Document:

EX-10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), effective as of September 1, 2008 (“Effective
Date”) is entered into by and between Double Eagle Petroleum Co., a Maryland corporation (the
“Company”), and Aubrey Harper (“Employee”). The Company and Employee are collectively referred to
as the “Parties”.

W I T N E S S E T H:

WHEREAS, the Company and Employee entered into that certain Employment Agreement, dated as of
May 7, 2008 (the “Original Employment Agreement”);

WHEREAS, the Company and Employee desire to terminate the Original Employment Agreement and
enter into this Agreement; and

WHEREAS, in order to establish the rights, duties and obligations of the Parties, the Company
and Employee desire to enter into a binding agreement regarding the employment of Employee;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set
forth herein, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE ONE

POSITION & DUTIES

1.1 Title.

Employee shall serve as Vice President—Midstream Assets and President Eastern Washakie
Midstream LLC, a wholly owned subsidiary of the Company and agrees to perform services for the
Company and such other affiliates of the Company, as described herein.

1.2 Term.

Employee’s employment shall be for an initial term commencing on the Effective Date through
December 31, 2009 (the “Term”), subject to the termination provisions herein. Employee hereby
agrees to be engaged by the Company for the Term in such capacity. This Agreement shall
automatically renew for a term of one (1) year unless this Agreement is superseded by a new
agreement, or unless notice of non-renewal is delivered in writing by the Company at least sixty
(60) days prior to the end of the term then in effect, or unless this Agreement is otherwise
terminated pursuant to the provisions hereof. Each renewal agreement shall have a one-year term and
will not include the equity grants set forth in Section 2.2. A notice of non-renewal of this
Agreement by the Company to Employee shall give rise to the severance benefits described in
paragraph 3.5 a. below pursuant to the terms and conditions set forth therein, unless the Company
gives notice of termination for cause pursuant to Section 3.2 a. and Section 3.3 of this Agreement.
If this Agreement is terminated for cause, there are no severance benefits. Bonuses, if any,
shall not be deemed to be accrued or part of any severance package unless and until the Board of
Directors has declared and awarded the particular bonus to the particular Employee.

1.3 Duties and Responsibilities.

Employee shall perform the tasks consistent with the office or position designated herein and
such other reasonable tasks directed by the position’s direct supervisor, by the CEO of the
Company, or by the Board of Directors of the Company. Employee hereby covenants and agrees to
perform the services for which he is hereby retained in good faith and with reasonable diligence in
light of attendant circumstances.

1.4 Performance of Duties.

During the term of the Agreement, except as otherwise approved by the CEO, the Board of
Directors or as provided below, Employee agrees to devote his full business time, effort, skill and
attention to the affairs of the Company and its subsidiaries, will use his best efforts to promote
the interests of the Company, and will discharge his responsibilities in a diligent and faithful
manner, consistent with sound business practices. The foregoing shall not, however, preclude
Employee from devoting reasonable time, attention and energy in connection with other activities,
provided that any such other activities do not interfere with the performance of his duties and
services hereunder and do not conflict with the business interests of the Company, and further
provided that Employee’s participation in those other activities is approved by the Board of
Directors.

1.5 Reporting Location.

For purposes of this Agreement, Employee’s reporting location shall be Casper, Wyoming, which
shall include the metropolitan area within a 60 mile radius from the Company’s current office at
that location.

ARTICLE TWO

COMPENSATION

2.1 Base Salary.

As compensation to Employee for the performance of his duties or obligations under this
Agreement, Company shall pay Employee a base salary (the “Base Salary”) of ONE HUNDRED EIGHTY FIVE
THOUSAND AND NO/100 DOLLARS ($185,000.00) annually, payable, at the election of the Company, in
monthly or semi-monthly installments subject to all federal, state, and municipal withholding
requirements. The Base Salary shall be prorated for any partial calendar month of employment.

2.2 Equity Grants on the Execution Date.

a. Execution Date. As used in this Agreement, the term “Execution Date” shall mean the date
on which both the Company and Employee have delivered (by U.S. mail, hand delivery, electronic mail
or facsimile) a signed copy of this Agreement to the Company.

b. Restricted Stock. On the Execution Date, the Company shall grant to Employee 14,053 shares
of the Company’s restricted common stock (the “Restricted Shares”). Twenty percent of the
Restricted Shares shall vest on December 31, 2008 and an additional 20% shall vest on December 31
of each of the following four years. Except as otherwise set forth in paragraphs 3.1 and 3.5 a.,
if Employee’s employment with the Company terminates for any reason, then any unvested Restricted
Shares will be forfeited by Employee and cancelled by the Company.

c. Stock Options. On the Execution Date, the Company shall grant to Employee options (the
“Options”) to purchase 37,469 shares of the Company’s common stock, at an exercise price equal to
the closing price of the Company’s common stock on the NASDAQ Global Select Market as of the
Execution Date. Twenty percent of the Options shall vest, and become exercisable on December 31,
2008 and an additional 20% shall vest and become exercisable on December 31 of each of the
following four years. The terms of the option plan under which the Options are issued provide that
the Options expire 90 days after termination of Employee’s employment for any reason. Otherwise,
the Options will expire seven years from the Execution Date.

2.3 Bonus Awards within Discretion of Board.

In addition to receiving the Base Salary described in Section 2.1 and the equity grants
described in Section 2.2, Employee may, in the sole discretion of the Board of Directors, be
awarded such cash and/or non-cash bonuses (including stock options, restricted stock or any
combination of cash and non-cash components) from time to time as are approved by the Compensation
Committee of the Board of Directors (the “Compensation Committee”) or by the Board of Directors
directly. The yearly cash bonus target will range between 0% and 35% of the amount of Employee’s
Base Salary paid for that year, unless the Compensation Committee or the Board of Directors
determines otherwise. Any bonus under this Section 2.3 will be paid to Employee no later than
March 15 of the calendar year following the calendar year during which the bonus was earned.

2.4 Employee Benefit Plans.

During the term of employment hereunder, Employee shall be eligible to participate in any
employee benefit plans provided by the Company on the same basis as other similarly positioned or
titled employees, as such plans may be changed from time to time, in accordance with the provisions
of such plans, including, but not limited to, the Company’s qualified retirement plans and the
Company’s stock incentive plan(s), if any. Employee hereby agrees and acknowledges that nothing in
this Agreement shall guarantee Employee that any employee benefit plan shall be in effect during
the term of his or her employment nor shall it guarantee Employee a right to any grant of stock
options, restricted stock or any other right under any stock incentive plan, or other plan.

2.5 Vacation.

Commencing upon Employee’s employment with the Company, Employee shall accrue, four (4) weeks
of vacation per calendar year, pro-rated proportionally for days worked as compared to the calendar
year accruable days in total. Unused vacation time may be carried over to a subsequent calendar
year; provided, however, that no more than 1.5 times (1.5x) Employee’s authorized annual vacation
allocation may be accrued, at any given time. Additionally, upon termination, Employee shall be
paid for all accrued but unused vacation days.

ARTICLE THREE

TERMINATION OF EMPLOYMENT

Employee’s employment with the Company may be terminated as follows:

3.1 Death or Disability.

Upon the death or long-term disability of Employee, this Agreement will automatically
terminate, and Employee (or his heirs in the case of death) will be entitled to receive his or her
Base Salary and benefits as listed above for a period of six (6) months from the Date of
Termination (as defined in Section 3.4 below). For purposes of this Agreement, “Disability” shall
mean the absence of Employee from Employee’s duties hereunder on a full-time basis for an aggregate
of 180 days within any given period of 270 consecutive days (in addition to any statutorily
required leave of absence and any leave of absence approved by the Company) as a result of the
incapacity of Employee, despite any reasonable accommodation required by law, due to bodily injury
or disease or any other mental or physical illness of Employee.

All of Employee’s issued but unexercised or unvested stock options and restricted stock grants
shall become fully vested and exercisable upon Employee’s death or the termination of this
Agreement due to Employee’s long-term disability and the stock options shall remain exercisable
until they are exercised or expire per the terms of the option plan and/or agreement under which
the option or shares were issued to Employee.

3.2 Termination by the Company.

a. Termination for Cause.

