Document:

Exhibit 10.49

Exhibit 10.49

ATHERSYS, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

This Agreement (“Agreement”) is made as of                     
 _____,
 _____ 

(the “Date of Grant”) by and
between Athersys, Inc., a Delaware corporation (the “Company”) and                                         
(“Optionee”) with respect to the grant of a Nonqualified Stock Option by the Company to Optionee
pursuant to the Athersys, Inc. Amended and Restated 2007 Long-Term Incentive Plan (As Amended and
Restated Effective June 16, 2011) (the “Plan”). (Capitalized terms used in this Agreement and not
otherwise defined have the meanings assigned to them in the Plan).

	1.	 	Grant of Stock Option. Subject to and upon the terms, conditions, and restrictions set forth
in this Agreement, the Company hereby grants to Optionee an option (the “Option”) to purchase
                                        
(_____) Shares (the “Option Shares”) of Common Stock of the Company or
any security unto which such shares may be changed by reason of any transaction or event of
the type referred to in Section 10 of this Agreement (“Common Shares”). The Option may be
exercised from time to time in accordance with the terms of this Agreement.

	2.	 	Type of Option. The Option is intended to be a nonqualified stock option and shall not be
treated as an “incentive stock option” within the meaning of that term under Section 422 of
the Internal Revenue Code of 1986, as amended from time to time, or any successor provision
thereto.

	3.	 	Option Price. The Option Shares may be purchased pursuant to this Option at a price of                     
($_____) per Common Share, subject to adjustment as hereinafter provided (the “Option Price”).
The Option Price shall in no event be less than the fair market value of an Option Share on
the Date of Grant.

	4.	 	Term of Option/Agreement. The term of the Option shall commence on the Date of Grant and
shall terminate and expire automatically and without further notice Ten (10) years from the
Date of Grant.

	5.	 	Right to Exercise. Subject to Section 4 above, the Option will vest and become exercisable
as provided in the attached Exhibit A, for so long as Optionee continues to perform services
for the Company or any Subsidiary. The Option may be exercised in whole or in part. In no
event shall Optionee be entitled to acquire a fraction of one Option Share pursuant to this
Option. Optionee shall be entitled to the privileges of ownership with respect to Option
Shares purchased and delivered to Optionee upon the exercise of all or part of this Option.

 

 

 

	6.	 	Notice of Exercise; Payment. To the extent then exercisable, the Option may be exercised in
whole or in part by written notice to the Company stating the number of Option Shares for
which the Option is being exercised and the intended manner of
payment. The date of such notice shall be the exercise date. The Option Price shall be
payable (a) in cash or by check acceptable to the Company, (b) by actual or constructive
transfer to the Company of nonforfeitable, unrestricted Common Shares that have been owned
by the Optionee for more than six (6) months prior to the date of exercise, (c) for
exercises of Options that occur more than one (1) year following the Date of Grant, by
transfer to the Company of shares or vested Options (including Options under this Agreement)
for the purchase of shares of Common Stock having a fair market value (net of the exercise
price) at the time of exercise equal to the portion of the Option Price for which such
transfer is made, or (d) by a combination of such methods of payment. The requirement of
payment in cash shall be deemed satisfied if the Optionee shall have made arrangements
satisfactory to the Company with a bank or a broker who is a member of the National
Association of Securities Dealers, Inc. to sell on the exercise date a sufficient number of
the shares being purchased so that the net proceeds of the sale transaction will at least
equal the Option Price plus payment of any applicable withholding taxes and pursuant to
which the bank or broker undertakes to deliver the full Option Price plus payment of any
applicable withholding taxes to the Company on a date satisfactory to the Company, but not
later than the date on which the sale transaction will settle in the ordinary course of
business. As soon as practicable upon the Company’s receipt of Optionee’s notice of
exercise and payment, the Company shall direct the due issuance of the Option Shares so
purchased.

As a further condition precedent to the exercise of this Option in whole or in part,
Optionee shall comply with all regulations and the requirements of any regulatory authority
having control of, or supervision over, the issuance of the Common Shares and in connection
therewith shall execute any documents which the Board shall in its sole discretion deem
necessary or advisable.

	7.	 	Termination. This Option shall terminate on the earliest of the following dates:

	 	(a)	 	Eighteen (18) months after the Optionee ceases to perform services for the
Company or a Subsidiary; and
	 
	 	(b)	 	Ten (10) years from the Date of Grant.

	8.	 	Option Nontransferable. This Option is not transferable by the Optionee otherwise than by
will or the laws of descent and distribution. This Option may be exercised, during the
lifetime of the Optionee, only by Optionee, or in the event of Optionee’s legal incapacity, by
Optionee’s guardian or legal representative acting on behalf of Optionee in a fiduciary
capacity under state law and court supervision.

	9.	 	Compliance with Law. This Option shall not be exercisable if such exercise would involve a
violation of any applicable federal, state or other securities law.

 

2

 

	10.	 	Adjustments. The Compensation Committee of the Board shall make such adjustments in the
Option Price and in the number or kind of Common Shares or other securities covered by this
Option as the Compensation Committee shall determine is equitably required to prevent dilution
or enlargement of the rights of the Optionee that otherwise
would result from (a) any stock dividend, extraordinary dividend, stock split, combination
of shares, recapitalization or other change in the capital structure of the Company, or (b)
any Change in Control, merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization or partial or complete liquidation, or other distribution of assets, issuance
of rights or warrants to purchase securities, or (c) any other corporate transaction or
event having an effect similar to any of the foregoing. Moreover, in the event of any such
transaction or event, the Compensation Committee, in its discretion, may provide in
substitution for any or all of the Option Rights provided for herein such alternative
consideration as it may determine to be equitable in the circumstances.

	11.	 	Taxes and Withholding. If the Company shall be required to withhold any federal, state,
local or foreign tax in connection with exercise of this Option, it shall be a condition to
such exercise that the Optionee pay or make provision satisfactory to the Company for payment
of all such taxes. The Optionee may elect that all or any part of such withholding
requirement be satisfied by retention by the Company of a portion of the shares purchased upon
exercise of this Option. If such election is made, the shares so retained shall be credited
against such withholding requirement at the Market Value per Share on the date of exercise.
In no event, however, shall the Company accept Common Shares for payment of taxes in excess of
required tax withholding rates.

	12.	 	Information. Information about the Optionee and the Optionee’s participation in the Plan may
be collected, recorded and held, used and disclosed for any purpose related to the
administration of the Plan. The Optionee understands that such processing of this information
may need to be carried out by the Company and its Subsidiaries and by third party
administrators whether such persons are located within the Optionee’s country or elsewhere,
including the United States of America. The Optionee consents to the processing of
information relating to the Optionee and the Optionee’s participation in the Plan in any one
or more of the ways referred to above.

	13.	 	Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the
event of any inconsistency between the provisions of this Agreement and the Plan, the Plan
shall govern. All terms used herein with initial capital letters and not otherwise defined
herein that are defined in the Plan shall have the meanings assigned to them in the Plan. The
Board (or a committee of the Board) acting pursuant to the Plan, as constituted from time to
time, shall, except as expressly provided otherwise herein, have the right to determine any
questions which arise in connection with the grant of the Option hereunder.

	14.	 	Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement
to the extent that the amendment is applicable hereto; provided, however, that
no amendment shall adversely affect the rights of the Optionee under this Agreement without
the Optionee’s consent.

	15.	 	Severability. If any provision of this Agreement or the application of any provision hereof
to any person or circumstances is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other person or
circumstances shall not be affected, and the provisions so held to be invalid,
unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid and legal.

 

3

 

	16.	 	Successors and Assigns. Without limiting Section 8 hereof, the provisions of this Agreement
shall inure to the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of the Optionee, and the successors and assigns of the
Company.

	17.	 	Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute one and the same
Agreement.

	18.	 	Governing Law. This Agreement shall be governed by and construed in accordance with the
internal substantive laws of the State of Delaware, without giving effect to any principle of
law that would result in the application of the law of any other jurisdiction.

	19.	 	Notices. Any notice to the Company provided for herein shall be in writing to the Company,
marked Attention: President, and any notice to Optionee shall be addressed to said Optionee
at Optionee’s address on file with the Company at the time of such notice. Except as
otherwise provided herein, any written notice shall be deemed to be duly given if and when
delivered personally or deposited in the United States mail, first class registered mail,
postage and fees prepaid, and addressed as aforesaid. Any party may change the address to
which notices are to be given hereunder by written notice to the other party as herein
specified (provided that for this purpose any mailed notice shall be deemed given on the third
business day following deposit of the same in the United States mail).

Executed in the name and on behalf of the Company, at 3201 Carnegie Avenue,
Cleveland, Ohio, 44115, as of the
 _____ day of  _____,  _____.

	 	 	 	 	 
	 	ATHERSYS, INC.

 	 
	 	 
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

The undersigned Optionee hereby accepts the Option Rights evidenced by this Nonqualified Stock
Option Agreement on the terms and conditions set

forth herein and in the Plan.

	 	 	 	 	 
	Dated:  _____ _____,  _____ 

	 	 

[Optionee Name]
	 	 

 

4

 

EXHIBIT A

	 	 	 	 	 	 	 
	Vesting Date	 	Shares Vesting	 	Total Shares Vested	 	Price/share
	 

	 	 
	 	 
	 	 

 

5exv10w1

Exhibit 10.1

Execution Version

Published CUSIP Number: 86164DAA0

$700,000,000

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

among

STONE ENERGY CORPORATION

as Borrower,

THE FINANCIAL INSTITUTIONS

NAMED IN THIS CREDIT AGREEMENT

as Banks,

BANK OF AMERICA, N.A.

as Administrative Agent and Issuing Bank,

BNP PARIBAS,

NATIXIS,

AND

THE BANK OF NOVA SCOTIA,

as Co-Syndication Agents,

CAPITAL ONE, N.A. and

TORONTO DOMINION (NEW YORK) LLC,

as Co-Documentation Agents, and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

as sole Lead Arranger and Bookrunner

April 26, 2011

 

 

	 	 	 	 	 

	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	Section 1.1. Certain Defined Terms
	 	 	1	 
	Section 1.2. Computation of Time Periods
	 	 	21	 
	Section 1.3. Accounting Terms; Changes in GAAP
	 	 	21	 
	Section 1.4. Types of Advances
	 	 	22	 
	Section 1.5. Miscellaneous
	 	 	22	 
	 
	ARTICLE II CREDIT FACILITIES
	 	 	22	 
	Section 2.1. Commitment for Advances
	 	 	22	 
	Section 2.2. Borrowing Base
	 	 	23	 
	Section 2.3. Method of Borrowing
	 	 	25	 
	Section 2.4. Prepayment of Advances
	 	 	27	 
	Section 2.5. Repayment of Advances
	 	 	29	 
	Section 2.6. Letters of Credit
	 	 	29	 
	Section 2.7. Fees
	 	 	33	 
	Section 2.8. Interest
	 	 	34	 
	Section 2.9. Payments and Computations
	 	 	35	 
	Section 2.10. Sharing of Payments, Etc.
	 	 	36	 
	Section 2.11. Breakage Costs
	 	 	37	 
	Section 2.12. Increased Costs
	 	 	37	 
	Section 2.13. Taxes
	 	 	38	 
	Section 2.14. Inability to Determine Rates
	 	 	42	 
	Section 2.15. Cash Collateral
	 	 	43	 
	Section 2.16. Defaulting Banks
	 	 	44	 
	Section 2.17. Mitigation Obligations
	 	 	46	 
	 
	ARTICLE III CONDITIONS OF LENDING
	 	 	46	 
	Section 3.1. Initial Conditions Precedent to Borrowings
	 	 	46	 
	Section 3.2. Conditions Precedent to All Borrowings
	 	 	48	 
	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	49	 
	Section 4.1. Corporate Existence; Subsidiaries
	 	 	49	 
	Section 4.2. Corporate Power; Authorization; No Violation
	 	 	49	 
	Section 4.3. Authorization and Approvals
	 	 	50	 
	Section 4.4. Enforceable Obligations
	 	 	50	 
	Section 4.5. Financial Statements
	 	 	50	 

 

 

	 	 	 	 	 

	Section 4.6. True and Complete Disclosure
	 	 	50	 
	Section 4.7. Litigation
	 	 	51	 
	Section 4.8. Use of Proceeds
	 	 	51	 
	Section 4.9. Investment Company Act
	 	 	52	 
	Section 4.10. Taxes
	 	 	52	 
	Section 4.11. ERISA Compliance
	 	 	52	 
	Section 4.12. Condition of Property; Casualties
	 	 	53	 
	Section 4.13. No Burdensome Restrictions; No Defaults
	 	 	53	 
	Section 4.14. Environmental Condition
	 	 	53	 
	Section 4.15. Permits, Licenses, Etc.; Compliance with Legal Requirements
	 	 	54	 
	Section 4.16. Gas Contracts
	 	 	54	 
	Section 4.17. Title to Properties, Liens, Leases, Etc.
	 	 	55	 
	Section 4.18. Mineral Interests
	 	 	55	 
	 
	ARTICLE V AFFIRMATIVE COVENANTS
	 	 	56	 
	Section 5.1. Compliance with Laws, Etc.
	 	 	56	 
	Section 5.2. Maintenance of Insurance
	 	 	56	 
	Section 5.3. Preservation of Corporate Existence, Etc.
	 	 	58	 
	Section 5.4. Payment of Taxes, Claims, Etc.
	 	 	58	 
	Section 5.5. Visitation Rights
	 	 	58	 
	Section 5.6. Reporting Requirements
	 	 	58	 
	Section 5.7. Designation of Public Information
	 	 	62	 
	Section 5.8. Maintenance of Property
	 	 	63	 
	Section 5.9. New Subsidiaries
	 	 	63	 
	Section 5.10. Maintenance of Books and Records
	 	 	63	 
	Section 5.11. Use of Proceeds
	 	 	64	 
	Section 5.12. Agreement to Mortgage; Further Assurances
	 	 	64	 
	Section 5.13. Title Information and Cure
	 	 	65	 
	 
	ARTICLE VI NEGATIVE COVENANTS
	 	 	66	 
	Section 6.1. Liens, Etc.
	 	 	66	 
	Section 6.2. Debts, Guaranties, and Other Obligations
	 	 	67	 
	Section 6.3. Agreements Restricting Liens and Distributions
	 	 	68	 
	Section 6.4. Merger or Consolidation; Asset Sales; Farm-Outs
	 	 	68	 
	Section 6.5. Restricted Payments
	 	 	69	 

-ii-

 

	 	 	 	 	 

	Section 6.6. Investments
	 	 	70	 
	Section 6.7. Prohibition on Speculative Hedging
	 	 	70	 
	Section 6.8. Affiliate Transactions
	 	 	70	 
	Section 6.9. Compliance with ERISA
	 	 	71	 
	Section 6.10. Maintenance of Ownership of Subsidiaries
	 	 	71	 
	Section 6.11. Sale-and-Leaseback
	 	 	71	 
	Section 6.12. Change of Business
	 	 	71	 
	Section 6.13. Debt to EBITDA Ratio
	 	 	71	 
	Section 6.14. Interest Coverage Ratio
	 	 	71	 
	Section 6.15. Subordinated Debt
	 	 	72	 
	 
	ARTICLE VII REMEDIES
	 	 	72	 
	Section 7.1. Events of Default
	 	 	72	 
	Section 7.2. Optional Acceleration of Maturity
	 	 	74	 
	Section 7.3. Automatic Acceleration of Maturity
	 	 	75	 
	Section 7.4. Right of Setoff
	 	 	75	 
	Section 7.5. Actions Under Credit Documents
	 	 	76	 
	Section 7.6. Non-exclusivity of Remedies
	 	 	76	 
	Section 7.7. Application of Funds
	 	 	76	 
	 
	ARTICLE VIII THE AGENT AND THE ISSUING BANK
	 	 	77	 
	Section 8.1. Appointment and Authorization of Agent
	 	 	77	 
	Section 8.2. Rights as a Bank
	 	 	77	 
	Section 8.3. Exculpatory Provisions
	 	 	78	 
	Section 8.4. Reliance by Agent
	 	 	78	 
	Section 8.5. Delegation of Duties
	 	 	79	 
	Section 8.6. Resignation of Agent
	 	 	79	 
	Section 8.7. Non-Reliance on Agent and Other Banks
	 	 	80	 
	Section 8.8. No Other Duties, Etc.
	 	 	80	 
	Section 8.9. Agent May File Proofs of Claim
	 	 	80	 
	Section 8.10. Collateral and Guaranty Matters
	 	 	81	 
	Section 8.11. Indemnification of Agent
	 	 	81	 
	 
	ARTICLE IX MISCELLANEOUS
	 	 	82	 
	Section 9.1. Amendments, Etc.
	 	 	82	 
	Section 9.2. Notices, Etc.
	 	 	83	 

-iii-

 

	 	 	 	 	 

	Section 9.3. No Waiver; Remedies
	 	 	85	 
	Section 9.4. Costs and Expenses
	 	 	85	 
	Section 9.5. Binding Effect
	 	 	85	 
	Section 9.6. Bank Assignments and Participations
	 	 	85	 
	Section 9.7. Indemnification
	 	 	90	 
	Section 9.8. USA Patriot Act Notice
	 	 	91	 
	Section 9.9. No Advisory or Fiduciary Responsibility
	 	 	91	 
	Section 9.10. Execution in Counterparts
	 	 	92	 
	Section 9.11. Survival of Representations, Etc.
	 	 	92	 
	Section 9.12. Severability
	 	 	92	 
	Section 9.13. Replacement of Banks
	 	 	92	 
	Section 9.14. [Reserved.]
	 	 	93	 
	Section 9.15. Amendment and Restatement
	 	 	93	 
	Section 9.16. Governing Law
	 	 	93	 
	Section 9.17. Submission to Jurisdiction; Waiver of Punitive Damages; Jury Trial;
Etc.
	 	 	93	 
	Section 9.18. Treatment of Certain Information; Confidentiality
	 	 	95	 

-iv-

 

	 	 	 	 	 

	Annex 1
	 	—	 	Commitments; Borrower, Agent, and Bank Notice
	 
	 	 	 	Information; Lending Offices
	 
	SCHEDULES:
	 	 	 	 
	 
	Schedule 2.6(h)
	 	—	 	Existing Letters of Credit
	Schedule 4.1
	 	—	 	Material Subsidiaries
	Schedule 4.7
	 	—	 	Existing Litigation
	Schedule 4.14(a)
	 	—	 	Existing Environmental Concerns
	Schedule 4.14(b)
	 	—	 	Designated Environmental Sites
	Schedule 6.1
	 	—	 	Permitted Existing Liens
	Schedule 6.2
	 	—	 	Permitted Existing Debt
	Schedule 6.8
	 	—	 	Affiliate Transactions
	 
	EXHIBITS:
	 	 	 	 
	 
	Exhibit A
	 	—	 	Form of Assignment and Acceptance
	Exhibit B
	 	—	 	Form of Compliance Certificate
	Exhibit C
	 	—	 	Form of Guaranty
	Exhibit D
	 	—	 	Form of Note
	Exhibit E
	 	—	 	Form of Notice of Borrowing
	Exhibit F
	 	—	 	Form of Notice of Conversion or Continuation
	Exhibit G
	 	—	 	Form of Letter of Credit Application
	Exhibit H
	 	—	 	Form of Security Agreement
	Exhibit I
	 	—	 	Form of Mortgage Compliance Certificate

-v-

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

     This Third Amended and Restated Credit Agreement dated as of April 26, 2011 is among Stone
Energy Corporation, a Delaware corporation, the Banks (as defined below), and Bank of America,
N.A., as administrative agent for the Banks and as Issuing Bank.

     The Borrower, the Banks, and the Agent agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

     Section 1.1. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (unless otherwise indicated, such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

     “2004 Indenture Documents” means the Indenture dated as of December 15, 2004 between
the Borrower and JPMorgan Chase Bank, N.A., as Trustee, relating to the issuance of unsecured
senior subordinated notes due 2014.

     “2010 Indenture Documents” means the Indenture dated as of January 26, 2010 among the
Borrower, Stone Offshore and The Bank of New York Mellon Trust Company, N.A., as Trustee, as
amended by the First Supplemental Indenture thereto, dated as of January 26, 2010, and any
additional supplemental indenture that is substantially similar thereto, relating to the issuance
of unsecured senior notes due 2017.

     “Acceptable Security Interest” in any Property means a Lien which (a) exists in favor
of the Agent for the benefit of the Agent and the Banks, (b) with respect to Property that is not
Borrowing Base Assets, is the only Lien on such Property other than Permitted Liens, and which is
superior to all Liens or rights of any other Person in such Property encumbered thereby except for
such Permitted Liens, (c) with respect to Borrowing Base Assets, is the only Lien on such Property
other than Permitted Borrowing Base Liens, and which is superior to all Liens or rights of any
other Person in such Property encumbered thereby except for such Permitted Borrowing Base Liens,
(d) secures the Obligations, and (e) is perfected and enforceable.

     “Adjusted Base Rate” means, for any day, the fluctuating rate per annum of interest
equal to the highest of (a) the Base Rate in effect on such day, (b) the Federal Funds Rate in
effect on such day plus 0.50% and (c) the Eurodollar Rate in effect on such day for an Interest
Period of one month plus 1.00%; provided that for any Advance maintained as a Base Rate Advance due
to the application of Section 2.14(b), the “Adjusted Base Rate” shall be the greater of clauses (a)
and (b) above.

     “Advance” means any advance by a Bank to the Borrower as part of a Borrowing and
refers to a Base Rate Advance or a Eurodollar Rate Advance.

     “Affiliate” means, as to any Person, any other Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under common control with,
such Person or any Subsidiary of such Person. The term “control” (including the terms “controlled

 

 

by” or “under common control with”) means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person, whether through
ownership of Voting Securities, by contract, or otherwise.

     “Agent” means Bank of America, in its capacity as an administrative agent pursuant to
Article VIII, and any successor administrative agent pursuant to Section 8.6.

     “Agent-Related Persons” means the Agent, together with its Affiliates (including, in
the case of Bank of America, in its capacity as the Agent, Merrill Lynch, Pierce, Fenner & Smith
Incorporated), and the officers, directors, employees, agents and attorneys-in-fact of such Persons
and Affiliates.

     “Agreement” means this Third Amended and Restated Credit Agreement, as the same may be
amended, supplemented, and otherwise modified from time to time.

     “Allocated Value” has the meaning set forth in Section 2.2(e).

     “Applicable Lending Office” means, with respect to each Bank, such Bank’s Domestic
Lending Office in the case of a Base Rate Advance and such Bank’s Eurodollar Lending Office in the
case of a Eurodollar Rate Advance.

     “Applicable Margin” means, for any day, the following percentages based upon the ratio
of (a) the aggregate outstanding amount of Advances plus the Letter of Credit Exposure to
(b) the Borrowing Base as of such day:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ratio of (Advances +	 	 	 	 	 	 	 	 	 
	Letter of	 	Applicable	 	 	Applicable	 	 	 	 
	Credit Exposure) to	 	Margin for	 	 	Margin for	 	 	Applicable	 
	(Borrowing	 	Base Rate	 	 	Eurodollar Rate	 	 	Margin for	 
	Base)	 	Advances	 	 	Advances	 	 	Commitment Fees	 
	Less than .30
	 	 	1.000	%	 	 	2.000	%	 	 	0.500	%
	Greater than
or equal to .30 but less than .60
	 	 	1.250	%	 	 	2.250	%	 	 	0.500	%
	Greater than
or equal to .60 but less than .90
	 	 	1.500	%	 	 	2.500	%	 	 	0.500	%
	Greater than or equal to .90
	 	 	1.750	%	 	 	2.750	%	 	 	0.500	%

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

     “Approved Indenture Documents” means each indenture and all other instruments,
agreements, and other documents related thereto or providing for a guarantee of the obligations

2

 

thereunder or other right in respect thereof that, collectively: (a) except as permitted by
clause (b) or (d) of this definition, provide for no amortization, scheduled repayment prior to
maturity, sinking fund, mandatory redemptions, or maturity, in each case, prior to the date that is
five years from the Effective Date; (b) do not contain any “asset sale” offer to purchase covenant
except such a covenant that provides that any net proceeds from asset sales may be applied to repay
obligations (including the Obligations) that are secured by the assets sold prior to the payment of
or offer to purchase any debt governed by such indenture or guarantee; (c) contain no maintenance
covenants; (d) contain no mandatory redemption or offer to purchase upon a change of control,
change of control covenant, or change of control event of default provision, in any case that is
more restrictive than that contained in the 2010 Indenture Documents; and (e) contain terms
otherwise no more restrictive than the terms of the 2010 Indenture Documents, taken as a whole.

     “Arranger” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity
as sole lead arranger and sole bookrunner.

     “Asset Disposition” means any sale, lease, license, transfer, assignment or other
consensual disposition by any Credit Party of any asset, but excluding (i) dispositions of
inventory or used, obsolete, worn-out, or surplus equipment, all in the ordinary course of
business, (ii) sales, transfers and other dispositions of accounts receivable in connection with
the compromise, settlement, or collection thereof in the ordinary course of business, and (iii) any
disposition of property or assets or issuance of equity interests to any Credit Party by (A)
Borrower or (B) any domestic Subsidiary of a Credit Party.

     “Assignment and Acceptance” means an assignment and acceptance entered into by a Bank
and an Eligible Assignee, and accepted by the Agent and, if applicable, the Borrower, in
substantially the form of the attached Exhibit A.

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

     “Banks” means the lenders listed on the signature pages of this Agreement and each
Eligible Assignee that shall become a party to this Agreement pursuant to Section 9.6.

     “Base Rate” means a fluctuating interest rate per annum as shall be in effect from
time to time equal to the rate of interest publicly announced by Bank of America as its prime rate,
whether or not the Borrower has notice thereof.

     “Base Rate Advance” means an Advance which bears interest as provided in Section
2.8(a).

     “Borrower” means Stone Energy Corporation, a Delaware corporation.

     “Borrower Materials” has the meaning set forth in Section 5.7.

     “Borrowing” means, subject to Sections 2.3(c)(ii) and 2.4(b)(v), a
borrowing consisting of simultaneous Advances of the same Type made by each Bank pursuant to
Section 2.3(a), continued by each Bank pursuant to Section 2.3(b), or Converted by
each Bank to Advances of a different Type pursuant to Section 2.3(b).

3

 

     “Borrowing Base” means, for any date of its determination by the Required Banks or all
of the Banks, as the case may be, the amount determined in accordance with Section 2.2.

     “Borrowing Base Assets” means, at any time, any assets (including any Swap Contracts)
that are given value in the most recently determined Borrowing Base.

     “Borrowing Base Deficiency” has the meaning given to such term in Section
2.4(b)(i).

     “Business Day” means a day of the year on which banks are not required or authorized
to close in Dallas, Texas and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on by banks in the London interbank market.

     “Capital Leases” means, as applied to any Person, any lease of any Property by such
Person as lessee which would, in accordance with GAAP, be required to be classified and accounted
for as a liability on the balance sheet of such Person.

     “Cash Collateral” has the meaning set forth in the definition of “Cash Collateralize”.

     “Cash Collateral Account” means a special interest bearing cash collateral account
pledged to the Agent for the ratable benefit of the Banks containing cash deposited pursuant to
Sections 2.4(b), 2.6, 2.15, 2.16, 7.2(b), or 7.3(b)
to be maintained at the Agent’s office in accordance with Section 2.6(g) and bear interest
or be invested in the Agent’s reasonable discretion.

     “Cash Collateralize” means to pledge and deposit with or deliver to the Agent, for the
benefit of the Agent or Issuing Bank (as applicable) and the Banks, as collateral for Letter of
Credit Exposure or obligations of Banks to fund participations in respect of either thereof (as the
context may require), cash or deposit account balances or, if the Issuing Bank shall agree in its
sole discretion, other credit support, in each case pursuant to documentation in form and substance
reasonably satisfactory to (a) the Agent and (b) the 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.

     “CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (42 U.S.C. §§ 9601 et seq.), as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in effect.

     “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

4

 

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.

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

     “Collateral” has the meaning specified in the Security Documents.

     “Commitment” means, for any Bank, the amount set opposite such Bank’s name on
Annex 1 as its Commitment, or if such Bank has entered into any Assignment and Acceptance,
as set forth for such Bank as its Commitment in the Register maintained by the Agent pursuant to
Section 9.6(c), as such amount may be reduced or terminated pursuant to Article
VII.

     “Compliance Certificate” means a compliance certificate in the form of the attached
Exhibit B signed by a Responsible Officer of the Borrower.

     “Consents” means the Consent and Agreements made by the counterparties to the
applicable Mortgaged Contracts in favor of the Agent for the benefit of the Secured Parties,
including any such Consent and Agreements delivered from time to time in accordance with
Section 5.12, in each case, as the same may be amended, supplemented, or otherwise modified
from time to time.

     “Controlled Group” means all members of a controlled group of corporations and all
trades (whether or not incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414 of the Code.

     “Convert,” “Conversion,” and “Converted” each refers to a conversion
of Advances of one Type into Advances of another Type pursuant to Section 2.3(b).

     “Credit Documents” means this Agreement, the Notes, the Letter of Credit Documents,
the Guaranties, the Security Documents and each other agreement, instrument, or document executed
by or at the request of a Credit Party at any time in connection with this Agreement. For the
avoidance of doubt, Specified Swap Contracts are not “Credit Documents”.

     “Credit Parties” means the Borrower and each Guarantor.

     “Debt,” for any Person, means without duplication:

     (a) indebtedness of such Person for borrowed money, including, without limitation, obligations
under letters of credit and agreements relating to the issuance of letters of credit or acceptance
financing;

     (b) obligations of such Person evidenced by bonds, debentures, notes or other similar
instruments;

     (c) obligations of such Person to pay the deferred purchase price of property or services
(other than trade payables);

5

 

     (d) trade payables more than 60 days past due;

     (e) the capitalized portion of obligations of such Person as lessee under Capital Leases;

     (f) obligations of such Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) of such Person to purchase or otherwise acquire, or otherwise
to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (e) above;

     (g) indebtedness or obligations of others of the kinds referred to in clauses (a) through (f)
secured by any Lien on or in respect of any Property of such Person; and

     (h) all liabilities of such Person in respect of unfunded vested benefits under any Plan.

For the avoidance of doubt, “Debt” does not include obligations in respect of Swap Contracts,
indemnities incurred in the ordinary course of business or in connection with the disposition of
assets, any non-cash employee or director compensation, any compensation paid to employees or
directors pursuant to stock appreciation rights, in each case unless evidenced by a note or similar
instrument.

     “Debtor Relief Law” 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 Legal
Requirements of the United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally

     “Default” means (a) an Event of Default or (b) any event or condition which with
notice or lapse of time or both would, unless cured or waived, become an Event of Default.

     “Defaulting Bank” means, subject to Section 2.16(b), any Bank that (a) has
failed to perform any of its funding obligations hereunder, including in respect of its Advances or
participations in respect of Letters of Credit, within two Business Days of the date required to be
funded by it hereunder unless such Bank notifies the Agent and the Borrower in writing that such
failure is the result of one or more conditions precedent to funding (each of which conditions
precedent, together with any applicable default, shall be specifically identified in such writing)
not being satisfied, (b) has notified the Borrower, the Agent or any Bank that it does not intend
to comply with its funding obligations or has made a public statement to that effect with respect
to its funding obligations hereunder (unless such Bank notifies the Agent and the Borrower in
writing that such position is the result of a condition precedent to funding not being satisfied
(which condition precedent, together with any applicable default, shall be specifically identified
in such writing)) or under other agreements in which it commits to extend credit, (c) has failed,
within three Business Days after request by the Agent, to confirm in a manner satisfactory to the
Agent that it will comply with its funding obligations (unless such Bank notifies the Agent and the
Borrower in writing that such failure is the result of a condition precedent to funding not being
satisfied (which condition precedent, together with any applicable default, shall be specifically
identified in such writing)), or (d) has, or has a direct or indirect parent company that

6

 

has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver,
conservator, trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or a custodian appointed for it, or
(iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence
in any such proceeding or appointment; provided that a Bank shall not be a Defaulting Bank solely
by virtue of the ownership or acquisition of any equity interest in that Bank or any direct or
indirect parent company thereof by a Governmental Authority.

     “Dollar Equivalent” means for all purposes of this Agreement, the equivalent in
another currency of an amount in Dollars to be determined by reference to the rate of exchange
quoted by Bank of America at 10:00 a.m. (Dallas, Texas time) on the date of determination, for the
spot purchase in the foreign exchange market of such amount of Dollars with such other currency.

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

     “Domestic Lending Office” means, with respect to any Bank, the office of such Bank
specified as its “Domestic Lending Office” opposite its name on Annex 1 or such other
office of such Bank as such Bank may from time to time specify to the Borrower and the Agent.

     “EBITDA” means, with respect to any Person and for any period of its determination,
the consolidated Net Income of such Person for such period, plus, in each case to the extent
deducted from Net Income (i) the consolidated interest expense, income taxes, exploration expense,
depreciation, depletion, and amortization of such Person for such period, and (ii) transaction
costs incurred by such Person during such period in connection with debt or equity issuances or
acquisitions to the extent such debt, equity issuances or acquisitions are permitted under this
Agreement. If any acquisition or disposition of assets permitted to be made under this Agreement
(other than non-material acquisitions in the ordinary course of business or non-material
dispositions in the ordinary course of business) occurs during such period of determination, EBITDA
for such period shall be calculated on a pro forma basis to give effect to such acquisition or
disposition as if each such acquisition or disposition had been consummated on the first day of
such period.

     “Effective Date” means the date on which each of the conditions precedent in
Section 3.1 has been met or waived.

     “Eligible Assignee” means (i) any Fund, (ii) any Bank, and (iii) any commercial bank,
in each case organized under the laws of any country which is a member of the Organization for
Economic Cooperation and Development and having primary capital (or its equivalent) of not less
than $250,000,000 (or its Dollar Equivalent) (subject to such consents, if any, as may be required
under Section 9.6(b)).

     “Environment” or “Environmental” shall have the meanings set forth in 42
U.S.C. § 9601(8) (1988).

     “Environmental Claim” means any third party or Governmental Authority action, lawsuit,
claim, demand, regulatory action or proceeding, order, decree, consent agreement or notice of
potential or actual responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Act or similar laws or requirements, to the extent relating to

7

 

occupational safety or exposure to Hazardous Substances) which seeks to impose liability under
any Environmental Law.

     “Environmental Law” means all Legal Requirements, including common law, arising from,
relating to, or in connection with the Environment or natural resources, including without
limitation CERCLA, or relating to (a) pollution, contamination, injury, destruction, loss,
protection, cleanup, reclamation or restoration of the air, surface water, groundwater, land
surface or subsurface strata, or other natural resources; (b) solid, gaseous or liquid waste
generation, treatment, processing, recycling, reclamation, cleanup, storage, disposal or
transportation; (c) exposure to pollutants, contaminants, Hazardous Substances, or Hazardous
Wastes; (d) the safety or health of employees, to the extent relating to occupational safety or
exposure to Hazardous Substances; or (e) the manufacture, processing, handling, transportation,
distribution in commerce, use, storage or disposal of Hazardous Substances or Hazardous Wastes.

     “Environmental Permit” means any permit, license, order, approval or other
authorization under Environmental Law.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.

     “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).

     “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 a Pension Plan or 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;
or (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
which could reasonably be expected to cause a Material Adverse Change, other than for PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

     “Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of
the Federal Reserve Board (or any successor), as in effect from time to time.

8

 

     “Eurodollar Lending Office” means, with respect to any Bank, the office of such Bank
specified as its “Eurodollar Lending Office” opposite its name on Annex 1 (or, if no such
office is specified, its Domestic Lending Office) or such other office of such Bank as such Bank
may from time to time specify to the Borrower and the Agent.

     “Eurodollar Rate” means:

     (a) for any Interest Period with respect to a Eurodollar Rate Advance, the rate per annum
equal to (i) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or such other commercially available source providing quotations of BBA LIBOR as may be
designated by the Agent from time to time) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest Period or, (ii) if such
rate is not available at such time for any reason, the rate per annum determined by the Agent to be
the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same
day funds in the approximate amount of the Eurodollar Rate Advance being made, continued or
converted and with a term equivalent to such Interest Period 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) two Business Days prior to the commencement of such Interest
Period; and

     (b) for any interest calculation with respect to a Base Rate Advance on any date, the rate per
annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two Business Days
prior to such date for Dollar deposits being delivered in the London interbank market for a term of
one month commencing that day or (ii) if such published rate is not available at such time for any
reason, the rate per annum determined by the Agent to be the rate at which deposits in Dollars for
delivery on the date of determination in same day funds in the approximate amount of the Base Rate
Advance being made or maintained and with a term equal to 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 the date and time of determination.

     “Eurodollar Rate Advance” means an Advance which bears interest as provided in
Section 2.8(b).

     “Eurodollar Rate Reserve Percentage” of any Bank for the Interest Period for any
Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average of such percentages for
those days in such Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Federal Reserve Board for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Bank with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.

     “Event of Default” has the meaning specified in Section 7.1.

     “Excluded Taxes” means, with respect to the Agent, any Bank, the Issuing Bank or any
other recipient of any payment to be made by or on account of any obligation of the Borrower

9

 

hereunder, (a) taxes imposed on or measured by its net income (however denominated), and
franchise taxes imposed on it (in lieu of or in addition to net income taxes), by the United States
of America (or any political subdivision thereof) or by the jurisdiction (or any political
subdivision thereof) under the Legal Requirements of which such recipient is organized or in which
its principal office is located or, in the case of any Bank, in which its Applicable Lending Office
is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by
any other jurisdiction in which the Borrower is located, (c) any backup withholding tax that is
required by the Code to be withheld from amounts payable to the Agent, any Bank, the Issuing Bank
or any other recipient, and (d) in the case of a Foreign Bank (other than an assignee pursuant to a
request by the Borrower under Section 9.13), any withholding tax that (i) is required to be
imposed on amounts payable to such Foreign Bank pursuant to the Legal Requirements in force at the
time such Foreign Bank becomes a party hereto (or designates a new Applicable Lending Office) or
(ii) is attributable to such Foreign Bank’s failure or inability (other than as a result of a
Change in Law) to comply with clause (B) of Section 2.13(e)(ii), except to the extent that
such Foreign Bank (or its assignor, if any) was entitled, at the time of designation of a new
Applicable Lending Office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.13(a)(ii) or (c), and (e) in the case
of a Bank, the Issuing Bank or other recipient of a payment, any United States taxes that are
attributable to the failure of such Bank, Issuing Bank or other recipient, as the case may be, to
comply with FATCA.

     “Existing Credit Agreement” means the Second Amended and Restated Credit Agreement
dated as of August 28, 2008 among the Borrower, the lenders party thereto, and Bank of America, as
administrative agent, as amended by Amendment No. 1 dated as of April 29, 2009 and Amendment No. 2
dated as of January 11, 2010.

     “Existing Letters of Credit” means the letters of credit outstanding on the date of
this Agreement, issued by the Issuing Bank for the account of the Borrower or its Subsidiaries,
which are described on Schedule 2.6(h).

     “Expiration Date” means, with respect to any Letter of Credit, the date on which such
Letter of Credit will expire or terminate in accordance with its terms.

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

     “FATCA” means Sections 1471 through 1474 of the Code (and any successor sections
thereto) and any regulations or official interpretations thereof.

     “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for any such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.

10

 

     “Federal Reserve Board” means the Board of Governors of the Federal Reserve System or
any of its successors.

     “Financial Statements” means the consolidated financial statements of the Borrower and
its Subsidiaries for the fiscal year ended 2010, including balance sheets, income and cash flow
statements, audited by independent public accountants and prepared in conformity with GAAP.

     “Foreign Bank” means any Bank that is organized under the Legal Requirements of a
jurisdiction other than that in which the Borrower is resident for tax purposes (including such a
Bank when acting in the capacity of the Issuing Bank). For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

     “Fronting Exposure” means, at any time there is a Defaulting Bank, such Defaulting
Bank’s Pro Rata Share of the outstanding Letter of Credit Exposure other than Letter of Credit
Exposure as to which such Defaulting Bank’s participation obligation has been reallocated to other
Banks or Cash Collateralized in accordance with the terms hereof.

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

     “GAAP” means United States generally accepted accounting principles as in effect from
time to time, applied on a basis consistent with the requirements of Section 1.3.

     “Governmental Authority” means any foreign governmental authority, the United States
of America, any state of the United States of America and any subdivision of any of the foregoing,
and any agency, department, commission, board, authority or instrumentality, bureau or court having
jurisdiction over any Bank, the Borrower, or the Borrower’s Subsidiaries or any of their respective
Properties.

     “Guaranties” means the Amended and Restated Guaranty dated as of the date hereof by
Stone Offshore and each other Guaranty in favor of the Agent for the ratable benefit of the Banks
in the form of the attached Exhibit C executed on the date hereof or as required by
Section 5.9, as the same may be amended, supplemented, or otherwise modified from time to
time.

     “Guarantors” means each Subsidiary of the Borrower which has executed a Guaranty on
the date hereof or as required by Section 5.9.

     “Hazardous Substance” means the substances identified as such pursuant to CERCLA and
those regulated as pollutants or contaminants under any other Environmental Law, including without
limitation petroleum or petroleum products, materials exhibiting radioactivity in excess of
background concentrations, and medical and infectious waste.

     “Hazardous Waste” means the substances regulated as such pursuant to any Environmental
Law.

11

 

     “Hydrocarbons” means oil, gas, coal seam gas, casinghead gas, drip gasolines, natural
gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be
produced in conjunction therewith, and all products, by-products and all other substances derived
therefrom or the processing thereof, and all other minerals and substances, including sulphur,
lignite, coal, uranium, thorium, iron, geothermal steam, water, carbon dioxide, helium, and any and
all other minerals, ores, or substances of value, and the products and proceeds therefrom,
including all gas resulting from the in-situ combustion of coal or lignite.

     “Indemnified Liabilities” has the meaning set forth in Section 9.7.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitees” has the meaning set forth in Section 9.7.

     “Information” has the meaning set forth in Section 9.18.

     “Insurance Certificate” shall mean a “Certificate of Insurance” issued by an insurance
broker on the form ACORD-25 (in the case of property or physical damage policies) or ACORD-27 (in
the case of liability policies) or its substantial equivalent, and, in the case of each liability
policy, shall include an ISO Form CG 2018 confirming that the Agent has been added as an additional
insured for such liability policy, in each case in form reasonably satisfactory to Agent.

     “Interest Period” means, for each Eurodollar Rate Advance comprising part of the same
Borrowing, the period commencing on the date of such Advance or the date of the Conversion of any
Base Rate Advance into such an Advance and ending on the last day of the period selected by the
Borrower pursuant to the provisions below or by Section 2.3 and, thereafter, each
subsequent period commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the provisions below or
by Section 2.3. The duration of each such Interest Period shall be one, two, three, or six
months, or such longer period approved by the Agent and the Banks, in each case as the Borrower
may, upon notice received by the Agent not later than 10:00 a.m. (Dallas, Texas time) on, the third
Business Day prior to the first day of such Interest Period select; provided,
however, that:

     (a) the Borrower may not select any Interest Period for any Advance which ends after the
Maturity Date;

     (b) Interest Periods commencing on the same date for Advances comprising part of the same
Borrowing shall be of the same duration;

     (c) whenever the last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and

     (d) any Interest Period which begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the end of

12

 

such Interest Period) shall end on the last Business Day of the calendar month in which it
would have ended if there were a numerically corresponding day in such calendar month.

     “ISP” means 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).

     “Issuing Bank” means Bank of America and any successor issuing bank pursuant to
Section 8.6.

     “Legal Requirement” means any law, statute, ordinance, decree, requirement, order,
judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms
of any license or permit issued by, any Governmental Authority, including, but not limited to,
Regulations U and X.

     “Letter of Credit” means, individually, any standby letter of credit issued by the
Issuing Bank which is subject to this Agreement, including the Existing Letters of Credit, and
“Letters of Credit” means all such letters of credit collectively.

