Common use of Derivative Contracts Clause in Contracts

Derivative Contracts. None of Borrower or Guarantors shall, nor shall any of Borrower or Guarantors permit any of their Subsidiaries to, enter into or in any manner be liable under any Derivative Contract attributable to Mortgaged Properties except: (a) Derivative Contracts entered into with the purpose and effect of fixing prices on Oil and Gas attributable to the Mortgaged Properties and expected to be produced by Borrower provided that at all times: (1) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of not more than forty-eight (48) months; (2) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.14(a) requires such Person to deliver more than 80% of total estimated Oil and Gas to be produced from the proved Oil and Gas Properties as so designated in the most recent Reserve Report furnished by Borrower under Section 7.02(c) as adjusted for any acquisitions or divestitures, and (3) each such contract shall be with any of the Banks or any Affiliates of the Banks, or with a counter-party or have a guarantor of the obligation of the counter-party who, at the time the contract is made, has long-term obligations rated BBB or Baa2 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., or Xxxxx'x Investors Service, Inc. (or a successor credit rating agency). (b) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of Borrower that is accruing interest at a variable rate, provided that (1) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of Borrower to be hedged by such contract; (2) no such contract with a counter-party other than a Bank or its Affiliate requires Borrower to put up money, assets, letters of credit, or other security against the event of its nonperformance prior to actual default by Borrower in performing obligations thereunder; and (3) each such contract shall be with a Bank or its Affiliate or with a counter-party or have a guarantor of the obligation of the counter party who, at the time the contract is made, has long-term obligations rated AA or Aa2 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., or Xxxxx'x Investors Service, Inc. (or a successor credit rating agency). (c) In the event Borrower, Guarantors or their Subsidiaries enter into a Derivative Contract with any of the Banks or any Affiliate of the Banks, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Bank's Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate of the Banks incurred under any Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all Obligations otherwise incurred hereunder or under the other Loan Documents as more particularly provided under Section 11.11. Borrower and Guarantors covenant and agree the payment on each and all of such Derivative Contracts with any of the Banks or their Affiliates is and shall be secured by liens on the Collateral under the Security Documents.

Derivative Contracts. None of Borrower or Guarantors No Loan Party shall, nor shall any of Borrower or Guarantors permit any of their its Subsidiaries to, enter into or in any manner be liable under any Derivative Contract attributable to Mortgaged Properties except:on any (a) Derivative Contracts entered into by the Company with the purpose and effect of fixing prices on limiting or reducing the market price risk of Oil and Gas attributable to the Mortgaged Properties and expected to be produced by Borrower the Company, the Acquired Company and their respective Subsidiaries provided that at all times: (1i) the aggregate of all each such Derivative Contracts Contract limits or reduces such market price risk for a term of not no more than forty-eight sixty (4860) months; (2ii) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 8.14(a8.10(a) (but excluding put option contracts or similar “floor” arrangements) requires such Person the Loan Parties, collectively, to deliver more than 80volumes in excess of the greater of (x) 85% of total estimated Oil Total Proved Reserves or (y) the following percentages of Proved Producing Reserves: Year Volumes 1 100% 2 100% 3 90% 4 90% 5 85% Third Amended and Gas Restated Credit Agreement – Breitburn Operating LP Page 83 provided, however, that with regard to a "costless collar" that involves the purchase of a put and the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be produced from included in calculating the proved Oil and Gas Properties as so designated in the most recent Reserve Report furnished by Borrower under Section 7.02(c) as adjusted for any acquisitions or divestituresapplicable percentage threshold, and (3iii) each such contract shall be with any of between the Banks or any Affiliates of the BanksCompany and a Lender Derivative Provider, or with a counter-party an unsecured counterparty or have a guarantor of the obligation of the counter-party unsecured counterparty who, at the time the contract is made, has long-term obligations rated BBB BBB+ or Baa2 Baal or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., ’s Corporation or Xxxxx'x Xxxxx’x Investors ServiceServices, Inc. (or a successor credit rating agency) (excluding Derivative Contracts offered by national commodity exchange for which no credit rating is required).; (b) Derivative Contracts entered into by the Company with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of Borrower the Company that is accruing interest at a variable rate, provided that (1i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of Borrower the Company to be hedged by such contract; , (2ii) no such contract