This Agreement may be terminated for “cause” by the Company immediately, without prior
notice (except as indicated herein below) and without severance pay or severance benefits.
For purposes hereof, “cause” shall mean any of the following events:

	 	i.	 	Any embezzlement or wrongful diversion of funds of the Company or any
affiliate of the Company by Employee;

	 	ii.	 	Malfeasance, poor performance as to core or delegated job assignments, in the
opinion of the Board of Directors, or insubordination by Employee in the conduct of
his duties.

	 	iii.	 	Failure to observe or strictly adhere to all of the Company policies put into
effect and/or amended from time to time;

	 	iv.	 	Abandonment by Employee of his job duties or repeated absences from the
Company-directed tasks which are not otherwise excused by the Company;

	 	v.	 	Competing with the Company or otherwise diverting away from the Company
business opportunities intended for the Company or which could reasonably benefit the
Company’s core business;

	 	vi.	 	Other material breach of this Agreement by Employee that remains uncured for
a period of at least thirty (30) days following written notice from the Company to
Employee of such alleged breach, which written notice describes in reasonable detail
the nature of such alleged breach; or

	 	vii.	 	Conviction of Employee or the entry of a plea of nolo contendere or
equivalent plea of a felony in a court of competent jurisdiction, or any other crime
or offense involving moral turpitude.

	 	b.	 	Reserved

	 	c.	 	Termination Without Cause

Notwithstanding the term provision of this Agreement, the Company may terminate
Employee at any time without “cause”, upon providing written notice to Employee. Upon such
termination, Employee shall have the rights set forth in Section 3.5 a. below subject to
the terms and conditions of Sections 3.5 e. and 3.5 f.

d. Termination for Good Reason

Notwithstanding the term provision of this Agreement, Employee may terminate this Agreement
for “good reason” 60 days after providing written notice to the Company of the “good reason” if the
written notice is provided within 30 days following the good reason event and the “good reason” is
not cured within the 60 day period following the notice. “Good reason” shall mean

	 	i.	 	a material breach of this Agreement by the Company, which breach is not cured
within 60 days after written notice by Employee to the Company of the breach; or

	 	ii.	 	a material change in reporting location not agreed to by Employee; or

	 	iii.	 	a material reduction in responsibilities or Base Salary.

Upon termination by Employee for good reason, Employee shall have the rights set forth in
Section 3.5 a. below, subject to the other terms and conditions of Sections 3.5 e. and 3.5 f.;
except that if termination by Employee for good reason satisfies the conditions of Section 3.5 b.,
then Employee shall have the rights set forth in Section 3.5 b., subject to the other terms and
conditions of Section 3.5b through 3.5 f. Such a termination shall be deemed to be an involuntary
termination.

If the Company enters into litigation with Employee as to whether Employee’s termination
validly qualifies as termination for “good reason,” then Employee will be entitled to continue to
be employed by the Company, at the same rate of salary as prior to Employee’s notice of
termination, until a court has rendered a decision in this matter, or until the parties have
reached a settlement, whichever occurs first.

3.3 Notice of Termination.

Any termination of Employee’s employment hereunder by the Company or by Employee shall be
communicated by a Notice of Termination (as defined below) to the other party hereto. For purposes
of this Agreement, a “Notice of Termination” shall mean a written notice which (a) indicates the
specific termination provision in this Agreement relied upon; (b) in the case of a termination for
disability or termination for cause, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee’s employment under the provision so
indicated; and (c) specifies the Date of Termination (as defined in Section 3.4 below). The
failure by the Company or Employee to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of a disability or a termination for cause shall not
waive any right of the Company or Employee hereunder or preclude the Company or Employee from
asserting such fact or circumstance in enforcing the Company’s or Employee’s rights hereunder.

3.4 Date of Termination.

For purposes of this Agreement, the “Date of Termination” shall mean the effective date of
termination of Employee’s employment hereunder, which date shall be (a) if Employee’s employment is
terminated by Employee’s death, the date of Employee’s death; (b) if Employee’s employment is
terminated because of Employee’s disability, the disability Effective Date; (c) if Employee’s
employment is terminated by the Company (or applicable affiliated company) for cause, the date on
which the Notice of Termination is given; and (d) if Employee’s employment is terminated for any
other reason, including the resignation by Employee, the date specified in the Notice of
Termination, which date shall in no event be earlier than the date such notice is given.

3.5 Severance Pay Provisions/Change in Control/Effect of Termination Without Cause by
Company, for good reason by Employee, or Due to Resignation.

a. In the event this Agreement is agreed by Employee to be renewed, but is not renewed by
the Company and is not superseded by a new agreement, or is terminated by Company without
“cause,” or is terminated by Employee for “good reason,” then Employee’s sole remedy shall
be limited to recovery by Employee from Company of his or her Base Salary and continuing
health care benefits for a period equal to six (6) months from the date of the expiration
of this Agreement (in the case of termination without cause or for good reason, or
Employee’s agreement to renew combined with the Company’s refusal to renew) or the Date of
Termination of this Agreement. Notwithstanding this Section 3.5 a., Employee shall not be
entitled to payment pursuant to this paragraph a. if he is entitled to payment pursuant to
Section 3.5 b.

b. In the event of a Change in Control as defined below, and Employee is terminated without
“cause” during the 12-month period following a Change in Control, or Employee terminates
his employment for “good reason” during the 12-month period following the Change in
Control, then Employee shall be entitled to benefits in the form of a lump sum payment in
the amount equal to his base salary and benefits (not including grants of common stock,
options or other equity) for a period equal to twelve (12) months plus 50% of the total
amount of cash bonuses granted to Employee during the 24 months preceding the Change in
Control (the “Change in Control Benefits”). Such payment of the Change in Control Benefits
shall be paid within 30 days of the effective termination date of Employee without “cause”
or for “good reason”, as applicable pursuant to Section 3.4. The Change in Control
Benefits provided for in this Agreement shall be in lieu of any other severance or
termination pay to which Employee may be entitled under any Company severance or
termination plan, program, practice or arrangement. Employee’s entitlement to any other
compensation or benefits shall be determined in accordance with any Company employee
benefit plans and any other applicable programs, policies and practices then in effect. In
addition, if Employee’s employment is terminated without “cause” during the 12-month period
following a Change in Control, or Employee terminates his employment for “good reason”
during the 12-month period following the Change in Control, then all of Employee’s issued
but unexercised or unvested stock options and restricted stock grants shall become fully
vested, and the unvested stock options shall become exercisable and shall remain
exercisable until they are exercised or expire per the terms of the option plan and/or
agreement under which the options or shares were issued to Employee.

For the purposes of this Agreement, a Change in Control shall be defined, in accordance
with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as the
occurrence of any of the following events:  

	 	i.	 	If any one person, or more than one person acting as a group (as defined in
Code Section 409A and Internal Revenue Service (“IRS”) guidance issued thereunder),
acquires ownership of common stock of the Company that, together with stock held by
such person or group, constitutes more than fifty (50) percent of the total fair
market value or total voting power of the common stock of the Company. However, if
any one person or more than one person acting as a group, is considered to own more
than fifty (50) percent of the total fair market value or total voting power of the
common stock of the Company, the acquisition of additional stock by the same person or
persons is not considered to cause a Change in Control, or to cause a change in the
effective control of the Company (within the meaning of Code Section 409A and IRS
guidance issued thereunder). An increase in the percentage of common stock owned by
any one person, or persons acting as a group, as a result of a transaction in which
the Company acquires its stock in exchange for property shall be treated as
an acquisition of stock for purposes of this Section. This paragraph applies only when
there is a transfer of stock of the Company (or issuance of stock of the Company) and
stock in such Company remains outstanding after the transaction;

	 	ii.	 	If any one person, or more than one person acting as a group (as determined
in accordance with Code Section 409A and IRS guidance thereunder), acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition
by such person or persons) ownership of common stock of the Company possessing thirty
(30) percent or more of the total voting power of the common stock of the Company;

	 	iii.	 	If a majority of members on the Company’s Board is replaced during any
12-month period by Directors whose appointment or election is not endorsed by a
majority of the members of the Company’s Board prior to the date of the appointment or
election (provided that for purposes of this paragraph, the term Company refers solely
to the “relevant” Company, as defined in Code Section 409A and IRS guidance issued
thereunder), for which no other Company is a majority shareholder; or

	 	iv.	 	If there is a change in the ownership of a substantial portion of the
Company’s assets, which shall occur on the date that any one person, or more than one
person acting as a group (within the meaning of Code Section 409A and IRS guidance
issued thereunder) acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) assets from the Company
that have a total gross fair market value equal to or more than forty (40) percent of
the total gross fair market value of all of the assets of the Company immediately
prior to such acquisition or acquisitions. For this purpose, gross fair market value
means the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such assets.

