JPMorgan - KASE

or is liquidated into, the Company or a Wholly Owned Restricted Subsidiary of the Company that
is engaged in the Oil and Gas Business; (d) Investments made as a result of the receipt of noncash
consideration from an Asset Sale that was made pursuant to and in compliance with the
covenant described under “— Asset Sales”; (e) Investments by the Company or any of its
Restricted Subsidiaries in an aggregate amount not to exceed $10.0 million outstanding at any
one time; (f) stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any of its Subsidiaries or in satisfaction
of judgments or pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any debtor; (g) any operating agreements, joint ventures,
partnership agreements, joint stock companies, limited liability partnerships, limited liability
companies (so long as any Investments therein are exclusively used in the ordinary course of
business of the Oil and Gas Business), working interests, royalty interests, mineral leases,
processing agreements, farm-out agreements, contracts for the sale, transportation or exchange
of oil and natural gas, unitization agreements, pooling arrangements, area of mutual interest
agreements, production sharing agreements or other similar or customary agreements,
transactions, properties, interests, or arrangements, and Investments and expenditures in
connection therewith or pursuant thereto, in each case made or entered into in the ordinary
course of the Oil and Gas Business; (h) accounts receivable created or acquired, and prepaid
expenses arising, in the ordinary course of business; (i) the endorsements of negotiable
instruments for collection or deposit in the ordinary course of business; and (j) the incurrence,
assumption or creation of Hedging Obligations that the Company or a Restricted Subsidiary of
the Company enter into in the ordinary course of business in the oil and gas industry for the
purpose of protecting its production against fluctuations in oil or natural gas prices or protecting
against fluctuations in interest rates or currency exchange rates, as applicable, in each case in
compliance with the Indenture.
“Permitted Liens” means, without duplication, (i) Liens securing Indebtedness under any Term
Facility, provided that the aggregate amount of secured Indebtedness under all such Term
Facilities shall not exceed the Secured Limit at any time; (ii) Liens securing Indebtedness
permitted by clauses (b), (c) (to the extent that the Liens securing such Indebtedness are Purchase
Money Liens, provided that Purchase Money Liens securing Capital Lease Obligations are
permitted hereunder without reference to the limitation as to aggregate principal amount
contained in such clause (c)), (f), (g) and (h) (to the extent that cash on deposit may be
encumbered by the issuance of trade letters of credit) of the second paragraph of the covenant
described under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”; (iii)
Liens in favor of the Company or any Restricted Subsidiary; (iv) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with the Company; (v) Liens on property of a Person
existing at the time such Person becomes a Restricted Subsidiary of the Company, provided that
such Liens were in existence prior to the contemplation of such acquisition; (vi) Liens on property
existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the
Company, provided that such Liens were in existence prior to the contemplation of such
acquisition and do not extend to any assets other than those of the Person or assets acquired by
the Company or such Restricted Subsidiary; (vii) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds, tenders, bids, leases or other obligations
of a like nature incurred in the ordinary course of business; (viii) Liens existing on the date of the
Indenture; (ix) Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made therefor; (x) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s, or other similar Liens arising in the
ordinary course of business which are not overdue for a period of more than 60 days or which are
being contested in good faith by appropriate proceedings diligently conducted; (xi) easements,
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