AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.1

$50,000,000

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of March 31, 2009

Among

CONTANGO OIL & GAS COMPANY,
CONTANGO ENERGY COMPANY,
AND
CONTANGO OPERATORS, INC.

as Borrowers,

THE LENDERS PARTY HERETO FROM TIME TO TIME

as Lenders,

and

GUARANTY BANK

as Administrative Agent and as Issuing Lender

TABLE OF CONTENTS

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EXHIBITS:

SCHEDULES:

AMENDED AND RESTATED CREDIT AGREEMENT

This Amended and Restated Credit Agreement dated as of March 31, 2009 is among Contango Oil & Gas Company, a Delaware corporation (“ Contango ”), Contango Energy Company, a Delaware corporation (“ CEC ”), and Contango Operators, Inc., a Delaware corporation and successor by merger to Contango Resources Company (“ COI ”, together with Contango and CEC, collectively, the “ Borrowers ” and individually, a “ Borrower ”), the Lenders (as defined below), and Guaranty Bank, as administrative agent and as issuing lender for such Lenders.

RECITALS

WHEREAS, Contango and Contango Resources Company, a Delaware corporation (“ CRC ”, and together with Contango, the “ Original Borrowers ”), and the Lenders, Administrative Agent and Issuing Lender entered into that certain Credit Agreement dated as of October 3, 2008 (the “ Original Credit Agreement ”), pursuant to which the Lenders provided to the Original Borrowers a credit facility in the maximum principal amount of $50,000,000;

WHEREAS, in order to secure the full and punctual payment and performance of the obligations under the Original Credit Agreement, CRC has executed and delivered mortgages, deeds of trust, collateral assignments, security agreements and financing statements in favor of the Administrative Agent (collectively, the “ Original Security Instruments ”) granting a mortgage lien and continuing security interest in and to the collateral described in such Original Security Instruments;

WHEREAS, Contango desires to effect a corporate restructuring (the “ Restructuring ”), pursuant to which (i) CRC will be merged with and into COI, an indirect wholly-owned subsidiary of Contango, and (ii) REX Offshore Corporation, a Delaware corporation and an indirect wholly-owned subsidiary of Contango, will be merged with and into COI;

WHEREAS, the Original Borrowers have requested that the Original Credit Agreement be amended and restated as set forth herein to, among other things, (i) permit and reflect the Restructuring and (ii) add COI and CEC as Borrowers to the Loan Documents;

WHEREAS, the Borrowers, Administrative Agent, Issuing Lender and all of the Lenders (i) have agreed to amend and restate (but not extinguish) the Original Credit Agreement in its entirety as set forth herein and (ii) desire to have the obligations of the Borrowers hereunder continue to be secured by the liens and security interests created under the Original Security Instruments; and

WHEREAS, it is the intention of the parties hereto that this Agreement is an amendment and restatement of the Original Credit Agreement and is not a new or substitute credit agreement or novation of the Original Credit Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties to this Agreement, intending to be legally bound, (i) hereby agree that the Original Credit Agreement is amended and restated (but not substituted or extinguished) and (ii) hereby further agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

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

“ Acceptable Security Interest ” in any Property means a Lien which (a) exists in favor of the Administrative Agent for the benefit of the Secured Parties, (b) is superior to all Liens or rights of any other Person in the Property encumbered thereby other than Permitted Subject Liens, (c) secures the Obligations, and (d) is perfected and enforceable.

“ Act ” has the meaning specified in Section 10.17.

“ Adjusted Reference Rate ” means, for any day, the fluctuating rate per annum of interest equal to the greater of (a) the Reference Rate in effect on such day and (b) the Federal Funds Rate in effect on such day plus ¹ / 2 of 1%.

“ Administrative Agent ” means Guaranty Bank, in its capacity as agent pursuant to Article IX, and any successor agent pursuant to Section 9.06.

“ Advance ” means an advance by a Lender to a Borrower pursuant to Section 2.01(a) as part of a Borrowing and refers to a Reference Rate Advance or a Eurodollar Rate Advance.

“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person or any Subsidiary of such Person. The term “control” (including the terms “controlled by” or “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of a Control Percentage, by contract, or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to be controlled by another Person if such other Person possesses, directly or indirectly, the power to vote 20% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.

“ Agreement ” means this Amended and Restated Credit Agreement, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with the terms hereof.

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

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of the attached Exhibit A.

“ Borrower ” or “ Borrowers ” has the meaning specified in the Preamble.

“ Borrower Representative ” means Contango which, pursuant to Section 8.06 of this Agreement, is authorized to act on behalf of the Borrowers.

“ Borrowing ” means a borrowing consisting of Advances made on the same day by the Lenders pursuant to Section 2.01(a) or the Conversion or continuation of such Advances pursuant to Section 2.03(b).

“ Borrowing Base ” means at any particular time, the Dollar amount determined as the “Borrowing Base” in accordance with Section 2.02 on account of Proven Reserves attributable to Oil and Gas Properties of COI (and, if Contango and/or CEC acquires any Oil and Gas Properties, Contango and/or CEC, as the case may be) subject to an Acceptable Security Interest and described in the most recent Engineering Report delivered to the Administrative Agent and the Lenders pursuant to Section 2.02.

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

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

“ Cash Collateral Account ” means a special interest bearing cash collateral account pledged by the Borrowers to the Administrative Agent containing cash deposited pursuant to Section 2.05(b)(i), Section 7.02(b), or Section 7.03(b) to be maintained with the Administrative Agent in accordance with Section 2.07(g) and bear interest or be invested in the Administrative Agent’s reasonable discretion.

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

“ Cash Management Bank ” means Guaranty Bank.

“ Cash Management Bank Obligations ” means all obligations of the Borrowers or any Subsidiary thereof arising from time to time under any Cash Management Agreement with the Cash Management Bank; provided that if such Cash Management Bank ceases to be a Lender or an Affiliate of a Lender hereunder, the Cash Management Bank Obligations owed to such Cash Management Bank shall no longer be secured or guaranteed under any Loan Document.

“ CEC ” has the meaning specified in the Preamble.

“ CERCLA ” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, state and local analogs, and all rules and regulations and requirements thereunder in each case as now or hereafter in effect.

“ Change in Control ” means any of the following events: (a) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act has become, directly or indirectly, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have “beneficial ownership” of all such shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time, by way of merger, consolidation or otherwise), of a majority or more of the common stock of Contango on a fully-diluted basis, after giving effect to the conversion and exercise of all outstanding warrants, options and other securities of Contango (whether or not such securities are then currently convertible or exercisable), (b) during any period of two consecutive calendar quarters, individuals who at the beginning of such period were members of Contango’s board of directors cease for any reason to constitute a majority of the directors of Contango then in office unless (i) such new directors were elected by a majority of the directors of Contango who constituted the board of directors of Contango at the beginning of such period (or by directors so elected) or (ii) the reason for such directors failing to constitute a majority is a result of retirement by directors due to age, death or disability, (c) any Borrower ceases to own directly or indirectly all of the Equity Interests of each of its Subsidiaries that such Borrower owns on the date of this Agreement, or (d) Kenneth R. Peak ceases to be (i) the Chairman and Chief Executive Officer of Contango and is not replaced with an individual satisfactory to the Administrative Agent in its sole discretion within 90 days after he ceases to be the Chairman and Chief Executive Officer of Contango or (ii) actively engaged in the executive management of any of the Borrowers and is not replaced with an individual satisfactory to the Administrative Agent in its sole discretion within 90 days after he ceases to be actively engaged in the executive management of any Borrower.

“ Chapter One ” has the meaning specified in Section 10.12.

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

“ COI ” has the meaning specified in the Preamble.

“ Collateral ” means (a) all “Collateral” and “Mortgaged Properties” (as defined in each of the Mortgages and the Security Agreements, as applicable) or similar terms used in the Security Instruments, each of which shall, as of the Effective Date, consist solely of Property relating to the DMR Leases, and (b) all amounts contained in bank accounts of each Borrower maintained by any Lender.