c. In the event that the Change in Control Benefits provided for under Section 3.5 b.
constitute “parachute payments” within the meaning of Section 280G of the Code, and but for
this Section 3.5 c., would be subject to the excise tax imposed by Section 4999 of the
Code, then the Change in Control Benefits under Section 3.5 b. will be either: (i)
delivered in full, or (ii) delivered as to such lesser extent that would result in no
portion of such Change in Control Benefits being subject to excise tax under Section 4999
of the Code, whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by Employee on an after-tax basis, of the greatest amount of Change in
Control Benefits, notwithstanding that all or some portion of such Change in Control
Benefits may be taxable under Section 4999 of the Code; provided, however, that Employee
may elect to receive Change in Control Benefits that would result in no portion of such
Change in Control Benefits being subject to excise tax under Section 4999 of the Code even
if such payment would not result in the greatest amount of Change in Control Benefits to
Employee. Unless the Company and Employee otherwise agree in writing, any determination
required under this Section 3.5 c. will be made in writing by the Company’s independent
public accountants immediately prior to the Change in Control (the “Accountants”), whose
determination will be conclusive and binding upon Employee and the Company for all
purposes. For purposes of making the calculations required by this Section, the
Accountants may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and Employee will furnish to the
Accountants such information and documents as the Accountants may reasonably request in
order to make a determination under this Section. The Company will bear all costs the
Accountants may reasonably incur in connection with any calculations contemplated by this
Section. In the event the Accountants determine that this Section requires a reduction in
Employee’s Change in Control Benefits, Employee will be provided the reasonable opportunity
to determine the order in which Change in Control Benefits will be reduced. If Employee
fails to make an appropriate reduction election within the reasonable time period
determined by the Compensation Committee, or the Company’s Board of Directors if no
Compensation Committee exists, in its sole discretion, the order of reduction will be
determined by the Compensation Committee or the Company’s Board of Directors, if
applicable.

d. If Employee terminates Employee’s employment with the Company by resignation, other than
resignation for “good reason”, such termination shall be without any severance pay or
severance benefits and Employee shall be entitled only to such compensation hereunder that
has accrued as of the Date of Termination.

e. As a condition and requirement in order to receive any payment pursuant to Section 3.5
a. or Section 3.5 b. above, Employee must sign and deliver to the Company a full release of
the Company from any claims that Employee may have against the Company, and Employee must
return to the Company all information, documents, records, memoranda, drafts, emails,
notes, data or other non-public information that is recorded in any electronic, audio,
video or other manner that was furnished to Employee or produced by Employee in connection
with Employee’s employment, except for documents relating to compensation or benefits to
which Employee is entitled following Employee’s resignation. Employee also shall be
required to return all other Company property and equipment, including keys and access
cards. The form of release to be signed and delivered by Employee to the Company will be
provided by the Company.

f. Notwithstanding anything to the contrary contained in this Section 3.5, if Employee is a
Specified Employee (as defined herein) on the date of termination and, as a result thereof,
Section 409A of the Code and the rules promulgated thereunder would so require, payment of
the severance benefit provided pursuant to Section 3.5 a. shall begin on the first day
following the six-month anniversary of the Date of Termination, and, the lump sum payment
of the Change in Control Benefit shall be made on the first day following the six-month
anniversary of the Date of Termination.

ARTICLE FOUR

CONFIDENTIALITY

4.1 Confidentiality.

In consideration of employment by the Company and Employee’s receipt of the salary and other
benefits associated with Employee’s employment, and in acknowledgment that:

a. the Company is engaged in the oil and gas business,

b. the Company maintains secret and confidential information,

c. during the course of Employee’s employment by the Company, such secret or confidential
information may become known to Employee, and

d. full protection of the Company’s business makes it essential that no employee
appropriate for his or her own use, or disclose, such secret or confidential information,

Employee agrees that, during the time of Employee’s employment and for a period of one (1) year
following the termination of Employee’s employment with the Company, Employee will hold in strict
confidence and shall not, directly or indirectly, disclose or reveal to any person, or use for his
own personal benefit or for the benefit of anyone else, any trade secrets, confidential dealings,
or other confidential or proprietary information of any kind, nature, or description (regardless of
whether acquired, learned, obtained, or developed by Employee alone or in conjunction with others)
belonging to or concerning the Company or any of its subsidiaries, except (i) with the prior
written consent of the Company duly authorized by its Board of Directors, (ii) in the course of the
proper performance of Employee’s duties hereunder, (iii) for information (A) that becomes generally
available to the public other than as a result of unauthorized disclosure by Employee or his
affiliates or (B) that becomes available to Employee on a non-confidential basis from a source
other than the Company or its subsidiaries who is not bound by a duty of confidentiality, or other
contractual, legal, or fiduciary obligation, to the Company, or (iv) as required by applicable law
or legal process. Notwithstanding the forgoing, this Section is not intended, nor shall be
construed, to prohibit Employee’s general knowledge, skill and experience or Employee’s inventive
powers.

4.2 Non-Competition.

During Employee’s employment with the Company and for so long as Employee receives any
severance benefit or is receiving any severance amount provided under this Agreement in respect of
the termination of his employment, Employee shall not be engaged as an officer or employee of, or
in any way be associated in a management or ownership capacity with any corporation, company,
partnership or other enterprise or venture that conducts a business in direct competition with the
business of the Company; provided, however, that Employee may own not more than two percent (2%)
of the outstanding securities, or equivalent equity interests, of any class of any corporation,
company, partnership, or other enterprise that is in direct competition with the business of the
Company, which securities are listed on a national securities exchange or traded in the
over-the-counter market. It is expressly agreed that the remedy at law for breach of this covenant
is inadequate and that injunctive relief shall be available to prevent the breach thereof.

4.3 Non-Solicitation.

Employee also agrees that he will not, directly or indirectly, during the term of his
employment or within two (2) years after termination of his employment for any reason, in any
manner, either (a) employ, or permit an entity by which he becomes employed or of which he becomes
a director, to employ, any person who was employed by the Company on the Date of Termination or 45
days prior to the Date of Termination; or (b) encourage, persuade, or induce any other employee of
the Company to terminate his employment, or any person or entity engaged by the Company to
represent it to terminate that relationship without the express written approval of the Company.
It is expressly agreed that the remedy at law for breach of this covenant is inadequate and that
injunctive relief shall be available to prevent the breach thereof.

4.4 Indemnification.

a. In the event Employee was, is or becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant in, any action, suit or
proceeding by reason of his being or having been an officer of the Company, then the Company shall
indemnify Employee against expenses reasonably incurred and/or liability incurred in connection
with any such action, suit or proceeding, and advance expenses to Employee, to the fullest extent
permitted by the Company’s Articles of Incorporation and bylaws now in effect, by the common law,
by the General Corporation Law of the State of Maryland (the “GCLM”) or other applicable law in
effect on the date hereof, and to any greater extent that the GCLM or applicable law may in the
future from time to time permit. Employee shall be indemnified as soon as practicable but in any
event no later than forty-five (45) days after written demand is presented to the Company by
Employee, and any indemnified amount shall include any and all expenses, judgments, fines,
penalties and amounts paid in settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such expenses, judgments, fines, penalties or
amounts paid in settlement) of such action, suit or proceeding for which Employee presents valid
invoices and/or receipts. If so requested by Employee, the Company shall advance to Employee,
within five (5) business days of such request, reasonable expenses (an “Expense Advance”) incurred
in defending any action, suit or proceeding, provided that Employee shall provide valid invoices
and/or receipts for such expenses to be advanced, and further provided that Employee shall execute
and deliver to the Company an undertaking that Employee shall repay to the Company any Expense
Advance if it shall ultimately be determined by a court of competent jurisdiction that Employee is
not entitled to be indemnified.

b. i. Upon written demand or other request by Employee for indemnification hereunder, Employee
shall be entitled to such indemnification unless (A) Employee did not act in good faith in a manner
that was reasonable and in the best interests of the Company; (B) Employee’s act or omission was
material to the matter giving rise to the liability and was committed in bad faith or was the
result of active or deliberate dishonesty; (C) Employee actually received an improper personal
benefit in money, property or services; or (D) in the case of a criminal proceeding, Employee had
reasonable cause to believe the act or omission was unlawful.

