SENIOR SECURED CREDIT AGREEMENT Dated as of October 21, 2016 among MIDSTATES PETROLEUM COMPANY, INC., as Parent, MIDSTATES PETROLEUM COMPANY LLC, as Borrower, SUNTRUST BANK, as Administrative Agent, Swing Line Lender, an Issuing Lender and a Lender,...

Exhibit 10.1

Execution Version

SENIOR SECURED CREDIT AGREEMENT

Dated as of October 21, 2016

among

MIDSTATES PETROLEUM COMPANY, INC.,

as Parent,

MIDSTATES PETROLEUM COMPANY LLC,

as Borrower,

SUNTRUST BANK,

as Administrative Agent, Swing Line Lender, an Issuing Lender and a Lender,

and

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

SUNTRUST ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.,

as Sole Bookrunner

SUNTRUST ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.,

as Lead Arranger

TABLE OF CONTENTS

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SENIOR SECURED CREDIT AGREEMENT

This SENIOR SECURED CREDIT AGREEMENT (this “Agreement”) is dated as of October 21, 2016, among MIDSTATES PETROLEUM COMPANY, INC., a Delaware corporation (“Parent”), MIDSTATES PETROLEUM COMPANY LLC, a Delaware limited liability company (“Borrower”), each of the financial institutions that is or that may from time to time become a signatory hereto as a Lender or an Issuing Lender and SUNTRUST BANK, a national banking association, as an Issuing Lender, as Swing Line Lender (in such capacity, together with its successors in such capacity, “Swing Line Lender”), as Administrative Agent for the benefit of the Lenders (in such capacity, together with its successors in such capacity, “Administrative Agent”) and as a Lender.

RECITALS

A.            Borrower, Parent, SunTrust Bank, as administrative agent (the “Existing Administrative Agent”) and issuing lender and the lenders (the “Existing Lenders”) party thereto entered into that certain Second Amended and Restated Credit Agreement dated as of June 8, 2012 (as heretofore amended, supplemented or otherwise modified, the “Pre-Petition RBL”);

B.            On April 30, 2016 (the “Petition Date”), the Parent, the Borrower and certain of their respective Affiliates filed voluntary petitions with the United States Bankruptcy Court for the Southern District of Texas, Houston Division, initiating cases under Chapter 11 of the United States Bankruptcy Code, consolidated administratively under Case No. 16-32237 (the “Chapter 11 Cases”), and continued in the possession of their assets and in the management of their businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Code;

C.            The Debtors filed the Plan of Reorganization (as defined herein) with the Bankruptcy Court on May 14, 2016, Dkt. No. 144, and the Disclosure Statement on July 13, 2016, Dkt. No. 382; and in support of the Plan of Reorganization the Debtors filed Plan Supplements, and amendments and supplements thereto, from August 3, 2016 through August 18, 2016, Dkt. Nos. 438, 455, 476, 509 and 511;

D.            Following certain revisions thereto, the Debtors proceeded to a confirmation hearing on their First Amended Plan of Reorganization, filed on September 28, 2016, Dkt. No. 690, and on September 28, 2016, the Bankruptcy Court entered the Confirmation Order confirming the Plan of Reorganization, which Confirmation Order inter alia authorized and approved the Debtors’ entry into and performance under this Agreement;

E.            On the Closing Date, $81,324,387.00 of the outstanding principal amount of loans plus accrued interest under the Pre-Petition RBL shall be repaid in cash, $168,059,253.00 of the outstanding principal amount of loans under the Pre-Petition RBL shall be continued as Revolving Credit Loans under this Agreement, and $1,940,747.00 aggregate face amount of Existing Letters of Credit shall be deemed Letters of Credit issued and outstanding hereunder;

F.             The Borrower has requested that the Revolving Lenders provide certain revolving loans to and extensions of credit on behalf of the Borrower and the Issuing Lender provide Letters of Credit; and

G.            The Revolving Lenders have indicated their willingness to lend and participate in Letters of Credit and the Issuing Lender has indicated its willingness to issue Letters of Credit, in each case subject to the terms and conditions of this Agreement;

H.            NOW, THEREFORE, in consideration of the foregoing recitals, of the representations, warranties, covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.
DEFINITIONS

1.01        Certain Defined Terms.  The following terms have the following meanings:

“Acceptable Counterparty” means (i) any Revolving Lender, (ii) any Affiliate of any Revolving Lender, or (iii) any other counterparty who has, or arranges for a guarantor of the obligation of the counterparty who has, at the time the contract is made, long-term obligations rated BBB or Baa2 or better, respectively, by Standard & Poor’s Rating Group, a division of McGraw Hill, Inc., or ▇▇▇▇▇’▇ Investors Service, Inc. (or a successor credit rating agency).

“Act” shall have the meaning assigned such term in Section 12.16.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which any Loan Party (a) acquires any assets of any Person (other than a Loan Party), or division thereof, whether through a purchase of assets, merger or otherwise or (b) directly or indirectly acquires Equity Interests of a Person who after giving effect to such investment becomes a Subsidiary of such Loan Party, in each case pursuant to Section 8.04(j).

“Administrative Agent” is defined in the preamble.

“Administrative Agent’s Payment Office” means the principal office of Administrative Agent set forth in Appendix I or such other address as Administrative Agent may from time to time specify.

“Administrative Questionnaire” means an administrative questionnaire in the form provided by Administrative Agent to any Lender and submitted to Administrative Agent duly completed by such Lender.

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract, or otherwise.

“Agent-Related Person” as to Administrative Agent, means Administrative Agent, its Affiliates, and the officers, directors, employees, agents, and attorneys-in-fact of Administrative Agent and its Affiliates.

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“Aggregate Commitment Amount” means the aggregate Commitment Amounts of all Revolving Lenders (which on the Closing Date equals $170,000,000), as such Commitments Amounts may be terminated and/or reduced or otherwise adjusted from time to time in accordance with the provisions hereof.

“Agreement” means this Credit Agreement including all Appendices, Schedules and Exhibits attached hereto, as same may be amended in writing from time to time.

“Alternative Swing Line Procedures” shall have the meaning assigned such term in Section 2.01(c)(vii).

“Anti-Corruption Laws” shall mean all laws, rules and regulations of any jurisdiction applicable to either Parent or Borrower, or their respective Subsidiaries, concerning or relating to bribery or corruption.

“Anti-Terrorism Order” shall mean Executive Order 13224, signed by President ▇▇▇▇▇▇ ▇. ▇▇▇▇ on September 24, 2001.

“Applicable Margin” means, with respect to LIBOR Loans and Base Rate Loans of a Class, and with respect to Commitment Fees, the respective percentages set forth on the Pricing Grid.

“April 2016 Business Plan” means the Business Plan delivered to the Administrative Agent in connection with the initial plan support agreement in April 2016, a copy of which is attached hereto as Exhibit K.

“April 2018 Notice Date” means the date of receipt by Borrower of the notice from the Administrative Agent pursuant to Section 2.04(a) with respect to the Scheduled Borrowing Base Determination on or about April 1, 2018.

“Approved 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 and that is administered or managed by (a) a Revolving Lender, (b) an Affiliate of a Revolving Lender or (c) an entity or an Affiliate of an entity that administers or manages a Revolving Lender.

“Approved Petroleum Engineer” means (a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Associates, (b) Netherland, ▇▇▇▇▇▇ & Associates, Inc., (c) ▇▇▇▇▇ ▇▇▇▇▇ Company Petroleum Consultants, L.P., (d) ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ or (e) another independent petroleum engineering firm reasonably acceptable to the Administrative Agent and the Borrower.

“Arranger” means SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.

“Asset Swap” means the substantially contemporaneous trade or exchange, whether in one or a series of transactions, by the Parent, Borrower or any Subsidiary of any of its Hydrocarbon Interests for Hydrocarbon Interests of another Person, including any cash or cash equivalents necessary in order to achieve an exchange of equivalent value; provided, however, that the value of the Hydrocarbon Interests received by the Parent, Borrower or any Subsidiary in

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such trade or exchange (including any cash or cash equivalents) is at least equal to the fair market value (as determined in good faith by the Board of Directors or a Responsible Officer, which determination shall, if requested by the Administrative Agent, be evidenced in a written certification delivered to the Administrative Agent) of the Hydrocarbon Interests (including any cash or cash equivalents) so traded or exchanged.

“Assignee” has the meaning specified in Section 12.08(b).

“Assignment and Acceptance Agreement” has the meaning specified in Section 12.08(b).

“Available Commitment” means, at the particular time in question, subject to Section 7.18, the aggregate Commitments of all Revolving Lenders then in effect minus the Credit Exposure at such time.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Bankruptcy Code” means the Federal Bankruptcy Code (11 U.S.C. §101, et seq.).

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of Texas.

“Base Rate” means the highest of (i) the rate which Administrative Agent announces from time to time as its prime lending rate, as in effect from time to time, (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%) per annum and (iii) LIBOR determined on a daily basis for an Interest Period of one (1) month, plus one percent (1.00%) per annum (any changes in such rates to be effective as of the date of any change in such rate); provided that if, in any case, such highest rate is less than 0.00%, such highest rate shall be deemed to equal 0.00%.  Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.  Administrative Agent may make commercial loans or other loans at rates of interest at, above, or below Administrative Agent’s prime lending rate.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrowing” means a borrowing hereunder consisting of Revolving Credit Loans made to Borrower by the Revolving Lenders under Article II.

“Borrowing Base” means, at any time, (a) from the Closing Date until the Initial Borrowing Base Termination Date, the Initial Borrowing Base, as the same may be adjusted from time to time in accordance with Section 2.04(f) and (b) from and after the Initial Borrowing

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Base Termination Date, the Borrowing Base determined in accordance with Section 2.04, as the same may be adjusted from time to time pursuant to the terms hereof.

“Borrowing Base Deficiency” means, at any time (including prior to the Initial Borrowing Base Termination Date), the amount by which the Credit Exposures exceeds the Borrowing Base then in effect, provided that, for purposes of determining the existence and amount of any Borrowing Base Deficiency, obligations under any Letter of Credit will not be deemed to be outstanding to the extent such obligations are Cash Collateralized.

“Borrowing Base Period” means each six (6) month period commencing on the “Scheduled Borrowing Base Determination Dates” set forth on Appendix I.

“Borrowing Base Value” means, with respect to (a) any Proved Reserves included in the most recently delivered Reserve Report (regardless of whether the Borrowing Base has been redetermined based on such Reserve Report or otherwise since the Closing Date) that are (or are proposed to be) the subject of a disposition or are the subject of a Casualty Event, or (b) any Derivative Transaction that is (or is proposed to be) the subject of a Derivative Liquidation, the amount determined in accordance with Section 2.04(c)(iii).

“Borrowing Date” means any date on which a Borrowing occurs under Section 2.02.

“Business Day” means any day other than (i) a Saturday, Sunday or other day on which commercial banks located in Oklahoma City, Oklahoma or Atlanta, Georgia are authorized or required by law to close and (ii) if such day relates to a Borrowing of, a payment or prepayment of principal or interest on, a conversion of or into, or an Interest Period for, a LIBOR Loan or a notice with respect to any of the foregoing, any day on which banks are not open for dealings in Dollar deposits in the London interbank market.

“Capital Lease” means, when used with respect to any Person, any lease in respect of which any of the obligations of such Person thereunder constitute Capitalized Lease Obligations.

“Capitalized Lease Obligations” means all obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations shall have been or should be, in conformity with GAAP, capitalized on the books of such Person; provided that leases that are recharacterized as Capitalized Lease Obligations due to a change in GAAP after the Closing Date shall not be treated as Capitalized Lease Obligations for any purposes under this Agreement and shall instead be treated as they would have been in accordance with GAAP as in effect on the Closing Date

“Cash Collateralize” means to deposit in the LC Collateral Account or to otherwise pledge and deposit with or deliver to Administrative Agent, for the benefit of one or more of the Issuing Lenders or Revolving Lenders, as collateral for the LC Obligation or obligations of Revolving Lenders to fund participations in respect of the LC Obligation, cash or deposit account balances or, if Administrative Agent and each applicable Issuing Lender shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to Administrative Agent and each applicable Issuing Lender.  “Cash

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Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Equivalents” means: (a) securities issued or fully guaranteed or insured by the United States Government or any agency thereof and backed by the full faith and credit of the United States having maturities of not more than twenty four (24) months from the date of acquisition; provided that, for the avoidance of doubt, treasury securities issued by the United States Government or any agency thereof shall be deemed to be Cash Equivalents for purposes of this clause (a); (b) certificates of deposit, time deposits, Eurodollar time deposits, or bankers’ acceptances having in each case a tenor of not more than twelve (12) months from the date of acquisition issued by any Lender or any U.S. commercial bank or any branch or agency of a non-U.S. commercial bank licensed to conduct business in the U.S. having combined capital and surplus of not less than Five Hundred Million Dollars ($500,000,000); (c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s at the time of acquisition, and in either case having a tenor of not more than twelve (12) months; (d) Investments, classified in accordance with GAAP as current assets of the Parent, 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 assigned at that time 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; (e) repurchase obligations with a term of not more than one-hundred eighty (180) days for underlying securities of the types described in clauses (a) and (b) entered into with any financial institution or recognized securities dealer meeting the qualifications specified in clause (b) above and (f) deposits in money market funds and investments investing at least 90% in investments described in clauses (a), (b), (c), (d) and (e) above.

“Cash Management Agreement” means any agreement related to Cash Management Services by and between Parent, Borrower or any of their respective Subsidiaries and any Cash Management Bank.

“Cash Management Bank” means any Person that is a Revolving Lender or Administrative Agent or an Affiliate of a Revolving Lender or Administrative Agent at the time it provides Cash Management Services.

“Cash Management Obligations” means obligations owed by Parent, Borrower or any Subsidiary to any Cash Management Bank in connection with, or in respect of, any Cash Management Services.

“Cash Management Services” shall mean treasury, depository, overdraft, credit or debit card, including non-card e-payables services, purchase card, electronic funds transfer, automated clearing house fund transfer services and other cash management services.

“Casualty Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of any Loan Party.

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“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 ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ 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 or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” means:

(a)           the ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act as in effect on the date hereof) other than Permitted Holders, of Equity Interests representing (i) more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Parent and (ii) more than the aggregate percentage of ownership, directly or indirectly, beneficially or of record, of the Permitted Holders;

(b)           during any period of 18 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Parent cease to be composed of individuals who are Continuing Directors;

(c)           Parent shall cease to own 100% of the Equity Interests of Borrower; or

(d)           a “Change of Control” (or any other defined term having similar purpose) shall have occurred under any indenture, credit agreement or other agreement evidencing any Indebtedness having an aggregate outstanding principal amount of more than the Threshold Amount.

“Chapter 11 Cases” has the meaning set forth in the recitals hereto.

“Class” means, when used in reference to any Loan, whether such Loan is a Revolving Credit Loan or Swing Line Loan.

“Closing Date” means the date on which all conditions precedent set forth in Section 5.01 are satisfied or waived by Administrative Agent and the Revolving Lenders.

“Code” means the Internal Revenue Code of 1986 and regulations promulgated thereunder.

“Collateral” means Parent’s, Borrower’s and the Subsidiaries’ Oil and Gas Properties, goods, equipment, accounts, general intangibles, inventory, as extracted collateral, fixtures, and contract rights, and all equity interests in each Borrower and Subsidiary now owned or hereafter acquired by Parent, Borrower or any Subsidiary, in each case, as such assets are intended to be or

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are subject to a Lien created in favor of Administrative Agent for the benefit of the Lenders (and others) pursuant to any Security Document.

“Collateral Account’ has the meaning set forth in Section 7.18.

“Combined Disposition/Derivative Threshold” means a combined threshold for sales and dispositions of Oil and Gas interests pursuant to Section 8.02(d) (measured by reference to the Borrowing Base Value of the Oil and Gas interests so sold or disposed) and Derivative Liquidations of commodity-price Derivative Contracts pursuant to Section 8.12(d) (measured by reference to the Borrowing Base Value, if any, attributable to such Derivative Liquidations), during any period between two successive Scheduled Borrowing Base Determinations (or, prior to the first Scheduled Borrowing Base Determination, from the Closing Date until the first Scheduled Borrowing Base Determination), in an aggregate amount equal to three percent (3%) of the then effective Borrowing Base.

“Commitment” means, with respect to each Revolving Lender, such Revolving Lender’s commitment to advance Revolving Credit Loans or participate in Letters of Credit, in an amount equal to the lesser of (a) such Revolving Lender’s Pro Rata Share of the Borrowing Base then in effect and (b) such Revolving Lender’s Commitment Amount, as such Commitment may be terminated and/or reduced or otherwise adjusted from time to time in accordance with the provisions hereof.

“Commitment Amount” means, with respect to each Revolving Lender, the amount set forth opposite such Revolving Lender’s name on Schedule 2.01 or in the Assignment and Acceptance Agreement pursuant to which such Revolving Lender shall have assumed its Commitment, as applicable, in each case, as such Commitment Amount may be terminated and/or reduced or otherwise adjusted from time to time in accordance with the provisions hereof.

“Commitment Fee” has the meaning specified in Section 2.06(b).

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

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

“Confirmation Order” has the meaning set forth in Section 5.01(j)(ii).

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

“Consolidated Cash Balances” means, at any time, (a) the aggregate amount of cash and Cash Equivalents, in each case, held or owned by (either directly or indirectly), credited to the account of, or that would otherwise be required to be reflected as an asset on the balance sheet of, the Parent and its Subsidiaries less (b) the sum of (i) any restricted cash or Cash Equivalents to pay bona fide royalty obligations, working interest obligations, production payments, vendor payments, suspense payments, severance taxes, payroll, payroll taxes, other taxes, employee wage and benefit payments and trust and fiduciary obligations (ii) cash or Cash Equivalents to

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pay obligations of the Parent, Borrower or any Subsidiary to third parties and for which either (x) the Parent, Borrower or such Subsidiary has issued checks or has initiated wires or ACH transfers (but which amounts have not, as of such time, been subtracted from the balance in the relevant account of the Parent, Borrower or such Subsidiary) or (y) reasonably anticipates in good faith that it will issue checks or initiate wires or ACH transfers within ten (10) Business Days thereafter, (iii) other amounts permitted to be paid by the Parent, Borrower or any Subsidiary in accordance with this Agreement and the other Loan Documents for which the Parent, Borrower or such Subsidiary has issued checks or has initiated wires or ACH transfers (but which amounts have not, as of such time, been subtracted from the balance in the relevant account of the Parent, the Borrower or such Subsidiary), (iv) while and to the extent refundable, any cash or Cash Equivalents held by the Parent, Borrower or any Subsidiary constituting purchase price deposits pursuant to a binding and enforceable purchase and sale agreement with a third party containing customary provisions regarding the payment and refunding of such deposits, (v) any cash or Cash Equivalents held by the Parent, Borrower or any Subsidiary in good faith to fund any customary deposit in the nature of ▇▇▇▇▇▇▇ money with respect to, or the purchase price of, any future acquisition permitted under this Agreement so long as the Borrower shall have provided notice of its intention to make such acquisition to the Administrative Agent at or prior to such time, (vi) cash held to Cash Collateralize Letters of Credit and (vii) cash and Cash Equivalents held in the Collateral Account.

“Consolidated Cash Balance Threshold” means $30,000,000.

“Contingent Obligation” means, as to any Person without duplication, any direct or indirect liability of that Person with or without recourse, (a) with respect to any Indebtedness (the “primary obligations”) of another Person (the “primary obligor”), including any obligation of that Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any security therefor, (ii) to advance or provide funds for the payment or discharge of any such primary obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof (each, a “Guaranty Obligation”); (b) with respect to any Surety Instrument issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings or payments; or (c) to purchase any materials, supplies or other property from, or to obtain the services of, another Person if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered.  The amount of any Contingent Obligation shall, in the case of Guaranty Obligations, be deemed equal to the maximum stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof, and in the case of other Contingent Obligations shall be equal to the maximum reasonably anticipated liability in respect thereof.

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“Continuing Director” shall mean, with respect to any period, any individuals (A) who were members of the board of directors or other equivalent governing body of Parent on the first day of such period, (B) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (A) above constituting at the time of such election or nomination at least a majority of members of the board of directors or other equivalent governing body of Parent on the first day of such period, or (C) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (A) and (B) above constituting at the time of such election or nomination at least a majority of members of the board of directors or other equivalent governing.

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

“Control Agreement” means a deposit account control agreement or securities account control agreement, as applicable, in form and substance reasonably satisfactory to the Administrative Agent, executed by the applicable Loan Party, the Administrative Agent and the depositary bank or securities intermediary, as applicable, party thereto.  Each such agreement shall perfect the Lien in favor of the Administrative Agent in the applicable Loan Party’s deposit account and/or securities account on a first-priority basis.

“Controlled Account” means (a) a deposit account or securities account that is subject to a Control Agreement or (b) in the sole discretion of the Administrative Agent, a deposit account or securities account maintained with the Administrative Agent.

“Conversion/Continuation Date” means the date on which any conversion or continuation occurs pursuant to Section 2.03(a).

“Credit Exposure” means, on any date, the aggregate outstanding principal amount of all Revolving Credit Loans after giving effect to any prepayments or repayments of Revolving Credit Loans occurring on such date plus the LC Obligation, after giving effect to any reimbursement in respect thereof occurring on such date.

“Curtailment Determination Notice Date” means the date of receipt by Borrower of the notice from the Administrative Agent pursuant to Section 2.04(f)(iii) setting forth the redetermined Borrowing Base following a breach by the Loan Parties of Section 8.19 prior to the occurrence of any of the events described in the clauses (b) through (d) in the definition of Initial Borrowing Base Termination Date.

“Debtors” means Parent and Borrower, each in their capacity as debtors and debtors-in-possession in the Chapter 11 Cases.

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

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“Default” means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default.

“Default Rate” has the meaning set forth in Section 2.05(b)(iii).

“Defaulting Lender” means, subject to Section 2.14(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies Administrative Agent and Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (ii) pay to Administrative Agent, any Issuing Lender or Swing Line Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due or (iii) pay to any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due absent a good faith dispute identified in writing, (b) has notified Borrower, Administrative Agent or any Issuing Lender or Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by Administrative Agent or Borrower, to confirm in writing to Administrative Agent and Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Administrative Agent and Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of an Insolvency Proceeding, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.14(b)) upon delivery of written notice of such determination to Borrower, each Issuing Lender, each Swing Line Lender and each Lender.

“Derivative Cancellation Notice” shall have the meaning set forth in Section 7.02(n).

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“Derivative Contracts” means all future contracts, forward contracts, swap (including any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act), cap or collar contracts, option contracts, hedging contracts or other derivative contracts or similar agreements covering Oil and Gas commodities or prices or financial, monetary or interest rate instruments.

“Derivative Liquidation” means the sale, assignment, novation, liquidation, unwind, cancellation, modification or termination (other than at its scheduled maturity or expiry) of all or any Derivative Transactions or all or any part of any Derivative Contract included in the calculation of the Borrowing Base.

“Derivative Obligation” means, with respect to any person, any obligation to pay or perform under any Derivative Transaction.

“Derivative Termination Value” means, in respect of any one or more Derivative Transactions, after taking into account the effect of any legally enforceable netting agreement relating to the Derivative Transactions under which Derivative Transactions have been entered into (a) for any date on or after the date such Derivative Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and any unpaid amounts and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the ▇▇▇▇-to-market value(s) for such Derivative Transactions as determined by the counterparties to such Derivative Transactions.

“Derivative Transaction” means any trade or other transaction entered into by a Person under any Derivative Contract.

“Disclosure Statement” has the meaning set forth in Section 5.01(j)(i).

“Dispositions” has the meaning set forth in Section 8.02.