“ Commitment ” means, for any Lender, the amount set opposite such Lender’s name on Schedule I as its Commitment, or if such Lender has entered into any Assignment and Acceptance, as set forth for such Lender as its Commitment in the Register maintained by the Administrative Agent pursuant to Section 10.06(c), as such amount may be reduced or terminated pursuant to Section 2.04 or Article VII or otherwise under this Agreement, and “ Commitments ” shall mean all such Commitments collectively. The aggregate Commitments on the date hereof are $50,000,000.

“ Commitment Termination Date ” means the earlier of (a) the Maturity Date and (b) the earlier termination in whole of the Commitments pursuant to Section 2.04 or Article VII.

“ Contango ” has the meaning specified in the Preamble.

“ Control Percentage ” means, with respect to any Person, the percentage of the outstanding Equity Interest (including any options, warrants or similar rights to purchase such Equity Interest) of such Person having ordinary voting power which gives the direct or indirect holder of such Equity Interest the power to elect a majority of the board of directors (or other applicable governing body) of such Person.

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

“ Convert ,” “ Conversion ,” and “ Converted ” each refers to a conversion of an Advance of one Type into an Advance of another Type pursuant to Section 2.03(b).

“ CRC ” has the meaning specified in the Recitals.

“ Credit Extensions ” means (a) an Advance made by any Lender, and (b) the issuance, increase or extension of any Letter of Credit by the Issuing Lender.

“ Current Assets ” means, for any period, the current assets of Contango and its consolidated Subsidiaries. For purposes of this calculation “current assets” shall include, as of the date of calculation, the Unused Commitment Amount and shall exclude, as of the date of calculation, (a) the current portion of deferred tax assets, (b) any assets representing a valuation account arising from the application of SFAS 133 and 143, and (c) any cash deposited with or at the request of a counterparty to any Hedge Contract.

“ Current Liabilities ” means, for any period, the current liabilities of Contango and its consolidated Subsidiaries. For purposes of this calculation “current liabilities” shall exclude, as of the date of calculation, (a) the current portion of Debt existing under this Agreement, (b) any liabilities representing a valuation account arising from the application of SFAS 133 and 143, and (c) the current portion of deferred tax obligations.

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

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

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

(c) obligations of such Person to pay the deferred purchase price of Property or services (including, without limitation, obligations that are non-recourse to the credit of such Person but are secured by the assets of such Person, but excluding trade accounts payable);

(d) obligations of such Person as lessee under Capital Leases and obligations of such Person in respect of synthetic leases;

(e) obligations of such Person under any Interest Hedge Agreement or Hydrocarbon Hedge Agreement;

(f) obligations of such Person owing in respect of redeemable preferred stock or other preferred equity interest of such Person;

(g) any obligations of such Person owing in connection with any volumetric or production prepayments;

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

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

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

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

“ DMR Leases ” means the Leases and Wells listed on Exhibit A to the Amended and Restated Act of First Lien Mortgage, Security Agreement, Financing Statement, Fixture Filing and Assignment of Production dated as of the Effective Date executed by COI in favor of the Administrative Agent for the ratable benefit of the Secured Parties.

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

“ Effective Date ” means the date on which all of the conditions precedent to effectiveness of this Agreement set forth in Section 3.01 shall have been satisfied by the Borrowers or waived in writing by the Lenders.

“ Eligible Assignee ” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent and the Issuing Lender in their sole discretion and (ii) unless an Event of Default has occurred and is continuing at the time any assignment is effected pursuant to this Agreement, the Borrower Representative (which consent by the Borrower Representative may not be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include a Borrower or any Affiliate or Subsidiary of a Borrower.

“ Engineering Report ” means a report, in form and substance reasonably satisfactory to the Administrative Agent, prepared by an Independent Engineer, addressed to the Administrative Agent and the Lenders with respect to the Oil and Gas Properties owned by any Borrower or any of its Subsidiaries (or to be acquired by any Borrower or any of its Subsidiaries, as applicable) which are included or are to be included in the Borrowing Base, which report shall (a) specify the location, quantity, and type of the estimated Proven Reserves attributable to such Oil and Gas Properties, (b) contain a projection of the rate of production of such Oil and Gas Properties, (c) contain an estimate of the net operating revenues to be derived from the production and sale of Hydrocarbons from such Proven Reserves based on product price and cost escalation assumptions reasonably specified by the Administrative Agent and the Lenders, and (d) contain such other information as is customarily obtained from and provided in such reports or is otherwise reasonably requested by the Administrative Agent.

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

“ Environmental Claim ” means any third party (including governmental agencies and employees) action, lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent agreement or notice of potential or actual responsibility or violation (including claims or proceedings under the Occupational Safety and Health Acts or similar laws or requirements relating to health or safety of employees) which seeks to impose liability under any Environmental Law or common law theories.

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

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

“ Equity Interest ” means with respect to any Person, any shares, interests, participation, or other equivalents (however designated) of corporate stock, membership interests, or partnership interests (or any other ownership interests) of such Person.

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

“ ERISA Affiliate ” means each member of a controlled group of corporations and all businesses (whether or not incorporated) under common control which, together with a Borrower, are treated as a single employer under Section 414 of the Code.

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

“ Eurodollar Rate ” means, for the Interest Period for each Eurodollar Rate Advance comprising the same Borrowing, the interest rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1% per annum) set forth on Reuters Reference LIBOR01 as the London Interbank Offered Rate, for deposits in Dollars at 11:00 a.m. (London, England time) two Business Days before the first day of such Interest Period and for a period equal to such Interest Period; provided that, provided that, if no such quotation appears on the Reuters Reference LIBOR01, the Eurodollar Rate shall be an interest rate per annum equal to the rate per annum at which deposits in Dollars are offered by the principal office of Guaranty Bank (or such other Lender as shall then be serving as the Administrative Agent) in London, England to prime banks in the London interbank market at 11:00 a.m. (London, England time) two Business Days before the first day of such Interest Period in an amount substantially equal to the Eurodollar Rate Advance to be maintained by the Lender that is the Administrative Agent in respect of such Borrowing and for a period equal to such Interest Period.

“ Eurodollar Rate Advance ” means an Advance which bears interest as provided in Section 2.09(b).

“ Event of Default ” has the meaning specified in Section 7.01.

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

“ Extraordinary Proceeds ” means any cash received by or paid to or for the account of a Borrower not in the ordinary course of business (but excluding proceeds described in Section 2.04(b)(i) or (ii), proceeds of Equity issuances by Contango, capital infusions by Contango in COI or CEC, and capital infusions by CEC in COI), including amounts received in respect of foreign, United States, state or local tax refunds, pension plan reversions, purchase price and other monetary adjustments made pursuant to any acquisition document and/or indemnification payments made pursuant to any acquisition document (other than such indemnification payments to the extent that the amounts so received are applied by the applicable Borrower for the purpose of replacing, repairing or restoring any assets or properties of such Borrower, thereby satisfying the condition giving rise to the claim for indemnification, or otherwise covering any out-of-pocket expenses incurred by such Borrower in obtaining such payments).

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

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

“ 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 business.

“ GAAP ” means United States generally accepted accounting principles as in effect from time to time, applied on a basis consistent with the requirements of Section 1.03.

“ Governmental Authority ” means, as to any Person in connection with any subject, any foreign, national, state or provincial governmental authority, or any political subdivision of any state thereof, or any agency, department, commission, board, authority or instrumentality, bureau or court, in each case having jurisdiction over such Person or such Person’s Property in connection with such subject.

“ Hazardous Substance ” means the substances identified as such pursuant to CERCLA and those regulated under any other Environmental Law, including without limitation pollutants, contaminants, petroleum, petroleum products, radionuclides, radioactive materials, and medical and infectious waste.