ii. In the event of a settlement before or after any action or suit, indemnification shall be
provided only in connection with such matters covered by settlement as to which the Company is
advised by the Reviewing Party (as defined below) that Employee was not guilty of such fraud or
misconduct as is covered by the provisions of Section 4.4 b.i. above.

iii. Employee shall not consent to the settlement of any action, suit or proceeding involving
his role as an officer of the Company without first obtaining the Company’s written consent, and
the Company shall not be liable to indemnify Employee for any amounts paid in settlement of any
action, suit or proceeding affected without its written consent, which consent shall not be
unreasonably withheld. The Company shall not be required to obtain the consent of Employee to
settle any action, suit or proceeding that the Company has undertaken to defend if the Company
assumes full and sole responsibility for such settlement and such settlement grants Employee a
complete and unqualified release in respect of any potential liability.

c. Promptly after receipt by Employee of notice of the commencement of any action, suit or
proceeding, Employee will, if a claim in respect thereof is to be made against the Company under
this Section 4.4, notify the Company in writing of the commencement thereof. The omission by
Employee to so notify the Company will not relieve the Company from any liability that it may have
to Employee under this Section 4.4 or otherwise, except to the extent that the Company may suffer
material prejudice by reason of such failure. Notwithstanding any other provision of this Section
4.4, with respect to any such action, suit or proceeding as to which Employee gives notice to the
Company of the commencement thereof:

i. The Company will be entitled to participate therein at its own expense.

	 	ii.	 	Except as otherwise provided in this Section 4.4, to the extent that it may
wish, the Company, jointly with any other indemnifying party similarly notified, shall
be entitled to assume the defense thereof with counsel reasonably satisfactory to
Employee. After notice from the Company to Employee of its election to so assume the
defense thereof, the Company shall not be liable to Employee under this Agreement for
any legal or other expenses subsequently incurred by Employee in connection with the
defense thereof other than reasonable costs of investigation or as otherwise provided
below. Employee shall have the right to employ Employee’s own counsel in such action,
suit or proceeding, but the fees and expenses of such counsel incurred after notice
from the Company of its assumption of the defense thereof shall be at the expense of
Employee unless (A) the employment of counsel by Employee and payment for same by the
Company has been authorized by the Company; (B) Employee shall have reasonably
concluded that there may be a conflict of interest between the Company and Employee in
the conduct of the defense of such action and such determination by Employee shall be
supported by an opinion of counsel, which opinion shall be reasonably acceptable to
the Company; or (C) the Company shall not in fact have employed counsel to assume the
defense of the action, in each of which cases the fees and expenses of counsel shall
be at the expense of the Company. The Company shall not be entitled to assume the
defense of any action, suit or proceeding brought by or on behalf of the Company or as
to which Employee shall have reached the conclusion provided for in clause (B) above.

d. If the Company advances Expense Advances or other funds for indemnification pursuant to
this Section, and, subsequently, indemnification pursuant to this Section is declared unenforceable
by a court of competent jurisdiction, or an independent third party, paid by the Company, that is
reviewing the indemnification set forth herein (the “Reviewing Party”) reasonably determines that
Employee is not entitled to indemnification pursuant to this Section, then Employee shall have the
right to retain the indemnification payments until all appeals of the court’s or the Reviewing
Party’s decision have been exhausted.

e. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the
Parties hereto and their respective successors or assigns, including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, spouses, heirs, executors and personal and legal
representatives. This Section 4.4 shall continue in effect regardless of whether Employee
continues to serve as an officer or director of the Company or of any other enterprise at the
Company’s request.

ARTICLE FIVE

MISCELLANEOUS

5.1 Time of Essence.

Time is of the essence with respect to this Agreement and same shall be capable of specific
performance without prejudice to any other rights or remedies under law.

5.2 Benefit.

This Agreement shall inure to and be binding upon the undersigned and their respective heirs,
representatives, successors and permitted assigns. This Agreement may not be assigned by either
party without the prior written consent of the other party.

5.3 Governing Law.

This Agreement shall be governed by, and construed in accordance with the laws of the State of
Colorado without resort to any principle of conflict of laws that would require application of the
laws of any other jurisdiction; provided, however, that the Maryland corporate laws shall be
applicable to the rights of Employee as a shareholder with regard to vested Company shares that
Employee may acquire pursuant to this Agreement.

5.4 Counterparts.

This Agreement may be executed in counterparts and via facsimile, each of which shall be
deemed to constitute an original, but all of which together shall constitute one and the same
Agreement. Each such counterpart shall become effective when one counterpart has been signed by
each Party thereto.

5.5 Severability.

In case any one or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
enforceability shall not affect any other provision hereof, and this Agreement shall be construed
as if such invalid, illegal or enforceable provision had never been contained herein.

5.6 Construction.

Use of the masculine pronoun herein shall be deemed to refer to the feminine and neuter
genders and the use of singular references shall be deemed to include the plural and vice versa, as
appropriate. No inference in favor of or against any Party shall be drawn from the fact that such
Party or such Party’s counsel has drafted any portion of this Agreement.

5.7 Captions for Convenience.

All captions herein are for convenience or reference only and do not constitute part of this
Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.

5.8  No Waiver.

No waiver of or failure to act upon any of the provisions of this Agreement or any right or
remedy arising under this Agreement shall be deemed or shall constitute a waiver of any other
provisions, rights or remedies (whether similar or dissimilar).

5.9  Amendment.

This Agreement may be amended only by a writing signed by all of the Parties hereto.

5.10 Entire Contract.

This Agreement and the documents and instruments referred to herein constitute the entire
contract between the Parties to this Agreement and supersede all other understandings, written or
oral, with respect to the subject matter of this Agreement. The Parties acknowledge and agree that
the Original Employment Agreement shall automatically terminate upon the execution of this
Agreement.

5.11 Notices.

All notices, requests, demands, directions and other communications (“Notices”) concerning
this Agreement shall be in writing and shall be mailed, delivered personally, sent by telecopier or
facsimile, or emailed to Employee at Employee’s address. When mailed, each such Notice shall be
sent by first class, certified mail, return receipt requested, enclosed in a postage prepaid
wrapper, and shall be effective on the fifth business day after it has been deposited in the mail.
When delivered personally, each such Notice shall be effective when delivered to Employee’s
address, provided that it is delivered on a business day and further provided that it is delivered
prior to 5:00 p.m., local time of Employee, on that business day; otherwise, each such Notice shall
be effective on the first business day occurring after the date on which the Notice is delivered.
When sent by email, telecopier or facsimile, each such Notice shall be effective on the day on
which it is sent provided that it is sent on a business day and further provided that it is sent
prior to 5:00 p.m., local time of Employee, on that business day; otherwise, each such Notice shall
be effective on the first business day occurring after the date on which the Notice is sent. Each
Notice shall be addressed to the Party to be notified as shown below:

	 	 	 	 	 
	(a)

	 	if to the Company:
	 	Double Eagle Petroleum Co.

1675 Broadway, Suite 2200

Denver, Colorado 80202

Facsimile No. (303)794-8451

Attention: Chief Executive Officer
	(b)

	 	if to Employee:
	 	Aubrey Harper

IN WITNESS WHEREOF, the Parties have set their hands and seals hereunto on the dates set forth
below to be effective as of the Effective Date.

	 	 	 
	“Company”

	 	“Employee”
	Double Eagle Petroleum Co.

	 	Aubrey Harper
	By: /s/ Richard Dole

	 	By: /s/ Aubrey Harper
	 

	 	 
	Richard Dole

	 	Aubrey Harper
	Chairman of the Board

	 	Vice President—Midstream Assets and

President Eastern Washakie Midstream LLC
	Date of Execution: September 4, 2008

	 	Date of Execution: September 4, 2008EX-10.1

UNITED STATES DEPARTMENT OF THE TREASURY

LENDING AGREEMENT

CREDIT AND SECURITY TERMS

1.0 SCOPE

1.1 This Agreement sets forth the terms under which an entity may, in accordance with

the Housing and Economic Recovery Act of 2008, borrow from and pledge Collateral to

the United States Department of the Treasury (Treasury)

2.0 DEFINED TERMS

Account means the account described in section 3.2 of this Agreement.

Adverse Claim has the meaning set forth in Section 9.1(d).