     “Letter of Credit Application” means the Issuing Bank’s standard form letter of credit
application for either a commercial or standby letter of credit, as the case may be, which has been
executed by the Borrower and accepted by the Issuing Bank in connection with the issuance of a
Letter of Credit, which form or forms as of the date of this Agreement are in the form of the
attached Exhibit G, as the same may be amended, supplemented, and otherwise modified from
time to time.

     “Letter of Credit Documents” means all Letters of Credit, Letter of Credit
Applications, and agreements, documents, and instruments entered into by or at the request of a
Credit Party in connection with or relating thereto.

     “Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate undrawn
maximum face amount of each Letter of Credit at such time, plus (b) the aggregate unpaid
amount of all Reimbursement Obligations at such time.

     “Letter of Credit Fees” has the meaning given such term in Section 2.7(d)(i).

     “Letter of Credit Obligations” means any obligations of the Borrower under this
Agreement in connection with the Letters of Credit, including the Reimbursement Obligations.

     “Lien” means any mortgage, lien, pledge, charge, deed of trust, security interest, or
encumbrance to secure or provide for the payment of any obligation of any Person, whether arising
by contract, operation of law, or otherwise (including, without limitation, the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease, or other title retention
agreement).

     “Liquid Investments” means:

13

 

     (a) debt securities issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof, with maturities of no more than two years from
the date of acquisition;

     (b) commercial paper of a domestic issuer rated at the date of acquisition not less than P1 by
Moody’s Investor Service, Inc., or A1 by S&P;

     (c) certificates of deposit, demand deposits, Eurodollar time deposits, overnight bank
deposits, and bankers’ acceptances, with maturities of no more than two years from the date of
acquisition, issued by any Bank or any bank or trust company organized under the laws of the United
States or any state thereof whose deposits are insured by the Federal Deposit Insurance
Corporation, and having capital and surplus aggregating at least $1,000,000,000;

     (d) corporate bonds, and municipal bonds of a domestic issuer rated at the date of acquisition
Aaa by Moody’s Investor Service, Inc., or AAA by S&P, with maturities of no more than two years
from the date of acquisition;

     (e) repurchase agreements secured by debt securities of the type described in part (a) above,
the market value of which, including accrued interest, is not less than 100% of the amount of the
repurchase agreement, with maturities of no more than two years from the date of acquisition,
issued by or acquired from or through any Bank or any bank or trust company organized under the
laws of the United States or any state thereof and having capital and surplus aggregating at least
$1,000,000,000; and

     (f) 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;

provided that (i) investments in any one issuer, excluding the United States government or any
agency or instrumentality thereof, shall not exceed 20% of total fixed-income Liquid Investments
based on market value at the time of acquisition, (ii) fixed-income holdings shall not exceed 5% of
all Liquid Investments at any time, and (iii) certificates of deposit, commercial paper, corporate
bonds, mortgaged-backed securities, or municipal bonds issued by any one issuer shall not exceed 5%
of all Liquid Investments at any time; provided, however, that for the avoidance of doubt, the
foregoing restrictions shall not apply to money market funds managed by JPMorgan Chase Bank, N.A.
or its affiliates.

     “Majority Banks” means, at any time and except as provided in the last sentence of
this definition, Banks holding more than 50% of the then aggregate unpaid principal amount of the
Notes held by the Banks and the Letter of Credit Exposure of the Banks at such time;
provided that if no such principal amount or Letter of Credit Exposure is then outstanding,
“Majority Banks” shall mean Banks having more than 50% of the aggregate amount of the Commitments
at such time; and provided further that the Commitment of, and the portion of the
aggregate unpaid

14

 

principal amount of the Notes and Letter of Credit Exposure held or deemed held by, any
Defaulting Bank shall be excluded for purposes of making a determination of Majority Banks.

     “Master Agreement” has the meaning set forth in the definition of “Swap Contract”.

     “Material Adverse Change” means (a) a material adverse change in the business,
financial condition, or results of operations of the Borrower and its Subsidiaries taken as a
whole, or (b) the occurrence and continuance of any event or circumstance which could reasonably be
expected (i) to have a material adverse effect on the Borrower’s ability individually or the Credit
Parties’ ability collectively to perform their obligations under this Agreement, any Note, any
Guaranty, or any other Credit Document, (ii) to materially impair the rights and remedies of the
Agent or any Bank under any Credit Document, or (iii) to have a materially adverse effect upon the
legality, validity, or binding effect, or enforceability against the Borrower or any Guarantor of,
any Credit Document to which it is party.

     “Material Subsidiary” means, as of any date of its determination, a Subsidiary of the
Borrower (a) with assets constituting 5% or more of the Borrower’s consolidated assets on such
date, (b) that contributed 5% or more of the Borrower’s consolidated EBITDA for the four-quarter
period most recently ended, (c) that owns any Borrowing Base Assets, (d) that has guaranteed any
Debt of any Credit Party, or (e) the Borrower has designated to be Material Subsidiary.

     “Maturity Date” means the earlier of (a)(i) if the Permitted Notes issued pursuant to
the 2004 Indenture Documents shall not have been retired in their entirety on or before April 15,
2014, September 15, 2014, and (ii) otherwise, April 26, 2015 and (b) the earlier termination in
whole of the Commitments pursuant to Section 2.1(b) or Article VII.

     “Maximum Rate” has the meaning set forth in Section 2.8(d).

     “Mortgaged Contracts” means the contracts of the Borrower and the Guarantors related
to the Mortgaged Properties.

     “Mortgaged Properties” means the Oil and Gas Properties of the Borrower and the
Guarantors that are subject to the Mortgages.

     “Mortgaged Property Value” means, as of any date of its determination, the aggregate
present value of the future net income with respect to the Mortgaged Properties as set forth in the
applicable engineering report, discounted at the stated per annum rate utilized in such report;
provided however that the Mortgaged Property Value shall not include any Oil and Gas Properties
acquired by any Credit Party after the recordation of the Mortgages in the real property records of
the jurisdiction where such Oil and Gas Properties are located unless an amendment or supplement to
such Mortgages sufficiently describing such after-acquired Oil and Gas Properties has been recorded
in such real property records. For the avoidance of doubt, the methodology utilized to calculate
the Mortgaged Property Value shall be the same methodology utilized to calculate the Oil and Gas
Property Value for all purposes of this Agreement.

     “Mortgages” means (i) the Amended and Restated Act of Mortgage, Assignment of
Production, Security Agreement, Fixture Filing, and Financing Statement dated as of August 28,

15

 

2008, made by the Borrower in favor of the Agent for the benefit of the Secured Parties, and
governed by Louisiana law, (ii) the Act of Mortgage, Assignment of Production, Security Agreement,
Fixture Filing, and Financing Statement dated as of August 28, 2008, made by Stone Offshore in
favor of the Agent for the benefit of the Secured Parties, and governed by Louisiana law, and (iii)
any other mortgage or deed of trust executed by the Borrower or any Guarantor in favor of the Agent
for the benefit of the Secured Parties, in each case, as the same may be amended, supplemented, or
otherwise modified from time to time.

     “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.

     “Net Cash Proceeds” means, with respect to any transaction or event, an amount equal
to the cash proceeds received by any Credit Party from or in respect of such transaction or event
(including proceeds of any non-cash proceeds of such transaction), less (i) any out-of-pocket
expenses paid to a Person that are reasonably incurred by such Credit Party in connection therewith
and (ii) in the case of an Asset Disposition, the amount of any Debt secured by a Lien on the
related asset and discharged from the proceeds of such Asset Disposition and any taxes paid or
reasonably estimated by the applicable Credit Party to be payable by such Person in respect of such
Asset Disposition (provided, that if the actual amount of taxes paid is less than the estimated
amount, the difference shall immediately constitute Net Cash Proceeds).

     “Net Income” means, for any Person and for any period of its determination, the net
income of such Person determined in accordance with GAAP, excluding, without duplication, the
non-cash impact of (a) impairments (including, without limitation, goodwill), (b) full cost ceiling
test write downs, (c) gains or losses on sale of property, (d) gains or losses on early
extinguishment of debt, (e) extraordinary items, and (f) accretion expense (in accordance with SFAS
No. 143).

     “Net Interest Expense” means, for any Person for any period (a) interest expense
(including Letter of Credit Fees) of such Person for such period minus (b) interest income of such
Person for such period, in each case determined in accordance with GAAP consistently applied.

     “Note” means a promissory note of the Borrower payable to any Bank or its registered
assigns, in substantially the form of the attached Exhibit D, evidencing indebtedness of
the Borrower to such Bank resulting from Advances owing to such Bank.

     “Notice of Borrowing” means a notice of borrowing in the form of the attached
Exhibit E signed by a Responsible Officer of the Borrower.

     “Notice of Conversion or Continuation” means a notice of conversion or continuation in
the form of the attached Exhibit F signed by a Responsible Officer of the Borrower.

16

 

     “Obligations” means all (a) principal, interest, fees, reimbursements,
indemnifications, and other amounts payable by the Borrower or any Guarantor to the Agent, the
Issuing Bank, or the Banks under the Credit Documents and (b) all debts, liabilities, obligations
of the Borrower or any Guarantor under any Specified Swap Contract or Specified Cash Management
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 the Borrower or any Guarantor of
any proceeding under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors naming such Person as the debtor in such proceeding, regardless of whether such interest
and fees are allowed claims in such proceeding; provided that any release of Collateral or
Guarantors pursuant to this Agreement shall not require the consent of the holders of Obligations
under Specified Swap Contracts or Specified Cash Management Agreements.

     “Oil and Gas Properties” means fee, leasehold or other interests in or under mineral
estates or oil, gas, and other liquid or gaseous hydrocarbon leases with respect to Properties
situated in the United States or offshore from any state of the United States, including overriding
royalty and royalty interests, leasehold estate interests, net profits interests, production
payment interests and mineral fee interests, together with contracts executed in connection
therewith and incidental rights belonging thereto.

     “Oil and Gas Property Value” means, as of any date of its determination, the aggregate
present value of the future net income with respect to the Oil and Gas Properties of the Borrower
and the Guarantors as set forth in the applicable engineering report, discounted at the stated per
annum rate utilized in such report.

     “Oil and Gas Reserve Report” means each engineering report covering the Borrower’s
consolidated Oil and Gas Properties provided to the Agent pursuant to Section 5.6(c).

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

     “Participant” has the meaning given to such term in Section 9.6(d).

     “Participant Register” has the meaning given to such term in Section 9.6(d).

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

     “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.

17

 

     “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.

     “Permitted Borrowing Base Liens” means Permitted Liens of the type described in
clauses (a) and (d) through (i) (inclusive) of Section 6.1.

     “Permitted Liens” means the Liens permitted to exist pursuant to Section 6.1.

     “Permitted Notes” means any unsecured Debt issued pursuant to the 2004 Indenture
Documents, the 2010 Indenture Documents, or other Approved Indenture Documents.

     “Permitted Notes Documents” means the 2004 Indenture Documents, the 2010 Indenture
Documents, and any other Approved Indenture Documents.

     “Person” means an individual, partnership, corporation (including a business trust),
joint stock company, limited liability corporation or company, limited liability partnership,
trust, unincorporated association, joint venture or other entity, or a government or any political
subdivision or agency thereof or any trustee, receiver, custodian or similar official.

     “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 5.7.

     “Property” of any Person means any property or assets (whether real, personal, or
mixed, tangible or intangible) of such Person.

     “Property Proceeds” means (i) the aggregate insurance proceeds received under any
property or physical damage insurance policy in connection with one or more related events or (ii)
any award or other compensation with respect to any eminent domain, condemnation of property or
similar proceedings (or any transfer or disposition of property in lieu of condemnation).

     “Pro Rata Share” means, with respect to any Bank, either (a) the ratio (expressed as a
percentage) of such Bank’s Commitments at such time to the aggregate Commitments at such time or
(b) if the Commitments have been terminated, the ratio (expressed as a percentage) of such Bank’s
aggregate outstanding Advances and Letter of Credit Exposure at such time to the aggregate
outstanding Advances and Letter of Credit Exposure of all the Banks at such time.

     “Proved Mineral Interests” means, collectively, proved developed producing reserves,
proved developed non-producing reserves, and proved undeveloped reserves.

     “Public Bank” has the meaning set forth in Section 5.7.

18

 

     “Register” has the meaning set forth in paragraph (c) of Section 9.6.

     “Regulations U and X” mean Regulations U and X of the Federal Reserve Board, as the
same is from time to time in effect, and all official rulings and interpretations thereunder or
thereof.

     “Reimbursement Obligations” means all of the obligations of the Borrower to reimburse
the Issuing Bank for amounts paid by the Issuing Bank under Letters of Credit as established by the
Letter of Credit Applications and Section 2.6(d).

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

     “Release” shall have the meaning set forth in CERCLA or under any similar applicable
Environmental Law.

     “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.

     “Required Banks” means, at any time and except as provided in the last sentence of
this definition, Banks holding at least 66-2/3% of the then aggregate unpaid principal amount of
the Notes held by the Banks and the Letter of Credit Exposure of the Banks at such time, but in no
event less than two Banks at any time when there are three or more Banks; provided that if
no such principal amount or Letter of Credit Exposure is then outstanding, “Required Banks” shall
mean Banks having at least 66-2/3% of the aggregate amount of the Commitments at such time, but in
no event less than two Banks at any time when there are three or more Banks; and provided
further that the Commitment of, and the portion of the aggregate unpaid principal amount of
the Notes and Letter of Credit Exposure held or deemed held by, any Defaulting Bank shall be
excluded for purposes of making a determination of Required Banks. For any redetermination of the
Borrowing Base under Section 2.2 which would increase the Borrowing Base, “66-2/3%” in the
foregoing sentence shall be “100%”.

     “Response” shall have the meaning set forth in CERCLA or under any similar applicable
Environmental Law.

     “Responsible Officer” means, with respect to any Person, such Person’s Chief Executive
Officer, President, Chief Financial Officer, Chief Accounting Officer, and Vice Presidents.

     “Restricted Payment” means, with respect to any Person, any dividends or other
distributions (in cash, property, or otherwise) on, or any payment for the purchase, redemption, or
other acquisition of, any shares of any capital stock of such Person, other than dividends payable
in such Person’s stock.

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

19

 

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

     “Secured Parties” means the Agent, the Issuing Bank, the Banks, and the holders of
Obligations under Specified Swap Contracts and Specified Cash Management Agreements.

     “Security Agreement” means the Amended and Restated Security Agreement dated as of the
date of this Agreement and each other Security Agreement in favor of the Agent for the ratable
benefit of the Secured Parties in the form of the attached Exhibit H, and any supplement or
joinder thereto, executed on the date hereof or as required by Section 5.9, as the same may
be amended, supplemented, or otherwise modified from time to time.

     “Security Documents” means the Mortgages, the Security Agreements, the Consents, any
agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of
Section 2.15 of this Agreement and each of the other agreements, instruments, or documents
that creates or purports to create, or to consent to the creation of, a Lien in favor of the Agent
for the benefit of the Secured Parties.

     “Specified 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 arrangements) between any Credit Party and any Bank or an
Affiliate of any Bank. The status of any such agreement as a Specified Cash Management Agreement
shall not create in favor of such Bank or Affiliate any rights in connection with the management or
release of any Collateral or of the obligations of any Credit Party under any Security Document.

     “Specified Swap Contract” means any Swap Contract entered into between any Credit
Party and any Person which is a Bank or an Affiliate of any Bank, or was a Bank or an Affiliate of
any Bank at the time such Swap Contract was executed. The status of any Swap Contract as a
Specified Swap Contract shall not create in favor of such Bank or Affiliate any rights in
connection with the management or release of any Collateral or of the obligations of any Credit
Party under any Security Document.

     “Stone Offshore” means Stone Energy Offshore, L.L.C., a Delaware limited liability
company.

     “Subsidiary” of a Person means any corporation or other entity of which more than 50%
of the outstanding capital stock or other ownership interests having ordinary voting power to elect
a majority of the board of directors or similar governing body of such corporation or other entity
(irrespective of whether at such time capital stock or other ownership interests of any other class
or classes of such corporation or other entity shall or might have voting power upon the occurrence
of any contingency) is at the time directly or indirectly owned by such Person, by such Person and
one or more Subsidiaries of such Person or by one or more Subsidiaries of such Person.

     “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

20

 

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, in each case, expressly including any such transactions in which a Person hedges the
price to be received by it for future production from the Oil and Gas Properties.

     “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.

     “Type” has the meaning set forth in Section 1.4.

     “Voting Securities” means with respect to any corporation, capital stock of the
corporation having general voting power under ordinary circumstances to elect directors of such
corporation (irrespective of whether at the time stock of any other class or classes shall have or
might have special voting power or rights by reason of the happening of any contingency).

     Section 1.2. Computation of Time Periods. In this Agreement in the computation of
periods of time from a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each means “to but excluding”.

     Section 1.3. Accounting Terms; Changes in GAAP.

     (a) All accounting terms not specifically defined in this Agreement shall be construed in
accordance with GAAP applied on a consistent basis with those applied in the preparation of the
Financial Statements.

     (b) Unless otherwise indicated, all financial statements of the Borrower, all calculations for
compliance with covenants in this Agreement and all calculations of any amounts to be calculated
under the definitions in Section 1.1 shall be based upon the consolidated accounts of the
Borrower and its Subsidiaries in accordance with GAAP (or in compliance with the regulations
promulgated by the United States Securities and Exchange Commission regarding financial reporting)
and consistent with the principles applied in preparing the Financial Statements. If at any time
any change in GAAP would affect the computation of any financial ratio or requirement set forth in
any Credit Document, and either the Borrower or the Majority Banks shall so request, the Agent, the
Banks 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
Majority Banks); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in

21

 

accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the
Agent and the Banks 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. Notwithstanding the
foregoing, if any change in GAAP would recharacterize an operating lease as a Capital Lease, or
treat a new lease that except for such change would have been characterized as an operating lease,
as a Capital Lease, such change shall be disregarded.

     Section 1.4. Types of Advances. Advances are distinguished by “Type.” The “Type” of
an Advance refers to the determination whether such Advance is a Eurodollar Rate Advance or Base
Rate Advance.

     Section 1.5. Miscellaneous. Article, Section, Schedule, and Exhibit references are to
Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified.

ARTICLE II

CREDIT FACILITIES

     Section 2.1. Commitment for Advances.

     (a) Advances. Each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to make Advances to the Borrower from time to time on any Business Day during the
period from the date of this Agreement until the Maturity Date in an aggregate outstanding amount
up to but not to exceed an amount equal to (i) the lesser of such Bank’s Commitment or such Bank’s
Pro Rata Share of the Borrowing Base less (ii) such Bank’s Pro Rata Share of the Letter of
Credit Exposure; provided that the sum of the outstanding amount of all Advances made by such Bank
and such Bank’s Pro Rata Share of the Letter of Credit Exposure shall not exceed such Bank’s
Commitment. Each Borrowing shall, in the case of Borrowings consisting of Base Rate Advances, be
in an aggregate amount not less than $500,000 (or, if less, the remaining undrawn Commitments of
all Banks) and in integral multiples of $100,000 in excess thereof, and in the case of Borrowings
consisting of Eurodollar Rate Advances, be in an aggregate amount not less than $2,000,000 (or, if
less, the remaining undrawn Commitments of all Banks) or in integral multiples of $1,000,000 in
excess thereof, and in each case shall consist of Advances of the same Type made on the same day by
the Banks ratably according to their respective Commitments. Within the limits of each Bank’s
Commitment, and subject to the terms of this Agreement, the Borrower may from time to time borrow,
prepay, and reborrow Advances.

     (b) Optional Reduction of Commitment. The Borrower shall have the right, upon at
least three Business Days’ irrevocable notice to the Agent, to terminate in whole or reduce ratably
in part the unused portion of the Commitments; provided that each partial reduction of the
Commitments shall be in the aggregate amount of $5,000,000 or in integral multiples of $1,000,000
in excess thereof. Any reduction or termination of the Commitments pursuant to this Section
2.1(b) shall be permanent, with no obligation of the Banks to reinstate such

22

 

Commitments, and the commitment fees provided for in Section 2.7(a) shall thereafter
be computed on the basis of the Commitments, as so reduced.

     (c) Notes. The indebtedness of any Borrower to each Bank resulting from the Advances
owing to such Bank shall, if such Bank requests, be evidenced by a Note of the Borrower in the
maximum principal amount of such Bank’s Commitment.

     Section 2.2. Borrowing Base.

     (a) The Borrowing Base has been set by the Banks and acknowledged by the Borrower as
$400,000,000 as of the Effective Date. On the date of any issuance of Debt in the form of
Permitted Notes after the Effective Date, the Borrowing Base shall be reduced automatically by an
amount equal to 30% of the amount of such Debt; provided, however, that, notwithstanding the
foregoing, the Borrowing Base shall not be reduced to the extent that the proceeds from the
issuance of such Permitted Notes are used to refinance the principal amount of Debt which
constitutes Permitted Notes existing at such time. The automatic reduction described in this
Section 2.2(a) shall not be deemed to take the place of regularly scheduled or other
redeterminations of the Borrowing Base in accordance with this Section 2.2.

     (b) From the date hereof through the Maturity Date and subject to the further provisions of
this Section 2.2, the Borrowing Base shall be redetermined by the Required Banks each May 1
and November 1 in accordance with Section 2.2(d) on the basis of information, including the
Oil and Gas Reserve Reports required to be delivered before each such date supplied by Borrower in
compliance with the provisions of this Agreement, such additional data concerning pricing,
quantities of production, purchasers of production, and other information and engineering and
geological data with respect thereto as the Agent or any Bank may reasonably request, together with
all other information then available to the Agent and the Banks; provided that the first such
scheduled redetermination shall occur on November 1, 2011. Notwithstanding the foregoing, the
Required Banks may, in the exercise of their good faith discretion, require additional
redeterminations of the Borrowing Base in accordance with Section 2.2(d) by providing
written notice to the Borrower, but only two such requests may be made during any calendar year.

     (c) The Borrower may request that the Required Banks redetermine the Borrowing Base (i) by
providing a written request to the Agent, but only two such requests may be made during any
calendar year or (ii) in connection with the Borrower’s or any Guarantor’s acquisition of Oil and
Gas Properties with a purchase price of $20,000,000 or more. In connection with any such request,
the Borrower shall provide the Agent and the Banks with an interim reserve report prepared by the
Borrower together with such other information, including additional data concerning pricing,
quantities of production, purchasers of production, and other information and engineering and
geological data, as the Agent or any Bank may reasonably request. Within 30 days following the
receipt of such interim reserve report and other information, the Required Banks shall make a
redetermination of the Borrowing Base in accordance with Section 2.2(d).

     (d) In connection with a redetermination of the Borrowing Base, the Agent shall propose a
Borrowing Base to the Banks, and the Banks shall vote to approve or disapprove such proposed
Borrowing Base. If the Required Banks do not approve the proposed Borrowing Base,

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the Agent shall propose, and the Banks shall vote to approve or disapprove, another Borrowing
Base, until the Required Banks approve a Borrowing Base proposed by the Agent. Once the Required
Banks approve the proposed Borrowing Base, the Agent shall notify the Borrower of such
redetermination. Until the Borrower receives such notification from the Agent, the Borrowing Base
most recently established shall remain in effect, and thereafter the new Borrowing Base as set
forth in such notification shall be in effect.

     (e) Upon any sale, lease, transfer, unwinding, termination, novation or other disposition
(including pursuant to a farm-out, participation, or other agreement that would reduce the
Borrower’s or such Subsidiary’s interest in any Property), whether directly or indirectly, and
whether or not in the ordinary course of business, by the Borrower or any of its Subsidiaries of
Borrowing Base Assets or equity interests in a Subsidiary owning Borrowing Base Assets that
(individually or on a cumulative basis with all such dispositions consummated since the
determination of the most recently determined Borrowing Base) (x) have Oil and Gas Property Value
allocated to such Borrowing Base Assets in the most recent Oil and Gas Reserve Report (the
“Allocated Value”) in excess of 5% of the amount of such Borrowing Base, or (y) in the case
of Swap Contracts, have Net Cash Proceeds in excess of 5% of the amount of such Borrowing Base, the
Borrowing Base shall automatically be reduced by (1) with respect to Swap Contracts, 75% of the Net
Cash Proceeds received by a Credit Party as a result of unwinding, terminating, or novating such
Swap Contracts (after giving effect to any new Swap Contracts that are given value in the Borrowing
Base and that were entered into prior to or in connection with such unwind, termination or
novation) and (2) with respect to all Borrowing Base Assets other than Swap Contracts, the
Allocated Value of such Borrowing Base Assets.

     (f) The Borrowing Base shall represent the determination by the Required Banks of the loan
value of the Borrower’s and the Guarantors’ Oil and Gas Properties which are either (i) subject to
an Acceptable Security Interest or (ii) unencumbered (except for Permitted Borrowing Base Liens),
but the Agent and the Required Banks shall make their determination and vote their approval,
respectively, in accordance with the applicable definitions and provisions herein contained, each
such Bank’s standard policies regarding energy lending, industry lending practices, consultation
with the Agent and the other Banks (but without requiring the approval of any such Bank), and
consideration for the nature of the facilities established hereunder. The Borrower acknowledges
that the determination of the Borrowing Base contains an equity cushion (market value in excess of
loan value), which is acknowledged by Borrower to be essential for the adequate protection of the
Agent and the Banks.

     (g) The Borrower shall also have the right to reduce the Borrowing Base once during the period
from October 1 to March 31 and once during the period from April 1 to September 30 during each year
by providing the Agent 30 days advance written notice of such reduction. The Agent shall promptly
send to each Bank a copy of such notice and such reduction shall be effective on the later of (i)
30 days following the date of the Agent’s receipt of such notice, and (ii) the date specified in
such notice, in each case unless otherwise agreed by the Agent.

     (h) As of the date of this Agreement, the Agent has provided the Borrower with the Agent’s
standard policies regarding energy lending. The Agent, but not any other Bank, agrees to provide
the Borrower with written notice of any changes to such policies.

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     Section 2.3. Method of Borrowing.

     (a) Notice. Each Borrowing shall be made pursuant to a Notice of Borrowing (or by
telephone notice promptly confirmed in writing by a Notice of Borrowing), given not later than
10:00 a.m. (Dallas, Texas time) (i) on the third Business Day before the date of the proposed
Borrowing, in the case of a Eurodollar Rate Borrowing or (ii) on the Business Day of the proposed
Borrowing, in the case of a Base Rate Borrowing, by the Borrower to the Agent, which shall in turn
give to each Bank prompt notice of such proposed Borrowing by telecopier or telex. Each Notice of
a Borrowing shall be given by telecopier or telex, confirmed immediately in writing specifying the
information required therein. In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Agent shall promptly notify each Bank of the applicable interest rate under
Section 2.8(b). Each Bank shall (A) in the case of a Eurodollar Rate Borrowing, before
10:00 a.m. (Dallas, Texas time) on the date of such Borrowing and (B) in the case of a Base Rate
Borrowing, before 1:00 p.m. (Dallas, Texas time) on the date of such Borrowing, make available for
the account of its Applicable Lending Office to the Agent at its address referred to in Section
9.2, or such other location as the Agent may specify by notice to the Banks, in same day funds,
such Bank’s Pro Rata Share of such Borrowing. After the Agent’s receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Agent shall make such funds
available to the Borrower at its account with the Agent.

     (b) Conversions and Continuations. The Borrower may elect to Convert or continue any
Borrowing under this Section 2.3 by delivering an irrevocable Notice of Conversion or
Continuation to the Agent at the Agent’s office no later than 10:00 a.m. (Dallas, Texas time) (i)
on the date which is at least three Business Days in advance of the proposed Conversion or
continuation date in the case of a Conversion to or a continuation of a Borrowing comprised of
Eurodollar Rate Advances and (ii) on the Business Day of the proposed conversion date in the case
of a Conversion to a Borrowing comprised of Base Rate Advances. Each such Notice of Conversion or
Continuation shall be in writing or by telex or telecopier confirmed immediately in writing
specifying the information required therein. Promptly after receipt of a Notice of Conversion or
Continuation under this Section, the Agent shall provide each Bank with a copy thereof and, in the
case of a Conversion to or a Continuation of a Borrowing comprised of Eurodollar Rate Advances,
notify each Bank of the applicable interest rate under Section 2.8(b).

     (c) Certain Limitations. Notwithstanding anything in paragraphs (a) and (b) above:

     (i) at no time shall there be more than twelve Interest Periods applicable to
outstanding Eurodollar Rate Advances;

     (ii) if any Bank shall, at least one Business Day before the date of any requested
Borrowing, Conversion, or continuation, notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful, or that any
central bank or other Governmental Authority asserts that it is unlawful, for such Bank or
its Eurodollar Lending Office to perform its obligations under this Agreement to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances, the right of the
Borrower to select Eurodollar Rate Advances from such Bank shall be suspended until such
Bank shall notify the Agent that the circumstances causing such

25

 

suspension no longer exist, and the Advance made by such Bank in respect of such
Borrowing, Conversion, or continuation shall be a Base Rate Advance;

     (iii) if the Agent is unable to determine the Eurodollar Rate for Eurodollar Rate
Advances comprising any requested Borrowing, the right of the Borrower to select Eurodollar
Rate Advances for such Borrowing or for any subsequent Borrowing shall be suspended until
the Agent shall notify the Borrower and the Banks that the circumstances causing such
suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate
Advance;

     (iv) if the Majority Banks shall, at least one Business Day before the date of any
requested Borrowing, notify the Agent that the Eurodollar Rate for Eurodollar Rate Advances
comprising such Borrowing will not adequately reflect the cost to such Banks of making or
funding their respective Eurodollar Rate Advances, as the case may be, for such Borrowing,
the right of the Borrower to select Eurodollar Rate Advances for such Borrowing or for any
subsequent Borrowing shall be suspended until the Agent shall notify the Borrower and the
Banks that the circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance; and

     (v) if the Borrower shall fail to select the duration or continuation of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions contained in the
definition of “Interest Period” in Section 1.1 and paragraph (b) above, the Agent
shall forthwith so notify the Borrower and the Banks and such Advances shall be made
available to the Borrower on the date of such Borrowing as Base Rate Advances or, if an
existing Advance, Convert into Base Rate Advances.

     (d) Notices Irrevocable. Each Notice of Borrowing and Notice of Conversion or
Continuation shall be irrevocable and binding on the Borrower. In the case of any Borrowing which
the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Bank against any loss, out-of-pocket cost, or expense incurred by
such Bank as a result of any failure by the Borrower to fulfill on or before the date specified in
such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III
including, without limitation, any loss, cost, or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to fund the Advance to be made by
such Bank as part of such Borrowing when such Advance, as a result of such failure, is not made on
such date.

     (e) Agent Reliance. Unless the Agent shall have received notice from a Bank before
the date of any Borrowing that such Bank shall not make available to the Agent such Bank’s Pro Rata
Share of such Borrowing, the Agent may assume that such Bank has made its Pro Rata Share of such
Borrowing available to the Agent on the date of such Borrowing in accordance with paragraph (a) of
this Section 2.3 and the Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have
so made its Pro Rata Share of such Borrowing available to the Agent, such Bank and the Borrower
severally agree to immediately repay to the Agent on demand such corresponding amount, together
with interest on such amount, for each day from the date such

26

 

amount is made available to the Borrower until the date such amount is repaid to the Agent, at
(i) in the case of the Borrower, the interest rate applicable on such day to Advances comprising
such Borrowing and (ii) in the case of such Bank, the Federal Funds Rate for such day. If such
Bank shall repay to the Agent such corresponding amount and interest as provided above, such
corresponding amount so repaid shall constitute such Bank’s Advance as part of such Borrowing for
purposes of this Agreement even though not made on the same day as the other Advances comprising
such Borrowing.

     (f) Bank Obligations Several. The failure of any Bank to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Bank of its obligation, if any, to make
its Advance on the date of such Borrowing. No Bank shall be responsible for the failure of any
other Bank to make the Advance to be made by such other Bank on the date of any Borrowing.

     Section 2.4. Prepayment of Advances.

     (a) Optional. The Borrower may prepay Advances, after giving by 10:00 a.m. (Dallas,
Texas time) (i) in the case of Eurodollar Rate Advances, at least two Business Days’ or (ii) in
case of Base Rate Advances, same Business Day’s, irrevocable prior written notice to the Agent
stating the proposed date and aggregate principal amount of such prepayment; provided, however,
that, in the case of a prepayment resulting from a refinancing of all Advances, the Borrower and
Agent may agree to the terms of such payment in a payoff letter acceptable to Agent. If any such
notice is given, the Borrower shall prepay Advances comprising part of the same Borrowing in whole
or ratably in part in an aggregate principal amount equal to the amount specified in such notice;
provided, however, that each partial prepayment with respect to: (A) any Borrowing
comprised of Base Rate Advances shall be made in $100,000 multiples and in an aggregate principal
amount such that after giving effect thereto such Borrowing shall have a principal amount
outstanding of at least $500,000 and (B) any Borrowing comprised of Eurodollar Rate Advances shall
be made in $1,000,000 multiples and in an aggregate principal amount such that after giving effect
thereto such Borrowing shall have a principal amount outstanding of at least $2,000,000. Full
prepayments of any Borrowing are permitted without restriction of amounts.

     (b) Mandatory.

     (i) Borrowing Base Deficiency. Except as provided in Section 2.4(b)(ii),
(iii), (iv), and (v) below, if the aggregate outstanding amount of Advances plus the
Letter of Credit Exposure ever exceeds the Borrowing Base (such excess being referred to
herein as the “Borrowing Base Deficiency”), the Borrower shall, within 30 days after
receipt of written notice of such condition from the Agent elect by written notice to the
Agent to take one or more of the following actions to remedy such Borrowing Base Deficiency:

     (A) prepay Advances and, if the Advances have been repaid in full, Cash
Collateralize the Letter of Credit Exposure, such that the Borrowing Base Deficiency
is cured within ten days after the Borrower’s written election;

27

 

     (B) add additional Oil and Gas Properties acceptable to the Required Banks to
the Borrowing Base (and take such actions as are requested by the Agent to cause
such additional Oil and Gas Properties to become subject to Mortgages, to the extent
necessary to cause the Mortgaged Property Value to equal or exceed 80% of the Oil
and Gas Property Value) such that the Borrowing Base Deficiency is cured within 30
days after the Borrower’s written election; or

     (C) pay the deficiency in five equal monthly installments in amounts equal to
one-fifth of the amount of the deficiency or such lesser amounts satisfactory to the
Required Banks for the prepayment of Advances and, if the Advances have been repaid
in full, Cash Collateralize the Letter of Credit Exposure such that the Borrowing
Base Deficiency is eliminated within six months of the occurrence of such Borrowing
Base Deficiency.

     (ii) Reduction of Commitments. On the date of each reduction of the aggregate
Commitments pursuant to Section 2.1(b), the Borrower agrees to make a prepayment in
respect of the outstanding amount of the Advances and then Cash Collateralize the Letter of
Credit Exposure to the extent, if any, that the aggregate unpaid principal amount of all
Advances plus the Letter of Credit Exposure exceeds the Commitments, as so reduced.
Any amount paid under the preceding sentence in respect of Letter of Credit Exposure shall
be held as Cash Collateral under Section 2.15.

     (iii) Asset Sales. If, after giving effect to the sale, transfer or other
disposition of any of the Borrower’s or any of its Subsidiaries’ Borrowing Base Assets, the
aggregate outstanding amount of Advances plus the Letter of Credit Exposure exceeds the
Borrowing Base, the Borrower shall repay the Advances, and then Cash Collateralize the
Letter of Credit Exposure, by an amount equal to the lesser of (A) such Borrowing Base
Deficiency and (B) 100% of the Net Cash Proceeds of such sale, transfer, or other
disposition, within three days after receipt of such proceeds.

     (iv) Property, Physical Damage and Other Insurance Proceeds. If any Credit
Party (or Agent as loss payee or assignee) receives any Property Proceeds arising from a
single event or related series of events, whether as one payment or a series of payments,
(A) during the existence of a Default or Event of Default, then the Borrower shall repay the
Advances, and then Cash Collateralize the Letter of Credit Exposure, by an amount equal to
100% of such Property Proceeds, upon receipt of such proceeds, and (B) during the existence
of a Borrowing Base Deficiency, then the Borrower shall repay the Advances, and then Cash
Collateralize the Letter of Credit Exposure, by an amount equal to the lesser of (1) such
Borrowing Base Deficiency and (2) 100% of such Property Proceeds, within three days after
receipt of such proceeds.

     (v) Illegality. If any Bank shall notify the Agent and the Borrower that the
introduction of or any change in or in the interpretation of any law or regulation makes it
unlawful, or that any central bank or other governmental authority asserts that it is
unlawful for such Bank or its Eurodollar Lending Office to perform its obligations under
this Agreement to maintain or make any Advances whose interest is determined by reference to
the Eurodollar Rate hereunder or any Governmental Authority has imposed

28

 

material restrictions on the authority of such Bank to purchase or sell, or to take
deposits of, Dollars in the London interbank market, (i) the Borrower shall, no later than
10:00 a.m. (Dallas, Texas time) (A) if not prohibited by law, on the last day of the
Interest Period for each outstanding Eurodollar Rate Advance made by such Bank or (B) if
required by such notice, on the second Business Day following its receipt of such notice
prepay all of the Eurodollar Rate Advances made by such Bank then outstanding, (ii) such
Bank shall simultaneously make a Base Rate Advance (the interest rate on such Base Rate
Advance of such Bank shall, if necessary to avoid such illegality, be determined by the
Agent without reference to the Eurodollar Rate component of the Base Rate) to the Borrower
on such date in an amount equal to the aggregate principal amount of the Eurodollar Rate
Advances prepaid to such Bank, and (iii) the right of the Borrower to select Eurodollar Rate
Advances from such Bank for any subsequent Borrowing shall be suspended until such Bank
giving notice referred to above shall notify the Agent that the circumstances causing such
suspension no longer exist.

     (c) No Additional Right; Ratable Prepayment; Interest and Breakage. The Borrower
shall have no right to prepay any principal amount of any Advance except as provided in this
Section 2.4, and all notices given pursuant to this Section 2.4 shall be
irrevocable and binding upon the Borrower. Each payment of any Advance pursuant to this
Section 2.4 shall be made in a manner such that all Advances comprising part of the same
Borrowing are paid in whole or ratably in part. Each prepayment pursuant to this Section
2.4 shall be accompanied by accrued interest on the amount prepaid to the date of such
prepayment and amounts, if any, required to be paid pursuant to Section 2.11 as a result of
such prepayment being made on such date.

     Section 2.5. Repayment of Advances. The Borrower shall repay to the Agent for the
ratable benefit of the Banks the outstanding principal amount of each Advance on the Maturity Date.

     Section 2.6. Letters of Credit.

     (a) Commitment. From time to time from the date of this Agreement until the Maturity
Date, at the request of the Borrower, the Issuing Bank shall, on the terms and conditions
hereinafter set forth, issue, increase, or extend the expiration date of Letters of Credit for the
account of the Borrower on any Business Day;

     (i) provided that no Letter of Credit shall be issued, increased, or extended:

(A) unless such issuance, increase, extension or conversion would not cause
the Letter of Credit Exposure to exceed the lesser of (1) $300,000,000 or
(2) the lesser of (x) the aggregate Commitments less the aggregate
outstanding principal amount of all Advances or (y) the Borrowing Base
less the aggregate outstanding principal amount of all Advances;

(B) unless such Letter of Credit has an Expiration Date not later than the
earlier of (1) 12 months after the date of issuance thereof (or, if
extendable beyond such period, unless such Letter of Credit is cancelable

29

 

upon at least 30 days’ notice given by the Issuing Bank to the beneficiary
of such Letter of Credit) or (2) five days prior to the Maturity Date;

(C) unless such Letter of Credit Documents are in form and substance
acceptable to the Issuing Bank in its sole discretion;

(D) unless such Letter of Credit is a standby letter of credit not
supporting the repayment of indebtedness for borrowed money of any Person;
and

(E) unless the Borrower has delivered to the Issuing Bank a completed and
executed Letter of Credit Application; and

     (ii) provided further that the Issuing Bank 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 Issuing Bank
from issuing such Letter of Credit, or any Legal Requirement applicable to
the Issuing Bank or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over the
Issuing Bank shall prohibit, or request that the Issuing Bank refrain from,
the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such Letter
of Credit any restriction, reserve or capital requirement (for which the
Issuing Bank is not otherwise compensated hereunder) not in effect on the
Effective Date, or shall impose upon the Issuing Bank any unreimbursed loss,
cost, or expense which was not applicable on the Effective Date and which
the Issuing Bank in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies
of the Issuing Bank; or

(C) any Bank is at that time a Defaulting Bank, unless the Issuing Bank has
entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the Issuing Bank (in its sole discretion) with the Borrower
or such Bank to eliminate the Issuing Bank’s actual or potential Fronting
Exposure (after giving effect to Section 2.16(a)(iv)) with respect
to the Defaulting Bank arising from either the Letter of Credit then
proposed to be issued or that Letter of Credit and all other Letter of
Credit Exposure as to which the Issuing Bank has actual or potential
Fronting Exposure, as it may elect in its sole discretion.

As of the Effective Date, the Existing Letters of Credit shall be deemed “Letters of Credit”
hereunder and shall be subject to the terms and provisions set forth herein.

30

 

     (b) Participations. Upon the date of the issuance or increase of a Letter of Credit
or the conversion of an Existing Letter of Credit to a Letter of Credit, the Issuing Bank shall be
deemed to have sold to each other Bank and each other Bank shall have been deemed to have purchased
from the Issuing Bank a participation in the related Letter of Credit Obligations equal to such
Bank’s Pro Rata Share at such date and such sale and purchase shall otherwise be in accordance with
the terms of this Agreement. The Issuing Bank shall promptly notify each such participant Bank by
telex, telephone, or telecopy of each Letter of Credit issued, increased, or extended or converted
and the actual dollar amount of such Bank’s participation in such Letter of Credit.

     (c) Issuing. Each Letter of Credit shall be issued, increased, or extended pursuant
to a Letter of Credit Application (or by telephone notice promptly confirmed in writing by a Letter
of Credit Application), given not later than 10:00 a.m. (Dallas, Texas time) on the fifth Business
Day before the date of the proposed issuance, increase, or extension of the Letter of Credit, and
the Agent shall give to each Bank prompt notice thereof by telex, telephone, or telecopy. Each
Letter of Credit Application shall be given by telecopier or telex, confirmed immediately in
writing, specifying the information required therein. After the Agent’s receipt of such Letter of
Credit Application and upon fulfillment of the applicable conditions set forth in Article III, the
Agent shall issue, increase, or extend such Letter of Credit for the account of the Borrower. Each
Letter of Credit Application shall be irrevocable and binding on the Borrower.

     (d) Reimbursement. The Borrower hereby agrees to pay on demand to the Issuing Bank an
amount equal to any amount paid by the Issuing Bank under any Letter of Credit. In the event the
Issuing Bank makes a payment pursuant to a request for draw presented under a Letter of Credit and
such payment is not promptly reimbursed by the Borrower upon demand, the Issuing Bank shall give
the Agent notice of the Borrower’s failure to make such reimbursement and the Agent shall promptly
notify each Bank of the amount necessary to reimburse the Issuing Bank. Upon such notice from the
Agent, each Bank shall promptly reimburse the Issuing Bank for such Bank’s Pro Rata Share of such
amount (and the Agent may make available Cash Collateral provided for this purpose), and such
reimbursement shall be deemed for all purposes of this Agreement to be an Advance to the Borrower
transferred at the Borrower’s request to the Issuing Bank. If such reimbursement is not made by
any Bank to the Issuing Bank on the same day on which the Agent notifies such Bank to make
reimbursement to the Issuing Bank hereunder, such Bank shall pay interest on its Pro Rata Share
thereof to the Issuing Bank at a rate per annum equal to the Federal Funds Rate. The Borrower
hereby unconditionally and irrevocably authorizes, empowers, and directs the Agent and the Banks to
record and otherwise treat such reimbursements to the Issuing Bank as Base Rate Advances under a
Borrowing requested by the Borrower to reimburse the Issuing Bank which have been transferred to
the Issuing Bank at the Borrower’s request.

