Loans and Advances. The Borrower will not, and will not permit any other Loan Party to, make or permit to remain outstanding
any Investments in or to any Person, except that the foregoing restriction shall not apply to:

 

(a)  Investments
reflected in the Financial Statements delivered on or prior to the Effective Date and which are disclosed to the Lenders in Schedule
9.05.

 

(b)  accounts
receivable arising in the ordinary course of business or under Section 9.10.

 

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

 

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

 

(e)  deposits
maturing within one year from the date of creation thereof with, including certificates of deposit issued by, any Lender or any
office located in the United States of any other bank or trust company which is organized under the laws of the United States or
any state thereof, has capital, surplus and undivided profits aggregating at least $500,000,000 (as of the date of such bank or
trust company’s most recent financial reports) and has a short term deposit rating of no lower than A2 or P2, as such rating
is set forth from time to time, by S&P or Moody’s, respectively.

 

(f)  Investments
in money market or similar funds with assets of at least $1,000,000,000 and rated Aaa by Moody’s and AAA by S&P.

 

(g)  Investments
(i) made by the Borrower in or to its Subsidiaries which are Loan Parties or (ii) made by the Subsidiaries of the Borrower which
are Loan Parties to each other and the Borrower.

 

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

 

(i)  loans
or advances to employees, officers or directors in the ordinary course of business of the Borrower or any of the other Loan Parties,
in each case only as permitted by applicable law, including Section 402 of the Sarbanes Oxley Act of 2002, but in any event not
to exceed $200,000 in the aggregate at any time.

 

(j)  Investments
in stock, obligations or securities received in settlement of debts arising from Investments permitted under this Section 9.05
owing to the Borrower or any other Loan Party as a result of a bankruptcy or other insolvency proceeding of the obligor in respect
of such debts or upon the enforcement of any Lien in favor of the Borrower or any of the other Loan Parties; provided that
the Borrower shall give the Administrative Agent prompt written notice in the event that the aggregate amount of all Investments
held at any one time under this Section 9.05(j) exceeds $250,000.

 

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

 

Section 9.06.         Nature
of Business; No International Operations. The Borrower will not, and will not permit any other Loan Party to, allow any material
change to be made in the character of its business as an independent oil and gas exploration and production company. The Loan
Parties will not acquire or make any other expenditures (whether such expenditure is capital, operating or otherwise) in or related
to, any Oil and Gas Properties not located within the geographical boundaries of the United States.

 

Section 9.07.         Limitation
on Leases. The Borrower will not, and will not permit any other Loan Party to, create, incur, assume or suffer to exist any
obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal but excluding Capital Leases and
leases of Hydrocarbon Interests), under leases or lease agreements which would cause the aggregate amount of all payments made
by the Loan Parties pursuant to all such leases or lease agreements, including any residual payments at the end of any lease,
to exceed $1,000,000 in any period of twelve consecutive calendar months during the life of such leases.

 

Section 9.08.         Proceeds
of Notes. The Borrower will not permit the proceeds of the Borrowings to be used for any purpose other than those permitted
by Section 7.23. No Loan Party nor any Person acting on behalf of the Borrower has taken or will take any action which might cause
any of the Loan Documents to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of the
Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter
be in effect. If requested by the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender
a statement to the foregoing effect in conformity with the requirements of FR Form U-1 or such other form referred to in Regulation
U, Regulation T or Regulation X of the Board, as the case may be.

 

Section 9.09.         ERISA
Compliance. The Borrower will not, and will not permit any ERISA Affiliate to, at any time:

 

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

 

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

 

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

 

(d)  fail
to satisfy, or allow any ERISA Affiliate to fail to satisfy, the minimum funding standards (within the meaning of Section 412 of
the Code or Section 302 of ERISA), in any case whether or not waived, with respect to any Plan.

 

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

 

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

 

Section 9.10.         Sale
or Discount of Receivables. Except for receivables obtained by the Loan Parties out of the ordinary course of business or
the settlement of joint interest billing accounts in the ordinary course of business or discounts granted to settle collection
of accounts receivable or the sale of defaulted accounts arising in the ordinary course of business in connection with the compromise
or collection thereof and not in connection with any financing transaction, the Borrower will not, and will not permit any other
Loan Party to, discount or sell (with or without recourse) any of its notes receivable or accounts receivable.

 

Section 9.11.         Mergers,
Etc. Neither the Borrower nor any other Loan Party will merge into or with or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or sell, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its Property to any other Person, (whether now owned or hereafter acquired)
(any such transaction, a “consolidation”), or liquidate or dissolve; except that (i) any Loan Party may consolidate
with or into the Borrower (provided the Borrower shall be the continuing or surviving corporation) and (ii) any Loan Party (other
than the Borrower) may consolidate with any Subsidiary of the Borrower which is a Loan Party (provided such Subsidiary shall be
the continuing or surviving corporation), in each case, so long as no Default is continuing or would occur as a result and notice
of such consolidation is provided to the Administrative Agent five Business Days prior to such consolidation.