“Disqualified Equity Interests” means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (i) matures or is mandatorily redeemable (other than solely for Equity Interests that are not otherwise Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise, (ii) is redeemable at the option of the holder thereof (other than solely for Equity Interests that are not otherwise Disqualified Equity Interests), in whole or in part, (iii) provides for scheduled payments or dividends or (iv) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Stated Maturity Date; provided that, if such Equity Interest  is issued pursuant to any plan for the benefit of employees of the Borrower or its Subsidiaries or issued by any such plan to such employees, such Equity Interest shall not constitute a Disqualified Equity Interest solely because it may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations; provided, further, that any Equity Interests held by any future, present or former employee, director, manager or consultant of the Borrower, any of its Subsidiaries or any of its direct or indirect parent companies or any other entity in which the Borrower or a Subsidiary has an Investment and is designated in good faith as an “affiliate” by

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the board of directors or managers of Parent or the Borrower, in each case pursuant to any equity holders’ agreement, management equity plan or stock incentive plan or any other management or employee benefit plan or agreement shall not constitute Disqualified Equity Interests solely because it may be required to be repurchased by the Borrower or its Subsidiaries.  The amount of Disqualified Equity Interests deemed to be outstanding at any time for purposes of this Agreement will be the maximum amount that any Loan Party may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Equity Interests, exclusive of accrued dividends.

“Dollars”, “dollars” and “$” each mean lawful money of the United States.

“EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Early Determination Notice Date” means the date of receipt by Borrower of the notice from the Administrative Agent pursuant to Section 2.04(e) setting forth the redetermined Borrowing Base with respect to a Special Borrowing Base Determination requested by Borrower prior to the occurrence of any of the events described in clauses (a) through (c) of the definition of Initial Borrowing Base Termination Date.

“Engineering Reports” shall have the meaning set forth in Section 2.04(a)(iv).

“Environmental Claims” means any and all material administrative, regulatory or judicial actions, suits, orders, decrees, demands, demand letters, claims, liens, notices of noncompliance, violation or potential responsibility or investigation by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release of hazardous materials or injury to the environment.

“Environmental Laws” means all material federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all material administrative orders, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental or occupational health, and safety matters.

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

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at the option of either the holder or the issuer thereof or upon the happening of certain contingencies, into Equity Interests shall not be Equity Interests.

“ERISA” means the Employee Retirement Income Security Act of 1974, and regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Parent, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to Pension Plan (other than an event for which the 30-day notice period is waived); (b) the determination that any Pension Plan, is considered an at-risk plan within the meaning of Section 430 of the Code or 303 of ERISA or that any Multiemployer Plan is endangered or is in critical status within the meaning of Sections 432 of the Code or Sections 305 of ERISA; (c) the incurrence but he Borrower or any ERISA or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Pension Plan, other than for PBGC premiums due but not yet delinquent; (d) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Pension Plan or to appoint a trustee to administer any Pension Plan; (e) the appointment of a trustee to administer any Pension Plan; (f) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during plan year in which such entity was a substantial employer (as defined in Section 400(a)(2) of ERISA) or the cessation of operations be the Borrower or any ERISA Affiliate that would be treated as a withdrawal by the Borrower or any ERISA Affiliate from any Multiemployer Plan; or (g) the taking of any action to terminate any Pension Plan under Section 4041 or 4041A of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“Event of Default” means any of the events or circumstances specified in Section 10.01.

“Exchange Act” means the Securities and Exchange Act of 1934, and regulations promulgated thereunder.

“Excluded Accounts” means depository and securities accounts (i) that are used solely for the purpose of making payroll and withholding tax payments related thereto and other employee wage and benefit payments and accrued and unpaid employee compensation (including salaries, wages, benefits and expense reimbursements), (ii) that are used solely for the purpose of paying Taxes, including sales taxes, (iii) that are used as escrow accounts or as fiduciary or trust accounts for the benefit of Persons other than Parent or its Subsidiaries or (iv) other accounts with funds on deposit not to exceed $2,500,000 in the aggregate for all such accounts at any time; provided that in no event shall any of the principal operating or collection accounts (including any accounts into which any purchaser remits the proceeds for the sale of Oil

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and Gas or Oil and Gas Properties) of Parent, Borrower or any Subsidiary constitute an Excluded Account.

“Excluded Derivative Obligation” means, with respect to any Loan Party, any obligation or liability in respect of a Derivative Contract if, and to the extent that, all or a portion of such obligation or liability of such Loan Party with respect to, or the grant by such Loan Party of a security interest to secure, such obligation or liability (or any guaranty thereof or other agreement or undertaking agreeing to guaranty, repay, indemnify or otherwise be liable therefor) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) (a) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the obligation or other liability of such Loan Party or the grant of such security interest becomes or would become effective with respect to such obligation or other liability or (b) in the case of any obligation or liability in respect of a Derivative Contract required to be cleared pursuant to section 2(h) of the Commodity Exchange Act (or any successor provision thereto), because such Loan Party is a “financial entity,” as defined in section 2(h)(7)(C)(i) the Commodity Exchange Act (or any successor provision thereto), at the time the obligation or other liability of such Loan Party becomes or would become effective with respect to such obligation or liability.  If any obligation or liability in respect of a Derivative Contract arises under a master agreement governing more than one Derivative Transaction, such exclusion shall apply only to the portion of such obligation or liability that is attributable to Derivative Transactions for which such guaranty obligation or other liability or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by Borrower under Section 3.09) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 3.01, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Lender’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Administrative Agent” is defined in the recitals.

“Existing Lenders” is defined in the recitals.

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“Existing Letters of Credit” means the letters of credit issued pursuant to the Pre-Petition RBL that are outstanding on the Closing Date and described on Schedule II.

“FATCA” means Sections 1471 through 1474 of the Code as of the date hereof (and any amendments or successor sections thereto that are not materially more onerous to comply with), any regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental agreement entered into between the United States and any other Governmental Authority in connection with the implementation of the foregoing and any fiscal or regulatory legislation, rules or official practices adopted pursuant to any such intergovernmental agreement).

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight federal funds transactions with a member of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (i) if the date for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent on such day on such transactions as determined by Administrative Agent; provided further that if, in any case, such rate is less than 0.00%, such rate shall be deemed to equal 0.00%.

“Fee Letter” means that certain fee letter dated April 28, 2016, among Parent, Administrative Agent and SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc., as Arranger.

“Foreign Lender” means any Lender that is not a “United States person” as defined in Section 7701(a)(30) of the Code.

“FRB” means the Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Pro Rata Share of the outstanding LC Obligations with respect to Letters of Credit issued by such Issuing Lender other than LC Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to Swing Line Lender, such Defaulting Lender’s Pro Rata Share of outstanding Swing Line Loans made by such Swing Line Lender other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Lenders in accordance with the terms hereof.

“GAAP” has the meaning ascribed such term in Section 1.03(b).

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or

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pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“Guarantor” means Parent and any Subsidiary (other than Borrower) that is required to execute a Guaranty under Section 7.14.

“Guaranty” means any guaranty in the form of Exhibit F hereto, that is executed by a Guarantor.

“Guaranty Obligation” has the meaning specified under the definition of “Contingent Obligation.”

“Highest Lawful Rate” means, for each Lender, as of a particular date, the maximum nonusurious interest rate that under applicable federal and New York law may then be contracted for, charged or received by such Lender in connection with the Loan Obligations.

“Hydrocarbon Interests” means leasehold and other interests in or under oil, gas and other liquid or gaseous hydrocarbon leases with respect to Oil and Gas wherever located, mineral fee interests, overriding royalty and royalty interests, net profit interests, production payment interests relating to Oil and Gas wherever located, including any beneficial, reserved or residual interest of whatever nature.

“Indebtedness” of any Person means, without duplication:

(a)           all indebtedness for borrowed money;

(b)           all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business on ordinary terms);

(c)           all reimbursement or payment obligations (contingent or non-contingent) with respect to Surety Instruments;

(d)           all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses;

(e)           all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by the Person including, without limitation, production payments, net profit interests and other interest in Oil and Gas subject to repayment out of future Oil and Gas production;

(f)            all obligations with respect to Capital Leases;

(g)           all Indebtedness referred to in clauses (a) through (l) secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contracts rights) owned by

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such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness;

(h)           all obligations of such Person under take/ship or pay contracts if any goods or services are not actually received or utilized by such Person;

(i)            any Indebtedness of a partnership for which such Person is the general partner, unless such Indebtedness is expressly made non-recourse to such Person;

(j)            Disqualified Equity Interests (for purposes hereof, the amount of any Disqualified Equity Interests shall be its liquidation value and, without duplication, the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase in respect of Disqualified Equity Interests);

(k)           net Derivative Obligations of such Person (for purposes hereof, the amount of any net Derivative Obligations on any date shall be deemed to be the Derivative Termination Value thereof as of such date); and

(l)            all Guaranty Obligations in respect of Indebtedness of others of the kinds referred to in clauses (a) through (k) above.

“Indemnified Environmental Liabilities” has the meaning specified in Section 12.06.

“Indemnified Liabilities” has the meaning specified in Section 12.05.

“Indemnified Person” has the meaning specified in Section 12.05.

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

“Initial Borrowing Base Amount” means $170,000,000.

“Initial Borrowing Base Termination Date” means the earliest of (a) the Curtailment Determination Notice Date, (b) the first date on which an Event of Default occurs, (c) the April 2018 Notice Date, and (d) the Early Determination Notice Date.

“Initial Reserve Report’ has the meaning set forth in Section 5.01(i)(v).

“Insolvency Proceeding” means (a) any case, action or proceeding relating to bankruptcy, reorganization, insolvency, liquidation, receivership, conservatorship, dissolution, winding up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; undertaken under U.S. Federal, state or foreign law, including any Debtor Relief Law.

“Interest Payment Date” means (a) as to any Base Rate Loan, the last Business Day of each calendar quarter and (b) as to any LIBOR Loan, the last day of each Interest Period

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applicable to such LIBOR Loan, provided, however, that if any Interest Period for a LIBOR Loan exceeds three (3) months, the date that falls three (3) months after the beginning of such Interest Period, and the date that falls three (3) months after each Interest Payment Date thereafter for such Interest Period, is also an Interest Payment Date.

“Interest Period” means, as to any LIBOR Loan, the period commencing on the Borrowing Date of such Loan or on the Conversion/Continuation Date on which the Loan is converted into or continued as a LIBOR Loan, and ending on the date one, two, three, six or twelve (if offered by all Lenders), months thereafter as selected by Borrower in its Notice of Borrowing or Notice of Conversion/Continuation; provided that: (a) if any Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless, in the case of a LIBOR Loan, the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day; (b) any Interest Period pertaining to a LIBOR Loan that 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 such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (c) no Interest Period for any Loan shall extend beyond the Stated Maturity Date.

“Interest Rate Type” means, with respect to any Loan, the interest rate, being either the Base Rate or LIBOR, forming the basis upon which interest is charged against such Loan hereunder.

“IRS” means the Internal Revenue Service, and any Governmental Authority succeeding to any of its principal functions under the Code.

“Issue” means with respect to any Letter of Credit, to issue or extend the expiry of, or to renew or increase the amount of, such Letter of Credit; and the terms “Issued,” “Issuing” and “Issuance” have corresponding meanings.

“Issuing Lender” means (including with respect to the Existing Letters of Credit) SunTrust Bank, and any successor thereto, and any other Lender who agrees with Borrower to become an Issuing Lender under this Agreement (and agrees to become a party to this Agreement as an Issuing Lender pursuant to a joinder agreement in a form reasonably satisfactory to Administrative Agent and Borrower).

“LC Application” means an application or agreement for a standby Letter of Credit in the Issuing Lender’s current form with appropriate insertions or in such other form as shall be acceptable to the Issuing Lender in its sole discretion duly executed by Borrower pursuant to Section 2.09(a).

“LC Collateral” means any cash or liquid securities held by Issuing Lender as security for LC Obligations of Borrower.

“LC Collateral Account” means a blocked deposit account held by Issuing Lender.

“LC Obligation” means, at the time in question, the sum of the Matured LC Obligations plus the aggregate undrawn stated amount under all Letters of Credit then outstanding.  The LC

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Obligation of any Revolving Lender at any time shall be its Pro Rata Share of the LC Obligation at such time.

“Lease Operating Statement” means a statement, in form and substance reasonably satisfactory to the Administrative Agent, prepared by the Parent or the Borrower with respect to the Oil and Gas Properties owned by any Loan Party or any Subsidiary (or to be acquired by any Loan Party or any Subsidiary, as applicable), which statement shall contain production, revenue, and expense data for the time period covered by such statement and such other information reasonably requested by the Administrative Agent.

“Lender” means each Person listed on Schedule 2.01 and any other Person that shall have become a party hereto as a Lender pursuant to an Assignment and Acceptance Agreement, other than any such Person that ceases to be a party thereto pursuant to an Assignment and Acceptance Agreement.  Unless the context requires otherwise, the term “Lender” includes the Swing Line Lender.  References to “Lenders” shall include Administrative Agent, in its individual capacity as a “Lender”, and such other lending institutions now a party or hereafter a party to this Agreement.

“Lender Derivative Party” means (i) with respect to any Derivative Transaction of any Loan Party in effect on the Closing Date, any Person party thereto that was a Revolving Lender or an Affiliate of a Revolving Lender on the Closing Date and (ii) with respect to any Derivative Contract of any Loan Party entered into after the Closing Date, any Person party thereto that was a Revolving Lender or an Affiliate of a Revolving Lender at the time such Derivative Contract was entered into.

“Letter of Credit” means any Existing Letter of Credit and any other standby letter of credit issued by any Issuing Lender pursuant to this Agreement and upon an LC Application.

“Letter of Credit Sub-Facility Amount” means $10,000,000.00. The Letter of Credit Sub-Facility Amount is part of, and not in addition to, the Aggregate Commitment Amount.

“LIBOR” means, for any Interest Period with respect to a Borrowing of LIBOR Loans, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for Dollar deposits at approximately 11:00 a.m. (London, England time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period (provided that, if such page is not available for any reason, LIBOR shall instead be the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Page BBAM of the Bloomberg Financial Markets Information Service (or any successor page) as the London interbank offered rate for Dollar deposits at approximately 11:00 a.m. (London, England time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period); provided that if, in any case, such rate is less than 1.00%, the LIBOR rate shall be deemed to equal 1.00%.  If for any reason such rate is not available on either such page, LIBOR for such Interest Period shall be the rate per annum reasonably determined by Administrative Agent as the rate of interest at which Dollar deposits in the approximate amount of the Eurodollar Loans comprising part of such Borrowing would be offered by Administrative Agent to major banks in the London interbank Eurodollar market at their request at or about

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11:00 a.m. (London, England time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided that if, in any case, such rate is less than 1.00%, the LIBOR rate shall be deemed to equal 1.00%.

“LIBOR Loan” means a Loan that bears interest based on the LIBOR.

“Lien” means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance, lien (statutory or other) or preferential arrangement of any kind or nature whatsoever in respect of any property (including those created by, arising under or evidenced by any conditional sale or other title retention agreement and the interest of a lessor under a Capital Lease), any financing lease having substantially the same economic effect as any of the foregoing.

“Loan” means an extension of credit by a Revolving Lender to Borrower under Article II, including Revolving Credit Loans and Swing Line Loans.

“Loan Documents” means this Agreement, the Notes (if any), any Letters of Credit, the Security Documents, the Fee Letter, Guaranties, and all other documents (other than any Derivative Contract or Cash Management Agreement) delivered to Administrative Agent, Issuing Lender or any Lender in connection herewith.

“Loan Obligations” means all Obligations of the Loan Parties under the Loan Documents.

“Loan Parties” means collectively Borrower and the Guarantors, and “Loan Party” means individually each of Borrower and the Guarantors.

“Majority Lenders” means, at any time, (i) Revolving Lenders (excluding Defaulting Lenders) holding more than fifty percent (50%) of the aggregate Credit Exposures attributable to Non-Defaulting Lenders or, (ii) if there are no Credit Exposures, Revolving Lenders (excluding Defaulting Lenders) holding more than fifty percent (50%) of the aggregate Commitments of all Non-Defaulting Lenders.

“Margin Stock” means “margin stock” as such term is defined in Regulation U or X of the FRB.

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

“Matured LC Obligation” means the aggregate amount of payments made by the Issuing Lenders in respect to Letters of Credit and not reimbursed by Borrower or deemed Loans pursuant to Section 2.01(b).

“Maximum Hedging Percentage” means, as of any date of determination, (i) for any month during the period of twenty-four (24) consecutive full months immediately following the

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date on which the Parent, Borrower or a Subsidiary thereof enters into a Derivative Transaction, the lesser of ninety percent (90%) of then current production of Oil, Gas or NGLs, as applicable, and ninety percent (90%) of total internally forecasted production of Oil, Gas or NGLs, as applicable for such month, (ii) for any month during the period following such twenty-four (24) month period until thirty-six (36) months following the date on which the Parent, Borrower or a Subsidiary thereof enters into a Derivative Transaction, the lesser of seventy-five percent (75%) of then current production of Oil, Gas or NGLs, as applicable, and seventy-five percent (75%) of total internally forecasted production of Oil, Gas or NGLs, as applicable, for such month, and (iii) for the period following such thirty-six (36) month period until forty-eight (48) months following the date on which the Parent, Borrower or a Subsidiary thereof enters into a Derivative Transaction, the lesser of fifty percent (50%) of then current production of Oil, Gas or NGLs, as applicable, and fifty percent (50%) of total internally forecasted production of Oil, Gas or NGLs, as applicable, for such month.

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral in the LC Collateral Account consisting of cash or deposit account balances, an amount equal to 105% of the Fronting Exposure of all Issuing Lenders with respect to Letters of Credit issued and outstanding at such time and (ii) otherwise, an amount determined by Administrative Agent and the Issuing Lenders in their sole discretion.

“Mortgaged Properties” means the Oil and Gas Properties and any other properties upon which certain of the Loan Parties have granted a Lien in favor of Administrative Agent for the benefit of the Lenders (and others) pursuant to the Mortgages.

“Mortgages” means, collectively, each mortgage, deed of trust, assignment of production or similar real property security agreement from any of the Loan Parties and all supplements, assignments, amendments and restatements thereto (or any agreement in substitution therefor) that are executed and delivered to Administrative Agent pursuant to Article IV of this Agreement.

“Multiemployer Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which any Loan Party makes, is obligated to make or has made contributions during the immediately preceding five (5) plan years.

“Negative Effect” means that, as of any date of determination, the Loan Parties have failed to achieve for the period of two consecutive calendar months immediately preceding such date of determination at least ninety percent (90%) of the projected daily average Oil and Gas production levels set forth in the April 2016 Business Plan for such two consecutive calendar month period as a result (in whole or in part) of a Regulatory Curtailment.

“New Borrowing Base Notice” shall have the meaning set forth in Section 2.04(a)(viii).

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all Revolving Lenders or all affected Lenders in accordance with the terms of Section 12.01 and (ii) has been approved by the Majority Lenders.

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

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“Note” means a promissory note specified in Section 2.01(a), substantially in the form of Exhibit A, including any amendments, modifications, renewals or replacements of such promissory note.

“Notice of Borrowing” means a notice in substantially the form of Exhibit B.

“Notice of Continuation/Conversion” means a notice in substantially the form of Exhibit C.

“NYMEX Pricing” means, as of any date of determination with respect to any month (i) for crude oil, the closing settlement price for the applicable futures contract for each month, (ii) for natural gas, the closing settlement price for the applicable futures contract for such month, and (iii) for natural gas liquids, the closing settlement price for the applicable futures contract for such month, in each case as published by New York Mercantile Exchange (NYMEX) on its website currently located at ▇▇▇.▇▇▇▇▇.▇▇▇ or any successor thereto (as such pricing may be corrected or revised from time to time by the NYMEX in accordance with its rules and regulations).

“Obligations” means the aggregate amount of all amounts owing by any Loan Party under (i) any Loan Document, (ii) any Cash Management Agreement with any Cash Management Bank or (iii) any Derivative Contract with any Lender Derivative Party, to any Lender, Administrative Agent, Issuing Lender, Lender Derivative Party, Cash Management Bank or any Indemnified Person, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising; provided, however, that the definition of “Obligations” shall not create any guarantee by any Loan Party of (or grant of security interest by any Loan Party to support, as applicable) any Excluded Derivative Obligations of such Loan Party for purposes of determining any obligations of any Loan Party.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Oil and Gas” means petroleum, natural gas and other related hydrocarbons or minerals or any of them and all other substances produced or extracted in association therewith.

“Oil and Gas Properties” means Hydrocarbon Interests now owned or hereafter acquired by Parent, Borrower or any Subsidiary and contracts executed in connection therewith and all tenements, hereditaments, appurtenances, and properties belonging, affixed or incidental to such Hydrocarbon Interests, including, without limitation, any and all property, real or personal, now owned or hereafter acquired by Parent, Borrower or any Subsidiary and situated upon or to be situated upon, and used, built for use, or useful in connection with the operating, working or developing of such Hydrocarbon Interests, including, without limitation, any and all petroleum and/or natural gas ▇▇▇▇▇, structures, field separators, processing plants, liquid extractors, plant compressors, pumps, pumping units, field gathering systems, tank and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, liters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, taping, tubing and rods, surface leases, rights-of-way, easements and servitudes, and all additions, substitutions, replacements for, fixtures and

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attachments to any and all of the foregoing owned directly or indirectly by Parent, Borrower or any Subsidiary.

“Organization Documents” means, for any corporation, its certificate or articles of incorporation and its bylaws; for any limited liability company, its certificate of formation or articles of organization and its limited liability company agreement or operating agreement; and for any limited partnership, its certificate of limited partnership or formation and its limited partnership agreement; as any of the foregoing have been amended or supplemented from time to time.

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

“Other Taxes” means any present or future mortgage tax, stamp, court or documentary, intangible, recording, filing or similar taxes, or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Documents, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.09).

“Participant” has the meaning specified in Section 12.08(a).

“Participant Register” has the meaning specified in Section 12.08(a).

“PBGC’ means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA) subject to Section 412 of the Code or Title IV of ERISA, other than a Multiemployer Plan, which any Loan Party sponsors, maintains, is making, or is obligated to make contributions.

“Permitted Acquisition” means any Acquisition by the Parent or any of its Subsidiaries that meets all of the following requirements:

(a)           no less than ten (10) Business days (or such shorter period as the Administrative Agent may reasonably agree in writing) prior to the proposed closing date of such Acquisition, the Borrower shall have delivered written notice of such Acquisition to the Administrative Agent, which notice shall include the proposed closing date of such Acquisition;

(b)           such Acquisition is not hostile;

(c)           the Person or business to be acquired shall be in a line of business permitted pursuant to Section 8.10;

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(d)           if, at the Borrower’s election, such Acquisition is a merger or consolidation, the surviving Person shall be the Borrower or a Guarantor (or shall concurrently become a Guarantor) and no Change in Control shall have been effected thereby;

(e)           if, at the Borrower’s election an increase in the Borrowing Base is to be effected in connection with such Acquisition, the Borrower shall comply with Section 2.04(f)(ii) to the extent applicable;

(f)            the Person acquired in such Acquisition shall become a Guarantor (and grantor or mortgagor, to the extent required) under Section 7.14;

(g)           the Borrower shall have delivered to the Administrative Agent a certificate in form substantially similar to the Compliance Certificate for the most recent fiscal quarter end preceding such Acquisition for which financial statements are available demonstrating, in substance and detail reasonably satisfactory to the Administrative Agent, that (i) the Parent is in compliance on a pro forma basis calculated in a manner acceptable to the Administrative Agent (as of the date of the Acquisition and after giving effect thereto and any Indebtedness incurred in connection therewith) with the financial covenants contained in Part II.A and Part II.B of Appendix II and (ii) any projected Capital Expenditures associated with the Oil and Gas Properties acquired through such Acquisition are in compliance on a pro forma basis with the limitations on Capital Expenditures set forth in Part II.C of Appendix II (after giving effect to the exclusion of projected Capital Expenditures in an amount of up to fifteen percent (15%) of the Permitted Acquisition Consideration for such Acquisition, in accordance with the clause (y) of the proviso therein, from such limitations on Capital Expenditures).