contract, except those with a counter-party other than a Bank Lender or its Affiliate Affiliate, when aggregated with all Derivative Contracts permitted under Sections 8.10(a) and (b), requires Borrower the Company to put up money, assets, letters of credit, or other security against the event of its nonperformance non- performance prior to actual default by Borrower the Company in performing obligations thereunder; , and (3iii) each such contract shall be with a Bank or its Affiliate Lender Derivative Provider, or with a counter-party an unsecured counterparty or have a guarantor of the obligation of the counter party an unsecured counterparty who, at the time the contract is made, has long-term obligations rated AA BBB+ or Aa2 Baa1 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., ’s Corporation or Xxxxx'x Xxxxx’x Investors ServiceServices, Inc. (or a successor credit rating agency).; (c) In the event Borrower, Guarantors or their Subsidiaries enter into of a Derivative Contract with between the Company and any of the Banks or any Affiliate of the BanksLenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Bank's Lender’s Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate obligation of the Banks incurred a Loan Party under any Lender Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all other Obligations otherwise incurred hereunder or under the other Loan Documents as more particularly provided under Section 9.02 and 11.11. Borrower ; and (d) The Company shall not modify in any material respect to the extent it adversely affects the then-current Borrowing Base or terminate any Derivative Contracts to which it is currently a party or subsequently becomes a party without the consent of the Administrative Agent, except that (i) Derivative Contracts with a party who ceases to be a Lender (or an Affiliate of a Lender) may be terminated in connection with the assignment, amendment or other transaction pursuant to which such party ceases to be a Lender or an Affiliate of a Lender, and Guarantors covenant and agree (ii) so long as no Default or Event of Default exists, Derivative Contracts may be modified or terminated, provided that, the payment on each and all net effect of the modifications or terminations of such Derivative Contracts with (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination), as determined by the Administrative Agent, plus the aggregate value (as determined by the value assigned to such properties under the most recent Reserve Report) of all Dispositions of Oil and Gas Properties made by the Loan Parties during such period, together, shall not exceed in any Borrowing Base Period five percent (5%) of the Banks or their Affiliates is and Borrowing Base then in effect; further provided that, the Borrowing Base shall be secured automatically reduced by liens an amount equal to the net effect of the modifications or terminations of such Derivative Contracts (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination) and to the extent a Borrowing Base Deficiency results from such reduction, up to one-hundred percent (100%) of the cash and cash equivalent proceeds of such modifications or terminations of Derivative Contracts received by the Loan Parties, net of payment of, or provisions for reasonable out-of-pocket fees, expenses and taxes incurred by the Company in connection with such transaction, shall be applied, as necessary, to cure such Borrowing Base Deficiency; (e) Derivative Contracts that would be permitted by Section 8.10(a) pertaining to Oil and Gas Properties to be acquired pursuant to a Specified Acquisition; provided that Derivative Contracts pursuant to this Section 8.10(e) must be terminated within thirty (30) days of the earlier to occur of: (i) the date that is 90 days after the execution of the purchase and sale agreement relating to the Specified Acquisition if the Specified Acquisition has not closed and (ii) the Company or the Parent obtaining knowledge with reasonable certainty that the Specified Acquisition will not be consummated; and (f) Derivative Contracts entered into with the purpose and effect of fixing prices for greenhouse gas (GHG) allowances related to expected emissions of GHG from the Company’s and its Subsidiaries’ facilities located in the State of California, provided that at all times: (i) no such Derivative Contract fixes a price for a term of more than sixty (60) months; (ii) the aggregate monthly notional amounts covered by all such Derivative Contract (determined, in the case of Derivative Contracts that are not settled on a monthly basis, by a monthly proration reasonably acceptable to Administrative Agent) for any single month does not in the aggregate exceed 100% of the Company’s and its Subsidiaries’ aggregate projected GHG emissions from such facilities for such month, (iii) except for Letters of Credit and the Collateral under the Security DocumentsDocuments with respect to Obligations to Lender Derivative Providers, no such Derivative Contract requires the Company or any of its Subsidiaries to put up money, assets or other security against the event of its nonperformance prior to actual default in performing its obligations thereunder, and (iv) each such Derivative Contract is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender Derivative Provider) at the time the Derivative Contract is made has long-term obligations rated A+ or A1, or better, respectively, by Standard & Poor’s Corporation or Xxxxx’x Investors Services, Inc. (or a successor credit rating agency).