Application Package means the Application Package, substantially in the form of

Appendix I, which the Borrower submitted in connection with its agreement to this

Agreement.

Borrower means an entity that incurs an Obligation to the Treasury.

Borrower-in-Custody or BIC Arrangement means an arrangement whereby the

Treasury authorizes a Borrower, or an affiliate of the Borrower, to retain possession of

the Collateral, as described in Section 7 of this Agreement.

Business Day means any day the Federal Reserve Bank of New York is open for

conducting all or substantially all its banking functions.

Certificate means the certificate, substantially in the form set forth in the appropriate

Application Package, provided to the Treasury by the Borrower.

Collateral means:

(i) all the Borrower’s rights, title, and interest in property as described in section 7.0 (and

any other property agreed to by Treasury) that is (a) identified on a Collateral Schedule,

(b) identified on the books or records of a Reserve Bank as pledged to, or subject to a

security interest in favor of, the Treasury or (c) in the possession or control of, or

maintained with, the Treasury including;

(ii) all documents, books and records, including programs, tapes, and related electronic

data processing software, evidencing or relating to any or all of the foregoing; and

(iii) to the extent not otherwise included, all proceeds and products of any and all of the

foregoing and all supporting obligations given by any person with respect to any of the

foregoing, including but not limited to interest, dividends, insurance, rents and refunds.

Collateral Schedule means the written, electronic or other statement(s) listing Collateral

in effect at any time. Each statement of Collateral shall be in the form required by the

Treasury and shall identify the items of Collateral with the specificity required by the

Treasury. The removal of an item from a statement of Collateral will not be effective and

will not affect the Treasury’s security interest in the item unless such removal is made in

accordance with this Agreement and the Treasury’s procedures, including prior Treasury

approval or authorization.

Event of Default means any of the following:

(i) the Borrower fails to repay or satisfy any Obligation when due;

(ii) the Borrower fails to perform or observe any of its obligations or agreements under

the Lending Agreement or under any other instrument or agreement delivered or

executed in connection with the Lending Agreement;

(iii) any representation or warranty made or deemed to be made by the Borrower under

or in connection with the Lending Agreement, or that is contained in any certificate,

document, or financial or other statement delivered by it or in connection with the

Lending Agreement, is inaccurate in any material respect on or as of the date made or

deemed made;

(iv) the Insolvency of the Borrower;

(v) the Lending Agreement or any other agreement delivered or executed in connection

with the Lending Agreement ceases, for any reason, to be in full force and effect, or the

Borrower so asserts or any security interest or lien created hereby ceases to be

enforceable or have the same effect and priority purported to be created hereby;

(vi) the creation of an encumbrance upon Collateral, or placement of a levy, judicial

seizure of, or an attachment upon Collateral;

(vii) whenever the Secretary of the Treasury determines that Treasury’s position is

insecure with respect to the financial condition of the Borrower or the Borrower’s ability

to perform its Obligations.

Federal Reserve Bank means any one of the Federal Reserve Banks.

Insolvency means:

(i) the condition of insolvency;

(ii) that a proceeding relating to bankruptcy, insolvency, reorganization or relief of

debtors, seeking to adjudicate an entity bankrupt or insolvent or seeking reorganization,

adjustment, dissolution, liquidation or other relief with respect to the Borrower or the

Borrower’s debt is commenced;

(iii) that an assignment for the benefit of the Borrower’s creditors occurs;

(iv) that a receiver, custodian, conservator, or the like is appointed for the Borrower or for

any of its United States or foreign branches or agencies;

(v) that the Borrower has been closed by order of its supervisory authorities, or a public

officer has been appointed to take over such entity;

(vi) that the Borrower ceases or refuses to make payments in the ordinary course of

business, or admits in a record its inability to pay its debt as they become due;

(vii) the Borrower’s business is suspended, or any party has presented or filed a petition

for winding-up or liquidating the Borrower; or

(viii) any other circumstances that evince the Borrower’s inability to pay its debts when

due.

Lending Agreement means this Agreement, any Collateral Schedule, each document in

the Application Package executed or furnished to the Treasury by the Borrower, and any

other agreement or document executed by the Borrower in connection with this

Agreement, in each case as the same may be amended, supplemented or otherwise

modified from time to time.

Lending Documents has the meaning set forth in Section 8 of this Agreement

Letter of Agreement means the Letter of Agreement, substantially in the form found in

Appendix I pursuant to which the Borrower agrees to be bound by the terms of this

Agreement.

Loan means an extension of credit to the Borrower.

Loan Repayment Amount means the amount of a Loan, plus all accrued and unpaid

interest thereon.

Obligation, whether now existing or hereafter incurred, means:

(i) Loan Repayment Amounts;

(ii) any other liabilities of the Borrower to the Treasury; and

(iv) any expense the Treasury or its designee(s) may incur to:

a. obtain, preserve and/or enforce the Lending Agreement or the Treasury’s security

interest in Collateral and the Borrower’s Obligations under the Lending Agreement,

b. collect any or all of the foregoing, or

c. assemble, transport, maintain or preserve Collateral (including, without limitation,

taxes, assessments, insurance premiums, repairs, reasonable attorneys’ fees, rent,

transportation, storage costs, and expenses of sale).

Treasury means the United States Department of the Treasury. For operational

purposes, the term “Treasury” includes a Federal Reserve Bank acting as fiscal agent to

the Treasury.

UCC means the Uniform Commercial Code.

3.0 LOANS

3.1 A request for a Loan shall be made to the Treasury in a form and time acceptable to

the Treasury. A Loan must be secured by Collateral acceptable to the Treasury. Upon

Treasury’s request, the Borrower shall submit a written application for a Loan.

3.2 The Treasury’s approval of a request for a Loan shall be evidenced by, and the Loan

shall be deemed made at the time of, the Treasury’s record of the credit of the amount of

the Loan to an Account agreed upon by the Borrower and the Treasury.

3.3 Loans to the Federal Home Loan Banks (FHLBs) or any FHLB under this Agreement

shall be joint and several obligations of all the FHLBs, issued under Section 11(a) of the

Federal Home Loan Bank Act, 12 U.S.C. § 1431(a), through the Office of Finance as

agent of the FHLBs, and therefore are consolidated obligations issued pursuant to part

966 of the rules of the Federal Housing Finance Board, in continuing force and effect

under Section 1312 of the Housing and Economic Recovery Act of 2008, and any

successor rule of the Federal Housing Finance Agency.

4.0 INTEREST

4.1 The interest rate applicable to a Loan shall be the rate, as from time to time

established by the Treasury. Interest on a Loan shall accrue from the day the Loan is

credited to the Account and shall be payable at the applicable rate in effect on that day,

except that if the interest rate changes while a Loan is outstanding, the new rate shall

apply as of the day on which the rate change is effective. Interest shall be computed on

the basis of 365 days in a year.

4.2 If all or any portion of a Loan Repayment Amount is not paid when due (whether by

acceleration or otherwise), interest on the unpaid portion of the Loan Repayment

Amount shall be calculated at a rate 500 basis points higher than the applicable rate

then in effect until the unpaid Loan Repayment Amount is paid in full.

5.0 REPAYMENT OF LOAN

5.1 The Borrower promises to pay a Loan Repayment Amount when due in actually and

finally collected funds. A Loan Repayment Amount is immediately due and payable

(a) on demand;

(b) without any demand, notice or other action on the due date and time specified by the

Treasury in writing (provided that if such date falls on a day that is not a Business Day,

the due date shall be extended to the next Business Day) or upon the occurrence of any

Event of Default described in clause (iv), (v) or (vii) of the definition of such term.

5.2 The Borrower waives any right to presentment, notice of dishonor, protest, and any

other notice of any kind except as expressly provided for herein.

5.3 Upon notice to the Treasury at least 2 days in advance, the Borrower may prepay a

Loan Repayment Amount, in whole or in part, without penalty.

5.4 The appropriate Federal Reserve Bank, acting on behalf of the Treasury, will debit

the Borrower’s Account for the Loan Repayment Amount and all other Obligations when

due.

6.0 GRANT OF SECURITY INTEREST

For value received and in consideration of the Treasury permitting the Borrower to obtain

Loans, the Borrower hereby transfers and assigns to the Treasury and grants to the

Treasury a continuing security interest in and lien on the Collateral as collateral security

for the timely and complete payment and performance when due (whether at stated

maturity, by acceleration or otherwise) of all Obligations.