     (e) Obligations Unconditional. The obligations of the Borrower under this Agreement
in respect of each Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances, including, without
limitation, the following circumstances:

     (i) any lack of validity or enforceability of any Letter of Credit Documents;

31

 

     (ii) any amendment or waiver of, or any consent to departure from, any Letter of Credit
Documents;

     (iii) the existence of any claim, setoff, defense, or other right which the Borrower
may have at any time against any beneficiary or transferee of such Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be acting), the Issuing
Bank, or any other person or entity, whether in connection with this Agreement, the
transactions contemplated in this Agreement or in any Letter of Credit Documents, or any
unrelated transaction;

     (iv) any statement or any 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 to the extent the Issuing Bank would not be liable
therefor pursuant to the following paragraph (f); or

     (v) payment by the Issuing Bank under such Letter of Credit against presentation of a
draft or certificate which does not comply with the terms of such Letter of Credit;

provided, however, that nothing contained in this paragraph (e) shall be deemed to
constitute a waiver of any remedies of the Borrower in connection with the Letters of Credit or the
Borrower’s rights under Section 2.6(f) below.

     (f) Liability of Issuing Bank. The Borrower assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such
Letter of Credit. Neither the Issuing Bank nor any of its officers or directors shall be liable or
responsible for:

     (i) the use which may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith;

     (ii) the validity, sufficiency, or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects invalid,
insufficient, fraudulent, or forged;

     (iii) payment by the Issuing Bank against presentation of documents which do not comply
with the terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the relevant Letter of Credit; or

     (iv) any other circumstances whatsoever in making or failing to make payment under any
Letter of Credit (INCLUDING THE ISSUING BANK’S OWN NEGLIGENCE),

except that the Borrower shall have a claim against the Issuing Bank, and the Issuing Bank
shall be liable to the Borrower, to the extent of any direct, as opposed to consequential, damages
suffered by the Borrower which the Borrower proves were caused by (A) the Issuing Bank’s willful
misconduct or gross negligence in determining whether documents presented under a Letter of Credit
comply with the terms of such Letter of Credit or (B) the Issuing Bank’s willful

32

 

failure to make lawful payment under any Letter of Credit after the presentation to it of a draft
and certificate strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank 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.

     Section 2.7. Fees.

     (a) Commitment Fees.

     (i) Subject to Section 2.16(a)(iii), the Borrower agrees to pay to the Agent
for the account of each Bank a commitment fee per annum equal to the Applicable Margin for
commitment fees in effect from time to time on the average daily amount by which such Bank’s
Pro Rata Share of the Borrowing Base exceeds the sum of such Bank’s outstanding Advances and
such Bank’s Pro Rata Share of the Letter of Credit Exposure, from the Effective Date until
the Maturity Date.

     (ii) The commitment fees shall be due and payable quarterly in arrears on the last day
of each March, June, September, and December during the term of this Agreement and on the
Maturity Date.

     (b) Agent and Arranger Fees. The Borrower agrees to pay to the Agent and the Arranger
for their own accounts the fees described in the letter dated April 18, 2010 from the Agent and the
Arranger to the Borrower.

     (c) Bank Fees. The Borrower agrees to pay to the Agent for the benefit of the Banks
on the Effective Date, the fees agreed to between the Borrower and the Banks in writing.

     (d) Letter of Credit Fees.

     (i) The Borrower agrees to pay (A) to the Agent for the pro rata benefit of the Banks a
per annum fee for each Letter of Credit issued hereunder equal to the Applicable Margin for
Eurodollar Advances on the face amount of such Letter of Credit, but with a minimum annual
fee of $1,000 on each Letter of Credit (collectively, the “Letter of Credit Fees”);
provided, however, any Letter of Credit Fees otherwise payable for the account of a
Defaulting Bank with respect to any Letter of Credit as to which such Defaulting Bank has
not provided Cash Collateral satisfactory to the Issuing Bank pursuant to this Section
2.7 shall be payable, to the maximum extent permitted by applicable Legal Requirements,
to the other Banks in accordance with the upward adjustments in their respective Pro Rata
Share allocable to such Letter of Credit pursuant to Section 2.16(a)(iv), with the
balance of such fee, if any, payable to the Issuing Bank for its own account and (B) to the
Agent for the benefit of the Issuing Bank a fronting fee for each Letter of Credit equal to
0.125% per annum of the face amount of such Letter of Credit, but with a minimum annual fee
of $1,000 on each Letter of Credit. Each such fee with respect to a Letter of Credit shall
be payable quarterly in arrears for the period such Letter of Credit is outstanding, and on
the Maturity Date.

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     (ii) The Borrower agrees to pay to the Issuing Bank for its own account the customary
issuance, presentation, amendment, and other processing fees, and other standard costs and
charges, of the Issuing Bank 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.

     Section 2.8. Interest. The Borrower shall pay interest on the unpaid principal amount
of each Advance made by each Bank from the date of such Advance until such principal amount shall
be paid in full, at the following rates per annum:

     (a) Base Rate Advances. If such Advance is a Base Rate Advance, a rate per annum
equal at all times to the Adjusted Base Rate in effect from time to time plus the
Applicable Margin in effect from time to time, payable in arrears on the last day of March, June,
September, and December and on the date such Base Rate Advance shall be paid in full,
provided that any amount of principal which is not paid when due (whether at stated
maturity, by acceleration, or otherwise) shall bear interest from the date on which such amount is
due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to
the Adjusted Base Rate in effect from time to time plus the Applicable Margin plus
2.00% per annum.

     (b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance, a rate
per annum equal at all times during the Interest Period for such Advance to the Eurodollar Rate for
such Interest Period plus the Applicable Margin in effect from time to time, payable on the
last day of such Interest Period, and, in the case of Interest Periods that are longer than three
months, every three months and on the last day of such Interest Period, provided that any
amount of principal which is not paid when due (whether at stated maturity, by acceleration, or
otherwise) shall bear interest from the date on which such amount is due until such amount is paid
in full, payable on demand, at a rate per annum equal to (i) until the end of the relevant Interest
Period, the Eurodollar Rate in effect from time to time plus the Applicable Margin plus
2.00% per annum and (ii) thereafter, the Adjusted Base Rate in effect from time to time
plus the Applicable Margin plus 2.00% per annum.

     (c) Additional Interest on Eurodollar Rate Advances. The Borrower shall pay to each
Bank, so long as any such Bank shall be required under regulations of the Federal Reserve Board to
maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance of
such Bank, from the effective date of such Advance until such principal amount is paid in full, at
an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of
such Bank for such Interest Period, payable on each date on which interest is payable on such
Advance. Such additional interest payable to any Bank shall be determined by such Bank and
notified to the Borrower through the Agent (such notice to include the calculation of such
additional interest, which calculation shall be conclusive in the absence of manifest error).

     (d) Usury.

34

 

     (i) If, with respect to any Bank, the effective rate of interest contracted for under
the Credit Documents, including the stated rates of interest and fees contracted for
hereunder and any other amounts contracted for under the Credit Documents which are deemed
to be interest, at any time exceeds the maximum lawful rate that may be contracted for,
charged, taken, received or reserved (the “Maximum Rate”) by such Bank in accordance
with applicable Legal Requirements, then the outstanding principal amount of the loans made
by such Bank hereunder shall bear interest at a rate which would make the effective rate of
interest for such Bank under the Credit Documents equal the Maximum Rate until the
difference between the amounts which would have been due at the stated rates and the amounts
which were due at the Maximum Rate (the “Lost Interest”) has been recaptured by such
Bank.

     (ii) If, when the loans made hereunder are repaid in full, the Lost Interest has not
been fully recaptured by such Bank pursuant to the preceding paragraph, then, to the extent
permitted by law, for the loans made hereunder by such Bank the interest rates charged under
Section 2.8 hereunder shall be retroactively increased such that the effective rate
of interest under the Credit Documents was at the Maximum Rate since the effectiveness of
this Agreement to the extent necessary to recapture the Lost Interest not recaptured
pursuant to the preceding sentence and, to the extent allowed by law, the Borrower shall pay
to such Bank the amount of the Lost Interest remaining to be recaptured by such Bank.

     (iii) In calculating all sums paid or agreed to be paid to any Bank by the Borrower for
the use, forbearance, or detention of money under the Credit Documents, such amounts shall,
to the extent permitted by applicable law, be amortized, prorated, allocated, and spread in
equal parts throughout the term of the Credit Documents.

     (iv) NOTWITHSTANDING the foregoing or any other term in this Agreement and the Credit
Documents to the contrary, it is the intention of each Bank and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if any Bank contracts for, charges, or
receives any consideration which constitutes interest in excess of the Maximum Rate, then
(A) the provisions of this Section 2.8 shall control, and (B) any such excess shall
be canceled automatically and, if previously paid, shall at such Bank’s option be applied to
the outstanding amount of the loans made hereunder by such Bank or be refunded to the
Borrower.

     Section 2.9. Payments and Computations.

     (a) Payment Procedures. The Borrower shall make each payment under this Agreement and
under the Notes not later than 10:00 a.m. (Dallas, Texas time) on the day when due in Dollars to
the Agent at 901 Main Street, 14th Floor, Dallas, Texas 75202 (or such other location as the Agent
shall designate in writing to the Borrower), in same day funds. The Agent shall promptly
thereafter cause to be distributed like funds relating to the payment of principal, interest or
fees ratably (other than amounts payable solely to the Agent, the Issuing Bank, or a specific Bank
pursuant to Section 2.7, 2.8(c), 2.11, 2.12, 2.13,
8.11, or 9.7, but after taking into account payments effected pursuant to
Section 9.4) to the Banks for the account of their respective Applicable Lending Offices,
and like funds relating to the payment of any other

35

 

amount payable to any Bank or the Issuing Bank to such Bank for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this Agreement.

     (b) Computations. All computations of interest based on the Base Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of
interest based on the Eurodollar Rate and the Federal Funds Rate and of fees shall be made by the
Agent, on the basis of a year of 360 days, in each case for the actual number of days (including
the first day, but excluding the last day) occurring in the period for which such interest or fees
are payable. Each determination by the Agent of an interest rate or fee shall be conclusive and
binding for all purposes, absent manifest error.

     (c) Non-Business Day Payments. Whenever any payment shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of payment of interest or
fees, as the case may be; provided, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.

     (d) Agent Reliance. Unless the Agent shall have received written notice from the
Borrower prior to the date on which any payment is due to the Banks that the Borrower shall not
make such payment in full, the Agent may assume that the Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed
to each Bank on such date an amount equal to the amount then due such Bank. If and to the extent
the Borrower shall not have so made such payment in full to the Agent, each Bank shall repay to the
Agent forthwith on demand such amount distributed to such Bank, together with interest, for each
day from the date such amount is distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate for such day.

     Section 2.10. Sharing of Payments, Etc. If any Bank shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of
the Advances or Letter of Credit Obligations made by it in excess of its Pro Rata Share of payments
on account of the Advances or Letter of Credit Obligations obtained by all the Banks, such Bank
shall notify the Agent and forthwith purchase from the other Banks such participations in the
Advances made by them or Letter of Credit Obligations held by them as shall be necessary to cause
such purchasing Bank to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and such Bank shall repay to the
purchasing Bank the purchase price to the extent of such Bank’s ratable share (according to the
proportion of (a) the amount of the participation sold by such Bank to the purchasing Bank as a
result of such excess payment to (b) the total amount of such excess payment) of such recovery,
together with an amount equal to such Bank’s ratable share (according to the proportion of (a) the
amount of such Bank’s required repayment to the purchasing Bank to (b) the total amount of all such
required repayments to the purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 2.10 may, to the
fullest extent permitted by law, exercise

36

 

all its rights of payment (including the right of set-off) with respect to such participation
as fully as if such Bank were the direct creditor of the Borrower in the amount of such
participation.

     Section 2.11. Breakage Costs. If (a) any payment of principal of any Eurodollar Rate
Advance is made other than on the last day of the Interest Period for such Advance, whether as a
result of any payment pursuant to Section 2.4, the acceleration of the maturity of the
Notes pursuant to Article VII, or otherwise, or (b) the Borrower fails to make a principal
or interest payment with respect to any Eurodollar Rate Advance on the date such payment is due and
payable, the Borrower shall, within 10 days of any written demand sent by any Bank to the Borrower
through the Agent, pay to the Agent for the account of such Bank any amounts required to compensate
such Bank for any additional losses, out-of-pocket costs or expenses which it may reasonably incur
as a result of such payment or nonpayment, including, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Bank to fund or maintain such Advance.

     Section 2.12. Increased Costs.

     (a) Advances Determined by Reference to Eurodollar Rate. If, due to either (i) the
introduction of or any Change in Law (other than any change by way of imposition or increase of
reserve requirements included in the Eurodollar Rate Reserve Percentage) or (ii) the compliance
with any guideline or request from any central bank or other Governmental Authority (whether or not
having the force of law) made after the date hereof, there shall be any increase in the cost to any
Bank of agreeing to make or making, funding, or maintaining any Advance the interest on which is
determined by reference to the Eurodollar Rate (including due to increased reserve or similar
requirements), then the Borrower shall from time to time, upon demand by such Bank (with a copy of
such demand to the Agent), immediately pay to the Agent for the account of such Bank additional
amounts sufficient to compensate such Bank for such increased cost. A certificate as to the amount
of such increased cost and detailing the calculation of such cost submitted to the Borrower and the
Agent by such Bank shall be conclusive and binding for all purposes, absent manifest error.

     (b) Capital Adequacy. If any Bank or the Issuing Bank determines in good faith that
any Change in Law affecting such Bank or the Issuing Bank or any Applicable Lending Office of such
Bank or such Bank’s or the Issuing Bank’s holding company, if any, regarding capital requirements
affects or would affect the amount of capital required or expected to be maintained by such Bank or
the Issuing Bank or any corporation controlling such Bank or the Issuing Bank and that the amount
of such capital is increased by or based upon the existence of such Bank’s commitment to lend or
the Issuing Bank’s commitment to issue the Letters of Credit and other commitments of this type,
then, upon 30 days’ prior written notice by such Bank or the Issuing Bank (with a copy of any such
demand to the Agent), the Borrower shall immediately pay to the Agent for the account of such Bank
or to the Issuing Bank, as the case may be, from time to time as specified by such Bank or the
Issuing Bank, additional amounts sufficient to compensate such Bank or the Issuing Bank, in light
of such circumstances, (i) with respect to such Bank, to the extent that such Bank reasonably
determines such increase in capital to be allocable to the existence of such Bank’s commitment to
lend under this Agreement and (ii) with respect to the Issuing Bank, to the extent that the Issuing
Bank reasonably determines such increase in capital

37

 

to be allocable to the issuance or maintenance of the Letters of Credit for such increased
cost. A certificate as to such amounts and detailing the calculation of such amounts submitted to
the Borrower by such Bank or the Issuing Bank shall be conclusive and binding for all purposes,
absent manifest error.

     (c) Letters of Credit. If any change in any law or regulation or in the
interpretation thereof after the date hereof by any court or administrative or Governmental
Authority charged with the administration thereof shall either (i) impose, modify, or deem
applicable any reserve, special deposit, or similar requirement against letters of credit issued
by, or assets held by, or deposits in or for the account of, the Issuing Bank or (ii) impose on the
Issuing Bank any other condition regarding the provisions of this Agreement relating to the Letters
of Credit or any Letter of Credit Obligations (including increased reserve or similar
requirements), and the result of any event referred to in the preceding clause (i) or (ii) shall be
to increase the cost to the Issuing Bank of issuing or maintaining any Letter of Credit (which
increase in cost shall be determined by the Issuing Bank’s reasonable allocation of the aggregate
of such cost increases resulting from such event), then, upon demand by the Issuing Bank, the
Borrower shall pay to the Issuing Bank, from time to time as specified by the Issuing Bank,
additional amounts which shall be sufficient to compensate the Issuing Bank for such increased
cost. A certificate as to such increased cost incurred by the Issuing Bank, as a result of any
event mentioned in clause (i) or (ii) above, and detailing the calculation of such increased costs
submitted by the Issuing Bank to the Borrower, shall be conclusive and binding for all purposes,
absent manifest error.

     (d) Delay in Requests. Failure or delay on the part of any Bank or Issuing Bank to
demand compensation pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Bank’s or Issuing Bank’s right to demand such compensation, provided that
the Borrower shall not be required to compensate a Bank or Issuing Bank pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions suffered more than 180
days prior to the date that such Bank or Issuing Bank, as the case may be, notifies the Borrower
of the Change in Law or regulation or the interpretation or application thereof giving rise to such
increased costs or reductions and of such Bank’s or Issuing Bank’s intention to claim compensation
therefore (except that, if the Change in Law or regulation or the interpretation or application
thereof giving rise to such increased costs or reductions is retroactive, then the 180 day period
referred to above shall be extended to include the period of retroactive effect thereof).

     Section 2.13. 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 the Borrower hereunder or under any
other Credit Document shall to the extent permitted by applicable Legal Requirements be made free
and clear of and without reduction or withholding for any Taxes. If, however, applicable Legal
Requirements require the Borrower or the Agent to withhold or deduct any Tax, such Tax shall be
withheld or deducted in accordance with such Legal Requirements as determined by the Borrower or
the Agent, as the case may be.

     (ii) If the Borrower or the Agent shall be required by applicable Legal Requirements to
withhold or deduct any Taxes, including both United States Federal backup withholding and
withholding taxes, from any payment, then (A) the Agent shall

38

 

withhold or make such deductions as are determined by the Agent based upon applicable
Legal Requirements, (B) the Agent shall timely pay the full amount withheld or deducted to
the relevant Governmental Authority in accordance with applicable Legal Requirements, and
(C) to the extent that the withholding or deduction is made on account of Indemnified Taxes
or Other Taxes, the sum payable by the Borrower shall be increased as necessary so that
after any required withholding or deductions of Indemnified Taxes or Other Taxes (including
deductions of Indemnified Taxes or Other Taxes applicable to additional sums payable under
this Section) the Agent, Bank or Issuing Bank, as the case may be, receives an amount equal
to the sum it would have received had no such withholding or deduction been made.

     (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable Legal Requirements.

     (c) Tax Indemnifications. (i) Without limiting the provisions of subsection (a) or
(b) above, the Borrower shall, and does hereby, indemnify the Agent, each Bank and the Issuing
Bank, and shall make payment in respect thereof within 10 days after demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed
or asserted on or attributable to amounts payable under this Section) withheld or deducted by the
Borrower or the Agent or paid by the Agent, such Bank or the Issuing Bank, as the case may be, and
any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether
or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. The Borrower shall also, and does hereby, indemnify the Agent,
and shall make payment in respect thereof within 10 days after demand therefor, for any amount
which a Bank or the Issuing Bank for any reason fails to pay to the Agent as required by clause
(ii) of this subsection, net of any amounts the Agent has received as a set off against such Bank
or Issuing Bank pursuant to clause (ii) of this subsection; provided that such indemnity shall not
be available to the extent that such payment is determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or willful misconduct
of the Agent; and provided further that, if the Borrower is required to directly indemnify the
Agent pursuant to this sentence, the Agent shall take all steps reasonably requested by the
Borrower in order to ensure that the Borrower is subrogated to the Agent’s right to collect from
the applicable Bank or Issuing Bank. Prior to seeking indemnity from the Borrower under the
immediately preceding sentence, the Agent shall make demand upon the applicable Bank or Issuing
Bank for such amounts owed and shall use commercially reasonable efforts to exercise any then
available set off rights against such Bank or Issuing Bank to satisfy such amounts owed. A
certificate as to the amount of any such payment or liability delivered to the Borrower by a Bank
or the Issuing Bank (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a
Bank or the Issuing Bank, shall be conclusive absent manifest error. Notwithstanding anything to
the contrary herein, the Borrower shall not be required to compensate the Agent, any Bank or the
Issuing Bank pursuant to this Section 2.13 for any Indemnified Taxes unless such Agent,
Bank or Issuing Bank requests compensation from the Borrower no later than 180 days after the
earlier of (i) the date on which the relevant Governmental Authority makes written demand upon such
Agent, Bank or Issuing Bank for payment of such Indemnified Taxes, and (ii) the date on which such
Agent, Bank or Issuing Bank has made payment of such Indemnified Taxes (except that, if the
circumstances giving rise

39

 

to such Indemnified Taxes are retroactive in effect, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof).

     (ii) Without limiting the provisions of subsection (a) or (b) above, each Bank and the
Issuing Bank shall, and does hereby, indemnify the Borrower and the Agent, and shall make
payment in respect thereof within 30 days after demand therefor, against any and all Taxes
and any and all related losses, claims, liabilities, penalties, interest and expenses
(including the fees, charges and disbursements of any counsel for the Borrower or the Agent)
incurred by or asserted against the Borrower or the Agent by any Governmental Authority as a
result of the failure by such Bank or the Issuing Bank, as the case may be, to deliver, or
as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be
delivered by such Bank or the Issuing Bank, as the case may be, to the Borrower or the Agent
pursuant to subsection (e). A certificate as to the amount of any such payment or liability
delivered to a Bank or the Issuing Bank by the Borrower or the Agent shall be conclusive
absent manifest error. Each Bank and the Issuing Bank hereby authorizes the Agent to set
off and apply any and all amounts at any time owing to such Bank or the Issuing Bank, as the
case may be, under this Agreement or any other Credit Document against any amount due to the
Agent under this clause (ii). The agreements in this clause (ii) shall survive the
resignation and/or replacement of the Agent, any assignment of rights by, or the replacement
of, a Bank or the Issuing Bank, the termination of the Commitments and the repayment,
satisfaction or discharge of all other Obligations.

     (d) Evidence of Payments. Upon request by the Borrower or the Agent, as the case may
be, after any payment of Taxes by the Borrower or by the Agent to a Governmental Authority as
provided in this Section 2.13, the Borrower shall deliver to the Agent or the 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 Legal
Requirements to report such payment or other evidence of such payment reasonably satisfactory to
the Borrower or the Agent, as the case may be.

     (e) Status of Banks; Tax Documentation. (i) Each Bank shall deliver to the Borrower
and to the Agent, at the time or times prescribed by applicable Legal Requirements or when
reasonably requested by the Borrower or the Agent, such properly completed and executed
documentation prescribed by applicable Legal Requirements or by the taxing authorities of any
jurisdiction and such other reasonably requested information as will permit the Borrower or the
Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any
other Credit Document are subject to Taxes, (B) if applicable, the required rate of withholding or
deduction, and (C) such Bank’s entitlement to any available exemption from, or reduction of,
applicable Taxes in respect of all payments to be made to such Bank by the Borrower pursuant to
this Agreement or otherwise to establish such Bank’s status for withholding tax purposes in the
applicable jurisdiction.

     (ii) Without limiting the generality of the foregoing, if the Borrower is resident for
tax purposes in the United States,

40

 

     (A) any Bank that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to the Borrower and the Agent executed
originals of Internal Revenue Service Form W-9 or such other documentation or
information prescribed by applicable Legal Requirements or reasonably requested by
the Borrower or the Agent as will enable the Borrower or the Agent, as the case may
be, to determine whether or not such Bank is subject to backup withholding or
information reporting requirements; and

     (B) each Foreign Bank that is entitled under the Code or any applicable treaty
to an exemption from or reduction of withholding tax with respect to payments
hereunder or under any other Credit Document shall deliver to the Borrower and the
Agent (in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Bank becomes a Bank under this Agreement (and from
time to time thereafter upon the request of the Borrower or the Agent, but only if
such Foreign Bank is legally entitled to do so), whichever of the following is
applicable:

     (I.) executed originals of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States is a party,

     (II.) executed originals of Internal Revenue Service Form W-8ECI,

     (III.) executed originals of Internal Revenue Service Form W-8IMY and
all required supporting documentation,

     (IV.) in the case of a Foreign Bank claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Bank is not (A) a “bank”
within the meaning of section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of the Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation”
described in section 881(c)(3)(C) of the Code and (y) executed originals of
Internal Revenue Service Form W-8BEN, or

     (V.) executed originals of any other form prescribed by applicable
Legal Requirements as a basis for claiming exemption from or a reduction in
United States Federal withholding tax together with such supplementary
documentation as may be prescribed by applicable Legal Requirements to
permit the Borrower or the Agent to determine the withholding or deduction
required to be made.

     (iii) In the case of each Bank or the Issuing Bank that would be subject to withholding
tax imposed by FATCA on payments made under this Agreement or the other Credit Documents if
such Bank or Issuing Bank fails to comply with the applicable reporting requirements of
FATCA (including those contained in Section 1471(b) or

41

 

1472(b) of the Code), such Bank or Issuing Bank shall provide such documentation
prescribed by applicable Legal Requirements (including as prescribed by Section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the
Borrower or the Agent as may be necessary for the Borrower or the Agent to comply with its
obligations under FATCA, to determine that such Bank or Issuing Bank has complied with such
Bank’s or Issuing Bank’s obligations under FATCA, or to determine the amount to deduct and
withhold from any such payments.

     (iv) Each Bank shall promptly (A) notify the Borrower and the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or reduction, and
(B) take such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Bank, and as may be reasonably necessary (including the re-designation of
its Applicable Lending Office) to avoid any requirement of applicable Legal Requirements of
any jurisdiction that the Borrower or the Agent make any withholding or deduction for taxes
from amounts payable to such Bank.

     (f) Treatment of Certain Refunds. Unless required by applicable Legal Requirements,
at no time shall the Agent have any obligation to file for or otherwise pursue on behalf of a Bank
or the Issuing Bank, or have any obligation to pay to any Bank or the Issuing Bank, any refund of
Taxes withheld or deducted from funds paid for the account of such Bank or the Issuing Bank, as the
case may be. If the Agent, any Bank or the Issuing Bank determines, in its sole discretion, that
it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of
all out-of-pocket expenses incurred by the Agent, such Bank or the Issuing Bank, as the case may
be, and without interest (other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that the Borrower, upon the request of the Agent, such
Bank or the Issuing Bank, agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the Agent, such Bank
or the Issuing Bank in the event the Agent, such Bank or the Issuing Bank is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to require the
Agent, any Bank or the Issuing Bank to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other Person.

     Section 2.14. Inability to Determine Rates. If the Majority Banks determine that for
any reason in connection with any request for Eurodollar Rate Advances or a conversion to or
continuation thereof that (a) Dollar deposits are not being offered to banks in the London
interbank Eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate
Advances, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for
any requested Interest Period with respect to such proposed Eurodollar Rate Advance or in
connection with an existing or proposed Base Rate Advance, or (c) the Eurodollar Rate for any
requested Interest Period with respect to such proposed Eurodollar Rate Advance does not adequately
and fairly reflect the cost to such Banks of funding such Advance, the Agent will promptly so
notify the Borrower and each Bank. Thereafter, (x) the obligation of the Banks to

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make Eurodollar Rate Advances, or effect any conversion thereto or continuation thereof, shall
be suspended, and (y) in the event of a determination described in the preceding sentence with
respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate
component in determining the Base Rate shall be suspended, in each case until the Agent (upon the
instruction of the Majority Banks) revokes such notice. Upon receipt of such notice, the Borrower
may revoke, without premium or penalty, any pending request for an Advance of, conversion to or
continuation of Eurodollar Rate Advances or, failing that, will be deemed to have converted such
request into a request for Advances bearing interest based upon the Base Rate in the amount
specified therein.

     Section 2.15. Cash Collateral.

     (a) Certain Credit Support Events. Upon the request of the Agent or the Issuing Bank
(i) if the Issuing Bank has honored any full or partial drawing request under any Letter of Credit
and such drawing has resulted in a Reimbursement Obligation, or (ii) if, as of the Letter of Credit
Expiration Date, any Letter of Credit Exposure for any reason remains outstanding, the Borrower
shall, in each case, immediately Cash Collateralize the aggregate Letter of Credit Exposure then
outstanding. At any time that there shall exist a Defaulting Bank, promptly upon the request of
the Agent or the Issuing Bank, the Borrower shall deliver to the Agent Cash Collateral in an amount
sufficient to cover all Fronting Exposure (after giving effect to Section 2.16(a)(iv) and
any Cash Collateral provided by the Defaulting Bank).

     (b) Grant of Security Interest. If the Borrower is required to deposit funds in the
Cash Collateral Account pursuant to Sections 2.4(b), 2.6, 2.15,
2.16, 7.2(b), or 7.3(b), then the Borrower and the Agent shall establish
the Cash Collateral Account and the Borrower shall execute any documents and agreements, including
the Agent’s standard form assignment of deposit accounts, that the Agent requests in connection
therewith to establish the Cash Collateral Account and grant the Agent a first priority perfected
security interest in such account and the funds therein. All Cash Collateral (other than credit
support not constituting funds subject to deposit) (i) provided by the Borrower shall be deposited
into the Cash Collateral Account and (ii) provided by a Bank shall be maintained in blocked,
non-interest bearing deposit accounts at Bank of America. The Borrower, and to the extent provided
by any Bank, such Bank, hereby grants to (and subjects to the control of) the Agent, for the
benefit of the Agent, the Issuing Bank and the Banks, and agrees to maintain, a first priority
perfected 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 2.15(c), and the Borrower agrees to execute any documents and agreements that the
Agent requests in connection therewith to grant the Agent a first priority perfected security
interest in such Cash Collateral. If at any time the Agent determines that Cash Collateral is
subject to any right or claim of any Person other than the Agent as herein provided, or that the
total amount of such Cash Collateral is less than the applicable Fronting Exposure and other
obligations secured thereby, the Borrower or the relevant Defaulting Bank will, promptly upon
demand by the Agent, pay or provide to the Agent additional Cash Collateral in an amount sufficient
to eliminate such deficiency.

     (c) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under any of Sections 2.4(b), 2.6,
2.15(a), 2.16, 7.2(b), or

43

 

7.3(b) in respect of Letters of Credit shall be held and applied to the satisfaction
of the specific Letter of Credit Exposure, obligations to fund participations therein (including,
as to Cash Collateral provided by a Defaulting Bank, 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 be provided for herein.

     (d) Release. Cash Collateral (or the appropriate portion thereof) provided to reduce
Fronting Exposure or 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 Bank status of the applicable Bank (or, as appropriate, its assignee
following compliance with Section 9.6(b)(vi))) or (ii) the Agent’s good faith determination
that there exists excess Cash Collateral; provided, however, (x) that Cash Collateral furnished by
or on behalf of a Credit Party shall not be released during the continuance of a Default or Event
of Default (and following application as provided in this Section 2.15 may be otherwise
applied in accordance with Section 7.7), and (y) the Person providing Cash Collateral and
the Issuing Bank, may agree that Cash Collateral shall not be released but instead held to support
future anticipated Fronting Exposure or other obligations.

     Section 2.16. Defaulting Banks.

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

     (i) Waivers and Amendments. That Defaulting Bank’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall be
restricted as set forth in Section 9.1.

     (ii) Reallocation of Payments. Any payment of principal, interest, fees or
other amounts received by the Agent for the account of that Defaulting Bank (whether
voluntary or mandatory, at maturity, pursuant to Article VII or otherwise, and
including any amounts made available to the Agent by that Defaulting Bank pursuant to
Section 7.4), shall be applied at such time or times as may be determined by the
Agent as follows: first, to the payment of any amounts owing by that Defaulting Bank to the
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that
Defaulting Bank to the Issuing Bank hereunder; third, if so determined by the Agent or
requested by the Issuing Bank, to be held as Cash Collateral for future funding obligations
of that Defaulting Bank of any participation in any Letter of Credit; fourth, as the
Borrower may request (so long as no Default or Event of Default exists), to the funding of
any Advance in respect of which that Defaulting Bank has failed to fund its portion thereof
as required by this Agreement, as determined by the Agent; fifth, if so determined by the
Agent and the Borrower, to be held in a non-interest bearing deposit account and released in
order to satisfy obligations of that Defaulting Bank to fund Advances under this Agreement;
sixth, to the payment of any amounts owing to the Banks or the Issuing Bank as a result of
any judgment of a court of competent jurisdiction obtained by any Bank or the Issuing Bank
against that Defaulting Bank as a result of that Defaulting Bank’s breach of its obligations
under this Agreement; seventh, so long as no

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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 that Defaulting Bank as a result of that Defaulting Bank’s breach of its obligations
under this Agreement; and eighth, to that Defaulting Bank 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 Advances or Reimbursement Obligations in respect of which that
Defaulting Bank has not fully funded its appropriate share and (y) such Advances or
Reimbursement Obligations were made at a time when the conditions set forth in Section
3.2 were satisfied or waived, such payment shall be applied solely to pay the Advances
of, and Reimbursement Obligations owed to, all non-Defaulting Banks on a pro rata basis
prior to being applied to the payment of any Advances of, or Reimbursement Obligations owed
to, that Defaulting Bank. Any payments, prepayments or other amounts paid or payable to a
Defaulting Bank that are applied (or held) to pay amounts owed by a Defaulting Bank or to
post Cash Collateral pursuant to this Section 2.16(a)(ii) shall be deemed paid to
and redirected by that Defaulting Bank, and each Bank irrevocably consents hereto.

     (iii) Certain Fees. That Defaulting Bank (x) shall not be entitled to receive
any commitment fee pursuant to Section 2.7(a) for any period during which that Bank
is a Defaulting Bank (and the Borrower shall not be required to pay any such commitment fee
that otherwise would have been required to have been paid to that Defaulting Bank) and (y)
shall be limited in its right to receive Letter of Credit Fees as provided in Section
2.7(d).

     (iv) Reallocation of Pro Rata Shares to Reduce Fronting Exposure. During any
period in which there is a Defaulting Bank, for purposes of computing the amount of the
obligation of each non-Defaulting Bank to acquire, refinance or fund participations in
Letters of Credit pursuant to Sections 2.6, the “Pro Rata Share” of each
non-Defaulting Bank shall be computed without giving effect to the Commitment of that
Defaulting Bank; provided, that, (i) each such reallocation shall be given effect
only if, at the date the applicable Bank becomes a Defaulting Bank, no Default or Event of
Default exists; and (ii) the aggregate obligation of each non-Defaulting Bank to acquire,
refinance or fund participations in Letters of Credit shall not exceed the positive
difference, if any, of (1) such non-Defaulting Bank’s Pro Rata Share of the Borrowing Base
minus (2) such non-Defaulting Bank’s (A) aggregate amount of the Advances plus (B)
the Pro Rata Share of the Letter of Credit Exposure.

     (b) Defaulting Bank Cure. If the Borrower, the Agent and the Issuing Bank agree in
writing in their sole discretion that a Defaulting Bank should no longer be deemed to be a
Defaulting Bank, the 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 Bank will, to the extent applicable,
purchase that portion of outstanding Advances of the other Banks or take such other actions as the
Agent may determine to be necessary to cause the Advances and funded and unfunded participations in
Letters of Credit to be held on a pro rata basis by the Banks in accordance with their Pro Rata
Share (without giving effect to Section 2.16(a)(iv)), whereupon that Bank will cease to be
a Defaulting Bank; provided that no adjustments will be made retroactively with

45

 

respect to fees accrued or payments made by or on behalf of the Borrower while that Bank was a
Defaulting Bank; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting Bank to Bank will
constitute a waiver or release of any claim of any party hereunder arising from that Bank’s having
been a Defaulting Bank.

     Section 2.17. Mitigation Obligations.

     (a) Designation of a Different Lending Office. If any Bank requests compensation
under Section 2.12, or the Borrower is required to pay any additional amount to any Bank,
the Issuing Bank, or any Governmental Authority for the account of any Bank or the Issuing Bank
pursuant to Section 2.13, or if any Bank gives a notice pursuant to Section
2.4(b)(v), then such Bank or the Issuing Bank shall, as applicable, use reasonable efforts to
designate a different Applicable Lending Office for funding or booking its Advances hereunder or to
assign its rights and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of such Bank or the Issuing Bank, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.12 or 2.13, as the case
may be, in the future, or eliminate the need for the notice pursuant to Section 2.4(b)(v),
as applicable, and (ii) in each case, would not subject such Bank or the Issuing Bank, as the case
may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Bank
or the Issuing Bank, as the case may be. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by any Bank or the Issuing Bank in connection with any such designation or
assignment.

     (b) Replacement of Banks. If any Bank requests compensation under Section
2.12, or if the Borrower is required to pay any additional amount to any Bank or any
Governmental Authority for the account of any Bank pursuant to Section 2.13, the Borrower
may replace such Bank in accordance with Section 9.13.

ARTICLE III

CONDITIONS OF LENDING

     Section 3.1. Initial Conditions Precedent to Borrowings. This Agreement shall become
effective on the date the following conditions precedent are met:

     (a) Documentation. On or before the day on which the initial Borrowing is made or the
initial Letters of Credit are issued, the Agent shall have received the following duly executed by
all the parties thereto, in form and substance satisfactory to the Agent and the Banks, and, where
applicable, in sufficient copies for each Bank:

     (i) this Agreement, the Notes, the Guaranty by Stone Offshore, the Security Agreement,
the Consents, and the Mortgages and supplements to the Mortgages to the extent required to
comply with Section 5.12;

     (ii) proper financing statements in form appropriate for filing under the Uniform
Commercial Code of all jurisdictions that the Agent may deem necessary or desirable in order
to perfect the Liens created under the Security Documents;

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     (iii) a favorable opinion of Vinson & Elkins LLP, counsel to the Credit Parties, dated
as of the Effective Date, covering such matters as any Bank through the Agent may reasonably
request;

     (iv) a favorable opinion of Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux
LLC, Louisiana counsel to the Borrower covering the Louisiana-law Mortgages and such other
matters as any Bank through the Agent may reasonably request;

     (v) a certificate of the Secretary or an Assistant Secretary of the Borrower and each
Guarantor certifying (A) certificates of good standing and existence or qualification to do
business for each of the Borrower and each Guarantor from its jurisdiction of organization
and each jurisdiction where it is required to be qualified to do business, (B) the
certificate of incorporation, formation, or partnership of each of the Borrower and each
Guarantor, (C) the bylaws, limited liability company agreement, or partnership agreement of
each of the Borrower and each Guarantor, (D) the resolutions of the Board of Directors of
the Borrower and each Guarantor authorizing this Agreement and related transactions, and (E)
the incumbency and signatures of the officers of the Borrower and each Guarantor authorized
to execute this Agreement and related documents;

     (vi) a certificate of a Responsible Officer of Borrower stating that (A) the
representations and warranties contained in this Agreement and the other Credit Documents
are true and correct in all material respects, (B) no Default or Event of Default exists,
and (C) all conditions set forth in this Section 3.1 and in Section 3.2 have
been satisfied (assuming satisfaction by the Agent and the Banks where such satisfaction is
specified in such conditions);

     (vii) Insurance Certificates from the Borrower’s and Guarantors’ insurance providers
setting forth the insurance maintained by Borrower and Guarantors, showing that insurance
meeting the requirements of Section 5.2 is in full force and effect and that all
premiums due with respect thereto have been paid, showing Agent as loss payee with respect
to all such property or physical damage policies and as additional insured with respect to
all such liability policies, and stating that such insurer will provide Agent with at least
30 days’ advance notice of cancellation of any such policy for any reason other than for
cancellation due to non-payment of the premium which shall require the insurer to provide
Agent with at least 10 days’ advance notice;

     (viii) such UCC lien search reports as Agent shall require, conducted in such
jurisdictions and reflecting such names as Agent shall request; and

     (ix) such other documents, governmental certificates, agreements, and lien searches as
the Agent or any Bank may reasonably request.

     (b) Payment of Fees. On the date of this Agreement, the Borrower shall have paid (i)
the fees required by Section 2.7(b) and (c), (ii) all costs and expenses which have
been invoiced and are payable pursuant to Section 9.4, and (iii) all fees payable to the
Arranger and Agent pursuant to any written agreement between Borrower and the Arranger or the
Agent.

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     (c) Financial Statements. The Agent shall have reviewed and be satisfied with (i) the
consolidated financial statements of the Borrower and its Subsidiaries for the fiscal years ended
2008, 2009, and 2010, including balance sheets, income and cash flow statements audited by
independent public accountants and prepared in conformity with GAAP and such other financial
information as the Agent may request, and (ii) projections for the fiscal years ending 2011, and
2012, including balance sheets and income and cash flow statements.

     (d) No Material Litigation. The absence of any action, suit, investigation or
proceeding pending or threatened in any court or before any arbitrator or governmental authority
that (i) could reasonably be expected to cause a Material Adverse Change, except as set forth on
Schedule 4.7 or (ii) purports to adversely affect any transaction contemplated hereby or
the ability of the Borrower and the Guarantors to perform their respective obligations under the
Credit Documents.

     (e) Engineering Reports. The Agent shall have received Oil and Gas Reserve Reports
for the Oil and Gas Properties included in the Borrowing Base.

     (f) Environmental Condition. The Agent shall be reasonably satisfied with the
environmental condition of the Borrower’s and its Subsidiaries’ Oil and Gas Properties.

     (g) Title. The Borrower shall have delivered to the Agent title reports (or title
opinions) regarding that portion of the Borrowing Base Assets representing not less than 80% of the
value of the aggregate oil and gas reserves of the Borrower and its Subsidiaries, and such title
reports or opinions shall reflect that the Borrower and its Subsidiaries have good and marketable
title to all such Borrowing Base Assets, free and clear of all Liens, except for Permitted
Borrowing Base Liens.

     (h) Other Matters. All matters related to this Agreement, the other Credit Documents,
and Borrower or any Guarantor shall be acceptable to Agent and each Bank in their sole discretion,
and Borrower shall have delivered to Agent and each Bank such evidence as they shall request to
substantiate any matters related to this Agreement, the other Credit Documents, and Borrower or any
Guarantor as Agent or any Bank shall request.

     Section 3.2. Conditions Precedent to All Borrowings. The obligation of each Bank to
make an Advance on the occasion of each Borrowing and of the Issuing Bank to issue, increase, or
extend any Letter of Credit shall be subject to the further conditions precedent that on the date
of such Borrowing or the issuance, increase, or extension of such Letter of Credit:

     (a) the Agent shall have timely received a Notice of Borrowing or Letter of Credit
Application, as applicable;

     (b) the following statements shall be true (and each of the giving of the applicable Notice of
Borrowing or Letter of Credit Application and the acceptance by the Borrower of the proceeds of
such Borrowing or the issuance, increase, or extension of such Letter of Credit shall constitute a
representation and warranty by the Borrower that, on the date of such Borrowing, or the issuance,
increase, or extension of such Letter of Credit, such statements are true):

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     (i) the representations and warranties contained in Article IV and the
Guaranties are correct in all material respects on and as of the date of such Borrowing or
the date of the issuance, increase, or extension of such Letter of Credit, before and after
giving effect to such Borrowing or to the issuance, increase, or extension of such Letter of
Credit and to the application of the proceeds from such Borrowing, as though made on and as
of such date;

     (ii) no Default has occurred and is continuing or would result from such Borrowing or
from the application of the proceeds therefrom or from the issuance, increase, or extension
of such Letter of Credit; and

     (iii) the funding of such Borrowing or issuance of such Letter of Credit and all other
Borrowings to be made or Letters of Credit to be issued on the same day under this
Agreement, shall not (A) cause the aggregate outstanding amount of Advances plus the Letter
of Credit Exposure to exceed the lesser of (1) the Borrowing Base and (2) the aggregate
Commitments, or (B) cause the Letter of Credit Exposure to exceed $300,000,000.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants as follows:

     Section 4.1. Corporate Existence; Subsidiaries. The Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of Delaware and in good standing
and qualified to do business in each jurisdiction where a failure to be qualified could reasonably
be expected to cause a Material Adverse Change. Each Guarantor is a corporation, limited liability
company, or limited partnership duly organized, validly existing, and in good standing under the
laws of its jurisdiction of formation and in good standing and qualified to do business in each
jurisdiction where a failure to be qualified could reasonably be expected to cause a Material
Adverse Change. Each Material Subsidiary of the Borrower has executed a Guaranty and otherwise
complied with the requirements of Section 5.9. Schedule 4.1 lists each Material
Subsidiary of the Borrower, its jurisdiction and type of organization, and the owners of the equity
interests in such Material Subsidiary.