Derivative Contracts. None of The Borrower or Guarantors shalland each Guarantor shall not, nor and shall any of Borrower or Guarantors not permit any of their the Restricted Subsidiaries to, directly or indirectly, enter into or in any manner be liable under on any Derivative Contract attributable to Mortgaged Properties except: (ai) Derivative Contracts entered into with the purpose and effect of fixing prices on Oil and Gas attributable to the Mortgaged Properties and oil or gas expected to be produced by Borrower provided such Person; provided, that at all times: times (1A) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of not more than forty-eight (48) monthsspeculative purposes; (2B) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.14(a) requires such Person to deliver more than (a)(i), shall cover a notional volume in excess of 80% of the total estimated Projected Oil and Gas Production to be produced from the proved Oil and Gas Properties as so designated in the most recent Reserve Report furnished by Borrower under Section 7.02(c) as adjusted for any acquisitions or divestitures, and month; (3C) each such contract (excluding Derivative Contracts offered by national commodity exchange) shall be with any an Approved Counterparty; and (D) no such contract requires the Borrower to put up money, assets, letters of credit or other security against the event of its non-performance prior to actual default by the Borrower in performing its obligations thereunder, except Liens in favor of the Banks or any Affiliates Collateral Trustee for the benefit of the Banks, Secured Parties under the Security Documents or with a counter-party or have a guarantor of the obligation of the counter-party who, at the time the contract is made, has long-term obligations rated BBB or Baa2 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., or Xxxxx'x Investors Service, Inc. (or a successor credit rating agency)First Liens. (bii) the Existing Derivative Contracts; provided, no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent; or (iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Borrower that is accruing interest at a variable rate; provided, provided that (1A) no such contract shall be for speculative purposes; (B) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Borrower to be hedged by such contract; , (2C) no such contract with a counter-party other than a Bank or its Affiliate requires the Borrower to put up money, assets, letters of credit, or other security against the event of its nonperformance non-performance prior to actual default by the Borrower in performing its obligations thereunder; , and (3D) each such contract shall be with a Bank or its Affiliate or with a counter-party or have a guarantor of the obligation of the counter party who, at the time the contract is made, has long-term obligations rated AA or Aa2 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., or Xxxxx'x Investors Service, Inc. (or a successor credit rating agency)an Approved Counterparty. (cb) In the event Borrower, Guarantors or their Subsidiaries enter the Borrower enters into a Derivative Contract with any of the Banks or any Affiliate of the BanksLender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Bank's Lender’s Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate The benefits of the Banks incurred under any Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Counterparty in respect to all Obligations otherwise incurred hereunder or under with respect to the other Loan Documents as more particularly provided under Section 11.11. Borrower and Guarantors covenant and agree the payment on each and all of such related Qualifying Derivative Contracts with any of the Banks or their Affiliates is and shall be secured by liens on the Collateral under the Security DocumentsContract.