 

Section 9.12.         Sale
of Properties and Termination of Hedging Transactions. The Borrower will not, and will not permit any other Loan Party to,
sell, assign, farm-out, convey or otherwise transfer any Property (subject to Section 9.11) except for:

 

(a)  the sale of Hydrocarbons
in the ordinary course of business;

 

(b)  farmouts in the
ordinary course of business of undeveloped acreage or undrilled depths and assignments in connection with such farmouts;

 

(c)  the sale or transfer
of equipment that is no longer necessary for the business of the Borrower or such other Loan Party or are replaced by equipment
of at least comparable value and use; and

 

(d)  the sale or other
disposition (including Casualty Events) of any Oil and Gas Property or any interest therein or the termination, unwinding, cancellation
or other disposition of Swap Agreements; provided that:

 

(i)  100% of the consideration
received in respect of such sale or other disposition of any such Oil and Gas Property shall be cash,

 

(ii) (other than in
respect of Casualty Events) the consideration received in respect of a sale or other disposition of any Oil and Gas Property shall
be equal to or greater than the fair market value of the Oil and Gas Property or interest therein subject of such sale or other
disposition (as reasonably determined by a Responsible Officer of the Borrower and if requested by the Administrative Agent, the
Borrower shall deliver a certificate of a Responsible Officer of the Borrower certifying to the foregoing),

 

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(iii)  no Default or
Event of Default is occurring or would result and no Borrowing Base Deficiency would result from any such sale or disposition of
Oil and Gas Properties or any such termination, unwinding, cancellation or other disposition of Swap Agreements; and

 

(iv)  if the the fair
market value attributable to the Oil and Gas Property (including farm-outs under Section 9.12(b)) included in the most recently
delivered Reserve Report in connection with such sale or other disposition, during any period between two successive Scheduled
Redetermination Dates is in excess of five percent (5%) of the Borrowing Base as then in effect (as determined by the Administrative
Agent), individually or in the aggregate, the Borrowing Base shall be reduced, effective immediately upon such sale, disposition
termination, unwind or cancellation, by an amount equal to the value, if any, attributed to such Property in the Borrowing Base
based on the most recently delivered Reserve Report;

 

(e)  sales and other
dispositions of Properties (not otherwise regulated by Section 9.12(a) through (d)) having a fair market value not to exceed $1,000,000
during any 12-month period;

 

(f)  transfers of Properties
from any Loan Party to the Borrower or any Subsidiary of the Borrower that is a Loan Party; and

 

(g)  Casualty Events
of Properties which are not Oil and Gas Properties.

 

Section 9.13.         Sales
and Leasebacks. The Borrower will not, and will not permit any other Loan Party to enter into any arrangement with any Person
providing for the leasing by any Loan Party of real or personal property that has been or is to be sold or transferred by such
Loan Party to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security
of such property or rental obligations of such Loan Party.

 

Section 9.14.         Environmental
Matters. The Borrower will not, and will not permit any other Loan Party to, (i) cause or knowingly permit any of its Property
to be in violation of, or (ii) do anything or knowingly permit anything to be done which will subject any such Property to any
Remedial Work (other than Remedial Work done in the ordinary course of business) under, any Environmental Laws that could reasonably
be expected to have a Material Adverse Effect; it being understood that clause (ii) above will not be deemed as limiting or otherwise
restricting any obligation to disclose any relevant facts, conditions and circumstances pertaining to such Property to the appropriate
Governmental Authority.

 

Section 9.15.         Transactions
with Affiliates. The Borrower will not, and will not permit any other Loan Party to, enter into any transaction, including
any purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate (other than between Borrower
and Subsidiaries of the Borrower who are Loan Parties) unless such transactions are otherwise permitted under this Agreement and
are upon fair and reasonable terms no less favorable to it than it would obtain in a comparable arm’s length transaction
with a Person not an Affiliate.

 

Section 9.16.         Subsidiaries.
The Borrower will not, and will not permit any other Loan Party to, create or acquire any additional Subsidiaries unless the Borrower
gives written notice to the Administrative Agent of such creation or acquisition and complies with Section 8.14(b) and Section
8.14(c).

 

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Section 9.17.         Negative
Pledge Agreements; Dividend Restrictions. The Borrower will not, and will not permit any other Loan Party to, create, incur,
assume or suffer to exist any contract, agreement or understanding which in any way prohibits or restricts (a) the granting, conveying,
creation or imposition of any Lien on any of its Property to secure the Secured Obligations or which requires the consent of or
notice to other Persons in connection therewith or (b) the Borrower or any other Loan Party from paying dividends or making distributions
to any Loan Party or receiving any money in respect of Debt or other obligations owed to it, or which requires the consent of
or notice to other Persons in connection therewith; provided that (i) the foregoing shall not apply to restrictions and
conditions under the Loan Documents, (ii) the foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of any asset or a Loan Party pending such sale; provided such restrictions and conditions
apply only to the asset or Loan Party that is to be sold and such sale is permitted hereunder, and (iv) clause (a) of the foregoing
shall not apply to (A) restrictions or conditions imposed by any agreement relating to Capital Leases permitted by this Agreement
if such restrictions or conditions apply only to the property or assets securing such Secured Obligations and (B) customary provisions
in leases restricting the assignment thereof.

 

Section 9.18.         Take-or-Pay
or Other Prepayments. The Borrower will not, and will not permit any other Loan Party to, allow take-or-pay or other prepayments
with respect to the Oil and Gas Properties of the Borrower or any other Loan Party that would require the Borrower or such other
Loan Party to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor.

 

Section 9.19.         Swap
Agreements.

 

(a)  The
Borrower will not, and will not permit any other Loan Party to, enter into any Swap Agreements with any Person other than (i) Swap
Agreements in respect of commodities (A) with an Approved Counterparty and (B) the notional volumes for which (when aggregated
and netted with other commodity Swap Agreements then in effect other than basis differential swaps on volumes already hedged pursuant
to other Swap Agreements) do not exceed, as of the date such Swap Agreement is executed, 80% of production from the proved, developed
producing Oil and Gas Properties, as listed on the most recently delivered Reserve Report pursuant to Section 2.07, of the Loan
Parties for each of crude oil, liquids and natural gas, calculated separately, for each month during the period commencing on the
month when such Swap Agreement is in executed and ending no later than 60 months later; and (ii) Swap Agreements in respect of
interest rates with an Approved Counterparty as follows: (A) Swap Agreements effectively converting interest rates from fixed to
floating, the notional amounts of which (when aggregated with all other Swap Agreements of the Borrower and its Subsidiaries then
in effect effectively converting interest rates from fixed to floating) do not exceed 75% of the then outstanding principal amount
of the Borrower’s Debt for borrowed money which bears interest at a fixed rate and (B) Swap Agreements effectively converting
interest rates from floating to fixed, the notional amounts of which (when aggregated with all other Swap Agreements of the Borrower
and its Subsidiaries then in effect effectively converting interest rates from floating to fixed) do not exceed 75% of the then
outstanding principal amount of the Borrower’s Debt for borrowed money which bears interest at a floating rate.