     Section 4.2. Corporate Power; Authorization; No Violation.

     (a) The execution, delivery, and performance by the Borrower of this Agreement, the Notes, and
the other Credit Documents to which it is a party and by the Guarantors of the Guaranties and the
consummation of the transactions contemplated hereby and thereby (i) are within the Borrower’s and
the Guarantors’ corporate, limited liability, or limited partnership powers, (ii) have been duly
authorized by all necessary corporate, limited liability, or limited partnership action, (iii) do
not contravene (A) the Borrower’s or any Guarantor’s certificate or articles of incorporation or
formation, by-laws, limited liability company agreement or other governing documents or (B) any law
or any material contractual restriction binding on the Borrower or any Guarantor, and (iv) will not
result in or require (A) the creation or imposition of

49

 

any Lien prohibited by this Agreement or (B) any preferential right, right of first refusal,
consent right, or similar right of a counterparty under any material contract.

     (b) At the time of each Borrowing, such Borrowing and the use of the proceeds of such
Borrowing (i) will be within the Borrower’s corporate powers, (ii) will have been duly authorized
by all necessary corporate action on the part of the Borrower, (iii) will not contravene (A) the
Borrower’s certificate of incorporation or by-laws or (B) any law or any material contractual
restriction binding on the Borrower, and (iv) will not result in or require the creation or
imposition of any Lien prohibited by this Agreement.

     Section 4.3. Authorization and Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority or third party is required
for the due execution, delivery, and performance by the Borrower of this Agreement, the Notes, or
the other Credit Documents to which the Borrower is a party or by each Guarantor of its Guaranty or
the consummation of the transactions contemplated thereby, except for (i) those that have already
been obtained or made, (ii) routine consents, authorizations, filings and notices required to be
made in the ordinary course of business, (iii) the filing of UCC-1 or UCC-3 financing statements in
the appropriate filing offices, and (iv) filings required pursuant to Section 5.9 in
connection with new Material Subsidiaries or Section 5.12 and Section 5.13 in
connection with the mortgaging of additional Oil and Gas Properties). At the time of each
Borrowing, no authorization or approval or other action by, and no notice to or filing with, any
Governmental Authority or third party will be required for such Borrowing or the use of the
proceeds of such Borrowing.

     Section 4.4. Enforceable Obligations. This Agreement, the Notes, and the other Credit
Documents to which the Borrower is a party have been duly executed and delivered by the Borrower
and the Guaranties and the other Credit Documents to which any Guarantor is a party have been duly
executed and delivered by such Guarantor. Each Credit Document is the legal, valid, and binding
obligation of the Borrower and each Guarantor which is a party to it enforceable against the
Borrower and each such Guarantor in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors’ rights generally and by general principles of equity.

     Section 4.5. Financial Statements. The Financial Statements, copies of which have
been furnished to each Bank, fairly present in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries, as at such date and the consolidated results of the
operations of the Borrower and its Subsidiaries, for the fiscal year ended on such date, and such
consolidated balance sheets and consolidated statements of operations, cash flow, and stockholders’
equity were prepared in accordance with GAAP (or in compliance with the regulations promulgated by
the United States Securities and Exchange Commission). Since the date of the Financial Statements,
no Material Adverse Change has occurred.

     Section 4.6. True and Complete Disclosure.

     (a) All factual information (excluding estimates, projections, and pro forma financial
information) heretofore or contemporaneously furnished by or on behalf of the Borrower or any

50

 

of its Subsidiaries in writing to any Bank or the Agent for purposes of or in connection with
this Agreement, any other Credit Document or any transaction contemplated hereby or thereby (but
limited to those delivered by the Borrower or its Subsidiaries to a Bank or the Agent in connection
with such agreements and transactions in anticipation of or in connection with this amendment and
restatement) is (taken as a whole) true and correct in all material respects on the date as of
which such information is dated or certified and does not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the statements contained therein
not misleading as of the date of this Agreement, in light of the circumstances under which they
were made. All such projections, estimates, and pro forma financial information heretofore or
contemporaneously furnished by the Borrower or any of its Subsidiaries were prepared in good faith
on the basis of assumptions, data, information, tests, or conditions believed to be reasonable at
the time such projections, estimates, and pro forma financial information were furnished.

     (b) All factual information (excluding estimates, projections, and pro forma financial
information) furnished by or on behalf of the Borrower or any of its Subsidiaries in writing to any
Bank or the Agent after the Effective Date for purposes of or in connection with this Agreement,
any other Credit Document or any transaction contemplated hereby or thereby is (taken as a whole)
true and correct in all material respects on the date as of which such information is dated or
certified and does not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained therein not misleading, in light of the
circumstances under which they were made. All such projections, estimates, and pro forma financial
information furnished by the Borrower or any of its Subsidiaries after the Effective Date were
prepared in good faith on the basis of assumptions, data, information, tests, or conditions
believed to be reasonable at the time such projections, estimates, and pro forma financial
information were furnished.

     Section 4.7. Litigation. Set forth on Schedule 4.7 is an accurate description
of all of the Borrower’s and its Subsidiaries’ pending litigation existing on the date of this
Agreement which could reasonably be expected to cause a Material Adverse Change. There is no
pending or, to the best knowledge of the Borrower, threatened action, proceeding, or investigation
affecting the Borrower or any of its Subsidiaries before any court, Governmental Authority or
arbitrator, which (a) could reasonably be expected to cause a Material Adverse Change, except as
set forth on Schedule 4.7, or (b) purports to affect the legality, validity, binding
effect, or enforceability of this Agreement, any Note, or any other Credit Document.

     Section 4.8. Use of Proceeds. All Advances and Letters of Credit shall be used (a) to
pay costs and expenses related to the credit facility evidenced by this Agreement, and (b) for
working capital, capital expenditures, and general corporate purposes of the Borrower and its
Subsidiaries (including without limitation to finance the acquisition of Oil and Gas Properties and
to pay transaction costs in connection with any permitted issuance of Permitted Notes). The
Borrower is not engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U). No proceeds of any Advance will be
used to purchase or carry any margin stock in violation of Regulation U or X.

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     Section 4.9. Investment Company Act. Neither the Borrower nor any of its Subsidiaries
is an “investment company” or a company “controlled” by an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.

     Section 4.10. Taxes. Proper and accurate (in all material respects) federal, state,
local, and foreign tax returns, reports and statements required to be filed (after giving effect to
any extension granted in the time of filing) by or on behalf of the Borrower, its Subsidiaries, or
any member of the Controlled Group (hereafter collectively called the “Tax Group”) have
been duly filed on a timely basis or appropriate extensions have been obtained with appropriate
governmental agencies in all jurisdictions in which such returns, reports, and statements are
required to be filed, except where the failure to so file would not be reasonably expected to cause
a Material Adverse Change; and all taxes (which are material in amount) and other material
impositions due and payable have been timely paid prior to the date on which any fine, penalty,
interest, late charge, or loss may be added thereto for non-payment thereof, except where contested
in good faith by appropriate proceedings. The reserves for accrued taxes reflected in the
financial statements delivered to the Banks under this Agreement are adequate in the aggregate for
the payment of all unpaid taxes, whether or not disputed, for the period ended as of the date
thereof and for any period prior thereto, and for which the Tax Group may be liable in its own
right, as withholding agent or as a transferee of the assets of, or successor to, any Person,
except for such taxes or reserves therefor, the failure to pay or provide for which does not and
could not cause a Material Adverse Change, and except that no reserves are maintained for the
Louisiana franchise taxes that are the subject of the litigation described in paragraph 1 of
Schedule 4.7. Timely payment of all material sales and use taxes required by applicable
law has been made by the Borrower and all other members of the Tax Group.

     Section 4.11. ERISA Compliance.

     (a) Except where such failure could not reasonably be expected to cause a Material Adverse
Change, each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other applicable Federal or state laws. Except where such failure or event
could not reasonably be expected to cause a Material Adverse Change, (i) each Pension Plan that is
intended to be a qualified plan under Section 401(a) of the Code has received a favorable
determination or opinion 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 and (ii) 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 Change. 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 Change.

     (c) In all cases, except where such event or failure, either individually or in the aggregate,
could not reasonably be expected to cause a Material Adverse Change: (i) No ERISA

52

 

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.

     Section 4.12. Condition of Property; Casualties. The material Properties used or to
be used in the continuing operations of the Borrower and each of its Subsidiaries are in all
material respects in good repair, working order and condition. Except as could not reasonably be
expected to cause a Material Adverse Change, since the date of the Financial Statements, neither
the business nor the material Properties of the Borrower and each of its Subsidiaries, taken as a
whole, has been materially and adversely affected as a result of any fire, explosion, earthquake,
flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of property or cancellation of contracts, permits, or concessions by a Governmental
Authority, riot, activities of armed forces, or acts of God or of any public enemy.

     Section 4.13. No Burdensome Restrictions; No Defaults. Neither the Borrower nor any
of its Subsidiaries is a party to any indenture, loan, or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate restriction or provision of
applicable law or governmental regulation which could reasonably be expected to cause a Material
Adverse Change. The Borrower and the Guarantors are not in default under or with respect to any
contract, agreement, lease, or other instrument to which the Borrower or any Guarantor is a party
and which could reasonably be expected to cause a Material Adverse Change. Neither the Borrower
nor any Guarantor has received any notice of default under any material contract, agreement, lease,
or other instrument to which the Borrower or such Guarantor is a party. No Default has occurred
and is continuing.

     Section 4.14. Environmental Condition.

     (a) Permits, Etc. Except as set forth on Schedule 4.14(a), the Borrower and
its Subsidiaries (i) have obtained all Environmental Permits material to the ownership and
operation of their respective Properties and the conduct of their respective businesses; (ii) have
been and are in compliance in all material respects with all terms and conditions of such
Environmental Permits and with all other applicable Environmental Laws; (iii) have not received
written notice of any unresolved violation or alleged violation of any Environmental Law or
Environmental

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Permit; and (iv) are not subject to any actual or contingent Environmental Claim, which could
reasonably be expected to cause a Material Adverse Change.

     (b) Certain Liabilities. Except as set forth on Schedule 4.14(b), none of the
present or, to the Borrower’s actual knowledge, previously owned or operated Property of the
Borrower or of any of its present or former Subsidiaries, wherever located, (i) has been placed on
or proposed to be placed on the National Priorities List, the Comprehensive Environmental Response
Compensation Liability Information System list, or their state or local analogs, or have been
otherwise investigated, designated, listed, or identified as a potential site for any material
removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under
any Environmental Laws; (ii) is subject to a Lien, arising under or in connection with any
Environmental Laws, that attaches to any revenues or to any Property owned or operated by the
Borrower or any of its Subsidiaries, wherever located, which could reasonably be expected to cause
a Material Adverse Change; or (iii) has been the site of any Release of Hazardous Substances or
Hazardous Wastes from present or past operations that has resulted in any condition at the site,
or, to the Borrower’s actual knowledge, at any third-party site, that could reasonably be expected
to result in the imposition of any Response, notice, or investigatory obligations on the Borrower
or any of its Subsidiaries under applicable Environmental Law that would cause a Material Adverse
Change.

     (c) Certain Actions. Without limiting the foregoing, except for matters that will not
result in a Material Adverse Change: (i) all necessary notices have been properly filed, and no
further action is required under current Environmental Law as to each Response or other restoration
or remedial project undertaken by the Borrower, or its present or former Subsidiaries on any of
their presently or, to the Borrower’s actual knowledge, formerly owned or operated Property (ii)
there are no current liabilities of the Borrower and its Subsidiaries arising under any
Environmental Laws, and (iii) to the Borrower’s actual knowledge, there are no facts or
circumstances that could reasonably be expected to result in the imposition of any liabilities,
costs or obligations on the Borrower or its Subsidiaries in connection with any Environmental Laws.

     Section 4.15. Permits, Licenses, Etc.; Compliance with Legal Requirements. Except for
Environmental Permits, which are addressed in Section 4.14(a), the Borrower and its
Subsidiaries possess (a) all permits and licenses which are material to the conduct of its business
and (b) except where the failure to possess the same could not reasonably be expected to result in
a Material Adverse Change, all patents, patent rights or patent licenses, trademarks, trademark
rights, trade names rights and copyrights necessary for the conduct of its business. The Borrower
and its Subsidiaries manage and operate their business in accordance with all applicable Legal
Requirements and good industry practices, except where the failure to do so could not reasonably be
expected to result in a Material Adverse Change.

     Section 4.16. Gas Contracts. Neither the Borrower nor any of its Subsidiaries, as of
the date hereof, (a) is obligated in any material respect by virtue of any prepayment made under
any contract containing a “take-or-pay” or “prepayment” provision or under any similar agreement to
deliver hydrocarbons produced from or allocated to any of the Borrower’s consolidated Oil and Gas
Properties at some future date without receiving full payment therefor at the time of delivery, or
(b) has produced gas, in any material amount, subject to, and none of the Borrower’s

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consolidated Oil and Gas Properties is subject to, balancing rights of third parties or
subject to balancing duties under governmental requirements, except as to such matters for which
the Borrower or its relevant Subsidiary has established monetary reserves adequate in amount in
accordance with GAAP to satisfy such obligations.

     Section 4.17. Title to Properties, Liens, Leases, Etc.

     (a) Except as is being cured pursuant to Section 5.13, Borrower and/or its applicable
Subsidiaries (i) have good and marketable title to all Borrowing Base Assets, free and clear of all
Liens, except for Permitted Borrowing Base Liens, and (ii) have good and marketable title to all
material assets reflected in the financial statements most recently delivered pursuant to
Section 5.6(a) or Section 5.6(b), free and clear of all Liens, except for Permitted
Liens.

     (b) On the date of this Agreement, (i) with respect to the Mortgages, all governmental actions
and all other filings, recordings, registrations, third party consents and other actions which are
necessary as of such date to create and perfect the Liens provided for in the Mortgages will have
been made, obtained and taken in all relevant jurisdictions and (ii) with respect to the Security
Agreement, (A) all UCC-1 financing statements which are necessary as of such date to create and
perfect the Liens provided for in the Security Agreement will have been made, obtained and taken in
all relevant jurisdictions and (B) all actions necessary to grant control over the Pledged
Securities (as defined in the Security Agreement) have been taken.

     (c) All leases and agreements for the conduct of business of the Credit Parties are valid and
subsisting, in full force and effect, and there exists no default or event of default or
circumstance which with the giving of notice or lapse of time or both would give rise to a default
under any such leases or agreements, in each case which could reasonably be expected to cause a
Material Adverse Change.

     (d) No Credit Party is a party to any agreement or arrangement (other than this Agreement, the
Security Documents, and the documents evidencing Debt referred to in Section 6.2(c)), or
subject to any order, judgment, writ or decree, which either restricts or purports to restrict its
ability to grant Liens to secure the Obligations against their respective assets or Properties.

     Section 4.18. Mineral Interests.

     (a) Except for Permitted Borrowing Base Liens, all Borrowing Base Assets are valid,
subsisting, and in full force and effect, and all rentals, royalties, and other amounts due and
payable in respect thereof have been duly paid.

     (b) Without regard to any consent or non-consent provisions of any joint operating agreement
covering Borrower’s or any Guarantor’s Proved Mineral Interests, and except for Permitted Borrowing
Base Liens, Borrower’s and each Guarantor’s share of (i) the costs for each Borrowing Base Asset is
not greater than the decimal fraction set forth in the most recently delivered Oil and Gas Reserve
Report, before and after payout, as the case may be, and described therein by the respective
designations “working interests”, “WI”, “gross working interest”, “GWI”, or similar terms, and (ii)
production from, allocated to, or attributed to each such Borrowing Base Asset is not less than the
decimal fraction set forth in such Oil and Gas Reserve

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Report, before and after payout, as the case may be, and described therein by the designations
“net revenue interest,” “NRI,” or similar terms.

     (c) Each well drilled in respect of proved producing reserves described in the most recently
delivered Oil and Gas Reserve Report (i) is capable of, and was, as of the date of such Oil & Gas
Reserve Report, producing Hydrocarbons in commercial quantities, and Borrower and each Guarantor
(as applicable) is currently receiving payments for its share of production, with no funds in
respect of any thereof being presently held in suspense, other than any such funds being held in
suspense pending delivery of appropriate division orders, and (ii) to Borrower’s knowledge, has
been drilled, bottomed, completed, and operated in compliance in all material respects with
applicable Legal Requirements and no such well which is currently producing Hydrocarbons is subject
to any penalty in production by reason of such well having produced in excess of its allowable
production.

ARTICLE V

AFFIRMATIVE COVENANTS

     The Borrower agrees to comply with the following covenants.

     Section 5.1. Compliance with Laws, Etc. The Borrower shall comply, and cause each of
its Subsidiaries to comply, with all Legal Requirements except where the failure to do so could not
reasonably be expected to result in a Material Adverse Change. Without limiting the generality and
coverage of the foregoing, the Borrower shall comply, and shall cause each of its Subsidiaries to
comply with all Environmental Laws and all laws, regulations, or directives with respect to equal
employment opportunity and employee safety in all jurisdictions in which the Borrower, or any of
its Subsidiaries do business, except where the failure to do so could not reasonably be expected to
result in a Material Adverse Change; provided, however, that this Section 5.1 shall
not prevent the Borrower, or any of its Subsidiaries from, in good faith and with reasonable
diligence, contesting the validity or application of any such laws or regulations by appropriate
legal proceedings.

     Section 5.2. Maintenance of Insurance.

     (a) Required Insurance Coverage. Borrower will maintain, and will cause each
Subsidiary to maintain, property and physical damage insurance on selected real and personal
property on an all risks basis (including the perils of flood and quake on a sub-limited basis),
covering the repair and replacement cost of all such selected property. Borrower will also
maintain commercial general liability and excess liability insurance and products/completed
operations liability coverage. Each of the policies described in this clause (a) shall be of the
kinds and in the amounts customarily carried or maintained by Persons of established reputation
engaged in similar businesses and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates. All such insurance shall be provided by insurers having a
minimum A.M. Best policyholders rating of A-, VII. Borrower will not, and will not permit any of
its Subsidiaries to, bring or keep any article on any business location of Borrower or any of its
Subsidiaries, or cause or allow any condition to exist, if the presence of such article

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or the occurrence of such condition would reasonably cause the invalidation of any insurance
required by this Section 5.2, or would otherwise be prohibited by the terms thereof.

     (b) Loss Payee; Additional Insured.

     (i) On or prior to the Effective Date, and at all times thereafter, Borrower will cause
Agent to be named as (A) an additional insured on each liability policy required to be
maintained pursuant to this Section 5.2, and (B) loss payee (which shall include, as
applicable, identification as mortgagee) on each property and physical damage policy
required to be maintained pursuant to this Section 5.2 for any Property Proceeds in
excess of $10,000,000 arising from a single event or related series of events.

     (ii) If (A) Agent receives Property Proceeds in its capacity as loss payee, (B) no
Default or Event of Default exists at such time, and (C) such Property Proceeds are not
required to be applied as a prepayment under the terms of this Agreement, Agent will remit
such Property Proceeds to Borrower within fifteen days after receipt.

     (iii) Agent shall, promptly after the Effective Date, deliver, to Borrower’s insurance
broker for delivery to each insurer that provides a property or physical damage policy on
which Agent is listed as loss payee, a revocable notice that such insurer may pay any
Property Proceeds arising from a single event or related series of events that occurred
prior to the date of this Agreement directly to Borrower; provided that (A) such notice may
be revoked by Agent at any time when a Default or Event of Default exists or any such
Property Proceeds would be required to be applied as a prepayment under the terms of this
Agreement, and (B) any Property Proceeds payable under such policy after receipt by the
insurer of written notice of such revocation shall be paid directly to Agent. If such
Default or Event of Default is cured or waived, the foregoing arrangement may be restored
with respect to future Property Proceeds.

     (iv) All loss payee and additional insured endorsements must be in form and substance
reasonably acceptable to Agent.

     (c) Evidence of Insurance Coverage. Borrower will deliver to Agent on the Effective
Date, an Insurance Certificate from Borrower’s insurance broker in effect on such date showing the
amount of coverage under all such policies as of such date, showing the endorsements required
above, and showing waivers of all rights of subrogation against all loss payees and additional
insureds. Each such Insurance Certificate will also indicate that each additional insured and loss
payee will be given at least 30 days’ written notice of the cancellation, termination, reduction in
amount or material change in coverage to any part of any applicable policy; provided that for
cancellation of the policy due to non-payment of the premium, only 10 days’ advance written notice
shall be required. Annually, on or prior to June 30, Borrower shall provide Insurance Certificates
for all of its insurance policies as of May 1 of such year and such additional information as to
the applicable policies as is reasonably requested by any Bank. Borrower will deliver to Agent,
(i) within 15 days after receipt of notice from any insurer, a copy of any notice of cancellation
or material change in coverage from that existing under the applicable policy immediately prior to
such notice, (ii) as soon as possible but no later than May 31 of any year, notice of any
cancellation or nonrenewal of any insurance policy by the

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applicable insurer, if such policy has not been renewed or replaced with a substantially
similar policy, effective as of May 1 of such year, and (iii) notice of any cancellation or
nonrenewal of any insurance policy by Borrower as soon as possible but no later than May 31 of any
year.

     Section 5.3. Preservation of Corporate Existence, Etc. The Borrower shall preserve
and maintain, and cause each of its Subsidiaries to preserve and maintain, its corporate existence,
rights, franchises, and privileges in the jurisdiction of its incorporation, and qualify and remain
qualified, and cause each such Subsidiary to qualify and remain qualified, as a foreign corporation
in each jurisdiction in which qualification is necessary or desirable in view of its business and
operations or the ownership of its properties, except, in each case, where failure to qualify or
preserve and maintain its rights and franchises could not reasonably be expected to cause a
Material Adverse Change; provided, however, that nothing herein contained shall prevent any
transaction permitted by Section 6.4.

     Section 5.4. Payment of Taxes, Claims, Etc. The Borrower shall pay and discharge, and
cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (a)
all taxes, assessments, and governmental charges or levies imposed upon it or upon its income or
profits or Property that are material in amount, prior to the date on which penalties attach
thereto and (b) all lawful claims in excess of $2,500,000 which, if unpaid, might by law become a
Lien upon its Property; provided, however, that neither the Borrower nor any such
Subsidiary shall be required to pay or discharge any such tax, assessment, charge, or levy which is
being contested in good faith and by appropriate proceedings, and with respect to which reserves
required by GAAP have been provided.

     Section 5.5. Visitation Rights. At any reasonable time and from time to time, upon
reasonable notice, the Borrower shall, and shall cause its Subsidiaries to, permit the Agent and
any Bank or any of its agents or representatives thereof, to (a) examine and make copies of and
abstracts from the records and books of account of, and visit and inspect at its reasonable
discretion the properties of, the Borrower and any such Subsidiary, and (b) discuss the affairs,
finances and accounts of the Borrower and any such Subsidiary with any of their respective officers
or directors; provided however, the Agent or the Bank for whose benefit such inspection and
visitation is made assumes sole responsibility for the condition of any property of the Borrower or
its Subsidiaries so visited and inspected, the access and egress thereto (including, but not
limited to wharves, docks, and helicopter landing areas), and any vice or defect therein or
thereon, and assumes all responsibility for and hereby releases and indemnifies the Borrower, its
Affiliates, and their officers, directors, employees, and agents against any claim for damage or
injury to or by the Agent or such Bank (or the representatives thereof) or to the Borrower’s or its
Subsidiaries’ property which may be occasioned by such inspection and visitation of the Borrower’s
or its Subsidiaries’ property.

     Section 5.6. Reporting Requirements. The Borrower shall furnish to the Agent and each
Bank:

     (a) Annual Financials. As soon as available and in any event not later than 120 days
after the end of each fiscal year of the Borrower, (i) a copy of the annual audit report for such
year for the Borrower and its Subsidiaries, including therein the consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year and consolidated statements of

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operations, cash flows, and stockholders’ equity of the Borrower and its Subsidiaries for such
fiscal year, in each case certified by Ernst & Young LLP or other independent certified public
accountants of national standing and including any management letters delivered by such accountants
to the Borrower in connection with such audit, (ii) the capital budget for the Borrower and its
Subsidiaries established by the Board of Directors of the Borrower for the next fiscal year, in
reasonable detail by geographical area and type of expenditure, and (iii) a Compliance Certificate
executed by the Chief Financial Officer or Chief Accounting Officer of the Borrower;

     (b) Quarterly Financials. As soon as available and in any event not later than 90
days after the end of each of the first three quarters of each fiscal year of the Borrower (or, if
earlier, 5 days after the date required to be filed with the SEC (without giving effect to any
extension permitted by the SEC)), (i) the unaudited consolidated balance sheet of Borrower and its
Subsidiaries as of the end of such quarter and the consolidated statements of operations and cash
flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous
year and ending with the end of such quarter, all in reasonable detail and duly certified with
respect to such consolidated statements (subject to year-end audit adjustments) by the Chief
Financial Officer or Chief Accounting Officer of the Borrower as having been prepared in accordance
with GAAP (or in compliance with the regulations promulgated by the United States Securities and
Exchange Commission), and (ii) a Compliance Certificate executed by the Chief Financial Officer or
Chief Accounting Officer of the Borrower;

     (c) Oil and Gas Reserve Reports.

     (i) As soon as available but in any event on or before March 31 of each year, an
engineering report in form and substance meeting the requirements of the Securities and
Exchange Commission for financial reporting purposes, certified by a firm or firms of
independent consulting petroleum engineers approved by the Agent as fairly setting forth (A)
the proved and producing, shut in, behind pipe, and undeveloped oil and gas reserves
(separately classified as such) attributable to the Borrower’s consolidated Oil and Gas
Properties as of December 31 of the previous year, (B) the aggregate present value,
determined on the basis of stated pricing assumptions, of the future net income with respect
to such Oil and Gas Properties, discounted at a stated per annum discount rate, and (C)
projections of the annual rate of production, gross income, and net income with respect to
such Oil and Gas Properties.

     (ii) As soon as available but in any event on or before September 30 of each year, an
internal engineering report in form and substance satisfactory to the Agent, certified by a
Responsible Officer of the Borrower, to such Responsible Officer’s actual knowledge without
investigation and not in such Responsible Officer’s individual capacity, as fairly setting
forth (A) the proved and producing, shut in, behind pipe, and undeveloped oil and gas
reserves (separately classified as such) attributable to the Borrower’s consolidated Oil and
Gas Properties as of June 30 of such year, (B) the aggregate present value, determined on
the basis of stated pricing assumptions, of the future net income with respect to such Oil
and Gas Properties, discounted at a stated per annum discount rate, and (C) projections of
the annual rate of production, gross income, and net income with respect to such Oil and Gas
Properties.

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     (iii) Each engineering report delivered pursuant to clause (i) or (ii) above or clause
(iv) below shall be accompanied by a certificate, executed by a Responsible Officer of the
Borrower in the form of Exhibit I attached hereto, which (A) sets forth the
Mortgaged Property Value, as set forth in such engineering report, (B) either (y)
demonstrates and certifies that such Mortgaged Property Value equals or exceeds 80% of the
Oil and Gas Property Value as set forth in such engineering report or (z) demonstrates and
certifies the amount by which such Mortgaged Property Value is less than 80% of such Oil and
Gas Property Value and agrees that the Borrower shall take all actions required under
Section 5.12 hereof within the period required by such Section, and (C) certifies a
true, correct and complete schedule of all Swap Contracts of the Credit Parties, specifying
the type of Swap Contract, pricing arrangements, volume, expiration, counterparty, and such
other information as may be reasonably requested by the Agent.

     (iv) (A) At least 10 days prior to the consummation of any sale, lease, transfer, or
other disposition, whether or not in the ordinary course of business, by the Borrower or any
Guarantor of any Mortgaged Property for which the value of the future net income attributed
thereto in the most recently delivered engineering report (individually or on a cumulative
basis with all sales of Mortgaged Properties consummated since the date of such report)
comprised in excess of 5% of the Mortgaged Property Value as set forth in such report, (B)
at least 10 days prior to the consummation of any acquisition by the Borrower or any
Guarantor of any Oil and Gas Property for which the value of the future net income
attributed thereto in the engineering reports obtained in connection with such acquisition
(individually or on a cumulative basis with all acquisitions of Oil and Gas Properties
consummated since the date of such report) comprises in excess of 5% of the Oil and Gas
Property Value as set forth in the engineering report most recently delivered under this
Agreement, and (C) no later than 10 days following the written request of the Agent
(provided that, so long as no Event of Default exists, the Agent shall not make more
than 2 such requests in any calendar year), the Borrower shall provide (y) an updated
internal engineering report, current as of the end of the month then most recently ended for
which production data is available and in form and substance satisfactory to the Agent,
setting forth the information required by clause (ii) above for internal engineering reports
and (z) a certificate as required by clause (iii) above which, in the case of any
disposition of any Mortgaged Property or acquisition of any Oil and Gas Property, shall make
the required calculation giving pro forma effect to such transaction (including, in the case
of any disposition of any Mortgaged Property, the inclusion of any additional Oil and Gas
Properties mortgaged by the Borrower or the Guarantors pursuant to Section
6.4(b)(ii) prior to or concurrently with such disposition).

     (v) The Agent and the Banks acknowledge that the Oil and Gas Reserve Reports contain
certain proprietary information including geological and geophysical data, maps, models, and
interpretations necessary for determining the Borrowing Base and the creditworthiness of the
Borrower and the Guarantors. The Agent and the Banks agree to maintain the confidentiality
of such information except (A) as required by law and (B) that the Agent and the Banks may
share such information with potential transferees of their interests under this Agreement if
such transferees agree to maintain the confidentiality of such information.

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     (d) Defaults. As soon as possible and in any event within five days after the
occurrence of each Default known to a Responsible Officer of the Borrower or any of its
Subsidiaries which is continuing on the date of such statement, a statement of the Chief Financial
Officer of the Borrower setting forth the details of such Default and the actions which the
Borrower has taken and proposes to take with respect thereto;

     (e) Securities Law Filings. Except as provided in paragraphs (a) and (b) above,
promptly and in any event within 15 days after the sending or filing thereof, copies of all proxy
material, reports and other information which the Borrower or any of its Subsidiary sends to or
files with the United States Securities and Exchange Commission or sends to any shareholder of the
Borrower;

     (f) ERISA Events. As soon as possible and in any event within ten Business Days after
the occurrence of each ERISA Event known to a Responsible Officer of the Borrower or any of its
Subsidiaries which is continuing on the date of such statement, a statement of the Chief Financial
Officer of the Borrower setting forth the details of such ERISA Event and the actions which the
Borrower has taken and proposes to take with respect thereto;

     (g) Other ERISA Notices. Promptly and in any event within ten Business Days after
receipt thereof by the Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy of
each notice received by the Borrower or any ERISA Affiliate concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA;

     (h) Environmental Notices. Promptly upon the receipt thereof by the Borrower or any
of its Subsidiaries, a copy of any form of notice, investigation, summons or citation received from
the EPA, or any other Governmental Authority, concerning (i) violations or alleged violations of
Environmental Laws, which seeks to impose liability on the Borrower or any of its Subsidiaries or
in relation to their respective Oil and Gas Properties in excess of $2,500,000, (ii) any action or
omission on the part of the Borrower or any of its present or former Subsidiaries in connection
with Hazardous Waste or a Release of Hazardous Substances which could reasonably result in the
imposition of liability on the Borrower or any of its Subsidiaries or in relation to their
respective Oil and Gas Properties in excess of $2,500,000, including without limitation any notice
of potential responsibility under CERCLA, or (iii) concerning the filing of a Lien upon, against or
in connection with the Borrower, its present or former Subsidiaries, or any of their leased or
owned Property, wherever located, pursuant to Environmental Laws;

     (i) Other Governmental Notices. Promptly and in any event within five Business Days
after receipt thereof by the Borrower or any Subsidiary, a copy of (i) any notice, summons,
citation, or proceeding seeking to modify in any material respect, revoke, or suspend any material
contract, license, permit, or agreement with any Governmental Authority (including material
Environmental Permits) and (ii) any other material notice from any Governmental Authority;

     (j) Material Changes. Prompt written notice of any condition or event of which the
Borrower has knowledge, which condition or event has resulted or may reasonably be expected to
result in a Material Adverse Change or;

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     (k) Disputes, Etc. Prompt written notice of any claims, proceedings, or
disputes, or to the knowledge of the Borrower threatened, or affecting the Borrower, or any of its
Subsidiaries which could reasonably be expected to cause a Material Adverse Change, or any material
labor controversy of which the Borrower or any of its Subsidiaries has knowledge resulting in or
reasonably considered to be likely to result in a strike against the Borrower or any of its
Subsidiaries; and

     (l) Other Information. Promptly, such other information respecting the business or
Properties, or the condition or operations, financial or otherwise, of the Borrower, or any of its
Subsidiaries, as any Bank through the Agent may from time to time reasonably request.

     (m) Notices regarding Oil and Gas Properties. Promptly, but in any event at least 10
days prior to the consummation thereof, written notice of (i) any sale, lease, transfer, or other
disposition, whether or not in the ordinary course of business, by the Borrower or any Guarantor of
any Mortgaged Property and (ii) any acquisition by the Borrower or any Guarantor of any Oil and Gas
Property for which the value of the future net income attributed thereto in the engineering reports
obtained in connection with such acquisition (individually or on a cumulative basis with all
acquisitions of Oil and Gas Properties consummated since the date of such report) comprises in
excess of 5% of the Oil and Gas Property Value as set forth in the engineering report most recently
delivered under this Agreement.

     Documents required to be delivered pursuant to Section 5.6(a), (b) or
(e) (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 on which such documents are posted by, or on behalf of, the Borrower on the Borrower’s
internet website or another internet or intranet website to which each Bank and the Agent have
access (whether a commercial, third-party website or whether sponsored by the Agent);
provided that the Borrower shall deliver paper copies of such documents to the Agent or any
Bank upon its written request, until a written request to cease delivering paper copies is given by
the Agent or such Bank. The 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 Bank for delivery,
and each Bank shall be solely responsible for requesting delivery to it or maintaining its copies
of such documents.

     Section 5.7. Designation of Public Information. The Borrower hereby acknowledges that
(a) Agent and/or the Arranger will make available to the Banks 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 Banks (each, a “Public Bank”) 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 (w) all Borrower Materials that are to be made available to Public
Banks 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 Agent, the Arranger, the Issuing Bank
and the Banks to treat such Borrower Materials as not containing any material

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non-public information with respect to the Borrower or its securities for purposes of United
States Federal and state securities laws; (y) all Borrower Materials marked “PUBLIC” are permitted
to be made available through a portion of the Platform designated “Public Investor”; and (z) the
Agent and the Arrangers shall be entitled to treat any Borrower Materials that are not marked
“PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public
Investor”. Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any
Borrower Materials “PUBLIC” unless and until the Agent (1) has been notified in writing by any Bank
that it is a Public Bank or has received notice through the Platform that any Bank is a Public Bank
and (2) has given notice to the Borrower that any Bank is a Public Bank.

     Section 5.8. Maintenance of Property. Borrower shall, and shall cause each of its
Subsidiaries to, (i) maintain their material Properties used or to be used in the continuing
operations of the Borrower and its Subsidiaries in all material respects in good repair, working
order, and condition, and (ii) abstain from committing and from knowingly or willfully permitting
the commission of, waste or other injury, destruction, or loss of natural resources, or the
occurrence of pollution, contamination, or any other condition in, on or about the owned or
operated property involving the Environment that could reasonably be expected to result in Response
activities the costs of which would result in a Material Adverse Change.

     Section 5.9. New Subsidiaries. Prior to the creation or acquisition of any Material
Subsidiary after the date of this Agreement or if an existing Subsidiary becomes a Material
Subsidiary after the date of this Agreement, the Borrower shall give written notice of such new
Material Subsidiary to the Agent. Within 15 days after such creation or acquisition or such
Subsidiary’s becoming a Material Subsidiary, the Borrower shall cause (a) such Subsidiary to
execute and deliver to the Agent a Guaranty (or joinder to an existing Guaranty) with such changes
as the Agent may reasonably request, (b) such Subsidiary to execute and deliver to the Agent a
Security Agreement (or joinder to an existing Security Agreement) with such changes as the Agent
may reasonably request, (c) if such Subsidiary holds Oil and Gas Properties, and if the Mortgaged
Property Value as set forth in the certificate of such value delivered in connection with the most
recently delivered engineering report is less than 80% of the Oil and Gas Property Value (after
giving effect to such New Subsidiary’s Oil and Gas Properties), such Subsidiary to execute and
deliver to the Agent a Mortgage or Mortgages granting an Acceptable Security Interest in such Oil
and Gas Properties, (d) each equity holder of such Subsidiary to execute and deliver a supplement
or joinder to its Security Agreement evidencing its pledge of the equity of such Subsidiary, (e)
such Subsidiary and such equity holders to deliver to the Agent evidence of corporate authority to
enter into such documentation as the Agent may reasonably request, including, without limitation,
if requested by Agent, a legal opinion regarding the enforceability of such documentation, and (f)
such Subsidiary and such equity holders deliver to the Agent such other documentation, or authorize
Agent to take such other action, as is reasonably requested by Agent.

     Section 5.10. Maintenance of Books and Records. The Borrower shall, and shall cause
its Material Subsidiaries to, (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

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all applicable requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Subsidiary, as the case may be.

     Section 5.11. Use of Proceeds. The Borrower shall, and shall cause its Subsidiaries
to, use all Advances and Letters of Credit (a) to pay costs and expenses related to the credit
facility evidenced by this Agreement, and (b) for working capital, capital expenditures, and
general corporate purposes of the Borrower and its Subsidiaries (including without limitation to
finance the acquisition of Oil and Gas Properties and to pay transaction costs in connection with
any permitted issuance of Permitted Notes).

     Section 5.12. Agreement to Mortgage; Further Assurances.

     (a) If any certificate delivered pursuant to Section 5.6(c)(iii) or (iv)
demonstrates that the Mortgaged Property Value as set forth in the related engineering report is
less than 80% of the Oil and Gas Property Value as set forth in such report, the Borrower shall, or
shall cause the Guarantors to (i) promptly, but in any event within 60 days of the delivery of such
certificate, grant to the Agent an Acceptable Security Interest in (A) additional Oil and Gas
Properties of the Borrower or the Guarantors as necessary to cause the Mortgaged Property Value to
equal or exceed 80% of the Oil and Gas Property Value, together with all related equipment and (B)
the Borrower’s and the Guarantors’ contracts related to such additional Mortgaged Properties
(unless the granting of a security interest in any such contract requires the consent of the
applicable counterparty, in which case the Borrower or applicable Guarantor shall grant such
security interest upon receipt of such consent), and (ii) promptly, but in any event within 90 days
of the delivery of such certificate (A) perform such title review, title reports (provided that no
title opinions shall be required), and title clean-up as are reasonably requested by the Agent with
respect to such additional Mortgaged Properties, (B) use commercially reasonable efforts to obtain
consents from contract counterparties with respect to each such additional Mortgaged Contract that
is material to (y) the Credit Parties’ business or financial condition or (z) the operation and
ownership of the additional Mortgaged Property to which it relates (including without limitation
production, transportation, and marketing of oil and gas produced therefrom), in each case, to the
extent such material Mortgaged Contract prohibits or restricts assignment of the applicable Credit
Party’s rights thereunder to the Agent, unless otherwise agreed by Agent and the Majority Banks,
and (C) take such other actions, approve such other filings, provide such opinions of counsel, and
execute and deliver such other documents as are reasonably requested by the Agent in connection
with the foregoing.

     (b) The Credit Parties shall from time to time execute and deliver, or cause to be executed
and delivered, such additional instruments, certificates or documents, and take such actions, as
the Agent may reasonably request for the purposes of implementing or effectuating the provisions of
this Agreement and the other Credit Documents, or of more fully perfecting or renewing the rights
of the Agent and the Banks with respect to the Collateral (or with respect to any additions thereto
or replacements or proceeds thereof or with respect to any other property or assets hereafter
acquired by any Credit Party which may be part of the Collateral) pursuant hereto or thereto,
including without limitation using commercially reasonable efforts to obtain consents from contract
counterparties with respect to any future Mortgaged Contract that is material to (i) the Credit
Parties’ business or financial condition or (ii) the operation and ownership of the Mortgaged
Property to which it relates (including without limitation

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production, transportation, and marketing of oil and gas produced therefrom), in each case, to
the extent such material Mortgaged Contract prohibits or restricts assignment of the applicable
Credit Party’s rights thereunder to the Agent, unless otherwise agreed by Agent and the Majority
Banks. Upon the exercise by the Agent or any Bank of any power, right, privilege or remedy
pursuant to this Agreement or the other Credit Documents which requires any consent, approval,
recording, qualification or authorization of any Governmental Authority, each Credit Party will
execute and deliver, or will cause the execution and delivery of, all applications, certifications,
instruments and other documents and papers that the Agent or such Bank may be required to obtain
from the Borrower or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.

     Section 5.13. Title Information and Cure.

     (a) Within 60 days after the delivery to Agent and the Banks of each Oil and Gas Reserve
Report required by Section 5.6, the Borrower shall deliver title information (provided that
no title opinions shall be required) in form and substance reasonably acceptable to Agent covering
enough of the Oil and Gas Properties evaluated by such Oil and Gas Reserve Report that were not
included in the immediately preceding Oil and Gas Reserve Report, so that Agent shall have
received, together with title information previously delivered to Agent, reasonably satisfactory
title information on at least 80% of the Oil and Gas Property Value; provided that, to the extent
it is not possible or is impractical for the Borrower to satisfy such 80% requirement without
delivering title information covering Oil and Gas Properties located in the Marcellus Shale, the
60-day deadline set forth above shall be extended by an additional 60 days, but only with respect
to the Oil and Gas Properties located in the Marcellus Shale.

     (b) Within 60 days after notice from Agent that title defects or exceptions (including defects
or exceptions as to priority, but excluding Permitted Borrowing Base Liens) exist with respect to
any Oil and Gas Properties such that Agent no longer has reasonably satisfactory title information
on at least 80% of the Oil and Gas Property Value, then the Borrower shall do one or a combination
of the following so that Agent shall have received, together with title information previously
delivered to Agent, satisfactory title information on at least 80% of the Oil and Gas Property
Value: (i) cure any such title defects or exceptions, (ii) substitute acceptable Oil and Gas
Properties having an equivalent or greater value with no title defects or exceptions other than
Permitted Borrowing Base Liens or (iii) deliver title information (provided that no title opinions
shall be required) in form and substance acceptable to Agent.

     (c) If Borrower is unable to cure any title defect requested by Agent to be cured within the
60-day period referred to in subsection (b) above or Borrower does not comply with the requirements
to provide acceptable title information covering 80% of the Oil and Gas Property Value in
accordance with subsection (b) above, such failure shall not be an Event of Default, but instead
Agent shall have the right to exercise the following remedy in its sole discretion from time to
time while such condition persists, and any failure to so exercise this remedy at any such time
shall not be a waiver as to future exercise of the remedy by Agent or the Banks. To the extent that
Agent is not satisfied with title to any Mortgaged Property after the 60-day period has elapsed,
such unacceptable Mortgaged Property shall not count towards the 80% requirement, and Agent may
send a notice to Borrower and the Banks that the then outstanding

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Borrowing Base shall be reduced by 50% of the value given to such unacceptable Mortgaged
Property in the most recently delivered Oil and Gas Reserve Report.

ARTICLE VI

NEGATIVE COVENANTS

The Borrower agrees to comply with the following covenants.