(h)           no later than five (5) Business Days prior to the proposed closing date of such Acquisition (or such shorter period of time as the Administrative Agent may agree), the Borrower, to the extent requested by the Administrative Agent, shall have delivered to the Administrative Agent promptly upon the finalization thereof copies of substantially final Permitted Acquisition Documents;

(i)            no Default or Event of Default or Borrowing Base Deficiency shall have occurred and be continuing both before and after giving effect to such Acquisition and any Indebtedness incurred in connection therewith;

(j)            [reserved];

(k)           the Permitted Acquisition Consideration shall be paid only with the proceeds of a substantially contemporaneous issuance (other than to a Subsidiary) of common stock of the Parent or a substantially contemporaneous contribution of capital (that does not constitute Indebtedness) to the Parent;

(l)            after giving effect to the Acquisition (including any increase to the Borrowing Base resulting therefrom), Liquidity shall be no less than 15% of the then effective Borrowing Base; and

(m)          the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officer certifying that all of the requirements set forth above have been

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satisfied or will be satisfied on or prior to the consummation of such purchase or other Acquisition.

“Permitted Acquisition Consideration” means the aggregate amount of the purchase price, including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), or deferred payments, to be paid on a singular basis in connection with any applicable Permitted Acquisition as set forth in the applicable Permitted Acquisition Documents executed by the Loan Parties in order to consummate the applicable Permitted Acquisition.

“Permitted Acquisition Documents” means with respect to any Acquisition proposed by the Borrower or any Guarantor, final copies or substantially final drafts if not executed at the required time of delivery of the purchase agreement, sale agreement, merger agreement or other primary agreement evidencing such Acquisition, including, without limitation, all legal opinions and any material amendment, modification or supplement to any of the foregoing.

“Permitted Holder” means each Person identified on Appendix III attached hereto.

“Permitted Liens” has the meaning set forth in Section 8.01.

“Permitted Refinancing Debt” means Indebtedness (for purposes of this definition, “New Debt”) substantially contemporaneously incurred in exchange for, or proceeds of which are substantially contemporaneously used to refinance, all of any other Indebtedness (the “Refinanced Debt”); provided that (a) such New Debt is in an aggregate principal amount not in excess of the aggregate principal amount then outstanding of the Refinanced Debt (or, if the Refinanced Debt is exchanged or acquired for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount); (b) such New Debt has a stated maturity no earlier than the stated maturity of the Refinanced Debt and an average life no shorter than the average life of the Refinanced Debt; (c) such New Debt does not contain any covenants which are more onerous to Parent, Borrower and their respective Subsidiaries in any material respects than those imposed by the Refinanced Debt (other than with respect to interest rates); (d) such New Debt (and any guarantees thereof) is subordinated in right of payment to the Loan Obligations (or, if applicable, the Guaranty) to at least the same extent as the Refinanced Debt and is otherwise subordinated on terms substantially reasonably satisfactory to Administrative Agent; (e) such New Debt does not provide for any mandatory prepayment, defeasance, redemption or payment of a sinking fund obligation prior to the date that is the stated maturity date of the Refinanced Debt (other than customary change of control or asset sale tender offer provisions); and (f) no direct or indirect Subsidiary of any Loan Party shall guarantee such New Debt unless such Subsidiary is (or concurrently with any such guarantee becomes) a Guarantor hereunder.  As used herein, “substantially contemporaneously” means with thirty (30) days following the date of such event.

“Person” means an individual, partnership, limited partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority.

“Plan Effective Date” has the meaning set forth in the Plan of Reorganization.

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“Plan of Reorganization” means First Amended Plan of Reorganization filed on September 28, 2016, in the case In re Midstates Petroleum, Company, Inc., et al., Case ▇▇. ▇▇-▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Court for the Southern District of Texas, Houston Division, Dkt. Number 690.

“Plan Supplement” means the Plan Supplement, as such term is defined in the Plan of Reorganization, comprising those documents filed in the Case from August 3, 2016 through August 18, 2016, and located at Dkt. Nos. 438, 455, 476, 509 and 511.

“Pre-Petition RBL” is defined in the recitals.

“Pricing Grid” means the following pricing grid:

Applicable Margin

“Principal Business” means the business of the exploration for, and development, acquisition, production, gathering, processing and upstream marketing of Oil and Gas onshore in the United States of America.

“Pro Rata Share” means, as of any date of determination, with respect to a Revolving Lender’s obligation to make Revolving Credit Loans and right to receive payments of principal, interest, fees, costs, and expenses with respect thereto, (i) prior to the Commitments being terminated or reduced to zero, the percentage obtained by dividing (x) such Revolving Lender’s Commitment Amount by (y) the Aggregate Commitment Amount and (ii) from and after the time the Commitments has been terminated or reduced to zero, the percentage obtained by dividing (x) the aggregate unpaid principal amount of such Lender’s Credit Exposure by (y) the aggregate unpaid principal amount of all Credit Exposure of all Revolving Lenders.

“Proposed Borrowing Base” shall have the meaning set forth in Section 2.04(a)(v).

“Proposed Borrowing Base Value” shall have the meaning set forth in Section 2.04(c)(iii).

“Proved Reserves” means the estimated quantities of hydrocarbons that geological and engineering data demonstrate with a reasonable certainty to be recoverable in future years from known reservoirs attributable to Oil and Gas Properties under then existing economic and operating conditions (i.e. prices and costs as of the date the estimate is made).

“PV-9 Value” means, in respect of the Oil and Gas Properties of the Loan Parties comprising Proved Reserves, the net present value of future cash flows (discounted at nine percent (9%) per annum) calculated by the Borrower based on the information from the most recent Reserve Report delivered by the Parent or Borrower, as applicable, pursuant to Section 5.01(i)(v) or Section 7.02(c) and taking into account all other factors that are reasonably deemed to be material, but provided that each calculation of such expected future cash flow shall be made in accordance with the then existing standards of the Society of Petroleum Engineers,

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provided that in any event (i) appropriate deductions shall be made for severance and ad valorem taxes, and for operating, gathering, transportation and marketing costs required for the production and sale of Oil and Gas produced from such reserves, (ii) the pricing assumptions used in determining PV-9 Value for any particular reserves shall be based upon the Strip Price and (iii) the cash-flows derived from the pricing assumptions set forth in clause (ii) above shall be further adjusted to account for the historical basis differential, in each case, in a manner and in substance acceptable to the Administrative Agent in its reasonable discretion.

“Qualified ECP Obligor” means, in respect of any obligation or liability in respect of a Derivative Contract, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant guaranty obligation or other liability or grant of the relevant security interest becomes or would become effective with respect to such obligation or liability or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Recipient” means (a) Administrative Agent, (b) any Lender and (c) any Issuing Lender, as applicable.

“Refinanced Debt” has the meaning set forth in the definition of “Permitted Refinancing Debt”.

“Regulation U” and “Regulation  X” means Regulation U and Regulation X, respectively, of the FRB.

“Regulatory Curtailment” means the imposition, whether before or after the Closing Date, by any Governmental Authority (including the Oklahoma Corporation Commission) of a limitation on the aggregate maximum volume of salt water that all or any of the Loan Parties are permitted to dispose of in the State of Oklahoma regardless of whether such imposition results from any negotiation, voluntary compliance, mandate, notice, exercise of regulatory authority, or judicial order, enforcement by such Governmental Authority or otherwise.  For the avoidance of doubt, the imposition of the limitations set forth in those certain letters, dated as of February 16, 2016, and August 18, 2016, respectively, from the Oklahoma Corporation Commission’s Oil and Gas Conservation Division, shall constitute a Regulatory Curtailment.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors or other representatives of such Person and such Person’s Affiliates.

“Required Engineered Value” means 95% of the discounted present value of future net income utilizing a 9% discount rate attributable to the Proved Reserves evaluated in the most recent Reserve Report delivered to the Lenders.

“Required Lenders” means, at any time, the Revolving Lenders (excluding Defaulting Lenders) holding at least sixty-six and two-thirds percent (66-2/3%) of the sum of the Credit Exposures attributable to Non-Defaulting Lenders or, if there is no Credit Exposures, Revolving

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Lenders (excluding Defaulting Lenders) holding at least sixty-six and two-thirds percent (66-2/3%) of the sum of the Commitments of all Non-Defaulting Lenders.

“Requirements of Law” means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Reserve Report” means a report, reasonably acceptable to Administrative Agent, covering Proved Reserves attributable to the Oil and Gas Properties of the Loan Parties and setting forth (i) the total quantity of proved developed and proved undeveloped reserves (separately classified as producing, shut-in, behind pipe, and undeveloped), (ii) the estimated future net revenues and future net income and cumulative estimated future net revenues and future net income utilizing a 9% discount rate, (iii) the discounted present value of future net income utilizing a 9% discount rate, and (iv) such other information and data with respect to the Oil and Gas Properties as Administrative Agent may reasonably request.

“Reserve Report Certificate” has the meaning set forth in Section 7.01(h).

“Responsible Officer” means the president, any vice president, the treasurer, the secretary, a corporate counsel, the chief operating officer, the chief financial officer, or the chief executive officer of a Loan Party, or such other Person designated as a Responsible Officer by such Loan Party.

“Revolving Credit Loan” has the meaning ascribed such term in Section 2.01(a).

“Revolving Lender” means, as of any date of determination, a Lender with a Commitment or, if the Commitments have terminated or expired, a Lender with Credit Exposure.

“Sanctioned Country” means, at any time, a country, region or territory that is, or whose government is, the subject or target of any Sanctions.

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union or any EU member state, (b) any Person located, organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person.

“Sanctions” shall mean economic or financial sanctions or trade embargoes administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

“Scheduled Borrowing Base Determination” has the meaning ascribed such term in Section 2.04(a)(ii).

“SEC” means the Securities and Exchange Commission.

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“Security Documents” means the mortgages, security agreements, pledges, assignments and related financing statements listed on Schedule I, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, and any and all other instruments currently existing or now or hereafter executed in connection with or as security for the payment of any of the Obligations.

“Security Termination Date” means the first date on which each of the following events shall have occurred on or prior to such time: (a) all Obligations due and payable are paid in full in cash (other than indemnities and other contingent obligations not then due and payable and as to which no claim has been made as of the time of determination and Obligations arising under any Derivative Contract with a Lender Derivative Party that have either been novated or with respect to which the applicable Loan Party has provided substitute credit support acceptable to such Lender Derivative Party as acknowledged to Administrative Agent in writing); (b) the Commitments under this Agreement and the other Loan Documents are terminated; and (c) all Letters of Credit have terminated or been fully cash collateralized and no Issuing Lending has any obligation to issue Letters of Credit hereunder.

“Solvent” means, as to any Person at any time, that (a) the fair value of all of the property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value of all of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital.

“Special Borrowing Base Determination” has the meaning set forth in Section 2.04(e).

“Stated Maturity Date” means the earlier of (a) fourth anniversary of the Closing Date or (b) September 30, 2020; provided, however, that if such date is not a Business Day, the Stated Maturity Date shall be the immediately preceding Business Day.

“Strip Price” shall mean, at any time, (a) for the remainder of the current calendar year (in the event of a Reserve Report delivered pursuant to Section 5.01(i)(v) or Section 7.02(c)), the average NYMEX Pricing for the contracts in such calendar year, (b) for each of the succeeding three calendar years, the average NYMEX Pricing for the twelve months in each such calendar year, and (c) for the succeeding calendar year, and for each calendar year thereafter, the average NYMEX Pricing for the twelve months in such succeeding calendar year for which NYMEX Pricing is quoted.

“Subsidiary” of a Person means any corporation, association, partnership, joint venture or other business entity of which either (a) more than 50% of the voting stock or other equity interests (in the case of Persons other than corporations), is owned or controlled directly or indirectly by such Person, or one or more of the Subsidiaries of such Person, or a combination thereof, or (b) such Person is the general partner, in the case of any limited partnership.  Unless

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the context otherwise clearly requires, references herein to a “Subsidiary” refer to a Subsidiary of Parent.

“Surety Instruments” means all letters of credit (including standby), banker’s acceptances, bank guaranties, surety bonds and similar instruments.

“Swing Line” means the revolving credit facility made available by Swing Line Lender pursuant to Section 2.01(c).

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.01(c).

“Swing Line Lender” is defined in the preamble.

“Swing Line Loan” has the meaning specified in Section 2.01(c)(i).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.01(c)(ii), which, if in writing, shall be in form of and substance satisfactory to Swing Line Lender.

“Swing Line Settlement Date” means the 15th day and the last day of each calendar month; provided, however, that if any such day is not a Business Day, the applicable Swing Line Settlement Date shall be the Business Day immediately preceding such day.

“Swing Line Sublimit” means an amount equal to the lesser of (a) ten million dollars ($10,000,000) and (b) Available Commitment.  The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitment Amount.

“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.

“Termination Date” means the earlier of (a) the Stated Maturity Date or (b) the date on which the Revolving Lenders’ Commitments terminate or are terminated in accordance with the provisions of this Agreement.

“Test Period” means, for any determination under this Agreement, the four consecutive fiscal quarters of the Parent then most recently ended.

“Threshold Amount” means, at any time, the greater of (a) eight million five hundred thousand dollars ($8,500,000) and (b) five percent (5%) of the then effective Borrowing Base.

“Trading with the Enemy Act” shall mean the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended and in effect from time to time.

“United States” and “U.S.” each means the United States of America.

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

“U.S. Tax Compliance Certificate” has the meaning set forth in Section 3.01(e).

1.02                        Other Interpretive Provisions.  The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.  Unless otherwise specified or the context clearly requires otherwise, the words “hereof”, “herein”, “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, Section, Schedule and Exhibit references are to this Agreement.  The term “documents” includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.  The term “including” is not limiting and means “including without limitation.” In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.” Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation.  The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.  This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to Administrative Agent, Issuing Lender, the Lenders, Borrower and the other Loan Parties, and are the products of all parties.  Accordingly, they shall not be construed against Borrower, the Lenders, Administrative Agent or Issuing Lender merely because of their involvement in the preparation thereof.

1.03                        Accounting Terms and Principles.

(a)                                 Certain accounting terms used herein are defined under Appendix II hereto, and such definitions are incorporated herein.

(b)                                 Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with generally accepted accounting principles in the United States of America (“GAAP”) as in effect from time to time, consistently applied; except that for purposes of Section 9.01, GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements referred to in Section 5.01(c)(i).  In the event that any “Accounting Change” (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then Parent, Borrower and Administrative Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired result that the criteria for evaluating Parent’s and Borrower’s financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made (any such amendment, an “Accounting Change Amendment”).  Borrower shall not be obligated to pay an

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amendment fee to the Lenders for any amendment the sole purpose of which is to effectuate an Accounting Change Amendment.  Until such time as such an amendment shall have been executed and delivered by Parent, Borrower, Administrative Agent and the Majority Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred.  “Accounting Changes” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC.

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

(d)                                 References herein to “fiscal year” and “fiscal quarter” refer to such fiscal periods of Parent.

(e)                                  References herein to Parent’s financial statements or balance sheets shall mean, respectively, the consolidated financial statements or consolidated balance sheets of Parent and its Subsidiaries, if any.

ARTICLE II.
THE CREDIT

2.01                        Amounts and Terms of the Commitments.

(a)                                 Revolving Credit Loans.  Each Revolving Lender severally agrees, on the terms and conditions set forth herein, to make Revolving Credit Loans to Borrower (each such loan, a “Revolving Credit Loan”) during the period of time from and after the Closing Date up to the Termination Date, so long as, after giving effect to any requested Revolving Credit Loans, (i) the Credit Exposure does not exceed the Aggregate Commitment Amount, and (ii) the aggregate amount of such Revolving Lender’s Credit Exposure at any time does not exceed the lesser of such Revolving Lender’s (A) Pro Rata Share of the Borrowing Base (determined as of the date on which the requested Revolving Credit Loan is to be made) and (B) Commitment Amount.  The amount of principal owing on any Revolving Lender’s Revolving Credit Loan at any given time shall be the aggregate amount of all Revolving Credit Loans theretofore made by such Revolving Lender minus all payments of principal theretofore received by such Revolving Lender.  Interest on Revolving Credit Loans shall accrue and be due and payable as provided herein.  Borrower may borrow, repay and reborrow any Revolving Credit Loans loaned hereunder.  At the request of any Revolving Lender (including Swing Line Lender) at any time, Borrower agrees that it will prepare, execute and deliver to such Revolving Lender a promissory

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note (herein called such Revolving Lender’s “Revolving Credit Note”) made by Borrower payable to such Revolving Lender substantially in the form of Exhibit A.  Thereafter, the Revolving Credit Loans evidenced by such Revolving Credit Note and interest thereon shall at all times (including after assignment permitted hereunder) be represented by such Revolving Credit Note.

(b)                                 Letters of Credit.  Subject to the terms and conditions of Section 2.09 below and relying upon the representations and warranties herein set forth, each Issuing Lender agrees to issue standby Letters of Credit upon the request of Borrower at any time and from time to time on and after the Closing Date and up to five (5) Business Days prior to the Termination Date.  No Letter of Credit will be issued in a face amount that, after giving effect to the issuance of such Letter of Credit, would cause (i) the LC Obligation to exceed the Letter of Credit Sub-Facility Amount, (ii) the Credit Exposure to exceed the lesser of (A) the Borrowing Base then in effect and (B) the Aggregate Commitment Amount, or (iii) the aggregate amount of any Revolving Lender’s Credit Exposure at any time to exceed the lesser of such Revolving Lender’s (A) Pro Rata Share of the Borrowing Base (determined as of the date on which the requested Letter of Credit is to be issued) and (B) Commitment Amount.  Borrower shall not request, and the Issuing Lender shall have no obligation to issue, any Letter of Credit the proceeds of which would be made available to any Person to fund any activity or business of or with any Sanctioned Person, or in any Sanctioned Countries, that, at the time of such funding, is the subject of any Sanctions or in any manner that would result in a violation of any Sanctions by any party to this Agreement.  If any Letter of Credit has been drawn upon and the amount so drawn has not been reimbursed, for all purposes hereof to the extent of the Available Commitment then existing, such funding shall be deemed a Revolving Credit Loan in an amount equal to the Matured LC Obligations applicable thereto.

(c)                                  Swing Line Loans.

(i)                                     The Swing Line.  Subject to the terms and conditions set forth herein, Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.01(c), to make loans (each such loan, a “Swing Line Loan”), to Borrower from time to time on any Business Day prior to the Termination Date in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the outstanding amount of Revolving Credit Loans and LC Obligations of the Revolving Lender acting as Swing Line Lender, may exceed the amount of such Revolving Lender’s Pro Rata Share of the Available Commitment; provided, however, that after giving effect to any Swing Line Loan, (A) the sum of the aggregate outstanding amount of the Revolving Credit Loans plus the Swing Line Loans plus LC Obligations shall not exceed the lesser of (1) the Borrowing Base and (2) the Aggregate Commitment Amount at such time, and (B) the sum of the aggregate outstanding amount of the Revolving Credit Loans of any Revolving Lender (other than Swing Line Lender) at such time, plus such Revolving Lender’s Pro Rata Share of the outstanding amount of all LC Obligations at such time, plus such Revolving Lender’s Pro Rata Share of the outstanding amount of all Swing Line Loans at such time shall not exceed the lesser of such Revolving Lender’s (x) Pro Rata Share of the Borrowing Base (determined as of the date on which the requested Revolving Credit Loan is to be made) and (y) Commitment Amount.  Within

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the foregoing limits, and subject to the other terms and conditions hereof, Borrower may borrow under this Section 2.01(c), prepay under Section 2.04, and reborrow under this Section 2.01(c).  Each Swing Line Loan shall bear interest only at a rate based on the Base Rate.  Immediately upon the making of a Swing Line Loan, each Revolving Lender (other than Swing Line Lender) shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Lender’s Pro Rata Share times the amount of such Swing Line Loan.

(ii)                                  Borrowing Procedures.  Each Swing Line Borrowing shall be made upon Borrower’s irrevocable notice to Swing Line Lender and Administrative Agent, which may be given by telephone.  Each such notice must be received by Swing Line Lender and Administrative Agent not later than 10:00 a.m. (Atlanta, Georgia time) on the requested borrowing date, and shall specify (A) the amount to be borrowed, which shall be a minimum of $500,000 or any whole multiple of $100,000 in excess thereof, and (B) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to Swing Line Lender and Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of Borrower.  Promptly after receipt by Swing Line Lender of any telephonic Swing Line Loan Notice, Swing Line Lender will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has also received such Swing Line Loan Notice and, if not, Swing Line Lender will notify Administrative Agent (by telephone or in writing) of the contents thereof.  Unless Swing Line Lender has received notice (by telephone or in writing) from Administrative Agent (including at the request of any Lender other than Swing Line Lender) prior to 11:00 a.m. (Atlanta, Georgia time) on the date of the proposed Swing Line Borrowing (I) directing Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.01(c)(i), or (II) that one or more of the applicable conditions specified in Section 5.02 is not then satisfied, then subject to the terms and conditions hereof, Swing Line Lender will, not later than 11:00 a.m. (Atlanta, Georgia time) on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to Borrower at its office by crediting the account of Borrower on the books of Swing Line Lender in immediately available funds.

(iii)                               Refinancing of Swing Line Loans.

(A)                               On each Swing Line Settlement Date and at any other time Swing Line Lender, in its sole and absolute discretion, may request, Swing Line Lender, on behalf of Borrower (which hereby irrevocably authorizes Swing Line Lender to so request on its behalf), may require that each Revolving Lender make a Revolving Credit Loan (which shall be a Base Rate Loan) in an amount equal to such Revolving Lender’s Pro Rata Share of the amount of Swing Line Loans then outstanding.  Such request shall be made in writing (which written request shall be deemed to be a borrowing notice delivered pursuant to Section 2.02(c) for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal

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amount of Base Rate Loans, but subject to the unutilized portion of the lesser of (1) the Borrowing Base and (2) the Aggregate Commitment Amount and the conditions set forth in Section 5.02.  Swing Line Lender shall furnish Borrower with a copy of the applicable borrowing notice promptly after delivering such notice to Administrative Agent.  Each Revolving Lender shall make an amount equal to its Pro Rata Share of the amount specified in such notice available to Administrative Agent in immediately available funds for the account of Swing Line Lender at Administrative Agent’s Payment Office not later than 3:00 p.m. Atlanta, Georgia time on the day specified in such borrowing notice, whereupon, subject to Section 2.01(c)(iii)(B), each Revolving Lender that so makes funds available shall be deemed to have made a Revolving Credit Loan (which shall be a Base Rate Loan) to Borrower in such amount.  Administrative Agent shall remit the funds so received to Swing Line Lender.

(B)                               If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Loan in accordance with Section 2.01(c)(iii)(A), the request for Revolving Credit Loans submitted by Swing Line Lender as set forth herein shall be deemed to be a request by Swing Line Lender that each of the Revolving Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Lender’s payment to Administrative Agent for the account of Swing Line Lender pursuant to Section 2.01(c)(iii)(A) shall be deemed payment in respect of such participation.

(C)                               If any Revolving Lender fails to make available to Administrative Agent for the account of Swing Line Lender any amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.01(c)(iii) by the time specified in Section 2.01(c)(iii)(A), Swing Line Lender shall be entitled to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by Swing Line Lender in connection with the foregoing.  If such Revolving Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Revolving Lender’s Revolving Credit Loan included in the relevant borrowing or funded participation in the relevant Swing Line Loan, as the case may be.  A certificate of Swing Line Lender submitted to any Revolving Lender (through Administrative Agent) with respect to any amounts owing under this clause (C) shall be conclusive absent manifest error.