 

(b)  Notwithstanding
Section 9.19(a): (i) in no event shall any Swap Agreement contain any requirement, agreement or covenant for any Loan Party to
post collateral or margin to secure their obligations under such Swap Agreement or to cover market exposures, (ii) Swap Agreements
shall only be entered into in the ordinary course of business (and not for speculative purposes), (iii) no Swap Agreement shall
be terminated, unwound, cancelled or otherwise disposed of except to the extent permitted by Section 9.12 and (iv) in no event
shall any Loan Party permit its production from proved, developed producing Oil and Gas Properties during the then current month
to be less than the aggregate amount of production from the proved, developed producing Oil and Gas Properties which is subject
to Swap Agreements during such month.

 

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Section 9.20.         Anti-Terrorism
Laws. The Borrower shall not permit, and shall not permit the other Loan Parties to (a) conduct any business or engage in
making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in Section 7.26
above, (b) deal in, or otherwise engage in any transaction relating to, any property of interests in property blocked pursuant
to the Executive Order of any other Anti-Terrorism Law or (c) engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, (i) any of the prohibitions set forth in any Anti-Terrorism
Law or (ii) any prohibitions set forth in the rules or regulations issued by OFAC (and, in each case, the Borrower shall cause
each of the other Loan Parties to promptly deliver or cause to be delivered to the Lenders any certification or other evidence
requested from time to time by any Lender in its reasonable discretion, confirming the Loan Parties’ compliance with this
Section 9.20).

 

ARTICLE
X

Events
of Default; Remedies

 

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

 

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

 

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

 

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

 

(d)  the
Borrower or any other Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 8.01(l),
Section 8.02 or in ARTICLE IX.

 

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

 

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(f)  the Borrower or any other Loan Party shall (i) fail to make any payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall become due and payable.

 

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

 

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

 

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

 

(j)  (i)
one or more judgments for the payment of money in an aggregate amount in excess of $1,000,000 (to the extent not covered by independent
third party insurance provided by financially sound and reputable insurers as to which the insurer does not dispute coverage and
is not subject to an insolvency proceeding) or (ii) any one or more non-monetary judgments that have, or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, shall be rendered against any Loan Party or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party to enforce
any such judgment.

 

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

 

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(l)  the
Borrower or any other Loan Party shall (i) fail to make any payment in an amount of $250,000 or more (whether in the form of an
exchange or redemption or a dividend) in respect of any Preferred Stock, when and as the same shall become due and payable or (ii)
default in the observance or performance of any material covenant or agreement in the Preferred Stock Agreement or any other agreement
or condition relating to any such Preferred Stock or contained in any instrument or agreement relating thereto and such failure
shall continued unremedied for any applicable grace period contained in the Preferred Stock Agreement or such other instrument
or agreement relating thereto.

 

(m)  a
Change in Control shall occur.

 

Section 10.02.         Remedies.

 

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

 

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

 

(c)  All
proceeds realized from the liquidation or other disposition of collateral or otherwise received after maturity of the Loans, whether
by acceleration or otherwise, shall be applied:

 

(i)          first,
to payment or reimbursement of that portion of the Secured Obligations constituting fees, expenses and indemnities payable to the
Administrative Agent in its capacity as such;

 

(ii)         second,
pro rata to payment or reimbursement of that portion of the Secured Obligations constituting fees, expenses and indemnities payable
to the Lenders;

 

(iii)        third,
pro rata to payment of accrued interest on the Loans;

 

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(iv)         fourth,
pro rata to payment of principal outstanding on the Loans and Secured Obligations referred to in Clause (b) of the definition of
Secured Obligations owing to a Lender or an Affiliate of a Lender and of Secured Obligations in respect of Secured Cash Management
Agreements and Secured Swap Agreements;

 

(v)          fifth,
pro rata to any other Secured Obligations;

 

(vi)         sixth,
to serve as cash collateral to be held by the Administrative Agent to secure the LC Exposure; and

 

(vii)        seventh,
any excess, after all of the Secured Obligations shall have been indefeasibly paid in full in cash, shall be paid to the Borrower
or as otherwise required by any Governmental Requirement.

 

ARTICLE
XI

The AgentS

 

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

 

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

 

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

 

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

 

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

 

Section 11.06.         Resignation
of Administrative Agent. Subject to the appointment and acceptance of a successor Agent as provided in this Section 11.06,
any Agent may resign at any time by notifying the Lenders, the Issuing Bank(s) and the Borrower. Upon any such resignation, the
Majority Lenders shall have the right, in consultation with the Borrower, to appoint from among the Lenders a successor. If no
successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation of the retiring Agent, then the retiring Agent may, on behalf of the Lenders and
the Issuing Bank(s), appoint a qualified financial institution as successor Agent. Upon the acceptance of its appointment as Agent
hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. The fees payable
by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Agent’s resignation hereunder, the provisions of this ARTICLE XI and Section 12.03
shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting as Agent.

 

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

 

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

 

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Section 11.09.         Administrative
Agent May File Proofs of Claim.