     Section 6.1. Liens, Etc. The Borrower shall not create, assume, incur, or suffer to
exist, or permit any of its Subsidiaries to create, assume, incur, or suffer to exist, any Lien on
or in respect of any of its Property whether now owned or hereafter acquired, or assign any right
to receive income, except that the Borrower and its Subsidiaries may create, incur, assume, or
suffer to exist:

     (a) Liens securing the Obligations;

     (b) Liens specified in the attached Schedule 6.1 on the Property owned by the Borrower
and its Subsidiaries which is specified therein securing only the obligations disclosed to be
secured by such Liens therein;

     (c) Liens securing indebtedness permitted under Section 6.2(c), provided that each
such Lien encumbers only the property acquired in connection with the creation of any such purchase
money indebtedness;

     (d) Liens for taxes, assessments, or other governmental charges or levies that (i) are not yet
due or (ii) provided foreclosure, distraint, sale, or other similar proceedings shall not have been
initiated, are being contested in good faith by appropriate proceedings, and for which such reserve
as may be required by GAAP shall have been made;

     (e) Liens in favor of vendors, carriers, warehousemen, repairmen, mechanics, workmen,
materialmen, construction, or similar Liens arising by operation of law in the ordinary course of
business in respect of obligations that are not yet due or that are being contested in good faith
by appropriate proceedings, provided such reserve as may be required by GAAP shall have been made
therefor;

     (f) Liens to operators and non-operators under joint operating agreements arising in the
ordinary course of the business of the Borrower or the relevant Subsidiary to secure amounts owing,
which amounts are not yet due or are being contested in good faith by appropriate proceedings, if
such reserve as may be required by GAAP shall have been made therefor;

     (g) easements, rights-of-way, restrictions, and other similar encumbrances, and minor defects
in the chain of title that are customarily accepted in the oil and gas financing industry, none of
which interfere with the ordinary conduct of the business of Borrower or the relevant Subsidiary or
materially detract from the value or use of the Property to which they apply;

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     (h) Liens of record under terms and provisions of the leases, unit agreements, assignments,
and other transfer of title documents in the chain of title under which the Borrower or the
relevant Subsidiary acquired the Property, which have been disclosed to the Agent;

     (i) Liens to secure plugging and abandonment obligations;

     (j) Liens to secure the performance of bids, trade contracts and leases (other than Debt),
statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business, in an aggregate amount not to exceed
$10,000,000;

     (k) 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; and

     (l) Liens securing judgments for the payment of money not constituting an Event of Default
under Section 7.1(f).

     Section 6.2. Debts, Guaranties, and Other Obligations. The Borrower shall not, and
shall not permit any of its Subsidiaries to, create, assume, suffer to exist, or in any manner
become or be liable in respect of, any Debt except:

     (a) Debt of the Borrower and its Subsidiaries under the Credit Documents;

     (b) Debt of the Borrower and its Subsidiaries disclosed in the attached Schedule 6.2
and any extensions, rearrangements, modifications, renewal, and refinancings thereof which do not
increase the principal amount thereof or the interest rate charged thereon above a market rate of
interest;

     (c) Debt (including Capital Leases and purchase money obligations) relating to Property or
assets acquired by the Borrower after the date of this Agreement not to exceed $25,000,000
(excluding gas balancing liabilities assumed in the acquisition of Oil and Gas Properties) at any
time outstanding;

     (d) Debt for borrowed money owed by any Subsidiary of the Borrower to the Borrower or to any
other Credit Party;

     (e) Debt in the form of obligations for the deferred purchase price of property or services
incurred in the ordinary course of business which are not yet due and payable or are being
contested in good faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP have been established;

     (f) any guarantee of any other Debt permitted to be incurred hereunder;

     (g) Debt in respect of letters of credit, bank or completion guarantees, surety, performance,
warranty, bid, appeal or other bonds or guarantees and similar instruments, in each case to the
extent (x) required by applicable Legal Requirements or any third Person and (y)

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provided in the ordinary course of business in connection with the operation of the Oil and
Gas Properties;

     (h) unsecured Debt incurred to finance insurance premiums in an aggregate amount not to exceed
$2,000,000 outstanding at any time;

     (i) endorsements of negotiable instruments for collection in the ordinary course of business;

     (j) Permitted Notes not to exceed an amount of $800,000,000 in aggregate outstanding principal
at any time, provided that (i) no Default or Event of Default exists at the time of the issuance of
such Permitted Notes and (ii) the obligors (including any guarantors) under any such Permitted
Notes shall be limited to Credit Parties; and

     (k) other unsecured Debt not to exceed $10,000,000 in the aggregate at any one time
outstanding.

     Section 6.3. Agreements Restricting Liens and Distributions. The Borrower shall not,
nor shall it permit any of its Subsidiaries to, enter into any agreement (other than a Credit
Document, and Permitted Notes Documents) which (a) except with respect to specific Property
encumbered to secure payment of Debt related to such Property, imposes restrictions upon the
creation or assumption of any Lien upon its Properties, revenues or assets, whether now owned or
hereafter acquired or (b) limits Restricted Payments to or any advance by any of the Borrower’s
Subsidiaries to the Borrower; provided that no Permitted Notes Document shall limit the
creation or existence of any Lien securing the Obligations or contain limitations on Restricted
Payments made by any Subsidiary to the Borrower or any other Subsidiary that are more restrictive
than the limitations in Section 6.5 of this Agreement.

     Section 6.4. Merger or Consolidation; Asset Sales; Farm-Outs. The Borrower shall not,
and shall not permit any of its Subsidiaries to:

     (a) merge or consolidate with or into any other Person, except that (i) the Borrower may merge
with any of its wholly owned Subsidiaries and any of the Borrower’s wholly owned Subsidiaries may
merge with another of the Borrower’s wholly owned Subsidiaries, and (ii) in connection with a sale
permitted pursuant to Section 6.4(b)(i) of a Subsidiary of Borrower that (A) is not a
Material Subsidiary and (B) does not own Borrowing Base Assets, such Subsidiary may merge with a
Person that is not a wholly owned Subsidiary of Borrower; provided that, in the case of the
mergers pursuant to clauses (i) or (ii) above, (x) immediately after giving effect to any such
proposed transaction no Default would exist, (y) in the case of any such merger to which the
Borrower is a party, the Borrower is the surviving entity, and (z) in the case of any such merger
between a Guarantor and a Subsidiary that is not a Guarantor, the Guarantor is the surviving
entity;

     (b) sell, lease, transfer, or otherwise dispose of any of its Property, or an equity interest
in a Subsidiary owning any Property, (including pursuant to a farm-out, participation, or other
agreement that would reduce the Borrower’s or such Subsidiary’s interest in any Property but
excluding, for the avoidance of doubt, issuances of equity by (1) the Borrower or (2) any
Subsidiary of a Credit Party to a Credit Party), except for (i) dispositions (directly or
indirectly)

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of assets that are not Borrowing Base Assets or Mortgaged Properties either (y) in the
ordinary course of business or (z) outside of the ordinary course of business in an aggregate
amount for any fiscal year not to exceed $50,000,000, and (ii) dispositions (directly or
indirectly), whether or not in the ordinary course of business, of Borrowing Base Assets, including
Mortgaged Properties, of which the Borrower has provided the Agent 10 days’ advance notice,
provided that (y) such proposed dispositions will not cause the aggregate outstanding amount of the
Advances plus the Letter of Credit Exposure to exceed the Borrowing Base, after giving effect to
any reduction of the Borrowing Base that would be required under Section 2.2(e) in
connection with such sale and (z) in the case of any disposition (directly or indirectly) of a
Mortgaged Property, at the time of such disposition the Mortgaged Property Value is not less than
80% of the Oil and Gas Property Value, as set forth in the engineering report most recently
delivered pursuant to Section 5.6(c), after giving effect to (1) any reduction of such
present value (which shall be the present value given to such assets in such most recent
engineering report, including the applicable stated discount utilized therein, in connection with
such disposition) on a cumulative basis with all direct or indirect sales of Mortgaged Properties
since the date of such report and (2) the aggregate present value, as set forth in such report or
otherwise reasonably determined by the Agent and discounted at the applicable rate stated in such
report, of any additional Oil and Gas Properties mortgaged by the Borrower or the Guarantors in
accordance with the requirements of Section 5.12 prior to or concurrently with such
disposition (on a cumulative basis with all mortgages of additional Oil and Gas Properties since
the date of such report); or

     (c) enter into any contract that would obligate the Borrower or such Subsidiary to sell,
lease, transfer, or otherwise dispose, directly or indirectly, of any interest in any of its
Property pursuant to a farm-out, participation, or other similar agreement, unless such sale,
lease, transfer, or other disposal would be permitted by Section 6.4(b) above.

     Section 6.5. Restricted Payments. The Borrower shall not, and shall not permit any of
its Subsidiaries to, make or pay any Restricted Payment or make any prepayment, redemption, or
defeasance of Debt (other than Debt under the Credit Documents) other than the following:

     (a) Restricted Payments from a Subsidiary of the Borrower to the Borrower;

     (b) the repurchase or redemption, in one or more transactions, of shares of Borrower’s common
stock, or a one-time payment of a special dividend, in an aggregate amount during the period from
December 31, 2010 until the Maturity Date not to exceed $100,000,000, so long as (i) at the time of
any such repurchase, redemption or special dividend, and immediately after giving effect thereto,
the Borrowing Base is at least $50,000,000 greater than the sum of the outstanding principal amount
of the Advances plus the Letter of Credit Exposure and (ii) no Default exists at the time of any
such repurchase, redemption or special dividend, or would be caused thereby;

     (c) any prepayment, redemption, or defeasance of Debt, so long as (i) at the time of such
prepayment, redemption, or defeasance, and immediately after giving effect thereto, the sum of the
outstanding principal amount of the Advances plus the Letter of Credit Exposure does not exceed 90%
of the Borrowing Base in effect at such time and (ii) no Default exists at the time of such
prepayment, redemption, or defeasance or would be caused thereby; and

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     (d) any substantially concurrent prepayment, redemption or defeasance of Permitted Notes from
the proceeds of other Permitted Notes.

     Section 6.6. Investments. The Borrower shall not, and shall not permit any of its
Subsidiaries to, make or permit to exist any loans, advances, or capital contributions to, or make
any investment in, or purchase or commit to purchase any stock or other securities or evidences of
indebtedness of or interests in any Person, except:

     (a) Liquid Investments;

     (b) trade and customer accounts receivable which are for goods furnished or services rendered
in the ordinary course of business and are payable in accordance with customary trade terms;

     (c) ordinary course of business contributions, loans, or advances to, or investments in, (i) a
directly or indirectly wholly owned Subsidiary of the Borrower, or (ii) the Borrower;

     (d) farm-outs, farm-ins, development venture agreements, joint operating agreements, area of
mutual interest agreements, limited partnerships, investments in gathering systems or pipelines,
and similar transactions, in each case related to oil and gas exploration and production businesses
and in the ordinary course of business;

     (e) investments not covered by clauses (a) through (d) above in an aggregate outstanding
amount not to exceed $5,000,000;

     (f) loans or advances to employees, officers or directors in the ordinary course of business
of the Borrower or any of its Subsidiaries, in each case only as permitted by applicable law,
including Section 402 of the Sarbanes Oxley Act of 2002, but in any event not to exceed $500,000 in
the aggregate at any time; and

     (g) investments in stock, obligations or securities received in settlement of debts arising
from investments permitted under this Section 6.6 owing to the Borrower or any Subsidiary
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 its Subsidiaries.

     Section 6.7. Prohibition on Speculative Hedging. The Borrower shall not, and shall
not permit any of its Subsidiaries to, purchase, assume, or hold a speculative position in any
commodities market or futures market. Borrower may continue its current production hedging program
policy, including swaps, puts, and collars, to reduce price risk on quantities less than its total
production.

     Section 6.8. Affiliate Transactions. Except as expressly permitted elsewhere in this
Agreement or otherwise approved in writing by the Agent, and except as described in Schedule
6.8, the Borrower shall not, and shall not permit any of its Subsidiaries to, make, directly or
indirectly: (a) any investment in any Affiliate (other than a Credit Party); (b) any transfer,
sale, lease, assignment, or other disposal of any assets to any such Affiliate or any purchase or
acquisition of assets from any such Affiliate (other than a Credit Party); or (c) any

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arrangement or other transaction directly or indirectly with or for the benefit of any such Affiliate
(other than a Credit Party) (including without limitation guaranties and assumptions of obligations
of an Affiliate) ; provided that the Borrower and its Subsidiaries may enter into any
arrangement or other transaction with any such Affiliate providing for the leasing of property, the
rendering or receipt of services or the purchase or sale of inventory and other assets in the
ordinary course of business if the monetary or business consideration arising therefrom would be
substantially as advantageous to the Borrower and its Subsidiaries as the monetary or business
consideration which it would obtain in a comparable arm’s length transaction with a Person not such
an Affiliate.

     Section 6.9. Compliance with ERISA. The Borrower shall not, and shall not permit any
of its Subsidiaries to, (a) terminate, or permit any ERISA Affiliate to terminate, any Pension Plan
so as to result in any material (in the opinion of the Majority Banks) liability of the Borrower or
any ERISA Affiliate to the PBGC or (b) permit to exist any occurrence of any Reportable Event, or
any other event or condition, which presents a material (in the opinion of the Majority Banks) risk
of such a termination by the PBGC of any Plan.

     Section 6.10. Maintenance of Ownership of Subsidiaries. Except as permitted by
Section 6.4, the Borrower shall not, and shall not permit any of its Subsidiaries to, sell
or otherwise dispose of any shares of capital stock of any of the Borrower’s Subsidiaries or permit
any Subsidiary to issue, sell, or otherwise dispose of any shares of its capital stock or the
capital stock of any of the Borrower’s Subsidiaries.

     Section 6.11. Sale-and-Leaseback. The Borrower shall not, nor shall it permit any of
its Subsidiaries to, sell or transfer to a Person (other than the Borrower or a Subsidiary of the
Borrower) any property, whether now owned or hereafter acquired, if at the time or thereafter the
Borrower or a Subsidiary of the Borrower shall lease as lessee such property or any part thereof or
other property which the Borrower or a Subsidiary of the Borrower intends to use for substantially
the same purpose as the property sold or transferred except such transactions (a) incident to
transactions permitted by Section 6.4(b), and (b) from which arise lease obligations and
other rental obligations not exceeding $3,000,000 during any fiscal year of the Borrower.

     Section 6.12. Change of Business. The Borrower shall not, nor shall it permit any of
its Subsidiaries to, materially change the character of their business as presently and normally
conducted or engage in any type of business not related to their business as presently and normally
conducted.

     Section 6.13. Debt to EBITDA Ratio. The Borrower shall not permit the ratio, as of
the last day of any fiscal quarter of Borrower, of (a) Borrower’s consolidated Debt on such date to
(b) Borrower’s consolidated EBITDA for the four fiscal quarters most recently ended, to be greater
than 3.25 to 1.00.

     Section 6.14. Interest Coverage Ratio. The Borrower shall not permit the ratio, as of
the last day of any fiscal quarter of Borrower, of (a) its consolidated EBITDA for the four fiscal
quarters most recently ended to (b) its consolidated Net Interest Expense for the four fiscal
quarters most recently ended, to be less than 3.00 to 1.00.

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     Section 6.15. Subordinated Debt. The Borrower (a) shall not violate the subordination
terms governing any Debt which is by its terms subordinated to the Obligations and (b) shall not
amend the subordination terms governing any such Debt without prior written consent of the Majority
Banks.

ARTICLE VII

REMEDIES

     Section 7.1. Events of Default. The occurrence of any of the following events shall
constitute an “Event of Default” under any Credit Document:

     (a) Payment. The Borrower shall fail to pay (i) any principal of any Advance or any
reimbursement obligation in respect of any Letter of Credit Obligation when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof
or otherwise, or (ii) any interest on any Advance or any fee or any other amount (other than an
amount referred to in clause (i) above) payable under any Credit Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a period of five
Business Days.

     (b) Representation and Warranties. Any representation or warranty made or deemed to
be made (i) by the Borrower in this Agreement or in any other Credit Document, (ii) by the Borrower
(or any of its officers) in connection with this Agreement or any other Credit Document, or (iii)
by any Subsidiary of the Borrower in any Credit Document shall prove to have been incorrect in any
material respect when made or deemed to be made;

     (c) Covenant Breaches.

     (i) The Borrower shall fail to perform or observe any covenant contained in Section
5.2, 5.3, 5.5, 5.6 (except for clauses (h), (i) and (l)
thereof), or 5.9, or Article VI of this Agreement,

     (ii) any Guarantor shall fail to perform or observe any covenant contained in its
Guaranty, or

     (iii) any Credit Party shall fail to perform or observe any other term or covenant set
forth in this Agreement or in any other Credit Document which is not covered by clause (i)
or (ii) above, or any other provision of this Section 7.1, if such failure shall
remain unremedied for 30 days after the earlier of written notice of such default shall have
been given to such Person by the Agent or any Bank or such Person’s actual knowledge of such
default;

     (d) Cross-Defaults. (i) The Borrower or any its Subsidiaries shall fail to pay any
principal of or premium or interest on its Debt or pay any net hedging obligation which is
outstanding in a principal amount of at least $10,000,000 individually or when aggregated with all
such Debt or net hedging obligations of the Borrower or its Subsidiaries so in default (but
excluding Debt evidenced by the Notes) when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such failure

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shall continue after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt or such hedging obligations; (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to Debt which is outstanding in a
principal amount of at least $10,000,000 individually or when aggregated with all such Debt of the
Borrower and its Subsidiaries so in default, and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or (iii) any such Debt
shall be declared to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof; or (iv) there occurs under
any Swap Contract an Early Termination Date (as defined in such Swap Contract, if applicable), or
such Swap Contract is otherwise terminated prior to the scheduled term of the applicable
transaction, in each case, resulting from (A) any event of default under such Swap Contract as to
which the Borrower or any Subsidiary is the defaulting party or (B) any “Termination Event” (as
defined in such Swap Contract, if applicable, or the equivalent defined term) under such Swap
Contract as to which the Borrower or any Subsidiary is an Affected Party (as defined in such Swap
Contract, if applicable, or the equivalent defined term) and, in either event, the net hedging
obligation owed by the Borrower or such Subsidiary as a result thereof is greater than $10,000,000;

     (e) Insolvency. The Borrower or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against the Borrower or any such
Subsidiary, either such proceeding shall remain undismissed for a period of 30 days or any of the
actions sought in such proceeding shall occur; or the Borrower or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in this paragraph (e);

     (f) Judgments. Any judgment or order for the payment of money in excess of
$10,000,000 (not fully covered by insurance) shall be rendered against the Borrower or any of its
Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect;

     (g) ERISA Events. (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 $10,000,000, 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 $10,000,000;

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     (h) Plan Withdrawals. The Borrower or any ERISA Affiliate as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal from such Multiemployer Plan
and the plan sponsor of such Multiemployer Plan shall have notified such withdrawing employer that
such employer has incurred a withdrawal liability in an annual amount exceeding $10,000,000;

     (i) Borrowing Base. Any failure to cure any Borrowing Base deficiency in accordance
with Section 2.4, including any failure to make payments to cure the Borrowing Base
deficiency within the time period specified by and in accordance with Section 2.4(b);

     (j) Credit Documents; Security Interests. Any provision of any Credit Document shall
for any reason cease to be valid and binding on the applicable Credit Parties or any such Credit
Party. Any Security Document shall for any reason (other than as permitted pursuant to the terms
thereof or hereof) cease to create a valid and perfected lien on and security interest in any
material portion of the Collateral or any Credit Party shall so state in writing; or

     (k) Change of Control. (i) As a result of one or more transactions after the date of
this Agreement, any “person” or “group” of persons shall have “beneficial ownership” of more than
35% of the outstanding common stock of the Borrower (within the meaning of Section 13(d) or 14(d)
of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations
thereunder), provided that the relationships among the officers and directors of the
Borrower and among the respective shareholders of the Borrower on the date of this Agreement shall
not be deemed to constitute all or any combination of them as a “group” or (ii) during any period
of 12 consecutive months, beginning with and after the date of this Agreement, individuals who at
the beginning of such 12-month period were directors of the Borrower or who were nominated for
election by a majority of the persons who were directors of the Borrower at the beginning of such
period cease for any reason to constitute a majority of the board of directors of the Borrower at
any time during such period.

     Section 7.2. Optional Acceleration of Maturity. If any Event of Default (other than
an Event of Default pursuant to paragraph (e) of Section 7.1) shall have occurred and be
continuing, then, and in any such event,

     (a) the Agent (i) shall at the request, or may with the consent, of the Majority Banks, by
notice to the Borrower, declare the obligation of each Bank and the Issuing Bank to make extensions
of credit hereunder, including making Advances and issuing Letters of Credit, to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Banks, by notice to the Borrower, declare all principal, interest, fees,
reimbursements, indemnifications, and all other amounts payable under this Agreement, the Notes,
and the other Credit Documents to be forthwith due and payable, whereupon all such amounts shall
become and be forthwith due and payable in full, without notice of intent to demand, demand,
presentment for payment, notice of nonpayment, protest, notice of protest, grace, notice of
dishonor, notice of intent to accelerate, notice of acceleration, and all other notices, all of
which are hereby expressly waived by the Borrower;

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     (b) the Borrower shall, on demand of the Agent at the request or with the consent of the
Majority Banks, deposit with the Agent into the Cash Collateral Account an amount of cash equal to
the Letter of Credit Exposure as security for the Obligations; and

     (c) the Agent shall at the request of, or may with the consent of, the Majority Banks proceed
to enforce its rights and remedies under the Guaranties and any other Credit Document for the
ratable benefit of the Banks by appropriate proceedings.

     Section 7.3. Automatic Acceleration of Maturity. If any Event of Default pursuant to
paragraph (e) of Section 7.1 shall occur,

     (a) (i) the obligation of each Bank and the Issuing Bank to make extensions of credit
hereunder, including making Advances and issuing Letters of Credit, shall terminate, and (ii) all
principal, interest, fees, reimbursements, indemnifications, and all other amounts payable under
this Agreement, the Notes, and the other Credit Documents shall become and be forthwith due and
payable in full, without notice of intent to demand, demand, presentment for payment, notice of
nonpayment, protest, notice of protest, grace, notice of dishonor, notice of intent to accelerate,
notice of acceleration, and all other notices, all of which are hereby expressly waived by the
Borrower;

     (b) the Borrower shall deposit with the Agent into the Cash Collateral Account an amount of
cash equal to the outstanding Letter of Credit Exposure as security for the Obligations; and

     (c) the Agent shall at the request of, or may with the consent of, the Majority Banks proceed
to enforce its rights and remedies under the Guaranties and any other Credit Document for the
ratable benefit of the Banks by appropriate proceedings.

     Section 7.4. Right of Setoff. Upon the occurrence and during the continuance of any
Event of Default, the Agent, the Issuing Bank, each Bank and each of their respective 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 indebtedness at any time owing by the Agent, the Issuing Bank, such Bank or
any such Affiliate to or for the credit or the account of the Borrower or any Credit Party against
any and all of the obligations of the Borrower or such Credit Party now or hereafter existing under
this Agreement, the Notes held by the Agent or such Bank, and the other Credit Documents,
irrespective of whether or not the Agent, the Issuing Bank, such Bank or any such Affiliate shall
have made any demand under this Agreement, such Notes, or such other Credit Documents, and although
such obligations of the Borrower or such Credit Party may be contingent or unmatured or are owed to
a branch or office of such Bank or the Issuing Bank different from the branch or office holding
such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting
Bank shall exercise any such right of setoff, (x) all amounts so set off shall be paid over
immediately to the Agent for further application in accordance with the provisions of Section
2.16 and, pending such payment, shall be segregated by such Defaulting Bank from its other
funds and deemed held in trust for the benefit of the Agent and the Banks, and (y) the Defaulting
Bank shall provide promptly to the Agent a statement describing in reasonable detail the
Obligations owing to such Defaulting Bank as to

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which it exercised such right of setoff. The rights of each Bank, the Issuing Bank and their
respective Affiliates under this Section are in addition to other rights and remedies (including
other rights of setoff) that such Bank, the Issuing Bank or their respective Affiliates may have.

The Agent, the Issuing Bank and each Bank agrees to promptly notify the Borrower and the 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. The rights of the Agent, the Issuing Bank
and each Bank under this Section 7.4 are in addition to any other rights and remedies
(including, without limitation, other rights of setoff) which the Agent, the Issuing Bank or such
Bank may have.

     Section 7.5. Actions Under Credit Documents. Following an Event of Default, the Agent
shall at the request, or may with the consent, of the Majority Banks, take any and all actions
permitted under the other Credit Documents, including enforcing it rights under the Guaranties for
the ratable benefit of the Banks.

     Section 7.6. Non-exclusivity of Remedies. No remedy conferred upon the Agent is
intended to be exclusive of any other remedy, and each remedy shall be cumulative of all other
remedies existing by contract, at law, in equity, by statute or otherwise.

     Section 7.7. Application of Funds. After the exercise of remedies provided for above
(or after the Advances have automatically become immediately due and payable and the Letter of
Credit Obligations have automatically been required to be Cash Collateralized as set forth in
Section 7.3), any amounts received on account of the Obligations shall, subject to the
provisions of Sections 2.15 and 2.16, be applied by the Agent in the following
order:

     First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and disbursements of
counsel to the Agent) payable to the 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 Banks and the Issuing Bank (including fees, charges and disbursements of
counsel to the respective Banks and the Issuing Bank and amounts payable underSections
2.11, 2.12, and 2.13), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;

     Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Advances and other Obligations, ratably
among the Banks and the Issuing Bank 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 Advances, and Obligations with respect to Specified Swap Contracts and
Specified Cash Management Agreements, ratably among the Banks, the Issuing Bank, and the
holders of Obligations under Specified Swap Contracts and Specified Cash Management
Agreements, in proportion to the respective amounts described in this clause Fourth
held by them;

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     Fifth, to the Agent for the account of the Issuing Bank, to Cash Collateralize
that portion of Letter of Credit Obligations comprised of the aggregate undrawn amount of
Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant
to Section 2.15; 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 applicable law.

Subject to Section 2.6(d) and 2.15, 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.

ARTICLE VIII

THE AGENT AND THE ISSUING BANK

     Section 8.1. Appointment and Authorization of Agent.

     (a) Each of the Banks and the Issuing Bank hereby irrevocably appoints Bank of America to act
on its behalf as the Agent hereunder and under the other Credit Documents and authorizes the Agent
to take such actions on its behalf and to exercise such powers as are delegated to the 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 Agent, the Banks and the
Issuing Bank, and the Borrower shall not have rights as a third party beneficiary of any of such
provisions except for the Borrower’s consultation rights explicitly set forth in Section
8.6.

     (b) The Issuing Bank shall act on behalf of the Banks with respect to any Letters of Credit
issued by it and the documents associated therewith, and the Issuing Bank shall have all of the
benefits and immunities (i) provided to the Agent in this Article VIII with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters of Credit issued by
it or proposed to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term “Agent” as used in this Article
VIII and in the definition of “Agent-Related Person” included the Issuing Bank with respect to
such acts or omissions, and (ii) as additionally provided herein with respect to the Issuing Bank.

     Section 8.2. Rights as a Bank. The Person serving as the Agent hereunder shall have
the same rights and powers in its capacity as a Bank as any other Bank and may exercise the same as
though it were not the Agent and the term “Bank” or “Banks” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include the Person serving as the 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 Agent hereunder and without any duty to account therefor to the Banks.

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     Section 8.3. Exculpatory Provisions. The Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Credit Documents. Without
limiting the generality of the foregoing, the 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 Credit Documents that the Agent is required to exercise as directed in
writing by the Majority Banks or the Required Banks, as applicable (or such other number or
percentage of the Banks as shall be expressly provided for herein or in the other Credit
Documents), provided that the Agent shall not be required to take any action that,
in its opinion or the opinion of its counsel, may expose the Agent to liability or that is
contrary to any Credit Document or applicable law; and

     (c) shall not, except as expressly set forth herein and in the other Credit 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 Agent or any of its Affiliates in any capacity.

     The Agent shall not be liable for any action taken or not taken by it (i) with the consent or
at the request of the Majority Banks or the Required Banks, as applicable (or such other number or
percentage of the Banks as shall be necessary, or as the Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Article VII and Section 9.1) or
(ii) in the absence of its own gross negligence or willful misconduct. The Agent shall be deemed
not to have knowledge of any Default unless and until notice describing such Default is given to
the Agent by the Borrower, a Bank or the Issuing Bank.

     The 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
Credit 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 Credit Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article III or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Agent.

     Section 8.4. Reliance by Agent. The 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 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 an Advance, or the issuance of a Letter of Credit, that by its terms

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must be fulfilled to the satisfaction of a Bank or the Issuing Bank, the Agent may presume
that such condition is satisfactory to such Bank or the Issuing Bank unless the Agent shall have
received notice to the contrary from such Bank or the Issuing Bank prior to the making of such
Advance or the issuance of such Letter of Credit. The 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.

     Section 8.5. Delegation of Duties. The Agent may perform any and all of its duties
and exercise its rights and powers hereunder or under any other Credit Document by or through any
one or more sub-agents appointed by the Agent. The 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 Agent and any such sub-agent, and shall apply to their respective activities
in connection with the syndication of the credit facilities provided for herein as well as
activities as Agent.

     Section 8.6. Resignation of Agent. The Agent may at any time give notice of its
resignation to the Banks, the Issuing Bank and the Borrower. Upon receipt of any such notice of
resignation, the Majority Banks 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, 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
Majority Banks and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may on behalf of the Banks and the Issuing
Bank, appoint a successor Agent meeting the qualifications set forth above; provided that
if the Agent shall notify the Borrower and the Banks that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Credit Documents (except that in the case of any collateral security held by the
Agent on behalf of the Banks or the Issuing Bank under any of the Credit Documents, the retiring
Agent shall continue to hold such collateral security until such time as a successor Agent is
appointed) and (2) all payments, communications and determinations provided to be made by, to or
through the Agent shall instead be made by or to each Bank and the Issuing Bank directly, until
such time as the Majority Banks appoint a successor Agent as provided for above in this Section.
Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations
hereunder or under the other Credit Documents (if not already discharged therefrom as provided
above in this Section). 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 retiring Agent’s resignation hereunder and under the other Credit Documents, the
provisions of this Article and Section 9.4 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 the retiring Agent was acting as Agent.

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Any resignation by Bank of America as Agent pursuant to this Section shall also constitute its
resignation as Issuing Bank. Upon the acceptance of a successor’s appointment as Agent hereunder,
(a) such successor shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring Issuing Bank, (b) the retiring Issuing Bank shall be discharged from all
of their respective duties and obligations hereunder or under the other Credit Documents, and (c)
the successor Issuing Bank 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 Issuing Bank to effectively assume the obligations of the retiring Issuing Bank with
respect to such Letters of Credit.

     Section 8.7. Non-Reliance on Agent and Other Banks. Each Bank and the Issuing Bank
acknowledges that it has, independently and without reliance upon the Agent or any other Bank 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 Bank and
the Issuing Bank also acknowledges that it will, independently and without reliance upon the Agent
or any other Bank 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 Credit Document or any related
agreement or any document furnished hereunder or thereunder.

     Section 8.8. No Other Duties, Etc. Anything herein to the contrary notwithstanding,
none of the Syndication Agents, Co-Documentation Agents, Managing Agents, Bookrunners, or Lead
Arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Credit Documents, except in its capacity, as applicable, as the
Agent, a Bank, or the Issuing Bank hereunder.

     Section 8.9. 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 Credit
Party, the Agent (irrespective of whether the principal of any Advance or Letter of Credit
Obligation shall then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the 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 Advances, Letter of Credit 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 Banks, the Issuing Bank and the Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Banks, the Issuing Bank and the Agent and
their respective agents and counsel and all other amounts due the Banks, the Issuing Bank and the
Agent under Sections 2.7 and 9.4) 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 Bank and the Issuing Bank to make such
payments to the Agent and, in the event that the Agent shall consent to the making of such

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payments directly to the Banks and the Issuing Bank, to pay to the Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Agent and its agents and
counsel, and any other amounts due the Agent under Sections 2.7 and 9.4.

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

     Section 8.10. Collateral and Guaranty Matters. The Banks and the Issuing Bank
irrevocably authorize the Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Agent under any Credit
Document (i) upon termination of the Commitments and payment in full of all Obligations
(other than contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection with any sale
permitted hereunder or under any other Credit Document, or (iii) subject to Section
9.1, if approved, authorized or ratified in writing by the Majority Banks;

(b) to release any Lien on any Mortgaged Property granted to or held by the Agent under the
Mortgages, so long as (i) after giving effect to such release, the Mortgaged Property Value
shall not be less than 80% of the Oil and Gas Property Value as set forth in the most recent
Oil and Gas Reserve Report, (ii) the Borrower shall deliver to the Agent a certificate in
the form of Exhibit I hereto, which sets forth the calculation of Mortgaged Property
Value and demonstrates and certifies that such Mortgaged Property Value equals or exceeds
80% of the Oil and Gas Property Value, after giving effect to such release of Mortgaged
Property, and (iii) the Borrower identifies in writing on such certificate the Mortgaged
Properties to be released and sets forth the value attributed thereto in the most recent Oil
and Gas Reserve Report;

(c) to subordinate any Lien on any property granted to or held by the Agent under any Credit
Document to the holder of any Lien on such property that is permitted by Section
6.2(c); and

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

Upon request by the Agent at any time, the Majority Banks will confirm in writing the 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 pursuant to this Section
8.10.

     Section 8.11. Indemnification of Agent. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED
HEREBY ARE CONSUMMATED, THE BANKS SHALL INDEMNIFY UPON DEMAND EACH AGENT-RELATED PERSON (TO THE
EXTENT NOT REIMBURSED BY OR ON BEHALF OF BORROWER AND WITHOUT LIMITING THE

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OBLIGATION OF BORROWER TO DO SO), PRO RATA (AS DETERMINED AT THE TIME INDEMNIFICATION IS
SOUGHT HEREUNDER), AND HOLD HARMLESS EACH AGENT-RELATED PERSON FROM AND AGAINST ANY AND ALL
INDEMNIFIED LIABILITIES INCURRED BY IT; PROVIDED, HOWEVER, THAT NO BANK SHALL BE
LIABLE FOR THE PAYMENT TO ANY AGENT-RELATED PERSON OF ANY PORTION OF SUCH INDEMNIFIED LIABILITIES
TO THE EXTENT DETERMINED IN A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO
HAVE RESULTED FROM SUCH AGENT-RELATED PERSON’S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT;
PROVIDED, HOWEVER, THAT NO ACTION TAKEN IN ACCORDANCE WITH THE DIRECTIONS OF THE
MAJORITY BANKS OR REQUIRED BANKS, AS APPLICABLE, SHALL BE DEEMED TO CONSTITUTE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT FOR PURPOSES OF THIS SECTION. WITHOUT LIMITATION OF THE FOREGOING, EACH BANK
SHALL REIMBURSE THE AGENT UPON DEMAND FOR ITS RATABLE SHARE (AS DETERMINED AT THE TIME
INDEMNIFICATION IS SOUGHT HEREUNDER) OF ANY COSTS OR OUT-OF-POCKET EXPENSES (INCLUDING ALL FEES,
EXPENSES, AND DISBURSEMENTS OF ANY LAW FIRM OR OTHER EXTERNAL COUNSEL AND, WITHOUT DUPLICATION, THE
ALLOCATED COST OF INTERNAL LEGAL SERVICES AND ALL EXPENSES AND DISBURSEMENTS OF INTERNAL COUNSEL)
INCURRED BY THE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS OR
OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT, ANY
OTHER CREDIT DOCUMENT, OR ANY DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, TO THE EXTENT THAT
THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY OR ON BEHALF OF THE BORROWER. THE UNDERTAKING IN
THIS SECTION SHALL SURVIVE TERMINATION OF THE COMMITMENTS, THE PAYMENT OF ALL OTHER OBLIGATIONS,
AND THE RESIGNATION OF THE AGENT.

ARTICLE IX

MISCELLANEOUS

     Section 9.1. Amendments, Etc. No amendment or waiver of any provision of this
Agreement, the Notes, or any other Credit Document, nor consent to any departure by the Borrower or
any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and
signed by the Majority Banks and the Borrower, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver, or consent shall, unless in writing and signed by all the
Banks, do any of the following: (a) waive any of the conditions specified in Section 3.1
or 3.2, (b) extend or increase the Commitment of the Banks, (c) reduce the principal of, or
interest on or rate of interest under, the Notes or any fees or other amounts payable hereunder or
under any other Credit Document, (d) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder or extend the Maturity Date,
(e) change the percentage of Banks which shall be required for the Banks or any of them to take any
action hereunder or under any other Credit Document, (f) amend Section 2.10 or this

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Section 9.1, (g) amend the definitions of “Majority Banks” or “Required Banks”, (h)
release any Guarantor from its obligations under any Guaranty (other than as provided in
Section 8.10(d) or as otherwise permitted by the Credit Documents), (i) release all or
substantially all of the Collateral (other than as provided in Section 8.10(a)(i)) in any
transaction or series of related transactions, or (j) except with respect to a Defaulting Bank,
change any provision which provides for payment to be distributed to the Banks in accordance with
their Pro Rata Shares; and provided, further, that no amendment, waiver or consent shall,
unless in writing and signed by the Agent or the Issuing Bank in addition to the Banks required
above to take such action, affect the rights or duties of the Agent or the Issuing Bank, as the
case may be, under this Agreement or any other Credit Document. Notwithstanding anything to the
contrary herein, no Defaulting Bank 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 Banks or each affected Bank may be effected with the consent of the applicable Banks
other than Defaulting Banks), except that (x) the Commitment of any Defaulting Bank may not be
increased or extended without the consent of such Bank and (y) any waiver, amendment or
modification requiring the consent of all Banks or each affected Bank that by its terms affects any
Defaulting Bank more adversely than other affected Banks shall require the consent of such
Defaulting Bank. If any Bank refuses to consent to any amendment, waiver or other modification of
any Credit Document requested by the Borrower that requires the consent of a greater percentage of
Banks than the Majority Banks and such amendment, waiver or other modification is consented to by
the Majority Banks, then the Borrower may replace such Bank in accordance with the provisions of
Section 9.13.

     Section 9.2. Notices, Etc.

     (A) Except as provided in clause (b) below, all notices and other communications shall be in
writing (including, without limitation, telecopy or telex) and mailed by certified mail, return
receipt requested, telecopied, telexed, hand delivered, or delivered by a nationally recognized
overnight courier, at the address for the appropriate party specified in Annex 1 or at such
other address as shall be designated by such party in a written notice to the other parties. All
such notices and communications shall, when so mailed, telecopied, telexed, or hand delivered or
delivered by a nationally recognized overnight courier, be effective when received if mailed, when
telecopy transmission is completed, when confirmed by telex answer-back, or when delivered by such
messenger or courier, respectively, except that (i) notices and communications to the Agent
pursuant to Article II or VIII shall not be effective until received by the Agent, and (ii) notices
delivered through electronic communications pursuant to clause (b) below shall be effective as
provided in such clause (b).

     (B) Electronic Communications. Notices and other communications to the Banks
hereunder may be delivered or furnished by electronic communication (including e-mail and internet
or intranet websites) pursuant to procedures approved by the Agent, provided that the
foregoing shall not apply to notices to any Bank pursuant to Article II if such Bank, as
applicable, has notified the Agent that it is incapable of receiving notices under such Article by
electronic communication. The 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.

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Unless the 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), provided that if such notice or other communication is not sent
during the normal business hours of the recipient, such notice or communication shall be deemed to
have been sent at the opening of business on the next business day for the recipient, 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.

     (C) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE
AGENT-RELATED PERSONS 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 AGENT-RELATED PERSONS IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Agent-Related Persons have any liability
to the Borrower, any Bank 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 or the Agent’s
transmission of Borrower Materials through the internet, except to the extent that such losses,
claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or willful misconduct
of Agent; provided, however, that in no event shall any Agent-Related Person have
any liability to the Borrower, any Bank, the Issuing Bank, or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

     (D) Change of Address, Etc. Each of the Borrower, the Agent, and the Issuing Bank may
change its address, telecopier or telephone number for notices and other communications hereunder
by notice to the other parties hereto. Each other Bank may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the Borrower and the
Agent. In addition, each Bank agrees to notify the Agent from time to time to ensure that the
Agent has on record (i) an effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent and (ii) accurate
wire instructions for such Bank. Furthermore, each Public Bank agrees to cause at least one
individual at or on behalf of such Public Bank 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 Bank or its delegate, in accordance with such Public Bank’s compliance
procedures and applicable Legal Requirements, 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.

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     (E) Reliance by Agent, Issuing Bank, and Banks. The Agent, Issuing Bank and the Banks
shall be entitled to rely and act upon any notices (including telephonic Notices of Borrowing)
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 Agent, the Issuing Bank, each Bank 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 Agent may be recorded by the
Agent, and each of the parties hereto hereby consents to such recording.

     Section 9.3. No Waiver; Remedies. No failure on the part of any Bank, the Agent, or
the Issuing Bank to exercise, and no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by law.

     Section 9.4. Costs and Expenses. The Borrower agrees to pay on demand (a) all
reasonable out-of-pocket costs and expenses of the Agent in connection with the syndication of the
credit facilities provided for herein, the preparation, execution, delivery, administration,
modification, and amendment of this Agreement, the Notes, the Guaranties, the Security Documents,
and the other Credit Documents including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect to advising the Agent as to its rights and
responsibilities under this Agreement, and (b) all out-of-pocket costs and expenses, if any, of the
Agent, the Issuing Bank, and each Bank (including, without limitation, reasonable counsel fees and
expenses of the Agent, the Issuing Bank, and each Bank) in connection with the enforcement (whether
through negotiations, legal proceedings, or otherwise) of this Agreement, the Notes, the
Guaranties, the Security Documents and the other Credit Documents. The agreements in this Section
shall survive the resignation of the Agent, the replacement of any Bank, the termination of the
Commitments, and the repayment, satisfaction or discharge of all the other Obligations.

     Section 9.5. Binding Effect. This Agreement shall become effective when it shall have
been executed by the Borrower and the Agent, and when the Agent shall have, as to each Bank, either
received a counterpart hereof executed by such Bank or been notified by such Bank that such Bank
has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent, the Issuing Bank, and each Bank and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights or delegate its duties under this Agreement
or any interest in this Agreement without the prior written consent of each Bank.

     Section 9.6. Bank Assignments and Participations.

     (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 the Borrower may not assign or otherwise transfer any of

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its rights or obligations hereunder without the prior written consent of the Agent and each
Bank and no Bank 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 Agent, the Issuing Bank and the Banks) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

     (b) Assignments by Banks. Any Bank may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Advances (including for purposes of this subsection (b),
participations in Letter of Credit Obligations) 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
Bank’s Commitment and the Advances at the time owing to it or in the case of an
assignment to a Bank, an Affiliate of a Bank 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 Advances outstanding
thereunder) or, if the Commitment is not then in effect, the principal outstanding
balance of the Advances of the assigning Bank subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the 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 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); provided, however, that
concurrent assignments to members of an Assignee Group and concurrent assignments
from members of an Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group) will be treated as a single assignment
for purposes of determining whether such minimum amount has been met.

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

     (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 Bank, an
Affiliate of a Bank or an Approved Fund;

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

(C) the consent of the Issuing Bank (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation of the
assignee to participate in exposure under one or more Letters of Credit (whether or
not then outstanding).

     (iv) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Agent an Assignment and Assumption, together with a processing and
recordation fee in the amount of $3,500; provided, however, that the 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 Bank, shall deliver to the Agent an
administrative questionnaire.

     (v) No Assignment to Borrower, Defaulting Bank, Natural Person. No such
assignment shall be made (A) to the Borrower or any of the Borrower’s Affiliates or
Subsidiaries, or (B) to any Defaulting Bank or any of its Subsidiaries, or any Person who,
upon becoming a Bank 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 Bank 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 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 Agent, the applicable
pro rata share of Advances previously requested but not funded by the Defaulting Bank, 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 Bank to the Agent
or any Bank hereunder (and interest accrued thereon) and (y) acquire (and fund as
appropriate) its full pro rata share of all Advances and participations in Letters of Credit
in accordance with its Pro Rata Share. Notwithstanding the foregoing, in the event that any
assignment of rights and obligations of any Defaulting Bank hereunder shall become effective
under applicable Legal Requirements without compliance with the provisions of this
paragraph, then the assignee of such interest shall be deemed to be a Defaulting Bank for
all purposes of this Agreement until such compliance occurs.