Derivative Contracts. None of Borrower or Guarantors (a) No Loan Party shall, nor shall any of Borrower directly or Guarantors permit any of their Subsidiaries toindirectly, enter into or in any manner be liable under on any Derivative Contract attributable to Mortgaged Properties except: (ai) Derivative Contracts entered into with the purpose and effect of fixing prices on Oil and Gas attributable to the Mortgaged Properties and oil or gas expected to be produced by Borrower provided such Person; provided, however, that at all times: times (1a) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of not more than forty-eight (48) monthsspeculative purposes; (2b) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.14(a) requires such Person to deliver more than 80% 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total estimated Projected Oil and Gas Production to be produced in any month from the proved Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent Reserve Report furnished by Borrower under Section 7.02(c) as adjusted for any acquisitions or divestitures, and Report; (3c) each such contract (excluding Derivative Contracts offered by national commodity exchange) shall be with the Administrative Agent, or any of the Banks or any Affiliates of the BanksLenders, or with a counter-party counterparty or have a guarantor of the obligation of the counter-party whocounterparty which, at the time the contract is made, has long-term obligations rated BBB BBB+ or Baa2 Baa1 or better, respectively, by Standard & Poor's Rating GroupS&P or Xxxxx’x; and (d) no such contract requires the Company to put up money, a division assets, letters of McGraw Hillcredit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, Inc., or Xxxxx'x Investors Service, Inc. (or a successor credit rating agency).except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents (bii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent; or (iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of Borrower the Company that is accruing interest at a variable rate; provided, provided however, that (1i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of Borrower the Company to be hedged by such contract; , (2iii) no such contract with a counter-party other than a Bank or its Affiliate requires Borrower the Company to put up money, assets, letters of credit, or other security against the event of its nonperformance non-performance prior to actual default by Borrower the Company in performing its obligations thereunder; , and (3v) each such contract shall be with a Bank or its Affiliate Lender or with a counter-party counterparty or have a guarantor of the obligation of the counter party counterparty who, at the time the contract is made, has long-term obligations rated AA BBB+ or Aa2 Baa1 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., S&P or Xxxxx'x Investors Service, Inc. (or a successor credit rating agency)Xxxxx’x. (cb) In the event Borrower, Guarantors or their Subsidiaries enter the Company enters into a Derivative Contract with any of the Banks or any Affiliate of the BanksLender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Bank's Lender’s Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate The benefits of the Banks incurred under any Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations otherwise incurred hereunder or under with respect to the other Loan Documents as more particularly provided under Section 11.11. Borrower and Guarantors covenant and agree the payment on each and all of such related Qualifying Derivative Contracts with any of the Banks or their Affiliates is and shall be secured by liens on the Collateral under the Security DocumentsContract.

Derivative Contracts. None of Borrower or Guarantors shallEach Credit Party shall not, nor and shall any of Borrower or Guarantors permit any of their not allow its Subsidiaries to, enter into or in any manner be liable under any Derivative Contract attributable to Mortgaged Properties exceptexcept such Derivative Contracts as may be required under Section 7.15 and: (a) Derivative Contracts entered into with the purpose and effect of fixing prices on Oil and Gas attributable to the Mortgaged Properties and expected to be produced by Borrower a Credit Party provided that at all times: (1i) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of not no less than six (6) and/or no more than fortytwenty-eight four (4824) months; (2ii) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.14(a8.16(a) and/or required under Section 7.15 requires such Person to deliver more than 8085% of total estimated Oil and Gas to be produced during the twelve (12) months from the date of each such Derivative Contract becomes effective from the proved developed producing Oil and Gas Properties as so designated in the most recent Reserve Report furnished by Borrower under Section 7.02(c) as adjusted for any acquisitions or divestitures), and (3iii) each such contract shall be with any of the Banks or any Affiliates of the Banks, or with a counter-party or have a guarantor of the obligation of the counter-party who, at the time the contract is made, has long-term obligations rated BBB or Baa2 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., or Xxxxx'x Moody's Investors Service, Inc. (or a successor xx x xuccessor credit rating agency). (b) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of Borrower a Credit Party that is accruing interest at a variable rate, provided that (1i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of Borrower such Credit Party to be hedged by such contract; (2ii) no such contract with a counter-party other than a Bank or its Affiliate requires Borrower such Credit Party to put up money, assets, letters of credit, or other security against the event of its nonperformance prior to actual default by Borrower such Credit Party in performing obligations thereunder; and (3iii) each such contract shall be with a Bank or its Affiliate or with a counter-party or have a guarantor of the obligation of the counter counter-party who, at the time the contract is made, has long-term obligations rated AA or Aa2 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., or Xxxxx'x Moody's Investors Service, Inc. Inx. (or xx a successor credit rating agency). (c) In the event Borrower, Guarantors Borrower or their any of its Subsidiaries enter enters into a Derivative Contract with any of the Banks or any Affiliate of the Banks, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Bank's Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate of the Banks incurred under any Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all Obligations otherwise incurred hereunder or under the other Loan Documents as more particularly provided under Section 11.11Documents. Borrower covenants and Guarantors covenant and agree agrees the payment on each and all of such Derivative Contracts with any of the Banks or their Affiliates is and shall be secured by liens on the Collateral under the Security Documents.