7.0 COLLATERAL

7.1 The Borrower shall ensure that the Collateral meets the requirements set forth in this

section or as the Treasury may otherwise from time to time prescribe.

7.2 Acceptable Collateral consists of Federal Home Loan Bank advances to member

financial institutions that have been collateralized in accordance with Federal Home

Loan Bank standards (FHLB advances) and mortgage backed securities issued by the

Federal National Mortgage Association or the Federal Home Loan Mortgage

Corporation.

7.3 Acceptable FHLB advances shall be valued with a 13% haircut applied to the

outstanding principal amount of the asset on the balance sheet of the Federal Home

Loan Bank. Haircuts may also be applied to the value of mortgage backed securities as

determined by Treasury.

7.4 FHLB advances pledged as Collateral under this Agreement may be held under a

BIC Arrangement subject to section 7.10 herein. FHLB advances must be prepositioned,

in an amount acceptable to the Treasury, before a Federal Home Loan Bank

is eligible to receive a Loan under this Agreement. MBS pledged as Collateral under this

Agreement must be held in a custodial National Book Entry System account established

through the Federal Reserve Bank of New York. MBS pledged hereunder may be

repositioned from an investment account into the custodial account on a same-day

basis.

7.5 On a weekly basis, Borrower must submit to the Federal Reserve Bank of New York

acting as fiscal agent of the Treasury, a Collateral Schedule listing the Collateral pledged

to Treasury under this Agreement, including the outstanding principal amount of any

FHLB advances.

7.6 The Treasury may at any time request the Borrower to replace any item of Collateral

or to grant a lien and security interest in additional assets of a type and in an amount

acceptable to the Treasury, and the Borrower shall promptly do so.

7.7 Unless otherwise specified by the Treasury in writing, the Borrower shall promptly

withdraw from the Collateral Schedule:

(a) any Collateral that has a payment of principal or interest past due, in whole or in part,

for more than 30 days;

(b) any Collateral that has been paid in full by the obligor; or

(c) any Collateral if the obligor on such Collateral becomes insolvent, or if a receiver,

custodian, or the like is appointed for the obligor.

Prior to such withdrawal, however, the Borrower shall update any relevant Collateral

Schedule and pledge substitute Collateral acceptable to the Treasury by submitting an

updated Collateral Schedule or otherwise pledging such Collateral to the Treasury.

7.8 The Treasury has no duty to collect any income accruing on Collateral or to preserve

any rights relating to Collateral.

7.9 The Borrower hereby:

(a) authorizes the Treasury at any time to file or record in any filing office in any

jurisdiction which the Treasury determines appropriate to perfect the security interests

set forth hereunder, financing statements, and any amendments or continuation

statements related thereto without the signature of the Borrower therein that describes

the Collateral and the Borrower shall, promptly at the Treasury’s request, provide any

additional information required by Article 9 of the UCC, as in effect in any relevant

jurisdiction, for the sufficiency or acceptability of any financing statement;

(b) ratifies its authorization for the Treasury to have filed any financing statement,

including any amendment or continuation statement related thereto, in any jurisdiction,

where the same has been filed prior to the date on which the Letter of Agreement is

signed by the Borrower;

(c) authorizes the Treasury at any time, to take any and all other actions that may be

necessary or, in the Treasury’s sole discretion, desirable to obtain, preserve, perfect or

enforce the Treasury’s security interest in the Collateral;

(d) authorizes the Treasury to endorse or assign as the Borrower’s agent any item of

Collateral, to inspect Collateral held by the Borrower, and copy any relevant records

and/or documents.

7.10 Treasury will keep all information regarding the identity of borrowers identified in

any collateral documentation confidential and such information will not be disclosed

except to as authorized or necessary to effectuate the terms of this Agreement.

7.11 If the Treasury approves, the Borrower may hold certain Collateral in a BIC

Arrangement (“BIC-held Collateral”) subject to the following:

(a) BIC-held Collateral shall be prominently identified as Pledged to the Treasury and

subject exclusively to the Treasury’s written instructions. At the Treasury’s request, the

Borrower shall, without delay, prominently and conspicuously affix a legend to items of

BIC-held Collateral indicating that such items are subject to a security interest in favor of

the Treasury.

(b) The Borrower shall mark its records to show that BIC-held Collateral has been

pledged to the Treasury and is subject exclusively to the Treasury’s written instructions.

Any computer generated list or report containing BIC-held Collateral must incorporate a

legend indicating that such Collateral is pledged to the Treasury.

(c) Upon the Treasury’s request, the Borrower shall at all times segregate BIC-held

Collateral from its own assets or the assets of any other party and shall hold Collateral in

such location(s) approved by the Treasury. BIC-held Collateral shall not be removed

from such location(s) without the prior written approval of the Treasury.

(d) The Borrower may withdraw or replace BIC-held Collateral only with the approval of

the Treasury and on terms acceptable to the Treasury.

(e) The Treasury may from time to time notify Borrower of additional requirements on

BIC-held Collateral. The Borrower’s failure to comply with such requirements may

disqualify the Borrower from participation in the BIC Arrangement.

7.12 With respect to any item of Collateral not delivered or transferred to the Treasury or

its agent or custodian, including BIC-held Collateral, the Borrower shall hold such item of

Collateral in trust for the Treasury until the Collateral is delivered or transferred in

accordance with the Treasury’s instructions. The Borrower bears the risk of loss for any

Collateral held in the Borrower’s possession, at any custodian, maintained in an account

at a securities intermediary other than a Reserve Bank, or in transit to or from the

Reserve Bank. The Borrower also bears the risk of any accidental loss or damage to

Collateral in the possession of the Treasury or its agent to the extent the Treasury

exercised reasonable care.

7.13 Unless an Event of Default occurs or the Treasury expressly directs otherwise, any

proceeds, dividend, interest, rent, proceeds of redemption, and/or any other payment

received by the Borrower regarding any Collateral may be retained by the Borrower. If

the Treasury directs that any of the foregoing be paid to the Treasury, the Borrower shall

remit those payments, or cause such payments to be remitted, promptly to the Treasury

and, until receipt by the Treasury, such payments are deemed to be held in trust for the

Treasury.

7.14 The Treasury is under no obligation to allow for the withdrawal of any item of

Collateral from the pledge to the Treasury, or to allow the removal of any item of

Collateral from the Collateral Schedule or otherwise release its security interest in any

item of Collateral unless:

(a) the Borrower has provided substitute Collateral acceptable to the Treasury; or

(b) the Treasury has verified, in accordance with its normal customs and procedures,

that all Obligations have been unconditionally repaid in full and that the Borrower is not

currently in default under another agreement with the Treasury.

7.15 Borrower shall submit a written certification to Treasury including the following

information and attestations: (i) the location of all supporting documentation or records;

(ii) a statement that all supporting documentation or records are complete, controlled,

and protected; (iii) a description of the Borrower’s asset valuation criteria; (iv) a

description of the Borrower’s internal loan-rating system; (v) a description of how

Collateral is marked as pledged to the Treasury; and (vi) where applicable, a statement

that Borrower’s Financial Statement including its portfolio of FHLB advances is audited

in accordance with applicable auditing standards. This certification is only required on a

one-time basis, however, Borrower shall notify Treasury if any of the information

contained in the certification changes or is no longer accurate.

8.0 MAINTENANCE OF LENDING DOCUMENTS

The documents specified below must be maintained continuously as official records of

the Borrower. The documents listed in subparagraph (a) shall at all times be kept

together in one place, while the document listed in subparagraph (b) may be kept in any

accessible and secure location on the Borrower’s premises.

(a) a copy of the Lending Agreement; and

(b) a current statement of outstanding Loans.