 

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

 

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

 

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

 

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

 

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

 

Section 11.10.         Authority
of Administrative Agent to Release Collateral and Liens. Each Lender and the Issuing Bank(s) hereby authorizes the Administrative
Agent to release any collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents. Each Lender
and the Issuing Bank(s) hereby authorizes the Administrative Agent to execute and deliver to the Borrower, at the Borrower’s
sole cost and expense, any and all releases of Liens, termination statements, assignments or other documents reasonably requested
by the Borrower in connection with any sale or other disposition of Property to the extent such sale or other disposition is permitted
by the terms of Section 9.12 or is otherwise authorized by the terms of the Loan Documents. Upon request by the Administrative
Agent at any time, the Majority Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate
its interest in particular types or items of property, or to release any Guarantor from its obligations under any Guaranty Agreement
pursuant to this Section 11.10.

 

Section 11.11.         Duties
of any Arranger or Agent. Any Arranger or Agent shall have no duties, responsibilities or liabilities under this Agreement
and the other Loan Documents other than their duties, responsibilities and liabilities in their capacity as Lenders hereunder.

 

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ARTICLE
XII

Miscellaneous

 

Section 12.01.         Notices.

 

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

 

(i)            if
to the Borrower, to it at:

Emerald
Oil, Inc.

1600 Broadway,
Suite 1040

Denver, Colorado
80202

Attention:
Paul Wiesner

Fax: 303-323-0008

Email: paulw@emeraldoil.com

 

(ii)           if
to the Administrative Agent or WF as Issuing Bank, to it at:

1700 Lincoln
Street, Suite 64

Denver, Colorado
80203

Attention:
Tim Green

Fax: 303-863-5196

Email: Tim.Green@wellsfargo.com

 

(iii)          if
to any other Lender or Issuing Bank, to it at its address (or facsimile number or e-mail address) set forth in its Administrative
Questionnaire.

 

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

 

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

 

Section 12.02.         Waivers;
Amendments.

 

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

 

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Neither this Agreement
nor any provision hereof nor any Security Instrument nor any provision thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower and/or the other applicable Loan Parties and the Majority
Lenders or by the Borrower and/or the other applicable Loan Parties and the Administrative Agent with the consent of the Majority
Lenders; provided that no such agreement shall (i) increase the Maximum Credit Amount of any Lender without the written
consent of such Lender, (ii) increase the Borrowing Base without the written consent of each non-Defaulting Lender, decrease or
maintain the Borrowing Base without the consent of the Required Lenders, (iii) reduce the principal amount of any Loan or LC Disbursement
or reduce the rate of interest thereon, or reduce any fees payable hereunder, or reduce any other Secured Obligations hereunder
or under any other Loan Document, without the written consent of each Lender affected thereby, (iv) postpone the scheduled date
of payment or prepayment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder,
or any other Secured Obligations hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such
payment, or postpone the Termination Date without the written consent of each Lender affected thereby, (v) change Section 4.01(b)
or Section 4.01(c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent
of each Lender, (vi) waive or amend Section 10.02(c) without the written consent of each Lender, Secured Swap Provider or Cash
Management Provider, (vii) release any Guarantor (except as set forth in the Guaranty Agreement), release all or substantially
all of the collateral (other than as provided in Section 11.10), or reduce the percentages set forth in Section 8.14(a), without
the written consent of each Lender, (viii) modify any Security Instrument in a manner that results in the Secured Swap Obligations
secured by such Security Instrument no longer being secured thereby on an equal and ratable basis with the principal of the Loans,
or amend or otherwise change the definition of “Secured Swap Agreement” or “Secured Swap Provider”, without
the written consent of each Secured Swap Provider adversely affected thereby or (ix) change any of the provisions of this Section
12.02(b) or the definitions of “Majority Lenders” or “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any rights hereunder or under any other Loan Documents or
make any determination or grant any consent hereunder or any other Loan Documents, without the written consent of each Lender;
provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative
Agent, any Agent or Issuing Bank hereunder or under any other Loan Document without the prior written consent of the Administrative
Agent, such Agent or Issuing Bank, as the case may be. Notwithstanding the foregoing, any supplement to Schedule 7.14 (Subsidiaries)
shall be effective simply by delivering to the Administrative Agent a supplemental schedule clearly marked as such and, upon receipt,
the Administrative Agent will promptly deliver a copy thereof to the Lenders. Notwithstanding the foregoing, the Borrower and the
Administrative Agent may amend this Agreement or any other Loan Document without the consent of the Lenders to add covenants or
other provisions in order to permit the Loan Parties to comply with Section 9.04(b)(ii) or in order to correct, amend or cure any
ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document.

 

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Section 12.03.         Expenses,
Indemnity; Damage Waiver.

 

(a)  The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including
the reasonable fees, charges and disbursements of counsel and other outside consultants for the Administrative Agent, the reasonable
travel, photocopy, mailing, courier, telephone and other similar expenses, and the cost of environmental invasive and non-invasive
assessments and audits and surveys and appraisals, in connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration (both before and after the execution hereof and including
advice of counsel to the Administrative Agent as to the rights and duties of the Administrative Agent and the Lenders with respect
thereto) of this Agreement and the other Loan Documents and any amendments, modifications or waivers of or consents related to
the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all
costs, expenses, taxes, assessments and other charges incurred by any Agent or any Lender in connection with any filing, registration,
recording or perfection of any security interest contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iv) all reasonable out-of-pocket
expenses incurred by any Agent, the Issuing Bank or any Lender, including the reasonable fees, charges and disbursements of any
counsel for any Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection
with this Agreement or any other Loan Document, including its rights under this Section 12.03, or in connection with the Loans
made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring
or negotiations in respect of such Loans or Letters of Credit.