Derivative Contracts. None of Borrower or Guarantors shall, nor shall any of Borrower or Guarantors permit any of their Subsidiaries to, not enter into or in any manner be liable under any Derivative Contract attributable to Mortgaged Properties except: (a) Derivative Contracts entered into with the purpose and effect of fixing prices on Oil and Gas attributable to the Mortgaged Properties and expected to be produced by Borrower provided that at all times: (1) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of not more than fortythirty-eight six (4836) months; (2) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.14(a8.15(a) requires such Person to deliver more than 80% of total estimated Oil and Gas to be produced during the following Borrowing Base Period from the proved Oil and Gas Properties as so designated in the most recent Reserve Report furnished by Borrower under Section 7.02(c) as adjusted for any acquisitions or divestitures, and (3) each such contract shall be with any of the Banks or any Affiliates of the Banks, or with a counter-party or have a guarantor of the obligation of the counter-party who, at the time the contract is made, has long-term obligations rated BBB or Baa2 or better, respectively, by Standard & Poor's ’s Rating Group, a division of McGraw Hill, Inc., or Xxxxx'x Xxxxx’x Investors Service, Inc. (or a successor credit rating agency). (b) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of Borrower that is accruing interest at a variable rate, provided that (1) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of Borrower to be hedged by such contract; (2) no such contract with a counter-party other than a Bank or its Affiliate requires Borrower to put up money, assets, letters of credit, or other security against the event of its nonperformance prior to actual default by Borrower in performing obligations thereunder; and (3) each such contract shall be with a Bank or its Affiliate or with a counter-party or have a guarantor of the obligation of the counter counter-party who, at the time the contract is made, has long-term obligations rated AA or Aa2 or better, respectively, by Standard & Poor's ’s Rating Group, a division of McGraw Hill, Inc., or Xxxxx'x Xxxxx’x Investors Service, Inc. (or a successor credit rating agency). (c) In the event Borrower, Guarantors or their Subsidiaries enter Borrower enters into a Derivative Contract with any of the Banks or any Affiliate of the Banks, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Bank's ’s Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate of the Banks incurred under any Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all Obligations otherwise incurred hereunder or under the other Loan Documents as more particularly provided under Section 11.11. Borrower and Guarantors covenant and agree the payment on each and all of such Derivative Contracts with any of the Banks or their Affiliates is and shall be secured by liens on the Collateral under the Security Documents11.

Derivative Contracts. None of Borrower or Guarantors No Loan Party shall, nor shall any of Borrower or Guarantors permit any of their its Subsidiaries to, enter into or in any manner be liable under on any Derivative Contract attributable to Mortgaged Properties except: (a) Derivative Contracts entered into by the Company with the purpose and effect of fixing prices on limiting or reducing the market price risk of Oil and Gas attributable to the Mortgaged Properties and expected to be produced by Borrower the Company, the Acquired Company and their respective Subsidiaries provided that at all times: (1i) the aggregate of all each such Derivative Contracts Contract limits or reduces such market price risk for a term of not no more than forty-eight sixty (4860) months; (2ii) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 8.14(a8.10(a) (but excluding put option contracts or similar “floor” arrangements) requires such Person the Loan Parties, collectively, to deliver more than 80volumes in excess of the greater of (x) 85% of total estimated Oil Total Proved Reserves or (y) the following percentages of Proved Producing Reserves: Year Volumes 1 100 % 2 100 % 3 90 % 4 90 % 5 85 % provided, however, that with regard to a "costless collar" that involves the purchase of a put and Gas to the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be produced from included in calculating the proved Oil and Gas Properties as so designated in the most recent Reserve Report furnished by Borrower under Section 7.02(c) as adjusted for any acquisitions or divestituresapplicable percentage threshold, and (3iii) each such contract shall be with any of between the Banks or any Affiliates of the BanksCompany and a Lender Derivative Provider, or with a counter-party an unsecured counterparty or have a guarantor of the obligation of the counter-party unsecured counterparty who, at the time the contract is made, has long-term obligations rated BBB BBB+ or Baa2 Baal or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., ’s Corporation or Xxxxx'x Mxxxx’x Investors ServiceServices, Inc. (or a successor credit rating agency) (excluding Derivative Contracts offered by national commodity exchange for which no credit rating is required).; (b) Derivative Contracts entered into by the Company with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of Borrower the Company that is accruing interest at a variable rate, provided that (1i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of Borrower the Company to be hedged by such contract; , (2ii) no