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

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

“ Hydrocarbon Hedge Agreement ” means a Hedge Contract which is intended to reduce or eliminate the risk of fluctuations in the price of Hydrocarbons.

“ Hydrocarbons ” means oil, gas, coal seam gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be produced in conjunction therewith from a well bore and all products, by-products, and other substances derived therefrom or the processing thereof, and all other minerals and substances produced in conjunction with such substances, including, but not limited to, sulfur, geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores, or substances of value and the products and proceeds therefrom.

“ Indemnitee ” has the meaning specified in Section 10.07 .

“ Independent Engineer ” means William M. Cobb & Associates, Inc., or any other engineering firm reasonably acceptable to the Administrative Agent.

“ Information ” has the meaning specified in Section 10.15 .

“ Initial Financial Statements ” means the audited consolidated balance sheet of Contango as at December 31, 2008, and the related audited consolidated and consolidating statements of income, cash flow, and retained earnings for the fiscal year then ended.

“ Interest Hedge Agreement ” means a Hedge Contract between a Borrower and one or more financial institutions providing for the exchange of nominal interest obligations between such Borrower and such financial institution or the cap of the interest rate on any Debt of such Borrower.

“ Interest Period ” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Reference Rate Advance into a Eurodollar Rate Advance and ending on the last day of the period selected by the Borrower Representative pursuant to the provisions below and Section 2.03 and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower Representative pursuant to the provisions below and Section 2.03. The duration of each such Interest Period shall be one, two, or three months, in each case as the Borrower Representative may, upon notice received by the Administrative Agent not later than 2:00 p.m. (Central Standard or Daylight Savings Time) on the third Business Day prior to the first day of such Interest Period, select; provided , however, that:

(a) no Borrower may select any Interest Period which ends after the Commitment Termination Date;

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

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

(d) any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month in which it would have ended if there were a numerically corresponding day in such calendar month.

“ Issuing Lender ” means Guaranty Bank and any successor issuing bank pursuant to Section 9.06.

“ Leases ” means all oil and gas leases, oil, gas and mineral leases, oil, gas and casinghead gas leases or any other instruments, agreements, or conveyances under and pursuant to which the owner thereof has or obtains the right to enter upon lands and explore for, drill, and develop such lands for the production of Hydrocarbons.

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

“ Lenders ” means the lenders listed on the signature pages of this Agreement and each Eligible Assignee that shall become a party to this Agreement pursuant to Section 10.06, and “ Lender ” means any such lender individually.

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

“ Letter of Credit ” means any standby letter of credit issued by the Issuing Lender for the account of a Borrower in connection with the Commitments and which is subject to this Agreement, and “ Letters of Credit ” means all such letters of credit collectively.

“ Letter of Credit Application ” means the Issuing Lender’s standard form letter of credit application for standby letters of credit that has been executed by the Borrower Representative and accepted by the Issuing Lender in connection with the issuance of a Letter of Credit.

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

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

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

“ Lien ” means any mortgage, lien, pledge, assignment, charge, deed of trust, security interest, hypothecation, preference, deposit arrangement for a third party’s benefit or encumbrance (or other type of arrangement having the practical effect of the foregoing) to secure or provide for the payment of any obligation of any Person, whether arising by contract, operation of law, or otherwise (including, without limitation, the interest of a vendor or lessor under any conditional sale agreement, synthetic lease, Capital Lease, or other title retention agreement).

“ Liquid Investments ” means:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States maturing within 180 days from the date of any acquisition thereof;

(b) (i) negotiable or nonnegotiable certificates of deposit, time deposits, or other similar banking arrangements maturing within 180 days from the date of acquisition thereof (“bank debt securities”), issued by (A) any Lender (or any Affiliate of any Lender) or (B) any other bank or trust company if at the time of deposit or purchase, such bank debt securities are rated not less than “AA” (or the then equivalent) by the rating service of Standard & Poor’s Ratings Group or of Moody’s Investors Service, Inc., and (ii) commercial paper issued by (A) any Lender (or any Affiliate of any Lender) or (B) any other Person if at the time of purchase such commercial paper is rated not less than “A-1” (or the then equivalent) by the rating service of Standard & Poor’s Ratings Group or not less than “P-1” (or the then equivalent) by the rating service of Moody’s Investors Service, Inc., or upon the discontinuance of both of such services, such other nationally recognized rating service or services, as the case may be, as shall be selected by the Borrower Representative with the consent of the Required Lenders;

(c) deposits in money market funds investing exclusively in investments described in clauses (a) and (b) above;

(d) repurchase agreements relating to investments described in clauses (a) and (b) above with a market value at least equal to the consideration paid in connection therewith, with any Person who regularly engages in the business of entering into repurchase agreements and has a combined capital surplus and undivided profit of not less than $500,000,000.00, if at the time of entering into such agreement the debt securities of such Person are rated not less than “AA” (or the then equivalent) by the rating service of Standard & Poor’s Ratings Group or of Moody’s Investors Service, Inc.; and

(e) such other instruments (within the meaning of Article 9 of the Texas Business and Commerce Code) as the Borrower Representative may request and the Administrative Agent may approve in writing.

“ Loan Documents ” means this Agreement, the Notes, the Letter of Credit Documents, the Security Instruments, each Hedge Contract entered into with a Swap Counterparty, and each other agreement, instrument, certificate or document executed by any Borrower, the Borrower Representative, or any Borrower’s Subsidiary or any of their respective officers at any time in connection with this Agreement.

“ Lost Interest ” has the meaning specified in Section 2.09(d)(i) .

“ Material Adverse Change ” means (a) a material adverse change since June 30, 2008 in the business, assets (including Oil and Gas Properties), condition (financial or otherwise), results of operations, or prospects of the Borrowers and their respective Subsidiaries taken as a whole (but excluding any adverse change resulting from Hurricane Gustav or Hurricane Ike) or (b) a material adverse effect on any Borrower’s or any Borrower’s Subsidiary’s ability to perform its obligations under this Agreement, any Note, or any other Loan Document.

“ Maturity Date ” means October 3, 2010, or to the extent that the Maturity Date is extended in writing by all the Lenders (it being understood that no such Lender is obligated to grant any such extension), such later date that is approved by the Lenders.

“ Maximum Rate ” means the maximum nonusurious interest rate under applicable law (determined under such laws after giving effect to any items which are required by such laws to be construed as interest in making such determination, including without limitation if required by such laws, certain fees and other costs).

“ Merger Documents ” means, collectively, (a) the Agreement and Plan of Merger of Contango Resources Company with and into Contango Operators, Inc. dated March 31, 2009, (b) the Agreement and Plan of Merger of REX Offshore Corporation with and into Contango Operators, Inc. dated March 31, 2009, (c) and all other documents, instruments, and agreements executed or delivered in connection with the Restructuring, together with any exhibits and schedules thereto.

“ Mortgages ” means, collectively, that certain Amended and Restated Act of First Lien Mortgage, Security Agreement, Financing Statement, Fixture Filing and Assignment of Production dated as of the Effective Date executed by COI in favor of the Administrative Agent for the ratable benefit of the Secured Parties, and any other mortgage or deed of trust executed by any Borrower in favor of the Administrative Agent for the ratable benefit of the Secured Parties in substantially the form of the attached Exhibit B or such other form as may be requested by the Administrative Agent.

“ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA.

“ Note ” means a promissory note of the Borrowers payable to the order of any Lender, in substantially the form of the attached Exhibit C, evidencing indebtedness of the Borrowers to such Lender resulting from Advances owing to such Lender.

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

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

“ Obligations ” means (a) all principal, interest, fees, reimbursements, indemnifications, and other amounts payable by any Borrower or any Subsidiary of a Borrower to the Administrative Agent, the Issuing Lender, or the Lenders under the Loan Documents, including without limitation, the Letter of Credit Obligations, and (b) all Cash Management Bank Obligations, and all renewals, extensions and/or rearrangements of any of the foregoing.