9.0 REPRESENTATIONS AND WARRANTIES

9.1 The Borrower represents and warrants that:

(a) (i) the Borrower has the power and authority, and the legal right, to make, deliver and

perform the Lending Agreement and to obtain a Loan; (ii) the Borrower has taken all

necessary organizational action to authorize the execution, delivery and performance of

the Lending Agreement and to authorize the obtaining of a Loan on the terms and

conditions of the Lending Agreement; (iii) no consent or authorization of, filing with,

notice to or other act by or in respect of, any governmental authority or any other person

is required in connection with the obtaining of Loans hereunder or with the execution,

delivery, performance, validity or enforceability of the Lending Agreement; and (iv) the

Lending Agreement has been duly executed and delivered on behalf of the Borrower;

(b) the Borrower is duly organized, validly existing and in good standing under the laws

of the jurisdiction of its organization and is not in violation of any laws or regulations in

any respect which could have any adverse effect whatsoever upon the validity,

performance or enforceability of any of the terms of the Lending Agreement;

(c) the Lending Agreement constitutes a legal, valid and binding obligation of the

Borrower, enforceable against the Borrower in accordance with its terms;

(d) the Borrower has rights in Collateral sufficient to grant an enforceable security

interest to the Treasury and its rights in Collateral are free of any assertion of a property

right that would adversely affect the Treasury’s right to Collateral, including but not

limited to any claim, lien, security interest, encumbrance, preference or priority

arrangement or restriction on the transfer or pledge of Collateral (an “Adverse Claim”),

except as created by, or otherwise permitted under, the Lending Agreement or by the

Treasury;

(e) all information set forth on the Certificate is accurate and complete and there has

been no change in such information since the date of the Certificate;

(f) (i) the Lending Agreement is effective to create in favor of the Treasury a legal, valid,

and enforceable security interest in the Collateral described in the Lending Agreement

and proceeds thereof; (ii) when financing statements are filed in the state filing offices

located in the jurisdictions specified on the Certificate, those security interests shall

constitute a fully and validly perfected lien on, and security interest in, all rights, title and

interest of the Borrower in such Collateral as to which perfection can be obtained by

filing, as security for the Obligations, in each case prior and superior in right to any other

person (except for liens that arise by operation of law); and (iii) no financing statement or

other public notice with respect to all or any part of the Collateral is on file or of record in

any public office, except such as have been filed in favor of the Treasury pursuant to the

Lending Agreement, are permitted by the Lending Agreement, or are otherwise

permitted by the Treasury;

9.2 Each time the Borrower requests a Loan or grants a security interest in any

Collateral to Treasury, the Borrower is deemed to make all of the foregoing

representations and warranties on and as of the date such Loan is incurred or security

granted. Such representations and warranties shall be true on and as of such date and

shall remain true and correct so long as the Lending Agreement remains in effect, any

Obligation remains outstanding, or any other amount is owing to the Treasury.

10.0 COVENANTS

The Borrower covenants that so long as the Lending Agreement remains in effect or any

Obligation remains outstanding or any other amount is owing to the Treasury:

(a) except for the security interest herein granted or otherwise permitted hereunder or by

the Treasury, the Borrower shall have rights in the Collateral free from any Adverse

Claim, and shall maintain the security interest created hereby with the priority set forth in

Section 9.1(f) and shall take all actions necessary or prudent to defend against Adverse

Claims;

(b) except as otherwise permitted hereunder or by the Treasury, the Borrower shall not

(i) sell or otherwise dispose of, or offer to sell or otherwise dispose of, the Collateral or

any interest therein, or (ii) pledge, mortgage, or create, or permit the existence of any

right of any person in or claim to, the Collateral other than the security interest granted

herein;

(c) the Borrower shall not perform any act with respect to any Collateral that would

impair the Treasury’s rights or interests therein, nor will the Borrower fail to perform any

act that would reasonably be expected to prevent such impairment or that is necessary

to preserve the Treasury’s rights;

(d) the Borrower shall promptly notify the Treasury if the Borrower fails or is about to fail

to meet the capital requirements required by regulations applicable to the Borrower.

(e) the Borrower shall renew or keep in full force and effect its organizational existence

or take all reasonable action to maintain all rights, privileges, licenses and franchises

necessary or desirable in the normal conduct of its business;

(f) in any BIC Arrangement, the Borrower shall provide for periodic audits of BIC-held

Collateral pledged to the Treasury, shall notify the Treasury immediately of any

irregularities discovered during any audits, and shall certify periodically, as determined

by the Treasury, that it is complying with the requirements of the BIC Arrangement;

(g) without providing at least 30 days’ prior written notice to the Treasury and submitting

an updated Certificate to the Treasury, the Borrower shall not cause or permit any of the

information provided in the Certificate, including its jurisdiction of organization, to

become untrue;

(h) the Borrower shall promptly notify the Treasury of the occurrence or impending

occurrence of any Event of Default; and

(i) the Borrower shall promptly notify the Treasury of any change in applicable law, the

regulations or policies of its chartering and/or licensing authority, or its charter, bylaws,

or other governing documents, or any legal or regulatory process asserted against the

Borrower, that materially affects or may materially affect the Borrower’s authority or

ability to lawfully perform its obligations under the Lending Agreement.

11.0 WAIVER OF IMMUNITY; SUBMISSION TO JURISDICTION

11.1 If the Borrower or its property is now, or in the future becomes, entitled to any

immunity, whether characterized as sovereign or otherwise (including, without limitation,

immunity from set-off, from service of process, from jurisdiction of any court or tribunal,

from attachment in aid of execution, from attachment prior to the entry of a judgment, or

from execution upon a judgment) in any legal proceeding in Federal or State court then

the Borrower expressly and irrevocably waives, to the maximum extent permitted by law,

any such immunity. To the extent the Borrower receives any such entitlement in the

future, the Borrower shall promptly notify the Treasury of such entitlement.

11.2 The Borrower submits in any legal action or proceeding relating to or arising out of

the Lending Agreement, or the conduct of any party with respect therefor or for

recognition and enforcement of any judgment in respect thereof, to the nonexclusive

general jurisdiction of the Federal District Court for the District of Columbia and any

appellate court thereof. The Borrower agrees that service of process in any such action

or proceeding may be effected by mailing a copy thereof by registered or certified mail

(or any substantially similar form of mail), postage prepaid, to the address provided in

the Letter of Agreement; and agrees that nothing herein shall affect the right to effect

service of process in any other manner permitted by law or shall limit the right to sue in

any other jurisdiction. The Borrower irrevocably waives, to the fullest extent permitted by

law, any objection which it may now or hereafter have to the venue of any such suit,

action, or proceeding brought in any such court and any claim that any such suit, action

or proceeding brought in such a court has been brought in an inconvenient forum. The

Borrower also agrees that a final judgment in any such suit, action, or proceeding

brought in such court shall be conclusive and binding upon the Borrower. The foregoing

does not diminish or otherwise affect any rights the Treasury may have under law.

12.0 REMEDIES UPON DEFAULT

12.1 Upon the occurrence of, and at any time during the continuance of, an Event of

Default, the Treasury may pursue any of the following remedies, separately,

successively, or concurrently:

(a) cause the Borrower’s Account to be debited in an amount up to the Borrower’s

unpaid Obligations;

(b) set off any Obligation against any amount owed by the Treasury to the Borrower,

whether or not such amount owed is then due and payable;

(c) exercise any right of set-off or banker’s lien provided by applicable law against the

Borrower’s property in the possession or control of, or maintained with, the Treasury,

including but not limited to items in process of collection and their proceeds and any

balance to the credit of the Borrower with the Treasury;

(d) take possession of any Collateral not already in Treasury’s possession, without

demand and without legal process. Upon the Treasury’s demand, the Borrower shall

assemble and make Collateral available to the Treasury as the Treasury directs. The

Borrower grants to the Treasury the right, for this purpose to enter into or on any

premises where Collateral may be located; and

(e) pursue any other remedy available to collect, enforce, or satisfy any Obligation,

including exercising its rights as a secured creditor to collect income on the Collateral, or

to sell, assign, transfer, lease or otherwise dispose of Collateral whether or not Collateral

is in the Treasury’s possession, or to take action against any other property or assets of

the Borrower whether or not pledged to Treasury as Collateral.

Where the Borrower is a FHLB, pursue any and all remedies available to collect,

enforce, or satisfy any Loan Repayment Amount against any other FHLB on the basis

that the Loan Repayment Amount is a consolidated obligation as described in section

3.3. In the event that a FHLB other than the Borrower satisfies a Loan Repayment

Amount owed by the Borrower pursuant to this subsection, Treasury will release any

collateral remaining upon satisfaction of all Obligations of the Borrower in accordance

with instructions provided by the Office of Finance.