 

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(b)  THE
BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER, THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING
PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND DEFEND AND HOLD EACH INDEMNITEE HARMLESS FROM,
ANY AND ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES, CHARGES AND DISBURSEMENTS
OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT
OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY
OR THEREBY, (ii) THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (iii) THE FAILURE
OF THE BORROWER OR ANY OTHER LOAN PARTY TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL
REQUIREMENT, (iv) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY OTHER LOAN
PARTY SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH,
(v) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY AN ISSUING
BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY
COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE
NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (vi) ANY OTHER
ASPECT OF THE LOAN DOCUMENTS, (vii) THE OPERATIONS OF THE BUSINESS OF THE BORROWER OR ANY OTHER LOAN PARTY BY SUCH PERSONS, (viii)
ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (ix) ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY OTHER LOAN PARTY OR ANY OF THEIR PROPERTIES OR OPERATIONS, INCLUDING WITHOUT
LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR
TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS MATERIALS ON OR AT ANY OF THEIR PROPERTIES, (x) THE BREACH OR NON-COMPLIANCE
BY THE BORROWER OR ANY OTHER LOAN PARTY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY OTHER LOAN PARTY, (xi) THE
PAST OWNERSHIP BY THE BORROWER OR ANY OTHER LOAN PARTY OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH,
THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xii) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF OIL, OIL
AND GAS WASTES, SOLID WASTES OR HAZARDOUS MATERIALS ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY OTHER
LOAN PARTY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE
BORROWER OR ANY OTHER LOAN PARTY, (xiii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OTHER LOAN PARTY,
(xiv) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xv) ANY ACTUAL OR PROSPECTIVE
CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY,
WHETHER BROUGHT BY A THIRD PARTY OR BY THE ANY LOAN PARTY, AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH
INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER,
WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT
IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES INCLUDING ORDINARY NEGLIGENCE; PROVIDED THAT SUCH INDEMNITY SHALL NOT,
AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED
BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH INDEMNITEE. THIS SECTION 12.03(b) SHALL NOT APPLY WITH RESPECT TO TAXES OTHER THAN ANY TAXES THAT REPRESENT
LOSSES, CLAIMS, DAMAGES, ETC. ARISING FROM ANY NON-TAX CLAIM.

 

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

 

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

 

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

 

Section 12.04.    Successors
and Assigns.

 

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

 

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

 

(A)         the
Borrower (such consent not to be unreasonably withheld), provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender, or, if an Event of Default has occurred and is continuing, to any Assignee;
provided further, that the Borrower shall be deemed to have consented to any such assignment unless the Borrower
shall object thereto by written notice to the Administrative Agent with five Business days after having received notice thereof;
and

 

(B)         the
Administrative Agent and each Issuing Bank.

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)        The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans and LC Exposure owing to, each Lender pursuant to the terms hereof from time
to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative
Agent, the Issuing Bank(s) and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. Any Assignment and Assumption,
whether or not evidenced by a Note or other Loan Document, shall be effective only upon appropriate entries with respect thereto
being made in the Register. The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice. In connection with any changes to the Register, if necessary,
the Administrative Agent will reflect the revisions on Annex I and forward a copy of such revised Annex I to the Borrower, the
Issuing Bank and each Lender.

 

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

 

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(vi)        Notwithstanding
the foregoing, no assignment or participation shall be made to any Loan Party or any Affiliate of a Loan Party.

 

(c)  Any
Lender may, without the consent of the Borrower, the Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement and (D) such Lender shall continue to give prompt attention to and process (including, if required, through discussions
with Participants) requests for waivers or amendments hereunder. Any agreement or instrument pursuant to which a Lender sells such
a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the proviso
to Section 12.02 that affects such Participant. In addition such agreement must provide that the Participant be bound by the provisions
of Section 12.03. The Borrower agrees that each Participant shall be entitled to the benefits of Section 5.01, Section 5.02 and
Section 5.03 (subject to the requirements and limitations therein, including the requirements under Section 5.03(g) (it being understood
that the documentation required under Section 5.03(g) shall be delivered to the participating Lender)) to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such
Participant (i) agrees to be subject to the provisions of Section 5.02 and Section 5.03 as if it were an assignee under paragraph
(b) of this Section and (ii) shall not be entitled to receive any greater payment under Section 5.02 or Section 5.03, with respect
to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement
to receive a greater payment results from an adoption of or any change in any law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof that occurs after the Participant acquired the applicable participation.
To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 4.01(c) as though it were a Lender. Each Lender that sells a participation
shall, acting solely for this purpose as an agent of the Borrower, shall maintain a register on which it enters the name and address
of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have
any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant
or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations
under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter
of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to
the contrary. Any sale or transfer of a participation, however evidenced, shall be effective only upon appropriate entries with
respect thereto being made in the Participant Register. For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

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

 

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

 

Section
12.05.    Survival; Revival; Reinstatement.

 

(a)  All
covenants, agreements, representations and warranties made by the Loan Parties herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon
by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance
of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that
the Administrative Agent or any other Agent, Issuing Bank or Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit or other Secured Obligations are outstanding. The provisions of Section 5.01, Section 5.02,
Section 5.03 and Section 12.03 and ARTICLE XI shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and
the Commitments or the termination of this Agreement, any other Loan Document or any provision hereof or thereof.

 

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

 

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Section
12.06.    Counterparts; Integration; Effectiveness.

 

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

 

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

 

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

 

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

 

Section 12.08.   Right
of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and other obligations (of whatsoever kind, including,
without limitations obligations under Swap Agreements) at any time owing by such Lender or Affiliate to or for the credit or the
account of the Borrower or any other Loan Party against any of and all the obligations of the Borrower or any other Loan Party
owed to such Lender now or hereafter existing under this Agreement or any other Loan Document, irrespective of whether or not such
Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured.
The rights of each Lender under this Section 12.08 are in addition to other rights and remedies (including other rights of setoff)
which such Lender or its Affiliates may have; provided that in the event that any Defaulting Lender shall exercise any such
right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application
in accordance with the provisions of Section 10.02(c) and, pending such payment, shall be segregated by such Defaulting Lender
from its other funds and deemed held in trust for the benefit of the Administrative Agent, Issuing Bank(s) and the Lenders, and
(y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured
Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, Issuing Bank(s)
and their respective Affiliates under this Section 12.08 are in addition to other rights and remedies (including other rights of
setoff) that such Lender, Issuing Bank(s) or their respective Affiliates may have. Each Lender and Issuing Bank agrees to notify
the Borrower and the Administrative Agent promptly after any such setoff and application; provided further that the
failure to give such notice shall not affect the validity of such setoff and application.