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(D)                               Each Revolving Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.01(c)(iii) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Revolving Lender may have against Swing Line Lender, Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Lender’s obligation to make Revolving Credit Loans pursuant to clause (A) of this Section 2.01(c)(iii) is subject to the conditions set forth in Section 5.02.  No such funding of risk participations shall relieve or otherwise impair the obligation of Borrower to repay Swing Line Loans, together with interest as provided herein.

(iv)                              Repayment of Participations.

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

(B)                               If any payment received by Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be refunded by Swing Line Lender under any of the circumstances described in Section 12.05 (including pursuant to any settlement entered into by Swing Line Lender in its discretion), each Revolving Lender shall pay to Swing Line Lender its Pro Rata Share thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate.  Administrative Agent will make such demand upon the request of Swing Line Lender.  The obligations of the Revolving Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(v)                                 Interest for Account of Swing Line Lender.  Swing Line Lender shall be responsible for invoicing Borrower for interest on the Swing Line Loans.  Until each Revolving Lender funds it Revolving Credit Loan or risk participation pursuant to this Section 2.01(c) to refinance such Revolving Lender’s Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of Swing Line Lender.

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

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(vii)                           Alternative Swing Line Procedures.  Notwithstanding the foregoing, Borrower and Swing Line Lender may alter or vary any of the timing for notices of or the form of notice required for Swing Line Borrowings or repayment of Swing Line Loans, the minimum amounts for Swing Line Borrowings or repayment of Swing Line Loans, and/or any of the other borrowing procedures for the Swing Line (collectively referred to as “Alternative Swing Line Procedures”) from those set forth in this Section 2.01(c) pursuant to any Cash Management Agreement or other agreement entered into between Borrower and Swing Line Lender and in effect from time to time.

2.02                        Procedure for Borrowing.

(a)                                 Each Borrowing (other than fundings of Letters of Credit deemed to be Revolving Credit Loans under Section 2.01(b) or refinancings of Swing Line Loans as Revolving Credit Loans under Section 2.01(c)) shall be made subject to the following procedures:

(i)                                     Each such Borrowing of Revolving Credit Loans shall be made upon Borrower’s irrevocable written notice delivered to Administrative Agent in the form of a Notice of Borrowing duly completed, which notice must be received by Administrative Agent prior to 11:00 a.m. (Atlanta, Georgia time) (x) three (3) Business Days prior to the requested Borrowing Date, in the case of LIBOR Loans; and (y) on the requested Borrowing Date, in the case of Base Rate Loans.

(ii)                                  Each Notice of Borrowing shall specify (i) the amount of the Borrowing, which shall be in an aggregate minimum amount (A) for Base Rate Loans, equal to the lesser of (y) $500,000 or any multiple integral of $100,000 thereof or (z) in the case of Revolving Credit Loans, the unadvanced portion of the Available Commitment, and (B) for LIBOR Loans, $1,000,000 or any multiple integral of $250,000 thereof (if the Available Commitment as of such Borrowing Date will be less than $1,000,000, then Borrower may not request a LIBOR Loan); (ii) the requested Borrowing Date, which shall be a Business Day; (iii) the Interest Rate Type of Revolving Credit Loans comprising the Borrowing; and (iv) for LIBOR Loans, the duration of the Interest Period applicable to such Loans.  If the Notice of Borrowing fails to specify the Interest Rate Type, such Borrowing shall be comprised of (x) LIBOR Loans, if such Notice of Borrowing is received by Administrative Agent prior to 11:00 a.m. (Atlanta, Georgia time) three (3) Business Days prior to the requested Borrowing Date, or (y) Base Rate Loans, if such Notice of Borrowing is received after such time.  If the Notice of Borrowing fails to specify the duration of the Interest Period for any Borrowing comprised of LIBOR Loans, such Interest Period shall be one (1) month.

(b)                                 Administrative Agent will promptly notify each Revolving Lender of its receipt of any Notice of Borrowing and of the amount of such Revolving Lender’s Pro Rata Share of that Borrowing, and such Notice of Borrowing shall not thereafter be revocable by Borrower.

(c)                                  Provided the applicable conditions in Article V are met, each Revolving Lender will make the amount of its Pro Rata Share of each Borrowing available to

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Administrative Agent for the account of Borrower at Administrative Agent’s Payment Office by 1:00 p.m. (Atlanta, Georgia time) on the Borrowing Date requested by Borrower in funds immediately available to Administrative Agent.  The proceeds of all such Loans will then be made available to Borrower by Administrative Agent to Borrower’s operating account with Administrative Agent of like funds as received or by wire transfer in accordance with Borrower’s Notice of Borrowing.

2.03                        Conversion and Continuation Elections.

(a)                                 Prior to the Stated Maturity Date, Borrower may, upon irrevocable notice to Administrative Agent in accordance with Section 2.03(b): (i) elect, as of any Business Day, in the case of Base Rate Loans of either Class, or as of the last day of the applicable Interest Period, in the case of LIBOR Loans of either Class, to convert any such Loans into the same Class of Loans of any other Interest Rate Type; or (ii) elect, as of the last day of the applicable Interest Period, to continue any Loans having Interest Periods expiring on such day; provided, that no more than six (6) LIBOR Loan tranches of Revolving Credit Loans, may exist at any one time and if at any time a LIBOR Loan in respect of any Borrowing is reduced by payment, prepayment, or conversion of part thereof to less than $100,000, such LIBOR Loan shall automatically convert into a Base Rate Loan.  Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a LIBOR Loan.

(b)                                 Borrower shall deliver an irrevocable Notice of Conversion/Continuation to be received by Administrative Agent not later than 11:00 a.m. (Atlanta, Georgia time) at least (i) three (3) Business Days in advance of the Conversion/Continuation Date, if the Loans are to be converted into LIBOR Loans and (ii) three (3) Business Days in advance of the last day of the applicable Interest Period, in the case of LIBOR Loans, to continue any such Loans having Interest Periods expiring on such day as LIBOR Loans of the same or different Interest Period, specifying: (A) the proposed Conversion/Continuation Date; (B) the aggregate amount of Loans to be converted or renewed; (C) the Interest Rate Type of Loans resulting from the proposed conversion or continuation; and (D) other than in the case of conversion into Base Rate Loans, the duration of the requested Interest Period.

(c)                                  If, by 11:00 a.m. (Atlanta, Georgia time) on the date that is three (3) Business Days in advance of the last day of any Interest Period applicable to LIBOR Loans, Borrower has failed to timely notify Administrative Agent of its selection for a new Interest Period to be applicable to LIBOR Loans, or if any Event of Default then exists, Borrower shall be deemed to have elected to convert such LIBOR Loans into Base Rate Loans effective as of the expiration date of such Interest Period.  Notwithstanding any contrary provision hereof, if (i) a Borrowing Base Deficiency has occurred and is continuing, no outstanding Loan may be converted to or continued as a LIBOR Loan with an Interest Period longer than one month (and any Notice of Conversion/Continuation that requests the conversion of any Borrowing to, or continuation of any Loan as, a LIBOR Loan shall be deemed to request an Interest Period of one month) and (ii) an Event of Default has occurred and is continuing, no outstanding Loans may be converted to or continued as a LIBOR Loan (and any Notice of Conversion/Continuation that requests the conversion of any Loans to, or continuation of any Loans as, a LIBOR Loan shall be ineffective) and, unless repaid, each LIBOR Loan shall be converted to a Base Rate Loan at the end of the Interest Period applicable thereto.

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2.04                        Borrowing Base Determinations, Mandatory Prepayments of Loans.

(a)                                 Scheduled Borrowing Base Determinations.

(i)                                     Until the Initial Borrowing Base Termination Date, the Borrowing Base shall equal the Initial Borrowing Base Amount, as the same may be adjusted in accordance with Section 2.04(f).  From and after the Initial Borrowing Base Termination Date, the Borrowing Base shall be the amount determined from time to time in accordance with this Section 2.04.

(ii)                                  From and after the Initial Borrowing Base Termination Date, the Borrowing Base shall be redetermined by the Revolving Lenders in good faith and consistent with their usual and customary oil and gas lending criteria as they exist at the time for each Borrowing Base Period (each such determination, a “Scheduled Borrowing Base Determination”), and effective as of the date set forth in such notice of redetermination.

(iii)                               The Borrowing Base shall represent the determination by the Revolving Lenders, in accordance with the provisions herein contained and each such Revolving Lender’s lending practices then in effect for loans of this nature (including, for the avoidance of doubt, each such Revolving Lender’s consideration of the impact of Derivative Transactions), of the loan value assigned to the Proved Reserves evaluated in the most recently delivered Reserve Report and such other credit factors (including without limitation the assets, liabilities, cash flow, current Derivative Contracts, business, properties, prospects, management and ownership of Borrower) that such Revolving Lender, in good faith and consistent with its respective usual and customary oil and gas lending criteria as they exist at such time, deems significant.

(iv)                              Each Scheduled Borrowing Base Determination, each Special Borrowing Base Determination and each redetermination pursuant to the Section 2.04(f)(ii) or Section 2.04(f)(iii) shall be effectuated as follows:  Upon receipt by the Administrative Agent of (A) the Reserve Report and the Reserve Report Certificate required to be delivered by the Borrower to the Administrative Agent, in the case of a Scheduled Borrowing Base Determination, pursuant to Section 7.02(c)(i) and Section 7.02(c)(ii), and, in the case of a Special Borrowing Base Determination and each redetermination in accordance with Section 2.04(f)(ii) or Section 2.04(f)(iii), pursuant to Section 7.02(c)(iii), (B) such other reports, data and supplemental information, including, the information provided pursuant to Section 7.02(h), as may, from time to time, be reasonably requested by the Required Lenders (the Reserve Report, such certificate and such other reports, data and supplemental information being the “Engineering Reports”), and (C) if applicable, a Derivative Cancellation Notice, the Administrative Agent shall evaluate the information contained in the Engineering Reports and Derivative Cancellation Notice, if any, and shall propose a new Borrowing Base (all such amounts being the “Proposed Borrowing Base”) based upon such information and such other information (including, the status of title information with respect to the Oil and Gas Properties as described in the Engineering Reports and the existence of any other Indebtedness) as the Administrative Agent deems appropriate in its sole discretion and

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consistent with its normal oil and gas lending criteria as it exists at the particular time.  In no event shall the Proposed Borrowing Base exceed the Aggregate Commitment Amount.

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

(A)                               in the case of a Scheduled Borrowing Base Determination (1) if the Administrative Agent shall have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 7.02(c)(i) and (ii) and, if applicable, any Derivative Cancellation Notice in a timely and complete manner, then on or before the March 15th and September 15th, as the case may be, of such year following the date of delivery or (2) if the Administrative Agent shall not have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 7.02(c)(i) and (ii) and applicable Derivative Cancellation Notice in a timely and complete manner, then promptly after the Administrative Agent has received complete Engineering Reports and applicable Derivative Cancellation Notice from the Borrower and has had a reasonable opportunity to determine the Proposed Borrowing Base in accordance with Section 2.4(c)(i); and

(B)                               in the case of a Special Borrowing Base Determination or a redetermination pursuant to Section 2.04(f)(ii) or Section 2.04(f)(iii), promptly, and in any event, within fifteen (15) days after the Administrative Agent has received the required Engineering Reports and applicable Derivative Cancellation Notice.

(vi)                              Any Proposed Borrowing Base that would increase the Borrowing Base then in effect must be approved or deemed to have been approved by all of the Revolving Lenders as provided in this Section 2.04; and any Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in effect must be approved or be deemed to have been approved by the Required Lenders as provided in this Section 2.04.  Upon receipt of the Proposed Borrowing Base Notice, each Revolving Lender shall have fifteen (15) days to agree with the Proposed Borrowing Base or disagree with the Proposed Borrowing Base by proposing an alternate Borrowing Base.  If at the end of such fifteen (15) days, any Revolving Lender has not communicated its approval or disapproval in writing to the Administrative Agent, such silence shall be deemed to be an approval of the Proposed Borrowing Base.  If, at the end of such 15-day period, all of the Revolving Lenders, in the case of a Proposed Borrowing Base that would increase the Borrowing Base then in effect, or the Required Lenders, in the case of a Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in effect, have approved or deemed to have approved, as aforesaid, then the Proposed Borrowing Base shall become the new Borrowing Base, effective on the date specified in Section 2.04(a)(vi).  If, however, at the end of such 15-day period, all the Revolving Lenders or the Required Lenders, as applicable, have not approved or deemed to have approved, as aforesaid, then the Administrative Agent shall poll the Revolving Lenders to ascertain the highest Borrowing Base then acceptable to a number of Revolving

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Lenders sufficient to constitute all the Revolving Lenders, in the case of a Proposed Borrowing Base that would increase the Borrowing Base then in effect, or the Required Lenders, in the case of an amount that would decrease or maintain the Borrowing Base, then in effect, for purposes of this Section 2.04 and such amount shall become the new Borrowing Base, effective on the date specified in Section 2.04(a)(vi).

(vii)                           In the event that the Borrower does not furnish to the Administrative Agent and the Revolving Lenders the Reserve Reports, or all such other information and data specified in clauses (v) and (vi) above by the date specified therein, the Administrative Agent and the Revolving Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time to time thereafter in their sole discretion until the Administrative Agent and the Revolving Lenders receive the relevant Reserve Reports, or other information, as applicable, whereupon the Administrative Agent and the Revolving Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.04.

(viii)                        After a redetermined Borrowing Base is approved or is deemed to have been approved by the Required Lenders or all Lenders, as applicable, pursuant to Section 2.04(a)(vi), the Administrative Agent shall notify the Borrower and the Lenders of the amount of the redetermined Borrowing Base (the “New Borrowing Base Notice”), and such amount shall become the new Borrowing Base effective and applicable to the Borrower, the Agents, each Issuing Bank and the Lenders:

(A)                               in the case of a Scheduled Borrowing Base Determination, (x) if the Administrative Agent shall have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 7.02(c)(i) and (ii) in a timely and complete manner, then on or around April 1st or October 1st of each year, as applicable, following such notice, or (y) if the Administrative Agent shall not have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 7.02(c)(i) and (ii) in a timely and complete manner, then on the Business Day next succeeding delivery of such notice; and

(B)                               in the case of a Special Borrowing Base Determination or a redetermination pursuant to Section 2.04(f)(ii) or Section 2.04(f)(iii), on the Business Day next succeeding delivery of such notice.

Such amount shall then become the new Borrowing Base until the next adjustment. Notwithstanding the foregoing, no Scheduled Borrowing Base Determination or a Special Borrowing Base Determination or a redetermination pursuant to Section 2.04(f)(ii) or Section 2.04(f)(iii) shall become effective until the New Borrowing Base Notice related thereto is delivered to the Borrower.

(b)                                 Revolving Lenders’ Discretion.  The Revolving Lenders shall have no obligation to determine the Borrowing Base at any particular amount, either in relation to the Aggregate Commitment Amount or otherwise.  Furthermore, Borrower acknowledges that (i) the Revolving Lenders have no obligation to increase the Borrowing Base, (ii) the Revolving

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Lenders may reduce the Borrowing Base in accordance with Section 2.04(a) at any time after the Initial Borrowing Base Termination Date pursuant to Sections 2.04(a) and (e) as a result of any circumstance, (iii) the Borrowing Base shall be reduced pursuant to Section 2.04(f)(i) at any time (including prior to the Initial Borrowing Base Termination Date), (iv) any increase in the Borrowing Base is subject to the individual credit approval processes of each of the Revolving Lenders which processes shall be conducted on a basis consistent with each such Revolving Lender’s credit standards and assumptions then in effect and (v) no Revolving Lender shall have any obligation to increase its Commitment in connection with an increase in the Borrowing Base.

(c)                                  Mandatory Prepayments of Loans.

(i)                                     Upon Scheduled or Special Borrowing Base Redeterminations.  If in connection with any Scheduled Borrowing Base Determination or Special Borrowing Base Determination, a Borrowing Base Deficiency results, then Borrower shall, within ten (10) Business Days after notice by Administrative Agent to Borrower, give notice to the Administrative Agent of Borrower’s election of any one or a combination of the following:

(A)                               within thirty (30) days of such notice, prepay the Revolving Credit Loans (and, if applicable, Cash Collateralize LC Obligations), together with accrued and unpaid interest thereon, in an aggregate amount equal to such Borrowing Base Deficiency on such date;

(B)                               prepay the Revolving Credit Loans (and, if applicable, Cash Collateralize LC Obligations), together with accrued and unpaid interest thereon, in an amount equal to the Borrowing Base Deficiency in six (6) equal successive monthly payments commencing thirty (30) days following Administrative Agent’s notice to Borrower; or

(C)                               provide a Reserve Report prepared by an Approved Petroleum Engineer covering additional unencumbered Proved Reserves of the Loan Parties not previously evaluated in the most recently delivered Reserve Report having sufficient value and character (as determined in good faith by the Administrative Agent and the Required Lenders) that when added to the Collateral will cause the Borrowing Base to equal the Credit Exposure and within thirty (30) days following Administrative Agent’s notice to Borrower, execute and deliver supplemental or additional Security Documents, in form and substance reasonably satisfactory to the Administrative Agent securing payment of the Obligations and covering such additional Proved Reserves (together with current title evidence or opinions applicable thereto and other documents (including opinions of counsel) reasonably requested by the Administrative Agent, each of which shall be in form and substance reasonably satisfactory to the Administrative Agent);

provided that if the Administrative Agent has not received within such ten (10) Business Day period the required notice from the Borrower, then without any necessity for notice

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to the Borrower or any other Person, the Borrower shall be deemed to have elected to make mandatory prepayments as required in clause (A) above.  Notwithstanding the foregoing, all payments required to be made pursuant to this Section 2.04(c)(i) must be made on or prior to the Stated Maturity Date.

(ii)                                  Upon Redeterminations of the Borrowing Base Related to Specified Events. If the Credit Exposure shall exceed the Borrowing Base in connection with any Borrowing Base adjustment referred to in Section 2.04(f)(i), Section 2.04(f)(ii) or Section 2.04(f)(iii), then Borrower shall within two (2) Business Days following such adjustment (or on such later date as may be expressly permitted hereunder) prepay the Revolving Credit Loans (and, if applicable, Cash Collateralize LC Obligations).

(iii)                               Upon Redeterminations of the Borrowing Base Related to Dispositions and Derivative Liquidations.  Upon delivery to the Administrative Agent of any notice required pursuant to Section 7.02(l) or Section 7.02(q) or any Derivative Cancellation Notice, the Administrative Agent shall evaluate the Proved Reserves or any Derivative Transactions described therein, as applicable, and shall promptly (A) if prior to the Initial Borrowing Base Termination Date, determine the value that the Administrative Agent would have attributed to such Proved Reserves in a determination of the Borrowing Base in accordance with the methodology set forth in Section 2.04(a) based on the most recently delivered Reserve Report as if the Borrowing Base (including any such Proved Reserves) were then subject to Scheduled Borrowing Base Determinations (provided that such determination shall be made without regard to any changes to the Administrative Agent’s price deck since the delivery of the most recent Reserve Report or depletion as a result of production of Oil and Gas from any such Oil and Gas Property since the delivery of the most recent Reserve Report) or (B) if after the Initial Borrowing Base Termination Date, determine the value that the Administrative Agent attributed to such Proved Reserves or Derivative Transactions, as applicable, in connection with the most recent determination of the Borrowing Base (in each case, the “Proposed Borrowing Base Value”).

The Administrative Agent shall thereafter notify the Revolving Lenders of the Proposed Borrowing Base Value and the Revolving Lenders shall promptly agree with the proposed Borrowing Base Value or disagree with such proposed Borrowing Base Value by proposing an alternate Borrowing Base Value.  If approved by the Required Lenders, the Proposed Borrowing Base Value shall constitute the Borrowing Base Value; if the Proposed Borrowing Base Value is not approved by at least the Required Lenders, then the Borrowing Base Value shall equal the largest amount approved by at least the Required Lenders.

If any Disposition before or after the Initial Borrowing Base Termination Date pursuant to Section 8.02(d) or any Derivative Liquidation after the Initial Borrowing Base Termination Date pursuant to Section 8.12(d) shall result in a reduction in the Borrowing Base by the Borrowing Base Value as described above and a Borrowing Base Deficiency shall result therefrom, the Borrower shall within two (2) Business Days of the consummation of such Disposition or Derivative Liquidation prepay the Revolving Credit

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Loans (and, if applicable, Cash Collateralize LC Obligations) in an aggregate amount equal to such Borrowing Base Deficiency on such date.

For the avoidance of doubt, inasmuch as no Derivative Transactions are in effect on the Closing Date, no Borrowing Base reduction or mandatory prepayment shall be required solely as a result of any Derivative Liquidation (if any) occurring prior to the Initial Borrowing Base Termination Date.

(iv)                              Upon Dispositions Following Issuance of Unsecured Indebtedness.  Following the issuance of any Indebtedness permitted by Section 8.05(l), upon the Disposition of any Oil and Gas Property or any interest therein or any Subsidiary owning Oil and Gas Properties pursuant to Section 8.02, which Disposition does not result in the total Credit Exposures exceeding the Borrowing Base (as the same may be adjusted pursuant to Section 2.04 upon any such Disposition), the Borrower shall prepay the Revolving Credit Loans (and, if applicable, Cash Collateralize LC Obligations), together with accrued and unpaid interest thereon, in an amount equal to the lesser of (x) 100% of the net cash proceeds (which net cash proceeds, for the avoidance of doubt, shall not be calculated giving effect to the payment of any other Indebtedness with such cash proceeds) received from such Disposition and (y) the aggregate principal amount of all Revolving Credit Loans plus all LC Obligations; provided that, such payment shall not be due until the earlier to occur of (i) one (1) Business Day prior to any date on which the Parent or any Subsidiary would be required to make a mandatory asset sale offer in respect of any Indebtedness permitted by Section 8.05(l) with the net cash proceeds from such Disposition and (ii) the Stated Maturity Date, provided further, that notwithstanding anything to the contrary, such payment shall be reduced by the amount of net cash proceeds that are reinvested in accordance with the asset sale provisions of such Indebtedness incurred under Section 8.05(l) during the period from the date of such Disposition to the due date of such prepayment as referred to in the first proviso above.

(v)                                 Upon Termination or Reduction of the Commitments.  If, in connection with any termination or reduction of the Aggregate Commitment Amount pursuant to Section 2.12(a)(i), there is a Borrowing Base Deficiency, then the Borrower shall immediately, but in any event within one (1) Business Day, (I) prepay the Revolving Credit Loans in an aggregate principal amount equal to such Borrowing Base Deficiency and (II) if any Borrowing Base Deficiency remains after prepaying all of the Revolving Credit Loans because of LC Obligations, cash collateralize such remaining excess as provided in Section 2.09(h).

(vi)                              Upon an Event of Default.  If an Event of Default has occurred and is continuing, upon any (A) Disposition of Property (other than pursuant to Section 8.02(a)), (B) Derivative Liquidation or (C) incurrence of any Indebtedness, an aggregate amount equal to 100% of the net proceeds thereof shall be immediately applied to repay the Obligations in accordance with the priority set forth in Section 10.06.

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(d)                                 Optional Prepayments.  Borrower may, at any time or from time to time:

(i)                                     prepay Base Rate Loans upon irrevocable notice to Administrative Agent of not less than one (1) Business Day, in whole or in part, in minimum principal amounts of $500,000 or multiple integrals of $100,000 thereof and will include interest accrued to the prepayment date (unless the portion of the Credit Exposure consisting of Base Rate Loans is less than $500,000, then such prepayments shall be equal to the then outstanding amount of Base Rate Loans);

(ii)                                  prepay LIBOR Loans upon irrevocable notice to Administrative Agent not later than 11:00 a.m. (Atlanta, Georgia time) on the date that is three (3) Business Days prior to the date of such prepayment, in whole or in part, in minimum principal amounts of $500,000 or multiple integrals of $100,000 thereof, subject to the payment of any breakage costs to the extent required by Section 3.04; and

(iii)                               prepay Swing Line Loans upon irrevocable notice to Swing Line Lender (with a copy to Administrative Agent) not later than 11:00 a.m. (Atlanta, Georgia time) on the date of such prepayment, in whole or in part, in minimum principal amounts of $500,000 or multiple integrals of $100,000 thereof and will include interest accrued to the prepayment date.