12.2 If the Treasury exercises its rights in Collateral upon an Event of Default:

(a) the Treasury may sell, assign, transfer, and deliver, at the Treasury’s option, all or

any part of Collateral at private or public sale, at such prices as the Treasury may, in

good faith, deem best, without advertisement, and the Borrower waives notice of the

time and place of the sale, except any notice that is required by law and may not be

waived;

(b) the Treasury has no obligation to prepare Collateral for sale, and the Treasury may

sell Collateral and disclaim any warranties without adversely affecting the commercial

reasonableness of the sale;

(c) the Treasury has no obligation to collect from any third party or to marshal any assets

in favor of the Borrower to satisfy any Obligation; and

(d) the Treasury may purchase any or all of Collateral and pay for it by applying the

purchase price to reduce amounts owed by the Borrower to the Treasury.

12.3 The Borrower appoints the Treasury with full power of substitution, as its true and

lawful attorney-in-fact with full irrevocable power and authority in the place and stead of

the Borrower, to endorse, assign, transfer, and deliver Collateral to any party, and to

take any action deemed necessary or advisable by the Treasury either to protect the

Treasury’s interests or exercise its rights under the Lending Agreement, including taking

any action to perfect or maintain the Treasury’s security interest (including but not limited

to recording an assignment of a mortgage or filing a financing statement). This power of

attorney is coupled with an interest and as such is irrevocable and full power of

substitution is granted to the assignee or holder. As attorney-in-fact, the Treasury may

take any lawful action to collect all sums due in connection with Collateral, the Treasury

may release any Collateral, instruments or agreements securing or evidencing the

Obligations as fully as the Borrower could do if acting for itself, and the Treasury may

take any action set forth in Section 7.9, but the Treasury has no obligation to take any

such actions or any other action in respect of the Collateral.

12.4 The proceeds realized by the Treasury upon selling or disposing of Collateral, to

the extent actually received in cash by the Treasury will be applied toward satisfaction of

the Obligations. The Treasury shall apply such proceeds first to any fees, other charges,

penalties, indemnities, and costs and expenses of, collection, or realizing on interests in

Collateral (including reasonable attorneys’ fees), next to accrued but unpaid interest, and

last to the unpaid principal balance. The Treasury will account to the Borrower for any

surplus amount realized upon such sale or other disposition, and the Borrower shall

remain liable for any deficiency.

12.5 No delay or failure by the Treasury to exercise any right or remedy accruing upon

an Event of Default shall impair any right or remedy, waive any default or operate as an

acquiescence to the Event of Default, or affect any subsequent Event of Default of the

same or of a different nature.

12.6 On complying with the provisions of the Lending Agreement and applicable law, the

Treasury is fully discharged from any liability or responsibility to any person regarding

Collateral.

13.0 INDEMNIFICATION

13.1 The Borrower shall indemnify the Treasury and its officers, directors, employees

and agents (each, an “Indemnified Party”) for any loss, claim, damage, liability, and

expense (including, without limitation, reasonable attorneys’ fees, court costs and

expenses of litigation) incurred by an Indemnified Party in the course of or arising out of

the performance of the Lending Agreement, any action related to Collateral, or any

action to which an Indemnified Party may become subject in connection with the

Treasury’s exercise, enforcement or preservation of any right or remedy granted to it

under the Lending Agreement, except to the extent that such loss, claim, damage,

liability, or expense results, as determined by a court, from the Treasury’s gross

negligence or willful misconduct.

13.2 The Treasury will give the Borrower written notice of any claim that the Treasury or

any other person may have under this indemnity. The Borrower is not liable for any claim

that is compromised or settled by the Treasury or such persons without the Borrower’s

prior written consent, provided that the Borrower responded promptly and in the

Treasury’s judgment, adequately, to the Treasury’s notice of such claim. This indemnity

remains an obligation of the Borrower notwithstanding termination of the Lending

Agreement, and is binding on the Borrower’s successors and assigns. Upon written

demand from the Treasury, the Borrower shall pay promptly amounts owed under this

indemnity, free and clear of any right of offset, counterclaim or other deduction, and the

Treasury’s reasonable determination of amounts owing hereunder is binding. If not

promptly paid by the Borrower, such obligation becomes an Obligation secured under

the Lending Agreement.

14.0 MISCELLANEOUS

14.1 The Treasury is not obligated by the Lending Agreement or otherwise to make,

increase, renew, or extend any Loan to the Borrower.

14.2 The Borrower’s obligations under the Lending Agreement shall be performed by it

at its own cost and expense.

14.3 Unless expressly agreed otherwise by the Treasury, Eastern Time shall be used to

determine any deadline hereunder, including the time a Loan Repayment Amount is due

and payable.

14.4 The Treasury or a Federal Reserve Bank acting on behalf of the Treasury may

record telephone communications with the Borrower and such recordings may be

submitted in evidence to any court or in any proceeding for the purpose of establishing

any matters pertinent to the Lending Agreement.

14.5 The Treasury’s rights and remedies under the Lending Agreement are in addition to

any others agreed to by the Borrower or that may exist at law or in equity.

14.6 Any provision of the Lending Agreement that is unenforceable or invalid under any

law in any jurisdiction is ineffective to the extent of such unenforceability or invalidity

without affecting the enforceability or validity of any other provision, and any such

unenforceability or invalidity shall not invalidate or render unenforceable such provision

in any other jurisdiction.

14.7 The Lending Agreement is binding on the receivers, administrators, permitted

assignees and successors, and legal representatives of the Borrower and inures to the

benefit of the Treasury, its assignees and successors.

14.8 The Borrower may not assign its rights or obligations hereunder.

14.9 The Treasury is not required to provide a written advice to the Borrower for any

Loan or Loan Repayment Amount.

14.10 The Treasury has no liability for acting in reliance upon any communication

(including a fax, telex, electronic communication, or similar communication) reasonably

believed by the Treasury to be genuine or to be sent by an individual acting on behalf of

the Borrower.

14.11 The Section headings used herein are for convenience only and are not to affect

the construction hereof or be taken into consideration in the construction hereof.

15.0 AMENDMENT

The Treasury, in its sole discretion, may amend the Lending Agreement without prior

notice at any time. The Treasury shall notify the Borrower of any such amendment and,

thereafter, any pledge of Collateral, request for any Loan or incurrence of any other

Obligation shall constitute the Borrower’s agreement to such amendment as of the

effective date of such amendment. An amendment does not modify the terms of an

outstanding Loan.

16.0 NOTICE

16.1 Any and all notices, statements, demands or other communications hereunder may

be given by a party to the other by mail, facsimile, telegraph, messenger or otherwise to

the address specified in Appendix I hereto, or so sent to such party at any other place

specified in a notice of change of address hereafter received by the other. All notices,

demands and requests hereunder may be made orally, to be confirmed promptly in

writing, or by other communication as specified in the preceding sentence.

16.2 If sent to the Treasury, the notice must be addressed as specified by the Treasury.

17.0 TERMINATION

17.1 The Lending Agreement shall terminate on December 31, 2009 but shall remain in

effect as to any Loan outstanding on that date. Notwithstanding any other provision of

this Agreement, the Borrower may terminate its consent to be bound by the Lending

Agreement prior to that time by giving written notice to the Treasury in the manner

specified by Treasury, so long as no Loan is then outstanding. Termination does not

release the Borrower or affect the Treasury’s rights, remedies, powers, security interests

or liens against Collateral in existence prior to the termination or to Treasury’s receipt of

the notice of termination, nor does termination affect any provision of the Lending

Agreement which by its terms survives termination of the Lending Agreement.

17.2 Upon termination, the Treasury may retain Collateral until the Treasury has had a

reasonable opportunity to verify, in accordance with its normal customs and procedures,

that all of the Borrower’s Obligations, contingent or otherwise, to the Treasury have been

fully satisfied and discharged.

18.0 GOVERNING LAW

The Lending Agreement, including any Loan or any other transaction entered into

pursuant thereto, is governed by federal law or to the extent no applicable federal law

exists by the laws of the State of New York. The Lending Agreement is a security

agreement for purposes of the UCC, as in effect in any relevant jurisdiction, and other

applicable law.

19.0 WAIVER OF JURY TRIAL

THE BORROWER AND THE TREASURY EACH HEREBY UNCONDITIONALLY AND

IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,

SUIT, COUNTERCLAIM, OR CROSS CLAIM ARISING IN CONNECTION WITH, OUT

OF, OR OTHERWISE RELATING TO THE LENDING AGREEMENT, THE

COLLATERAL, OR ANY TRANSACTION OR AGREEMENT ARISING THEREFROM

OR RELATED THERETO.

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