 

    	89

    	 

    

 

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

 

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

 

(b)  EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY: SUBMITS (AND THE BORROWER SHALL CAUSE EACH LOAN PARTY TO SUBMIT) FOR ITSELF
AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY,
OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF; PROVIDED,
THAT NOTHING CONTAINED HEREIN OR IN ANY OTHER LOAN DOCUMENT WILL PREVENT ANY LENDER OR THE ADMINISTRATIVE AGENT FROM BRINGING ANY
ACTION TO ENFORCE ANY AWARD OR JUDGMENT OR EXERCISE ANY RIGHT UNDER THE SECURITY INSTRUMENTS OR AGAINST ANY COLLATERAL OR ANY OTHER
PROPERTY OF ANY LOAN PARTY IN ANY OTHER FORUM IN WHICH JURISDICTION CAN BE ESTABLISHED. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
12.13.    Collateral Matters; Swap Agreements. The benefit of the
Security Instruments and of the provisions of this Agreement relating to any collateral securing the Secured Obligations shall
also extend to and be available to the Secured Swap Providers in respect of the Secured Swap Agreements as set forth herein. Except
as set forth in Section 12.02(b)(v), no Lender or any Affiliate of a Lender shall have any voting rights under any Loan Document
as a result of the existence of obligations owed to it under any such Swap Agreements.

 

Section
12.14.    No Third Party Beneficiaries. This Agreement, the other
Loan Documents, and the agreement of the Lenders to make Loans and any Issuing Bank to issue, amend, renew or extend Letters of
Credit hereunder are solely for the benefit of the Borrower, and no other Person (including any other Loan Party of the Borrower,
any obligor, contractor, subcontractor, supplier or materialsman) shall have any rights, claims, remedies or privileges hereunder
or under any other Loan Document against the Administrative Agent or any other Agent, Issuing Bank or Lender for any reason whatsoever.
There are no third party beneficiaries.

 

    	92

    	 

    

 

Section 12.15.    EXCULPATION
PROVISIONS. EACH OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS;
THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS
OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY
FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY
PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION
OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

 

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 “Patriot 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 and the Borrower in accordance with the Act.

 

Section
12.17.    Flood Insurance Provisions. Notwithstanding any provision
in this Agreement or any other Loan Document to the contrary, in no event is any Building (as defined in the applicable Flood Insurance
Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) included in the definition
of “Mortgaged Property” and no such Building or Manufactured (Mobile) Home is hereby encumbered by this Agreement or
any other Loan Document. As used herein, “Flood Insurance Regulations” means (a) the National Flood Insurance Act of
1968 as now or hereafter in effect or any successor statute thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter
in effect or any successor statue thereto, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.),
as the same may be amended or recodified from time to time and (d) the Flood Insurance Reform Act of 2004 and any regulations promulgated
thereunder.

 

[SIGNATURES BEGIN NEXT PAGE]

 

    	93

    	 

    

 

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

 

	BORROWER:	 
	 	EMERALD OIL, INC.
	 	 	 
	 	By:	/s/ Paul Wiesner
	 	Name:	 Paul Wiesner
	 	Title:	 Chief Financial Officer

 

Signature
Page

Credit
Agreement

 

    	 

    	 

    

 

	ADMINISTRATIVE AGENT:	WELLS FARGO BANK, N.A.,
	 	as Administrative Agent and Lender
	 	 	 
	 	By: 	/s/  Suzanne Ridenhour
	 	Name:	 Suzanne Ridenhour
	 	Title:	 Director

 

Signature
Page

Credit
Agreement

 

    	 

    	 

    

 

ANNEX I

 

LIST OF MAXIMUM CREDIT AMOUNTS

 

Aggregate Maximum Credit Amounts

 

	Name of Lender	 	Applicable Percentage	 	 	Maximum Credit Amount	 
	Wells Fargo Bank, N.A.	 	 	100	%	 	$	400,000,000.00	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	TOTAL:	 	 	100.0	%	 	$	400,000,000.00	 

 

Annex
i

 

    	 

    	 

    

 

EXHIBIT A

 

FORM OF NOTE

 

	$[          ]	[          ], 201[  ]

 

FOR VALUE RECEIVED,
EMERALD OIL, INC., a Montana corporation, (the “Borrower”), hereby promises to pay to [          ]
(the “Lender”), at the principal office of WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Administrative
Agent”), 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, may be endorsed by
the Lender on the schedules attached hereto or any continuation thereof or on any separate record maintained by the 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 this Note.

 

This Note is one of
the Notes referred to in the Credit Agreement dated as of November 20, 2012 among the Borrower, the Guarantors, the Administrative
Agent, and the other agents and lenders signatory thereto (including the Lender), and evidences Loans made by the Lender thereunder
(such Credit Agreement as the same may be amended, supplemented or restated from time to time, the “Credit Agreement”).
Capitalized terms used in this Note have the respective meanings assigned to them in the Credit Agreement.

 

This Note is issued
pursuant to, and is subject to the terms and conditions set forth in, the Credit Agreement and is entitled to the benefits provided
for in the Credit Agreement and the other Loan Documents. 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 NEW YORK.