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Subject to acceptance and recording thereof by the 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 Bank under this Agreement,
and the assigning Bank 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 Bank’s rights and obligations under this
Agreement, such Bank shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 2.11, 2.12, 2.13, 9.4, and 9.7with respect to facts and circumstances
occurring prior to the effective date of such assignment. Upon request, the Borrower (at its
expense) shall execute and deliver a Note to the assignee Bank. Any assignment or transfer by a
Bank 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 Bank of a participation in such rights
and obligations in accordance with subsection (d) of this Section.

     (c) Register. The Agent, acting solely for this purpose as an agent of the Borrower
(and such agency being solely for tax purposes), shall maintain at the Agent’s Office a copy of
each Assignment and Assumption delivered to it and a register for the recordation of the names and
addresses of the Banks, and the Commitments of, and principal amounts of the Advances and Letter of
Credit Obligations owing to, each Bank pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Borrower, the Agent
and the Banks may treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Bank hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. In addition, the Agent shall maintain on the Register information regarding the
designation, and revocation of designation, of any Bank as a Defaulting Bank. The Register shall
be available for inspection by the Borrower and any Bank, at any reasonable time and from time to
time upon reasonable prior notice.

     (d) Participations. Any Bank may at any time, without the consent of, or notice to,
the Borrower or the Agent, sell participations to any Person (other than a natural person, a
Defaulting Bank or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Bank’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Advances (including such Bank’s
participations in Letter of Credit Obligations) owing to it); provided that (i) such Bank’s
obligations under this Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations and (iii) the
Borrower, the Agent, the Banks and the Issuing Bank shall continue to deal solely and directly with
such Bank in connection with such Bank’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Bank sells such a participation shall provide that
such Bank 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 Bank will not, without the consent of the Participant, agree to
any amendment, waiver or other modification described in the first proviso to Section 9.1
that affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.11, 2.12, and
2.13 to the same extent as if it were a Bank and had acquired its interest by assignment
pursuant

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to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 7.4 as though it were a Bank, provided such
Participant agrees to be subject to Section 2.10 as though it were a Bank. Each Bank that
sells a Participation shall, acting solely for this purpose as an agent of Borrower (and such
agency being solely for tax purposes), maintain a register (the “Participant 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 Commitments. The entries in the Participant
Register shall be conclusive absent manifest error, and such Bank 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.

     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 2.12 or 2.13 than the applicable Bank
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Bank if it were a Bank shall not be entitled to the
benefits of Section 2.13 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to comply with
Section 2.13(d) as though it were a Bank.

     (f) Certain Pledges. Any Bank 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 Bank, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such Bank from any
of its obligations hereunder or substitute any such pledgee or assignee for such Bank as a party
hereto.

     (g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption 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.

     (h) Resignation as Issuing Bank after Assignment. Notwithstanding anything to the
contrary contained herein, if at any time Bank of America assigns all of its Commitment and
Advances pursuant to subsection (b) above, Bank of America may, upon 30 days’ notice to the
Borrower and the Banks, resign as Issuing Bank. In the event of any such resignation as Issuing
Bank, the Borrower shall be entitled to appoint from among the Banks a successor Issuing Bank
hereunder; provided, however, that no failure by the Borrower to appoint any such
successor shall affect the resignation of Bank of America as Issuing Bank. If Bank of America
resigns as Issuing Bank, it shall retain all the rights, powers, privileges and duties of the
Issuing Bank hereunder with respect to all Letters of Credit outstanding as of the effective date
of its resignation as Issuing Bank and all Letter of Credit Obligations with respect thereto
(including the right to require the Banks to make Advances or fund risk participations in
unreimbursed

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amounts pursuant to Section 2.6(d)). Upon the appointment of a successor Issuing
Bank, (a) such successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Issuing Bank, and (b) the successor Issuing Bank 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.

     Section 9.7. Indemnification. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED, THE BORROWER SHALL INDEMNIFY AND HOLD HARMLESS EACH AGENT-RELATED PERSON, EACH BANK
AND THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, AGENTS AND
ATTORNEYS-IN-FACT (COLLECTIVELY THE “INDEMNITEES”) FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES, AND DISBURSEMENTS (INCLUDING ALL FEES, EXPENSES, AND DISBURSEMENTS OF ANY LAW FIRM
OR OTHER EXTERNAL COUNSEL AND, WITHOUT DUPLICATION, THE ALLOCATED COST OF INTERNAL LEGAL SERVICES
AND ALL EXPENSES AND DISBURSEMENTS OF INTERNAL COUNSEL AND INCLUDING SETTLEMENT COSTS) OF ANY KIND
OR NATURE WHATSOEVER, (EXCLUDING, HOWEVER, THE COSTS AND EXPENSES INCURRED BY THE BANKS, OTHER THAN
THE AGENT, IN CONNECTION WITH THE PREPARATION, EXECUTION OR DELIVERY OF THIS AGREEMENT) WHICH MAY
AT ANY TIME BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY SUCH INDEMNITEE IN ANY WAY RELATING
TO OR ARISING OUT OF OR IN CONNECTION WITH (A) THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE OR
ADMINISTRATION OF ANY CREDIT DOCUMENT OR ANY OTHER AGREEMENT, LETTER, OR INSTRUMENT DELIVERED IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED THEREBY OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED THEREBY, (B) ANY COMMITMENT, ADVANCE, OR LETTER OF CREDIT OR THE USE OR PROPOSED USE
OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE 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 (C) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE
OF HAZARDOUS WASTE OR HAZARDOUS SUBSTANCES ON OR FROM ANY PROPERTY CURRENTLY OR FORMERLY OWNED OR
OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY LIABILITY UNDER ENVIRONMENTAL LAW
RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (D) 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 THE BORROWER, ANY OTHER CREDIT PARTY OR ANY
THIRD PARTY (INCLUDING ANY INVESTIGATION OF, PREPARATION FOR, OR DEFENSE OF ANY PENDING OR
THREATENED CLAIM, INVESTIGATION, LITIGATION OR PROCEEDING) AND REGARDLESS OF WHETHER ANY INDEMNITEE
IS A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”), IN ALL
CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN

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WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY, OR SOLE NEGLIGENCE OF THE INDEMNITEE;
PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT
THAT SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS (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 CREDIT PARTY AGAINST AN INDEMNITEE FOR BREACH IN BAD FAITH OF SUCH INDEMNITEE’S OBLIGATIONS
HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT, IF THE BORROWER OR SUCH CREDIT PARTY HAS OBTAINED A
FINAL AND NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION. NO INDEMNITEE SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY
INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION
TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL ANY INDEMNITEE HAVE ANY LIABILITY
FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE
EFFECTIVE DATE). ALL AMOUNTS DUE UNDER THIS SECTION 9.7 SHALL BE PAYABLE WITHIN TEN
BUSINESS DAYS AFTER DEMAND THEREFOR. THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE RESIGNATION
OF THE AGENT, THE REPLACEMENT OF ANY BANK, THE TERMINATION OF THE COMMITMENTS, AND THE REPAYMENT,
SATISFACTION OR DISCHARGE OF ALL THE OTHER OBLIGATIONS. FOR THE AVOIDANCE OF DOUBT, ANY
INDEMNIFICATION RELATING TO TAXES, OTHER THAN TAXES RESULTING FROM ANY NON-TAX CLAIM, SHALL BE
COVERED BY SECTIONS 2.12 AND 2.13 AND SHALL NOT BE COVERED BY THIS SECTION
9.7.

     Section 9.8. USA Patriot Act Notice. Each Bank that is subject to the Act (as
hereinafter defined) and the Agent (for itself and not on behalf of any Bank) hereby notifies the
Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the name and address of
the Borrower and other information that will allow such Bank or the Agent, as applicable, to
identify the Borrower in accordance with the Act.

     Section 9.9. 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 Credit 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 Agent and the Arranger are arm’s-length commercial
transactions between the Borrower and its Affiliates, on the one hand, and the 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

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capable of evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby and by the other Credit Documents; (ii) (A) the 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
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 Credit Documents; and (iii) the 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 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 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.

     Section 9.10. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement.

     Section 9.11. Survival of Representations, Etc. All representations and warranties
contained in this Agreement or made in writing by or on behalf of the Borrower in connection
herewith shall survive the execution and delivery of this Agreement and the Credit Documents, the
making of the Advances and any investigation made by or on behalf of the Banks, none of which
investigations shall diminish any Bank’s right to rely on such representations and warranties. All
obligations of the Borrower provided for in Sections 2.11, 2.12, 2.13(c), 9.4, and
9.7 and all of the obligations of the Banks in Section 8.7 shall survive any
termination of this Agreement and repayment in full of the Obligations.

     Section 9.12. Severability. In case one or more provisions of this Agreement or the
other Credit Documents shall be invalid, illegal or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Credit 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 9.12, if and to the extent that the enforceability of any
provisions in this Agreement relating to Defaulting Banks shall be limited by Debtor Relief Laws,
as determined in good faith by the Agent or Issuing Bank, as applicable, then such provisions shall
be deemed to be in effect only to the extent not so limited.

     Section 9.13. Replacement of Banks. If any Bank requests compensation under
Section 2.12, or if the Borrower is required to pay any additional amount to any Bank or
any Governmental Authority for the account of any Bank pursuant to Section 2.13, if any
Bank is a Defaulting Bank, or if Borrower is otherwise permitted to replace a Bank pursuant to
Section 9.1, then the Borrower may, at its sole expense and effort, upon notice to such
Bank and the Agent,

92

 

require such Bank to assign and delegate, without recourse (in accordance with and subject to
the restrictions contained in, and consents required by, Section 9.6), all of its
interests, rights and obligations under this Agreement and the related Credit Documents to an
assignee that shall assume such obligations (which assignee may be another Bank, if a Bank accepts
such assignment), provided that:

     (a) the Borrower shall have paid to the Agent the assignment fee specified in Section
9.6(b);

     (b) such Bank shall have received payment of an amount equal to 100% of the outstanding
principal of its Loans and Letter of Credit Obligations, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Credit Documents (including any
amounts under Section 2.11) 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 2.11 or payments required to be made pursuant to Section 2.13, such
assignment will result in a reduction in such compensation or payments thereafter; and

     (d) such assignment does not conflict with applicable Legal Requirements.

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

     Section 9.14. [Reserved.]

     Section 9.15. Amendment and Restatement. This Agreement represents an amendment and
restatement of the Existing Credit Agreement. Any indebtedness under the Existing Credit Agreement
continues under this Agreement, and the execution of this Agreement does not indicate a payment,
satisfaction, novation, or discharge thereof.

     Section 9.16. Governing Law. This Agreement, the Notes and the other Credit Documents
shall be governed by, and construed and enforced in accordance with, the laws of the State of New
York. Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of
Credit is issued, the rules of the ISP shall apply to each standby Letter of Credit.

     Section 9.17. Submission to Jurisdiction; Waiver of Punitive Damages; Jury Trial; Etc.

     (a) SUBMISSION TO JURISDICTION. EACH PARTY HERETO 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 CREDIT DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES

93

 

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 CREDIT DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE AGENT, ANY BANK OR THE ISSUING BANK MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AGAINST THE BORROWER
OR ANY OTHER CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

     (b) WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY ANY LEGAL REQUIREMENT, 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 CREDIT DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (a) 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.

     (c) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.2. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY ANY LEGAL
REQUIREMENT.

     (d) WAIVER OF PUNITIVE DAMAGES, ETC. EACH PARTY HERETO HEREBY (i) IRREVOCABLY WAIVES,
TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE CREDIT DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED
THEREWITH, ANY “SPECIAL DAMAGES,” AS DEFINED BELOW, PROVIDED, HOWEVER, THAT, THIS WAIVER OF SPECIAL
DAMAGES SHALL NOT INCLUDE ANY SPECIAL DAMAGES FOR WHICH ANY OF THE INDEMNITEES MAY BE LIABLE
PURSUANT TO SECTION 9.7; (ii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR
AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iii)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS AND
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION. AS USED IN THIS SECTION, “SPECIAL DAMAGES” INCLUDES ALL
SPECIAL,

94

 

CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE
ANY PAYMENT OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER
PARTY HERETO.

     (e) 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 CREDIT
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 CREDIT DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     Section 9.18. Treatment of Certain Information; Confidentiality.

Each of the Agent, the Banks and the Issuing Bank agrees to maintain the confidentiality of the
Information, except that Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents, advisors and
representatives (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 requested by any regulatory authority purporting to have
jurisdiction over it (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 Credit Document or any action or proceeding
relating to this Agreement or any other Credit 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 or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction relating to the
Borrower and its obligations, (g) with the consent of the Borrower or (h) 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 Agent, any Bank, the Issuing Bank, 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 Agent, any Bank, or the
Issuing Bank 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

95

 

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.

Each of the Agent, the Banks, and the Issuing Bank 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 Legal
Requirements, including United States federal and state securities laws.

     THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

     THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

96

 

     EXECUTED as of the date first above written.

	 	 	 	 	 
	 	BORROWER:

STONE ENERGY CORPORATION

 	 
	 	By:  	/s/ David H. Welch
 	 
	 	 	Name:  	David H. Welch 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 	 	 
	 	By:  	                 /s/ Kenneth H. Beer
 	 
	 	 	Name:  	Kenneth H. Beer 	 
	 	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	AGENT: 

BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Alan Tapley
 	 
	 	 	Name:  	Alan Tapley 	 
	 	 	Title:  	Assistant Vice President 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	BANK AND ISSUING BANK:

BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Ronald E. McKaig
 	 
	 	 	Name:  	Ronald E. McKaig 	 
	 	 	Title:  	Managing Director 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	BANKS:

BNP PARIBAS

 	 
	 	By:  	/s/ Douglas R. Liftman
 	 
	 	 	Name:  	Douglas R. Liftman 	 
	 	 	Title:  	Managing Director 	 
	 	 	 
	 	By:  	    /s/ Edward Pak
 	 
	 	 	Name:  	Edward Pak  	 
	 	 	Title:  	Vice President 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	NATIXIS

 	 
	 	By:  	/s/ Donovan C. Broussard
 	 
	 	 	Name:  	Donovan C. Broussard  	 
	 	 	Title:  	Managing Director 	 
	 	 	 
	 	By:  	     /s/ Liana Tchernysheva
 	 
	 	 	Name:  	Liana Tchernysheva  	 
	 	 	Title:  	Managing Director 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA

 	 
	 	By:  	/s/ Keith Buchanan
 	 
	 	 	Name:  	Keith Buchanan  	 
	 	 	Title:  	Managing Director 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	CAPITAL ONE, N.A.

 	 
	 	By:  	/s/ Wesley Fontana
 	 
	 	 	Name:  	Wesley Fontana  	 
	 	 	Title:  	Vice President 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	TORONTO DOMINION (NEW YORK) LLC

 	 
	 	By:  	/s/ Debbi L. Brito
 	 
	 	 	Name:  	Debbi L. Brito  	 
	 	 	Title:  	Authorized Signatory 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	BARCLAYS BANK PLC

 	 
	 	By:  	/s/ Vanessa A. Kurbatskiy
 	 
	 	 	Name:  	Vanessa A. Kurbatskiy  	 
	 	 	Title:  	Vice President 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	REGIONS BANK

 	 
	 	By:  	/s/ William A. Philipp
 	 
	 	 	Name:  	William A. Philipp  	 
	 	 	Title:  	Senior Vice President 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Daria Mahoney
 	 
	 	 	Name:  	Daria Mahoney  	 
	 	 	Title:  	Vice President 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	IBERIABANK

 	 
	 	By:  	/s/ Bryan Chapman
 	 
	 	 	Name:  	Bryan Chapman  	 
	 	 	Title:  	Executive Vice President and

Energy Lending Manager 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	WHITNEY NATIONAL BANK

 	 
	 	By:  	/s/ John B. Lane
 	 
	 	 	Name:  	John B. Lane  	 
	 	 	Title:  	Senior Vice President 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	SUMITOMO MITSUI BANKING CORPORATION

 	 
	 	By:  	/s/ Masakazu Hasegawa
 	 
	 	 	Name:  	Masakazu Hasegawa  	 
	 	 	Title:  	General Manager 	 
	 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

Annex 1

COMMITMENTS;

BORROWER, AGENT, AND BANK NOTICE INFORMATION;

LENDING OFFICES

I.       Commitments

	 	 	 	 	 

	Bank of America, N.A.
	 	$	66,500,000	 
	BNP Paribas
	 	$	66,500,000	 
	Natixis
	 	$	66,500,000	 
	The Bank of Nova Scotia
	 	$	66,500,000	 
	Capital One, N.A.
	 	$	66,500,000	 
	Toronto Dominion (New York) LLC
	 	$	66,500,000	 
	Barclays Bank PLC
	 	$	59,500,000	 
	Regions Bank
	 	$	59,500,000	 
	U.S. Bank National Association
	 	$	59,500,000	 
	IBERIABANK
	 	$	43,750,000	 
	Whitney National Bank
	 	$	43,750,000	 
	Sumitomo Mitsui Banking Corporation
	 	$	35,000,000	 
	 
	Total Commitments
	 	$	700,000,000	 

II.        Borrower Notice Information

Stone Energy Corporation

625 E. Kaliste Saloom Road

Lafayette, Louisiana 70508

Attn: Mr. Kenneth H. Beer

Telephone: 337-237-0410

Telecopy:   337-521-9880

 

 

III.       Agent Notice Information

Bank of America, N.A.

901 Main Street, 14th Floor

Dallas, Texas 75202-3714

Attn: Mr. Alan Tapley

Telephone: 214-209-4125

Telecopy:   214-290-9507

With a copy to:

Bank of America, N.A.

Energy Finance Department

700 Louisiana St., 8th Floor

Houston, Texas 77002

Attn: Mr. Ronald McKaig

Telephone: 713-247-7237

Telecopy:   713-247-7286

 

 

IV. Bank Notice Information

	 	 	 
	Credit Contact	 	Operations Contact
	Bank of America, N.A.

	 	Bank of America, N.A.
	Energy Finance Department

	 	Mail Code: TX1-492-14-04
	700 Louisiana St., 8th Floor

	 	901 Main Street
	Houston, Texas 77002

	 	Dallas, Texas 75202-3714
	Attn: Mr. Ronald McKaig

	 	Attn: Ms. Melissa Lopez
	Telephone: 713-247-7237

	 	Telephone: 214-209-2031
	Telecopy:   713-247-7286

	 	Telecopy:   214-290-9485
	 
	 	 
	Barclays Capital

	 	Barclays Capital
	Vanessa Kurbatskiy

	 	70 Hudson Street
	745 7th Avenue, 26th Floor

	 	Jersey City, NJ 07302
	New York, NY 10119

	 	Attn: Charles Kuykendoll
	Telephone: 212-526-2799

	 	Telephone: 201-499-4935
	Telecopy:   212-526-5115

	 	Telecopy:   212-412-7401
	 
	 	 
	BNP Paribas

	 	BNP Paribas
	1200 Smith St., Suite 3100

	 	525 Washington Blvd.
	Houston, Texas 77002

	 	Jersey City, NJ 07310
	Attn: Doug Liftman

	 	Attn: Tammy Papadeas
	Telephone: 713-982-1154

	 	Telephone: 514-285-6043
	Telecopy:   713-659-6915

	 	Telecopy:   201-850-4058
	 
	 	 
	Capital One, N.A.

	 	Capital One, N.A.
	5718 Westheimer, Ste 1430

	 	5718 Westheimer, Ste 1430
	Houston, Texas 77057

	 	Houston, Texas 77057
	Attn: Wesley Fontana

	 	Attn: Norma Platt
	Telephone: 713-435-5349

	 	Telephone: 713-435-5233
	Telecopy:   713-435-7106

	 	Telecopy:   713-435-5106
	 
	 	 
	IBERIABANK

	 	IBERIABANK
	11 E. Greenway Plaza, Suite 2900

	 	11 E. Greenway Plaza, Suite 2900
	Houston, TX 77046

	 	Houston, TX 77046
	Attn: Cameron Jones

	 	Attn: Cameron Jones
	Telephone: 713-624-7726

	 	Telephone: 713-624-7722
	Telecopy:   713-965-0276

	 	Telecopy:   713-481-6307

 

 

	 	 	 
	Credit Contact	 	Operations Contact
	 
	 	 
	Natixis

	 	Natixis
	Houston Energy Group

	 	1251 Avenue of the Americas, 34th Floor
	333 Clay Street, Suite 4340

	 	New York, NY 10020
	Houston, TX 77002

	 	Attn: Joseph Brandariz
	Attn: Liana Tchnernysheva

	 	Telephone: 212-583-4914
	Telephone: 713-759-9495

	 	Telecopy:   713-583-7745
	Telecopy:   713-571-6167
	 	 
	 
	 	 
	Regions Bank

	 	Regions Bank
	1020 Highland Colony

	 	201 Milam Parkway
	Parkway, Suite 200

	 	Birmingham, AL 35211
	Ridgeland, MS 39157

	 	Attn: LaShunda Johnson
	Attn: Bill Philipp

	 	Telephone: 205-420-7505
	Telephone: 601.790.8229

	 	Telecopy:   205-261-7069
	Telecopy:   601.790.8563
	 	 
	 
	 	 
	Sumitomo Mitsui Banking Corporation

	 	Sumitomo Mitsui Banking Corporation
	277 Park Avenue, 6/F

	 	1200 Smith Street, Suite 1140
	New York, NY 10172

	 	Houston, Texas 77002
	Attn: Lind Soohoo

	 	Attn: Luis Vaca
	Telephone: 212-224-4328

	 	Telephone: 713-277-3504
	Telecopy:   212-224-4391

	 	Telecopy:   713-277-3555
	 
	 	 
	Toronto Dominion (New York) LLC

	 	Toronto Dominion (New York) LLC
	909 Fannin Street., Suite 1950

	 	77 King St. W.
	Houston, TX 77010

	 	Royal Trust Tower 18th Floor
	Attn: Mark Snyder

	 	Toronto, ON M5K 1A2
	Telephone: 713-653-8211

	 	Attn: Brian Pirotta
	 

	 	Telephone: (416) 983-5700
	 

	 	Telecopy:   (416) 983-0003
	 
	 	 
	The Bank of Nova Scotia

	 	The Bank of Nova Scotia
	711 Louisiana, Suite # 1400

	 	720 King St., 2nd Floor
	Houston, TX 77002

	 	Toronto, Ontario
	Attn: Patrick Mc Williams

	 	M5V2T3
	Telephone: 713-759-3428

	 	Attn: Kevin Yepson
	Telecopy:   713-752-2425

	 	Telephone: 212-225-5705
	 

	 	Telecopy:   212-225-5709

 

 

	 	 	 
	Credit Contact	 	Operations Contact
	U.S. Bank National Association

	 	U.S. Bank National Association
	950 17th Street, DNCOT8E

	 	555 SW Oak, PDORP7LS
	Denver, CO 80202

	 	Portland, OR 97208
	Attn: Daria Mahoney

	 	Attn: Robert Getch
	Telephone: 303-585-4216

	 	Telephone: 503-275-3113
	Telecopy:   303-585-4362

	 	Telecopy:   866-721-7062
	 
	 	 
	Whitney National Bank

	 	Whitney National Bank
	4265 San Felipe Ave, Suite 490

	 	4265 San Felipe Ave, Suite 490
	Houston, TX 77027

	 	Houston, TX 77027
	Attn: Will Jochetz

	 	Attn: Shari Jones
	Telephone: 713-951-7288

	 	Telephone: 713-951-7108
	Telecopy:   713-951-7719

	 	Telecopy:   713-951-7719

 

 

			
	V.	 	Lending Offices

	 	 	 
	Domestic Lending Office	 	Eurodollar Lending Office
	Bank of America, N.A.

	 	Bank of America, N.A.
	901 Main Street

	 	901 Main Street
	Dallas, Texas 75202-3714

	 	Dallas, Texas 75202-3714
	 
	 	 
	Barclays Bank PLC

	 	Barclays Bank PLC
	745 7th Avenue

	 	745 7th Avenue
	New York, NY 10019

	 	New York, NY 10019
	 
	 	 
	BNP Paribas

	 	BNP Paribas
	525 Washington Blvd.

	 	525 Washington Blvd.
	Jersey City, NJ 07310

	 	Jersey City, NJ 07310
	Attn: Loan Servicing — 8th Floor

	 	Attn: Loan Servicing — 8th Floor
	 
	 	 
	Capital One, N.A.

	 	Capital One, N.A.
	5718 Westheimer, Ste 1430

	 	5718 Westheimer, Ste 1430
	Houston, Texas 77057

	 	Houston, Texas 77057
	 
	 	 
	IBERIABANK

	 	IBERIABANK
	11 E. Greenway Plaza, Suite 2900

	 	11 E. Greenway Plaza, Suite 2900
	Houston, TX 77046

	 	Houston, TX 77046
	 
	 	 
	Natixis

	 	Natixis
	1251 Avenue of the Americas

	 	1251 Avenue of the Americas
	34th Floor, New York, NY 10020

	 	34th Floor, New York, NY 10020
	 
	 	 
	Regions Bank

	 	Regions Bank
	1900 5th Ave North

	 	1900 5th Ave North
	Birmingham, AL 35203

	 	Birmingham, AL 35203
	 
	 	 
	Sumitomo Mitsui Banking Corp., New York

	 	Sumitomo Mitsui Banking Corp., New York
	277 Park Avenue

	 	277 Park Avenue
	New York, NY 10172

	 	New York, NY 10172
	 
	 	 
	Toronto Dominion (New York) LLC

	 	Toronto Dominion (New York) LLC
	31 W. 52nd, 22nd Floor

	 	31 W. 52nd, 22nd Floor
	New York, NY 10019

	 	New York, NY 10019

 

 

	 	 	 
	Domestic Lending Office	 	Eurodollar Lending Office
	The Bank of Nova Scotia

	 	The Bank of Nova Scotia
	711 Louisiana, Suite # 1400

	 	711 Louisiana, Suite # 1400
	Houston, Texas 77002

	 	Houston, Texas 77002
	 
	 	 
	U.S. Bank National Association

	 	U.S. Bank National Association
	950 17th Street, 8th Floor

	 	950 17th Street, 8th Floor
	DN-CO-T8E

	 	DN-CO-T8E
	Denver, CO 80202

	 	Denver, CO 80202
	 
	 	 
	Whitney National Bank

	 	Whitney National Bank
	4265 San Felipe Ave, Suite 490

	 	4265 San Felipe Ave, Suite 490
	Houston, TX 77027

	 	Houston, TX 77027

 

 

SCHEDULE 2.6(h)

EXISTING LETTERS OF CREDIT

The issuer of each Existing Letter of Credit listed below is Bank of America, N.A.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Letter of Credit	 	 	 	 	 	 	 	 	 	 
	Number	 	Beneficiary	 	Amount	 	 	Issue Date	 	Expiration Date	 
	139745
	 	Chevron U.S.A. Inc.	 	$	730,000.00	 	 	07/20/1994	 	 	6/24/2011	 
	139717
	 	Chevron U.S.A. Inc.	 	$	1,400,000.00	 	 	06/22/1994	 	 	5/30/2011	 
	142785
	 	Conoco, Inc.	 	$	952,000.00	 	 	12/14/1994	 	 	6/24/2011	 
	150588
	 	Chevron U.S.A. Inc.	 	$	65,000.00	 	 	09/18/1995	 	 	6/24/2011	 
	908720
	 	Chevron U.S.A. Inc.	 	$	1,400,000.00	 	 	05/10/1996	 	 	6/24/2011	 
	3091162
	 	Chevron U.S.A. Inc.	 	$	1,800,000.00	 	 	01/14/2008	 	 	6/24/2011	 
	3083069
	 	BP Exploration & Production	 	$	34,000,000.00	 	 	07/07/2006	 	 	6/24/2011	 
	3099240
	 	Anadarko Petroleum Corporation	 	$	20,797,859.00	 	 	04/08/2009	 	 	6/24/2011	 

 

 

SCHEDULE 4.1

MATERIAL SUBSIDIARIES

	 	 	 	 	 
	 	 	Jurisdiction and Type	 	 
	Subsidiary	 	of Organization	 	Ownership
	Stone Energy
Offshore, L.L.C.

	 	Delaware Limited
Liability Company
	 	Stone Energy Corporation

(Sole Member)

 

 

SCHEDULE 4.7

EXISTING LITIGATION

Franchise Tax Action

     On December 30, 2004, Stone was served with two petitions (civil action numbers 2004-6227 and
2004-6228) filed by the Louisiana Department of Revenue (“LDR”) in the 15th Judicial District Court
(Parish of Lafayette, Louisiana) claiming additional franchise taxes due. In one case, the LDR is
seeking additional franchise taxes from Stone in the amount of $640,000, plus accrued interest of
$352,000 (calculated through December 15, 2004), for the franchise tax year 2001. In the other
case, the LDR is seeking additional franchise taxes from Stone (as successor to Basin Exploration,
Inc.) in the amount of $274,000, plus accrued interest of $159,000 (calculated through December 15,
2004), for the franchise tax years 1999, 2000 and 2001. On December 29, 2005, the LDR filed another
petition in the 15th Judicial District Court claiming additional franchise taxes due for the
taxable years ended December 31, 2002 and 2003 in the amount of $2.6 million plus accrued interest
calculated through December 15, 2005 in the amount of $1.2 million. Also, on January 2, 2008,
Stone was served with a petition (civil action number 2007-6754) claiming $1.5 million of
additional franchise taxes due for the 2004 franchise tax year, plus accrued interest of $800,000
calculated through November 30, 2007. Further, on January 7, 2009, Stone was served with a
petition (civil action number 2008-7193) claiming additional franchise taxes due for the taxable
years ended December 31, 2005 and 2006 in the amount of $4.0 million plus accrued interest
calculated through October 21, 2008 in the amount of $1.7 million. In addition, we have received
assessments from the LDR for additional franchise taxes in the amount of $2.9 million resulting
from audits of a subsidiary. These assessments all relate to the LDR’s assertion that sales of
crude oil and natural gas from properties located on the Outer Continental Shelf, which are
transported through the State of Louisiana, should be sourced to the State of Louisiana for
purposes of computing the Louisiana franchise tax apportionment ratio. The Company disagrees with
these contentions and intends to vigorously defend itself against these claims. Total asserted
claims plus estimated accrued interest amount to approximately $20,450,000 (calculated through
December 31, 2010). The franchise tax years 2007 through 2010 for Stone remain subject to
examination, which potentially exposes Stone to additional estimated assessments of $7,000,000
(calculated through December 31, 2010) including accrued interest..

 

 

SCHEDULE 4.14(a)

EXISTING ENVIRONMENTAL CONCERNS

None.

 

 

SCHEDULE 4.14(b)

DESIGNATED ENVIRONMENTAL SITES

None.

 

 

SCHEDULE 6.1

PERMITTED EXISTING LIENS

	1.	 	Lien in favor of GreatAmerica Leasing Corporation on various leased copy and fax machines
more fully described in Delaware Secretary of State UCC-1 filing Number 20083587282.
	 
	2.	 	Lien in favor of GreatAmerica Leasing Corporation on various leased copy and fax machines
more fully described in Delaware Secretary of State UCC-1 filing Number 20103889072.
	 
	3.	 	Lien in favor of GreatAmerica Leasing Corporation on various leased copy and fax machines
more fully described in Caddo Parish UCC-1 filing Number 09-1093256.

 

 

SCHEDULE 6.2

PERMITTED EXISTING DEBT

None.

 

 

SCHEDULE 6.8

AFFILIATE TRANSACTIONS

None.

[EXHIBIT A TO CREDIT AGREEMENT]

 

 

EXHIBIT A

FORM OF

ASSIGNMENT AND ACCEPTANCE

[date]

     Reference is made to the Third Amended and Restated Credit Agreement dated as of April 26,
2011 (as the same may be modified from time to time, the “Credit Agreement”), among Stone
Energy Corporation, a Delaware corporation (“Borrower”), the banks named therein
(“Banks”), and Bank of America, N.A., as administrative agent for the Banks
(“Agent”). Capitalized terms used herein but not defined herein shall have the meanings
specified by the Credit Agreement.

     Pursuant to the terms of the Credit Agreement, [ ] (“Assignor”), wishes to assign and
delegate to [ ] (“Assignee”), [ ]%1 of its rights and obligations under the
Credit Agreement. Therefore, Assignor, Assignee, and the Agent agree as follows:

     1. The Assignor hereby sells and assigns and delegates to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, without recourse to the Assignor and without
representation or warranty except for the representations and warranties specifically set forth in
clauses (i), (ii), and (iii) of Section 2 of this Assignment and Acceptance, a [ ]%
interest in and to all of the Assignor’s rights and obligations under the Credit Agreement and the
other Credit Documents as of the Effective Date (as defined below), including such percentage
interest in the Assignor’s Commitment, the Advances owing to the Assignor, and the Note held by the
Assignor.

     2. The Assignor (i) represents and warrants that, prior to executing this Assignment and
Acceptance, its Commitment is $[ ], the aggregate outstanding principal amount of Advances owed by
the Borrower to the Assignor is $[ ], and its Pro Rata Share of the Letter of Credit Exposure is
$[ ]; (ii) represents and warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse claim; (iii) makes
no representation or warranty and assumes no responsibility with respect to any statements,
warranties, or representations made in or in connection with the Credit Agreement or any other
Credit Document or the execution, legality, validity, enforceability, genuineness, sufficiency, or
value of the Credit Agreement or any other Credit Document or any other instrument or document
furnished pursuant thereto; (iv) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any Guarantor or the performance or
observance by the Borrower or any Guarantor of any of its obligations under the Credit Agreement or
any other Credit Document or any other instrument or document furnished pursuant thereto; and (v) attaches the Note referred to in Section
1 above and requests that the Agent exchange such Note for a new Note dated [ ], in the
principal

 

			
	1	 	Specify percentage to 4 decimal points.

[EXHIBIT A TO CREDIT AGREEMENT]

 

 

amount of
$[      ] payable to the order of
the Assignee and a new Note dated [
     ], in the principal amount of $[   ] payable to the order of Assignor.

     3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements referred to in Section 4.05 thereof 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 Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor, or any other Bank 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 Credit Agreement or any other Credit Document; (iii) appoints
and authorizes the Agent to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement and any other Credit Document as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with their terms all of the obligations which by the terms of the Credit
Agreement or any other Credit Document are required to be performed by it as a Bank; (v) specifies
as its Domestic Lending Office (and address for notices) and Eurodollar Lending Office the offices
set forth beneath its name on the signature pages hereof; (vi) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes
of determining exemption from United States withholding taxes with respect to all payments to be
made to the Assignee under the Credit Agreement and the Note or such other documents as are
necessary to indicate that all such payments are subject to such rates at a rate reduced by an
applicable tax
treaty2, and (vii) represents that it is an Eligible Assignee.

     4. The effective date for this Assignment and Acceptance shall be [________] (“Effective
Date”)3, and following the execution of this Assignment and Acceptance, the Agent
will record it in the Register.

     5. Upon such recording, and as of the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement for all purposes, and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Bank thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights (other than rights against the
Borrower pursuant to Sections 9.4 and 9.7 of the Credit Agreement, which shall
survive this agreement) and be released from its obligations (other than obligations to the Agent
pursuant to Section 8.11 of the Credit Agreement, which shall survive this agreement) under
the Credit Agreement.

     6. Upon such recording, from and after the Effective Date, the Agent shall make all payments
under the Credit Agreement and the Note in respect of the interest assigned hereby (including all
payments of principal, interest, and fees) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and the Notes for periods prior
to the Effective Date directly between themselves.

 

			
	2	 	If the Assignee is organized under the laws of a jurisdiction outside the
United States.
	 
	3	 	See Section 9. 6. Such date shall be at least three
Business Days after the execution of this Assignment and Acceptance.

[EXHIBIT A TO CREDIT AGREEMENT]

 

 

     7. This Assignment and Acceptance shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.

     The parties hereto have caused this Assignment and Acceptance to be duly executed as of the
date first above written.

	 	 	 	 	 
	 	[ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address: 	 	 
	 	 	 
	 	 	 
	 	Attention: 	 	 
	 	Telecopy No: 	 	 
	 
	 	[ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Domestic Lending Office:	 
	 
	 	Address: 	 	 
	 	 	 
	 	 	 
	 	Attention: 	 	 
	 	Telecopy No: 	 	 
	 
	 	Eurodollar Lending Office:	 
	 
	 	Address: 	 	 
	 	 	 
	 	 	 
	 	Attention: 	 	 
	 	Telecopy No: 	 	 
	 

[EXHIBIT A TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[CONSENTED TO

this _____ day of
________________________, __.]4

	 	 	 	 	 
	STONE ENERGY CORPORATION

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

 

			
	4	 	Consent of Borrower not required if Default
or Event of Default exists or if assignment is to a Bank, an Affiliate of a
Bank or an Approved Fund.

[EXHIBIT A TO CREDIT AGREEMENT]

 

 

EXHIBIT B

FORM OF

COMPLIANCE CERTIFICATE

[date]

Bank of America, N.A., as Agent

700 Louisiana Street, 8th Floor

Houston, Texas 77002

Attention: Mr. Ron E. McKaig

Ladies and Gentlemen:

Reference is made to the Third Amended and Restated Credit Agreement dated as of April 26, 2011 (as
the same may be modified from time to time, the “Credit Agreement”), among Stone Energy
Corporation (“Borrower”), the banks named therein (“Banks”), and Bank of America,
N.A., as administrative agent for the Banks (“Agent”), the defined terms of which are used
herein unless otherwise defined herein.

Each of the undersigned hereby certifies that we have no knowledge of any Defaults under the Credit
Agreement which existed as of [________] or which exist as of the date of this letter.

Each of the undersigned also certifies that the accompanying consolidated financial statements
present fairly, in all material respects, the consolidated financial condition of the Borrower as
of [__________], and the related results of operations for the period then ended, in conformity
with generally accepted accounting principles.

The following sets forth the information and computations to demonstrate compliance with the
requirements of Sections 6.13 and 6.14 of the Credit Agreement as of [_________]:

	 	 	 	 	 	 	 	 	 

	 	A.	 	 	Section 6.13 - Debt to EBITDA Ratio
	 	 	 	 
	 	 	 	 	1. consolidated Debt as of [                    ]
	 	$	                    	 
	 	 	 	 	2. consolidated Net Income1 for four quarters
ending [                     ]
	 	$	                    	 
	 	 	 	 	3. consolidated interest expense for such period
	 	$	                    	 
	 	 	 	 	4. exploration expense
	 	$	                    	 
	 	 	 	 	5. depreciation, depletion, and amortization
for such period
	 	$	                    	 

 

			
	1	 	Excluding the non-cash impact of (a)
impairments, (b) full cost ceiling test write downs, (c) gains or losses on
sale of property, (d) extraordinary items, and (e) accretion expense (in
accordance with SFAS No. 143).

[EXHIBIT B TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 	 	 	 	 

	 	 	 	 	6. income taxes for such period
	 	$	                    	 
	 	 	 	 	7. transaction costs incurred by such Person during such
period in connection with debt or equity
issuances or acquisitions
	 	$	                    	 
	 	 	 	 	8. A.2 + A.3 +A.4 + A.5 + A.6 + A.7
	 	$	                    	 
	 	 	 	 	9. ratio A.1 ÷ A.8
	 	___ to 1.00
	 	 	 	 	10. maximum
	 	 	3.25 to 1.00	 
	 	B.	 	 	Section 6.14 — Interest Coverage Ratio
	 	 	 	 
	 	 	 	 	1. consolidated EBITDA for four fiscal
quarters ending [                    ]
(copy from line A.8 above)

	 	$	                    	 
	 	 	 	 	2. consolidated interest expense for such period
	 	$	                    	 
	 	 	 	 	3. consolidated interest income for such period 
	 	$	                    	 
	 	 	 	 	4. Letter of Credit Fees accrued during such period
	 	$	                    	 
	 	 	 	 	5. B.2 — B.3 + B.4
	 	$	                    	 
	 	 	 	 	6. ratio B.1 ÷ B. 5
	 	____ to 1.00
	 	 	 	 	7. minimum
	 	 	3.00 to 1.00	 

This certificate is given each of our capacities as an officer of the Borrower and not in our
individual capacities.

	 	 	 	 	 
	 	Very truly yours,2

 	 
	 	
 	 
	 	[Chief Financial Officer] 	 
	 	 	 
	 
	 	 	 
	 	
 	 
	 	[Chief Accounting Officer] 	 
	 	 	 
	 

 

			
	2	 	Note: Certificate must be executed by two
officers.

 

 

EXHIBIT C

FORM OF GUARANTY

     This Amended and Restated Guaranty dated as of April 26, 2011 (“Agreement”), is made
by the undersigned Subsidiaries of Stone Energy Corporation (collectively the
“Guarantors”), in favor of the Agent for the benefit of the Agent and the Beneficiaries
referred to below.

INTRODUCTION

     This Amended and Restated Guaranty is given in connection with the Third Amended and Restated
Credit Agreement dated as of April 26, 2011 (as the same may be amended, restated or otherwise
modified from time to time, the “Credit Agreement”), among Stone Energy Corporation, a
Delaware corporation (“Borrower”), the banks named therein (“Banks” and together
with the other holders of Obligations, the “Beneficiaries”), and Bank of America, N.A., as
administrative agent for the Banks (“Agent”). Capitalized terms used herein but not
defined herein shall have the meanings specified by the Credit Agreement. As a condition precedent
to the extension of credit under the Credit Agreement, the Agent and the Banks require the
Guarantors to enter into this Agreement. Each Guarantor believes that it will obtain substantial
direct and indirect benefit from the credit extended to the Borrower by the Banks under the Credit
Agreement.

     In consideration of the foregoing and for other valuable consideration received, each
Guarantor agrees as follows:

     ARTICLE I Guaranty.

     Section 1.1. Each Guarantor irrevocably guarantees to the Agent, for the benefit of the
Beneficiaries, the full payment (without duplication) of (a) the Obligations, (b) all principal,
interest, fees, reimbursements, indemnifications, and other amounts now or hereafter owed by the
Borrower to the Agent and the Beneficiaries under the Credit Agreement and the other Credit
Documents, and (c) any increases, extensions, and rearrangements of the foregoing obligations under
any amendments, supplements, and other modifications of the documents and agreements creating the
foregoing obligations (collectively, the “Guaranteed Obligations”). This is a guaranty of
payment and not merely a guaranty of collection, and each Guarantor is liable as a primary obligor.
If any of the Guaranteed Obligations are not punctually paid when due (after giving effect to all
applicable grace periods), whether by maturity, acceleration, or otherwise, the Guarantors shall
immediately pay upon demand to the Agent, for the ratable benefit of the Beneficiaries, the full
amount due. Each Guarantor shall make each payment to the Agent in Dollars in immediately
available funds as directed by the Agent. The Agent and each Beneficiary is hereby authorized at
any time following any demand for payment hereunder to set off and apply any indebtedness owed by
the Agent or the Beneficiary to the Guarantors against any and all of the Guaranteed Obligations.
The Agent and each Beneficiary severally agrees to promptly notify the Guarantors after any such
setoff and application, but the failure to give such notice shall not affect the validity of such
setoff and application.

     Section 1.2. This Agreement shall continue to be effective or be reinstated, as the case may
be, if any payment on the Guaranteed Obligations must be refunded for any reason

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

including any bankruptcy proceeding. In the event that the Agent or any Beneficiary must
refund any payment received against the Guaranteed Obligations, any prior release from the terms of
this Agreement given to the Guarantors by the Agent shall be without effect, and this Agreement
shall be reinstated in full force and effect. It is the intention of each Guarantor that the
Guarantor’s obligations hereunder shall not be discharged except by final payment of the Guaranteed
Obligations.

     ARTICLE II Guaranty Absolute.