“ Oil and Gas Properties ” means fee mineral interests, term mineral interests, Leases, subleases, farm-outs, royalties, overriding royalties, net profit interests, carried interests, production payments and similar mineral interests, and all unsevered and unextracted Hydrocarbons in, under, or attributable to such oil and gas Properties and interests.

“ Original Borrowers ” has the meaning specified in the Recitals.

“ Original Closing Date ” means October 3, 2008.

“ Original Credit Agreement ” has the meaning specified in the Recitals.

“ Other Borrower Obligations ” has the meaning specified in Section 8.01 .

“ Other Taxes ” has the meaning specified in Section 2.14(b) .

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

“ Permit ” means any approval, certificate of occupancy, consent, waiver, exemption, variance, franchise, order, permit, authorization, right or license of or from any Governmental Authority, including without limitation, an Environmental Permit.

“ Permitted Liens ” means the Liens permitted under Section 6.01.

“ Permitted Subject Liens ” means the Liens permitted under paragraphs (b), (c), (d), (e), (f), (g), (h) and (i) of Section 6.01.

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

“ Plan ” means an employee benefit plan (other than a Multiemployer Plan) maintained for employees of any Borrower or any member of the Controlled Group and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

“ Pro Rata Share ” means, with respect to any Lender, (a) with respect to amounts owing under the Commitments, (i) if such Commitments have not been canceled, the ratio (expressed as a percentage) of such Lender’s uncancelled Commitment at such time to the aggregate uncancelled Commitments at such time, or (ii) if the aggregate Commitments have been terminated, the ratio as determined pursuant to the preceding clause (i) immediately prior to such termination or (b) with respect to amounts owing generally under this Agreement and the other Loan Documents, the ratio (expressed as a percentage) of aggregate Commitments of such Lender to the aggregate Commitments of all the Lenders (or if such Commitments have been terminated, the ratio (expressed as a percentage) of Credit Extensions owing to such Lender to the aggregate Credit Extensions owing to all such Lenders).

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

“ Proven Reserves ” means, at any particular time, the estimated quantities of Hydrocarbons which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs attributable to Oil and Gas Properties included or to be included in the Borrowing Base under then existing economic and operating conditions (i.e., prices and costs as of the date the estimate is made).

“ Reference Rate ” means a fluctuating interest rate per annum as shall be in effect from time to time equal to the rate of interest publicly announced by Guaranty Bank (or such other Lender as shall then be serving as the Administrative Agent), as its reference rate, whether or not any Borrower has notice thereof.

“ Reference Rate Advance ” means an Advance which bears interest as provided in Section 2.09(a).

“ Register ” has the meaning set forth in paragraph (c) of Section 10.06.

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

“ Reimbursement Obligations ” means the obligations of the Borrowers to reimburse the Issuing Lender for amounts paid by the Issuing Lender under Letters of Credit as established by the Letter of Credit Applications and Section 2.07(d)(i).

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

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

“ Reportable Event ” means a “reportable event” described in Section 4043 of ERISA and the regulations issued thereunder.

“ Required Lenders ” means, (a) at any time when there are more than two Lenders, Lenders holding at least 66 ² / 3 % of the aggregate Commitments, or if the Commitments have been terminated or expired, 66 ² / 3 % of the outstanding principal amount of the Advances and Letter of Credit Exposure (with the aggregate amount of each Lender’s risk participation and funded participation in Letter of Credit Obligations being deemed to be “held” by such Lender for purposes of this definition) or (b) at any time when there are one or two Lenders, all of the Lenders.

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

“ Responsible Officer ” means (a) with respect to any Person that is a corporation, such Person’s Chairman, Chief Executive Officer, President, Chief Financial Officer, Vice President or Secretary, (b) with respect to any Person that is a limited liability company, a manager or the Chairman, Chief Executive Officer, President, Chief Financial Officer, Vice President or Secretary of such Person or of such Person’s managing member or manager, and (c) with respect to any Person that is a general partnership or a limited liability partnership, the Chief Executive Officer, President, Chief Financial Officer, Vice President or Secretary of such Person’s general partner or partners.

“ Restricted Payment ” means, with respect to any Person, (a) any direct or indirect dividend or distribution (whether in cash, securities or other Property) or any direct or indirect payment of any kind or character (whether in cash, securities or other Property) in consideration for or otherwise in connection with any retirement, purchase, redemption or other acquisition of any Equity Interest of such Person, or any options, warrants or rights to purchase or acquire any such Equity Interest of such Person or (b) principal or interest payments (in cash, Property or otherwise) on, or redemptions of, subordinated debt of such Person; provided that the term “Restricted Payment” shall not include any dividend or distribution payable solely in Equity Interests of such Person or warrants, options, or other rights to purchase such Equity Interests.

“ Restructuring ” has the meaning specified in the Recitals.

“ Returns ” has the meaning specified in Section 4.11(c) .

“ Secured Parties ” means the Administrative Agent, the Issuing Lender, the Lenders, the Cash Management Bank and the Swap Counterparties.

“ Security Agreements ” means, collectively, that certain Amended and Restated Security Agreement dated as of the Effective Date executed by COI in favor of the Administrative Agent for the ratable benefit of the Secured Parties and any other security agreement in substantially the form of the attached Exhibit F, executed by any of the Borrowers.

“ Security Instruments ” means, collectively, (a) the Mortgages, (b) the Transfer Letters, (c) the Security Agreements, (d) each other agreement, instrument or document executed at any time in connection with the Security Agreements or the Mortgages, (e) each agreement, instrument or document executed in connection with the Cash Collateral Account, and (f) each other agreement, instrument or document executed at any time in connection with securing the Obligations.

“ Solvent ” means, with respect to any Person as of the date of any determination, that on such date (a) the fair value of the Property of such Person (both at fair valuation and at present fair saleable value) is greater than the total liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations, and other commitments as they mature in the normal course of business, (d) 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 (e) 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 after giving due consideration to current and anticipated future capital requirements and current and anticipated future business conduct and the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, such liabilities shall be computed at the amount which, in light of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“ Subsidiary ” of a Person means any corporation or other entity of which more than 50% of the outstanding Equity Interests having ordinary voting power under ordinary circumstances to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether at such time Equity Interests of any other class or classes of such corporation or other entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more Subsidiaries of such Person or by one or more Subsidiaries of such Person. Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of a Borrower. Notwithstanding the foregoing, in no event shall Contango Offshore Exploration, LLC be considered a Subsidiary.

“ Summer/Fall Months ” has the meaning specified in Section 6.14 .

“ Swap Counterparty ” means any Lender (or Affiliate of a Lender) that is party to a Hydrocarbon Hedge Agreement or Interest Hedge Agreement with a Borrower or any of its Subsidiaries; provided that, any such Swap Counterparty that ceases to be a Lender or an Affiliate of a Lender shall continue to be a “Swap Counterparty” for purposes of this Agreement and the other Loan Documents to the extent that such Swap Counterparty entered into a Hedge Contract with a Borrower or any of its Subsidiaries and such Hedge Contract remains in effect and there are remaining obligations under such Hedge Contract (but excluding any transactions, confirms, or trades entered into after such Person ceases to be a Lender or an Affiliate of a Lender).

“ Taxes ” has the meaning specified in Sections 2.14(a) and 4.11(b) .

“ Tax Group ” has the meaning specified in Section 4.11(a) .

“ Termination Event ” means (a) a Reportable Event with respect to a Plan (other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under such regulations), (b) the withdrawal of a Borrower or any of its Affiliates from a Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any other event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.

“ Transfer Letters ” means, collectively, the letters in lieu of transfer orders in substantially the form of the attached Exhibit G and executed by any Borrower executing a Mortgage.

“ Type ” has the meaning set forth in Section 1.04.