Such notice of prepayment shall specify the date and amount of such prepayment and the Interest Rate Type(s) of Loans to be prepaid.  Administrative Agent will promptly notify each Revolving Lender of its receipt of any such notice and of such Lender’s Pro Rata Share of such prepayment.  The payment amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to each such date on the amount prepaid.  There shall be no penalty or premium for such prepayment, except for funding losses, if any, caused by such prepayment as provided under Section 3.04.

(e)                                  Special Borrowing Base Determination.  In addition to Scheduled Borrowing Base Determinations pursuant to Section 2.04(a), the Borrower may at any time, and the Administrative Agent (as directed by the Required Lenders) may at any time after the Initial Borrowing Base Termination Date (including after a Curtailment Determination Notice Date), each request a special redetermination once during each Borrowing Base Period (“Special Borrowing Base Determination”).  In the event Borrower requests a Special Borrowing Base Determination, Borrower shall deliver written notice of such request to Administrative Agent with sufficient copies for each Revolving Lender which shall include: (i) Reserve Report(s) prepared as of a date not more than thirty (30) calendar days prior to the date of such request, (ii) such other information as Administrative Agent shall reasonably request, and (iii) the amount of the Borrowing Base requested by Borrower to become effective.  Likewise, in the event the Required Lenders exercise their option for a Special Borrowing Base Determination, upon written request and notification by Administrative Agent to Borrower, Borrower shall furnish the information described above within thirty (30) days of such request.  The Revolving Lenders shall redetermine the Borrowing Base in accordance with the procedures set forth in Section 2.04(a) and the Administrative Agent shall give the Borrower and the Lenders notice of the Borrowing Base as so redetermined in accordance with Section 2.04(a)(viii), which redetermined Borrowing Base shall then be the effective Borrowing Base until further

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redetermination or adjustment.  If the Borrower requests a Special Borrowing Base Determination prior to the occurrence of any event of the types described in clauses (a) through (c) of the definition the Initial Borrowing Base Termination Date, then the Initial Borrowing Base Termination Date shall have occurred on the Early Determination Notice Date.

(f)                                   Other Borrowing Base Adjustments.

(i)                                     Adjustment of the Borrowing Base Due to Specified Events.  Notwithstanding anything to the contrary contained herein, the Borrowing Base may be subject to reduction from time to time, including prior to the Initial Borrowing Base Termination Date, pursuant to Section 2.04(f)(iii), Section 7.16(c), Section 8.02(d)(iii), Section 8.05(l) and Section 8.12(d).  Upon the applicable effective date of any adjustment referred to in Section 2.04(f)(iii), Section 7.16(c), Section 8.02(d)(iii), Section 8.05(l) or Section 8.12(d), the Borrowing Base as so reduced shall become the new Borrowing Base immediately and shall remain in effect until redetermined or adjusted pursuant to this Agreement; provided that any such reduction in the Borrowing Base shall be without duplication of any reduction to the Borrowing Base pursuant to Section 2.04(d)(iii).  No such adjustment to the Borrowing Base shall constitute a Special Borrowing Base Determination under Section 2.04(e) of this Agreement.

(ii)                                  Redetermination of the Borrowing Base Upon Request by the Borrower in Connection with Acquisitions.  Unless the Administrative Agent requires a redetermination pursuant to Section 2.04(c)(iv), Borrower may request an additional Borrowing Base redetermination in connection with any acquisition of Proved Reserves permitted under this Agreement with a purchase price (whether calculated individually or in the aggregate with all related acquisitions consummated contemporaneously therewith) of $10,000,000 or more (whether calculated individually or in the aggregate with all acquisitions part of the same closing procedure).  In the event Borrower requests such a Borrowing Base determination, Borrower shall deliver written notice of such request to Administrative Agent with sufficient copies for each Revolving Lender which shall include: (i) Reserve Report(s) prepared as of a date not more than thirty (30) calendar days prior to the date of such request, (ii) such other information as Administrative Agent shall reasonably request, and (iii) the amount of the Borrowing Base requested by Borrower to become effective.  The Revolving Lenders shall redetermine the Borrowing Base in accordance with the procedures set forth in Section 2.04(a), which redetermined Borrowing Base shall then be the effective Borrowing Base until further redetermination or adjustment.  Such redetermination of the Borrowing Base shall not constitute a Special Borrowing Base Determination under Section 2.04(e) of this Agreement.  For the avoidance of doubt, any such redetermination shall be limited to the effects of the transactions described in this Section 2.04(f)(ii) and shall not include changes in the Revolving Lenders’ price decks since the delivery of the most recent Reserve Report or depletion as a result of production of Oil and Gas from any such Oil and Gas Property since the delivery of the most recent Reserve Report.

(iii)                               Redetermination of the Borrowing Base Upon Breach of Curtailment Covenant Prior to Initial Borrowing Base Termination Date.  If a Negative Effect in breach of Section 8.19 occurs prior to the occurrence of any event of

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the types described in clauses (b) through (d) of the definition the Initial Borrowing Base Termination Date, then (i) notwithstanding anything to the contrary in Section 2.04(e) or any other limits on unscheduled redetermination, the Administrative Agent and the Required Lenders shall promptly redetermine the Borrowing Base in accordance with the procedures set forth in Section 2.04(a) and the Administrative Agent shall give the Borrower and the Lenders notice of the Borrowing Base as so redetermined in accordance with Section 2.04(a)(viii) (which redetermined Borrowing Base shall then be the effective Borrowing Base until further redetermination or adjustment) and (ii) the Initial Borrowing Base Termination Date shall have occurred on the Curtailment Determination Notice Date.

(g)                                  Borrower’s Right to Elect Reduced Borrowing Base.  Within three Business Days of its receipt of a new Borrowing Base notice, the Borrower may provide written notice to the Administrative Agent and the Lenders that specifies that for the period from the effective date of the new Borrowing Base notice until the next succeeding Scheduled Borrowing Base Determination date, the Borrowing Base will be a lesser amount than the amount set forth in such new Borrowing Base notice, whereupon such specified lesser amount will become the new Borrowing Base; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency.  The Borrower’s notice under this Section 2.04(g) shall be irrevocable, but without prejudice to its rights to initiate Special Borrowing Base Determinations.

2.05                        Repayment.

(a)                                 The Loans.  Borrower shall repay to Administrative Agent on or before the Stated Maturity Date (or, in the case of Swing Line Loans, the earlier of (x) the first Swing Line Settlement Date to occur after such Swing Line Loan is made and (y) the Stated Maturity Date) for the Revolving Lenders’ respective Pro Rata Shares the Credit Exposure (with the amount paid in respect of any undrawn Letters of Credit to be held as cash collateral by Administrative Agent in accordance with Section 2.09(g)), plus all accrued but unpaid interest and outstanding expenses hereunder or under the Loan Documents.

(b)                                 Interest.

(i)                                     Each Revolving Credit Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date, or date of conversion or continuation pursuant to Section 2.03, as the case may be, at a rate per annum equal to the lesser of (a) the Base Rate or LIBOR, as the case may be, plus the Applicable Margin, or (b) the Highest Lawful Rate.  Each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date, at a rate per annum equal to the lesser (x) the Base Rate plus the Applicable Margin or (y) the Highest Lawful Rate.

(ii)                                  Interest on each Loan shall be paid in arrears on each Interest Payment Date for such Loan or the Stated Maturity Date.  Interest shall also be paid on the date of any payment of Loans under Section 2.05(a) or Section 2.04(c) or (d) for the

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portion of the Loans so paid and upon payment in full thereof and, during the existence of any Event of Default, interest shall be paid on demand of Administrative Agent.

(iii)                               Notwithstanding the foregoing, during an Event of Default, all outstanding principal amounts shall bear interest, after as well as before judgment, at a rate per annum equal to the lesser of (x) the Highest Lawful Rate and (y) the Default Rate set forth on Appendix I (the “Default Rate”).

(c)                                  Other Obligations.  On the Termination Date, unless the Borrower has Cash Collateralized the LC Obligations in accordance with Section 2.09(g), any Letters of Credit issued by Issuing Lender and outstanding for the benefit of any Loan Party shall, at the Issuing Lenders’ sole discretion, be terminated and all sums due and owing thereunder shall be due and payable in full.

2.06                        Fees.

(a)                                 Upfront Fees.  On the Closing Date, Borrower shall pay to the Administrative Agent, for the account of the Revolving Lenders in accordance with their respective Pro Rata Shares, upfront fees in an aggregate amount equal to 0.50% of the Aggregate Commitment Amount.

(b)                                 Commitment Fee.  Borrower shall pay to Administrative Agent, for the ratable benefit of each Revolving Lender (excluding Defaulting Lenders), a fee (“Commitment Fee”) calculated on the average daily amount of the Available Commitment (but, for purposes of calculating the Commitment Fee only, the aggregate principal amount of all Swing Line Loans then outstanding shall be excluded from the Credit Exposure, except to the extent the Revolving Lenders have funded their respective risk participations with respect to such Swing Line Loans) at a per annum rate equal to the Applicable Margin with respect to Commitment Fees.  Such Commitment Fee shall accrue from the Closing Date to the Termination Date and shall be due and payable quarterly in arrears on the first day of each calendar quarter commencing on the first day of the first full calendar quarter following the Closing Date through the Termination Date, with the final payment to be made on the Termination Date.  The Commitment Fee shall accrue at all times after the Closing Date, including at any time during which one or more conditions in Article V are not met.

(c)                                  Letter of Credit Fee.  Borrower agrees to pay to each applicable Issuing Lender, for the ratable account of the Revolving Lenders (excluding Defaulting Lenders), quarterly in arrears on the first day of each calendar quarter commencing on the first day of the first full calendar quarter following the Issuance of the Letter of Credit by such Issuing Lender, a fee (“Letter of Credit Fee”) on the undrawn amount of such Letter of Credit in an amount per annum equal to the Applicable Margin then in effect for LIBOR Loans multiplied by the undrawn stated amount of such Letter of Credit (such fee shall be prorated for any period less than a full year).  Borrower agrees to pay to each Issuing Lender, quarterly in arrears on the first day of each calendar quarter commencing on the first day of the first full calendar quarter following the Issuance of any Letter of Credit by such Issuing Lender, a fronting fee for the account of such Issuing Lender equal to the greater of (A) $500.00 or (B) 0.125% per annum of

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the stated amount of such Letter of Credit, together with such Issuing Lender’s usual and customary fees for amendment to, or transfer of each Letter of Credit.

(d)                                 Other Fees.  Borrower shall pay to the Arranger and Administrative Agent the fees referred to in the Fee Letter at the times and in the amounts set forth in the Fee Letter.

2.07                        Computation of Fees and Interest.

(a)                                 All computations of interest for Base Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed, at any time that such Base Rate Loans are bearing interest based upon clauses (i) or (ii) of the definition of “Base Rate”.  All other computations of fees shall be made on the basis of a 360-day year and actual days elapsed.  Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof up to the last day thereof.

(b)                                 Each determination of an interest rate by Administrative Agent shall be conclusive and binding on the parties in the absence of manifest error.

(c)                                  All fees shall be due and payable and shall be deemed fully earned on the date payment of such fee is required pursuant to the terms of this Agreement.

2.08                        Payments by Borrower; Borrowings Pro Rata.

(a)                                 All payments to be made by Borrower shall be made without set-off, recoupment or counterclaim.  Except as otherwise expressly provided herein, all payments by Borrower shall be made to Administrative Agent at Administrative Agent’s Payment Office for the account of Administrative Agent or the Lender(s) to whom such payment is owed, and shall be made in dollars and in immediately available funds, no later than 12:00 noon (Atlanta, Georgia time) on the date due.  Any payment received by Lender later than 12:00 noon (Atlanta, Georgia time) may, in the discretion of Administrative Agent, be deemed to have been received on the following Business Day for purposes of calculating interest thereon and any applicable interest or fee shall continue to accrue.

(b)                                 Whenever any payment is due on a day other than a Business Day, such payment shall be made on the following Business Day (except as otherwise provided in the definition of “Interest Period”), and such extension of time shall in such case be included in the computation of interest or fees, as the case may be.

(c)                                  Except to the extent otherwise provided herein, (i) each payment by Borrower of fees, other than fees to Administrative Agent or Issuing Lender in such capacities, shall be made for the account of the applicable Lenders pro rata in accordance with their respective Pro Rata Shares, (ii) each payment of principal of Revolving Credit Loans shall be made for the account of the Revolving Lenders pro rata in accordance with their respective outstanding principal amount of Revolving Credit Loans, and (iii) each payment of interest on Revolving Credit Loans shall be made for the account of the Revolving Lenders pro rata in accordance with their respective Pro Rata Shares of the aggregate amount of interest due and payable to the Revolving Lenders.

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(d)                                 Administrative Agent will promptly distribute to each Lender its applicable share of such payment in like funds as received.  Subject to Section 10.06, when Administrative Agent collects or receives money on account of the Loan Obligations or otherwise pursuant to the Security Documents, if such money is insufficient to pay all such Loan Obligations, such money shall be applied first to any reimbursements of any fees or expenses due Administrative Agent and, after payment of such amounts in full, shall be applied in accordance with Section 2.05(a).

(e)                                  Unless Administrative Agent receives notice from Borrower prior to the date on which any payment is due to the Lenders that Borrower will not make such payment in full as and when required, Administrative Agent may assume that Borrower has made such payment in full to Administrative Agent on such date in immediately available funds and Administrative Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent Borrower has not made such payment in full to Administrative Agent, each Lender shall repay to Administrative Agent on demand such amount distributed to such Lender, together with interest thereon for each day from the date such amount is distributed to such Lender at the Federal Funds Rate for the first three (3) days following demand by Administrative Agent and at the Base Rate for each day thereafter until the date repaid.

(f)                                   Except to the extent otherwise expressly provided herein, each Borrowing hereunder shall be from the Revolving Lenders pro rata in accordance with their respective Pro Rata Shares.

2.09                        Issuing the Letters of Credit.

(a)                                 In order to effect the issuance of a Letter of Credit by any Issuing Lender, Borrower shall submit a Notice of Borrowing and a LC Application in writing by telecopy to such Issuing Lender not later than 2:00 p.m. (Atlanta, Georgia time) three (3) Business Days before the requested date of issuance of such Letter of Credit.  Each such Notice of Borrowing and LC Application shall be signed by Borrower, specify the Business Day on which such Letter of Credit is to be issued, the purpose for the requested Letter of Credit, the amount of expected availability for Letters of Credit under the Available Commitment and the Letter of Credit Sub-Facility Amount as of the date of issuance of such Letter of Credit, and the expiry date thereof which shall not be later than the earlier of (i) 12 months after its issuance or such longer period of time as may be agreed by the applicable Issuing Lender and (ii) five (5) Business Days prior to the Stated Maturity Date; provided that any Letter of Credit may provide for automatic renewal thereof for additional periods of up to 12 months or such longer period of time as may be agreed by the applicable Issuing Lender (which in no event shall extend beyond the date referred to in clause (ii) above, except to the extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the applicable Issuing Lender).

(b)                                 Upon satisfaction of the applicable terms and conditions set forth in Article V, the applicable Issuing Lender shall issue such Letter of Credit to the specified beneficiary not later than the close of business at such Issuing Lender’s principal address set forth on Appendix I, on the date so specified.  Each applicable Issuing Lender shall provide Borrower and Administrative Agent with a copy of each Letter of Credit so issued.  Each such

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Letter of Credit shall (i) provide for the payment of drafts, presented for honor thereunder by the beneficiary in accordance with the terms thereon, at sight when accompanied by the documents described therein and (ii) unless otherwise expressly agreed by the applicable Issuing Lender and Borrower at the time such Letter of Credit is issued, be subject to the rules of the “International Standby Practices of 1998” or such later version as may be published by the Institute of International Banking Law and Practice (the “ISP 1998”) and shall, as to matters not governed by the ISP 1998, be governed by, and construed and interpreted in accordance with, the laws of the State of New York.

(c)                                  Upon the issuance date of each Letter of Credit, the applicable Issuing Lender shall be deemed, without further action by any party hereto, to have sold to each other Revolving Lender, and each other Revolving Lender shall be deemed, without further action by any party hereto, to have purchased from such Issuing Lender, a participation, to the extent of such Revolving Lender’s Pro Rata Share, in such Letter of Credit, the obligations thereunder and in the reimbursement obligations of Borrower due in respect of drawings made under such Letter of Credit.  If requested by an Issuing Lender, the other Revolving Lenders will execute any other documents reasonably requested by such Issuing Lender to evidence the purchase of such participation.

(d)                                 Upon the presentment of any draft for honor under any Letter of Credit by the beneficiary thereof that the applicable Issuing Lender determines is in compliance with the conditions for payment thereunder, such Issuing Lender shall promptly notify Borrower and each other Revolving Lender of the intended date of honor of such draft and Borrower hereby promises and agrees, at Borrower’s option, to either (i) pay to such Issuing Lender, within one (1) Business Day of the date payment is due as specified in such notice, the full amount of such draft in immediately available funds or (ii) request a Revolving Credit Loan pursuant to the provisions of Section 2.01(a) and Section 2.02 in the full amount of such draft, which request shall specify that the Borrowing Date of such Revolving Credit Loan is to be within one (1) Business Day of the date payment is due under the Letter of Credit as specified in the Issuing Lender’s notice.  If Borrower fails to timely make such payment because such a Revolving Credit Loan cannot be made pursuant to Section 2.01(a) and/or Section 2.02, each Revolving Lender shall, notwithstanding any other provision of this Agreement (including the occurrence and continuance of a Default or an Event of Default), make available to the applicable Issuing Lender an amount equal to such Revolving Lender’s Pro Rata Share of the presented draft on the day such Issuing Lender is required to so honor such draft.  If such amount is not in fact made available to the applicable Issuing Lender by such Revolving Lender on such date, such Revolving Lender shall pay to such Issuing Lender, on demand made by such Issuing Lender, in addition to such amount, interest thereon at the Federal Funds Rate for the first three (3) days following demand and at the Base Rate thereafter until paid.  Upon receipt by the applicable Issuing Lender from the Revolving Lenders of the full amount of such draft, notwithstanding any other provision of this Agreement (including the occurrence and continuance of a Default or an Event of Default), the full amount of such draft shall automatically and without any action by Borrower, be deemed to have been a Revolving Credit Loan as of the date of payment of such draft.  Nothing in this clause (d) or elsewhere in this Agreement shall diminish Borrower’s obligation under this Agreement to provide the funds for the payment of, or on demand to reimburse any Issuing Lender for payment of any draft presented to, and duly honored by, such Issuing Lender under any Letter of Credit, and the automatic funding of a Revolving Credit Loan

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as in this paragraph provided shall not constitute a cure or waiver of the Event of Default for failure to provide timely such funds as in this paragraph is agreed.

(e)                                  In order to induce the issuance of Letters of Credit by the Issuing Lenders and the purchase of participations therein by the other Revolving Lenders, Borrower agrees with the Issuing Lenders and the other Revolving Lenders that none of Administrative Agent, the Issuing Lenders or any other Revolving Lender shall be responsible or liable (except as provided in the following sentence) for amounts paid by any Issuing Lender, as provided in Section 2.09(d) above, on account of drafts so honored under the Letters of Credit, and Borrower’s unconditional obligation to reimburse the Issuing Lenders for such amounts shall not be affected by any circumstance, act or omission whatsoever (whether or not known to Administrative Agent or any Revolving Lender, including the Issuing Lenders) other than a circumstance, act or omission resulting from the gross negligence or willful misconduct of the applicable Issuing Lender.  Borrower agrees that any action taken or omitted to be taken by any Issuing Lender under or in connection with any Letter of Credit or any related draft, document or property shall be binding on Borrower and shall not put any Issuing Lender under any resulting liability to Borrower, unless such action or omission is the result of the gross negligence or willful misconduct of such Issuing Lender (as determined by a court having competent jurisdiction in a final judgment not subject to further appeal).  Borrower hereby waives presentment for payment (except the presentment required by the terms of any Letter of Credit) and notice of dishonor, protest and notice of protest with respect to drafts honored under the Letters of Credit.  Each Issuing Lender agrees to promptly notify Borrower whenever a draft is presented under any Letter of Credit issued by such Issuing Lender, but failure to so notify Borrower shall not in any way affect Borrower’s obligations hereunder.

(f)                                   In the event that any provision of a LC Application is inconsistent with, or in conflict of, any provision of this Agreement, including provisions for the rate of interest applicable to drawings thereunder or rights of setoff or any representations, warranties, covenants or any events of default set forth therein, the provisions of this Agreement shall govern.

(g)                                  If the Loan Obligations, or any part thereof, are declared or otherwise become immediately due and payable pursuant to Article X of this Agreement, or if any LC Obligations shall be outstanding on the Termination Date, then all LC Obligations shall become immediately due and payable without regard for actual drawings or payments on the Letters of Credit, and Borrower shall be obligated to Cash Collateralize such LC Obligations immediately.  All amounts Cash Collateralized by Borrower under this Section 2.09(g) (and any excess amounts required to be Cash Collateralized pursuant to Section 7.18) may be applied as Administrative Agent elects to any of the various LC Obligations; provided, however, that such amounts applied by Administrative Agent to the LC Obligations shall be (a) first, applied to the Matured LC Obligations, and (b) second, held by Administrative Agent for the benefit of the Issuing Lenders as LC Collateral in the LC Collateral Account until all remaining Loan Obligations have been satisfied.  This Section 2.09(g) shall not limit or impair any rights which Administrative Agent, the Issuing Lenders or any of the Revolving Lenders may have under any other document or agreement relating to any Letter of Credit or LC Obligation, including, without limitation, any LC Application.  Borrower hereby grants a security interest in and lien on the LC Collateral Account to Administrative Agent for and on behalf of the Issuing Lenders and

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the Revolving Lenders as security for the Obligations.  Borrower agrees to execute and deliver from time to time such documentation as Administrative Agent may reasonably request to further assure such security interest.

(h)                                 The Existing Letters of Credit shall automatically be deemed to have been issued under this Agreement as of the Closing Date, and the terms and provisions of the Pre-Petition RBL shall thereafter have no force or effect with respect thereto.  Without limiting the foregoing, (i) each such Existing Letter of Credit shall be included in the calculation of LC Obligation, (ii) all liabilities of Borrower and the other Loan Parties with respect to such Existing Letters of Credit shall constitute Obligations and (iii) each Revolving Lender shall have reimbursement obligations with respect to such Existing Letters of Credit as provided in Section 2.09(c); provided, that in the case of any Existing Letter of Credit that has automatic extension provisions, Borrower shall instruct the applicable Issuing Lender to prevent any automatic extension of such Existing Letter of Credit after the Closing Date.