such contract contract, except those with a counter-party other than a Bank Lender or its Affiliate Affiliate, when aggregated with all Derivative Contracts permitted under Sections 8.10(a) and (b), requires Borrower the Company to put up money, assets, letters of credit, or other security against the event of its nonperformance non-performance prior to actual default by Borrower the Company in performing obligations thereunder; , and (3iii) each such contract shall be with a Bank or its Affiliate Lender Derivative Provider, or with a counter-party an unsecured counterparty or have a guarantor of the obligation of the counter party an unsecured counterparty who, at the time the contract is made, has long-term obligations rated AA BBB+ or Aa2 Baa1 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., ’s Corporation or Xxxxx'x Mxxxx’x Investors ServiceServices, Inc. (or a successor credit rating agency).; (c) In the event Borrower, Guarantors or their Subsidiaries enter into of a Derivative Contract with between the Company and any of the Banks or any Affiliate of the BanksLenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Bank's Lender’s Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate obligation of the Banks incurred a Loan Party under any Lender Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all other Obligations otherwise incurred hereunder or under the other Loan Documents as more particularly provided under Section 9.02 and 11.11. Borrower ; and (d) The Company shall not modify in any material respect to the extent it adversely affects the then-current Borrowing Base or terminate any Derivative Contracts to which it is currently a party or subsequently becomes a party without the consent of the Administrative Agent, except that (i) Derivative Contracts with a party who ceases to be a Lender (or an Affiliate of a Lender) may be terminated in connection with the assignment, amendment or other transaction pursuant to which such party ceases to be a Lender or an Affiliate of a Lender, and Guarantors covenant and agree (ii) so long as no Default or Event of Default exists, Derivative Contracts may be modified or terminated, provided that, the payment on each and all net effect of the modifications or terminations of such Derivative Contracts with (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination), as determined by the Administrative Agent, plus the aggregate value (as determined by the value assigned to such properties under the most recent Reserve Report) of all Dispositions of Oil and Gas Properties made by the Loan Parties during such period, together, shall not exceed in any Borrowing Base Period five percent (5%) of the Banks or their Affiliates is and Borrowing Base then in effect; further provided that, the Borrowing Base shall be secured automatically reduced by liens an amount equal to the net effect of the modifications or terminations of such Derivative Contracts (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination) and to the extent a Borrowing Base Deficiency results from such reduction, up to one-hundred percent (100%) of the cash and cash equivalent proceeds of such modifications or terminations of Derivative Contracts received by the Loan Parties, net of payment of, or provisions for reasonable out-of-pocket fees, expenses and taxes incurred by the Company in connection with such transaction, shall be applied, as necessary, to cure such Borrowing Base Deficiency; (e) Derivative Contracts that would be permitted by Section 8.10 (a) pertaining to Oil and Gas Properties to be acquired pursuant to a Specified Acquisition; provided that Derivative Contracts pursuant to this Section 8.10(e) must be terminated within thirty (30) days of the earlier to occur of: (i) the date that is 90 days after the execution of the purchase and sale agreement relating to the Specified Acquisition if the Specified Acquisition has not closed and (ii) the Company or the Parent obtaining knowledge with reasonable certainty that the Specified Acquisition will not be consummated; and (f) Derivative Contracts entered into with the purpose and effect of fixing prices for greenhouse gas (GHG) allowances related to expected emissions of GHG from the Company’s and its Subsidiaries’ facilities located in the State of California, provided that at all times: (i) no such Derivative Contract fixes a price for a term of more than sixty (60) months; (ii) the aggregate monthly notional amounts covered by all such Derivative Contract (determined, in the case of Derivative Contracts that are not settled on a monthly basis, by a monthly proration reasonably acceptable to Administrative Agent) for any single month does not in the aggregate exceed 100% of the Company’s and its Subsidiaries’ aggregate projected GHG emissions from such facilities for such month, (iii) except for Letters of Credit and the Collateral under the Security DocumentsDocuments with respect to Obligations to Lender Derivative Providers, no such Derivative Contract requires the Company or any of its Subsidiaries to put up money, assets or other security against the event of its nonperformance prior to actual default in performing its obligations thereunder, and (iv) each such Derivative Contract is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender Derivative Provider) at the time the Derivative Contract is made has long-term obligations rated A+ or A1, or better, respectively, by Standard & Poor’s Corporation or Mxxxx’x Investors Services, Inc. (or a successor credit rating agency).