 

	 	EMERALD OIL, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

Exhibit
A

 

    	 

    	 

    

 

EXHIBIT B

 

FORM OF BORROWING REQUEST

 

[          ],
201[  ]

 

Emerald Oil, Inc.,
a Montana corporation (the “Borrower”), pursuant to Section 2.03 of the Credit Agreement dated as of November
20, 2012 (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”)
among the Borrower, Wells Fargo Bank, National Association, as Administrative Agent and the other agents and lenders (the “Lenders”)
which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in the Credit
Agreement), hereby requests a Borrowing as follows:

 

(1)         Aggregate
amount of the requested Borrowing is $[          ]; 

 

(2)         Date
of such Borrowing is [          ], 201[ ];

 

(3)         Requested
Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing];

 

(4)         In
the case of a Eurodollar Borrowing, the initial Interest Period applicable thereto is [          ];

 

(5)         Amount
of Borrowing Base in effect on the date hereof is $[          ];

 

(6)         Total
Revolving Credit Exposures on the date hereof (i.e., outstanding principal amount of Loans and total LC Exposure) is $[          ];
and

 

(7)         Pro
forma total Revolving Credit Exposures (giving effect to the requested Borrowing) is $[          ];
and

 

(8)         Location
and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section
2.05 of the Credit Agreement, is as follows:

 

[                                              ]

 

[                                              ]

 

[                                              ]

 

[                                              ]

 

[                                              ]

 

[Signature
Page Follows]

 

Exhibit
B

 

    	 

    	 

    

 

The undersigned certifies
that he/she is the [______________] of the Borrower, and that as such he/she is authorized to execute this certificate on behalf
of the Borrower. The undersigned further certifies, represents and warrants on behalf of the Borrower that the Borrower is entitled
to receive the requested Borrowing under the terms and conditions of the Credit Agreement.

 

	 	EMERALD OIL, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

Exhibit
B

 

    	 

    	 

    

 

EXHIBIT C

 

FORM OF INTEREST ELECTION REQUEST

 

[          ],
201[  ]

 

Emerald Oil, Inc.,
a Montana corporation, (the “Borrower”), pursuant to Section 2.04 of the Credit Agreement dated as of November
20, 2012 (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”)
among the Borrower, Wells Fargo Bank, National Association, as Administrative Agent and the other agents and lenders (the “Lenders”)
which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in the Credit
Agreement), hereby makes an Interest Election Request as follows:

 

The Borrowing
to which this Interest Election Request applies, and if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information specified pursuant to
(iii) and (iv) below shall be specified for each resulting Borrowing) is [          ];

 

(9)         The
effective date of the election made pursuant to this Interest Election Request is [          ],
201[ ];[and]

 

(10)        The
resulting Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing][; and]

 

[i.            
[If the resulting Borrowing is a Eurodollar Borrowing] The Interest Period applicable to the resulting Borrowing after giving effect
to such election is [          ]].

 

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

 

	 	EMERALD OIL, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

Exhibit
C

 

    	 

    	 

    

 

EXHIBIT D

 

FORM OF

COMPLIANCE CERTIFICATE

 

[_____________], 20[__]

 

The undersigned hereby
certifies that he/she is the [          ] of Emerald Oil, Inc., a Montana corporation
(the “Borrower”), and that as such he/she is authorized to execute this certificate on behalf of the Borrower.
With reference to the Credit Agreement dated as of November 20, 2012 (together with all amendments, restatements, supplements or
other modifications thereto being the “Agreement”) among the Borrower, Wells Fargo Bank, National Association,
as Administrative Agent, and the other agents and lenders (the “Lenders”) which are or become a party thereto,
the undersigned represents and warrants as follows (each capitalized term used herein having the same meaning given to it in the
Agreement unless otherwise specified):

 

1             The
representations and warranties of the Borrower contained in Article VII of the Agreement and in the Loan Documents and otherwise
made in writing by or on behalf of the Guarantor and the Borrower pursuant to the Agreement and the Loan Documents were true and
correct when made, and are repeated at and as of the time of delivery hereof and are true and correct in all material respects
at and as of the time of delivery hereof, except to the extent such representations and warranties are expressly limited to an
earlier date or the Majority Lenders have expressly consented in writing to the contrary.

 

2             The
Borrower has performed and complied with all agreements and conditions contained in the Agreement and in the Loan Documents required
to be performed or complied with by the Borrower prior to or at the time of delivery hereof [or specify default and describe].

 

3             Since
[Date], no change has occurred in the condition, financial or otherwise, of the Guarantor, the Borrower or any Subsidiary which
could reasonably be expected to have a Material Adverse Effect [or specify event].

 

4             There
exists no Default or Event of Default [or specify Default and describe].

 

5             
[Omit from the Compliance Certificate delivered on the Effective Date:] Attached hereto are the detailed computations necessary
to determine whether the Borrower is in compliance with Section 9.01 as of the end of the [fiscal quarter][fiscal year] ending
[          ].

 

EXECUTED AND DELIVERED
as of the date first written above.

 

	 	EMERALD OIL, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

Exhibit
D

 

    	 

    	 

    

 

EXHIBIT E

 

SECURITY INSTRUMENTS

 

		1.	Guaranty and Collateral Agreement dates as of November 20, 2012 by the Borrower and the Loan Parties in favor of the Administrative
Agent and the Lenders.