2.10                        Payments by the Lenders to Administrative Agent.

(a)                                 Unless Administrative Agent receives notice from a Lender on or prior to the Closing Date or, with respect to any Borrowing after the Closing Date, at least one (1) hour prior to the time of such Borrowing, that such Lender will not make available as and when required hereunder to Administrative Agent for the account of Borrower the amount of that Lender’s Pro Rata Share of the Borrowing, Administrative Agent may assume that each Lender has made such amount available to Administrative Agent in immediately available funds on the Borrowing Date and Administrative Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrower on such date a corresponding amount.  If and to the extent any Lender shall not have made its full amount available to Administrative Agent in immediately available funds and Administrative Agent in such circumstances has made available to Borrower such amount, that Lender shall, on the Business Day following such Borrowing Date, make such amount available to Administrative Agent, together with interest at the Federal Funds Rate for the first three (3) days during such period and at the Base Rate thereafter until paid.  A notice of Administrative Agent submitted to any Lender with respect to amounts owing under this Section 2.10(a) shall be conclusive, absent manifest error.  If such amount is so made available, such payment to Administrative Agent shall constitute such Lender’s Loan on the Borrowing Date for all purposes of this Agreement.  If such amount is not made available to Administrative Agent on the Business Day following the Borrowing Date, Administrative Agent will notify Borrower of such failure to fund and, upon demand by Administrative Agent, Borrower shall pay such amount to Administrative Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at the interest rate applicable to such Borrowing.

(b)                                 The failure of any Lender to make any Loan to be made by it or to provide funds for disbursements or reimbursements under Letters of Credit or for its participations in Swing Line Loans on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan or provide funds on such date, but no Lender shall be responsible for the failure of any other Lender to make a Loan to be made by such other Lender or (except as provided by Section 2.14(a)(iv)) to provide funds to be provided by such other Lender.

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2.11                        Sharing of Payments, Etc.

(a)                                 If any Lender shall obtain on account of the Loan Obligations owing to such Lender any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) or receive any collateral in respect thereof in excess of the amount such Lender was entitled to receive pursuant to the terms of this Agreement, such Lender shall immediately (i) notify Administrative Agent of such fact, and (ii) purchase from the other Lenders such participations in the Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment according to the terms hereof; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall, to that extent, be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.03) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation.  Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section 2.11 and will in each case notify the Lenders following any such purchases or repayments.

2.12                        Termination and Reduction of Commitments.

(a)                                 (i)                                     Borrower shall have the right to terminate or to reduce the amount of the Aggregate Commitment Amount at any time, or from time to time, upon not less than three (3) Business Days’ prior notice to Administrative Agent (which shall promptly notify the Lenders) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction (which shall not be less than $5,000,000 or any whole multiple of $1,000,000 in excess thereof), and shall be irrevocable and effective only upon receipt by Administrative Agent; provided that a notice of termination or reduction delivered by Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by Borrower (by notice to Administrative Agent on or prior to the specified effective date) if such condition is not satisfied;

(ii)                                  If any reduction in the Borrowing Base pursuant to any provision of Section 2.04 or Section 7.16(c), Section 8.02(d)(iii) or Section 8.12(d) would result in the Borrowing Base being less than the Aggregate Commitment Amount, then each Revolving Lender’s Commitment Amount shall be automatically and permanently reduced, without premium or penalty, contemporaneously with such reduction in the Borrowing Base by such Revolving Lender’s Pro Rata Share of the amount by which the Borrowing Base being less than the Aggregate Commitment Amount (and concurrently with, and effective on, the effective date of such Borrowing Base reduction, (i) Schedule 2.01 and the register shall each be amended to reflect the decrease in the Aggregate Commitment Amount and the Commitment of each Lender and (ii) the

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Administrative Agent shall promptly distribute to the Borrower, the Issuing Lender and each Lender the revised Schedule 2.01); and

(iii)                               Any termination or deduction of the Aggregate Commitment Amount shall be applied to the Commitments of the Revolving Lenders in accordance with their Pro Rata Shares.

(b)                                 Unless previously terminated, the Commitments shall terminate on the Stated Maturity Date.

(c)                                  The aggregate Commitments of all Lenders once terminated or reduced pursuant to Section 2.12(a) may not be reinstated.

2.13                        Letter of Credit Cash Collateral. At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of Administrative Agent or any Issuing Lender (with a copy to Administrative Agent) Borrower shall Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.14(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

(a)                                 Grant of Security Interest.  Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to Administrative Agent, for the benefit of the Issuing Lenders, and agrees to maintain, a first-priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of the LC Obligation, to be applied pursuant to clause (b) below.  If at any time Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than Administrative Agent and the Issuing Lenders as herein provided (other than with respect to Permitted Liens), or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, Borrower will, promptly upon demand by Administrative Agent, pay or provide to Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

(b)                                 Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.13 or Section 2.14  in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of the LC Obligation (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(c)                                  Termination of Requirement.  Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Lender’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.13 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by Administrative Agent and each Issuing Lender that there exists excess Cash Collateral.  Promptly following any of the events set forth in

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clauses (i) and (ii) of the preceding sentence, the Cash Collateral (or the appropriate portion thereof) shall be returned to the applicable Loan Party or other Person providing such Cash Collateral; provided that to the extent that such Cash Collateral was provided by Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

2.14                        Defaulting Lenders.

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

(i)                                     Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definitions of Required Lenders, Majority Lenders and in Section 12.01.

(ii)                                  Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article X or otherwise) or received by Administrative Agent from a Defaulting Lender pursuant to Section 10.03 shall be applied at such time or times as may be determined by Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Lender or Swing Line Lender hereunder; third, to Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.13; fourth, as Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by Administrative Agent; fifth, if so determined by Administrative Agent and Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.13; sixth, to the payment of any amounts owing to the Lenders, the Issuing Lenders or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lenders or Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, to the payment of any amounts owing to Borrower as a result of any judgment of a court of competent jurisdiction obtained by Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or Matured LC Obligations in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such

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Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Obligation owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Matured LC Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in LC Obligations and Swing Line Loans are held by the Lenders in accordance with their respective Pro Rata Shares without giving effect to Section 2.14(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.14(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)                               Certain Fees.

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

(B)                               Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Pro Rata Share of the undrawn stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.13.

(C)                               With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (B) above, Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in the LC Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each Issuing Lender the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv)                              Reallocation of Participations to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in the LC Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Pro Rata Shares (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 5.02 are satisfied at the time of such reallocation (and, unless Borrower shall have otherwise notified Administrative Agent at such time, Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Credit Exposure attributable to any Non-

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Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v)                                 Cash Collateral, Repayment of Swing Line Loans.  If the reallocation described in clause (iv) above cannot, or can only partially, be effected, Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swing Line Loans in an amount equal to Swing Line Lender’s Fronting Exposure and (y) second, Cash Collateralize the Issuing Lenders’ Fronting Exposure in accordance with the procedures set forth in Section 2.13.

(b)                                 Defaulting Lender Cure.  If Borrower, Administrative Agent, Swing Line Lender and each Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held in accordance with their Pro Rata Shares (without giving effect to Section 2.14(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c)                                  New Swing Line Loans/Letters of Credit.  So long as any Lender is a Defaulting Lender, (i) Swing Line Lender shall not be required to fund any Swing Line Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swing Line Loan and (ii) no Issuing Lender shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY

3.01                        Taxes.

(a)                                 Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an

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Indemnified Tax, then the sum payable by Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)                                 Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of Administrative Agent timely reimburse it for the payment of, any Other Taxes.  Borrower, however, may delay paying or discharging any Other Taxes so long as (i) it is in good faith contesting the validity thereof by appropriate proceedings and has set aside on its books adequate reserves therefor and (ii) no Governmental Authority has initiated any actions to foreclose liens therefor.

(c)                                  Borrower agrees to indemnify and hold harmless each Lender and Administrative Agent for the full amount of Indemnified Taxes or Other Taxes (including any Indemnified Taxes or Other Taxes imposed on amounts payable under this Section 3.01(c)) paid by such Lender or Administrative Agent, as applicable, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally asserted (except to the extent of Other Taxes contested by Borrower as provided in Section 3.01(b) above).  Payment under this indemnification shall be made within thirty (30) days after the date the Lender or Administrative Agent makes written demand therefor and provides a certificate as to the amount of such payment or liability, with certificate shall be conclusive absent manifest error.

(d)                                 If requested by Administrative Agent, upon payment by Borrower of Indemnified Taxes or Other Taxes, Borrower shall furnish Administrative Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment reasonably satisfactory to Administrative Agent.

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

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

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

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

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

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

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

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

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substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner;

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

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

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

(f)                                   If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.01 (including by the payment of additional amounts pursuant to this Section 3.01), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this clause (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this clause (f), in no event will the indemnified party

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be required to pay any amount to an indemnifying party pursuant to this clause (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(g)                                  For purposes of this Section 3.01, any reference to “Lender” includes any Issuing Lender and the term “applicable law” includes FATCA.

3.02                        Illegality.

(a)                                 If any Lender reasonably determines that after the Closing Date a Change in Law has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make LIBOR Loans for any Interest Period, then, on notice thereof by the Lender to Borrower through Administrative Agent, any obligation of that Lender to make LIBOR Loans having an affected Interest Period shall be suspended until such Lender notifies Administrative Agent and Borrower that the circumstances giving rise to such determination no longer exist (which the Lender agrees to do promptly thereafter).  Each Lender represents that as of the Closing Date no such circumstances exist as to such Lender.

(b)                                 If any Lender reasonably determines that it is unlawful to maintain any LIBOR Loan having a particular Interest Period, such Loan will automatically convert into a Base Rate Loan either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Loan.

(c)                                  If the obligation of any Lender to make or maintain LIBOR Loans has been so terminated or suspended as contemplated above, all Loans that would otherwise be made by such Lender as LIBOR Loans having an affected Interest Period shall be instead made as LIBOR Loans with an unaffected Interest Period or if there are no such unaffected Interest Periods, as Base Rate Loans.

(d)                                 Before giving any notice to Administrative Agent under this Section, the affected Lender shall designate a different Lending Office with respect to its LIBOR Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Lender, be illegal or otherwise disadvantageous to the Lender.

3.03                        Increased Costs and Reduction of Return.

(a)                                 If any Change in Law shall:

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender or any Issuing Lender;

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

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

and the result of any of the foregoing shall be to increase the cost to such Lender, Administrative Agent or such Issuing Lender of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, Administrative Agent, or such Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, Administrative Agent or such Issuing Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, Administrative Agent or such Issuing Lender, Borrower will pay to Lender, Administrative Agent or such Issuing Lender, as the case may be, such additional amount or amounts as will compensate Lender, Administrative Agent or such Issuing Lender, as the case may be, for such additional costs incurred or reduction suffered.

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

3.04                        Funding Losses.  Borrower shall reimburse each Lender and hold each Lender harmless from any loss or expense that the Lender may actually sustain or incur as a consequence of: (a) the failure of Borrower to make on a timely basis any payment of principal of any LIBOR Loan; (b) the failure of Borrower to borrow, continue or convert a Loan after Borrower has given (or is deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation (including by reason of the failure to satisfy any condition precedent thereto); (c) the failure of Borrower to make any prepayment in accordance with any notice delivered under Section 2.04; (d) the prepayment or other payment (including after acceleration thereof) of any LIBOR Loan on a day that is not the last day of the relevant Interest Period; (e)

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the automatic conversion under Section 3.02 of any LIBOR Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period; or (f) the assignment of any LIBOR Loan of a Lender to a replacement Lender in connection with the replacement of such assigning Lender pursuant to Section 3.09(b) on a day that is not the last day of the relevant Interest Period; in each case including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Loans or from fees payable to terminate the deposits from which such funds were obtained.  For purposes of calculating amounts payable by Borrower to the Lenders under this Section and under Section 3.03, each LIBOR Loan made by a Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the LIBOR for such LIBOR Loan by a matching deposit or other borrowing in the interbank eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Loan is in fact so funded.

3.05                        Inability to Determine Rates.  If Administrative Agent determines that for any reason adequate and reasonable means do not exist for determining the LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan, or the Required Lenders notify Administrative Agent that the LIBOR applicable for any requested Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, Administrative Agent will promptly so notify Borrower.  Thereafter, the obligation of such Lenders to make, maintain or convert Loans into LIBOR Loans hereunder having such Interest Period shall be suspended until Administrative Agent upon the instruction of the Required Lenders revokes such notice in writing and each LIBOR Loan that has been affected will automatically, on the last day of the then-existing Interest Period therefor, convert into LIBOR Loans having unaffected Interest Periods or if there are none, into a Base Rate Loan.  Upon receipt of such notice, Borrower may, notwithstanding anything in this Agreement to the contrary, revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.  If any of the Lenders notify Borrower through Administrative Agent of any event occurring after the date hereof that will entitle such Lender to compensation pursuant to Section 3.01 or 3.03 or if any of the Lenders shall notify Borrower through Administrative Agent of any event as to illegality under Section 3.02, then such Lender shall designate a different Lending Office for the Loans affected by such event if such designation will, as the case may be, avoid the need for, or reduce the amount of, such compensation or avoid such illegality and will not, in the reasonable opinion of the Lender, be disadvantageous to the Lender.

3.06                        Contents of Notice.  If any Lender or Issuing Lender requests payment or reimbursement from Borrower under Section 3.03 or 3.04, such Lender or Issuing Lender shall deliver to Borrower (with a copy to Administrative Agent) a notice requesting same and shall set forth in reasonable detail the basis and amount of its request for compensation.  Any request for additional compensation under Section 3.03 or 3.04 shall be paid by Borrower within ten (10) days of the receipt by Borrower of the notice described in this Section 3.06.

3.07                        [Reserved].

3.08                        Survival.  Failure or delay on the part of any Lender or any Issuing Lender to demand compensation pursuant to this Article III shall not constitute a waiver of such Lender’s or any Issuing Lender’s right to demand such compensation; provided that Borrower shall not be required to compensate a Lender or any Issuing Lender pursuant to this Article III for any

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Indemnified Taxes, Other Taxes, increased costs or reductions incurred more than 270 days prior to the date that such Lender or Issuing Lender, as the case may be, notifies Borrower of the change in law or other circumstance giving rise to such request for reimbursement or indemnification for Indemnified Taxes, Other Taxes, increased costs or reductions and of such Lender’s or Issuing Lender’s intention to claim compensation therefor; and provided further that, if the change in law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

3.09                        Mitigation Obligations.

(a)                                 Designation of Different Lending Office.  If any Lender requests compensation under Section 3.03, or if Borrower is required to pay any additional amount or indemnification to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.03, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)                                 Replacement of Lenders.  If (i) any Lender requests compensation under Section 3.03, (ii) Borrower is required to pay any additional amount or indemnification to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or (iii) any Revolving Lender is a Defaulting Lender or a Non-Consenting Lender, then Borrower may, at its sole expense and effort, upon notice to such Lender and Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.08), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that Borrower shall have received the prior written consent of Administrative Agent (and, in the case of an assignment of a Commitment, each Issuing Lender and the Swing Line Lender) (such consent(s) not to be unreasonably be withheld), such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Matured LC Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrower (in the case of all other amounts), and, in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling Borrower to require such assignment and delegation cease to apply.

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ARTICLE IV.
SECURITY

4.01                        The Security.

(a)                                 On the Closing Date, the Loan Obligations are secured by a Lien on all of the Mortgaged Properties and such other Collateral described in Schedule I that secured the Pre-Petition RBL under the Security Documents, as same may be amended or supplemented from time to time (including on the Closing Date) as provided in this Agreement and the Security Documents.

(b)                                 From and after the Closing Date, the Collateral securing the Loan Obligations shall include (A) all of the Mortgaged Properties that secured the Pre-Petition RBL (except to the extent released in accordance with this Agreement), (B) a Lien on substantially all of the tangible and intangible assets of each Loan Party related to such Mortgaged Properties that secured the Pre-Petition RBL, deposit accounts, commodity accounts and securities accounts (other than Excluded Accounts), general intangibles, all as-extracted collateral related to any Mortgaged Property, inventory, equipment, fixtures and proceeds of the foregoing, other than any Excluded Assets (as defined in the Security Documents), (C) additional Mortgages on Proved Reserves set forth in the Initial Reserve Report delivered pursuant to Section 5.01(i) sufficient to cause at least the Required Engineered Value of such Proved Reserves to be covered by a Mortgage in favor of the Administrative Agent (after taking account of the Mortgaged Properties that secured the Pre-Petition RBL), provided that the Loan Parties shall use commercially reasonable efforts to execute and deliver Mortgages covering all of the Loan Parties’ Oil and Gas Properties, (D) such additional Mortgages as may be required from time to time in accordance with Section 4.02, and (E) a Lien on substantially all of the tangible and intangible assets of each Loan Party, including Derivative Contracts, deposit accounts, commodity accounts and securities accounts (other than Excluded Accounts), general intangibles, Equity Interests, all as-extracted collateral related to any Mortgaged Property, all inventory, all equipment, all fixtures and all proceeds of the foregoing, other than any Excluded Assets (as defined in the Security Documents) and except in each case for those properties and assets as to which Administrative Agent shall determine (and shall have confirmed in writing to the Borrower) in its reasonable discretion that the costs of obtaining such Liens are excessive in relation to the value of the Collateral to be encumbered thereby.

Notwithstanding the foregoing, Parent, Borrower and their respective Subsidiaries will not be required to take any action with respect to the perfection of a Lien in motor vehicles or letter-of-credit rights.

4.02                        Agreement to Deliver Security Documents.

(a)                                 On the Closing Date, the Loan Parties shall execute such additional Mortgages, security agreements, financing statements and other Security Documents substantially similar to the mortgages, security agreements, financing statements and other security documents executed in connection with the Pre-Petition RBL, or otherwise in form and substance reasonably satisfactory to Administrative Agent, for the purpose of granting and perfecting first and prior Liens (after taking account of the Mortgaged Properties that secured the

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Pre-Petition RBL) to the Administrative Agent for the benefit of itself, the Issuing Lenders, the Swing Line Lender and the Lenders in at least the Required Engineered Value of the Oil and Gas Properties reflected in the Initial Reserve Report delivered under Section 5.01(i), provided that the Loan Parties shall use commercially reasonable efforts to execute and deliver Mortgages covering all of the Loan Parties’ Oil and Gas Properties (provided that no additional Mortgages shall be required on the Closing Date with respect to Oil and Gas Properties located in the State of Louisiana).  In connection with each Scheduled Borrowing Base Determination, Special Borrowing Base Determination or redetermination pursuant to the Section 2.04(f)(ii) or Section 2.04(f)(iii), Borrower shall provide to Administrative Agent a report listing all current Mortgaged Properties included in the Reserve Report that secure the Loan Obligations to ascertain whether such Mortgaged Properties represent at least the Required Engineered Value of the Proved Reserves in the Reserve Report delivered by Borrower to Administrative Agent on such date or in connection with such Scheduled Borrowing Base Determination, Special Borrowing Base Determination or redetermination pursuant to the Section 2.04(f)(ii) or Section 2.04(f)(iii), as the case may be, after giving effect to exploratory and production activities, acquisitions, dispositions and production.  In the event that the Mortgaged Properties securing the Loan Obligations do not represent at least the Required Engineered Value, then, within thirty (30) days of such date or such Scheduled Borrowing Base Determination, Special Borrowing Base Determination or redetermination pursuant to the Section 2.04(f)(ii) or Section 2.04(f)(iii), as the case may be, Parent and Borrower shall, and shall cause their respective Subsidiaries to, grant to Administrative Agent as security for the Loan Obligations a first-priority Lien interest (subject to Permitted Liens) on additional Proved Reserves not already subject to a Lien of the Security Documents such that after giving effect thereto, the Mortgaged Properties securing the Loan Obligations will represent at least the Required Engineered Value of such total value, provided that the Loan Parties shall use commercially reasonable efforts to execute and deliver Mortgages covering all of the Loan Parties’ Oil and Gas Properties.  All such Liens will be created and perfected by and in accordance with the provisions of deeds of trust, security agreements and financing statements or other Security Documents, all in form and substance reasonably satisfactory to Administrative Agent and in sufficient executed and acknowledged counterparts for recording purposes.  In order to comply with the foregoing, if any Subsidiary places a Lien on its Oil and Gas Properties and such Subsidiary is not a Guarantor, then it shall become a Guarantor.

(b)                                 The Borrower agrees to deliver promptly, if requested by the Administrative Agent, in connection with any new mortgage of Oil and Gas Properties required by Section 4.02, or in the event that a new Loan Party is formed, acquired or otherwise becomes party to any Loan Document, favorable opinions from legal counsel acceptable to the Administrative Agent with respect to any Collateral confirming that such Collateral is subject to Security Documents securing Loan Obligations that constitute and create legal, valid and duly perfected Liens in such properties and interests and the proceeds thereof, and covering such other matters as the Administrative Agent may request in good faith.

(c)                                  Notwithstanding the foregoing, the Administrative Agent will not require additional Mortgages to be executed and delivered after the Closing Date on Oil and Gas Properties located in the State of Louisiana unless and until any such property constitutes a Proved Reserve or the Administrative Agent, in consultation with the Borrower, reasonably

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determines that the value of such Oil and Gas Properties justifies the execution and delivery of such Mortgages.

4.03                        Perfection and Protection of Security Interests and Liens.  Each of Parent and Borrower will, and will cause its Subsidiaries to, from time to time deliver to Administrative Agent such additional Mortgages, security agreements, financing statements, amendments, assignment and continuation statements, and other documents, properly completed and executed (and acknowledged when required) by such Loan Party in form and substance reasonably satisfactory to Administrative Agent, that the Revolving Lenders reasonably request for the purpose of perfecting, confirming, or protecting any Liens securing the Loan Obligations or other rights in the Collateral.

4.04                        Letters in Lieu/Power of Attorney.

(a)                                 Upon the occurrence and during the continuance of an Event of Default and if so requested by Administrative Agent, each of Parent and Borrower shall, and shall cause its Subsidiaries to, provide to Administrative Agent undated letters, in the form of Exhibit G attached hereto, in blank to each purchaser of production and disburser of proceeds of production from or attributable to the Mortgaged Properties, with the addressees left blank, authorizing and directing the addressees to make future payments attributable to production from the Mortgaged Properties directly to Administrative Agent for the ratable benefit of the Lenders.

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

4.05                        Assignment of Production/As-Extracted Collateral.  Notwithstanding that, under the Mortgages, each Loan Party, as applicable, has granted a Lien in favor of Administrative Agent for the ratable benefit of the Lenders secured thereby in all Oil and Gas produced and all As-Extracted Collateral (as defined in Article 9 of the Uniform Commercial Code) accruing to the Mortgaged Properties covered by such Mortgages:

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(a)                                 Until such time as an Event of Default shall have occurred and be continuing and Administrative Agent shall notify each Loan Party, as applicable, to the contrary, each Loan Party shall be entitled to receive from the purchasers or disbursers of its production all such As-Extracted Collateral and all proceeds thereof, subject however to the Liens created under the Mortgages, which Liens are hereby affirmed and ratified.  Upon the occurrence and during the continuance of an Event of Default, Administrative Agent may deliver to the addressees the letters-in-lieu described in Section 4.04(a) above or other notices permitted under Article 9 of the Uniform Commercial Code and may exercise all rights and remedies granted under the Mortgages, including the right to obtain possession of all proceeds of As-Extracted Collateral then held by any Loan Party and to receive directly from the purchaser or disburser of production all other proceeds of As-Extracted Collateral.

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

(c)                                  Each of Parent and Borrower will, and will cause its Subsidiaries to, if requested by the Administrative Agent upon the occurrence and during the continuance of an Event of Default join with Administrative Agent in notifying in writing (and accompanied, if necessary, by certified copies of the applicable Mortgages) the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgages, and instructing that all proceeds of As-Extracted Collateral be paid directly to Administrative Agent for the ratable benefit of the applicable Lenders and other secured parties.

4.06                        Authorization to File Financing Statements.  Each of Parent and Borrower hereby authorizes, and shall cause each of its Subsidiaries to authorize, Administrative Agent to file, in any applicable jurisdiction where Administrative Agent deems it reasonably necessary, a financing statement or statements.  At the request of Administrative Agent, Parent and Borrower will, jointly and severally, pay the cost of filing or recording this instrument, as a financing statement, in all public offices at any time and from time to time whenever filing or recording of any financing statement is deemed by Administrative Agent to be reasonably necessary or desirable.