Derivative Contracts. None of Borrower or Guarantors (a) No Loan Party shall, nor shall any of Borrower directly or Guarantors permit any of their Subsidiaries toindirectly, enter into or in any manner be liable under on any Derivative Contract attributable to Mortgaged Properties except: (ai) Derivative Contracts entered into in the ordinary course of business with the purpose and effect of fixing or setting a floor for prices on Oil and Gas attributable to the Mortgaged Properties and oil or gas expected to be produced by Borrower provided such Person; provided, however, that at all times: times (1a) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of not more than forty-eight (48) monthsspeculative purposes; (2b) as of any date no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.14(a) requires such Person to deliver more than 80% 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total estimated Projected Oil and Gas Production to be produced in any month from the proved Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent Reserve Report furnished by Borrower Report; provided, however, for purposes of the foregoing calculation, that any Derivative Contract under Section 7.02(c) as adjusted for which the Company’s or any acquisitions Guarantor’s interest is solely a put or divestitures, and an option to purchase a put shall not be considered when calculating the Applicable Percentage; (3c) each such contract (excluding Derivative Contracts offered by national commodity exchange) shall be with the Administrative Agent, or any of the Banks Lenders or any Affiliates of the Bankstheir Affiliates, or with a counter-party counterparty or have a guarantor of the obligation of the counter-party whocounterparty which, at the time the contract is made, has long-term obligations rated BBB BBB+ or Baa2 Baa1 or better, respectively, by Standard & Poor's Rating GroupS&P or Xxxxx’x; and (d) no such contract requires the Company to put up money, a division assets, letters of McGraw Hillcredit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, Inc., or Xxxxx'x Investors Service, Inc. (or a successor credit rating agency).except Liens in favor of the Administrative Agent for the benefit of the Secured Parties under the Security Documents; or (bii) Derivative Contracts entered into in the ordinary course of business with the purpose and effect of (A) fixing or capping interest rates on a principal amount of Indebtedness of Borrower the Company that is accruing interest at a variable rate, provided the notional amount of which does not exceed (when aggregated with all other Derivative Contracts of the Company then in effect and effectively converting interest rates from floating to fixed) 100% of the outstanding principal amount of Indebtedness which bears interest at a floating rate or (B) converting the interest rate on a principal amount of Indebtedness of the Company that is accruing interest at a fixed rate to a floating rate the notional amount of which does not exceed (1when aggregated with all Derivative Contracts of the Company then in effect effectively converting interest rates from fixed to floating) 100% of the outstanding principal amount of Indebtedness which bears interest at a fixed rate; provided, however, that, in each case, (i) no such contract shall be for speculative purposes; (ii) in the case of clause (A) above, the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of Borrower the Company to be hedged by such contract; , (2iii) no such contract with a counter-party other than a Bank or its Affiliate requires Borrower the Company to put up money, assets, letters of credit, or other security against the event of its nonperformance non-performance prior to actual default by Borrower the Company in performing its obligations thereunder; and , (3iv) each such contract shall be with a Bank the Administrative Agent or its Affiliate any of the Lenders or any Affiliates of the foregoing or with a counter-party counterparty or have a guarantor of the obligation of the counter party counterparty who, at the time the contract is made, has long-term obligations rated AA BBB+ or Aa2 Baa1 or better, respectively, by Standard & Poor's Rating GroupS&P or Xxxxx’x, a division and (v) such Derivative Contracts shall correspond to the tenor of McGraw Hill, Inc., or Xxxxx'x Investors Service, Inc. the corresponding Indebtedness and (or a successor credit rating agency)iv) no such Derivative Contract shall remain in effect after the corresponding Indebtedness with respect to which such Derivative Contract was originally entered into has been repaid in full. (cb) In the event