     Section 2.1. In the event that one or more other parties guarantees all or part of the
Guaranteed Obligations, such other guarantees shall not reduce any Guarantor’s obligations
hereunder and the Guarantor shall remain fully liable for all of the Guaranteed Obligations.

     Section 2.2. There are no conditions precedent to the enforcement of this Agreement, except as
expressly contained herein. It shall not be necessary for the Agent, in order to enforce payment
by any Guarantor under this Agreement, to show proof of any default by the Borrower, to exhaust the
Agent’s remedies against the Borrower or any other person liable for the payment of the Guaranteed
Obligations, to enforce any support for the payment of the Guaranteed Obligations, or to enforce
any other means of obtaining payment of the Guaranteed Obligations. Neither the Agent nor any
Beneficiary shall be required to mitigate damages or take any other action to reduce, collect, or
enforce the Guaranteed Obligations.

     Section 2.3. Each Guarantor agrees that such Guarantor’s obligations under this Agreement
shall not be released, diminished, or impaired by, and waives any rights which such Guarantor might
otherwise have which relate to:

          (a) Any lack of validity or enforceability of the Guaranteed Obligations, any Credit Document,
or any other agreement or instrument relating thereto;

          (b) Any increase, reduction, extension, or rearrangement of the Guaranteed Obligations, any
amendment, supplement, or other modification of the Credit Documents, or any waiver or consent
granted under the Credit Documents, including waivers of the payment and performance of the
Guaranteed Obligations;

          (c) Any release, exchange, subordination, waste, or other impairment of any collateral
securing payment of the Guaranteed Obligations;

          (d) Any full or partial release of the Borrower, any guarantor, or any other person liable for
the payment of the Guaranteed Obligations;

          (e) Any change in the organization or structure of the Borrower, any guarantor, or any other
person liable for the payment of the Guaranteed Obligations; or the insolvency, bankruptcy,
liquidation, or dissolution of the Borrower or any other person liable for the payment of the
Guaranteed Obligations;

          (f) The failure to apply or any manner of applying payments or the proceeds of any collateral
against the Guaranteed Obligations;

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

          (g) The failure to give notice of the occurrence of any of the events or actions referred to
in this Section 2.3, notice of any default or event of default, however denominated, under
the Credit Documents, notice of intent to demand, notice of demand, notice of presentment for
payment, notice of nonpayment, notice of intent to protest, notice of protest, notice of grace,
notice of dishonor, notice of intent to accelerate, notice of acceleration, notice of bringing of
suit, notice of sale or foreclosure of any collateral for the Guaranteed Obligations, notice of the
Agent’s or any Beneficiary’s transfer of the Guaranteed Obligations, notice of the financial
condition of or other circumstances regarding the Borrower or any other person liable for the
Guaranteed Obligations, or any other notice of any kind relating to the Guaranteed Obligations (and
the parties intend that no Guarantor shall be considered a “Debtor” as defined in Section 9-102(28)
of the Uniform Commercial Code in effect in the State of New York from time to time for the purpose
of notices required to be given to a Debtor thereunder, should such section apply); and

          (h) Any other action taken or omitted which affects the Guaranteed Obligations, whether or not
such action or omission prejudices any Guarantor or increases the likelihood that any Guarantor
will be required to pay the Guaranteed Obligations pursuant to the terms hereof—it is the
unambiguous and unequivocal intention of each Guarantor that such Guarantor shall be obligated to
pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event,
action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not
particularly described herein.

     ARTICLE III Contribution, Subrogation and Fraudulent Transfer.

     Section 3.1. Contribution and Subrogation. In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree that in the event a payment shall be made
on any date under this Agreement by any Guarantor (the “Funding Guarantor”), each other
Guarantor (each a “Contributing Guarantor”) shall indemnify the Funding Guarantor in an
amount equal to the amount of such payment, in each case multiplied by a fraction the numerator of
which shall be the net worth of the Contributing Guarantor as of such date and the denominator of
which shall be the aggregate net worth of all the Contributing Guarantors together with the net
worth of the Funding Guarantor as of such date. Any Contributing Guarantor making any payment to a
Funding Guarantor pursuant to this Section 3.1 shall be subrogated to the rights of such
Funding Guarantor to the extent of such payment. No Guarantor shall have any right of subrogation,
reimbursement, contribution or indemnity (including any statutory rights of subrogation under
Section 509 of the Bankruptcy Code, 11 U.S.C. § 509) nor any right of recourse to security for the
Obligations unless and until 91 days shall have elapsed after the date on which the Obligations
have been repaid in full in cash, all Commitments have been terminated, and all Letter of Credit
Obligations shall have been paid in full in cash or terminated, in each case without the filing or
commencement, by or against the Borrower, of any provincial, state or federal action, suit,
petition or proceeding seeking any reorganization, liquidation or other relief or arrangement in
respect of creditors of, or the appointment of a receiver, liquidator, trustee or conservator in
respect to, the Borrower or its assets. This waiver is expressly intended to prevent the existence
of any claim in respect to such subrogation, reimbursement, contribution or indemnity by the
Guarantors against the estate of the Borrower within the meaning of Section 101 of the Bankruptcy
Code, in the event of a subsequent case involving the Borrower. If an amount shall be paid to any
Guarantor on account of such rights at

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

any time prior to termination of this Agreement, such amount shall be held in trust for the
benefit of the Agent and the Beneficiaries and shall forthwith be paid to the Agent, to be credited
and applied to the Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Documents or otherwise as the Agent may elect. The agreements in this Section 3.1
shall survive repayment of all of the Obligations and the termination or expiration of this
Agreement in any manner.

     Section 3.2. Fraudulent Transfer Laws. Anything contained in this Agreement to the
contrary notwithstanding, the obligations of each Guarantor under this Agreement on any date shall
be limited to a maximum aggregate amount equal to the largest amount that would not, on such date,
render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of the Bankruptcy Code of the United States or any applicable provisions of comparable
laws relating to bankruptcy, insolvency, or reorganization, or relief of debtors (collectively, the
“Fraudulent Transfer Laws”), but only to the extent that any Fraudulent Transfer Law has
been found in a final non-appealable judgment of a court of competent jurisdiction to be applicable
to such obligations as of such date, in each case

     (a) after giving effect to all liabilities of such Guarantor, contingent or otherwise, that
are relevant under the Fraudulent Transfer Laws, but specifically excluding

     (i) any liabilities of such Guarantor in respect of intercompany indebtedness to the
Borrower or other affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder;

     (ii) any liabilities of such Guarantor under this Agreement; and

     (iii) any liabilities of such Guarantor under other guarantees of and joint and several
co-borrowings of Debt, entered into on the date this Agreement becomes effective, which
contain a limitation as to maximum amount substantially similar to that set forth in this
Section 3.2 (each such other guarantee and joint and several co-borrowing entered
into on the date this Agreement becomes effective, a “Competing Guaranty”) to the
extent such Guarantor’s liabilities under such Competing Guaranty exceed an amount equal to
(x) the aggregate principal amount of such Guarantor’s obligations under such Competing
Guaranty (notwithstanding the operation of that limitation contained in such Competing
Guaranty that is substantially similar to this Section 3.2), multiplied by (y) a
fraction (I) the numerator of which is the aggregate principal amount of such Guarantor’s
obligations under such Competing Guaranty (notwithstanding the operation of that limitation
contained in such Competing Guaranty that is substantially similar to this Section
3.2), and (II) the denominator of which is the sum of (A) the aggregate principal amount
of the obligations of such Guarantor under all other Competing Guaranties (notwithstanding
the operation of those limitations contained in such other Competing Guaranties that are
substantially similar to this Section 3.2), (B) the aggregate principal amount of
the obligations of such Guarantor under this Agreement (notwithstanding the operation of
this Section 3.2, and (C) the aggregate principal amount of the obligations of such
Guarantor under such Competing Guaranty (notwithstanding the operation of that

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

limitation contained in such Competing Guaranty that is substantially similar to this
Section 3.2)); and

     (b) after giving effect as assets to the value (as determined under the applicable provisions
of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement, indemnification or
contribution of such Guarantor pursuant to applicable law or pursuant to the terms of any agreement
(including any such right of contribution under Section 3.1).

     ARTICLE IV Representations, Warranties, and Covenants of Guarantor. Each Guarantor
represents and warrants to (and with each extension of credit under the Credit Agreement again
represents and warrants to) and agrees with the Agent as follows:

     Section 4.1. As of the date hereof, assuming each of the transactions contemplated by the
Credit Documents is consummated and the Borrower makes full use of the credit facilities
thereunder, and taking into account the effect thereof, (a) the fair value of the property of such
Guarantor is greater than the total amount of liabilities, including contingent liabilities, of
such Guarantor, (b) the present fair salable value of the assets of such Guarantor is not less than
the amount that will be required to pay the probable liability of such Guarantor on its debts as
they become absolute and matured, (c) such Guarantor does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Guarantor’s ability to pay such debts and
liabilities as they mature, (d) such Guarantor is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Guarantor’s property would
constitute an unreasonably small capital, and (e) such Guarantor 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.

     Section 4.2. The representations and warranties set forth in Article IV of the Credit
Agreement are incorporated herein by reference to the extent applicable to the Guarantors, and each
Guarantor represents and warrants to the Agent each such representation and warranty which applies
to such Guarantor as if set forth herein.

     Section 4.3. The covenants set forth in Article V and VI of the Credit Agreement are
incorporated herein by reference to the extent applicable to the Guarantors, and each Guarantor
agrees with the Agent to comply with each such covenant which applies to such Guarantor as if set
forth herein.

     ARTICLE V Miscellaneous.

     Section 5.1. Each Guarantor agrees to pay on demand (a) all reasonable out-of-pocket costs and
expenses of the Agent in connection with the preparation, execution, delivery, administration,
modification, and amendment of this Agreement and the other Credit Documents including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent with respect to
advising the Agent as to its rights and responsibilities under this Agreement, and (b) all
out-of-pocket costs and expenses, if any, of the Agent, the Issuing Bank, and each Beneficiary
(including, without limitation, reasonable counsel fees and expenses of the

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

Agent, the Issuing Bank, and each Beneficiary) in connection with the enforcement (whether
through negotiations, legal proceedings, or otherwise) of this Agreement and the other Credit
Documents. The agreements in this Section shall survive the resignation of the Agent, the
replacement of any Beneficiary, the termination of the Commitments, and the repayment, satisfaction
or discharge of all the other Guaranteed Obligations.

     Section 5.2. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, EACH
GUARANTOR SHALL INDEMNIFY AND HOLD HARMLESS EACH AGENT-RELATED PERSON, EACH BENEFICIARY AND THEIR
RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, AGENTS AND ATTORNEYS-IN-FACT
(COLLECTIVELY THE “INDEMNITEES”) FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
GUARANTEED OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES, AND DISBURSEMENTS (INCLUDING ALL FEES, EXPENSES, AND DISBURSEMENTS OF ANY LAW FIRM
OR OTHER EXTERNAL COUNSEL AND, WITHOUT DUPLICATION, THE ALLOCATED COST OF INTERNAL LEGAL SERVICES
AND ALL EXPENSES AND DISBURSEMENTS OF INTERNAL COUNSEL AND INCLUDING SETTLEMENT COSTS) OF ANY KIND
OR NATURE WHATSOEVER, (EXCLUDING, HOWEVER, THE COSTS AND EXPENSES INCURRED BY THE BENEFICIARIES,
OTHER THAN THE AGENT, IN CONNECTION WITH THE PREPARATION, EXECUTION OR DELIVERY OF THIS AGREEMENT)
WHICH MAY AT ANY TIME BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY SUCH INDEMNITEE IN ANY WAY
RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH (A) THE EXECUTION, DELIVERY, ENFORCEMENT,
PERFORMANCE OR ADMINISTRATION OF ANY CREDIT DOCUMENT OR ANY OTHER AGREEMENT, LETTER, OR INSTRUMENT
DELIVERED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED THEREBY OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED THEREBY, (B) ANY COMMITMENT, ADVANCE, OR LETTER OF CREDIT OR THE USE OR
PROPOSED USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE 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 (C) ANY ACTUAL OR ALLEGED PRESENCE
OR RELEASE OF HAZARDOUS WASTE OR HAZARDOUS SUBSTANCES ON OR FROM ANY PROPERTY CURRENTLY OR FORMERLY
OWNED OR OPERATED BY ANY GUARANTOR OR ANY OF ITS SUBSIDIARIES, OR ANY LIABILITY UNDER ENVIRONMENTAL
LAW RELATED IN ANY WAY TO ANY GUARANTOR OR ANY OF THEIR SUBSIDIARIES, OR (D) 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 THE BORROWER, ANY OTHER
CREDIT PARTY OR ANY THIRD PARTY (INCLUDING ANY INVESTIGATION OF, PREPARATION FOR, OR DEFENSE OF ANY
PENDING OR THREATENED CLAIM, INVESTIGATION, LITIGATION OR PROCEEDING) AND REGARDLESS OF WHETHER ANY
INDEMNITEE IS A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY, THE “INDEMNIFIED
LIABILITIES”), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF
THE COMPARATIVE,

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

CONTRIBUTORY, OR SOLE NEGLIGENCE OF THE INDEMNITEE; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LIABILITIES, OBLIGATIONS,
GUARANTEED OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS (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 CREDIT PARTY AGAINST AN
INDEMNITEE FOR BREACH IN BAD FAITH OF SUCH INDEMNNITEE’S OBLIGATIONS HEREUNDER OR UNDER ANY OTHER
CREDIT DOCUMENT, IF THE BORROWER OR SUCH CREDIT PARTY HAS OBTAINED A FINAL AND NONAPPEALABLE
JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT OF COMPETENT JURISDICTION. NO
INDEMNITEE SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY INFORMATION OR
OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN
CONNECTION WITH THIS AGREEMENT, NOR SHALL ANY INDEMNITEE HAVE ANY LIABILITY FOR ANY INDIRECT OR
CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR ARISING OUT OF ITS
ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE EFFECTIVE DATE). ALL
AMOUNTS DUE UNDER THIS SECTION 5.2 SHALL BE PAYABLE WITHIN TEN BUSINESS DAYS AFTER DEMAND
THEREFOR. THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE RESIGNATION OF THE AGENT, THE
REPLACEMENT OF ANY BENEFICIARY, THE TERMINATION OF THE COMMITMENTS, AND THE REPAYMENT, SATISFACTION
OR DISCHARGE OF ALL THE OTHER OBLIGATIONS AND GUARANTEED OBLIGATIONS. FOR THE AVOIDANCE OF DOUBT,
ANY INDEMNIFICATION RELATING TO TAXES, OTHER THAN TAXES RESULTING FROM ANY NON-TAX CLAIM, SHALL BE
COVERED BY SECTIONS 2.12 AND 2.13 OF THE CREDIT AGREEMENT AND SHALL NOT BE COVERED
BY THIS SECTION 5.2.

     Section 5.3. This Agreement shall be governed by the laws of the State of New York. If any
provision in this Agreement is held to be unenforceable, such provision shall be severed and the
remaining provisions shall remain in full force and effect. All representations, warranties, and
covenants of each Guarantor in this Agreement shall survive the execution of this Agreement and any
other contract or agreement. If a due date for an amount payable is not specified in this
Agreement, the due date shall be the date on which the Agent demands payment therefor. The Agent’s
remedies under this Agreement shall be cumulative, and no delay in enforcing this Agreement shall
act as a waiver of the Agent’s or the Beneficiaries’ rights hereunder. The provisions of this
Agreement may be waived or amended only in a writing signed by the party against whom enforcement
is sought. This Agreement shall bind each Guarantor and its successors and assigns and shall inure
to the benefit of the Agent and its successors and assigns. No Guarantor may assign its rights or
delegate its duties under this Agreement. The Agent may assign its rights and delegate its duties
under this Agreement. This Agreement may be executed in multiple counterparts which together shall
constitute one and the same agreement. Unless otherwise specified, all notices provided for in
this Agreement shall be

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

in writing, delivered to the following addresses or to such other address as shall be
designated by one party in writing to the other parties: if to the Agent: Bank of America, N.A.,
Attn: Ron McKaig, Principal, 700 Louisiana St., 8th Floor, Houston, Texas 77002,
telephone: 713-247-7237, telecopy: 713-247-7286; if to the Guarantor: Stone Energy Offshore,
L.L.C., Attn: Kenneth H. Beer, 625 E. Kaliste Saloom Road, Lafayette, Louisiana 70508, telephone:
337-237-0410, telecopy: 337-521-9880. Notice sent by telecopy shall be deemed to be given and
received when receipt of such transmission is acknowledged, and delivered notice shall be deemed to
be given and received when receipted for by, or actually received by, an authorized officer of the
receiving party.

     Section 5.4. Waiver of Punitive Damages, Jury Trial, Etc.

     (a) SUBMISSION TO JURISDICTION. EACH GUARANTOR 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 CREDIT 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 CREDIT DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE AGENT, ANY BENEFICIARY OR THE ISSUING BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AGAINST ANY GUARANTOR OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

     (b) WAIVER OF VENUE. EACH GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY ANY LEGAL REQUIREMENT, 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 CREDIT DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (a) 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.

     (c) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 5.3. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT
OF ANY

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY ANY LEGAL REQUIREMENT.

     (d) WAIVER OF PUNITIVE DAMAGES, ETC. EACH GUARANTOR HEREBY (i) IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE CREDIT DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED
THEREWITH, ANY “SPECIAL DAMAGES,” AS DEFINED BELOW; (ii) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (iii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
CREDIT DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION. AS USED IN THIS SECTION, “SPECIAL
DAMAGES” INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW
NAMED), BUT DOES NOT INCLUDE ANY PAYMENT OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO
PAY OR DELIVER TO ANY OTHER PARTY HERETO.

     (e) 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 CREDIT
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 CREDIT DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Remainder of page intentionally left blank; signatures follow.]

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

     EXECUTED as of the date first above written.

	 	 	 	 	 
	 	STONE ENERGY OFFSHORE, L.L.C.

Through its sole member,

STONE ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	David H. Welch 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Kenneth H. Beer 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 
	 

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

EXHIBIT D

FORM OF NOTE

			
	$[_______]
	 	[date]

     For value received, the undersigned Stone Energy Corporation, a Delaware corporation
(“Borrower”), hereby promises to pay to [      ] (“Bank”) or
registered assigns the principal amount of [ ] and [ ]/100 Dollars ($[      ]) or, if
less, the aggregate outstanding principal amount of each Advance (as defined in the Credit
Agreement referred to below) made by the Bank to the Borrower, together with accrued but unpaid
interest on the principal amount of each such Advance from the date of such Advance until such
principal amount is paid in full, at such interest rates, and at such times, as are specified in
the Credit Agreement.

     This Note (“Note”) is one of the Notes referred to in, and is entitled to the benefits
of, and is subject to the terms of, the Third Amended and Restated Credit Agreement dated as of
April 26, 2011 (as the same may be modified from time to time, the “Credit Agreement”),
among the Borrower, the banks named therein (“Banks”), and Bank of America, N.A., as
administrative agent for the Banks (“Agent”). Capitalized terms used herein but not
defined herein shall have the meanings specified by the Credit Agreement. The Credit Agreement,
among other things, (a) provides for the making of Advances by the Bank to the Borrower from time
to time in an aggregate outstanding amount not to exceed the amount of this Note, the indebtedness
of the Borrower resulting from each such Advance being evidenced by this Note, and (b) contains
provisions for acceleration of the maturity of this Note upon the happening of certain events
stated in the Credit Agreement and for prepayments of principal prior to the maturity of this Note
upon the terms and conditions specified in the Credit Agreement.

     Both principal and interest are payable in lawful money of the United States of America to the
Agent as specified in the Credit Agreement. The Bank shall record all Advances and payments of
principal made under this Note, but no failure of the Bank to make such recordings shall affect the
Borrower’s repayment obligations under this Note.

     It is contemplated that because of prepayments there may be times when no indebtedness is owed
under this Note. Notwithstanding such prepayments, this Note shall remain valid and shall be in
force as to Advances made pursuant to the Credit Agreement after such prepayments.

     It is the intention of the Bank and the Borrower to conform strictly to any applicable usury
laws. Accordingly, the terms of the Credit Agreement relating to the prevention of usury will be
strictly followed.

     This Note shall be governed by, and construed and enforced in accordance with, the laws of the
State of New York.

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

     EXECUTED as of the date first above written.

	 	 	 	 	 
	 	STONE ENERGY CORPORATION

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

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

EXHIBIT E

FORM
OF

NOTICE OF BORROWING

[date]

Bank of America, N.A., as Agent

901 Main Street

Dallas, Texas 75202-3714

Attention:       Ms. Melissa Lopez

Telephone:     214-209-2031

Telecopy:       214-290-9485

Ladies and Gentlemen:

The undersigned, Stone Energy Corporation, a Delaware corporation (“Borrower”), refers to
the Third Amended and Restated Credit Agreement dated as of April 26, 2011 (as the same may be
modified from time to time, the “Credit Agreement,” the defined terms of which are used in
this Notice of Borrowing unless otherwise defined in this Notice of Borrowing) among the Borrower,
the banks named therein (“Banks”), and Bank of America, N.A., as administrative agent for
the Banks (“Agent”), and hereby gives you irrevocable notice pursuant to Section
2.03(a) of the Credit Agreement that the undersigned hereby requests a Borrowing (the
“Proposed Borrowing”) on the terms set forth below:

Date of Borrowing1      :

Type of Advances2       :

Aggregate
Amount3      :

Interest
Period4             :

The undersigned hereby certifies that the following statements are true on the date hereof, and
will be true on the date of the Proposed Borrowing:

 

			
	1	 	The Date of Borrowing must be a Business
Day. The Borrower must give three Business Days’ advance notice for Proposed
Borrowings comprised of Eurodollar Rate Advances.
	 
	2	 	The Type of Advances comprising the Proposed Borrowing may be
Base Rate Advances or Eurodollar Rate Advances.
	 
	3	 	The aggregate amount of Borrowings must be (a) in a minimum
amount of $500,000 and in multiples of $100,000 with respect to Base Rate
Advances and (b) in a minimum amount of $2,000,000 and in multiples of
$1,000,000 with respect to Borrowings comprised of Eurodollar Rate Advances.
	 
	4	 	The Interest Period applies only to Eurodollar Rate Advances
and may be one, two, three, or six months, or such longer period approved by
Agent and Banks. Insert “N/A” for Base Rate Advances.

[EXHIBIT
E TO CREDIT AGREEMENT]

 

 

     (a) the representations and warranties contained in the Credit Agreement are correct in all
material respects, before and after giving effect to the Proposed Borrowing and the application of
the proceeds therefrom, as though made on the date of the Proposed Borrowing;

     (b) no Default has occurred and remains uncured, nor would result from the Proposed Borrowing
or from the application of the proceeds therefrom; and

     (c) the funding of such Proposed Borrowing and all other Borrowings to be made or Letters of
Credit to be issued on the date of the Proposed Borrowing under the Credit Agreement, shall not (A)
cause the aggregate outstanding amount of Advances plus the Letter of Credit Exposure to exceed the
lesser of (1) the Borrowing Base and (2) the aggregate Commitments, or (B) cause the Letter of
Credit Exposure to exceed $300,000,000.

	 	 	 	 	 
	 	Very truly yours,

STONE ENERGY CORPORATION

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

	cc:  	 	Bank of America, N.A.

Energy Finance Department

700 Louisiana St., 8th Floor

Houston, Texas 77002

Attn: Mr. Ron McKaig

Telephone: 713-247-7237

Telecopy: 713-247-7286

[EXHIBIT C TO CREDIT AGREEMENT]

 

 

EXHIBIT F

FORM
OF

NOTICE OF CONVERSION OR CONTINUATION

[date]

Bank of America, N.A., as Agent

901 Main Street

Dallas, Texas 75202-3714

Attention: Ms. Melissa Lopez

Telephone: 214-209-2031

Telecopy: 214-290-9485

Ladies and Gentlemen:

The undersigned, Stone Energy Corporation, a Delaware corporation (“Borrower”), refers to
the Third Amended and Restated Credit Agreement dated as of April 26, 2011 (as the same may be
modified from time to time, the “Credit Agreement,” the defined terms of which are used in
this Notice of Conversion or Continuation unless otherwise defined in this Notice of Conversion or
Continuation), among the Borrower, the banks named therein (“Banks”), and Bank of America,
N.A., as administrative agent for the Banks (“Agent”), and hereby gives you irrevocable
notice pursuant to Section 2.03(b) of the Credit Agreement that the undersigned hereby
requests a [conversion][continuation] of an outstanding Borrowing into a new Borrowing (the
“Proposed Borrowing”) on the terms set forth below:

	 	 	 	 	 

	 

	 	Outstanding Borrowing	 	 
	 

	 	Date of Borrowing
	 	:
	 

	 	Type of Advance
	 	:
	 

	 	Aggregate Amount
	 	:
	 

	 	Interest Period
	 	:
	 
	 

	 	Proposed Borrowing	 	 
	 

	 	Date of Conversion	 	 
	 

	 	or Continuation1
	 	:
	 

	 	Type of Advance2
	 	:
	 

	 	Aggregate Amount3
	 	:

 

			
	1	 	The Date of Conversion or Continuation
must be a Business Day. The Borrower must give three Business Days’ advance
notice for conversions into or continuations of Borrowings comprised of
Eurodollar Rate Advances.
	 
	2	 	The Type of Advances comprising a Proposed
Borrowing may be Base Rate Advances or Eurodollar Rate Advances.

[EXHIBIT F TO CREDIT AGREEMENT]

 

 

     Interest Period4 :

The undersigned hereby certifies that the following statements are true on the date hereof, and
will be true on the date of the Proposed Borrowing:

     (a) the representations and warranties contained in the Credit Agreement are correct in all
material respects, before and after giving effect to the Proposed Borrowing and the application of
the proceeds therefrom, as though made on the date of the Proposed Borrowing;

     (b) no Default has occurred and remains uncured, nor would result from the Proposed Borrowing;
and

     (c) the funding of such Proposed Borrowing and all other Borrowings to be made or Letters of
Credit to be issued on the date of the Proposed Borrowing under the Credit Agreement, shall not (A)
cause the aggregate outstanding amount of Advances plus the Letter of Credit Exposure to exceed the
lesser of (1) the Borrowing Base and (2) the aggregate Commitments, or (B) cause the Letter of
Credit Exposure to exceed $300,000,000.

	 	 	 	 	 
	 	Very truly yours,

STONE ENERGY CORPORATION

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

 

			
	3	 	The aggregate amount of the Proposed Borrowing[s]
must be (a) in an amount equal to the Outstanding Borrowing and (b) in a
minimum amount of $2,000,000 and in multiples of $1,000,000 in excess thereof
with respect to a Proposed Borrowing comprised of Eurodollar Rate Advances.
	 
	4	 	The Interest Period applies only to Eurodollar Rate
Advances and may be one, two, three, or six months, or such longer period
approved by Agent and Banks. Insert “N/A” for Base Rate Advances.

[EXHIBIT F TO CREDIT AGREEMENT]

 

 

	cc: 	 	 Bank of America, N.A.

Energy Finance Department

700 Louisiana St., 8th Floor

Houston, Texas 77002

Attn: Mr. Ronald McKaig

Telephone: 713-247-7237

Telecopy:   713-247-7286

[EXHIBIT F TO CREDIT AGREEMENT]

 

 

EXHIBIT G

FORM OF

LETTER OF CREDIT APPLICATION

See attached.

[EXHIBIT
H TO CREDIT AGREEMENT]

 

 

EXHIBIT H

FORM OF

SECURITY AGREEMENT

SECOND AMENDED AND RESTATED SECURITY AGREEMENT

Dated as of April 26, 2011

among

STONE ENERGY CORPORATION

and the other Debtors parties hereto

in favor of

BANK OF AMERICA, N.A.,

as Administrative Agent

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

TABLE OF CONTENTS

(CONTINUED)

	 	 	 	 	 

	SECTION 1. DEFINITIONS
	 	 	1	 
	1.1 Defined Terms
	 	 	1	 
	1.2 Interpretation
	 	 	2	 
	1.3 Certain Definitions
	 	 	2	 
	SECTION 2. GRANT OF SECURITY INTEREST
	 	 	6	 
	2.1 Grant of Security Interest
	 	 	6	 
	2.2 Fraudulent Transfer Laws
	 	 	7	 
	2.3 Debtors Remain Liable
	 	 	7	 
	SECTION 3. REPRESENTATIONS AND WARRANTIES
	 	 	7	 
	3.1 No Other Liens
	 	 	8	 
	3.2 Perfected First-Priority Liens
	 	 	8	 
	3.3 Debtor’s Legal Name; Jurisdiction of Organization; Chief Executive Office
	 	 	8	 
	3.4 Certain Collateral
	 	 	8	 
	3.5 Investment Property; No Consents or Approvals Required
	 	 	9	 
	SECTION 4. COVENANTS AND AGREEMENTS
	 	 	9	 
	4.1 Maintenance of Insurance
	 	 	9	 
	4.2 Maintenance of Perfected Security Interest; Further Documentation;
Filing Authorization; Further Assurances; Power of Attorney
	 	 	9	 
	4.3 Changes in Name, etc
	 	 	11	 
	4.4 Pledged Securities
	 	 	11	 
	4.5 Commercial Tort Claims
	 	 	13	 
	SECTION 5. LIMITATION ON PERFECTION OF SECURITY INTEREST
	 	 	13	 
	SECTION 6. REMEDIAL PROVISIONS
	 	 	13	 
	6.1 General Interim Remedies
	 	 	13	 
	6.2 Receivables, Chattel Paper, Instruments and Payment Intangibles
	 	 	14	 
	6.3 Contracts
	 	 	14	 
	6.4 Pledged Securities
	 	 	15	 
	6.5 Foreclosure
	 	 	16	 
	6.6 Application of Proceeds
	 	 	16	 
	6.7 Waiver of Certain Rights
	 	 	16	 
	6.8 Remedies Cumulative
	 	 	17	 
	6.9 Reinstatement
	 	 	17	 

-iii-

 

TABLE OF CONTENTS

(CONTINUED)

	 	 	 	 	 

	SECTION 7. MISCELLANEOUS
	 	 	17	 
	7.1 Amendments
	 	 	17	 
	7.2 Notices
	 	 	17	 
	7.3 No Waiver by Course of Conduct; Cumulative Remedies; No Duty
	 	 	17	 
	7.4 [Reserved]
	 	 	18	 
	7.5 Successors and Assigns
	 	 	18	 
	7.6 Set-Off
	 	 	18	 
	7.7 Counterparts
	 	 	18	 
	7.8 Severability
	 	 	18	 
	7.9 Section Headings
	 	 	18	 
	7.10 Integration; Direct Conflict
	 	 	18	 
	7.11 GOVERNING LAW
	 	 	19	 
	7.12 Additional Debtors
	 	 	19	 
	7.13 Termination; Releases
	 	 	19	 
	7.14 Amendment and Restatement; Confirmation of Liens
	 	 	19	 

	 	 	 	 	 

	SCHEDULES
	 	 	 	 
	Schedule 3.3

	 	-
	 	Organization, Location, and Filing Information
	Schedule 3.4

	 	-
	 	Certain Collateral
	Schedule 3.5(a)

	 	-
	 	Pledged Securities
	Schedule 7.2

	 	-
	 	Debtors’ Addresses for Notice
	 
	 	 	 	 
	ANNEXES
	 	 	 	 

	 	 	 	 	 

	Annex I

	 	-
	 	Security Agreement Supplement

-iv-

 

SECOND AMENDED AND RESTATED SECURITY AGREEMENT

     This SECOND AMENDED AND RESTATED SECURITY AGREEMENT dated as of April 26, 2010 (this
“Agreement”), is among STONE ENERGY CORPORATION, a Delaware corporation (the
“Borrower”), any subsidiary of Borrower party hereto from time to time (the
“Subsidiaries”) (the Borrower and the Subsidiaries collectively being the
“Debtors”) and BANK OF AMERICA, N.A., in its capacity as administrative agent (in such
capacity, the “Agent”) for the benefit of the Secured Parties (as defined below).

INTRODUCTION

     A. Reference is made to the Second Amended and Restated Credit Agreement dated as of August
28, 2008 (as heretofore amended or otherwise modified, the “Existing Credit Agreement”)
among the Borrower, certain financial institutions which are or may become parties thereto, and the
Agent.

     B. The Existing Credit Agreement is being amended and restated in its entirety pursuant to
that certain Third Amended and Restated Credit Agreement dated as of April 26, 2011 (as amended,
restated, supplemented and otherwise modified from time to time, the “Credit Agreement”)
among the Borrower, certain financial institutions which are or may become parties thereto, and the
Agent.

     C. In connection with the Existing Credit Agreement, Borrower has previously executed and
delivered the Amended and Restated Security Agreement dated as of August 28, 2008 (the
“Existing Security Agreement”) between the Borrower and the Agent.

     D. It is a condition precedent to the effectiveness of the Credit Agreement and the making of
Advances thereunder that the Debtors shall have entered into this Agreement, which shall amend and
restate the Existing Security Agreement, in order to secure the Borrower’s obligations under the
Credit Agreement, the obligations of the Subsidiaries under any Guaranty, and all other Secured
Obligations (as defined below).

     In consideration of the credit and other direct and indirect benefits expected to be received
in connection with the Credit Agreement, including as a result of the shared identity of interest
as members of a combined group of companies, and for other good, valuable, and reasonably
equivalent consideration, each Debtor jointly and severally agrees with the Agent as follows:

SECTION 1.

DEFINITIONS

     1.1 Defined Terms. Terms defined above and elsewhere in this Agreement shall have
their specified meanings. Capitalized terms used herein but not defined herein shall have the
meanings specified by the Credit Agreement. Unless otherwise defined herein or in the Credit
Agreement, all terms used herein and defined in the UCC shall have the same definitions herein as
specified therein.

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

     1.2 Interpretation. Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Debtor, shall refer to such Debtor’s Collateral or the
relevant part thereof. Each Debtor agrees to the terms and provisions of Section 1.2 and
1.3 of the Credit Agreement and such terms and provisions are incorporated herein for all
purposes.

     1.3 Certain Definitions. The following terms shall have the following meanings:

     “Chattel Paper” means all of each Debtor’s present and future chattel paper, including
electronic chattel paper.

     “Collateral” has the meaning specified in Section 2.1.

     “Collateral Account” means any deposit account with the Agent which is designated,
maintained, and under the control of the Agent in which the Agent has a security interest, and
which has been established pursuant to the provisions of this Agreement or another Credit Document
for the purposes described in this Agreement, including collecting, holding, disbursing, or
applying certain funds, all in accordance with this Agreement.

     “Commercial Tort Claims” means all commercial tort claims of any Debtor, including
those specified on Schedule 3.4.

     “Contracts” means all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) to which any Debtor now or hereafter is
bound, or a party, beneficiary or assignee, in any event, including all such contracts,
undertakings, or agreements in or under which any Debtor may now or hereafter have any right, title
or interest, including any agreement relating to the terms of payment or the terms of performance
of any Receivable.

     “Copyrights” means all of the following now owned or hereafter acquired by any Debtor:
(a) all copyright rights in any work subject to the copyright laws of the United States or any
other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States or any other country and
all extensions and renewals thereof, including registrations, recordings, supplemental
registrations and pending applications for registration in the United States Copyright Office.

     “Copyright Licenses” means any written agreement naming any Debtor as licensor or
licensee, granting any right under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

     “Deposit Accounts” means all deposit accounts, commodity accounts or securities
accounts now or hereafter held in the name of any Debtor.

     “Document” means any document, including, without limitation, a bill of lading, dock
warrant, dock receipt, warehouse receipt or order for the delivery of goods, and also any other
document which in the regular course of business or financing is treated as adequately evidencing
that the person in possession of it is entitled to receive, hold and dispose of the document and
the goods it covers.

[EXHIBIT H TO CREDIT AGREEMENT]

-2-

 

     “Equipment” means all of each Debtor’s present or future owned or leased fixtures and
equipment wherever located, including drilling platforms and rigs and remotely operated vehicles,
trenchers, and other equipment used by any Debtor for the provision of marine construction
services, well operations services, oil and gas production services, or other services, vehicles,
motor vehicles, rolling stock, vessels, aircraft, and any manuals, instructions, blueprints,
computer software (including software that is imbedded in and part of the equipment) and similar
items which relate to the above, together with all parts thereof and all accessions and additions
thereto.

     “Equity” means shares of capital stock or a partnership, profits, capital or member
interest, or options, warrants or any other right to substitute for or otherwise acquire the
capital stock or a partnership, profits, capital or member interest of any Debtor.

     “Fixtures” means any fixture or fixtures now or hereafter owned or leased by any of
the Debtors, or in which any of the Debtors holds or acquires any other right, title or interest,
constituting “fixtures” under the UCC.

     “General Intangibles” means all general intangibles now owned or hereafter acquired by
any Debtor, including all right, title and interest that such Debtor may now or hereafter have in
or under any Contract, all payment intangibles, customer lists, Licenses, Copyrights, Trademarks,
Patents, and all applications therefor and reissues, extensions or renewals thereof, rights in
Intellectual Property, interests in partnerships, joint ventures and other business associations,
permits, trade secrets, software, data bases, data, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or Trademark License), all
rights and claims in or under insurance policies (including insurance for fire, damage, loss and
casualty, whether covering personal property, real property, tangible rights and intangible rights,
all liability, life, key man and business interruption insurance, and all unearned premiums),
uncertificated securities, rights to receive dividends, distributions, cash, Instruments and other
property in respect of or in exchange for pledged stock and Investment Property, rights or
indemnification.

     “Instruments” means all of each Debtor’s instruments, including all promissory notes
and other evidences of indebtedness, including intercompany instruments, other than instruments
that constitute, or are a part of a group of writings that constitute, Chattel Paper.

     “Intellectual Property” means all intellectual and similar property of any Debtor of
every kind and nature now owned or hereafter acquired by any Debtor, including inventions, designs,
Patents, Patent Licenses, Trademarks, Trademark Licenses, Copyrights, Copyright Licenses, domain
names and domain name registrations, trade secrets, confidential or proprietary technical and
business information, know-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and franchises, licenses
for any of the foregoing and all license rights, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the foregoing.

     “Investment Property” means all investment property now owned or hereafter acquired by
any Debtor, wherever located, including (i) all securities, whether certificated or uncertificated,
including stocks, bonds, interests in limited liability companies, partnership interests,
treasuries,

[EXHIBIT H TO CREDIT AGREEMENT]

-3-

 

certificates of deposit, and mutual fund shares; (ii) all securities entitlements of any
Debtor, including the rights of any Debtor to any securities account and the financial assets held
by a securities intermediary in such securities account and any free credit balance or other money
owing by any securities intermediary with respect to that account; (iii) all securities accounts of
any Debtor; (iv) all commodity contracts of any Debtor; and (v) all commodity accounts held by any
Debtor.

     “Inventory” means all of each Debtor’s present and future inventory, wherever located,
including inventory, merchandise, goods and other personal property that are held by or on behalf
of any Debtor for sale or lease or are furnished or are to be furnished under a contract of
service, or that constitute raw materials, work in process, finished goods, returned goods, or
materials or supplies of any kind, nature or description used or consumed or to be used or consumed
in such Debtor’s business or in the processing, production, packaging, promotion, delivery or
shipping of the same, including all supplies, and embedded software. “Inventory” shall also
include inventory in joint production with another person, inventory in which any Debtor has an
interest as consignor, and inventory that is returned to or stopped in transit by any Debtor, and
all combinations and products thereof.

     “Letter-of-Credit Rights” means all letter-of-credit rights now owned or hereafter
acquired by any Debtor, including rights to payment or performance under a letter of credit,
whether or not such Debtor, as beneficiary, has demanded or is entitled to demand payment or
performance.

     “Licenses” means any Patent License, Trademark License, Copyright License or other
license or sublicense to which any Debtor is a party, including any franchises, permits,
certificates, licenses, authorizations and the like and any other requirements of any government or
any commission, board, court, agency, instrumentality or political subdivision thereof.

     “Liquid Assets” means all cash and cash equivalents at any time held by any of the
Debtors, including all amounts from time to time held in any checking, savings, deposit or other
account of any of the Debtors, all monies, proceeds or sums due or to become due therefrom or
thereon and all documents (including, but not limited to passbooks, certificates and receipts)
evidencing all funds and investments held in such accounts.

     “Patents” means all of the following now owned or hereafter acquired by any Debtor:
(a) all letters patent of the United States or any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or any other country,
including registrations, recordings and pending applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any State thereof, or any
other country, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.

     “Patent License” means all agreements, whether written or oral, providing for the
grant by or to any Debtor of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent.

[EXHIBIT H TO CREDIT AGREEMENT]

-4-

 

     “Pledged Securities” means, with respect to each Debtor, (a) all Equity held by such
Debtor in any corporations or other entities (including, without limitation, those corporations or
other entities described in Schedule 3.5 that are directly held by such Debtor), together
with all warrants to purchase, all depositary shares, and all other rights of such Debtor in
respect of such Equity, (b) all certificates, instruments or other documents evidencing such Equity
and registered or held in the name of, or otherwise in the possession of, such Debtor, and (c) all
present and future payments, dividend distributions, instruments, compensation, property, assets,
interests and rights in connection with or related to the Equity described in clause (a) above, and
all monies due or to become due and payable to such Debtor in connection with or related to such
Equity or otherwise paid, issued or distributed in respect of or in exchange therefor (including,
without limitation, all proceeds of dissolution or liquidation).

     “Proceeds” means all of each Debtor’s present and future (a) proceeds of the
Collateral, whether arising from the collection, sale, lease, exchange, assignment, licensing, or
other disposition of the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable from time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any
person acting under authority from a Governmental Authority), (c) claims against third parties for
impairment, loss, damage, or impairment of the value of such Collateral, and (d) any and all
proceeds of, and all claims for, any insurance, indemnity, warranty or guaranty payable from time
to time with respect to any of the Collateral, including any credit insurance with respect to
Receivables, in each case whether represented as money, deposit accounts, accounts, general
intangibles, securities, instruments, documents, chattel paper, inventory, equipment, fixtures, or
goods.

     “Receivables” means all of each Debtor’s present and future accounts, accounts from
governmental agencies, instruments, and general intangibles, including those arising from the
provision of services to the customers of any Debtor, and rights to payment under all Contracts,
income tax refunds, and other rights to the payment of money, together with all of the right, title
and interest of any of the Debtors in and to (a) all security pledged, assigned, hypothecated or
granted to or held by any of the Debtors to secure the foregoing, (b) all of any of the Debtors’
right, title and interest in and to any goods or services, the sale of which gave rise thereto, (c)
all guarantees, endorsements and indemnifications on, or of, any of the foregoing, (d) all powers
of attorney granted to any of the Debtors for the execution of any evidence of indebtedness or
security or other writing in connection therewith, (e) all credit information, reports and
memoranda relating thereto, and (f) all other writings related in any way to the foregoing.

     “Records” means all of each Debtor’s present and future books, accounting records,
files, computer files, computer programs, correspondence, credit files, records, ledger cards,
invoices, and other records primarily related to any other items of Collateral, including without
limitation all similar information stored on a magnetic medium or other similar storage device and
other papers and documents in the possession or under the control of any of the Debtors or any
computer bureau from time to time acting for any of the Debtors.

     “Secured Obligations” means (a) the Obligations and (b) any increases, extensions,
renewals, replacements, and rearrangements of the foregoing obligations under any amendments,

[EXHIBIT H TO CREDIT AGREEMENT]

-5-

 

supplements, and other modifications of the agreements creating the foregoing obligations, in
each case, whether direct or indirect, absolute or contingent.

     “Secured Parties” means the Banks, the holders of any Secured Obligations arising
under Specified Swap Contracts or Specified Cash Management Agreements, the Issuing Bank, and the
Agent.

     “State of Organization” means the jurisdiction of organization of each of the Debtors
as listed on Schedule 3.3, as the same may be changed in accordance with Section
4.4.

     “Supporting Obligations” means all supporting obligations, including letters of credit
and guaranties issued in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.