4.07                        Exclusion of Flood Properties.  Notwithstanding any provision in any Mortgage to the contrary, in no event is any “building” or “mobile home” (each as defined in Regulation H promulgated under the Flood Insurance Laws) included in the definition of “Mortgaged Properties” and no building or mobile home is hereby encumbered by this Mortgage. As used herein, “Flood Insurance Laws” shall mean the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, and the regulations (including Regulation H as promulgated by the F.R.S. Board), each as it may be amended, reformed or otherwise modified from time to time.

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ARTICLE V.
CONDITIONS PRECEDENT

5.01                        Conditions of Initial Credit Extensions.  The obligation of each Revolving Lender to make its initial Loan hereunder and the obligation of the Issuing Lender to issue its initial Letter of Credit hereunder are subject to the condition that Administrative Agent shall have received on or before the Closing Date all of the following, in form and substance satisfactory to Administrative Agent and each Revolving Lender, and in sufficient copies for each Revolving Lender:

(a)                                 Credit Agreement and Other Loan Documents.  This Agreement, the Security Documents, the Guaranties, if any, and such other Loan Documents made a part hereof to be executed and delivered at the Closing Date, executed by each party thereto, and where appropriate, properly acknowledged and notarized, including, with respect to the Oil and Gas Properties of the Borrower or any Guarantor, a duly executed Mortgage providing for a fully perfected Lien, in favor of the Administrative Agent, in all right, title and interest of the Borrower or such Guarantor in such Oil and Gas Properties and (and the Administrative Agent shall be reasonably satisfied that the Mortgages create first-priority, perfected Liens (subject only to Liens permitted by Section 8.01) on at least the Required Engineered Value of the Oil and Gas Properties evaluated in the Initial Reserve Report, together with amendments to the Closing Date Mortgages to reflect the terms of this Agreement to the extent that the Administrative Agent has determined that such amendments are necessary or desirable to continue its Liens securing the Pre-Petition RBL.

(b)                                 Secretary’s Certificates.  A certificate of the Secretary or Assistant Secretary of each Loan Party certifying as of the Closing Date: (i) resolutions adopted by such Loan Party and authorizing the transactions contemplated hereby; (ii) the names and genuine signatures of the Responsible Officers of such Loan Party authorized to execute, deliver and perform, as applicable, this Agreement, the Security Documents and all other Loan Documents to be delivered hereunder; (iii) the Organization Documents of such Loan Party as in effect on the Closing Date; (iv) the good standing certificate for such Loan Party in its jurisdiction of organization as of a date no more than thirty (30) days prior to the Closing Date; and (v) as applicable, certificate(s) of authority for Borrower in the States of Texas and Oklahoma evidencing such Loan Party’s qualification to do business in such state as of a date no more than thirty (30) days prior to the Closing Date.

(c)                                  Financial Statements.  (i) Parent’s unaudited financial statements for the fiscal quarter ended March 31, 2016 and audited financial statements for the fiscal year ended December 31, 2015, (ii) Parent’s balance sheet dated as of September 30, 2016, giving pro forma effect to any Loans made and Letters of Credit issued under this Agreement on the Closing Date, and (iii) a 13-week cash flow statement (including sources and uses), substantially in the form of Exhibit I attached hereto.

(d)                                 Title and Environmental Diligence.  Evidence of title covering a portion of the Oil and Gas Properties covered by the Reserve Report delivered under Section 5.01(i)(v) reasonably satisfactory to Administrative Agent, and Administrative Agent shall be otherwise reasonably satisfied with Borrower’s compliance with applicable Environmental Laws.

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(e)                                  Payment of Fees.  Evidence of payment by Borrower of all accrued and unpaid fees, costs and expenses owed pursuant to this Agreement and the Fee Letter to the extent then due and payable on the Closing Date, together with (i) attorney costs of Administrative Agent to the extent invoiced prior to or on the Closing Date, (ii) such additional amounts of attorney costs and filing fees as shall constitute Administrative Agent’s estimate of same incurred or to be incurred by it through the Closing Date (provided that such estimate shall not thereafter preclude final settling of accounts between Borrower and Administrative Agent), (iii) any costs, fees and expenses arising under or referenced in Sections 2.06 and 12.04, and (iv) all fees of FTI Consultants, Inc. to the extent invoiced prior to or on the Closing Date.

(f)                                   Responsible Officer’s Certificate.  A certificate executed by a Responsible Officer of Borrower stating that (i) the representations and warranties contained in this Agreement and the other Loan Documents are true and correct in all material respects as of the Closing Date (unless limited to an earlier date, in which case, true and correct in all material respects as of such earlier date), (ii) no Default or Event of Default has occurred and is continuing, and (iii) all conditions set forth in this Section 5.01 and Section 5.02 have been satisfied.

(g)                                  Solvency Certificate.  A certificate executed by a Responsible Officer of Borrower stating that after giving effect to this Agreement, each of Parent and Borrower is Solvent.

(h)                                 Insurance.  Certificates of insurance coverage of the Loan Parties in form and substance reasonably satisfactory to the Administrative Agent evidencing that the Loan Parties are carrying insurance in accordance with Section 7.06, containing loss payable clauses (in the case of casualty insurance policies insuring the applicable Loan Party’s Property) endorsed in favor of and made payable to the Administrative Agent as sole “loss payee” (or other formulation acceptable to the Administrative Agent) and containing additional insureds clauses naming the Administrative Agent, each Issuing Lender and the Lenders as “additional insureds” thereunder, and providing that the insurer will endeavor to give at least 30 days (or 10 days in the case of non-payment of premiums) prior notice of any cancellation of such insurance policies to the Administrative Agent.

(i)                                     Other Documents.  Each additional document, instrument, or item of information reasonably requested by Administrative Agent or any Lender, including without limitation:

(i)                                     copies of UCC and other Lien searches on Parent, Borrower and each Subsidiary thereof evidencing no prior Liens filed against Borrower or on the Collateral other than Permitted Liens;

(ii)                                  certificates of insurance evidencing compliance with Section 7.06 of this Agreement;

(iii)                               a list of all Derivative Contracts to which Parent, the Borrower or any of their respective Subsidiaries is a party, specifying the counterparty, type of contract, the notional volumes or amounts, the tenor and pricing features;

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(iv)                              opinions of counsel from (A) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel of Parent and Borrower, and (B) local counsel(s) of Parent or Borrower in the States of Oklahoma and Texas in connection herewith, each such opinions in form and substance reasonably satisfactory to Administrative Agent;

(v)                                 copy of Borrower’s most recently prepared Reserve Report dated as of June 30, 2016 (the “Initial Reserve Report”);

(vi)                              a copy of the April 2016 Business Plan and the Borrower’s then-current business plan, and

(vii)                           a copy of the then-current ARIES database of the Loan Parties’ Oil and Gas Properties.

(j)                                    Disclosure Statement; Plan of Reorganization.

(i)                                     The Administrative Agent and each Revolving Lender shall be satisfied that the disclosure statement filed in accordance with Section 1125 of the Code (the “Disclosure Statement”) with respect to the Plan of Reorganization does not contain any materially inaccurate information (or fail to disclose material information) and that there are no material administrative expenses, priority tax claims, reclamation claims, general unsecured claims or other claims that have not been disclosed or estimated in the Disclosure Statement;

(ii)                                  The Plan of Reorganization, and all orders of the Bankruptcy Court, including, without limitation, the confirmation order entered in connection with the Plan of Reorganization (the “Confirmation Order”) shall be in form and substance satisfactory to each of the Administrative Agent and each Revolving Lender and shall (A) approve this Agreement as binding upon the Lenders, (B) contain the releases in favor of the Lenders, and their related and representative parties, contemplated in the Plan of Reorganization and (C) be final and non-appealable and in full force and effect and shall not have been stayed, reversed, vacated or otherwise modified in a manner material and adverse to interests of the Administrative Agent and the Revolving Lenders or otherwise contrary to this Agreement;

(iii)                               The Plan Effective Date shall have occurred, all conditions precedent to the effectiveness of the Plan of Reorganization shall have been fulfilled or waived as permitted therein, and all transactions contemplated in the Plan of Reorganization or in the Confirmation Order to occur on the effective date of the Plan of Reorganization shall have been substantially consummated in accordance with the terms thereof and in compliance with applicable law, Bankruptcy Court and regulatory approvals;

(iv)                              The Administrative Agent shall have received satisfactory evidence as to the payment in full on the Plan Effective Date of all material administrative expense claims, priority claims and other claims required to be paid upon the Plan Effective Date; and

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(v)                                 The Administrative Agent shall have received from the Borrower for the account of the Existing Lenders a repayment of loans outstanding under the Pre-petition RBL in an aggregate amount of not less than $81,324,387.00, such that, after giving effect thereto, the aggregate outstanding Credit Exposure shall not exceed the Initial Borrowing Base Amount.

(k)                                 Additional Conditions Precedent.  Such additional documentation and evidence of satisfaction of such other conditions as set forth on Appendix I.

The Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding.  For purposes of determining compliance with the conditions specified in this Section 5.01, each Revolving Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Revolving Lender unless the Administrative Agent shall have received notice from such Revolving Lender prior to the proposed Closing Date specifying its objection thereto.

5.02                        Conditions to All Loans.  The obligation of each Revolving Lender to make any Loan (including its initial Loans) and the obligation of the Issuing Lender to issue, amend, renew or extend any Letter of Credit (excluding any automatic extension or renewal) is subject to the satisfaction of the following additional conditions precedent on the relevant Borrowing Date or date of issuance, amendment, renewal or extension, as the case may be:

(a)                                 Administrative Agent shall have received a Notice of Borrowing;

(b)                                 The representations and warranties in Article VI shall be true and correct in all material respects (except for representations and warranties already qualified by materiality or Material Adverse Effect, which shall be true and correct), on and as of such date with the same effect as if made on and as of such date (except to the extent such representations and warranties expressly refer to an earlier date in which case they shall be true and correct in all material respects, except for representations and warranties already qualified by materiality or Material Adverse Effect, which shall be true and correct as of such earlier date);

(c)                                  No Default or Event of Default shall exist or shall result from such Borrowing, issuance, amendment, renewal or extension;

(d)                                 At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, the Credit Exposure shall not exceed the Borrowing Base then in effect; and

(e)                                  At the time of such Borrowing, and after giving effect thereto, the Consolidated Cash Balance shall not exceed the Consolidated Cash Balance Threshold (or, if the Borrower has provided at least five (5) Business Days (or such shorter period as the Administrative Agent shall agree) prior written notice in sufficient detail of a bona fide direct or indirect acquisition of Oil and Gas Properties permitted hereunder in the ordinary course of business, a greater amount requested by the Borrower to be used on the date of such Borrowing to fund the purchase price of such acquisition (provided that after consummation of such

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acquisition, the Consolidated Cash Balance shall not exceed the Consolidated Cash Balance Threshold)).

Each Notice of Borrowing submitted by Borrower shall constitute a representation and warranty by Borrower, as of the date of each such notice and as of each Borrowing Date that the conditions in this Section 5.02 are satisfied.

ARTICLE VI.
REPRESENTATIONS AND WARRANTIES

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

6.01                        Corporate Existence and Power.  Each Loan Party: (a) is validly existing and in good standing under the laws of the jurisdiction of its incorporation, formation or organization, as applicable; (b) has the power and authority and all material governmental licenses, authorizations, consents and approvals to own its assets, carry on its business as currently conducted and to execute, deliver, and perform its obligations under the Loan Documents to which it is a party except where the failure does not constitute a Default and could not reasonably be expected to have a Material Adverse Effect; and (c) is duly qualified as a foreign company and is licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license where a failure could reasonably be expected to result in a Material Adverse Effect.  Schedule 6.01 lists each Subsidiary of Parent as of the Closing Date.

6.02                        Corporate Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of this Agreement and each other Loan Document to which such Person is a party, have been duly authorized by all necessary corporate, partnership or limited liability company action, as applicable, and do not and will not: (a) contravene the terms of any of that Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any material Contractual Obligation (other than the Obligations arising under any Loan Document) to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its property is subject or give rise to a right thereunder to require any payment to be made by any Loan Party; or (c) violate any Requirement of Law.

6.03                        Authorization.  Except for recordations and filings related to the Security Documents, no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person that is a party to a document with a Loan Party evidencing any material Contractual Obligation is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document to which it is a party.

6.04                        Binding Effect.  This Agreement and each other Loan Document to which each Loan Party is a party constitute the legal, valid and binding obligations of such Person to the extent it is a party thereto, enforceable against such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar

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laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

6.05                        Litigation.  Except as disclosed on Schedule 6.05, there are no actions, suits, proceedings, claims or disputes pending, or to the knowledge of Parent or Borrower, threatened, against any Loan Party, or any of its respective properties that, if determined adversely to such Person, would reasonably be expected to have a Material Adverse Effect.  No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan Document, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.

6.06                        [Reserved].

6.07                        ERISA.  As of the Closing Date, no Loan Party sponsors or maintains a Pension Plan or contributes to or has an obligation to contribute to a Multiemployer Plan.

6.08                        Margin Regulations.  The proceeds of the Loans and Letters of Credit shall be used solely for the purposes set forth in and permitted by Section 7.11.  Borrower is not generally engaged in the business of purchasing or selling Margin Stock.

6.09                        Title to Mortgaged Properties.

(a)                                 Except as set forth in Schedule 6.09, each Loan Party has good and defensible title to its respective Oil and Gas Properties, subject to Permitted Liens, and has good title to all other Collateral and all other property necessary or used in the ordinary conduct of its business.  The property of each Loan Party is subject to no Liens, other than Permitted Liens.  Except as set forth on Schedule 6.09, after giving full effect of the Permitted Liens and the dispositions permitted by Section 8.02, the Loan Party specified as the owner owns the net interests in production attributable to the Hydrocarbon Interests as reflected in the most recently delivered Reserve Report, and except as otherwise provided by statute, regulation or the standard and customary provisions of any applicable joint operating agreement, the ownership of such Oil and Gas Properties shall not in any material respect obligate the Loan Party to bear the costs and expenses relating to the maintenance, development and operations of each such Oil and Gas Property in an amount in excess of the working interest of each Property set forth in the most recently delivered Reserve Report that is not offset by a corresponding proportionate increase in the Loan Party’s net revenue interest in such Oil and Gas Property.

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

(c)                                  The rights and Properties presently owned, leased or licensed by the Loan Parties including all easements and rights of way, include all rights and Properties necessary to permit the Loan Parties to conduct their business in the same manner as its business is conducted

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on the Closing Date except where the failure of the foregoing could not reasonably be expected to result in a Material Adverse Effect.

(d)                                 Except for Properties being repaired, all of the Properties of the Loan Parties which are reasonably necessary for the operation of their businesses are in good working condition and are maintained in accordance with prudent business standards, except where the failure of the foregoing could not reasonably be expected to result in a Material Adverse Effect.

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

6.10                        Compliance with Laws and Obligations.  Each Loan Party is in compliance with all laws applicable to either it or its property and with all its Contractual Obligations except where the failure to so comply could not reasonably be expected to result in a Material Adverse Effect.

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

6.12                        Gas Imbalances.  As of the Closing Date, except as set forth on Schedule 6.12, to Parent’s and Borrower’s knowledge, there are no outstanding gas imbalances, take-or-pay or other prepayments with respect to the Loan Parties’ Oil and Gas Properties that would require any Loan Party to deliver Oil and Gas produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, except gas imbalances, take-or-pay or other prepayments not in excess of 2% of the aggregate volume of Oil and Gas produced from such Oil and Gas Properties from the most recent calendar year.

6.13                        Taxes.  Each Loan Party has filed all tax returns and reports required to be filed, or extensions thereof, and has paid all taxes, assessments, fees and other governmental charges levied or imposed upon its or its properties, income or assets otherwise due and payable, except otherwise permitted by Section 7.07.

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6.14                        Financial Condition.

(a)                                 Since the date of the most recent audited annual financial statement delivered to Administrative Agent and the Lenders and through the Closing Date, except for the Chapter 11 Cases, there has been no Material Adverse Effect.

(b)                                 The Parent has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, shareholder’s equity and cash flows (i) as of and for the fiscal year ended 2015, reported on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended June 30, 2016, certified by its chief financial officer.  Such financial statements present fairly in all material respects the financial position and results of operations and cash flows of the Parent and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(c)                                  All balance sheets, all statements of income and of cash flows and all other financial information of the Parent and its Subsidiaries furnished pursuant to Section 7.01(a), (b) and (c) have been and will for periods following the Closing Date be prepared in accordance with GAAP consistently applied with the financial statements referred to in Section 6.14(b), and do or will present fairly in all material respects the consolidated financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended, subject to year-end audit adjustments and the absence of (i) footnotes in the case of the statements referred to in Section 7.01(b) and (c) and (ii) certain quarterly accruals and the calculation of certain quarterly impairment tests in the case of the statements referred to in Section 7.01(c).

(d)                                 The consolidated forecasted balance sheet and statements of income and cash flows of the Parent and its Subsidiaries delivered pursuant to Appendix I, Item 3.D were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Parent’s good faith estimate of its future financial condition and performance.

(e)                                  Except as expressly described in the Plan of Reorganization or as set forth on Schedule 6.14, no Loan Party has on the date of this Agreement any Indebtedness or any contingent liabilities, or off-balance sheet liabilities or partnerships, liabilities for taxes, or unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments other than in respect of the Obligations.

6.15                        Environmental Matters.  Each Loan Party conducts in the ordinary course of business a review of its operations and its compliance with existing Environmental Laws, including such properties which it is acquiring or planning to acquire.  Each Loan Party is in compliance with all Environmental Laws except where the failure to comply could not reasonably be expected to have a Material Adverse Effect and no Loan Party has any liability for any Environmental Claim that could reasonably be expected to have a Material Adverse Effect.

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6.16                        Regulated Entities.  None of the Loan Parties is required to register as an “investment company” under the Investment Company Act of 1940, as amended.  Borrower is not subject to regulation under the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness.

6.17                        Solvency.  As of the Closing Date, each of Parent and Borrower is Solvent.

6.18                        Subsidiaries/Investments.  As of the Closing Date, each of Parent and Borrower has no direct or indirect Subsidiaries and owns directly or indirectly no Equity Interests in any other Person other than as set forth on Schedule 6.01.

6.19                        Insurance.  Each Loan Party’s interest in its respective Oil and Gas Properties is insured with financially sound and reputable insurance companies not Affiliates of Parent or Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where each Loan Party’s Mortgaged Properties are located.

6.20                        Full Disclosure.  None of the factual statements contained in any exhibit, report, written statement or certificate furnished by or on behalf of each Loan Party in connection with the Loan Documents (including the offering and disclosure materials delivered by or on behalf of each Loan Party to Administrative Agent or any Lender prior to the Closing Date), taken as a whole, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered; it being understood and agreed that for purposes of this Section 6.20, such factual information and data shall not include information of a general economic or general industry nature; provided that, with respect to projected financial information, the Parent and the Borrower represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.  There are no statements or conclusions in any Reserve Report or any projections delivered under Section 7.02 that are based upon or include materially misleading information or fail to take into account material information regarding the matters reported therein, it being understood that projections concerning volumes attributable to the Oil and Gas Properties and production and cost estimates contained in each Reserve Report or any projections delivered under Section 7.02 are necessarily based upon professional opinions, estimates and projections and that the Parent, the Borrower and the Subsidiaries do not warrant that such opinions, estimates and projections will ultimately prove to have been accurate.

6.21                        No Default.  Neither a Default nor an Event of Default has occurred and is continuing.

6.22                        Sanctions.

(a)                                 The Parent, Borrower and their Subsidiaries have conducted their businesses in compliance in all material respects with Anti-Corruption Laws and applicable Sanctions.

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(b)                                 None of (i) Parent, Borrower or any of their respective Subsidiaries or, to the knowledge of Parent, Borrower or any such Subsidiary, any of their respective directors, officers, employees or Affiliates or (ii) to the knowledge of the Parent or Borrower, any agent or representative acting or benefitting in any capacity in connection with this Agreement, (A) is owned or controlled by a Sanctioned Person, (B) is a Sanctioned Person or (C) is located, organized  or resident in a Sanctioned Country.  No Loan or Letter of Credit or the use of proceeds therefrom will violate any Anti-Corruption Laws or Sanctions.

6.23                        Patriot Act.  Neither any Loan Party nor any of its Subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act or any enabling legislation or executive order relating thereto.  Neither any Loan Party nor any or its Subsidiaries is in violation of (i) the Trading with the Enemy Act, (ii) any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or (iii) the Act.  None of the Loan Parties (i) is a blocked person described in Section 1 of the Anti-Terrorism Order or (ii) to its knowledge, engages in any dealings or transactions, or is otherwise associated, with any such blocked person.

6.24                        Marketing of Production.  Except in effect on the Closing Date, as listed on Schedule 6.24, or, in the case of contracts entered into after the Closing Date, either disclosed in writing to the Administrative Agent or included in the most recently delivered Reserve Report (with respect to all of which contracts the Parent and the Borrower represent that it or its Subsidiaries are receiving a price for all production sold thereunder which is computed substantially in accordance with the terms of the relevant contract and are not having deliveries curtailed substantially below the subject property’s delivery capacity), no material agreements exist that are not cancelable on 60 days’ notice or less without penalty or detriment for the sale of production from the Loan Parties’ Oil and Gas (including calls on or other rights to purchase, production, whether or not the same are currently being exercised) that (i) pertain to the sale of production at a fixed price and (ii) have a maturity or expiry date of longer than twelve (12) months from the Closing Date or the date of disclosure to the Administrative Agent in writing, as applicable.

6.25                        Derivative Contracts.  As of the Closing Date hereof, Schedule 6.25, and after the Closing Date, each report required to be delivered by the Parent pursuant to Section 7.02(j), sets forth, a true and complete list of all Derivative Contracts of each Loan Party, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net ▇▇▇▇ to market value thereof, all credit support agreements relating thereto (including any margin required or supplied) and the counterparty to each such agreement.

6.26                        Excluded Accounts.  Each Excluded Account existing as of the Closing Date is set forth in Schedule 6.26.

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ARTICLE VII.
AFFIRMATIVE COVENANTS

Until the Security Termination Date:

7.01                        Financial Statements.  Parent shall deliver to Administrative Agent:

(a)                                 Annual Financial Statements. Within 90 days after the end of each fiscal year of Parent, the annual consolidated financial statements of Parent as of the end of each fiscal year, including the related balance sheet and statements of income, members’ equity and cash flows for such year, and applicable comparative financial statements for the previous fiscal year, together with an opinion from a recognized independent public accounting firm retained by Parent and reasonably acceptable to Administrative Agent (without (w) a “going concern” or like qualification or exception (other than any “going concern” qualification as a result of the impending Stated Maturity Date), (x) any qualification or exception (i) as to the scope of such audit, (ii) that relates to the limited scope of examination of matters relevant to such financial statement or (iii) that relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause the Borrower to be in Default) that such financial statements fairly present, in all material respects, the consolidated financial position and results of Parent for the period indicated in accordance with GAAP;

(b)                                 Quarterly Financial Statements. Within 45 days after the end of each of the first three fiscal quarters of Parent in each fiscal year, the unaudited quarterly consolidated balance sheets of Parent as of the end of such quarter and the related statements of income, members’ equity and cash flows for the period then ended, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Responsible Officers as presenting fairly in all material respects the financial condition and results of operations of the Parent and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; and

(c)                                  Monthly Financial Statements.  By December 15, 2016, with respect to the calendar month ending October 31, 2016, and within 30 days after the end of each of the first 11 months of each fiscal year, other than October 31, 2016 and other than the last month of any fiscal quarter, commencing with the month ending November 30, 2016, the unaudited monthly consolidated balance sheets of Parent as of the end of such month and the related statements of income for the period then ended, in each case, certified by one of its Responsible Officers as presenting fairly in all material respects the financial condition and results of operations of the Parent and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, certain quarterly accruals and the calculation of certain quarterly impairment tests.