Borrower, Guarantors or their Subsidiaries enter the Company enters into a Derivative Contract with any of the Banks or any Affiliate of the BanksLender, the Contingent Obligation contingent obligations evidenced under such Derivative Contract shall not be applied against such Bank's Lender’s Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate The benefits of the Banks incurred under any Derivative Contract shall be treated as an Obligation pari passu Guaranty and secured pro rata under the Security Documents with and of the provisions of the Loan Documents relating to the Collateral and status as a Secured Party shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations otherwise incurred hereunder or with respect to related Qualifying Derivative Transactions under the other Loan Documents as more particularly provided under Section 11.11. Borrower and Guarantors covenant and agree the payment on each and all of such Qualifying Derivative Contracts but not with any of the Banks or their Affiliates is and shall be secured by liens on the Collateral under the Security Documentsrespect to other transactions thereunder which are not Qualifying Derivative Transactions.

Derivative Contracts. None of Borrower or Guarantors shall, nor the Credit Parties shall any of Borrower or Guarantors permit any of their Subsidiaries to, enter into or in any manner be liable under any Derivative Contract attributable to Mortgaged Properties except: (a) Derivative Contracts as required under Section 5.22; (b) Derivative Contracts entered into with the purpose and effect of fixing prices on Oil and Gas hydrocarbons attributable to the Mortgaged Borrowing Base Properties and expected to be produced by Borrower the Credit Parties provided that at all times: (1i) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of not no more than fortytwenty-eight four (4824) months; (2ii) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.14(a) 6.2 and/or required under Section 5.22 requires such Person to deliver more than 80% eighty-five (85%) of total estimated Oil and Gas hydrocarbons to be produced during any month over the term from the proved Oil and Gas Properties as so designated in the most recent Reserve Report reserve report furnished by Borrower the Credit Parties under Section 7.02(c) as adjusted for any acquisitions or divestituresthis Agreement, and (3iii) each such contract shall be with (xx) any of the Banks Senior Lenders or any Affiliates of the Banks, Senior Lenders thereof or (yy) with a counter-party or have a guarantor of the obligation of the counter-party who, at the time the contract is made, has long-term obligations rated BBB or Baa2 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., Group or Xxxxx'x Moody's Investors Service, Inc. Xxx. (or xr a successor credit rating agency).; and (bc) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness Debt of Borrower the Credit Parties that is accruing interest at a variable rate, provided that (1i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness Debt of Borrower the Credit Parties to be hedged by such contract; (2ii) no such contract with a counter-party other than a Bank Senior Lender or its an Affiliate of a Senior Lender requires Borrower the Credit Parties to put up money, assets, letters of credit, or other security against the event of its nonperformance non-performance prior to actual default by the Borrower in performing obligations thereunder; and (3iii) each such contract shall be with a Bank Senior Lender or its an Affiliate of a Senior Lender or with a counter-party or have a guarantor of the obligation of the counter counter-party who, at the time the contract is made, has long-term obligations rated AA or Aa2 or better, respectively, by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., Group or Xxxxx'x Moody's Investors Service, Inc. Xxx. (or a successor credit rating agency). (c) In the event Borrower, Guarantors or their Subsidiaries enter into a Derivative Contract with any of the Banks or any Affiliate of the Banks, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Bank's Commitment nor against the Effective Amount. Any Indebtedness to any Bank or any Affiliate of the Banks incurred under any Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all Obligations otherwise incurred hereunder or under the other Loan Documents as more particularly provided under Section 11.11. Borrower and Guarantors covenant and agree the payment on each and all of such Derivative Contracts with any of the Banks or their Affiliates is and shall be secured by liens on the Collateral under the Security Documents.