“ Unused Commitment Amount ” means, with respect to a Lender at any time, (a) the lesser of (i) such Lender’s Commitment at such time and (ii) such Lender’s Pro Rata Share of the Borrowing Base then in effect at such time minus (b) in each case the sum of (i) the aggregate outstanding principal amount of all Advances owed to such Lender at such time plus (ii) such Lender’s Pro Rata Share of the aggregate Letter of Credit Exposure at such time.

“ Wells ” has the meaning specified in Section 2.02(b)(iv) .

“ Winter/Spring ” has the meaning specified in Section 6.14 .

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

1.03 Accounting Terms; Changes in GAAP . Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at the time of delivery thereof) be prepared, in accordance with GAAP applied on a basis consistent with those used in the preparation of the Initial Financial Statements. All calculations made for the purposes of determining compliance with this Agreement shall (except as otherwise expressly provided herein) be made by application of GAAP applied on a basis consistent with those used in the preparation of the Initial Financial Statements. In addition, all calculations and defined accounting terms used herein shall, unless expressly provided otherwise, when referring to any Person, refer to such Person on a consolidated basis and mean such Person and its consolidated Subsidiaries.

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

1.05 Miscellaneous . Article, Section, Schedule, and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” means “including, without limitation,”. Paragraph headings have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement.

ARTICLE II
CREDIT FACILITIES

2.01 Commitment for Advances .

(a) Each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make Advances to any Borrower from time to time on any Business Day during the period from the date of this Agreement until the Commitment Termination Date in an amount for each Lender not to exceed such Lender’s Unused Commitment Amount. Each Borrowing shall, in the case of Borrowings consisting of Reference Rate Advances, be in an aggregate amount not less than $100,000 and in integral multiples of $100,000 in excess thereof, and in the case of Borrowings consisting of Eurodollar Rate Advances, be in an aggregate amount not less than $100,000 and in integral multiples of $100,000 in excess thereof, and in each case shall consist of Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender’s Commitment, and subject to the terms of this Agreement, any Borrower may from time to time borrow, prepay, and reborrow Advances.

(b)  Notes . The indebtedness of the Borrowers to each Lender resulting from the Advances owing to such Lender shall be evidenced by a Note of the Borrowers payable to the order of such Lender.

2.02 Borrowing Base .

(a)  Borrowing Base . The Borrowing Base in effect as of the date of this Agreement has been set by the Administrative Agent and the Lenders and acknowledged and accepted by the Borrowers as $375,000,000. Such Borrowing Base shall remain in effect until the next redetermination made pursuant to this Section 2.02. The Borrowing Base shall be determined in accordance with the standards set forth in Section 2.02(d) and is subject to periodic redetermination pursuant to Section 2.02(b) and Section 2.02(c).

(b) Calculation of Borrowing Base .

(i) The Borrower Representative shall deliver to the Administrative Agent and each of the Lenders on or before each April 1, beginning April 1, 2009, an Engineering Report dated effective as of the immediately preceding December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ receipt of such Engineering Report and other information, deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and the Administrative Agent shall promptly notify the Borrower Representative in writing of the amount of the Borrowing Base as so redetermined.

(ii) The Borrower Representative shall deliver to the Administrative Agent and each Lender on or before each October 1, beginning October 1, 2009, an Engineering Report dated effective as of the immediately preceding June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ receipt of such Engineering Report and other information, deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and the Administrative Agent shall promptly notify the Borrower Representative in writing of the amount of the Borrowing Base as so redetermined .

(iii) In the event that the Borrower Representative does not furnish to the Administrative Agent and the Lenders the Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the 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 Lenders receive the relevant Engineering Report or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02.

(iv) Each delivery of an Engineering Report by the Borrower Representative to the Administrative Agent and the Lenders shall constitute a representation and warranty by each Borrower to the Administrative Agent and the Lenders that (A) COI (and, if Contango and/or CEC acquires any Oil and Gas Properties, Contango and/or CEC, as the case may be) owns the Oil and Gas Properties specified therein with all of such Proven Reserves of COI (and, if applicable, Contango and/or CEC, as the case may be) covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the wells pertaining to such Oil and Gas Properties that are described therein as producing wells (“ Wells ”), were each producing oil and gas in paying quantities, except for Wells that were utilized as water or gas injection wells or as water disposal wells.

(c)  Interim Redeterminations . In addition to the Borrowing Base redeterminations provided for in Section 2.02(b), the Administrative Agent and the Lenders may (i) at the request of the Borrowers make one additional redetermination of the Borrowing Base during any six-month period between scheduled redeterminations, and (ii) in their sole discretion make additional redeterminations of the Borrowing Base at any time and for any reason between scheduled redeterminations, and in any case, based on such information as the Administrative Agent and the Lenders deem relevant (but in accordance with Section 2.02(d)). The party requesting the redetermination shall give the other party at least 10 days’ prior written notice that a redetermination of the Borrowing Base pursuant to this paragraph (c) is to be performed. In connection with any redetermination of the Borrowing Base under this Section 2.02(c), the Borrower Representative shall promptly, and in any event with 14 days after a request is made by the Administrative Agent or a Lender, provide the Administrative Agent and the Lenders with such information regarding each Borrower’s and its respective Subsidiaries’ business (including, without limitation, its Oil and Gas Properties, the Proven Reserves, and production relating thereto) as the Administrative Agent or any Lender may request. The Administrative Agent shall promptly, and in any event within 45 days after the Administrative Agent and the Lenders’ receipt of such information, and to the extent applicable, an updated Engineering Report, notify the Borrower Representative in writing of each redetermination of the Borrowing Base pursuant to this Section 2.02(c) and the amount of the Borrowing Base as so redetermined.

(d)  Standards for Redetermination . Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Engineering Report or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of COI (and, if Contango and/or CEC shall have acquired any Oil and Gas Properties, Contango and/or CEC, as the case may be), and (iv) based upon the estimated value of the Proven Reserves owned by COI (and, if Contango and/or CEC shall have acquired any Oil and Gas Properties, Contango and/or CEC, as the case may be) as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrowers and their respective Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, each Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves of COI’s (and, if Contango and/or CEC acquires any Oil and Gas Properties, Contango’s and/or CEC’s, as the case may be) Oil and Gas Properties shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense and only to the extent required hereunder, evidence of title satisfactory in form and substance to the Administrative Agent that the Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto pursuant to the Security Instruments. At all times after the Administrative Agent has given the Borrower Representative notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower Representative and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

(e)  Voting . Any changes in, or renewals of, the Borrowing Base (other than increases in the Borrowing Base) must be consented to in writing by the Required Lenders. Any increases in the Borrowing Base must be consented to in writing by all the Lenders.

2.03 Method of Borrowing .

(a)  Notice . Each Borrowing shall be made pursuant to a Notice of Borrowing (or by telephone notice promptly confirmed in writing by a Notice of Borrowing), given not later than 1:00 p.m. (Central Standard or Daylight Savings Time) (i) on the third Business Day before the date of the proposed Borrowing, in the case of a Borrowing comprised of Eurodollar Rate Advances or (ii) one Business Day before the date of the proposed Borrowing, in the case of a Borrowing comprised of Reference Rate Advances, by the Borrower Representative to the Administrative Agent, which shall in turn give to each Lender prompt notice of such proposed Borrowing by facsimile or telex. Each Notice of a Borrowing shall be given by facsimile or telex, confirmed immediately in writing if by telex, specifying the information required therein. In the case of a proposed Borrowing comprised of Eurodollar Rate Advances, the Administrative Agent shall promptly notify each Lender of the applicable interest rate under Section 2.09(b). Each Lender shall, before 2:00 p.m. (Central Standard or Daylight Savings Time) on the date of such Borrowing, make available for the account of its Lending Office to the Administrative Agent at its address referred to in Section 10.02, or such other location as the Administrative Agent may specify by notice to the Lenders, in same day funds, in the case of a Borrowing, such Lender’s Pro Rata Share of such Borrowing. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent shall make such funds available to any Borrower, as requested by the Borrower Representative, at its account with the Administrative Agent.