Notwithstanding anything herein to the contrary, Parent shall be deemed to have furnished the information required by this Section 7.01 if it shall have timely made the same available on

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“▇▇▇▇▇” and/or through its home page on the worldwide web (at the date hereof located at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇).

7.02                        Certificates; Other Production and Reserve Information.  Parent and/or Borrower shall furnish to Administrative Agent:

(a)                                 Curtailment Information.  On or before the tenth (10th) day of each calendar month, a report certified by a Responsible Officer of the Parent setting forth in reasonable detail information regarding average daily Oil and Gas production in the State of Oklahoma for each day of the two calendar month period then most recently ended, together with a comparison between such actual production and the projected Oil and Gas production levels as set forth in the April 2016 Business Plan for such two calendar month period and a certification as to whether or not a Negative Effect has occurred with respect to such two calendar month period;

(b)                                 Compliance Certificate.  Concurrently with the delivery of each of the statements and reports referred to in Sections 7.01(a) and (b), a Compliance Certificate executed by a Responsible Officer of Parent;

(c)                                  Reserve Reports. (i) commencing as of the date set forth in Appendix I, and annually thereafter, as soon as available but in any event no later the date set forth on Appendix I of each year during the term of this Agreement, a Reserve Report prepared by an Approved Petroleum Engineer covering the Oil and Gas Properties as of December 31 of such year, and commencing as of the date set forth in Appendix I,

(ii)                                  as soon as available but in any event no later than the date set forth on Appendix I of each year during the term of this Agreement, a Reserve Report prepared by Parent’s or Borrower’s in-house staff, in a format consistent with the independent consultant’s report, covering the Oil and Gas Properties as of June 30 of such year, and

(iii)                               as soon as available but in no event later than 30 days prior to any Special Borrowing Base Determination or any redetermination pursuant to Section 2.04(f)(ii) or Section 2.04(f)(iii), a Reserve Report prepared by Parent’s or Borrower’s in-house staff, in a format consistent with the independent consultant’s report, covering the Oil and Gas Properties with an “as of” date not more than thirty (30) days prior to the date of such request;

(d)                                 Engineering Data.  Promptly upon the reasonable request of Administrative Agent, subject to limitations on confidentiality, access to copies of all geological, engineering and related data contained in the Loan Parties’ files or readily accessible to the Loan Parties relating to the Oil and Gas Properties as may reasonably be requested;

(e)                                  Additional Information.  Promptly upon the request of Administrative Agent, such additional information regarding the business or financial affairs of the Loan Parties as the Lenders may from time to time reasonably request;

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(f)                                   SEC and Other Filings.  Promptly upon its becoming available, each Form 10-K, Form 10-Q, registration statement or prospectus filed by the Parent with any securities exchange or the SEC;

(g)                                  Notices Under Material Agreements.  Promptly after the furnishing thereof, copies of any financial statement, report or notice (other than ministerial notices) furnished to any Person pursuant to the terms of any preferred stock designation, indenture, loan or credit or other similar agreement in respect of Indebtedness in excess of $10,000,000, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this Section 7.02;

(h)                                 Reserve Report Certificates.  With the delivery of each Reserve Report, a certificate (the “Reserve Report Certificate”) from a Responsible Officer certifying that, to the best of his or her knowledge: (1) the information contained in the Reserve Report and any other information delivered in connection therewith is true and correct in all material respects and any projections based upon such information have been prepared in good faith based upon assumptions believed by the Parent to be reasonable, subject to uncertainties inherent in all projections, (2) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments in excess of the volume specified in Section 8.17 with respect to its Oil and Gas Properties evaluated in such Reserve Report which would require the Parent, the Borrower or any Subsidiary to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, (3) attached to the certificate is a list of all marketing agreements entered into subsequent to the later of the date hereof or the most recently delivered Reserve Report which the Parent could reasonably be expected to have been obligated to list on Schedule 6.25 had such agreement been in effect on the Closing Date, (4) attached thereto is a schedule of the Oil and Gas Properties evaluated by such Reserve Report that are Mortgaged Properties and demonstrating the percentage of the Borrowing Base that the value of such Mortgaged Properties represent and that such percentage is in compliance with Section 4.01, (5) attached to the certificate is (x) a list of its Oil and Gas Properties added to and deleted from the immediately prior Reserve Report and (y) a list showing any change in working interest or net revenue interest in its Oil and Gas Properties (other than Oil and Gas Properties constituting proved undeveloped reserves) occurring and the reason for such change, (6) attached to such certificate is the current list of purchasers of products, including mailing addresses and the ▇▇▇▇▇ covered by such production sales contracts and (7) attached to such certificate are any amendments or supplements to the then-current business plan and financial projections for the Loan Parties for the then immediately following one-year period (presented on a semi-annual basis);

(i)                                     Borrower Plan Performance Reports and Cash Flow Statements.  On the twentieth (20th) day of each month prior to the April 2018 Notice Date, commencing November 20, 2016, (i) a report in reasonable detail setting forth the performance of the Loan Parties relative to the then-current business plan and (ii) an updated thirteen (13) week cash flow statement (included sources and uses) and a variance against prior periods, substantially in the form of Exhibit I attached hereto;

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(j)                                    Derivative Contracts.  Together with the delivery of the Compliance Certificate under Section 7.02(b), a certificate of a Responsible Officer:

(i)                                     comparing aggregate notional volumes of all Derivative Contracts of the Parent, the Borrower and each respective Subsidiary, which were in effect during such period (other than basis differential Derivative Contracts) and the actual production volumes for each of natural gas and crude oil during such period, which certificate shall certify that the hedged volumes for each of natural gas and crude oil did not exceed 100% of actual production or if such hedged volumes did exceed actual production, specify the amount of such excess, and

(ii)                                  setting forth a true and complete list of all Derivative Contracts, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net ▇▇▇▇-to-market value therefor, any new credit support agreements relating thereto, any margin required or supplied under any credit support document, and the counterparty to each such agreement;

(k)                                 Other Accounting Reports.  Promptly upon receipt thereof, (i) a copy of each other material report or opinion submitted to the Parent, Borrower or any of their respective Subsidiaries by independent accountants in connection with any annual, interim or special audit made by them of the books of the Parent, Borrower or any such Subsidiary, and (ii) a copy of any response by the Parent, Borrower or any such Subsidiary, or the board of directors or other equivalent governing body of the Parent, Borrower or any such Subsidiary, to such material report or opinion;

(l)                                     Notice of Sale of Oil and Gas Properties.  In the event any Loan Party intends to Dispose of any Oil or Gas Properties or any Equity Interests in any Subsidiary pursuant to Section 8.02(d) with a PV-9 Value in excess of (x) prior to the Initial Borrowing Base Termination Date, $2,500,000 and (y) after the Initial Borrowing Base Termination Date $5,000,000, written notice of such disposition at least ten (10) Business Days prior thereto (or such shorter period of time as the Administrative Agent may in its sole and absolute discretion agree in writing), the price thereof, the anticipated date of closing and the PV-9 Value of the Oil and Gas Properties to be disposed, and any other details thereof reasonably requested by the Administrative Agent;

(m)                             Notice of Permitted Additional Debt Issuance and Amendments.  Written notice, at least five (5) Business Days (or such shorter period as the Administrative Agent may in its sole and absolute discretion agree) prior to the incurrence of any Indebtedness incurred in reliance on Section 8.05(l), of the principal amount thereof and the anticipated date of closing, together with the most recent drafts of each material document pursuant to which such Indebtedness is to be incurred, and prompt delivery to the Administrative Agent of each such material document following the incurrence of any such Indebtedness.  Additionally, the Borrower will promptly deliver to the Administrative Agent copies of each material amendment, modification or waiver to any such material document;

(n)                                 Notice of Derivative Liquidation.  In the event that any Loan Party receives any notice of early termination of any Derivative Contract to which it is a party from

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any of its counterparties, or any Derivative Contract to which any such Person is a party is subject to a Derivative Liquidation, prompt written notice of the receipt of such early termination notice or such Derivative Liquidation (and in the case of a voluntary Derivative Liquidation of any Derivative Contract, no less than five (5) Business Days’ prior written notice thereof), as the case may be (a “Derivative Cancellation Notice”), setting forth in reasonable detail (and otherwise subject to the Borrower’s good faith estimate), (x) the effect of such Derivative Liquidation on the aggregate notional volume of crude oil, natural gas and natural gas liquids, subject to such Person’s Derivative Contracts and (y) the amount of net cash proceeds received by such Person as a result of such Derivative Liquidation, and (z) the aggregate notional volume of crude oil, natural gas and natural gas liquids affected by such Derivative Liquidation, together with all other Derivative Liquidations consummated since the most recent Scheduled Borrowing Base Determination date (or, prior to the first Scheduled Borrowing Base Determination Date, since the Closing Date), and certifying whether such volume exceeds three percent (3%) of the aggregate notional volume of crude oil, natural gas and natural gas liquids subject to the Derivative Contracts of the Parent, the Borrower and their respective Subsidiaries in effect as of the most recent Scheduled Borrowing Base Determination date (or, prior to the first Scheduled Borrowing Base Determination Date, the Closing Date), and any other details thereof requested by the Administrative Agent or any Lender;

(o)                                 Updated ARIES Database.  Semi-annually, commencing with the delivery of the Reserve Report as of December 31, 2016, files containing the then-current ARIES database of the Loan Parties’ Oil and Gas Properties;

(p)                                 Notice of Acquisitions of Oil and Gas Properties.  Promptly, but in any event within five (5) Business Days, written notice of any acquisition of Oil and Gas Properties by any Loan Party in one or a series of related transaction(s) having a PV-9 Value in excess of $5,000,000 or where the consideration paid exceeded $5,000,000;

(q)                                 Notice of Casualty Events.  Promptly, but in any event within five (5) Business Days after the occurrence thereof (or such later date as the Administrative Agent may in its sole and absolute discretion agree in writing), written notice of the occurrence of any Casualty Event or the commencement of any action or proceeding that could reasonably be expected to result in a Casualty Event, in each case, of any Property of any Loan Party having a PV-9 Value in excess of (x) prior to the Initial Borrowing Base Termination Date, $2,500,000, and (y) after the Initial Borrowing Base Termination Date $5,000,000, and the PV-9 of any Proved Reserves evaluated in the most recent Reserve Report delivered to the Lenders that are the subject of any such Casualty Event or potential Casualty Event;

(r)                                    Notice of Amendment to Organization Documents.  Promptly, but in any event within five (5) Business Days after the execution thereof (or such later date as the Administrative Agent may in its sole and absolute discretion agree in writing), copies of any amendment, modification or supplement to the certificate or articles of incorporation, by-laws, any preferred stock designation or any other organizational document of any Loan Party;

(s)                                   Lease Operating Statements. Concurrently with each delivery of financial statements under Section 7.01(a) and (b), Lease Operating Statements for such calendar quarter; and

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(t)                                    Annual Budget.  Within sixty (60) days following the end of each fiscal year, a copy of the consolidated annual budget for the Parent, the Borrower and their respective Subsidiaries for the forthcoming fiscal year, including the consolidated cash flow budget and operating budget for the Loan Parties, certified as such by a Responsible Officer of Parent.

Notwithstanding anything herein to the contrary, Parent shall be deemed to have furnished the information required by Sections 7.02(f), 7.02(g), 7.02(k), 7.02(m), 7.02(p), 7.02(q) and 7.02(r) if it shall have timely made the same available on “▇▇▇▇▇” and/or through its home page on the worldwide web (at the date hereof located at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇).

7.03                        Notices.  Parent and/or Borrower shall promptly deliver to the Administrative Agent:

(a)                                 Defaults.  Written notice of any Responsible Officer of any Loan Party becoming aware of the occurrence of any Default or Event of Default;

(b)                                 Material Adverse Effect.  Written notice of any Responsible Officer of any Loan Party becoming aware of any matter that has resulted or may reasonably be expected to result in a Material Adverse Effect, including any dispute, litigation, investigation or proceeding which, if adversely determined, could reasonably be expected to have a Material Adverse Effect;

(c)                                  Accounting Changes.  Written notice of any material change in accounting policies or financial reporting practices by any Loan Party;

(d)                                 Formation and Acquisition of Subsidiaries.  At least five (5) Business Days’ prior thereto (or such later date as the Administrative Agent may in its sole and absolute discretion agree in writing), written notice of the formation or acquisition by any Loan Party of any Subsidiary;

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

(f)                                   Title Defects.  All title or other information received after the Closing Date by any Loan Party which discloses any material defect in the title to any property included in the Borrowing Base with a PV-9 Value in excess of $5,000,000.

Each notice under this Section shall be accompanied by a written statement by a Responsible Officer of the applicable Loan Party setting forth details of the occurrence referred to therein, and stating what action, if any, the Loan Parties propose to take with respect thereto and at what time.

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7.04                        Preservation of Corporate Existence, Etc.  Each of Parent and Borrower shall, and shall cause its Subsidiaries to:

(a)                                 preserve and maintain in full force and effect its legal existence, and maintain its good standing under the laws of its state or jurisdiction of incorporation or organization, as applicable, except, in each case, as otherwise permitted by Section 8.03; and

(b)                                 preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary for the normal conduct of its business, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

7.05                        Maintenance of Property.  Each of Parent and Borrower shall, and shall cause its Subsidiaries to:

(a)                                 maintain and preserve all its property that is used or useful in, and material to, its business in good working order and condition, ordinary wear and tear excepted and shall use the reasonably prudent standard of care typical in the industry in the operation and maintenance of its Oil and Gas Properties;

(b)                                 promptly pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all material delay rentals, royalties, expenses and indebtedness accruing under the lease or other agreements affecting or pertaining to its Oil and Gas Properties and will do all other things necessary, in accordance with industry standards, to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder, in each case, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect;

(c)                                  promptly perform or make reasonable and customary efforts to cause to be performed, in accordance with customary industry standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties and other material Properties, in each case, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and

(d)                                 to the extent the Borrower is not the operator of any Property, use commercially reasonable efforts to cause the operator to comply with this Section 7.05 (it being understood that this shall not be construed to require any Loan Party to include this Section 7.05 in any contractual arrangements with such operators).

7.06                        Insurance.  Each of Parent and Borrower shall, and shall cause its Subsidiaries to, maintain, with financially sound and reputable independent insurers, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances which insurance shall name Administrative Agent, for the ratable benefit of the Lenders, as “additional insured” (with respect to liability insurance) and as a “loss payee” (with respect to any casualty insurance) as applicable.

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7.07                        Payment of Obligations.  Each of Parent and Borrower shall, and shall cause its Subsidiaries to, pay and discharge as the same shall become due and payable, all of its obligations and liabilities, including: (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets; (b) all lawful claims that, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, having an outstanding aggregate principal amount of more than the Threshold Amount but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness, in each case except where (i) the validity or amount thereof is being contested in good faith by appropriate proceedings, (ii) the Parent, Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (iii) failure to make payment does not  result in a Lien (other than a Lien permitted by Section 8.01(c)) and (iv) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

7.08                        Compliance with Laws.  Each of Parent and Borrower shall, and shall cause its Subsidiaries to, comply with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.  Each of Parent and Borrower shall, and shall cause its Subsidiaries to, maintain in effect and enforce policies and procedures reasonably designed to promote and achieve compliance by each of Parent, Borrower, its Subsidiaries and their respective directors, officers, employees and agents that are acting in connection with this Agreement with Anti-Corruption Laws and applicable Sanctions in each case, applicable to Parent, the Borrower and its Subsidiaries.

7.09                        Inspection of Property and Books and Records.

(a)                                 Each of Parent and Borrower shall, and shall cause its Subsidiaries to, maintain proper books of record and account, in which, in all material respects, full, true and correct entries in conformity with GAAP on an accrual basis consistently applied shall be made of all financial transactions and matters involving the assets and business of such Person.

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

7.10                        Environmental Laws.  Each of Parent and Borrower shall, and shall cause its Subsidiaries to, conduct its operations and keep and maintain its Oil and Gas Properties in compliance with all Environmental Laws except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

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7.11                        Use of Proceeds.  Borrower shall use the proceeds of the Loans and the Letters of Credit (a) for general corporate purposes of Parent and its Subsidiaries; (b) to support the capital expenditure programs of Parent and its Subsidiaries; and (c) to finance the acquisition and development of Oil and Gas Properties.

7.12                        Further Assurances.  Each of Parent and Borrower shall, and shall cause its Subsidiaries to, promptly cure any defects in the creation and issuance of each Lender’s Note and the execution and delivery of this Agreement, the Security Documents, the Guaranties, if any, or any other instruments referred to or mentioned herein or therein to which such Person is a party.  Each of Parent and Borrower at its expense will promptly do all acts and things, and will execute and file or record, all instruments reasonably requested by Administrative Agent, to establish, perfect, maintain and continue the perfected security interests of Administrative Agent in or the Lien of Administrative Agent on the Collateral.  Borrower will pay the costs and expenses of all filings and recordings and all searches deemed necessary by Administrative Agent to establish and determine the validity and the priority of the Liens created or intended to be created by the Security Documents; and each of Parent and Borrower shall, and shall cause its Subsidiaries to, satisfy all other claims and charges that in the reasonable opinion of Administrative Agent might prejudice, impair or otherwise affect any of the Collateral or any Lien thereon in favor of Administrative Agent for the benefit of the Issuing Lender and the Lenders.

7.13                        Compliance with ERISA.  If after the Closing Date any Loan Party sponsors or maintains a Pension Plan or has an obligation to make contributions to a Multiemployer Plan, each of Parent and Borrower shall, and shall cause its Subsidiaries to (a) maintain such Pension Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law and (b) make all required contributions to such Pension Plan and to such Multiemployer Plan, but excluding any failures under (a) and (b) above that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

7.14                        Subsidiary Guarantors.  Parent and/or Borrower shall (i) notify the Administrative Agent of the formation or acquisition of each Subsidiary pursuant to Section 7.03(d), (ii) cause each such Subsidiary to (A) execute and deliver to Administrative Agent a Guaranty and such other Security Documents within twenty (20) days of such formation or acquisition and as otherwise necessary for Parent and Borrower to comply with Article IV, (B) pledge all of the Equity Interests of such Subsidiary (including, without limitation, delivery of original stock certificates evidencing the Equity Interests of such Subsidiary, together with an appropriate undated stock power for each certificate duly executed in blank by the registered owner thereof, if applicable) and (C) execute and deliver such other additional closing documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent.

7.15                        Accounts.  The Loan Parties shall maintain all of their respective operating and other depository and securities accounts (other than Excluded Accounts) in one or more Controlled Accounts (which shall provide for the activation of exclusive control only upon an Event of Default).  The Borrower will, and will cause each Loan Party to, until the proceeds of any Loans are transferred to a third party in accordance with the Loan Documents, hold the proceeds of any Loans made under this Agreement in a Controlled Account.  The Borrower shall

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give the Administrative Agent prompt written notice of any Excluded Account opened after the Closing Date.

7.16                        Title Information.

(a)                                 On or before the delivery to Administrative Agent of each Reserve Report required by Section 7.02(c), Parent and/or Borrower will deliver title information in form and substance reasonably acceptable to Administrative Agent covering enough of the Oil and Gas Properties evaluated by such Reserve Report that were not included in the immediately preceding Reserve Report, so that Administrative Agent shall have received together with title information previously delivered to Administrative Agent, satisfactory title information on at least 80% of the total value of the Loan Party’s Proved Reserves evaluated by the most recent Reserve Report that are mortgaged as Collateral.

(b)                                 If Parent or Borrower has provided title information for additional properties under Section 7.16(a), Parent and/or Borrower shall, within 60 days of notice from Administrative Agent that title defects or exceptions exist with respect to such additional properties, either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not Permitted Liens raised by such information, (ii) substitute acceptable Mortgaged Properties with no title defects or exceptions except for Permitted Liens having an equivalent value or (iii) deliver title information in form and substance acceptable to Administrative Agent so that Administrative Agent shall have received, together with title information previously delivered to Administrative Agent, satisfactory title information on at least 80% of the total value of the Loan Party’s Proved Reserves evaluated by the most recent Reserve Report that are mortgaged as Collateral.

(c)                                  If Parent and Borrower are unable to cure any title defect requested by Administrative Agent to be cured within the 60-day period or Parent and Borrower do not comply with the requirements to provide acceptable title information covering at least 80% of the total value of the Loan Party’s Proved Reserves evaluated by the most recent Reserve Report that are mortgaged as Collateral, such circumstance shall not be a Default, but instead Administrative Agent and/or the Required Lenders shall have the right to exercise the following remedy in their sole discretion from time to time, and any failure to so exercise this remedy at any time shall not be a waiver as to future exercise of the remedy by Administrative Agent or the Required Lenders.  To the extent that Administrative Agent or the Required Lenders are not satisfied with title to any Mortgaged Property after the 60-day period has elapsed (or if such title defect is incapable of being cured, upon notice of such title defect to Borrower) such unacceptable Mortgaged Property shall not count toward the 80% requirement, and Administrative Agent may send a notice to Parent, Borrower and the Revolving Lenders that the then outstanding Borrowing Base shall be reduced by an amount as determined by the Required Lenders to cause Parent and Borrower to be in compliance with the requirement to provide acceptable title information on 80% of the total value of the Loan Party’s Proved Reserves.  This new Borrowing Base shall become effective immediately after receipt of such notice.

7.17                        Keepwell.  The Parent hereby absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under any Derivative Contract with any Lender

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Derivative Party or any Guaranty in respect of any obligations or other liabilities under a Derivative Contract with any Lender Derivative Party (provided, however, that the Parent shall only be liable under this Section 7.17 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 7.17 or otherwise voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  The obligations of each Qualified ECP Obligor under this Section 7.17 shall remain in full force and effect until the Security Termination Date.  The Parent intends that this Section 7.17 constitute, and this Section 7.17 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

7.18                        Collateral Account.  On the Closing Date, Borrower shall fund a cash collateral account that shall be maintained at the Administrative Agent (the “Collateral Account”) in an amount equal to $40,000,000.  The documentation with respect to the Collateral Account shall be acceptable to the Administrative Agent in its sole discretion.  Borrower shall have no authority to access funds in the Collateral Account until five (5) Business Day following the earliest to occur of (i) the April 2018 Notice Date, (ii) the Curtailment Determination Notice Date and (iii) the Early Determination Notice Date (after which, so long as no Borrowing Base Deficiency, Default or Event of Default then exists, Borrower will have access to the funds, provided that the Collateral Account shall remain a Controlled Account); provided, however, that either Borrower or the Required Lenders may at any time (including prior to the Initial Borrowing Base Termination Date) direct the Administrative Agent to apply all, but not less than all, of the funds in the Collateral Account to the repayment of the Revolving Credit Loans, and if any Credit Exposure remains as a result of any LC Obligations, pay to the Administrative Agent on behalf of the Revolving Lenders an amount equal to such excess to Cash Collateralize such LC Obligations pursuant to Section 2.09(g).  In the event that the Borrower or the Required Lenders directs the Administrative Agent to repay the Revolving Credit Loans (and Cash Collateralize any remaining LC Obligations) with funds in the Collateral Account (such amount, the “Released Funds”), then from such date until the first Business Days following the earliest to occur of (i) the April 2018 Notice Date, (ii) the Curtailment Determination Notice Date and (iii) the Early Determination Notice Date, notwithstanding the amount of the Aggregate Commitment Amount, the Available Commitment as of such date shall be reduced by the amount of the Released Funds.  Notwithstanding the foregoing, the Lenders hereby direct the Administrative Agent to apply the $40,000,000 amount comprising the Released Funds on the Closing Date to the Revolving Credit Loans of the Lenders on such date without the need to establish the Collateral Account, and the Parent and Borrower hereby acknowledge and agree to such application.