 

		2.	Financing Statements in respect of item 1, by

 

(a) the Borrower

 

(b) the Guarantors

 

		3.	Mortgage, Assignment of As-Extracted Collateral, Security Agreement, Line of Credit Mortgage, Fixture Filing and Financing
Statement from Emerald Oil, Inc., as Mortgagor to Wells Fargo Bank, National Association, as Administrative Agent. (Montana)

 

		4.	Mortgage, Assignment of As-Extracted Collateral, Security Agreement, Line of Credit Mortgage, Fixture Filing and Financing
Statement from Emerald Oil, Inc., as Mortgagor to Wells Fargo Bank, National Association, as Administrative Agent. (North Dakota)

 

		5.	Financing Statement in respect of item 3 and 4.

 

Exhibit
E

 

    	 

    	 

    

 

EXHIBIT F

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption
(the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).
Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as
amended, 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 in its capacity
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 any letters of credit and guarantees 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 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:	______________________________
	 	 	 
	 	 	[and is an Affiliate of [identify Lender]1 ]
	 	 	 
	3	Borrower:	Emerald Oil, Inc.
	 	 	 
	4	Administrative Agent:	Wells Fargo Bank, National Association as the administrative agent under the Credit Agreement

 

 

1 Select as
applicable.

 

Exhibit
F

 

    	 

    	 

    

 

	5	Credit Agreement:	The Credit Agreement dated as of November 20, 2012 among Emerald Oil, Inc., the Lenders parties thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the other agents parties thereto
	 	 	 
	6	Assigned Interest:	 

 

	
        Commitment

        Assigned
	 	
        Aggregate Amount of

        Commitment/Loans

        for all Lenders
	 	
        Amount of

        Commitment/Loans

        Assigned
	 	
        Percentage Assigned of

        Commitment/Loans2

	 	 	$	 	$	 	%
	 	 	$	 	$	 	%
	 	 	$	 	$	 	%

 

Effective Date: [_____________
___], 201[__] [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	 
	 	Name:
	 	Title:
	 	 
	 	ASSIGNEE
	 	 
	 	[NAME OF ASSIGNEE]
	 	 
	 	By	 
	 	Name:
	 	Title:

 

 

2 Set forth,
to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

 

Exhibit
F

 

    	 

    	 

    

 

	[Consented to and]3 Accepted:	 
	 	 
	Wells Fargo Bank, National Association, as	 
	  Administrative Agent	 
	 	 
	By	 	 
	  Name:	 
	  Title:	 
	 	 
	[Consented to:]4	 
	 	 
	Emerald Oil, Inc.	 
	 	 
	By	 	 
	  Name:	 
	  Title:	 

 

 

3 To be added only if the consent of the Administrative
Agent is required by the terms of the Credit Agreement.

 

4 To be added only if the consent of the Borrower
is required by the terms of the Credit Agreement.

 

Exhibit
F

 

    	 

    	 

    

 

ANNEX 1

 

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 satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied
by it in order to acquire the Assigned Interest and become a Lender, (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 to the Assignment and Assumption 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.

 

Exhibit
F

 

    	 

    	 

    

 

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
F

 

    	 

    	 

    

 

EXHIBIT
G-1

Form
of U.S. Tax Compliance Certificate

 

(For Foreign Lenders That Are Not Partnerships
For U.S. Federal Income Tax Purposes)

 

Reference
is hereby made to the Credit Agreement dated as of November 20, 2012 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among Emerald Oil, Inc., as Borrower, Wells
Fargo Bank, National Association, as Administrative Agent, and each lender from time to time party thereto. 

 

Pursuant to the provisions
of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of
the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not
a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished
the Administrative Agent and the Borrower with a certificate of its Foreign Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly
so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and
the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	[NAME OF LENDER]	 
	 	 	 
	By:	 	 
	 	Name: 	 
	 	Title: 	 

Date: [________ __], 20[  ]

 

Exhibit
G-1

 

    	 

    	 

    

 

EXHIBIT
G-2

Form
of U.S. Tax Compliance Certificate

 

(For Foreign Participants That Are Not Partnerships
For U.S. Federal Income Tax Purposes)

 

Reference
is hereby made to the Credit Agreement dated as of November 20, 2012 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among Emerald Oil, Inc., as Borrower, Wells
Fargo Bank, National Association, as Administrative Agent, and each lender from time to time party thereto. 

 

Pursuant to the provisions
of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of
the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A)
of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code,
and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished
its participating Lender with a certificate of its Foreign Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such
Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

 

Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	[NAME OF PARTICIPANT]	 
	 	 	 
	By:	 	 
	 	Name: 	 
	 	Title: 	 

Date: [________ __], 20[  ]

 

Exhibit
G-2

 

    	 

    	 

    

 

EXHIBIT
G-3

Form
of U.S. Tax Compliance Certificate

 

(For Foreign Participants That Are Partnerships
For U.S. Federal Income Tax Purposes)

 

Reference
is hereby made to the Credit Agreement dated as of November 20, 2012 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among Emerald Oil, Inc., as Borrower, Wells
Fargo Bank, National Association, as Administrative Agent, and each lender from time to time party thereto. 

 

Pursuant to the provisions
of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation
in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners
of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members
is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the
meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members
is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished
its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN
from each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption. By executing this certificate,
the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform
such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar
years preceding such payments.

 

Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	[NAME OF PARTICIPANT]	 
	 	 	 
	By:	 	 
	 	Name: 	 
	 	Title: 	 

Date: [________ __], 20[ ]

 

Exhibit
G-3

 

    	 

    	 

    

 

EXHIBIT
G-4

Form
of U.S. Tax Compliance Certificate

 

(For Foreign Lenders That Are Partnerships
For U.S. Federal Income Tax Purposes)

 

Reference
is hereby made to the Credit Agreement dated as of November 20, 2012 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among Emerald Oil, Inc., as Borrower, Wells
Fargo Bank, National Association, as Administrative Agent, and each lender from time to time party thereto. 

 

Pursuant to the provisions
of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as
well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect
to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course
of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members
is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct
or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of
the Code.

 

The undersigned has furnished
the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members
that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form
W-8BEN from each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption. By executing this
certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly
so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and
the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	[NAME OF LENDER]	 
	 	 	 
	By:	 	 
	 	Name: 	 
	 	Title: 	 

Date: [________ __], 20

 

Exhibit
G-4

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