     “Trademarks” means all of the following now owned or hereafter acquired by any Debtor:
all trademarks, service marks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications filed in connection therewith, including
registrations and registration applications in the United States Patent and Trademark Office, any
State of the United States or any similar offices in any other country or any political subdivision
thereof, and all extensions or renewals thereof.

     “Trademark License” means any agreement, whether written or oral, providing for the
grant by or to any Debtor of any right to use any Trademark.

     “UCC” means the Uniform Commercial Code as in effect on the date hereof in the State
of New York, as amended from time to time, and any successor statute; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the perfection or priority of
the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than New York, the term “UCC” shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions related to such provisions.

SECTION 2.

GRANT OF SECURITY INTEREST

     2.1 Grant of Security Interest. Each Debtor hereby grants to the Agent, for the
benefit of the Secured Parties, a security interest in all of such Debtor’s right, title, and
interest in and to the following property (the “Collateral”) to secure the payment and
performance of the Secured Obligations: (a) all Chattel Paper, all Collateral Accounts, all
Commercial Tort Claims, all Contracts, all Deposit Accounts, all Documents, all Equipment, all
Fixtures, all General Intangibles, all Instruments, all Intellectual Property, all Inventory, all
Investment Property (including without limitation the Pledged Securities), all Letter-of-Credit
Rights, all Liquid Assets, all Receivables, all Records, and all Supporting Obligations, (b) any
and all additions, accessions and improvements to, all substitutions and replacements for and all
products of or derived from the foregoing, and (c) all Proceeds of the foregoing.

[EXHIBIT H TO CREDIT AGREEMENT]

-6-

 

To the extent that the Collateral is not subject to the UCC, each Debtor collaterally assigns all
of such Debtor’s right, title, and interest in and to such Collateral to the Agent for the benefit
of the Secured Parties to secure the payment and performance of the Secured Obligations to the full
extent that such a collateral assignment is possible under the relevant law.

Notwithstanding anything to the contrary in this Agreement, the term “Collateral” shall not include
(i) any lease, license, contract, property right or agreement (or any of its rights or interests
thereunder) if and to the extent that the grant of the security interest shall, after giving effect
to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) or
any other applicable law, constitute or result in (A) the abandonment, invalidation or
unenforceability of any material right, title or interest of the applicable Debtor therein or (B) a
breach or termination pursuant to the terms of, or a default under, any such lease license,
contract, property rights or agreement; provided, however, that the security interest shall attach
immediately at any such time as the restriction resulting in abandonment, invalidation or
unenforceability or breach or termination shall be removed or become invalid or any condition
thereto (including any consent) shall be satisfied; (ii) once paid, any amounts constituting the
payment of a dividend or the repurchase or redemption of the shares of the Borrower’s common stock,
in each case to the extent such dividend, repurchase or redemption is permitted under Section
6.5 of the Credit Agreement; (iii) Realty Collateral (as such term is defined in the
Mortgages); and (iv) assets subject to a Lien securing Capital Leases or purchase money debt
obligations, in each case permitted under Section 6.1(c) and 6.2(c) of the Credit
Agreement, if the contract or other agreement in which such Lien is granted prohibits the creation
of any other Lien on such assets (other than to the extent that any such prohibition would be
rendered ineffective pursuant to the UCC or any other applicable Legal Requirement), provided that
such asset (x) will be excluded from the Collateral only to the extent and for so long as the
consequences specified in this clause (iv) will result and (y) will cease to be excluded from the
Collateral and will become subject to the Lien granted hereunder, immediately and automatically, at
such time as such consequences will no longer result.

     2.2 Fraudulent Transfer Laws. Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Debtor under this Agreement shall be limited to the extent
set forth in Section 3.1 of the Guaranty to which such Debtor is a party.

     2.3 Debtors Remain Liable. Anything herein to the contrary notwithstanding: (a) each
Debtor shall remain liable under the Contracts included in the Collateral to the extent set forth
therein to perform such Debtor’s obligations thereunder to the same extent as if this Agreement had
not been executed; (b) the exercise by the Agent of any rights hereunder shall not release any
Debtor from any obligations under the Contracts included in the Collateral; and (c) the Agent shall
not have any obligation under the Contracts included in the Collateral by reason of this Agreement,
nor shall the Agent be obligated to perform or fulfill any of the obligations of any Debtor
thereunder, including any obligation to make any inquiry as to the nature or sufficiency of any
payment any Debtor may be entitled to receive thereunder, to present or file any claim, or to take
any action to collect or enforce any claim for payment thereunder.

[EXHIBIT H TO CREDIT AGREEMENT]

-7-

 

SECTION 3.

REPRESENTATIONS AND WARRANTIES

To induce the Banks to make Advances to the Borrower and to issue Letters of Credit for the account
of the Borrower under the Credit Agreement, each Debtor hereby represents and warrants to the
Agent, for the benefit of the Secured Parties, that:

     3.1 No Other Liens. Each Debtor owns each item of the Collateral free and clear of
any and all Liens or claims of others except for Permitted Liens. 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 (i) such as have been filed in favor of the Agent, for the ratable benefit of
the Secured Parties, pursuant to this Agreement or (ii) such as have been filed with respect to
Permitted Liens.

     3.2 Perfected First-Priority Liens. To the extent that the filing of a UCC financing
statement or fixture filing, or the “control” by Agent of a certificated security or Deposit
Account, can be effective to perfect a security interest in the Collateral under the UCC, the
security interests granted pursuant to this Agreement (a) will, upon completion of the filing of
UCC financing statements describing the Collateral in the offices located in the jurisdictions
listed on Schedule 3.3, the filing of UCC fixture filings describing the Fixture Collateral
(as defined in the Mortgages) in the mortgage records of any county or parish where such Fixture
Collateral is located, the obtaining of “control” by Agent in respect of Deposit Accounts, and the
taking of all applicable actions in respect of perfection contemplated by Section 4.4 in
respect of Collateral, constitute valid perfected security interests in the Collateral in favor of
the Agent, for the benefit of the Secured Parties, as collateral security for the Secured
Obligations, enforceable in accordance with the terms hereof and (b) are prior to all other Liens
on the Collateral except for Permitted Liens.

     3.3 Debtor’s Legal Name; Jurisdiction of Organization; Chief Executive Office. Each
Debtor’s exact legal name is set forth on the signature page hereof, and from and after an
amendment or modification thereto, on a written notification delivered to the Agent pursuant to
Section 4.4. Except as set forth in Schedule 3.3, such Debtor has not conducted business
under any name other than its current name during the last five years prior to the date of this
Agreement. On the date hereof, such Debtor’s jurisdiction of organization, type of organization,
identification number from the jurisdiction of organization (if any), and the location of such
Debtor’s chief executive office or sole place of business or principal residence, as the case may
be, are specified on Schedule 3.3.

     3.4 Certain Collateral. Except as set forth on Schedule 3.4,

          (a) none of the Collateral constitutes, or is the Proceeds of, farm products and none of the
Collateral has been purchased for, or will be used by any Debtor primarily for personal, family or
household purposes;

          (b) such Debtor holds no Commercial Tort Claims with a value in excess of $2,500,000;

          (c) such Debtor holds no interest in, title to or power to transfer, any material Patents,
material Trademarks, or material Copyrights;

[EXHIBIT H TO CREDIT AGREEMENT]

-8-

 

          (d) such Debtor holds no interest in, title to or power to transfer any material Intellectual
Property that is registered or for which an application has been filed in the United States Patent
and Trademark Office or the United States Copyright Office;

          (e) such Debtor owns no (i) certificated vehicles with an aggregate value greater than
$500,000 or (ii) vessels, railcars, or aircraft, and Schedule 3.4 sets forth the fair
market value of such certificated vehicles, vessels, railcars, or aircraft.

     3.5 Investment Property; No Consents or Approvals Required.

          (a) Each Debtor is the legal and beneficial owner of the Pledged Securities as set forth on
Schedule 3.5(a). The Pledged Securities have been duly authorized, validly issued and are
fully paid and non-assessable and are not subject to any limitations to purchase or similar rights
by any person, and none of the Pledged Securities constitutes margin stock (within the meaning of
Regulation U issued by the Federal Reserve Board). Except as set forth on Schedule 3.5(a),
the Pledged Securities constitute all of the issued and outstanding Equity of each of the
respective issuers thereof and no such issuer has any obligation to issue any additional Equity or
rights or options thereto.

          (b) Except (x) as may be required in connection with any disposition of any portion of the
Pledged Securities by laws affecting the offering and sale of securities generally, and (y) the
filing of UCC financing statements and other actions contemplated by Section 3.2, no
consent of any Person and no license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any Governmental Authority is required in
connection with (i) the execution, delivery, performance, validity or enforceability of this
Agreement, (ii) the perfection or maintenance of the security interest created hereby (including
the first-priority nature thereof), or (iii) the exercise by the Agent of the rights provided for
in this Agreement.

          (c) Such Debtor is the record and beneficial owner of, and has good title to the Investment
Property pledged by it hereunder, free of any and all Liens or options in favor of, or claims of,
any other Person, except the security interest created by this Agreement and other Permitted Liens.

SECTION 4.

COVENANTS AND AGREEMENTS

Each Debtor covenants and agrees with the Agent and the Secured Parties that, from and after the
date of this Agreement until this Agreement terminates in accordance with Section 7.13(a):

     4.1 Maintenance of Insurance. Such Debtor will comply with the provisions of the
Credit Agreement governing the maintenance of insurance for any of its assets constituting
Collateral.

     4.2 Maintenance of Perfected Security Interest; Further Documentation; Filing
Authorization; Further Assurances; Power of Attorney.

[EXHIBIT H TO CREDIT AGREEMENT]

-9-

 

          (a) Subject to Section 5, such Debtor shall maintain the security interest created by
this Agreement in the Collateral as a perfected first-priority security interest subject only to
Permitted Liens and shall defend such security interest against the claims and demands of all
Persons whomsoever other than Persons holding such Permitted Liens.

          (b) Such Debtor will furnish to the Agent from time to time statements and schedules further
identifying and describing the assets and property of such Debtor and such other reports in
connection with the Collateral as the Agent may reasonably request, all in reasonable detail.

          (c) Subject in each case to Section 5, each Debtor further agrees to take any other
action reasonably requested by the Agent to insure the attachment, perfection and priority of, and
the ability of the Agent to enforce, the security interest in any and all of the Collateral
including, without limitation, (i) executing, delivering and, where appropriate, filing financing
statements and amendments relating thereto under the UCC, to the extent, if any, that any Debtor’s
signature thereon is required therefor; and (ii) complying with any provision of any statute, law,
regulation or treaty of the United States or any other country, including the UCC of any applicable
jurisdictions, as to any Collateral if compliance with such provision is a condition to the
attachment, perfection or priority of, or the ability of the Agent to enforce, the security
interest in such Collateral.

          (d) Each Debtor hereby irrevocably authorizes the Agent at any time and from time to time to
file in any applicable jurisdiction in which the Uniform Commercial Code has been adopted and is in
effect any initial financing statements and amendments thereto that (a) indicate the Collateral (i)
as all assets of each Debtor or words of similar effect, or (ii) as being of an equal or lesser
scope or with greater detail, and (b) contain any other information required by the UCC for the
sufficiency or filing office acceptance of any initial financing statement or amendment. Each
Debtor agrees to furnish any such information to the Agent promptly upon request. Each Debtor also
ratifies its authorization for the Agent to have filed in any Uniform Commercial Code jurisdiction
any like initial financing statements or amendments thereto if filed prior to the date hereof.

          (e) During the existence of an Event of Default,

          (i) At the Agent’s request, each Debtor shall take any actions reasonably requested by
the Agent with respect to such Event of Default, including diligently endeavoring to cure
any material defect existing or claimed, and taking all reasonably necessary and desirable
steps for the defense of any legal proceedings, including the employment of counsel, the
prosecution or defense of litigation, and the release or discharge of all adverse claims;

          (ii) The Agent, whether or not named as a party to any legal proceedings, is authorized
to take any additional steps as the Agent deems necessary or desirable for the defense of
any such legal proceedings or the protection of the validity or priority of this Agreement
and the security interests, collateral assignments, and other Liens created hereunder,
including the employment of independent counsel, the prosecution or defense of litigation,
the compromise or discharge of any adverse claims

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made with respect to any Collateral and the payment or removal of prior liens or
security interests, and the reasonable expenses of the Agent in taking such action shall be
paid by the Debtors; and

          (iii) Each Debtor agrees that, if such Debtor fails to perform under this Agreement or
any other Credit Document to which such Debtor is a party, the Agent may, but shall not be
obligated to, perform such Debtor’s obligations under this Agreement or such other Credit
Document, and any reasonable expenses incurred by the Agent in performing such Debtor’s
obligations shall be paid by such Debtor. Any such performance by the Agent may be made by
the Agent in reasonable reliance on any statement, invoice, or claim, without inquiry into
the validity or accuracy thereof. The amount and nature of any expense of the Agent
hereunder shall be conclusively established by a certificate of any officer of the Agent
absent manifest error, and such amount shall be included in the Secured Obligations.

          (f) Each Debtor irrevocably appoints the Agent as such Debtor’s attorney in fact, with full
authority to act during the existence of an Event of Default, for such Debtor and in the name of
such Debtor, to take any action and execute any agreement which the Agent deems necessary or
advisable to accomplish the purposes of this Agreement, including the actions that Agent is
expressly authorized to take pursuant to this Agreement (including pursuant to paragraph (e)
above), and instituting proceedings the Agent deems necessary or desirable to enforce the rights of
the Agent with respect to this Agreement.

     4.3 Changes in Name, etc. Such Debtor will not, except upon 30 days’ prior written
notice to the Agent or such lesser period to which the Agent may agree in writing, (a) change its
type of organization, jurisdiction of organization or other legal structure from that referred to
in Section 3.3, (b) change its organizational number if it has one, or (c) change its name.
Promptly following such notice to the Agent and before taking any action described in clause (a),
(b), or (c) above, such Debtor shall deliver to the Agent all additional approved or executed
financing statements and other executed documents reasonably requested by the Agent to maintain the
validity, perfection, and priority of the security interests provided for or required herein.

     4.4 Pledged Securities. With respect to Pledged Securities:

          (a) If any Debtor shall at any time own or acquire any Pledged Securities which are
certificated securities, whether as a stock split, stock dividend, or other distribution with
respect to Pledged Securities, or otherwise, such Debtor shall promptly, and in any event within
ten (10) Business Days after receipt thereof, deliver the same to the Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Agent may from time to time
specify. If any Pledged Securities now owned or hereafter acquired by any Debtor are
uncertificated securities and are issued to such Debtor or its nominee directly by the issuer
thereof, such Debtor shall immediately notify the Agent thereof, and shall take any actions
requested by the Agent to enable the Agent to obtain “control” (within the meaning of Section 8-106
of the UCC) with respect thereto.

          (b) So long as no Event of Default has occurred and is continuing, each Debtor shall be
entitled:

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          (i) to exercise, in a manner not inconsistent with the terms hereof, the voting power
with respect to the Pledged Securities of such Debtor, and for that purpose the Agent shall
(if any Pledged Securities shall be registered in the name of the Agent or its nominee)
execute or cause to be executed from time to time, at the expense of the Borrower, such
proxies or other instruments in favor of such Debtor or its nominee, in such form and for
such purposes as shall be reasonably requested by such Debtor, to enable it to exercise such
voting power with respect to the Pledged Securities; and

          (ii) except as otherwise provided herein or in the Credit Agreement, to receive and
retain for its own account any and all payments, proceeds, dividends, distributions,
property, assets, or rights to the extent such are permitted pursuant to the terms of the
Credit Agreement.

          (c) Upon the occurrence and during the continuation of any Event of Default, all rights of
each Debtor to exercise or refrain from exercising the voting and other consensual rights that it
would otherwise be entitled to exercise pursuant to Section 4.4(b) and to receive the
payments, proceeds, dividends, distributions, property, assets, or rights that the Debtor would
otherwise be authorized to receive and retain pursuant to Section 4.4(b) shall cease, and
thereupon the Agent shall be entitled to exercise all voting power with respect to the Pledged
Securities and to receive and retain, as Collateral hereunder, any and all payments, proceeds,
dividends, distributions, property, assets, or rights at any time declared or paid upon any of the
Pledged Securities during such an Event of Default and otherwise to act with respect to the Pledged
Securities to the same extent as the applicable Debtor would have been, absent application of this
clause (c).

          (d) All payments, proceeds, dividends, distributions, property, assets, instruments or rights
that are received by each Debtor contrary to the provisions of this Section 4.4 shall be
received and held in trust by such Debtor for the benefit of the Agent, shall be segregated by each
Debtor from other funds of such Debtor and shall be forthwith paid over to the Agent as Pledged
Securities in the same form as so received (with any necessary endorsement).

          (e) If such Debtor is an issuer of Pledged Securities, such Debtor agrees that (i) it will be
bound by the terms of this Agreement relating to the Pledged Securities issued by it and will
comply with such terms insofar as such terms are applicable to it and (ii) it will comply with
instructions received by it pursuant to the terms of Section 4.4(f) with respect to the
Pledged Securities issued by it.

          (f) Each Debtor hereby authorizes and instructs each issuer of any Pledged Securities pledged
by such Debtor hereunder to (i) comply with any instruction received by it from the Agent in
writing that (x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or further instructions
from such Debtor, and each Debtor agrees that each such issuer shall be fully protected in so
complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Pledged Securities directly to the Agent.

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     4.5 Commercial Tort Claims. If any Debtor shall at any time hold or acquire a
Commercial Tort Claim with a value in excess of $2,500,000, such Debtor shall promptly notify the
Agent in a writing signed by such Debtor of the brief details thereof and grant to the Agent in
such writing a security interest therein and in the proceeds thereof, all upon the terms of this
Security Agreement, with such writing to be in form and substance satisfactory to the Agent.
Notwithstanding the foregoing, any such security interest in Commercial Tort Claims shall, prior to
the occurrence (and after the waiver or cure) of an Event of Default (and during the continuation
of an Event of Default unless the Agent has demanded the attachment of such security interest
thereto), not be required to attach to the extent the value of any such Commercial Tort Claim does
not exceed $2,500,000.

SECTION 5.

LIMITATION ON PERFECTION OF SECURITY INTEREST

Notwithstanding anything to the contrary contained above, the perfection of the security interest
granted in Section 2 above (except with respect to Deposit Accounts, Letter of Credit
Rights and certificated Pledged Securities) will, prior to the occurrence (and after the waiver or
cure) of an Event of Default (and during the continuation of an Event of Default unless the Agent
has required that further actions are taken with respect to the perfection thereof), be effected
solely by filing an appropriate financing statement under the applicable Uniform Commercial Code.
The perfection of the security interest granted in Section 2 above in certificated Pledged
Securities will be effected by filing an appropriate financing statement under the applicable
Uniform Commercial Code and by possession by the Agent of the certificates representing such
Pledged Securities, accompanied by such instruments of transfer or assignment duly executed in
blank as the Agent may from time to time specify.

SECTION 6.

REMEDIAL PROVISIONS

During the existence of an Event of Default, the Agent may, at the Agent’s option, exercise one or
more of the remedies specified elsewhere in this Agreement or the following remedies:

     6.1 General Interim Remedies. During the existence of an Event of Default, the Agent
may exercise one or more of the following remedies:

          (a) To the extent permitted by law, the Agent may exercise all the rights and remedies of a
secured party under the UCC.

          (b) The Agent may prosecute actions in equity or at law for the specific performance of any
covenant or agreement herein contained or in aid of the execution of any power herein granted or
for the enforcement of any other appropriate legal or equitable remedy.

          (c) The Agent may require any Debtor to promptly assemble any tangible Collateral of such
Debtor and make it available to the Agent at a place to be designated by the Agent. The Agent may
occupy any premises owned or leased by any Debtor where the Collateral is assembled for a
reasonable period in order to effectuate the Agent’s rights and

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remedies hereunder or under law, without obligation to any Debtor with respect to such
occupation.

     6.2 Receivables, Chattel Paper, Instruments and Payment Intangibles. During the
existence of an Event of Default, the Agent may establish one or more Collateral Accounts for the
purpose of collecting the payments due to the Debtors under any Contracts or otherwise with respect
to the Receivables, Chattel Paper, Instruments and/or payment intangibles constituting Collateral
and holding the proceeds thereof, and may, or may direct the Debtors to, instruct all makers and/or
all obligors with respect thereto to make all payments with respect to such Collateral directly to
the Agent for deposit into the Collateral Accounts designated by the Agent. After such direction
to the Debtors, all payments, whether of principal, interest, or other amounts, under any Contracts
or otherwise with respect to the Receivables, Chattel Paper, Instruments and/or payment intangibles
constituting Collateral shall be directed to the appropriate Collateral Account. All such payments
which may from time to time come into the possession of any Debtor shall be held in trust for the
Agent, segregated from the other funds of such Debtor, and delivered to the Agent immediately in
the form received with any necessary endorsement for deposit into the appropriate Collateral
Account, such delivery in no event to be later than one Business Day after receipt thereof by the
applicable Debtor. Each Debtor agrees to execute any documents reasonably requested by the Agent
to create any Collateral Account and pledge it to the Agent. In connection with the foregoing, the
Agent shall have the right at any time during the existence of an Event of Default to take any of
the following actions, in the Agent’s own name or in the name of the applicable Debtor: compromise
or extend the time for payment of any payments due with respect to any Instrument or Chattel Paper
upon such terms as the Agent may reasonably determine; endorse the name of the applicable Debtor,
on checks, instruments, or other evidences of payment with respect to any such Collateral; make
written or verbal requests for verification of amount owing on any such Collateral from the maker
thereof or obligor thereunder; open mail addressed to such Debtor which the Agent reasonably
believes relates to any such Collateral, and, to the extent of checks or other payments with
respect to any such Collateral, dispose of the same in accordance with this Agreement; take action
in the Agent’s name or the applicable Debtor’s name, to enforce collection of such checks and other
payments; and take all other action necessary to carry out this Agreement and give effect to the
Agent’s rights hereunder. Costs and expenses incurred by the Agent in collection and enforcement
of amounts owed under any Contracts or otherwise with respect to the Receivables, Chattel Paper,
Instruments and/or payment intangibles constituting Collateral, including attorneys’ fees and
out-of-pocket expenses, shall be reimbursed by the applicable Debtor to the Agent on demand.

     6.3 Contracts. During the existence of an Event of Default, the Agent may, at its
option, exercise one or more of the following remedies with respect to the Contracts that
constitute Collateral:

          (a) (i) take any action permitted under Section 6.2 and (ii) in the place and stead of
the applicable Debtor, exercise any other rights of such Debtor under such Contracts in accordance
with the terms thereof. Without limitation of the foregoing, each Debtor agrees that under the
foregoing circumstances, the Agent may give notices, consents and demands and make elections under
such Contracts, modify or waive the terms of such Contracts and enforce such Contracts, in each
case, to the same extent and on the same terms as such Debtor might have

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done. It is understood and agreed that notwithstanding the exercise of such rights and/or the
taking of such actions by the Agent, such Debtor shall remain liable for performance of its
obligations under such Contracts;

          (b) upon receipt by the Agent of notice from any counterparty to any such Contract of such
Person’s intent to terminate such Contract, the Agent shall be entitled to (i) cure or cause to be
cured the condition giving rise to such Person’s right of termination of such Contract, or (ii)
acquire and assume (or assign and cause the assumption by a third party of) the rights and
obligations of the applicable Debtor under such Contract; and

          (c) upon termination of any Contract by operation of law or otherwise, the Agent shall be
entitled to enter into a new agreement (“Successor Agreement”) with the counterparty to
such terminated Contract, on the same terms and with the same provisions as such terminated
Contract. Each Debtor agrees that such Debtor shall have no rights whatsoever with respect to any
Successor Agreement.

     6.4 Pledged Securities.

          (a) Each Debtor recognizes that the Agent may be unable to effect a public sale of any or all
the Pledged Securities, by reason of certain prohibitions and registration requirements contained
in the Securities Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each Debtor acknowledges and
agrees that any such private sale may result in prices and other terms less favorable than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The Agent shall be under no
obligation to delay a sale of any of the Pledged Securities for the period of time necessary to
permit the issuer thereof to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such issuer would agree to do so.

          (b) Each Debtor agrees to use its best efforts to do or cause to be done all such other acts
(other than preparation and filing of a registration statement) as may be necessary to make such
sale or sales of all or any portion of the Pledged Securities pursuant to this Section 6.4
valid and binding and in compliance with any and all other applicable Legal Requirements. Each
Debtor further agrees that a breach of any of the covenants contained in this Section 6.4
will cause irreparable injury to the Agent and the Secured Parties, that the Agent and the Secured
Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each
and every covenant contained in this Section 6.4 shall be specifically enforceable against
such Debtor, and such Debtor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event of Default has
occurred.

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     6.5 Foreclosure.

          (a) During the existence of an Event of Default, the Agent may foreclose on the Collateral in
any manner permitted by the courts of or in the State of New York or the jurisdiction in which any
Collateral is located. If the Agent should institute a suit against any Collateral or any Debtor
for the collection of the Secured Obligations and for the foreclosure of this Agreement, the Agent
may at any time before the entry of a final judgment dismiss the same, and take any other action
permitted by this Agreement.

          (b) To the extent permitted by law, the Agent may exercise all the foreclosure rights and
remedies of a secured party under the UCC during the existence of an Event of Default. In
connection therewith, the Agent may sell any Collateral at public or private sale, at the office of
the Agent or elsewhere, for cash or credit and upon such other terms as the Agent deems
commercially reasonable. The Agent may sell any Collateral at one or more sales, and the security
interest granted hereunder shall remain in effect as to the unsold portion of the Collateral. Each
Debtor agrees that to the extent permitted by law such sales may be made without notice. If notice
is required by law, each Debtor hereby deems ten days advance notice of the time and place of any
public or private sale reasonable notification, recognizing that if any portion of the Collateral
is perishable or threatens to decline speedily in value or is of a type customarily sold on a
recognized market, shorter notice may be reasonable. The Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The Agent may adjourn any sale
by announcement at the time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was adjourned. In the event that any sale hereunder is not
completed or is defective in the opinion of the Agent, the Agent shall have the right to cause
subsequent sales to be made hereunder. Any statements of fact or other recitals made in any bill
of sale, assignment, or other document representing any sale hereunder, including statements
relating to the occurrence of an Event of Default, acceleration of the Secured Obligations, notice
of the sale, the time, place, and terms of the sale, and other actions taken by the Agent in
relation to the sale may be conclusively relied upon by the purchaser at any sale hereunder. The
Agent may delegate to any agent the performance of any acts in connection with any sale hereunder,
including the sending of notices and the conduct of the sale.

     6.6 Application of Proceeds. Unless otherwise specified herein, any cash proceeds
received by the Agent from the sale of, collection of, or other realization upon any part of the
Collateral or any other amounts received by the Agent hereunder may be, at the reasonable
discretion of the Agent (i) held by the Agent in one or more Cash Collateral Accounts as cash
collateral for the Secured Obligations or (ii) applied in the order specified in Section
7.7 of the Credit Agreement.

     6.7 Waiver of Certain Rights. To the full extent each Debtor may do so under
applicable law, such Debtor shall not insist upon, plead, claim, or take advantage of any law
providing for any appraisement, valuation, stay, extension, or redemption, and such Debtor hereby
waives and releases the same, and all rights to a marshaling of the assets of such Debtor,
including the Collateral of such Debtor, or to a sale in inverse order of alienation in the event
of foreclosure of the liens and security interests hereby created. Such Debtor shall not assert
any right under any law pertaining to the marshaling of assets, sale in inverse order of
alienation, the

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administration of estates of decedents or other right to defeat, reduce, or otherwise
adversely affect in any respect the rights of the Agent under the terms of this Agreement.

     6.8 Remedies Cumulative. The Agent’s remedies under this Agreement and the Credit
Documents to which any Debtor is a party shall be cumulative, and no delay in enforcing this
Agreement and the Credit Documents to which any Debtor is a party shall act as a waiver of the
Agent’s rights hereunder.

     6.9 Reinstatement. The obligations of each Debtor under this Agreement shall continue
to be effective or automatically be reinstated, as the case may be, if at any time payment of any
of the Secured Obligations is rescinded or otherwise must be restored or returned by the Agent upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Debtor or any other
obligor or otherwise, all as though such payment had not been made.

SECTION 7.

MISCELLANEOUS

     7.1 Amendments. None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with Section 9.1 of the
Credit Agreement. No consent of any holder of Secured Obligations arising under a Specified Swap
Contract or Specified Cash Management Agreements (in each case, except in such Person’s capacity as
a Bank, if applicable) shall be required for any waiver, amendment, supplement or other
modification to this Agreement.

     7.2 Notices. All notices, requests and demands to or upon the Agent or any Debtor
hereunder shall be effected in the manner provided for in Section 9.2 of the Credit
Agreement. All notices, requests and demands hereunder to any Debtor shall be given to it at its
address or telecopy number provided on Schedule 7.2 or at such other address in the United
States as may be specified by such Debtor in a written notice delivered to the Agent in accordance
with Section 9.2 of the Credit Agreement.

     7.3 No Waiver by Course of Conduct; Cumulative Remedies; No Duty. No failure to
exercise, nor any delay in exercising, on the part of the Agent, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. A waiver by the Agent of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that the Agent would otherwise have
on any future occasion. The rights and remedies provided herein and in the other Credit Documents
are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights
or remedies provided by law. The powers conferred on Agent under this Agreement are solely to
protect Agent’s rights under this Agreement and shall not impose any duty upon it to exercise any
such powers. Except as elsewhere provided hereunder, Agent shall have no duty as to any of the
Collateral or as to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to the Collateral.

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     7.4 [Reserved].

     7.5 Successors and Assigns. This Agreement shall be binding upon the successors and
assigns of each Debtor and shall inure to the benefit of the Agent and the Secured Parties and
their successors and assigns; provided that no Debtor may assign, transfer or delegate any
of its rights or obligations under this Agreement without the prior written consent of the Agent.

     7.6 Set-Off. Each Debtor hereby irrevocably authorizes the Agent and each Bank at any
time and from time to time upon the occurrence and during the continuation of any Event of Default,
without prior notice to such Debtor or any other Debtor, any such notice being waived by such
Debtor 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 by, and other indebtedness at
any time owing by, such Bank to or for the credit or the account of the respective Debtor against
any and all Obligations owing to such Bank under the Credit Agreement, the Guaranties, or under any
other Credit Document, now or hereafter existing, irrespective of whether or not the Agent or such
Bank shall have made demand for payment and although such Obligations may be contingent or
unmatured or denominated in a currency different from that of the applicable deposit or
indebtedness. Any such set-off shall be subject to the notice requirements of Section 7.4
of the Credit Agreement; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.

     7.7 Counterparts. This Agreement may be executed in one or more counterparts (and by
different parties hereto in different counterparts), each of which shall constitute an original,
but all of which together shall constitute a single contract. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy or electronic transmission shall be effective as
delivery of an original manually executed counterpart of this Agreement.

     7.8 Severability. If any provision of this Agreement is held to be illegal, invalid
or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this
Agreement 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.

     7.9 Section Headings. The Section headings used in this Agreement are included for
convenience of reference only and shall not affect the interpretation of this Agreement.

     7.10 Integration; Direct Conflict. This Agreement and the other Credit Documents
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. In the event of a direct conflict between this Agreement and the Credit
Agreement, the Credit Agreement shall control; provided, however, the parties understand and agree
that this Agreement sets forth additional covenants, obligations and rights and the parties will
use all reasonable efforts to construe the provisions and covenants in this Agreement as not being
in direct conflict with the Credit Agreement.

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

     7.12 Additional Debtors. Each Subsidiary of the Borrower that is required to become a
party to this Agreement after the date hereof pursuant to Section 5.9 of the Credit
Agreement shall become a Debtor for all purposes of this Agreement upon execution and delivery by
such Subsidiary of an instrument in the form of Annex I hereto.

     7.13 Termination; Releases.

          (a) This Security Agreement and the security interest created hereby shall terminate when all
the Secured Obligations have been paid in full in cash and all commitments of each of the Secured
Parties to the Debtors have been fully and finally terminated, at which time the Agent shall
execute and deliver to the Debtors or the Debtors’ designee, at the Debtors’ expense, all Uniform
Commercial Code termination statements and similar documents which the Debtors shall reasonably
request from time to time to evidence such termination. Any execution and delivery of termination
statements or documents pursuant to this Section 7.13(a) shall be without recourse to or
warranty by the Agent.

          (b) Any Debtor other than the Borrower shall automatically be released from its obligations
hereunder and the security interest granted hereby in the Collateral of such Debtor shall be
automatically released in the event that all the Equity of such Debtor shall be sold, transferred
or otherwise disposed of to a person that is not an Affiliate of the Borrower in accordance with
the terms of the Credit Agreement; provided that, to the extent required by the Credit
Agreement, the Majority Banks or, if required by the terms of the Credit Agreement, such other
requisite number of Banks, shall have consented to such sale, transfer or other disposition and the
terms of such consent did not provide otherwise. If any of the Collateral shall be sold,
transferred or otherwise disposed of by any Debtor in a transaction permitted by the Credit
Agreement the security interest created hereby in any Collateral that is so sold, transferred or
otherwise disposed of shall automatically terminate and be released upon the closing of such sale,
transfer or other disposition, and such Collateral shall be sold free and clear of the Lien and
security interest created hereby; provided, however, that such security interest
will continue to attach to all proceeds of such sales or other dispositions. In connection with
any of the foregoing, the Agent shall promptly execute and deliver to the Debtors or the Debtors’
designee, at the Debtors’ expense, all Uniform Commercial Code termination statements and similar
documents that the Debtors shall reasonably request from time to time to evidence such termination.
Any execution and delivery of termination statements or documents pursuant to this Section
7.13(b) shall be without recourse to or warranty by the Agent.

          (c) No consent of any holder of Secured Obligations arising under a Specified Swap Contract or
Specified Cash Management Agreement (in each case, except in such Person’s capacity as a Bank, if
applicable) shall be required for any release of Collateral or Debtors pursuant to this Section
7.13.

     7.14 Amendment and Restatement; Confirmation of Liens. This Agreement is an amendment
and restatement of the Existing Security Agreement, and supersedes the Existing Security Agreement
in its entirety; provided, however, that (i) the execution and delivery of this

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Security Agreement shall not effect a novation of the Existing Security Agreement but shall be, to
the fullest extent applicable, in modification, renewal, confirmation and extension of such
Existing Security Agreement, and (ii) the Liens, security interests and other interests in the
Collateral (as such term is defined in the Existing Security Agreement, hereinafter the
“Original Collateral”) granted under the Existing Security Agreement are and shall remain
legal, valid, binding and enforceable with regard to such Original Collateral. Each Grantor party
to the Existing Security Agreement hereby acknowledges and confirms the continuing existence and
effectiveness of such Liens, security interests and other interests in the Original Collateral
granted under the Existing Security Agreement, and further agrees that the execution and delivery
of this Security Agreement and the other Loan Documents shall not in any way release, diminish,
impair, reduce or otherwise affect such Liens, security interests and other interests in the
Original Collateral granted under the Existing Security Agreement.

THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THE CREDIT AGREEMENT, REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Signature pages follow.]

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     EXECUTED as of the date first above written.

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as

Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	Alan Tapley 	 
	 	 	Title:  	Assistant Vice President 	 
	 

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	STONE ENERGY CORPORATION,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	David H. Welch 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Kenneth H. Beer 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 
	 
	 	STONE ENERGY OFFSHORE, L.L.C.,

a Delaware limited liability company

Through its sole member,

STONE ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	David H. Welch 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Kenneth H. Beer 	 
	 	 	Title:  	Executive Vice President and
Chief Financial Officer 	 

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

SCHEDULE 3.3

ORGANIZATION, LOCATION

AND FILING INFORMATION

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Jurisdiction of	 	File # in	 	 
	 	 	Prior	 	Formation and	 	Domestic	 	Address of Chief
	Entity	 	Names	 	Type of Entity	 	Jurisdiction	 	Executive Office
	Stone Energy 

Corporation
	 	Stone Energy

Corporation (Rockies)
	 	Delaware Corporation
	 	2329102
	 	625 E. Kaliste

Saloom Road

Lafayette, Louisiana

70508
	 	 	 	 	 	 	 	 	 
	Stone Energy 

Offshore, L.L.C.
	 	Bois d’Arc Properties,

LP;

Bois d’Arc Energy,

Inc.;

Bois d’Arc Holdings,

LLC;

Bois d’Arc Offshore

Ltd.;

Stone Energy, L.L.C.
	 	Delaware Limited

Liability Company
	 	4537731
	 	625 E. Kaliste

Saloom Road

Lafayette, Louisiana

70508

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

SCHEDULE 3.4

CERTAIN COLLATERAL

     [__________]

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

SCHEDULE 3.5(a)

PLEDGED SECURITIES

     [__________]

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

SCHEDULE 7.2

DEBTORS’ ADDRESS FOR NOTICE

     [__________]

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

Annex I to the

Security Agreement

     This SUPPLEMENT NO. [     ] dated as of [                              ] (this
“Supplement”), is delivered in connection with the Second Amended and Restated Security
Agreement dated as of April 26, 2011 (as amended or otherwise modified from time to time, the
“Security Agreement”), among Stone Energy Corporation (the “Borrower”), certain
subsidiaries of the Borrower party thereto from time to time (such subsidiaries together with the
Borrower, the “Debtors”), and Bank of America, N.A. (“BOA”), as administrative
agent (in such capacity, the “Agent”) for the benefit of the Secured Parties (as defined
therein).

     A. Reference is made to the Third Amended and Restated Credit Agreement dated as of April 26,
2011 (as amended or otherwise modified from time to time, the “Credit Agreement”), among
the Borrower, the lenders from time to time party thereto (the “Banks”), and the Agent.

     B. The Debtors have entered into the Security Agreement as a condition precedent to the
effectiveness of the Credit Agreement. Section 7.12 of the Security Agreement provides
that additional Subsidiaries of the Borrower may become Debtors under the Security Agreement by
execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary
(the “New Debtor”) is executing this Supplement in accordance with the requirements of the
Credit Agreement to become a Debtor under the Security Agreement.

     C. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement or, where any such term is not defined in the
Security Agreement, the Credit Agreement.

     Accordingly, the Agent and the New Debtor agree as follows:

     SECTION 1. In accordance with Section 7.12 of the Security Agreement, the New Debtor
by its signature below becomes a Debtor under the Security Agreement with the same force and effect
as if originally named therein as a Debtor, and the New Debtor hereby (a) agrees to all the terms
and provisions of the Security Agreement applicable to it as a Debtor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Debtor thereunder are true and
correct on and as of the date hereof. The Schedules to the Security Agreement are hereby
supplemented by the Schedules attached hereto with respect to the New Debtor. In furtherance of
the foregoing, the New Debtor, as security for the payment and performance in full of the Secured
Obligations (as defined in the Security Agreement), does hereby create and grant to the Agent, for
the benefit of the Secured Parties, a security interest in and lien on all of the New Debtor’s
right, title and interest in and to the Collateral of the New Debtor. Each reference to a “Debtor”
in the Security Agreement shall be deemed to include the New Debtor.

     SECTION 2. The New Debtor represents and warrants to the Agent that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

To the Agent and the Banks

c/o Bank of America, N.A.

as Administrative Agent for the Banks

[date]

     SECTION 3. This Supplement may be executed by one or more of the parties to this Agreement on
any number of separate counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

     SECTION 4. Except as expressly supplemented hereby, the Security Agreement and the Guaranties
shall remain in full force and effect.

     SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

     SECTION 6. All communications and notices to the New Debtor under the Security Agreement shall
be in writing and given as provided in Section 7.2 of the Security Agreement to the address
for the New Debtor set forth under its signature below.

     SECTION 7. The New Debtor agrees to reimburse the Agent for its reasonable out-of-pocket
expenses in connection with this Supplement, including the reasonable fees, other charges and
disbursements of counsel for the Agent.

THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THE CREDIT AGREEMENT, REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

To the Agent and the Banks

c/o Bank of America, N.A.

as Administrative Agent for the Banks

[date]

     IN WITNESS WHEREOF, the New Debtor and the Agent have duly executed this Supplement to the
Security Agreement as of the day and year first above written.

	 	 	 	 	 
	 	[NAME OF NEW DEBTOR]

 	 
	 	By:  	 	 
	 	 	Name:
	 
	 	 	Title:
	 
	 	 	Address:

	 
	 
	 	BANK OF AMERICA, N.A., as

Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:
	 
	 	 	Title:
	 
	 

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

To the Agent and the Banks

c/o Bank of America, N.A.

as Administrative Agent for the Banks

[date]

SCHEDULE 3.3

ORGANIZATION, LOCATION

AND FILING INFORMATION

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Jurisdiction of	 	File # in	 	 
	 	 	Prior	 	Formation and	 	Domestic	 	Address of Chief
	Entity	 	Names	 	Type of Entity	 	Jurisdiction	 	Executive Office
	 	 	 	 	 	 	 	 	 

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

To the Agent and the Banks

c/o Bank of America, N.A.

as Administrative Agent for the Banks

[date]

SCHEDULE 3.5(a)

PLEDGED SECURITIES

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Percentage of
	Debtor	 	Issuer	 	Type of Interests	 	Certificate Number	 	Number of Shares	 	Interests
	 	 	 	 	 	 	 	 	 	 	 

]

[EXHIBIT H TO CREDIT AGREEMENT]

 

 

EXHIBIT I

FORM OF

MORTGAGE COMPLIANCE CERTIFICATE

[date]

Bank of America, N.A., as Agent

700 Louisiana Street, 8th Floor

Houston, Texas 77002

Attention:      Mr. Ronald E. McKaig

Ladies and Gentlemen:

Reference is made to the Third Amended and Restated Credit Agreement dated as of April 26, 2011 (as
the same may be modified from time to time, the “Credit Agreement”), among Stone Energy
Corporation (“Borrower”), the banks named therein (“Banks”), and Bank of America,
N.A., as administrative agent for the Banks (“Agent”), the defined terms of which are used
herein unless otherwise defined herein.

In connection with the delivery of, and based upon the information set forth in, the Oil and Gas
Reserve Report with respect to the Borrower’s consolidated Oil and Gas Properties as of [________],
dated as of [_________] (the “Applicable Report”), the following sets forth the information
and computations required by Section 5.6(c)(iii) of the Credit Agreement as of [_________]:

	 	 	 	 	 

	8.   Mortgaged Property Value1 (as set forth in
the Applicable Report)

	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	9.   Oil and Gas Property Value (as set forth in
the Applicable Report)

	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	10. 80% of line 2 above

	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	11. [Amount by which the Mortgaged Property Value
is less than 80% of the Oil and Gas Property
Value

   (line 3 minus line 1)]

      [Include the above only if line 1 is less than line 3]

	 	[$	 	]
	 
	 	 	 	 

 

			
	1	 	the Mortgaged Property Value shall not
include any Oil and Gas Properties acquired by any Credit Party after the
recordation of the Mortgages in the real property records of the jurisdiction
where such Oil and Gas Properties are located unless an amendment or supplement
to such Mortgages sufficiently describing such after-acquired Oil and Gas
Properties has been recorded in such real property records.

 

 

To the Agent and the Banks

c/o Bank of America, N.A.

as Administrative Agent for the Banks

[date]

Each of the undersigned hereby certifies that [the Mortgaged Property Value (as set forth in the
Applicable Report) equals or exceeds 80% of the Oil and Gas Property Value (as set forth in the
Applicable Report).] [the amount by which the Mortgaged Property Value (as set forth in the
Applicable Report) is less than 80% of the Oil and Gas Property Value (as set forth in the
Applicable Report) is $__________, and the Borrower agrees to take all actions required by
Section 5.12 of the Credit Agreement with respect to such difference within the time period
required by such Section.] [Select appropriate alternative.]

This certificate is given in each of our capacities as an officer of the Borrower and not in our
individual capacities.

	 	 	 	 	 
	 	Very truly yours,2

 	 
	 	 	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	 	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

			
	2	 	Note: Certificate must be executed by two officers.

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