(b)  Conversions and Continuations . The Borrowers may elect to Convert or continue any Borrowing under this Section 2.03 by delivering an irrevocable Notice of Conversion or Continuation to the Administrative Agent at the Administrative Agent’s office no later than 1:00 p.m. (Central Standard or Daylight Savings Time) (i) on the date which is at least three Business Days in advance of the proposed Conversion or continuation date in the case of a Conversion to or a continuation of a Borrowing comprised of Eurodollar Rate Advances and (ii) on the Business Day before the date of the proposed Conversion in the case of a Conversion to a Borrowing comprised of Reference Rate Advances. Each such Notice of Conversion or Continuation shall be in writing or by telex or facsimile, confirmed immediately in writing if by telex, specifying the information required therein and executed by a Responsible Officer of the Borrower Representative. Promptly after receipt of a Notice of Conversion or Continuation under this Section, the Administrative Agent shall provide each Lender with a copy thereof and, in the case of a Conversion to or a continuation of a Borrowing comprised of Eurodollar Rate Advances, notify each Lender of the applicable interest rate under Section 2.09(b).

(c)  Certain Limitations . Notwithstanding anything to the contrary contained in paragraphs (a) and (b) above:

(i) at no time shall there be more than five Interest Periods applicable to outstanding Eurodollar Rate Advances and no Borrower may select Eurodollar Rate Advances for any Borrowing at any time that a Default has occurred and is continuing;

(ii) if any Lender shall, at least one Business Day before the date of any requested Borrowing, Conversion, or continuation, notify the Administrative Agent and the Borrower Representative that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Lender or its Lending Office to perform its obligations under this Agreement to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances, the right of the Borrowers to select Eurodollar Rate Advances from such Lender shall be suspended until such Lender shall notify the Administrative Agent that the circumstances causing such suspension no longer exist, and the Advance made by such Lender in respect of such Borrowing, Conversion, or continuation shall be a Reference Rate Advance;

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

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

(v) if a Borrower shall fail to select the duration or continuation of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01 and paragraph (b) above, the Administrative Agent shall forthwith so notify the Borrower Representative and the Lenders and such Advances shall be made available to the applicable Borrower, as designated by the Borrower Representative, on the date of the Borrowing comprised of such Advances as Reference Rate Advances or, if existing Eurodollar Rate Advances, shall Convert into Reference Rate Advances.

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

(e)  Administrative Agent Reliance . Unless the Administrative Agent shall have received notice from a Lender before the date of any Borrowing that such Lender shall not make available to the Administrative Agent such Lender’s Pro Rata Share of a Borrowing, the Administrative Agent may assume that such Lender has made its Pro Rata Share of such Borrowing available to the Administrative Agent on the date of such Borrowing in accordance with paragraph (a) of this Section 2.03 and the Administrative Agent may, in reliance upon such assumption, make available to the applicable Borrower, as designated by the Borrower Representative, on such date a corresponding amount. If and to the extent that such Lender shall not have so made its Pro Rata Share of such Borrowing available to the Administrative Agent, such Lender and the Borrowers severally agree to immediately repay to the Administrative Agent on demand such corresponding amount, together with interest on such amount, for each day from the date such amount is made available to a Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrowers, the interest rate applicable on such day to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for such day. If such Lender shall repay to the Administrative Agent such corresponding amount and interest as provided above, such corresponding amount so repaid shall constitute such Lender’s Advance as part of such Borrowing for purposes of this Agreement even though not made on the same day as the other Advances comprising such Borrowing.

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

2.04 Reduction of the Commitments .

(a)  Optional . The Borrowers shall have the right, upon at least three Business Days’ irrevocable notice from the Borrower Representative to the Administrative Agent, to terminate in whole or reduce ratably in part the unused portion of the Commitments; provided that, in each case, each partial reduction shall be in the aggregate amount of $10,000,000 or in integral multiples of $5,000,000 in excess thereof.

(b)  Mandatory . If at any time the Borrowing Base is less than an amount equal to five (5) times the amount of the aggregate Commitments, the Commitments shall automatically and without the giving of any notice or other condition, be reduced ratably to the extent necessary to cause such Commitments, as so reduced, to equal no more than 20% of the Borrowing Base then in effect. In addition, if either of the Borrowers (i) sells, leases, transfers, assigns, farms-out, conveys or otherwise disposes of any of its Property in a transaction not permitted by Section 6.04, (ii) creates, incurs, assumes or otherwise becomes liable for any Debt in a transaction not permitted by Section 6.02, or (iii) receives Extraordinary Proceeds, then the aggregate amount of the Commitments shall be reduced by an amount equal to the net sales proceeds, debt issuance proceeds, or Extraordinary Proceeds, as applicable, received by the Borrowers.

(c)  Application . Any reduction and termination of the Commitments pursuant to this Section 2.04 (whether voluntary or mandatory) shall be applied ratably to each Lender’s Commitments and shall be permanent, with no obligation of the Lenders to reinstate such Commitments.

2.05 Prepayment of Advances; Deposits Into Cash Collateral Account .

(a)  Optional . The Borrowers may prepay the Advances, after giving by 1:00 p.m. (Central Standard or Daylight Savings Time) (i) in the case of Eurodollar Rate Advances, at least three Business Days’ or (ii) in the case of Reference Rate Advances, same Business Day’s, irrevocable prior written notice from the Borrower Representative to the Administrative Agent stating the proposed date and aggregate principal amount of such prepayment. If any such notice is given, the Borrowers shall prepay the Advances in whole or ratably in part in an aggregate principal amount equal to the amount specified in such notice, together with accrued interest to the date of such prepayment on the principal amount prepaid and amounts, if any, required to be paid pursuant to Section 2.12 as a result of such prepayment being made on such date; provided , however, that each partial prepayment with respect to: (a) any amounts prepaid in respect of Eurodollar Rate Advances shall be applied to Eurodollar Rate Advances comprising part of the same Borrowing; (b) any prepayments made in respect of Reference Rate Advances shall be made in a minimum amounts of $100,000 and in integral multiples of $100,000 in excess thereof; and (c) any prepayments made in respect of any Borrowing comprised of Eurodollar Rate Advances shall be made in an aggregate principal amount of at least $500,000 and in integral multiples of $100,000 in excess thereof, and in an aggregate principal amount such that after giving effect thereto such Borrowing shall have a remaining principal amount outstanding with respect to such Borrowing of at least $500,000. Full prepayments of any Borrowing are permitted without restriction of amounts.

(b)  Mandatory . If the aggregate Commitments are reduced pursuant to Section 2.04 (whether voluntarily or as the result of a mandatory reduction) and after giving effect to such reduction the sum of (A) the aggregate outstanding amount of the Advances plus (B) the excess, if any, of the Letter of Credit Exposure over the amount held in the Cash Collateral Account at such time ever exceeds the aggregate Commitments (such excess being referred to herein as a “deficiency”), the Borrower Representative shall after receipt of written notice from the Administrative Agent regarding such deficiency, deliver to the Administrative Agent within ten days of receipt of such notice from the Administrative Agent, a written response indicating which of the following actions (or combination thereof) the Borrowers intend to take to remedy such deficiency (and the failure of the Borrower Representative to deliver such election notice or the Borrowers to perform the action chosen to remedy such deficiency shall constitute an Event of Default):

(i) prepay the Advances to the extent of the deficiency set forth in such notice or, if the Advances have been repaid in full, make deposits into the Cash Collateral Account to provide cash collateral for the Letter of Credit Exposure such that the deficiency is cured within 30 days after the date such deficiency notice is received by the Borrower Representative from the Administrative Agent; or

(ii) pledge as Collateral for the Obligations additional Oil and Gas Properties acceptable to the Administrative Agent and each of Lenders such that the deficiency is cured within 30 days after the date such written response is sent by the Borrower Representative to the Administrative Agent.

(c) Each prepayment pursuant to this Section 2.05(b) shall be accompanied by accrued interest on the amount prepaid to the date of such prepayment and amounts, if any, required to be paid pursuant to Section 2.12 as a result of such prepayment being made on such date. Each prepayment under Section 2.05(b)(i) shall be applied to the Advances as determined by the Administrative Agent and agreed to by the Lenders in their sole discretion.

(d)  Illegality . If any Lender shall notify the Administrative Agent and the Borrower Representative that, on or after the date hereof, the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful for such Lender or its Lending Office to perform its obligations under this Agreement to maintain any Eurodollar Rate Advances of such Lender then outstanding hereunder, (i) the Borrowers shall, no later than 2:00 p.m. (Central Standard or Daylight Savings Time) (A) if not prohibited by law, on the last day of the Interest Period for each outstanding Eurodollar Rate Advance made by such Lender or (B) if required by such notice, on the second Business Day following its receipt of such notice, prepay all of the Eurodollar Rate Advances made by such Lender then outstanding, together with accrued interest on the principal amount prepaid to the date of such prepayment and amounts, if any, required to be paid pursuant to Section 2.12 as a result of such prepayment being made on such date, (ii) such Lender shall simultaneously make a Reference Rate Advance to the Borrowers on such date in an amount equal to the aggregate principal amount of the Eurodollar Rate Advances prepaid to such Lender, and (iii) the right of the Borrowers to select Eurodollar Rate Advances from such Lender for any subsequent Borrowing shall be suspended until such Lender gives notice referred to above shall notify the Administrative Agent that the circumstances causing such suspension no longer exist.

(e)  No Additional Right; Ratable Prepayment . No Borrower shall have the right to prepay any principal amount of any Advance except as provided in this Section 2.05, and all notices given pursuant to this Section 2.05 shall be irrevocable and binding upon each Borrower. Each payment of any Advance pursuant to this Section 2.05 shall be made in a manner such that all Advances comprising part of the same Borrowing are paid in whole or ratably in part.

2.06 Repayment of Advances . The Borrowers shall repay to the Administrative Agent for the ratable benefit of the Lenders the outstanding principal amount of each Advance, together with any accrued interest thereon, on the Maturity Date or such earlier date pursuant to Section 7.02 or Section 7.03.

2.07 Letters of Credit .

(a)  Commitments for Letters of Credit . From time to time from the date of this Agreement until 30 days prior to the Maturity Date at the request of the Borrower Representative, the Issuing Lender shall, on the terms and conditions hereinafter set forth, issue, increase, or extend the Expiration Date of, Letters of Credit for the account of the Borrower on any Business Day. No Letter of Credit will be issued, increased, or extended:

(i) if such issuance, increase, or extension would cause the Letter of Credit Exposure to exceed the lesser of (A) $5,000,000 and (B) the lesser of (1) the aggregate Commitments at such time and (2) the Borrowing Base in effect at such time minus , in each case, under this clause (B) the sum of the aggregate outstanding principal amount of all Advances at such time;

(ii) if such Letter of Credit has an Expiration Date later than the earlier of (A) one year after the date of issuance thereof (or, in the case of any extension thereof, one year after the date of such extension) and (B) 30 days prior to the Maturity Date;

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

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

(v) unless the Borrower Representative has delivered to the Issuing Lender a completed and executed Letter of Credit Application; and

(vi) unless such Letter of Credit is governed by (A) the Uniform Customs and Practice for Documentary Credits (2007 Revision) or the Uniform Customs and Practice for Documentary Credits (2006 Revision), or (B) the International Standby Practices (ISP98) or International Chamber of Commerce Publication No. 590, in either case, including any subsequent revisions thereof approved by a Congress of the International Chamber of Commerce and adhered to by the Issuing Lender.

If the terms of any Letter of Credit Application referred to in the foregoing clause (v) conflicts with the terms of this Agreement, the terms of this Agreement shall control.

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

(c)  Issuing . Each Letter of Credit shall be issued, increased, or extended pursuant to a Letter of Credit Application (or by telephone notice promptly confirmed in writing by a Letter of Credit Application), given by the Borrower Representative not later than 2:00 p.m. (Central Standard or Daylight Savings Time) on the fifth Business Day before the date of the proposed issuance, increase, or extension of such Letter of Credit, and the Issuing Lender shall give to each other Lender prompt notice thereof by telex, telephone, or facsimile. Each Letter of Credit Application shall be delivered by facsimile or by mail specifying the information required therein; provided that if such Letter of Credit Application is delivered by facsimile, the Borrower Representative shall follow such facsimile with an original by mail. After the Issuing Lender’s receipt of such Letter of Credit Application (by facsimile or by mail) and upon fulfillment of the applicable conditions set forth in Article III, the Issuing Lender shall issue, increase, or extend such Letter of Credit for the account of any Borrower. Each Letter of Credit Application shall be irrevocable and binding on each Borrower.

(d) Reimbursement .

(i) The Borrowers hereby agree to pay to the Issuing Lender an amount equal to any amount paid by the Issuing Lender under any Letter of Credit, which amount shall be due and payable on demand given by the Issuing Lender to the Borrower Representative. In the event the Issuing Lender makes a payment pursuant to a request for draw presented under a Letter of Credit and such payment is not promptly reimbursed by the Borrowers upon demand, the Issuing Lender shall give the Administrative Agent notice of the Borrowers’ failure to make such reimbursement and the Administrative Agent shall promptly notify each Lender of the amount necessary to reimburse the Issuing Lender. Upon such notice from the Administrative Agent, each Lender shall promptly reimburse the Issuing Lender for such Lender’s Pro Rata Share of such amount, and such reimbursement shall be deemed for all purposes of this Agreement to be an Advance to the Borrowers transferred at the Borrowers’ request to the Issuing Lender. If such reimbursement is not made by any Lender to the Issuing Lender on the same day on which the Administrative Agent notifies such Lender to make reimbursement to the Issuing Lender hereunder, such Lender shall pay interest on its Pro Rata Share thereof to the Issuing Lender at a rate per annum equal to the Federal Funds Rate. Each Borrower hereby unconditionally and irrevocably authorizes, empowers, and directs the Administrative Agent and the Lenders to record and otherwise treat such reimbursements to the Issuing Lender as Reference Rate Advances under a Borrowing made at the request of the Borrowers to reimburse the Issuing Lender which have been transferred to the Issuing Lender at the Borrowers’ request.

(ii) Each Lender’s obligation to make Advances or to purchase and fund risk participations in Letters of Credit pursuant to this Section 2.07(d) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Issuing Lender, any 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. No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrowers to pay the Reimbursement Obligations together with interest as provided herein. Nothing herein is intended to release the Borrowers’ obligations under any Letter of Credit Application, but only to provide an additional method of payment therefor. The making of any Borrowing under Section 2.07(d)(i) shall not constitute a cure or waiver of any Default or Event of Default, other than the payment Default or Event of Default which is satisfied by the application of the amounts deemed advanced hereunder, caused by a Borrower’s failure to comply with the provisions of this Agreement or the Letter of Credit Application.

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

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

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

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

(iv) any statement or any other document presented under such Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

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

(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing,

provided , however, that nothing contained in this paragraph (e) shall be deemed to constitute a waiver of any remedies of the Borrowers in connection with the Letters of Credit or the Borrowers’ rights under Section 2.07(f) below.

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

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

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

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

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

except that the Borrowers shall have a claim against the Issuing Lender, and the Issuing Lender shall be liable to the Borrowers, to the extent of any direct, as opposed to consequential, damages suffered by the Borrowers which the Borrowers prove were caused by the Issuing Lender’s willful misconduct or gross negligence in determining whether documents presented under a Letter of Credit comply with the terms of such Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

(g) Cash Collateral Account .

(i) If the Borrowers are required to deposit funds in the Cash Collateral Account pursuant to terms hereof, then the Borrowers and the Issuing Lender shall establish the Cash Collateral Account and the Borrowers shall execute any documents and agreements, including the Issuing Lender’s standard form assignment of deposit accounts, that the Issuing Lender requests in connection therewith to establish the Cash Collateral Account and grant the Administrative Agent a first priority security interest in such account and the funds therein. Each Borrower hereby pledges to the Administrative Agent and grants to the Administrative Agent for the benefit of the Secured Parties a security interest in the Cash Collateral Account, whenever established, all funds held in the Cash Collateral Account from time to time, and all proceeds thereof as security for the payment of the Obligations.

(ii) So long as no Default or Event of Default exists, (x) the Administrative Agent may apply the funds held in the Cash Collateral Account only to the reimbursement of any Letter of Credit Obligations, and (y) the Issuing Lender shall release to the applicable Borrower as designated by, and at the Borrower Representative’s written request, any funds held in the Cash Collateral Account in an amount up to but not exceeding the excess, if any (immediately prior to the release of any such funds), of the total amount of funds held in the Cash Collateral Account over the Letter of Credit Exposure. During the existence of any Default, the Administrative Agent may apply any funds held in the Cash Collateral Account to the Obligations in accordance with Section 7.06, regardless of the Letter of Credit Exposure that may remain outstanding.

(iii) The Administrative Agent shall exercise reasonable care in the custody and preservation of any funds held in the Cash Collateral Account and shall be deemed to have exercised such care if such funds are accorded treatment substantially equivalent to that which the Administrative Agent accords its own Property, it being understood that the Administrative Agent shall not have any responsibility for taking any necessary steps to preserve rights against any parties with respect to any such funds.

(h)  Letters of Credit Issued for Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary of a Borrower, the Borrowers shall be obligated to reimburse the Issuing Lender hereunder for any and all drawings under such Letter of Credit issued under the either Facility by the Issuing Lender. Each Borrower hereby acknowledges that the issuance of Letters of Credit for the account of any of Subsidiary of a Borrower inures to the benefit of such Borrower, and that such Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

2.08 Fees .

(a)  Commitment Fees . The Borrowers agree to pay to the Administrative Agent for the account of each Lender a commitment fee at a per annum rate equal to 0.50% on the daily Unused Commitment Amount of such Lender from the date of this Agreement until the Commitment Termination Date. The commitment fees shall be due and payable quarterly in arrears on the last day of each March, June, September, and December commencing on March 31, 2009 and continuing thereafter through and including the Commitment Termination Date.

(b) Letter of Credit Fees .

(i) The Borrowers agree to pay (a) to the Administrative Agent for the pro rata benefit of the Lenders a per annum letter of credit fee for each Letter of Credit issued hereunder in an amount equal to the greater of (1) 2.00% times the daily maximum amount available to be drawn under such Letter of Credit and (2) $500, and (b) to the Issuing Lender, a fronting fee for each Letter of Credit equal to 0.125% times the maximum amount available to be drawn under such Letter of Credit. Each such fee shall be computed on a quarterly basis in arrears and be due and payable on the last day of each March, June, September, and December commencing March 31, 2009.

(ii) The Borrowers also agree to pay to the Issuing Lender such other usual and customary fees associated with any transfers, amendments, drawings, negotiations or reissuances of any Letters of Credit.

2.09 Interest . The Borrowers shall pay interest on the unpaid principal amount of each Advance made by each Lender from the date of such Advance until such principal amount shall be paid in full as follows:

(a)  Reference Rate Advances . If such Advance is a Reference Rate Advance, the Borrowers shall pay interest on the unpaid principal amount of such Advances at a rate per annum equal at all times to the Adjusted Reference Rate in effect from time to time payable monthly in arrears on the last day of each calendar month and on the date such Reference Rate Advance shall be paid in full; provided that, if a Default or Event of Default shall have occurred and be continuing, such interest shall accrue at a rate per annum equal at all times to the Adjusted Reference Rate plus 4% per annum.

(b)  Eurodollar Rate Advances . If such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during the Interest Period for such Advance to the Eurodollar Rate for such Interest Period plus 2.00%; provided that, if a Default or Event of Default shall have occurred and be continuing, such interest shall accrue at a rate per annum equal at all times to the Adjusted Reference Rate plus 4% per annum .

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

(d) Usury Recapture .

(i) If, with respect to any Lender or the Issuing Lender, the effective rate of interest contracted for under the Loan Documents, including the stated rates of interest and fees contracted for hereunder and any other amounts contracted for under the Loan Documents which are deemed to be interest, at any time exceeds the Maximum Rate, then the outstanding principal amount of the loans made by such Lender or Issuing Lender, as applicable, hereunder shall bear interest at a rate which would make the effective rate of interest for such Lender or Issuing Lender, as applicable, under the Loan Documents equal the Maximum Rate until the difference between the amounts which would have been due at the stated rates and the amounts which were due at the Maximum Rate (the “ Lost Interest ”) has been recaptured by such Lender or Issuing Lender, as applicable.

(ii) If, when the loans and reimbursement obligations made hereunder are repaid in full, the Lost Interest has not been fully recaptured by such Lender or Issuing Lender, as applicable, pursuant to the preceding paragraph, then, to the extent permitted by law, for the loans and other credit extensions made hereunder by such Lender or Issuing Lender, as applicable, the interest rates charged under Section 2.09 hereunder shall be retroactively increased such that the effective rate of interest under the Loan Documents was at the Maximum Rate since the effectiveness of this Agreement to the extent necessary to recapture the Lost Interest not recaptured pursuant to the preceding sentence and, to the extent allowed by law, the Borrowers shall pay to such Lender or Issuing Lender, as applicable, the amount of the Lost Interest remaining to be recaptured by such Lender or Issuing Lender, as applicable.

(iii) NOTWITHSTANDING THE FOREGOING OR ANY OTHER TERM IN THIS AGREEMENT AND THE LOAN DOCUMENTS TO THE CONTRARY, IT IS THE INTENTION OF EACH LENDER, THE ISSUING LENDER AND THE BORROWERS TO CONFORM STRICTLY TO ANY APPLICABLE USURY LAWS. ACCORDINGLY, IF ANY LENDER OR THE ISSUING LENDER CONTRACTS FOR, CHARGES, OR RECEIVES ANY CONSIDERATION WHICH CONSTITUTES INTEREST IN EXCESS OF THE MAXIMUM RATE, THEN ANY SUCH EXCESS SHALL BE CANCELED AUTOMATICALLY AND, IF PREVIOUSLY PAID, SHALL AT SUCH LENDER’S OR THE ISSUING LENDER’S OPTION, AS APPLICABLE, BE APPLIED TO THE OUTSTANDING AMOUNT OF THE LOANS MADE HEREUNDER BY SUCH LENDER OR REIMBURSEMENT OBLIGATIONS DUE HEREUNDER, AS APPLICABLE, OR BE REFUNDED TO THE BORROWERS.

2.10 Payments and Computations .

(a)  Payment Procedures . The Borrowers shall make each payment under this Agreement and under the Notes not later than 2:00 p.m. (Central Standard or Daylight Savings Time) on the day when due in Dollars to the Administrative Agent at its Lending Office (or such other location as the Administrative Agent shall designate in writing to the Borrower Representative) in same day funds without deduction, setoff, or counterclaim of any kind. The Administrative Agent shall promptly thereafter cause to be distributed like funds relating to the payment of principal, interest or fees ratably (other than amounts payable solely to the Administrative Agent, the Issuing Lender, or a specific Lender pursuant to Section 2.08(c), Section 2.09(c), Section 2.09(d), Section 2.12, Section 2.13, Section 2.14, Section 9.05, or Section 10.07, but after taking into account payments effected pursuant to Section 7.04) in accordance with each Lender’s Pro Rata Share to the Lenders for the account of their respective Lending Offices, and like funds relating to the payment of any other amount payable to any Lender or the Issuing Lender to such Lender or Issui